Good morning. My name is Candice, and I will be your conference operator today. At this time, I would like to welcome you to the AutoNation Second Quarter 2022 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question- and- answer session. If you would like to ask a question during this time, simply press star followed by one on your telephone keypad. If you would like to withdraw your question, please press star followed by two. Thank you. I would now like to turn the call over to Ankur Shah, Director of Investor Relations. You may now begin your conference. Good morning and welcome to AutoNation's Second Quarter 2022 conference call and webcast. Please ensure that your lines are muted until the operator announces your turn to ask a question. Leading your call today will be Mike Manley, our Chief Executive Officer, and Joe Lower, our Chief Financial Officer. Also joining the call is Derek Fiebig, Vice President of Investor Relations. Following their remarks, we will open up the call for questions. We will be available by phone after the call to address any additional questions you may have. Before beginning, let me read our brief statement regarding forward-looking comments. Certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued earlier today and our SEC filings, including our most recent annual report on Form 10-K, subsequent quarterly reports on Form 10-Q, and current reports on Form 8-K. With that, I'll turn the call over to AutoNation's Chief Executive Officer, Mike Manley. Thanks, Ankur. Well, good morning, everyone, and thank you for joining us. Firstly, I really do wanna just spend a little bit of time to thank all of the team at AutoNation for continuing to deliver great results in the quarter, which obviously enabled Joe and I to report another record performance. As usual, Joe is gonna take you through the numbers in detail, and I'll begin with a general overview of performance. From a substantially flat year-over-year revenue of $6.9 billion, we were able to increase our operating income by 5% to $558 million, which as I already mentioned, is a record for the group. Our earnings per share for the quarter was also a record of $6.48, a year-over-year increase of 34%. Now as you can see, total new volume was down 25%, which when you consider our low level of new inventory and our high inventory turn rates, was, in my view, purely a result of continued constrained supply. As you can see, volume was substantially offset with strong margins up 47% compared to the prior year and stable quarter-over-quarter. Again, I think an indication that demand for new vehicles remains strong. Used revenue in the quarter was 13% above the prior year. However, from a volume perspective, total used sales were down 4% and down 9% on the same store basis. All of the volume reduction was in our entry selection of vehicles, which are priced at $20,000 and below. When you look at our performance, our mid and premium used vehicle categories both increased in volume year-over-year, which I think indicated the strength in demand in those price bands. What is clear to me though is that our year-over-year volume change, even though it was basically in line with the industry, I do believe we had some volume upside, which frankly, we left on the table in the quarter. Historically, about 40% of our sales have been in that entry category, and clearly that is a segment that's under pressure. We've already shown we can improve our mix, particularly in the mid price bands, and the teams are now very focused on that. As I said, these segments increased year-over-year. Now you may remember during our last call, I talked about our focus on improving used margins, and as you can imagine, I'm pleased with the progress we've made since the end of that quarter, and this continues to be a daily focus. Our F&I teams continue to prove they're the best in the business with another strong performance this quarter. I think what is important to note is the main driver of our performance is the penetration we achieve with optional products such as service plans and extended warranties. As a result, the announcement we made today regarding our agreement to acquire CIG Financial is not only complementary to what we're doing today, but will also over time bring significant upside. In previous calls, I've made a point to talk about the structural changes we've made in our business that in my opinion, I don't really think we get sufficient recognition for. The first is our ability to generate used vehicles. I think this is a considerable strength and an advantage over some of our single-focus competitors. During the quarter, we self-sourced either from trades, lease returns, or our very successful We Buy Your Car program, over 90% of our used vehicle inventory. Now this strength continues to put more of our destiny in our own hands. Other areas of structural change include our after-sales operation. Our intense focus on our customers created double-digit growth of 11% in after-sales gross profit, 11%. This is part of our business that I think we have further upside in. In the past, we've also discussed our disciplined approach to cost management, and as you can see again in these results, the benefit this continues to bring to the business. Moving on to AutoNation USA business. Today, we announced our plans to open a new AutoNation USA store in Georgia. This will happen in the third quarter. This will be our 12th store. Just to remind everybody, our objective remains to have over 130 of these stores in operation from coast to coast by the end of 2026. As I briefly touched on earlier, today we announced that we've entered into an agreement to acquire CIG Financial, and subject to normal closing conditions we expect to close in the next 90 days. The acquisition of CIG Financial aligns with our strategic business model and singular focus on personalized finance and mobility solutions that are easy, transparent, and customer-centric. This acquisition provides capabilities, footprint, technology, and most importantly, a proven motivated team with great leadership. CIG has everything we need to scale and improve our financial performance with modest upfront investment and little risk. While this is an important addition to our growth strategy, we have no present intention to displace or replace existing captive financing with our OEM partners. Our intention is that we'll focus our new captive finance house on our AutoNation USA business and the great book of business that CIG has developed with its many retail partners. Now from AN USA perspective, there's already a strong overlap from a FICO point of view, from a geographic perspective, and a business development focus that has ensured the success and growth of CIG over about the last two decades. This will be a great addition to the group, and as I mentioned earlier, will over time unlock significant upside in our already industry-leading F&I performance. I want to formally welcome 160 new members of the AutoNation family. I can tell you we have very much been looking forward to this day. With that, Joe, I'm gonna hand it over to you. Thank you, Mike, and good morning, everyone. Before I get into my prepared comments, I would like to welcome Derek, our new Vice President of Investor Relations. I think he will be an excellent addition to our team and someone you will enjoy interacting with moving forward. Now on to the results. Today, we reported second quarter total revenue of $6.9 billion, a decrease of 2% year-over-year, driven by a 14% decline in new vehicle revenue due to the continuing supply chain disruption to new vehicle production. Mitigating this decline was total used vehicle revenue growth of 13% and after-sales revenue growth of 9% year-over-year. Strong consumer demand and tight new vehicle inventories continued to support new vehicle margins in the second quarter. We expect demand to continue to outpace supply into the back half of 2022. Additionally, as Mike touched upon, our used vehicle margins improved sequentially from the inventory rebalancing efforts in the first quarter, with total used PBR increasing by $349 per unit or up 22% when compared to the first quarter of this year. For the quarter, total variable gross profit decreased 2% year-over-year, despite total variable PBR growing to $6,436 per unit or up 17%. Our sustained strength in CFS product penetration and attachment rates helped drive this improvement. We also demonstrated strong growth in after-sales gross profit, which increased 11% year-over-year. Taken together, our total gross profit increased 3% compared to the second quarter of 2021. Moving to costs. Second quarter SG&A as a percentage of gross profit was 55.4%, a record low and a 110 basis point improvement compared to a year ago period. As measured against gross profit, compensation decreased a 190 basis points, advertising was essentially flat, and overhead was higher by 70 basis points, primarily reflecting investments in acquisitions and the expansion of AN USA. This overall improvement is the result of structural changes that we have made to our business model. Taken together and combined with fewer shares outstanding, we reported net income of $376 million or $6.48 per share, a 34% increase year over year and an all-time quarterly earnings per share result. Our operating performance and cash flow generation continue to remain strong with cash from operations totaling nearly $900 million for the first half of the year. This performance continues to provide a significant capacity to deploy capital. To this end, we announced today an agreement to acquire CIG Financial, as Mike referenced. We agreed to acquire the business for $85 million and assume certain liabilities, a portion of which will be repaid at closing. We are excited to add captive finance capabilities to this acquisition and look forward to working with the CIG management team to grow and integrate the business into the AutoNation family. We also continue to invest capital to grow our business with the expansion of AutoNation USA and remain on target to operate over 130 stores by the end of 2026. We also continue to repurchase our own shares. During the second quarter, we repurchased 3.7 million shares or 6% of shares outstanding for an aggregate purchase price of $404 million. Further, we announced today that the board of directors authorized the repurchase of up to an additional $1 billion of AutoNation common stock. As of July 19th, there were approximately 56 million shares outstanding. We ended the second quarter with total liquidity of approximately $2.1 billion, and our covenant leverage ratio of debt to EBITDA of 1.5x remains well below our historical range of 2x to 3x. Looking ahead, we will continue to focus on operational excellence and a disciplined capital allocation to drive long-term shareholder value. With that, I will turn the call back over to Mike. Yeah, thanks, Joe. I think, let's get straight into Q&A. Thank you. As a reminder, if you would like to ask a question, press star followed by one on your telephone keypad. We'll pause here for a moment to compile a Q&A roster. Our first question comes from the line of Rajat Gupta of J.P. Morgan. Your line is now open. Please go ahead. Hey, good morning. Thanks for taking the question. You know, maybe your first one, just on the captive, FinCo, CIG. Could you tell us a bit more about the company? You know, what their customer or loan book looks like today? And maybe, you know, what is the integration timeline we should be expecting? You know, how is the accounting gonna work? You know, when can you see this moving the needle on earnings, et cetera? Thanks. And I have a follow-up. Sure. Let me give you, Rajat, good talking to you. Let me just give a few points of reference and a little bit about our thoughts. If you look at. Again, Mike emphasized our focus in this acquisition was on capabilities. It was on a management team. Specifically, frankly, we were not looking to acquire a big book of existing business. The loan receivable today is just about $325 million. $300 million of that has already been securitized, so the residual is relatively modest. They originated about $195 million of loans last year, about 12,000 loans. They have an existing large network of primarily independent dealerships, about 80 of which are independent. Our intention is to continue to serve those institutions. Our integration plan is one that will be very deliberate. There's strong overlap in the credit profile, particularly within AN USA. They have a very strong proven record in both underwriting and in servicing, which was a real attraction to us. Obviously our first focus is closing, which, as we indicated, we expect within the next 90 days. It will be a very deliberate integration, focused initially on AN USA, that we'll roll out over the next six to 12 months, as we integrate that and look to build the business in a prudent fashion, in the context of our existing business. Got it. Great. Thanks for the color. Maybe, you know, shifting gears, you know, Ford this morning, or, you know, announced their, you know, updated, you know, electric vehicle ambitions. Could you give us a sense of, you know, how the conversations are with Ford and other OEMs, on how these vehicles will be sold? You know, the floor planning, you know, invoicing, you know, any implications for GPUs. And relatedly, you know, in your service base, you know, what's the OEM involvement looking like, you know, with respect to training, tooling facilities, you know, technicians? And how far are you in that upgradation process? Thanks. Hi, Rajat. It's Mike. Well, I would tell you that obviously we're having conversations with every OEM, and it's absolutely clear the transition is completely inevitable. Our role in this, I think, is twofold. Firstly, to not just use our size and strength to be a really strong partner for our OEMs, but we also think that there's an opportunity to build out on our mobility side that we're focused on in pools to come. You'll hear more about that, as part of the business model that we're developing. When I think about it, we're heavily working. I'll take it chunk by chunk, and if I've missed something, then you can obviously redirect. From an infrastructure perspective, I already talked about the fact that we are making significant investments to have our buildings ready from a charging point of view. Now, that's gonna create two things. Firstly, in each individual location, we will have opportunity for customers to charge, but we'll create naturally our own network of charging stations effectively within AutoNation. We are doing that in many instances in line or in advance of some of the requirements. We're working already in terms of training because we recognize that the sale of an electric vehicle on paper looks as if it may go through the same steps, but the reality is we think and we've had experience from talking to European dealers that have already had advanced experience with this, that the sales process itself is much more involved and much more educational. We're making sure that we are trained both on the front end with our sales executives, and we're at the very beginning of this. On the technician side as well. There's a lot of discussion about whether more service will migrate. Tell me when you've heard enough as well. You can tell we're in deep discussions because, you know, the fact of the matter is that the hurdles for the OEMs, I think are high in terms of penetration rates they've got to reach by the time they get to 2026 and 2027. The best way to get there is to be part of a solution for them, and that's our intention. Got it. Great. That's helpful. Maybe just last one on F&I. You know, obviously we hear more around CIG and, you know, the impact to the finance business. But I just had a question on service contract penetration. You know, it's gone up quite a bit since pre-COVID. If you could give us a sense of, you know, where we are today and, I mean, how do you see that sustaining, you know, once, you know, consumers maybe start to get a little more disciplined with their spending? Thanks. Thanks, Rajat. Well, candidly, we continue to see success primarily in the product side. If you look back historically, at one point, we often talked about 60% of the composition of our CFS being product that's now up above 70%. We see the penetration increasing, on average in excess of two products per customer, and we see the profitability increasing as well. It appears from everything we see on really a sequential year-over-year basis, the demand continues to be strong because I think people see the value in it. We obviously are continuing to look at ways to continue to improve that portfolio. As we mentioned, the acquisition of CIG is just complementary to an already strong piece of business. We see it as a very positive trend and one that is growing because the customer does see value in the offerings we have. I'll just add. Got it. [crosstalk] Just a couple of points on that. As we've talked about before, I think one of the biggest assets that AutoNation have is we have a very detailed and growing customer base of over 13 million customers. We know which of those customers are active. As you can imagine, with predominantly franchised businesses, we would see the similar decay that you see in the industry as customers migrate to different channels. What we are able to do in terms of that customer base is to use some of the offerings that Joe talked about to retarget some of our customers and make sure they stay in our family with a known cost associated with it for their vehicle. That represents a very partially tapped opportunity and a great way to grow this business even further from the product side. Understood. That makes sense. Thanks a lot for all the color. Good luck, and get back in queue. Thank you. Our next question comes from the line of John Murphy of Bank of America. Your line is now open. Please go ahead. Good morning, guys. Just three quick ones. First on the CIG acquisition. I'm just curious what kind of competition this may create for your existing lender partners, and if there, you know, there may be any kind of pushback there. Ultimately, is this more of an AutoNation USA used vehicle underwriter or just kind of a full service, you know, company that you're intending to really build? What kind of size or penetration level do you think you'll get to with CIG? Is it sort of a five, 10, 15, 20% penetration of vehicles sold? I'm just curious how you're thinking about this. Yeah. We've been very clear internally, and as we've thought about this, the focus initially for this organization is to be part of the growth story for AutoNation USA. As you know, our rollout plan for that business is aggressive. It's already growing significantly. I said we're gonna open another store in the third quarter. When I think about the scale and overlap of this organization, it brings everything that we need for it to be a strong partner for the growth of AN USA and our, let me say, non-CPO used vehicles. I think one of the things that I touched on before is, you know, our partnership with our OEMs and the use of their finance companies is gonna continue and be a focus for us in our franchise business. This is a separate business line, and that for sure will be our approach. My view is that we should be able to build to penetration levels of around 40% plus in AN USA once we do two things. The first thing is today we have about a 70% coverage in terms of licenses and footprint. We're going to build that out in the balance of the year. The second thing is that we have a great partnership with existing businesses in AN USA, which we will want to support. As Joe said, I think we've got a phenomenal asset that has the technology you want, which obviously is very scalable. It has the experience, not just in terms of underwriting, but also securitization, which was important to us. It has the processes. It has been around through cycles because it's now 18, 19 years old from memory, so it's seen cycles. Very importantly, it's got a great team of skilled people and great leadership. All of that, as Joe mentioned, comes at what I think is a really, a really good entry ticket. It is primed perfectly to scale with AN USA initially, and then as things develop, we'll obviously talk about that in the future. Okay, that's helpful. Then just a second question around SG&A. Performance was very good in the quarter. It's been very good for a while. I'm just curious, as volumes ultimately recover, whenever that is, probably you know late this year or sometime next year because of supply coming on, do you think you can hold sort of these levels in the mid-50s, or are we kinda gonna drift back? And Joe, you may have commented on this. I may have missed it early in the call. You know, back to the sort of the 60% range plus or minus. I mean, what is sustainable on SG&A as a% of gross? Or is there a number that we should think about that's more of just an absolute dollar number to model going forward? It's just, it's a big leverage point that's been very positive for a while. Yeah. That's, I think as a result of Joe and many of the leadership team in the business, this has been an incredible positive trend for the organization, really starting pre-COVID, that thankfully I get the benefit of it being in place and it being a continued focus. One of the things I would say is if you looked at our retail businesses, and Joe, I might be marginally off on my numbers, but correct me. If I look at the biggest cost in those businesses, which is obviously our biggest asset, our people, about 75% of that is variable. So as our business scales, a big portion of the cost in the business will scale in that nature. That obviously also works if we do at some point hit a downturn in the opposite direction. I think there are parts of the business that represent opportunity for us. I've talked about after-sales and the fact that I would like to see improved penetration. At the right time in the right dealerships, we will be adding resources into that on a more fixed basis. I'm a great believer in let's stretch the system first and then when we're fully confident that we're in the right direction, put the resource in. My expectation is you will see some slight growth as a percentage as we do some of that structural stuff. Joe is very, very focused at keeping it under that number he keeps talking about. Anything you wanna add? I think you summarized it well. We're finding a balance. We have made structural changes to the business, which will clearly sustain through any changes in kind of the market, if you will. We have a very fixated mindset on how we continue to leverage business. We are gonna make investments, as Mike indicated, that will cause a modest amount of pressure. I think you will see us on a very sustained basis, well below pre-pandemic levels. Okay. Just lastly, you know, on the consumer, I mean, obviously there's lots of cross currents and conflicting signals of the health of the consumer. You guys are dealing with these folks on a daily basis in your dealerships. I mean, Mike and Joe, what would you call the health of your consumer? If you were to kinda think about sort of your backlog of orders or wait times on vehicles, maybe you could give us some metrics or even anecdotal data to understand, you know, how tight the market is and how strong or not strong the consumer may be. Yeah, I'll start on that. I think there are different pockets that I would talk about. If you take new vehicles across our three, let me call it divisions of domestic import and premium luxury, obviously demand strong, as we mentioned, inventory levels still incredibly low, high turn rates, and really sustained margins over the last few quarters. In the first quarter, from memory, I reported something like 50% of our incoming three months inventory was sold. I would say that on the domestic side, that is now down to about 35%. On imports, it is sustained, and on premium, it is also largely sustained. I think on the domestic side, it's really as a result of some improved flow that we saw, whether that continues or not, we will have to see, because I think supply is still one of the big variables where we're not entirely stabilized, even stabilized at a lower level. On the used side, as I mentioned, our used volume was down. We weren't down as much as the industry was, but still I wasn't particularly pleased with that. When we look at that in detail, all of it is in sub-$20,000. In fact, $20,000-$45,000 is flat with high close rates. Above $45,000 is still from a demand perspective, slightly up year over year, and again, with high close rates. For us, historically, that sub-$20,000 price range has been about 40% of the business, which is more really than you see in some of our competitors. I think we can rebalance and push some of that with a better performance in our mid-price band and really try and address what I think will be continued pressure in that price point. We are seeing also the increased interest rate getting passed on to consumers because that's obviously been a question that we've been asked. I would guess about 50 basis points has been passed on at this moment in time. To mitigate that, what we've also seen is the average length of loan has already extended by 1 month. Now, that may not seem a lot, but that is the average length of loan across our portfolio. I think what's happening is you're getting other levers pulled to keep monthly payments in balance. Notwithstanding that, as I said, there's pressure on sub-$20,000 vehicles, which I'm confident the team are very focused on, as I said, to change our mix so that we can mitigate some of the impact on us. Joe, do you want to add any more flavor on that? Obviously, on after-sales, very pleased with that. It's It's been up. I think miles driven has gone up, and that combined with the focus of the teams has helped us there. I think that will continue for sure. Sorry, Joe, you were saying. No, I think you're right. That's fully driven by customer pay, which has done very well. The only thing I would just put in context is Mike talked about the pre-owned levels, just perspective, pre-pandemic, that was 5%-10%. We still are at extremely high levels, indicating both, I think the demand as well as reinforcing the availability. Hopefully, that provides you pretty good color on some of what we're seeing. Would it be fair to say that you see a tiny sequential erosion in the strength of the consumer, but the consumer is still wildly strong relative to pre-pandemic, and sort of relative to supply? Is that a fair way to characterize that? I think it is. I think that's very fair. Okay. All right. Thank you very much, guys. I appreciate it. Thank you. Our next question comes from the line of Daniel Imbro of Stephens. Your line is now open. Please go ahead. Yeah, good morning, guys. Thanks for taking our questions and congrats on the quarter. I wanted to follow up on the used business and really the trade-off between inventory and GPU. You know, after Q4, you guys sacrificed some GPU in Q1, and you drove stronger comps. This quarter, it looks like comps, you said were a little bit lighter than expected, but GPU stepped up. But we ended the day back at 40 days of supply. So I'm curious, you know, what is the optimal day supply you're targeting there? Would you expect to work that back down in Q3, and maybe give back some GPU? Or kind of how are you thinking about that trade-off in this environment? Yes, this is Mike. Daniel, for me, it's really simple. It's about your turn rates. It's how fresh you're able to keep your day supply. With the demand levels that we've got, I'm comfortable with where our day supply is right now. We constantly work on our obviously analytics to try and make sure that it's in the right place from both a price and a product and a geography perspective, but without incurring too much logistics costs. We mentioned in Q1, one of the things that we were working on was actually aging because we had pockets of aging, which we completely removed in Q1, and we got the benefit of, I would say, fresher inventory in Q2. That's going to flow over now into Q3. If we look at the momentum we ended Q2 with, it continues so far into the month. But obviously that is the biggest focus. You know, I think sequential comps are more illuminated this year rather than year-over-year comps because last year we were in a very unusual situation, as you know, where used car prices were actually increasing. So the value of the inventory on our lots was going up and obviously the cost was fixed and therefore our margins found a bump as a result of that. We're not in the same dynamic now. We're seeing a more traditional, even though slightly delayed, movement of prices both up and down in the used market. I would say much more traditional than a year ago. Yeah, that's helpful. Then maybe moving to the new side. I have a question just on the supply backdrop. You know, within premium luxury, you guys have decent exposure to some of those German brands. You know, are you hearing anything from them around how this energy shortage potential issue is gonna impact production? You know, seeing headlines of 15% national reductions in energy use. Could that be another headwind to vehicle production and inventory building or any change in visibility from those OEM partners? None. Easy enough. Last follow-up on CIG. You know, it sounds like it's small today, but growing. As this grows, will it tie up more capital as you build the loan book? Does that impact your ability to do share repurchase or deploy capital in other parts of the business? What are the capital needs of that as it grows? Well, firstly, it's interesting. You know, we spent some time talking about how we think people should think about scale with regard to this. What we didn't want to do was buy a big book. We bought all of the capability needed, right? And a relatively low entry ticket that comes with low risk. I think about scale, you know, what we bought in a very different way. What we wanted, as I said, was proven team capability, technology, experience, been through the cycles with great coverage that matches ours at the lowest possible entry ticket because we're obviously very focused on capital deployment. I think Joe and the teams did a great job, frankly. Joe, do you want to take the balance sheet question? Yeah, I guess I would, I'd refer to a number of points we've tried to make in the course of this call and the announcement that kind of hopefully indicate a little bit of our intention. One, Mike has obviously reinforced the size of the book, also reinforced their ability to have a proven securitization process. We would fully intend to do that to minimize the amount of capital that we're deploying. We also were very deliberate in the share repurchase announcement, which hopefully reinforces our commitment to a balanced deployment. Obviously, share repurchase has been very valuable to us. I think very much appreciated by our shareholders, and we continue to have that balanced approach going forward. I don't expect to see significant changes in that. That's great. Mike, Joe, thanks for the color and best of luck going forward. Thank you. Our next question comes from the line of Evan Silverman of Morgan Stanley. Your line is now open. Please go ahead. Hey, it's Adam Jonas actually on for Evan. I believe it's Silverman, but I like Silverman. That sounds nice. How's everybody? I just got a couple of questions. Mike, I'm curious what percentage of your sales across all your stores are pre-ordered right now and how that's trended. I'd love any color on where you see that order to delivery time. Are your customers having to wait longer than they did a few months ago, shorter, or is it kind of stabilized in terms of that order to delivery time? Actually, Adam, we're gonna do the same as you did your intro. It's actually Joe on for Mike. Hey, Adam. How are you? Hey, Joe. You don't sound like Mike, but anyway, how are you? I'm working on the accent. Let me give you some perspective on the buckets and the pre-owned, and then I'll give you a little bit, whatever I can on the timing. Pre-owned, if you go back domestic Q1, we said it was about 50%. As Mike referenced, that's probably 35%-40%. That one's gonna vary, but again, you see a little bit of contraction there. Import, we mentioned Q1 was 50%. It's about 50% today, so we really have not seen a significant deterioration there. Luxury was about 70% at Q1. It's 60%-65%. I mean, it's in range down just a tick. As I mentioned and as you know, those are all significantly above kind of pre-pandemic levels. Again, demand remains. I think the comment made earlier, it may be slight downtick, but still remarkable in the absolute sense. As far as delivery times, I would say, and it's obviously gonna vary not just by brand but by model. I would say there's been some slight improvement, but nothing that I would wanna highlight and probably still longer than people appreciate. Have not seen a notable change there that I would wanna call out. And, um- [crosstalk] All right. Adam, I just wanna add one thing. Yeah. If you look at our closing inventory sequentially, it's up slightly. That, when you dig into it, was purely a timing thing from our perspective because we got some inventory delivered to our dealerships. There was not enough time for us to prep them properly, get them prepared, and get them out to our customers. I can tell you that they were delivered very early in the following month. I don't think anything really to read into that at this moment. If it changes, obviously the next call we can talk about it. Great. Mike, just one follow-up. You can take a stab at it. You can give it to Joe, do whatever you want. Given your experience at the OEMs, I would value your insight. Your margins and margins of your peers on the new have kind of round number tripled over the last couple years. The operating margins in North America of the producers of the vehicles have been kind of stable, maybe up a bit. Why aren't the OEMs increasing invoice prices? When I talk to dealers and I say, "Why don't these guys?" The OEMs gotta pay a massive UAW bill next year. It's gonna be, like, historic increase. You guys are crushing it. They're kinda hanging on. They're gonna start cutting heads soon. Why aren't they taking? Why aren't they kinda repricing some of this stuff on those pre-orders? The answer I tend to get is they don't know what they're doing, they can't do it, or there's, like, laws or just they're not organized enough. I don't really buy that, but I'd love your view, Mike. What's going on? Or are they repricing a bit? Well, what I see is something slightly different. The net price back to them has increased because of the work that they've been doing on the incentive front. The last time I looked at it, a couple of things had happened. A lot of the incentive subsidies on leases had not been completely taken away, but had been reset, effectively increasing a lease MSRP. A number of the programs that were supporting retail business were also either reduced or removed and increased the net price back to the OEMs. That should be pretty easy number to look at. That's the first place that I would go to, but that's my view. I think what they did was they took the opportunity to reset the net transaction price for their vehicles, which will have a consequential impact on the residual values. That, over the long term, is a very strong move from the OEMs, notwithstanding your point, as well made, regarding some of the costs that are gonna hit the business, so. Okay. I haven't looked at it in that detail from their point of view in a couple of months, but next time you're in town, we can look at it together. Look forward to that. Thanks, Mike. Thanks, Joe. Thanks. Thank you. That's all the questions we've got time for now, so I'd like to hand the conference over to Mr. Manley at this time for closing remarks. Great. Thank you. Again, thanks for your time, and thanks for coming to the call. I really just want to end in one of the comments that I made. You know, it's great for Joe and I to be able to come and talk about a record quarter. The fact of the matter is, with the large number of dealerships that we've got and the large group of people that are working every day, it is down to them. I'm actually gonna end by thanking them again, all of the 22,000 people that work at AutoNation. I think not with standing the fact that obviously there are things that have been happening in the industry and the economy, this is the eighth consecutive record quarter for the team, and that deserves my recognition every single day. I know a lot of the guys and girls are listening to this. I wanna thank you for your commitment to our customers, each other, and particularly the communities with our DRV PNK campaign. Thank you for what you do. Let's keep it going. This now concludes today's conference call. You may now disconnect your lines.