Good morning. My name is Briana, and I will be your conference operator for today. At this time, I would like to welcome everyone to the AutoNation First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise, and 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 restore your question, please press star then two. Thank you. I would now like to turn the call over to Derek Fiebig, Vice President of Investor Relations. Derek, you may begin your conference. Thanks, Briana. Good morning, everyone. Welcome to AutoNation's First Quarter 2023 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer, and Joe Lower, our CFO. Following their remarks, we'll open up the call for questions. Before beginning, I'd like to remind you that 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 Federal 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 today and in our filings with the SEC. Certain non-GAAP financial measures as defined under SEC rules will be discussed on this call. Reconciliations are provided in our materials in our websites located at investors.autonation.com. With that, I'll turn the call over to Mike. Yeah, thanks, Derek. Good morning, everybody, and thank you for joining us today. We reported first quarter EPS of $6.07, that really is a result of our resilience of our business in this environment, but coupled with disciplined capital allocation. As a result of those two things, that $6.07 was a record result for us. Now, Joe will take you through the numbers in detail, but before that, I wanted to discuss how we've been successfully navigating in the current environment and where we'll be taking the business in the future. Obviously, there's a lot of mixed economic signals in the market and within auto retail, which do warrant, I think, a more cautionary approach than the past few years. Although I think it's also evident that the current economic environment is having an impact, some of the concerns of late last year have not yet manifested themselves to the extent some thought they would. The consumer, in our opinion, is in no way tapped out, and the industry is benefiting from lower unit sales over the past few years and an aging vehicle park, which has historically supported demand within the industry. Now, for new vehicles, industry inventory remains well below historical levels, and we have seen some recovery, but there is a wide variation amongst brands and models. First quarter new sales increased from a year ago, driven by a large increase in fleet vehicles, with retail units up slightly. Even with the recent increase in sales, the industry still remains at or near recessionary levels. AutoNation's unit mix for the quarter were in line with industry after accounting for our brand mix. If you look at our portfolio and the way the industry shaped out, our new vehicle sales were, as I just said, in line with the industry for that period. Our new vehicle profitability was solid, as you've seen. PVRs continued to moderate as expected as the in-inventory increased, yet remained very robust at more than $5,200. As we discussed on our last call, availability of used vehicle inventory will be a key theme this year, and the lower new unit sales over the past years have led to scarcity of supply of late-model new vehicles. As at the end of last year, the population of vehicles five years and less of age was down about 10% from 2019, and vehicles three years and less were down more than 15% from 2019. In addition, the turnover of younger used vehicles, which are more of our sweet spot, has also declined as consumers are holding onto their vehicles for longer. I do have to say that none of this was unexpected. Now, to help offset the resulting reduction in used volumes, we focused on enhancing economics through effective self-sourcing, reconditioning, speed to market and of course, pricing. Our focus was squarely on internal sourcing, which is a strength of ours, asset turnover, and avoiding purchasing vehicles at auction, which either require substantial reconditioning to get them up to the AutoNation standard or come at a premium price, which would have significantly impacted our margin. Used vehicle gross profit was a first quarter record, and up both year-over-year and on a sequential basis from the fourth quarter. Last year in the first quarter, we made the tactical decision to realign, reposition, and reduce our used car inventory. I think that proved to be a prudent move as the year went on. It did, however, set us up for a tough comp for unit volume in Q1. We will remain nimble in our approach to used vehicles, and the expansion of our AutoNation USA footprint remains a core tenet of our expansion and densification efforts. Turning to CFS, we continue to lead the industry in customer financial services through increased focus on product penetration. We have structurally changed our CFS PVR, and we continue to average two products per vehicle. Product attachment for new vehicles has remained steady, while not surprisingly, there has been some reduction in product attachment for used vehicles. On the finance side, which represents about 30% of our total CFS business, penetration is lower than a year ago, but increased marginally from late last year. For after-sales, we have been consistently growing in the high margin business. Gross profit was a record $511 million, up 11% from the first quarter last year. This was fueled by customer pay warranty and collision as we've been able to overcome the decrease in late model vehicle park. We remain focused on expanding our technician workforce and serving more customers. Finally, for cash flow and capital allocation. For the quarter, we generated significant cash flow with cash from operations of more than $500 million. This strong cash flow generation, combined with the strength of our balance sheet, allow us to continue to invest to change our business for the long term, make investments in our core operations, and return capital to shareholders through share repurchase. During the first quarter, we invested more than $300 million to repurchase a total of 2.4 million shares. I think when you look at the shape and the performance of our business in this quarter, and in fact recent prior periods, it's increasingly evident that the structural changes that we have, we have made to AutoNation during a time when the supply and demand economics have been a tailwind for our operation, will have a lasting and meaningful impact on a go-forward basis on how to drive shareholder value and returns regardless of what cyclicality we may face. just before turning the call over to Joe, I would like to provide some color on where AutoNation is heading and our channels for growth. I think we've been intentional looking at areas we can expand and grow to meet the transportation need of our 11 million customers and their households as we seek a deeper, more frequent relationship for a longer period of time, which builds on AutoNation's very strong core business utilizing our brand and our significant footprint. In many ways, this represents a change of mindset within the company. The approach is centered on the broader needs of our customers and the nearly 10 million households we serve. During the first quarter, we brought on nearly 100,000 new households. We're focused on enhancing our relationships with active customers and reactivating lapsed customers. We've taken a number of actions to extend the value creation of our core business by increasing the depth and breadth of our product and service offerings while providing a convenient, trusted, and transparent customer experience. These include our digital efforts and the investment in TrueCar, the acquisition of CIG and creation of AM Finance, and the acquisition of RepairSmith, which extends the reach and brand of our after-sales business. As we've said, these acquisitions will not have a material impact on our near-term results. Have put in place critical pieces for our future. We're pleased with the effectiveness of AM Finance and its ability to compete with other financial institutions in meeting our customers' needs. We have great relationships with existing lenders, and will continue to work with them. As we've said, it will be a slow expansion for AM Finance as it earns its business with its customers. For RepairSmith, we're in the very early days, having acquired them earlier in the first quarter. It will take time for the business to attain meaningful scale and scope, we expect it will thrive in the AutoNation ecosystem. Both of these acquired businesses are additive and not substitutional for our business, we will take a measured approach as we work for sustainable, profitable growth. The expansion of offerings builds on some of the step changes we have made to the business, which include our continued expansion into used vehicles through AM USA, which is now at 15 stores. Our continued growth in after sales and our continued growth and focus in CFS to industry-leading PVRs. Over time, we expect our actions will garner a larger share of wallet from consumers, thereby reducing our relative exposure to the more cyclical parts of the business, namely new auto sales. Now I'll turn the call over to Joe, who's going to take you through the financials in greater detail. Joe? Thank you, Mike. Good morning, everybody. I'm also going to start with the bottom line and then work back through the pieces of our performance for the quarter. I am also pleased to report that we generated a record first quarter EPS of $6.07 per share, an increase of 5% versus the prior year. As Mike said, this was driven by robust margins, strong after-sales growth, disciplined expense management, and our balanced capital deployment strategies overcame lower unit sales of both new and used vehicles. Starting at the top of the P&L, we reported first quarter total revenues of $6.4 billion, a decrease of 5% year-over-year, driven by lower units sold, more than offsetting continued growth of after sales. Our new unit sales decreased by 2% in the quarter, which was in line with the industry when adjusted for brand mix, as Mike mentioned earlier. New vehicle PVR margins remained above $5,200, but have moderated from prior peaks. Inventory for new vehicles increased to 25 days on average, with a wide dispersion by brand and model. The overall new vehicle market remained healthy during the quarter as approximately 45% of our vehicles were sold at MSRP. This continues to be far higher percentage than pre-pandemic levels. Our total used vehicle gross profit increased by 13% from a year ago to a first quarter record of $154 million as strong margins, with PVRs exceeding $2,100 more than offset lower unit sales. As Mike mentioned, in the first quarter of last year, we realigned our inventory, resulting in unit sales of nearly 80,000 units and PVRs in the mid $1,500 range for context. We continue to enhance our used vehicle economics through effective self-sourcing, which remained around 90%, as well as efficient reconditioning and pricing. After-sales growth profit grew 11% year-over-year as we continue to drive strong performance in this area of our business. Customer pay, warranty, and collision all grew year-over-year in the mid-teens. The recurring revenue stream from our after-sales continues to grow, with 2022 full year annual growth profit up more than $275 million since 2019. CFS performance also remained robust, and we continue to lead the sector with PVRs consistently above $2,700. Moving to cost, SG&A, as a percentage of gross, was 60.8% for the quarter, remaining significantly below pre-pandemic levels, reflecting permanent structural changes to our cost basis. As expected, SG&A, as a percentage of gross profit, was slightly higher than recent periods, reflecting investments in technology and new business initiatives to better position us for the future, as Mike highlighted earlier in his remarks. First quarter floor plan interest expense of $27 million was impacted by both higher rates and increased inventory levels. The quarterly expense increased from $20 million in the fourth quarter and $5 million a year ago. This all culminated into net income for the first quarter of $289 million, or a record $6.07 per share. Our operating performance and cash flow generation remained very strong, with cash from operations totaling more than half a billion dollars for the quarter. This consistent cash flow generation, combined with the strength of our balance sheet, provides us with significant capacity to deploy capital into our business and return capital to our shareholders. During the quarter, we invested approximately $285 million in our business operations, including the acquisition of RepairSmith and $95 million of capital expenditures. We also continued to expand our AutoNation USA footprint, adding locations in Austin and Albuquerque during the quarter, bringing the current store count to 15. As Mike mentioned, the AutoNation USA stores play an integral part of both our long-term growth plans and the achievement of scale, scope, and density in our markets to better serve and meet the needs of our customers. Returning capital to shareholders via share repurchase remains significant. During the quarter, we invested $305 million, reducing our share count by 2.4 million shares or 5% in the quarter. We have approximately $875 million of remaining authority for share repurchase. Finally, we ended the first quarter with total liquidity of approximately $1.6 billion. Our covenant leverage ratio of debt to EBITDA of 1.8 times remains well below our historical two times to three times range. Looking ahead, we will continue to focus on operational excellence and disciplined capital allocation to fuel growth and drive long-term shareholder value. With that, I will turn the call back over to Mike. Yeah. Thanks, Joe. Before taking your questions, I really would like to take the opportunity to thank our more than 24,000 associates who help deliver, I think, a wonderful customer experience every day. You know, in my mind, it's very clear since I was fortunate enough to join this organization that this is really a company of values. One of those important values is the Drive Pink initiative. I think it's absolutely fundamental and really sits firmly at the center of our corporate culture. Marc Cannon and his team and all of the associates that get involved on their own time, on their own volition, I think have done an amazing job and have now raised more than $37 million to help drive out cancer. If you wanna know anything about AutoNation, then that's an important thing to know. Thank you, Marc. Thank you, all of the colleagues who get involved in that, and thanks to everybody for helping us navigate in Q1. With that, we'll open up for questions, Sarah. Thank you. Yeah, Brianna, you can open up the line for questions. That'd be great. Thank you. If you would like to ask a question, please press star then one on your telephone keypad. If you change your mind, please press star two. We have the first question on the phone lines from John Murphy of Bank of America. Your line is open. Good morning, guys. Just a first quick one on SG&A. I mean, obviously, you know, grosses may move around, and there's some market dynamics that are outside of your control, but you definitely control SG&A. Just curious, you know, if we saw... You know, try to kind of come up with a rule of thumb. If we saw gross drop by $100, what would be sort of the natural flow-through on SG&A without any actions taken? Meaning, you know, how much is sales comp or variable comp? I know it might depend through the segments. Mike, also, what kind of actions would you take on top of sort of that natural flow-through to reduce SG&A if grosses did come down? Good question, John. I'll take that one, given my focus on SG&A. All our folks focus on SG&A. The quick answer is the flow-through, you know, round numbers is about 70% flow-through. That's been kind of a historic rule of thumb. I would tell you, as we look at the business and the way it has transformed pre-pandemic to now, I think there's some, you know, more fundamental things. If you go back, as an example, compensation used to be 45%-46% of gross. You know, that's coming now at 40%, and I think that is the type of benchmark we will continue to monitor as we look at how we can be consistently more efficient, both in the stores and in the operations. Advertising has been kind of historically, you know, 6%, and we've driven that down to 3%-4%. Overhead, you know, historically was kind of about 20%, and we're now operating at kind of a 15%-16%. I think, you know, we are gonna continue to aggressively manage the business, aggressively manage the cost, while we're also making investments in the business, which we've talked about. That's kind of the numbers. Mike will give you kind of a broader perspective. Yeah, thanks, John. That's a pretty good job, actually. Just to add into that. I mean, one of the things that we've talked about in the past, if you look at the ratio between what is fixed structurally in our business and what is actually variable as a result of growth, we're very high on the variable level. To some extent, in the initial parts of a downturn, we get natural protection from that. The balance that we look at, obviously, is productivity within the business. It'd be naive to think that there's not a floor where we need to maintain a level of customer service, a level of responsiveness to our customers and indeed make sure our people have the right level of resources. You know, at the end of the day, when you reach that, I think you have to very much recognize it's a cyclical business and recovers pretty quickly after a downturn. From my point of view, very fortunate to have Joe and the team look at it, you know, on a daily basis. It's self-moderating down to a point. We understand where that floor may well be, but we're not prepared to sacrifice in the very short term our ability not just to recover if markets recover, but also to provide our service with the customer levels of handling they expect to continue to drive our loyalty up. Hopefully with Joe's more thoughtful answer and my babbling, you've got what you want, John. That's incredibly helpful. Then just on aftersales, obviously a real good guy in the quarter, outperforming. I'm just curious, you know, if you were limited by tech availability or if you were able to attract a lot more techs to drive that. I mean, what's the status of your capacity utilization in your base and then also your man capacity, and how should we think about potential upside over there? Is this really just constrained by tech availability? Yeah, I think I've been very pleased with the work that everyone's been doing in this area. If you look at the total opportunity, whether it's accessible or not, John, there's no doubt that you're constrained by tech availability. The reality is most retail dealerships operate at about 40%-50% penetration in the vehicle parks they're responsible for. I think most people have staffed up to that, with the relief valve being lead times. We're very much focused on driving those lead times down, in conjunction with our OEM partners, and we're very much focused at improving our penetration, in the vehicle parks that we're responsible for. On that basis, I would say, yeah, we're constrained. No more constrained than our competitors, but I think maybe our aspirations may be different. I don't know. We are continuing to recruit. We're also working very hard on retention because as you know, that's a very sought after labor force. There has always been, in my experience, a lot of attrition in that area. We're working hard on not just recruiting more people, but providing a great career path for them and development for them and work on the retention side. I think the growth that we have got is a reflection of all of that. Mike, I'm sorry, just one follow-up on that. You said something very interesting, that you're only getting to 40%, 50% penetration of really your installed base or what you think you can get at. I mean, do you think you could ultimately get to a 100%? Or is that gonna be really difficult, and we should think about something lower than that? I mean, where on the spectrum of that 40%-50% to a 100% do you think you may ultimately be able to get to? Yeah, this may well. In a perfect world, if techs are available. Yeah, yeah. This may well fall into opening Pandora's box, eh, John? well. Well, you opened it. Okay. I accept that. Thank you. The answer is you're never gonna get to 100% because firstly, you got to understand what age of vehicle park are you looking at. Typically you'd look between a seven and 10 year vehicle park. Post that, people are looking for different solutions than franchise businesses, as you know. They also, the other big impact on retention is drive time to the dealership. Once you get beyond the 15 mile, let me use miles rather than time, drive time to the dealership, you see a significant decay in penetration, which is one of the reasons why RepairSmith for us is very, very interesting because of course they remove that reason for people to find a different solution. You will never get to 100%. It's not just us at 40%-50%. My guess is that that's a typical kind of number that you would hear. I think there's opportunity for us to grow that number, but deploying not just improvements in availability at our dealerships, but other initiatives to help provide convenient service at the right cost equation for customers. Safe to say there's a huge structural opportunity. We're not looking at something that's cyclical here. It's a matter of getting the capacity in the human capital to address this that should drive same-store sales comps going forward, whether it be RepairSmith or actual techs. Is that a fair statement? Yep. Yep. Great. That's fantastic. Thank you very much. Welcome. Thanks. Thank you. We now have Daniel Imbro of Stephens Inc. You may proceed with your question. Hey guys, this is Joseph Enderlin on for Daniel. Thanks for taking our question. looking at used GPU-. Sure. that came in ahead of our expectation. How would you attribute the sequential gain there to the increase in wholesale pricing during the quarter? As you look forward, what would be your expectation for trajectory there? Is that something that would allow you to hold on to GPU more than you initially thought? Yeah. Thanks, Joe. I think as always, there's a lot of combination of things that contribute to it. I think for us, one of the things is that you never got the supply and demand dynamics on used that you have with new, as you know, for very obvious reasons. As we thought about our used vehicle inventory and our approach, what we really wanted to do was make sure that we maximize the inventory that we had. With that, it means that we were even more diligent, I think, in terms of pricing. The other thing was for us to try and continue to improve our days to supply and our turn rates. We were able to improve that through the quarter. All of these things become additive. As Joe mentioned, you know, our year-over-year comp on this one, it was always gonna be a good guy because of the work we did last year. How much of it is structural in this market? I think that, as I said, in the area of vehicles that for AutoNation is the sweet spot, there will be continued constraints. We have, as you can imagine, not just accepted that, but put in place some actions and some processes to mitigate that where possible. In some areas, learned from others that have done, good job over the years as well. Add that to the discipline in terms of getting these vehicles to the front, pricing, thinking about where the vehicle should be sold from, I think helped and contributed to all of it. How much, how much sticks is a great question. I anticipate some of it will stick, not all of it for sure, because it's a, it's a very dynamic market at the moment. Thank you. That's super helpful. As a follow-up, you had a peer suggest there's a disproportionate number of fleet vehicles being transacted right now as opposed to retail. As a result, customer incentives remain constrained. Could you provide some thoughts on this? Then in particular, how do you expect the cadence of customer incentives to trend this year? Thank you. I mean, unlike the previous recessions where all markets were being served with plenty of supply and it was pure demand, the fleet market obviously has been starved of supply during this period as the OEMs have prioritized their retail channels. I think as OEMs are beginning to return, they're obviously looking at their margin and may have made the decision, I think, to do two things. One is to give their fleet customers, which are very important to OEMs, the vehicle that they've been asking for for some time, so you naturally see a spike. Secondly, look at their performance in the broader marketplace. I don't think it's an unusual phenomenon. From an incentive point of view, we all know incentives are still significantly lower. I think there are some brands that will have to progressively increase their incentives to drive net price position down in the marketplace if they're going to maintain or even slightly grow market share. One of the things that I think aggressively will happen is leasing business will begin to return. I think it's around 15% or 16% at the moment. It's about 30%, 32%, 33%, something like that in normal times. As we go through the year, I think, if the residual demand out there remains where it is, you're gonna see OEMs progressively, I think adjust their net price position so that they can balance that production, the fleet demand, and their need to maintain retail market share. That's helpful. Great. Thank you. That's all for us. We now have Bret Jordan of Jefferies. Please go ahead when you're ready. Hey, good morning, guys. A couple questions on the new business initiatives. RepairSmith, I guess was it incremental to the parts and service business? Then I guess within parts and service, if you could break out what was ticket versus traffic? Yeah, I mean, as we've said, RepairSmith is not substitutional for our businesses. It's very much additive. The other thing that for us, we recognize with our AN USA expansion is we also wanted to provide our AutoNation USA customers with a very tailored, specific, convenient after-sale service provision, which none of the standalone used car businesses really have been able to do. Therefore, RepairSmith effectively becomes AN USA's after-sales division, giving Dave and the team what I think could be a fairly significant USP in the marketplace. I'm pleased about that. The good news is, as we've said, both with AutoNation Finance and Joe reiterated with RepairSmith, our approach is to deliberately grow these businesses in the same way that we are growing deliberately AutoNation USA. Very much additive. I think it's very much, now a USP for AutoNation USA and expecting the team to be able to use that effectively in the marketplace. Is RepairSmith? Sorry. No, go on. No, I was going to say, is RepairSmith geographically restricted in the sense that it's an outdoor work or remote work? Are you mostly Southern markets or is it harder to staff for that model because technicians prefer to work indoors? You know, how does that work? What's the potential rollout for it? This is interesting because, as we started to look at this more and more, I think my going in assumption was exactly that. Which for us, if you think about our footprint, not really a huge issue. The reality is, as I got in the business more, during the diligence phase and actually understood the way that they work, there are so many different ways that they address the extreme cold climates. Their rollout plan really was not, necessarily, driven by, you know, does it snow a lot or does the temperature drop dramatically in these areas? Because as they, as they've been able to prove, many of the things that they do can be done in multi-story car parks, for example, within garages and different places as well. I would think it'd be completely unfair for me to say there isn't an impact. You're completely right. Technicians prefer to work indoors, particularly during the extreme cold and heat. There are benefits that come to the technicians in the model in terms of the way they manage their day, their autonomy, the way they think about growing their own business, their own territory. As always, there's pros and cons to the model. I would say they're not hampered necessarily by that. Obviously what we're focusing on is how we can densify our existing footprint to maximize the efficiency of our businesses and provide a complete range of services to customers that we have built up over the last two decades of being, one of the most progressive automotive retailers in the country. Okay. One last quick one. CIG, was it incremental to F&I, or was the volume relatively small and an offset to somebody else's loan revenues? Firstly, as we said, we're really aligning CIG's growth now AutoNation Finance has growth alongside AutoNation USA, and I can tell you they've integrated phenomenally. We're very pleased with that. The model that we set up, frankly, was one where there was no right for business, because what I didn't want to do, what we didn't want to do was just say, "Hey, you know, we've got this finance company, now you have to use it." I think they have to remain very competitive. They have to understand that there is no right to them getting the business for us. Response times, look to book all of the normal things you would expect. They have displaced some, obviously they've displaced volume because our finance penetration, as Joe said, is broadly on new vehicles it's the same. On used vehicles it's slightly down, as you may expect, because there has been some reduction in deep subprime and subprime. They have displaced some volume with other providers. All in all, I think what we've got now is a great competitive marketplace, and they're a competing player in that. Great. Thank you. Thank you. We now have Adam Jonas of Morgan Stanley. Your line is now open. Hey, everybody. Hey, Mike. Adam, how are you? I am good, thanks. I'm good. Your comment about 45% of volume being done at MSRP, and that being lower than others. I'd just be curious if you could add a bit of detail around the trend. You know, where was that number a year ago? Maybe where was it at the start of the year? Where is it trending? I don't know if there was any other detail about your price, your average price versus MSRP, but I don't want to get too greedy. Then a follow-up. You guys had made a big initiative on seeding a captive finance operation and also through M&A. I'm curious if your path of growth there or the way you would fund that or grow that may be changing given some of the changes in the credit environment. Thanks. Yeah, thanks. I would say that at peak margins somewhere in the region, and Joe, you correct me, but somewhere in the region about 60% at MSRP, 55%, 60% at MSRP. As inventory levels have come in and as the monthly payment conditions in the marketplace have been changing with progressive rate increases, the subsidy of that net transaction price has driven us down slowly but consistently to the numbers that Joe gave you. What I would tell you, it's an interesting dynamic because if you look at the availability of inventory across imports, domestics, and luxury retail premium, obviously they're at different stages. What you do see if you're looking from our lens is you do see that direct impact of availability and demand. Some of our divisions are performing at a much higher level of sales to MSRP, some are performing at a lower level. Joe gave you the blended average. Our expectation is as I think everybody's expectation is, as more inventory comes into the marketplace, as we continue to see higher monthly payments, that will continue to mitigate, not at a dramatic shock pace, but mitigate throughout the year. That's my view. Joe, if you could answer. Firstly, if you want to qualify what I've said, feel free. If you want to answer the question on funding for AM Finance, that'd be great. I'll really reiterate, I think, what Mike said on the PVRs. It really is, you know, almost by brand, by model. As Mike said, you know, if you go back again, by brand and model, it could have been as high as, you know, 70% or 80%, and we're seeing a general trend down. But still, as you know, at a much higher than it had been historically. I'd remind you that we really don't price above at SRP, and that's continued. I think that's another factor to continue. As far as the funding, you know, I would tell you, we are continuing to be very opportunistic as it relates to the funding and as we've mentioned repeatedly, a very deliberate cadence on originations. We have warehouse facilities in place to provide a significant capacity. We continue to monitor closely the securitization market. It is available, but we're gonna access that when it's most attractive, given the other available funding vehicles we have. You know, strategically, our approach hasn't changed, but we're being very mindful of kind of current market conditions and utilizing our balance sheet as effectively as we can. Thanks, Mike. Thanks, Joe. Thank you. We now have our final question from Rajat Gupta of J.P. Morgan. You may proceed. Hey, good morning. Thanks for taking my question. Just sort of first one on capital allocation. You know, if you can give us an update there. You know, how do you start to the buyback here in the first quarter? You know, how should we think about, you know, the cadence for the remainder of the year? Also, like any update on your plans and pipeline for acquisitions? Relatedly, would you be willing to add more leverage to the balance sheet, you know, for more buybacks going forward? Thanks. I have a follow-up. Let me tackle a couple of questions there. Let me start first with, maybe availability and capital. You know, we benefit, as you know, Raj, from very strong free cash flow, which helps us significantly. From a leverage standpoint, we're still below 2.0. As we've said consistently, we're very comfortable in the 2-3 times range. We're deliberate right now in being thoughtful and making sure we have capacity to be opportunistic. As we've said repeatedly, we highly value our investment-grade rating. It provides us some strategic and financial advantages, we will continue to operate in that framework. As it relates to deployment of capital, I'd just say it hasn't changed. We've always indicated that we are based on returns. We look at organic, inorganic, and share repurchase, really from the standpoint of returns. We have viewed AutoNation USA as a very attractive return, and frankly, the returns have exceeded our initial expectations. We'll continue to fund that appropriately. We look very opportunistically at acquisitions. Those that we've been able to identify, we feel very good about, as Mike indicated, but we maintain a discipline in this marketplace. Share repurchase continues to be attractive at these price levels. You know, we're gonna continue to have a balanced approach. It's gonna, you know, shift based upon the relative opportunities. We will use a modest level of leverage, as opportunities arise, whether those are organic, inorganic, or share repurchase. kind of within those parameters, we intend to continue the path we've been on, you know, with modest shifts just based upon availability of opportunity. Understood. excuse me. That's a good color. you mentioned earlier on the call, the prepared remarks that, you know, there was a slight improvement in finance penetration, versus, you know, 2022 ending levels. You know, with credit unions, you know, it is what we're hearing, you know, continuing to tighten, their standards. You know, should we expect, you know, a further increase, in penetration there? Relatedly, you know, for F&I, you know, outside of finance, you know, could you give us an update on how the penetration of, you know, other ancillary products, have trended since the pandemic? Would you expect penetration for those also to remain sticky going forward? thanks. This is Mike. As we mentioned, in the opening comments, the number of products that we sell on new has been very stable. I think that obviously speaks to the focus and the processes that we have in place. We've seen some mitigation on used, as you may expect. It doesn't mean they're more sensitive in terms of their monthly payments. I think everybody is sensitive in terms of their monthly payments. I just think that they're more exposed to the increases in interest rates. Our penetration on our penetration overall remains stable. New has shown continued strength, particularly as some of the OEMs are coming back into the market with subsidized finance. That obviously helps and adds another tool to the bag. On used, as I mentioned before, from a FICO perspective, there's been a reduction in subprime and deep subprime. I expect that to continue. A lot of that is by choice, I would say. That's how I would expect it to continue. In terms of it, is there upside? From my perspective, I think price obviously is always been sensitive, at the end of the day, it comes back to that monthly payment, that includes not just the vehicle, but all the product services, warranties, and everything else. Therefore, sometimes to get to those monthly payments, you take a contribution across the whole of the services and products that you're selling to get a balanced response to what the customer needs if it's possible. I wouldn't imagine that there'd be significant upside on that. I think, we have some great processes in place. That doesn't mean to say there's not room for improvement. I think there always is. I think to some extent, you may see some trade-off between penetration and margin in those products. Understood. Great. Thanks for the color. Thank you. We have no further questions on the line, so I'd like to hand it back to Mr. Manley for any final remarks. Yeah. Okay. Thank you very much. Again, thanks for, thanks for your time on the call today. We appreciate it. We also appreciate the questions. By your questions, you also give us insight on what's on your mind. Again, I'll just end by thanking all of my associates and colleagues within AutoNation. As I said, we also, in this quarter, have been very pleased to welcome all of RepairSmith employees into our family as well. With that, I wish you all a great day. Thank you very much for your time. Thank you all for joining. This does conclude today's call. You may now disconnect your line and have a lovely day.