Good morning, and thank you for joining AutoNation's fourth quarter 2024 earnings call. My name is Harry, and I will be your operator today. All lines are currently in listen-only mode, and there will be an opportunity for Q&A after management's prepared remarks. If you would like to enter the queue for questions, please dial star followed by one on your telephone keypad. I would now like to hand the conference over to Derek Fiebig, VP of Investor Relations. Thank you, you may proceed. Thank you, Harry, and good morning, everyone. Welcome to AutoNation's fourth quarter 2024 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer, and Tom Szlosek, our Chief Financial Officer. Following their remarks, we'll open up the call to 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 and on our website located at investors.autonation.com. With that, I'll turn the call over to Mike. Yeah, thanks, Derek, and good morning, everyone, and thank you for joining us today. I'm going to dive in on the third slide. So we're almost halfway through the first quarter of 2025, and it feels a little bit stranger talking about the previous year. But that said, 2024 was a good year for AutoNation, highlighted by what I think was a super fourth quarter. Heading into the year, there were several uncertainties that were difficult to plan for, and these obviously included the U.S. election, the debate and discussion about new vehicle pricing normalization, and how would that play out, just to name a few. But adding to that uncertainty was the early summer business interruption from the CDK outage, which, as you know, had a significant impact spanning both quarter two and quarter three. Now we'll get into the fourth quarter details in a moment, but for me, the key highlight of the quarter was the delivery of 12% same-store new unit volume growth. New vehicle sales is the front end of our profit cycle, and volume growth in this area bodes well for the future of our after-sales and financial services business, which provide approximately 75% of our gross profit. Speaking of after-sales, the second highlight was achieving year-over-year 5% same-store gross profit growth and improving our gross margin by 110 basis points. Importantly, the growth was principally driven by external customer channels, warranty, and customer pay, delivering improvements in gross per repair order and growth in number of repair orders. The third highlight was the performance of AN Finance, which was introduced in late 2022. Now, you will notice in our annual report, which we expect to file later this week, that we're giving more prominence to it, so I'd like to take a little bit more time discussing this business than I normally would. Tom will also go into more detail in a few minutes. AN Finance had an outstanding 2024, growing its originations by three times over 2023 and building a portfolio that now stands north of $1.1 billion. Notwithstanding the significant growth, which came solely from originations from our retail stores, AutoNation Finance only had a 12% penetration of our franchise store finance volume and approximately a 30% penetration of our AN USA finance volume, so there is plenty of headroom for further growth. But as you know, it's not just about origination and volume growth. The quality of the portfolio is critical, and in this area, our performance is encouraging. Throughout the year, we meaningfully improved the average credit rating and quality of our portfolio, significantly de-risking the business. As a result of disciplined origination growth, highly focused portfolio servicing, a planned, well-executed sale of the majority of the legacy subprime book, which was inherited when we acquired the business, our year-end delinquencies are less than 3%. Now, AN Finance continues to gain scale. We were able to reduce our operating expenses from 2023 to 2024 while driving a 40% increase in interest income. This is helping us to rapidly march towards profitability in AN Finance, which we expect to achieve on a run rate basis by the end of 2025. Now, on previous calls, you've heard Tom referring to impacts on our CFS profitability because of AN Finance growth. When CFS finances a deal with a third-party lender, the lender typically provides an upfront payment or a reserve fee. When AN Finance pays a similar upfront incentive to AutoNation at the onset of each deal, but that incentive is eliminated for accounting purposes as the transaction is all within AutoNation. We have confidence, however, that the incremental net interest income over the life of each loan far outweighs this foregone fee. One final point: the relative capital required for this portfolio continues to decline. The portfolio is currently funded 75% by non-recourse financing, which rate we expect to continue increasing. As a result, we expect that the return on equity will become highly accretive to AutoNation's ROE as the portfolio matures. Now, moving on from AN Finance, we also took important action with our invested capital, selling off eight stores that did not fit into our model and were delivering substandard returns. We sold these businesses at extremely attractive valuations. We were then able to deploy this capital into further share repurchases, which I will touch on later. Lastly, we were once again recognized by Fortune as one of the world's most admired companies, with the highest ranking amongst automotive retailers. This marks the fifth year in a row that AutoNation has been America's most admired automotive retailer, a strong testament to our unrelenting focus on our customers, associates, and the communities we live in and serve. And again, I'd like to thank the AutoNation team and congratulate them for that achievement. All of the guys and girls that are listening to this, thank you so much. Turning to our fourth quarter overview on slide four, last quarter, I mentioned some trends that we found encouraging, including the reduction in interest rates helping to improve affordability and lift demand for both new and used vehicles. Actions we were seeing from a number of our OEM partners to balance demand and production, either through initiatives to make vehicles more affordable or adjusting inventory levels by moderating production, and these were well received. Both trends played out and contributed to our fourth quarter results. Fourth quarter new vehicle sales were strong. As I mentioned, we grew unit sales by 12% on a same-store basis, and like the third quarter, gained share in our markets. Sales for the quarter were particularly strong for hybrid vehicles and battery electric vehicles, and Tom's going to take you through that in greater detail. Domestic segment new vehicle unit sales increased 17%, import segment sales increased 5%, and our premium luxury segment achieved beyond its typically strong seasonal performance, growing unit sales by 12% from a year ago, with particularly strong performance in some of the upper-end vehicle trends. Premium luxury was a key driver in our overall new vehicle unit profitability, which improved on a sequential basis from Q3 for the first time since the fourth quarter of 2021. Our used vehicle gross profit increased 14% from the fourth quarter a year ago as our actions to manage inventory and vehicle turn rates resulted in higher unit profitability, and we delivered unit sales with performance in line with the overall used retail industry. For CFS, we retained our leading position in the industry as unit profitability increased both year-over-year and sequentially. More than 70% of our CFS income comes from product attachment. For the fourth quarter, we attached more than two products per contract on average, a nice improvement from the preceding two quarters, which were adversely impacted by the CDK outage. I've already covered my thoughts on AN Finance, which is now exclusively focused on our AutoNation franchise and AN USA customers. Our after-sales teams continue to deliver strong growth, with same-store gross profit up more than 5% from a year ago, and achieved AutoNation's total store records for gross profit for both the fourth quarter and the full year. Total store results included fourth quarter margin expansion of 110 basis points from a year ago and 70 basis points expansion for the full year. Now, looking back to 2019, we've grown after-sales annual gross profit by nearly $600 million and expanded margin by nearly 250 basis points. This more recurring revenue portion of our business is a key part of our customer retention efforts. We remain focused on the development and retention of our technicians and continue to actively hire. Finally, as you saw in our press release, we repurchased approximately $100 million of shares during the fourth quarter and the average price of $166 per share, bringing our full-year share repurchases to $460 million or nearly 2.9 million shares. This represented a 7% reduction in shares during the year. The $460 million returned to our shareholders during 2024 represented 58% of our capital deployment, and this compared to 56% in 2023. So with that now, Tom, I'm going to turn the call over to you to take us through the results in more detail. Thanks, Mike. I'm turning to slide five to discuss our fourth quarter P&L. Our total revenue for the quarter was $7.2 billion, an increase of 7% from a year ago. That's 8% on a same-store basis. This was driven by a 12% increase in new vehicle revenue. That's 13% same-store as we increased new unit volumes across all three segments, as Mike mentioned. Gross profit of $1.24 billion increased by 5% on a sequential basis and 3% from a year ago on a same-store basis. The year-over-year growth was driven by used vehicles, which was up 14%, CFS, which was up 6%, and after-sales, which was up 5%, all on a same-store basis. The gross profit margin of 17.2% of revenue was down slightly from a year ago, reflecting the moderation in new vehicle unit profitability, partially offset by improvements in after-sales, which was up 110 basis points, and used vehicles retailed, which was up 40 basis points. Adjusted SG&A was 66.3% of gross profit, down more than 100 basis points from the third quarter. Adjusted operating income increased sequentially to just over 5% of revenue. Now, below the operating line, our fourth quarter results were impacted by higher interest expense from floor plan debt, which is a reflection of recovering new vehicle inventory levels. The fourth quarter floor plan interest expense of $55 million was up $9 million from a year ago, but down from the $61 million in the third quarter of 2024, reflecting lower short-term funding rates and inventory levels. Now, as a reminder, we reflect floor plan assistance received from OEMs in gross margins. This assistance totaled $35 million, which was up $2 million from a year ago. So net of these OEM incentives, net new vehicle floor plan expense totaled $18 million, which was up nearly $9 million from a year ago. Going forward, we'll continue to focus on maintaining optimal levels of new and used inventory to balance the opportunity to drive future sales growth with a desire to keep net financing costs in check. All in, this resulted in an adjusted net income of $199 million as compared to $216 million a year ago. As Mike mentioned, total shares repurchased over the 12 months decreased our weighted average shares outstanding by 7% to $40.1 million shares in the fourth quarter. This was a benefit for our adjusted EPS, which was $4.97 for the quarter, $0.05 below the fourth quarter of 2023. Let me go deeper on some of these results. Slide six provides some more color for new vehicle performance. New vehicle unit volumes were a strong point for the quarter, increasing more than 10% from a year ago on a total store basis and nearly 12% on a same-store basis. Total store unit sales were up across our three segments, with import units up 5%, premium luxury up 12%, and domestic up 17%, with results reflecting stronger supply, better incentives, and good performance by our commercial teams. By powertrain, hybrid vehicles unit sales were up approximately 50% from the fourth quarter of a year ago and represented nearly 20% of our unit sales and 10% of our ending inventory. Battery electric vehicle sales were up more than 25% from a year ago and represented about 8% of our sales for the quarter and 8% of ending inventory. OEM actions with incentives and uncertainty regarding the longevity of government incentives for BEVs likely contributed to stronger BEV sales from traditional OEMs during the quarter. Internal combustion engine unit sales were up about 3% in the quarter. Our new vehicle unit profitability averaged $2,969 for the quarter, up $165 from the third quarter, led by the performance of our premium luxury vehicles and marked the first sequential increase since the fourth quarter of 2021, as Mike noted earlier. On average, new vehicle unit revenue increased 2% from a year ago, while our cost per vehicle retailed increased 3%, resulting in a year-over-year moderation in our new vehicle unit profitability. On the balance sheet, our 39-day supply of new vehicle inventory at year-end was down 25%, or 13 days from the third quarter. The new vehicle inventory ended the year below 43,000 units, which was up from 35,000 units a year ago, but down from the 46,000 units at the end of September. The strong new vehicle sales contributed in part to these reductions, but also our operating teams have been more selective in the OEM allocation process. Looking ahead in the first quarter, we expect normal seasonal shift back to import vehicles, which have lower selling prices and gross profit per vehicle than the premium luxury brands. Turning to slide seven, our used unit sales were flat year-over-year, tracking in line with the overall market. Sequentially, we were down 2% from the third quarter, while the market was down 11% on the same basis. Supply availability has continued to be a challenge, particularly for the mid and higher-priced years, consistent with the past few quarters, driven by lower new vehicle production during COVID. We continue to source more than 90% of our vehicles internally, with our We'll Buy Your Car program helping to offset the headwinds we are experiencing in supply from lower lease returns. Used vehicle inventory levels were approximately 34,000 units at year-end, up from 32,000 units at the end of September. This represents 37-day sales, roughly the same as at the end of September. Used vehicle sales and profitability continue to be a big area of focus for us as we emphasize effective sourcing, pricing, and speed while optimizing customer satisfaction. Looking ahead, we expect a normal seasonal swing to used vehicles for the spring selling season to occur and that used vehicle unit sales will perform accordingly. In November, we opened our 24th AN USA store in Chandler, Arizona. This was the fifth store opened during 2024, in addition to one in Las Vegas and three in North Florida, with all the store additions adding density to our existing markets, and in January, we opened two additional AN USA stores in Texas. I'm now on slide eight, customer financial services. On the last call, we described the momentum our CFS operations had in August and September. That performance continued during the fourth quarter. Our product attachment rate was strong, ended up being above two products per vehicle. Also, our finance penetration for the fourth quarter increased more than 200 basis points for new vehicles and 70 basis points from used vehicles from the period a year ago. Our CFS PVR of $2,686 was up about $100 sequentially from the third quarter, and it also increased from the fourth quarter last year. We continue to grow our AN Finance business, which provides superior long-term value but creates a short-term CFS PVR headwind, as Mike explained earlier. The year-over impact from this headwind was approximately $120 per unit in the fourth quarter. Now, slide nine is a new one for us. You will see in our Form 10-K, which we expect to file on Friday, that we've enhanced the disclosures for AN Finance, given its growth and its status as a separate reportable segment in the company. AN Finance originated $1.1 billion of loans during 2024, including $360 million in the fourth quarter. The quality of the portfolio also continues to improve. Our credit and performance metrics are improving, with average FICO scores on originations of 678 for the year compared to 623 in 2023. This includes FICO scores in the fourth quarter of 684 compared to the sub-650 in the fourth quarter of 2023. The loss rate of 2.6% is solid, reflecting our proprietary underwriting standards and fourth quarter sale of the substantive remainder of the legacy subprime portfolio inherited with the CIG acquisition. This sale resulted in a $7.4 million pre-tax gain during the quarter. From a funding perspective, 75% of our portfolio balance is funded with non-recourse debt as of year-end. This is up from 57% a year ago and obviously frees up capital for us to deploy elsewhere. We're getting great support from our warehouse lenders, and as we begin to establish a regular ABS funding cadence, we expect the 75% funding level to continue increasing. We anticipate our inaugural ABS offering in the second quarter. As we continue to grow the AN Finance portfolio, the accounting impact from the upfront life of loan credit provisioning, which is a non-cash item, will be a continued headwind to the P&L of AN Finance, but this will begin to balance out as the portfolio reaches scale. It's our expectation that AN Finance becomes profitable by the end of 2025. Moving to slide 10, after-sales, representing nearly one-half of our gross profits, continued its revenue and margin momentum. Same-store gross profit increased by more than 5% from a year ago, led by warranty and customer pay. Growth was driven equally by volume, mix, and pricing. Mike mentioned that our after-sales gross profit margin has increased nearly 250 basis points since 2019. For the fourth quarter, our margin rate was 48.4%, up 110 basis points from a year ago, reflecting improved parts and labor rates, higher tech efficiency, leverage, and higher value repair orders. We continue to develop and promote our technician workforce, which has led year-to-date increases in our master and certified technician headcount, and our overall technician headcount increased nearly 2% on a same-store basis. So looking ahead, we expect after-sales business will grow roughly mid-single digits each year. On slide 11, we continue to generate a consistent and attractive conversion of income into cash. Adjusted free cash flow for 2024 was $750 million compared to $969 million a year ago. While the quantum of free cash flow normalized in line with new vehicle unit profitability, the efficiency of our cash generation, as measured by the conversion of net income into free cash flow, improved to 105% from 94% in 2023, which is in part attributable to our focus on measuring and reducing our transactional cycle times, particularly in customer deal building and financing, as well as in optimizing inventory levels. We are focused on sustaining this operational performance, as well as on the prudent allocation of capital to CapEx. Let me wrap up with a capital allocation slide 12 before I turn it back over to Mike. We consider capital allocation in two categories. One, reinvesting in the business in the form of CapEx or M&A, or two, returning capital to our shareholders via share repurchase. CapEx is mostly maintenance-related compulsory spending, totaled $329 million for 2024 and was 20% lower than 2023. Spending is expected to settle in this range. We continue to actively explore M&A opportunities, many on the franchise store side. We are competitive buyers and are confident in achieving year-three returns greater than our weighted average cost of capital for core franchise acquisition opportunities. This hurdle rate is a bit higher for non-franchise. It's difficult to predict the timing of M&A opportunities, as you know. During the second half of 2024, the landscape was improving, and we are starting to see a more regular flow of potential opportunities. Share repurchases have been and will continue to be an important part of our playbook. During the fourth quarter, we purchased more than $100 million worth of shares at an average price of $166 per share. This brought our full-year share repurchases to $460 million, nearly 2.9 million shares above or about 7% of our shares outstanding at the start of the year. In our capital allocation decisioning, we also continually consider our investment-grade balance sheet and associated leverage levels. At quarter-end, our leverage was 2.45 times EBITDA, which modestly improved from Q3 and was in line with our 2 to 3 times EBITDA long-term target. During the year, we reduced our non-vehicle debt by $268 million and received more than $150 million in store sale proceeds. Now, let me turn the call back to Mike before we address your questions. Yeah, thanks, Tom. Just before I go now to questions, I want to talk to you a little bit about some of the thoughts for 2025. Obviously, there are multiple unknowns regarding the economy and geopolitical factors, and obviously, depending on how they play out, they may have an impact on our business. However, when I think about new vehicles, I believe there is a pent-up demand still, and as a result, I think if the economic environment continues on its recent trend, we're going to see moderate unit growth from 2024, more so in the first half, less so in the second half. But I think I anticipate moderation in unit profitability to support that growth. During such circumstances, I have optimism that gross profit per unit, however, will eventually stabilize above historical levels. I think our efforts to manage used vehicle costs, pricing, and inventory levels will result in continued stabilization in unit profitability in what I think will be a stable used car market, and we expect our CFS volumes and unit profitability to remain resilient and we continue to offer valuable products to customers to aid in their overall cost of vehicle ownership, and as part of our CFS performance, we'll continue to grow our AN Finance business. I previously mentioned the penetration opportunities and the associated benefits from scale that we should expect to progressively unlock throughout the year. For after-sales, obviously, it's a big focus for us, and we're going to remain very focused on that, particularly around technician recruitment, retention, and development of our technicians. And this, as you know, remains a highly competitive market with limited labor resource, and I don't expect that to change at all as we get deeper into this year. Our efforts to drive a strong cash conversion of our profits to cash will continue, as Tom mentioned, and 100% conversion on our adjusted net income, I think, is a good starting point. In summary, I think with the strength and diversification of our business, AutoNation has proven its ability to deliver strong results, profits, and cash flow during a broad range of economic backdrops, which is our expectation for the coming year. Our capital allocation activities are most focused on opportunities that drive the highest returns for our shareholders on invested capital, and that will not change. And now, with that, I'm going to open the lines to your questions. Harry, if you could please remind participants how to get in queue for the question and answer, please. Yes, of course. To ask a question, please dial star followed by one on your telephone keypad now. If you change your mind and would like to exit the queue, please dial star followed by two. And finally, when preparing to ask your question, please ensure that your phone is unmuted locally. And our first question will be from the line of John Murphy with Bank of America. Please go ahead. Your line is open. All right. Good right. Good morning, guys. Mike, I just wanted to ask a first question, and this is, for lack of a better term, sort of the Trump bump we've seen post-election. It seems like there's kind of a benefit on the lux side as consumer sentiment, or at least, whether it be measured or not, improved dramatically, but also EVs and hybrids for fear of the cancellation of the $7,500 IRA incentive. So it seems like it's kind of helped in both directions. I'm just curious if you're seeing that extend into early 2025, and also, are the automakers realistic about what happened or what's happening with EVs here and they're not stuffing more back into the channel and everybody's using this as an opportunity to maybe clear the decks and get those inventories in balance? So will the Trump bump be extended and what's happened on the EV side? Yeah, thanks, John. Good morning to you. Let's focus on new vehicle sales. If I think about the pattern on new vehicle sales, the industry obviously was running something around 16 million pre-election, and then you saw progressive improvements in the overall industry with what I think is a very strong exit rate. That ultimately is just two things. I think, firstly, the uncertainty of the election and the confidence in terms of the target for the economic environment obviously helped people, I think, make the decision to purchase. Then secondly, as I've mentioned before, we are seeing improved affordability on a monthly payment basis, I think, for consumers. The question is, will that industry level continue? To use a different term, what's the underlying run rate rather than is it a bump? I think we already saw in January where, from memory, the retail SAAR was something north of 13.3, 13.4, something like that, which was significantly above prior year. I think that that has the opportunity to continue through Q1, less so in Q2 on a year-over-year comp, and then you'll see a flattening as we get into Q3 and into Q4. So I'm optimistic on, as I said, the year-over-year comps in Q1, and I think the industry is in good shape. What was the second question, John? Sorry. Just, I mean, you've also gotten a bump on EV sales. I mean, is everybody kind of buying into this and thinking this is the new world order, or are they using this as an opportunity to hopefully clear the decks on some of that inventory and not restock? I think the OEMs are taking an incredible—I think the OEMs are all over this topic, frankly. They must have had multiple, multiple meetings in terms of their product capacity and what they're going to do to balance because I think everybody's clear that the next four years are going to be different to their anticipation should a different outlook happen. And they are already, I think, pivoting in terms of their products, in terms of their powertrains, in terms of how they think the market will play out. So yes, there was an element of clearing the decks and urgency around Q4 in BEVs and hybrids. But remember, we had seen BEVs kind of settle in at 6%-8% of the marketplace. Hybrids had a very strong year last year as people recognized the benefits of both combustion and battery power. But there was, and I look at this in a positive fashion, there was a degree of clearing the decks, particularly with inventory. And we ended the year, I think, in a really good balance with what I think is going to be probably an underlying, given our state and our distribution geographically, an underlying battery electric market. We're short on hybrids because the demand is significantly above. Unfortunately, the pipeline has been able to keep up with very high turn rates. So I think from a balance perspective, we ended the year in a better shape than I had anticipated mid-year. And that, I think, was driven by expectations that the environment's going to change in terms of subsidies and targets. And then just a second quick follow-up on the gross. I mean, you mentioned a fade, and it sounds like more on the new GPU side. But front-end gross is kind of how a dealer's traditionally, I think, worked in the dealership. As you look at that, I think it was $4,974 in the fourth quarter, $4,740, $800 first three quarters of the year. I mean, what is the opportunity that a salesperson or a GM has to work that front-end gross to maybe offset some of that pressure on new? And that pressure on new has really not been that great. But I mean, are there ways that through the used transaction and the F&I, they might be able to help offset that and stay closer to the high 4,000s as opposed to dipping down to where we were before? I think the reality of pricing in the marketplace is one of those areas that there's so much transparency. Your ability in terms of being able to influence that dramatically as a dealer is relatively small, and I think the way that I've talked about this before and the way that I think about this is that there are many elements that go into putting together a transaction with a customer that meets what they need. In 90% of the cases when I've been involved in it, it is around monthly payments to make sure that you give the customer what they are looking for, not just in their vehicle, but also in products to help manage their cost of ownership during that period of time, and our teams are focused on trying to come up with the best blend for that individual customer. You may expect me as the CEO of an automotive retail group to put it in that fashion, but genuinely, that is the best way, not just to sell a car, but also to keep customers happy. And if you look at some of the things that we've been able to do, that's how it is done. And at the end of the day, obviously, our team are focused on trying to maintain profitability of transactions, but they really do understand the value of continuing to grow our customer base and continuing to make sure our customers come back in our service and parts departments to look after their vehicles. So I don't think it's necessarily as controllable as your question suggests. I think they genuinely try and put together a package that meets what the customer's looking for, and then we can sell a car. Great. Thank you very much. Thanks, John. Our next question will be from the line of Rajat Gupta with J.P. Morgan. Please go ahead. Your line is open. Great. Thanks for taking the question. I had one question on AutoNation Finance. Based on your expectations for loan origination in 2025 and the fact that your equity funding is reducing, I mean, the combination of that, would you be able to size how much funding would you need for AN Finance this year? And I have a quick follow-up on parts and services. Thanks. So Rajat, you're talking about the absolute level of non-recourse financing for the portfolio? So that was. Yes. And just like the equity funding, how much of your own balance sheet would you be using to fund that? Right. Right. As we talked about, we went from roughly 60% non-recourse funding at the end of 2023 to around 75% in 2024. As that portfolio continues to mature, we work with just the warehouse lenders in increasing that funding percentage. We'll get some benefit there. I think the bigger benefit will come from on the ABS side. I think you can start with 90% and work your way up there depending on the way the rating agencies rate the portfolios, which, as we've tried to emphasize, we think are pretty strong. We think we'll get good funding rates. It just depends on the amount of—I mean, the quantum of the funding depends upon the growth in the portfolio. The originations have continued to be very strong. They improved month over month throughout 2024. That has continued into 2025. So at the current pace, we'll outpace originations from 2024, which will mean more funding on a quantum basis. But in terms of the coverage by non-recourse to that, that will continue to grow from 75%. I can't give you an exact number because the size of the ABS transaction will be meaningful. And the outcome on the advanced funding on that will be determinant in terms of what our overall funding is. But I'm starting with a 90% kind of assumption on what we do on the ABS side. Understood. That's helpful, color. And then just on parts and services, you mentioned, I think, in the prepared remarks that you expect a single-digit growth in the medium term. Presumably, 2025 would be higher because you have some EV compares on CDK from 2Q and 3Q. Can you give us a little more color on what makes up the medium-term targets and maybe a little more granularity on 2025? And what kind of technician headcount addition are you baking in within that framework? Thanks. Yes. This is Mike. Obviously, I think we tried to be as transparent as possible regarding the impact of CDK both over Q2 and Q3. And I think Tom did a good job in terms of isolating that out. And obviously, our expectation is that that will not be a repeatable event this year. So you can just look back and look at some of the commentary we had in those quarters to see how it impacted our business in what area. In terms of the way that we think about after-sales opportunity going forward, I've talked a lot about our penetration in the vehicle parc that we have. It is still a great opportunity for us, and the teams are focused on breaking it out into addressable sub-segments, so zero to three years, obviously, being the most addressable for us is a huge focus, but certainly, three to seven years is an area where I think there's continued opportunity for us to grow, and if you look at a couple of things, our underlying productivity in our business is good. I think with training, and I think with the way that we approach loading our workshops, there's opportunity to grow that a little bit more. We certainly have a bay utilization where we can increase the productivity of our assets. That's not in question at all, and fundamentally, unlocking this will be two things. One will be encouraging customers to return back to a franchise environment, so that's all conquest business. That's not easy to do. We will not try and do that through price. What we will try and do is through added service and value, so price, for me, will not be a driver of that, but it will come with some impact on gross because the added service and value, to me, is important to encourage customers to come back, but to your point, the constraint, as I see it, will be technician count and technician numbers. We had moderate growth of technician in 2024. We in-housed all of our recruitment during 2024 with Lisa and her team, and I think they've done a really strong job, and thank you, Lisa, for that, but I think if she was on this call, she would tell you it's a big, big focus for her to drive up those recruitment numbers. I think from memory (and Derek, you need to circle back because I don't want to give wrong information) from memory, I think our total technician growth was somewhere in the order of 2% to 3%, something like that, for the year. When I look at that, I would say my expectation and what I want the teams to do is to try and grow that at a higher rate. It is going to be difficult. I mean, you all saw the national campaign from CarMax, I'm sure, in terms of their recruitment on technicians and national recruitment month and everything else. It is a limited resource out there in a competitive marketplace. And when you get those situations, obviously, that can come with some additional costs. So a long answer to a very, I think, straightforward question, which I apologize for. I'd like to see our tech. So I'll try and summarize. Big focus for us, three to seven years. Our penetration is in line with industry, which means that we're all average. And I think we want to be better than average there. To really unlock that is conquest business, bringing people back. That's not easy. But the constraint is in technician count. I think our productivity, we can squeeze some additional hours out of that. But we and the teams do a good job there. So big focus on recruitment. Last year, we ended at 2%. I'd like to end above that. And the CDK thing, I think we'll see the benefits of not having that, obviously, in Q2. Remember the big impact last month, the quarter, and roll into Q3. So hopefully, that answers your question. That's great, color. I appreciate it. Thank you and good luck. Our next question will be from the line of Douglas Dutton with Evercore ISI. Please go ahead. Your line is open. Yep. Hey, good morning, team. Congrats on the great print. My first question is just on SG&A. And it looks like it took a meaningful step down here versus what we saw in the earlier part of the year. Is there anything structural changing there where this might be lower into 2025, whether that's lower promotional dollars, advertising, something else? Thanks, Douglas. My answer. And by the way, congratulations on the addition to the family. Hope you're. Thank you very much. Yeah. I think when you look at the fourth quarter, very strong growth, profit-wise, when we talk about all the factors that contributed. So I think it was more of leveraging in the fourth quarter, very strong new unit vehicle sales and good performance on CFS and in some of the places in the portfolio that drove that growth up. It had the effect of a modest impact on the overall ratio. As we go forward to 2025, we do expect modest improvement in the ratio if we continue to drive growth and pay close attention to some of the cost drivers, the more meaningful cost drivers. But I think on balance, we'll make progress that's going to be notable, but I wouldn't say it's going to be radical in terms of its impact on any given quarter, but a slow, steady improvement in that ratio. Okay. Great. And then just another quick one for me on after-sales gross margins and the improvement there. 110 basis points driven by some of those input costs being lower according to the presentation, labor parts. Is this sort of strong pass-through of costs and the associated revenue going to be able to continue while keeping those repair tickets higher? At some point, is there a natural limit in what your customers are going to accept paying for these repair orders, and costs will normalize a bit lower in terms of the top line? I think you have to consider the mix of the growth in the quarter, for sure. A lot of good external-based revenue in the quarter between warranty and customer pay. Those can influence the margin rates. I think when we talked about the contributions to the gross profit improvement, it was a combination of that more favorable mix, but also the productivity points that we talked about, as well as higher value-type orders. Mix amongst customer pay and warranty is definitely favorable to internal-type work. Productivity, as well as some of the other initiatives as well, will enable us to keep growing that. But I wouldn't count on 110 basis points on a continual basis. I'm just going to add in there as well, if I may, Tom, just a couple of things. Obviously, when you talk about mix, I think we should point out that, obviously, wholesale parts had a tough year across the industry, particularly around collision shops and actual repair order volume, which has been widely reported. That business is lower margin. You saw the benefit of that come through in terms of margin. Obviously, I think collision will recover a little bit as you come into here, which will, again, change the mix as you get into 2025, deeper into the year. I think it is competitive. You asked the question about, is there a limit that customers compare? The fact of the matter is we don't try and push that limit. I think if you found out what that limit is, you've probably got your—you've probably got yourself a problem on your hands. I think what we do is we regularly look into the marketplace, both on franchise and non-franchise service providers, and understand the value we add as a franchise and a non-franchise service provider, and try and make sure that we're priced effectively in the marketplace for what we're trying to do. And as everything, at the end of the day, elasticity in service applies in the same way as it does on vehicle sales. So Christian and his team are very, very focused on that. And I talked at length about three to seven years. And that's obviously one of the three categories he's focused on. And part of that will make sure that we're competitive, clearly from a price point of view, but very, very competitive from a service point of view. And that's part of his aspirations for this year. So a combination of Tom and my answer hopefully gives you the detail you need. Yeah. Perfect. Congrats again, gents. And great quarter here. The next question will be from the line of Bret Jordan with Jefferies. Please go ahead. Your line is open. Hey, good morning, guys. When you talked about stabilization in used, good morning. Good morning. When you talk about stabilization in used, I guess looking back 10 years, the margin rates in used, obviously, you can approach double digits. Do you think we are forever less profitable on the margin rate in those units now, just given the competition for inventory and price transparency from online product search? Or is the stabilization in used also maybe some meaningful upside in those unit profits? No. I think that the way that used cars are transactions in the marketplace is always with reference to the actual retail price. And then all of the people that buy used cars invariably, with the exception of some specialists and some very niche products, step off of that price. And it has been a pricing model that whether you have come to market with a disruptive model or a more traditional model has remained and been pervasive. And I think because of that, when I think about used margin as a percentage basis, it's been moderated. And that's why I tend to talk about used margin on a dollar basis rather than a percentage basis. And I think that's what's going to continue because, as we've said in the past, and I think we've debated at length, wholesale and resale prices, there's a short time difference between the effect of changes in wholesale prices into retail, but they are in lockstep. You just need to take the time period into account. Okay. And then in your prior question, I think you mentioned you talked about collision being a challenging compare, but you expected some recovery. Are you seeing that yet? Is it seasonal recovery just as you lap what was a very mild winter last year? Or is there something more structural that might be improving the collision trend? So really, through the summer and as we closed out the year, what we were seeing was that the repair order as a percentage of collisions was dropping. And that was as more vehicles either the size of the impact or the value of the vehicle, more total losses, and therefore less work flowing into the shops in the industry. And that has continued. So that was really my reference with regard to that. But I think from my point of view, as you get through the winter months and you get into spring, you naturally see an improvement in terms of your collision business. And for us in particular, given the fact that we've got a big collision business, well over 50 collision centers around, our focus has got to be, regardless of what's happening, with regard to that ratio of repaired to crashed vehicles growing our share. So again, big focus on share regardless of the sector of the business. Okay. Great. Thank you. The next question today will be from the line of Jeff Lick with Stephens Inc. Please go ahead. Your line is open. Good morning, guys. Congrats on an impressive fourth quarter. I was wondering if you could just talk a little bit about capital allocation. It looks like AutoNation Finance won't be as onerous this year as needy. And just kind of wondering how you think about share repurchases versus M&A. Can that share repurchase level kind of is the $400 million-$500 million a steady state? And then I guess, Mike, the one thing I'd be curious about is what would it take for you guys to do a fairly sizable acquisition? The parameters upon which we, and Tom, you can obviously overlay, the parameters upon which we make that decision are identical. And that's what's the benefit to our, what's the biggest benefit to our shareholders? So what would make us do a very sizable acquisition is a lot of confidence that the return on invested capital from doing that and then the appreciation in the resulting appreciation in the per-share price outweighs the other uses of that capital very simply. And we've talked before that some of the pricing we've seen for M&A in the marketplace transfers all of the value to the seller and keeps the buyer with zero value. And while that pervades, then we'll find better uses for our capital. But that dynamic is changing to some extent. We think it will continue to change as we get into this year. And as opportunities come across our desk, we will compare them in exactly the same way as we do. And that's on the basis of the same way the shareholders are. And Tom, you can add to that. No, I think the - I mean, it all starts with strong free cash flow generation. We're confident we'll continue to deliver on that fund as long as the business is performing like we think they will. That will give us optionality. Obviously, we have CapEx obligations to fund. And I think we'll be on order of what we were in 2024 in terms of OEM requirements. And so putting that aside, that leaves you with ample capacity to deploy to M&A. The pipeline, as Mike alluded to earlier, is. It It hasn't opened. The gates aren't flooding open, but we are seeing some more levels of opportunities present themselves to us. And we pursue those with a full organization that's dedicated to that. And we're active in those pursuits. And as Mike said, we have plenty of opportunity as well on our returning capital shareholders to the extent we think we can drive a better return. So it's not just about M&A. It's also about our portfolio review. I mean, I talked about the fact that we divested of a number of stores where we thought the ownership of those stores was better elsewhere from our shareholder point of view. And the reality is that freed up significant invested capital that we were not getting the returns that we felt were required from those businesses. And they didn't fit into our model in terms of where automation adds great value, which is dense markets, good processes, a lot of optimization that we can bring. And therefore, we freed up that capital. So it isn't just about M&A and the free cash flow we generate, which, by the way, I agree with you, fundamentally starts the whole world turning. It's also about constantly reviewing how we've deployed capital in the business and what's the best use of it. And I think it's the combination of those things. And Tom, you and your team do a great job reviewing portfolio performance as well as, in conjunction with Gianluca Camplone, reviewing opportunities that come across the desk. And that's going to continue in 2025 and beyond. Awesome. That's helpful. Just a quick clarification follow-up on a previous questioner's call or question. When you had mentioned SG&A's% of gross improving, was that or were you indicating that the 66.6% you did in 2024, the objective is to be below that in 2025? Yeah. I mean, that's a good question, Jeff. I mean, you know the normal seasonality of SG&A from Q4 to Q1. I mean, we do see an increase in that ratio. But if I look at, I'd say first quarter, I'd say we'll be mid-67% kind of area. And then, obviously, the increase from the fourth quarter reflects the normal seasonal impacts. You have payroll taxes. You have long-term compensation. It has a profound impact on Q1. And then, as the year progresses, that's when you'll start to see the improvement that I talked about when you get to the first quarter things out of the way. Oh, yeah. Just to be clear, I thought the 66.6% was great. And if you could even hold that this year, that was great. That's why I was just a little taken. I wanted to make a little clarification on that. But great work on that front. You and I have the same view on it. I was interested in just watching Tom answer your question. Unfortunately, this is not a video call because you couldn't see me smiling as Tom danced around the question that you asked him. But I thought the result was good. I agree with you there's going to be pressure as a percentage in Q1 as we get there. But again, we are also making investments in our business to try and grow in other areas. And they will have an impact on our SG&A. And as those investments pan out and start producing results, they'll be beneficial. And if they don't pan out, they'll obviously stop the investment. So we run our business, as Tom said, to generate, I think, great cash flow for the business, but also gives us optionality not just in M&A and returning capital to our shareholders that we talked about. But there are other things that we are doing because AutoNation, over its entire history, has been an innovative company. And that we have to continue to make sure that we do innovate where it's appropriate for us. And that brings the SG&A burden in the early stages, as you know. Yeah. Awesome. I appreciate the opportunity to ask the question. That's the lockdown in Q1 in 2025. Thank you so much. Hey, Harry, I think we have time for one more. Great. We will take our next question, which is from the line of Colin Langan with Wells Fargo. Please go ahead. Your line is open. Oh, great. Thanks for taking my questions. You commented that you expect normalization of new GPU. Any color on how we should think about it? I feel like in the past, you've talked about 100, 150 decline a month. It sounds like the improvement here was mostly that the mix of luxury. Should we expect that moderation to continue at that pace into Q1? Or are we getting close to the floor? And when you talk about normalization, are you kind of talking about as a percent in history where you're getting fairly close now or dollars versus history of GPU? How are you kind of referring to that? Thanks. Good question. I think the way when we talk about normalization, when you just look at the last couple of years, if you look at 2023, we averaged about a 10% decline a quarter sequentially in PVRs. That definitely moderated in 2024 to the point where, as we said, it was positive in the fourth quarter. But it was probably half of the rate of decline that you had in 2023 in 2024. So that's the height and weight of the moderation. Going forward, Mike can share his thoughts on this as well, but it's definitely market-driven. We're going to be competitive in the market. And there's quite a bit of transparency when it comes to new vehicle selling prices. And so to be competitive, you need to reflect those realities. But of course, I mean, our opportunities are where the other 75% of our gross profit is, which is on financial services and on after-sales. And our focus is driving the installed base to be able to benefit from those profit streams. Nothing to add, Tom. Thank you. And I guess second question is just on tariffs. How do you see it? How do you see that risk from your perspective? Obviously, it's more of your customer. But any thoughts if there's tariffs on Mexico or Europe, how that might impact your volume and sort of mix potential? How are you framing that potential risk? I mean, there's obviously potential for tariffs to impact your volume, to impact your margin. I think that I mean, if I look back at 2018 and what happened during that period of time, what we saw was the tariff impact come through in wholesale prices and ultimately through into retail prices, but after a period of time, they began to be mitigated either through actions from the manufacturers in terms of their ability to drive cost efficiency elsewhere or just to maintain volumes in the marketplace. So the 2018 experience of tariffs was there was an impact in the marketplace from a price point of view, which did impact subsequently volume, but that was, I think from memory, maybe a year, two years lived. Difficult to call because I think we ran straight into COVID and everything changed, but you were already beginning to see the mitigation of wholesale prices and retail prices as those tariffs were absorbed in the system. Manufacturers were finding different ways of being able to mitigate those in some form or fashion to maintain some volume in the marketplace. I think if—and I'm not an expert in this area—but if I was looking at it, that's how I would be thinking it. I would be thinking about it. Got it. All right. Thanks for taking my questions. Yeah. Great. Thanks everyone for joining us on the call today. I look forward to speaking with you over the course of the quarter. Thank you, everyone. This concludes AutoNation's fourth quarter 2024 conference call. Thank you for your participation. You may now disconnect your lines.