Good morning and welcome to the Lithia & Driveway Fourth Quarter 2020 conference call. All lines have been placed on mute to prevent background noise. After the speaker's remarks, there will be a question-and-answer session. I would now like to turn the call over to Eric Pitt, Vice President of Investor Relations and Treasurer. Please begin. Thank you and welcome to the Lithia & Driveway Fourth Quarter 2020 earnings call. Presenting today are Bryan DeBoer, President and CEO, Chris Holzshu, Executive Vice President and COO, and Tina Miller, Senior Vice President and CFO. Today's discussions may include statements about future events, financial projections, and expectations about the company's products, markets, and growth. Such statements are forward-looking and subject to risks and uncertainties that could cause actual results to differ materially from the statements made. We disclose those risks and uncertainties we deem to be material in our filings with the Securities and Exchange Commission. We urge you to carefully consider these disclosures and not to place undue reliance on forward-looking statements. We undertake no duty to update any forward-looking statements which are made as of the date of this release. Our results discussed today include references to non-GAAP financial measures. Please refer to the text of today's press release for a full reconciliation to comparable GAAP measures. We have also posted an updated investor presentation on our website, lithiainvestorrelations.com, highlighting our fourth quarter results. With that, I would like to turn the call over to Bryan DeBoer, President and CEO. Thank you, Eric. Good morning and welcome, everyone. Earlier today, we reported the highest fourth quarter earnings in company history at $7.02 per share. Adjusted fourth quarter earnings were $5.46 per share, an increase of 85%, eclipsing last year's record $2.95 per share by a wide margin. Tina will provide details on the pro forma adjustments in a moment. Our full year adjusted EPS was $18.19, a 55% increase over last year's $11.76 per share. These record results were driven by an acceleration in our acquisition engine, including the purchase of nearly $1.8 billion in expected annualized revenues during the fourth quarter, underpinned by strong operational performance in our core business. We saw continued gross profit strength in new vehicles, revenue growth in used vehicles, normalizing of fixed operation sales, and leveraging of our cost structure. Combined, we grew revenue by 3.6% for the year in an industry that was down over 14% and continued to carry the momentum and focus into 2021. Now that our unique strategy and associated 50 & 50 Plan are well underway, we look forward to utilizing our strengths of execution to continue to establish Lithia & Driveway as the consumer channel of choice. I want to start by congratulating our LAD Partner Group, or LPG Winners, for their exceptional performance in 2020. Recognition as an LPG member is a highly coveted award and represents the pinnacle of our mission, Growth Powered by People. Though high performance resides throughout LAD, these stores demonstrate a relentless and elevated focus on culture, customer experiences, and continuous improvement to create impressive results. We aspire that all locations within our network rise to a partner level. Thank you to our entire team and well done in 2020. During the quarter, total revenue grew 21% and total gross profit increased 30%. New vehicle revenue increased 19% for the quarter and remains a key driver in sourcing high-quality, scarce used vehicles and the catalyst to growth in our higher margin fixed operation business lines. Total used vehicle revenues increased 24%, F&I increased 27%, and Service, Body, and Parts increased 16%. Total vehicle gross profit per unit for the quarter increased $4,371, a $667 increase over last year, driven largely by a 28% increase in new vehicle gross profit per unit. Gross profit levels began to normalize during the fourth quarter when compared sequentially to the third quarter of 2020, primarily due to more typical supply and demand levels for used vehicles. These elevated gross profit levels in new vehicles, coupled with higher performing new acquisitions, improvements in all business lines, and strategic cost-saving measures executed last year, led us to earning over $750 million in adjusted EBITDA for 2020. We are in an exciting time and in the early stages of executing on our five-year plan to expand our presence in the over $2 trillion market of automotive products and services. Our strategy, focusing on the most expansive addressable market of any retailer in the automotive space, is designed to address the full vehicle ownership life cycle, all levels of affordability, and ensures our considerable competitive advantages are maximized. We are now well underway towards our $50 billion in revenue and $50 EPS five-year plan that was designed three years ago and began on July 1, 2020. Building on our existing network and multi-year development in Driveway, we are excited to now provide the most comprehensive e-commerce home solution in the automotive retail space. Our multi-faceted and disciplined approach to investing to meet changing consumer needs leverages our owned inventory, personnel, and national network of locations to thoughtfully focus on gross margin in order to competitively and profitably modernize the industry. Beginning with our first proprietary technology released in Pittsburgh in May of 2019, Driveway empowered consumers to simply and transparently sell their vehicles through our application from home. This release included key functionality such as workflow management for our valets, consumer scheduling, and geofencing for logistics on a national level, and are now mature in the backbone of our recently released offerings. We expanded the Driveway application functionality with the launch of in-home service options in September of 2020 in Portland, Oregon, and established the first My Driveway consumer portal interface. This expansion of the Driveway experience allowed us to provide consumers with convenient in-home service solutions while further leveraging our physical network and decades of rich consumer data. Earlier in the fourth quarter of 2020, we launched the ability for consumers to shop for our 20,000 high-quality used vehicles available for delivery anywhere in the United States with assistance in checkout from our Driveway Care Center. Later that quarter, we achieved our most crucial milestone by providing consumers with a complete end-to-end digital shopping solution with consumer-driven, fully automated checkout. This advancement integrated immediate financing from 23 financial institutions and the option for in-home F&I subscription services to protect their vehicles through their entire ownership life cycle. With this functionality, consumers can choose to complete their entire life cycle of vehicle ownership from the comfort of their own home and never set foot in a traditional dealership again. Two weeks ago, Driveway also became the first e-commerce retailer in the country to offer negotiation-free new vehicles with free in-home delivery and seven-day money-back guarantee at a national level. Driveway's new vehicle solution, now with vehicle leasing and captive manufacturer financing, added another six lender APIs, now totaling 29 available to consumers with auto approvals in a matter of seconds. This lease and finance auto approval optionality was released two quarters ahead of our previously shared plans. Driveway now offers a selection of 57,000 new and used vehicles, the largest negotiation-free inventory selection of any retailer in the country. Our new vehicle inventory represents all major brands, and our selection of scarce used vehicles spans the entire spectrum from Certified used vehicles to 20-year-old Value Auto s. Although consumers today can purchase all vehicles accompanied with our brand guarantees and receive in-home delivery anywhere in the country, our marketing dollars are currently focused only in Portland and Pittsburgh markets. As we continue to perfect our execution in these two markets, demand from existing network and competitive positioning has allowed us to accelerate our further network rollout plans to key top 10 largest U.S. metropolitan areas. Driveway will now enter four of these markets by April and a minimum of 12 total major markets located in all six of our regions by the end of this year. Our data science continues to show us that although Driveway customers now have the option to purchase and finance their vehicles fully online, the complexity of their own financial ability and desires will usually require the assistance of a Driveway Care Center and network. Our financing virtual Centers of Excellence connect our existing finance specialists with our Driveway Care Centers. Behind the scenes, these 900 finance experts are using their relationships with over 150 lenders throughout the United States to quickly gain approval for consumers that are not auto-approved. In addition to leveraging our third-party financial partners, we have continued to expand Lithia & Driveway 's fintech arm. Driveway Finance Corporation, or DFC, is a fully integrated captive finance company that further strengthens our ability to auto-decision consumers by leveraging Driveway's powerful data science engines. DFC also utilizes the rich data history of our legacy Southern Cascade Finance Corp, which was started nearly a decade ago. For the last three months, DFC has originated an average of 1,000 loans per month across all channels. Longer term, we expect that Driveway's fintech platform will play a larger role in elevating the experience for our consumers and capture up to 20% of all vehicle sales transactions, further differentiating LAD in profitability. Driveway remains competitively positioned to be the leading provider of personal transportation solutions with 210 existing reconditioning and vehicle storage locations, over 500 nationally distributed inventory procurement specialists, and now 9,000 existing underutilized associates that currently perform in a negotiation-free environment. While Driveway is still in its infancy, we embark on 2021 with a clear pathway for Driveway to become the online buying, selling, and servicing brand of choice. Today, the team of 90 Driveway engineers have developed a suite of consumer solutions and functionality that provide the first complete end-to-end digital ownership experience spanning the full vehicle ownership life cycle. Our team continues an aggressive network rollout cadence and will be releasing improved functionality updates approximately every two weeks in 2021. Consumer convenience, cost advantages, and competitive pricing are achieved through having a physical network of locations closest to our customers. These elements are the foundation for how we designed our experiences and future network needs. Density of this network provides massive competitive advantages over any of our digital and used-only competitors. Building our network with new vehicle franchise positions Lithia & Driveway with other advantages such as upstream procurement for new and Certified vehicle trade-ins with more attractive valuations, distributed inventory and reconditioning network that eliminates logistics costs by being closest to the customer, and access to the industry's highest margin service, body, and parts businesses that brings 10 times the consumer life cycle touchpoints than vehicle sales-only retailers. These advantages are delivered through a network cost similar or lower than used-only retailers. Please reference slide 16 of our investor presentation to learn more about our network cost and utilization rate relative to our competition. The opportunities for rapid consolidation within our industry remain plentiful, and our pipeline remains full. During the quarter, we completed the acquisition of Latham Ford in Albany, New York, Keyes Automotive Group in California and Arizona, Sterling Motorcars in Washington, D.C., and the important Region 3 addition of Ramsey Subaru Mazda in Iowa. These strategic acquisitions in key geographic locations are anticipated to generate nearly $1.8 billion in annualized steady-state revenues. For the entire year, this brings our total network expansion to $3.5 billion, of which $3.3 billion occurred since launching our five-year plan seven months ago. With the addition of key franchise dealerships in the Mid-Atlantic, the Lithia & Driveway network now reaches 100% of the U.S. population within a 400-mile radius. This allows for efficient and competitively priced reconditioning delivery and pickup of vehicles across all business lines. Our nationwide network continues to grow in each of our six regions, and we continue to target a 100-mile reach to allow for convenient, affordable, and timely consumer servicing experiences during and after the purchase of their vehicles. With nearly $1.4 billion in available liquidity, we remain poised for further growth and acceleration of our network. We continue to seek acquisitions to improve our reach, more conveniently serve our customers, and grow our highest margin business lines. With the acquisition of more than $3.3 billion of revenue in the last six months, we are well ahead of our base case five-year plan that outlined acquiring $4 billion per year. We now have more than $3 billion of additional revenue under definitive purchase agreements that is expected to close in early 2021 and numerous others under LOI. Lastly, we have another $7-$10 billion of potential acquisitions that we believe are priced to meet our discipline return hurdles. As such, we expect our network expansion in 2021 to far exceed our record levels achieved last year. Coming off our highest annual earnings in company history and doubling our quarterly earnings again over the prior year, we remain humble, never quite satisfied, and acutely focused on our growth aspirations. History has shown that our complex and diversified high-growth business strategy is difficult, if not impossible, to replicate. Our growing network composed of our people, inventory, and physical locations, combined with our Driveway digital home solution, completes our unique omnichannel strategy. Our mission of Growth Powered by People and our values of Customer for Life, Improving Constantly, and Taking Personal Ownership, are the driving forces behind our ability to outperform and compete in any environment. This strategy and culture positions us to continue to lead our industry's transformation and progress towards our five-year plan of $50 billion in revenue and $50 of EPS. With that, I'd like to turn the call over to Chris. Thank you, Bryan. As we enter 2021, our Lithia operations team continues to build on the success of last year and find ways to exceed customer expectations, increase market share, and improve profitability. The demand from our consumers for both in-home and in-network solutions continues to grow and has shifted the mindset of our teams, which includes accelerating the adoption of Driveway throughout our network. Our store leaders are also challenging their teams to maximize performance by setting individual departmental goals to achieve their 2021 annual operating plans, or AOPs. These AOPs are a key foundation in defining the specific actions necessary to continue to drive the highest levels of performance throughout the network. Following is a discussion about our quarterly results and is on a same-store basis. For the three months ended December 31st, 2020, total same-store sales increased 3%, driven by a slight increase in new vehicle sales, a 9% increase in used vehicle sales, a 4% increase in F&I revenue, and a 3% decrease in Service, Body, and Parts revenues. The new vehicle business line increased slightly for the entire quarter and improved to an increase of 4% for the month of December. For the quarter, our average selling price increased 6%, and unit sales decreased 5%. Gross profit per unit increased to $3,023 compared to $2,263 last year, a $760 increase, or up 34%. Total new vehicle gross profit per unit, including F&I, was $4,814, an increase of $897 per unit, or 23%. At approximately $4,800 of gross profit per unit, new vehicles remain highly profitable with an 11% margin, similar selling costs per unit as used vehicles and inventory carrying costs that are subsidized by our manufacturer partners. For used vehicles, we saw a 9% increase in revenues for the quarter. Gross profit per unit for the quarter was $2,456, an increase of 16%, or $334 over last year. Total used vehicle gross profit per unit, including F&I, was $3,963, an increase of $467, or up 13%. Our used vehicle mix for the quarter was 20% Certified, 58% core, or vehicles 3 to 7 years old, and 22% Value Auto, or vehicles older than 8 years. As Bryan mentioned earlier, our strategy of selling deep into the used vehicle age spectrum and our ability to procure the right scarce vehicles remains the catalyst for future success and growth of Driveway Buy and Sell consumer offerings. New and used vehicle sales are supported by our experienced financing specialists that help match the complexity of a consumer's financial position with lending options at over 150 financial institutions. In the quarter, our finance and insurance business line continued to show substantial improvement, averaging $1,635 per unit compared to $1,520 the prior year, an increase of $115 per unit. New and used vehicle sales create incremental profit opportunities through the resale of trade-in vehicles, rate manufacturer incentives, F&I sales, and future parts and service work. We continue to monitor this through the growth of our total gross profit per unit, which was $4,398 this quarter, an increase of $683 per unit, or over 18% over last year. Although we experienced a significant increase over last year, we expect continued sequential moderation of gross margins as the supply and demand environment continues to normalize. New vehicle margins may remain elevated as our varying manufacturers idle their factories due to the recent microchip shortages and continued county and city COVID-19 business mandates in some states. As used vehicle supply returned to seasonal levels in the fourth quarter, margins have mostly normalized, and we do not expect any material gross profit elevation in 2021. Our stores remain focused on the highest margin business lines, Service, Body, and Parts, which decreased 3% for the quarter. This was driven by a 2% increase in customer pay work, offset by a 7% decrease in warranty, 10% decrease in wholesale parts, and a 13% decrease in body shop revenue. In December, these negative trends reversed course, and we saw single-digit increases in our service, body, and parts, which was driven by double-digit growth in our highest margin customer pay work. Our service, body, and parts business see over $5 million paying consumers and brand impressions annually, generating over 50% margins, which remains a huge competitive advantage for Lithia & Driveway. Same-store adjusted SG&A gross profit was 62.3% in the quarter, an improvement of 760 basis points over the prior year, driven largely by the gross profit expansion in our new vehicle segment. We expect to see the continued normalization of margins throughout the first half of 2021 and SG&A gross profit returning to 67% in the second half of the year. Our five-year plan continues to target SG&A gross in the low 60% range. As we continue to properly modernize the consumer experience, the opportunity to leverage our existing cost structure will continue as we maximize the utilization and integration of our existing locations and as our digital home solution, Driveway, adds additional incremental sales. The flexibility and synergies with SG&A provide significant earnings opportunities as our highest-performing stores consistently maintain an SG&A gross profit metric below these long-term levels. For the year, the live consumer funnel saw 31.5 million unique website visits and an increase of 7.4 million unique visits over the prior year. In addition, our four business lines generated more than 5.5 million paying consumer brand experiences for the year, and through our acquisitions, we added another 600,000 annual paying consumer brand experiences. As evident in recent months, we are ready now, more than ever, to accelerate our growth engine. We took measures over the past few years to strengthen our operational leadership team and now have 10 platform vice presidents that are experienced in acquisition integration and culture transformation, while being geographically positioned to support all six regions. Partnering with our home office team, these leaders are the backbone of our growth and can be relied upon to support multiple individual and group acquisitions at any time. We continue to source our pipeline of high-performing leaders through internal development and higher-performing acquisitions, which together provide a massive bench for the continued growth in front of us. Our leaders are all innovating and meeting consumers' increasing digital in-home expectations through incremental and pragmatic modernization and are prepared for the continued growth that will occur in 2021 and beyond. I would also like to congratulate our 2020 LAD Partner Group winners for an amazing year. While we saw incredible performance throughout the platform, these leaders embodied high performance and set a high bar for all our teams to exceed in 2021. Our team's ability to achieve high performance in any environment continues to be the foundation of our culture as we remain focused on profitably modernizing and consolidating the industry and reaching our 50 & 50 Plan. With that, I'd like to turn the call over to Tina. Thank you, Chris. As Bryan mentioned earlier, our fourth quarter unadjusted earnings per share was $7.02 compared to an adjusted earnings per share of $5.46. The difference was related to a $1.19 unrealized gain in our investment in Shift Technologies, which went public in the fourth quarter through a SPAC transaction, and a $0.41 gain from the sale of stores as we continued to optimize our network. These gains were offset by acquisition expenses of $0.04. For the quarter, we generated nearly $250 million of adjusted EBITDA and over $123 million of free cash flows, defined as adjusted EBITDA plus stock-based compensation less the following items paid in cash: interest, income taxes, dividends, and capital expenditures. As a result, we ended the quarter with $1.4 billion in cash, available credit, and unfloored new vehicle inventory. In addition, our unfinanced real estate could provide additional liquidity of approximately $471 million for a combined $1.8 billion of liquidity. As of December 31st, we had $3.9 billion outstanding in debt, of which $1.9 billion was floor plan, used vehicle, and service loaner financing. The remaining portion of our debt is primarily related to the financing of real estate associated with owning over 85% of our physical network. A unique aspect of debt in our industry is the financing of vehicle inventory with floor plan debt. This financing is integral to our operations and collateralized by these assets. The industry treats the associated interest expense as an operating expense in EBITDA and excludes this debt from the balance sheet leverage calculations. Unadjusted, our total debt to EBITDA is overstated at 5.1 times. Adjusted to treat these items as an operating expense, our net debt to adjusted EBITDA is 1.8 times. This means we could add over $900 million in additional debt, which equals acquiring $3.6 billion in annualized revenues at our 25% purchase price to revenue metric, while remaining within our targeted range. If our network growth and associated planned capital deployment would increase our leverage beyond three times for a sustained period, we would look to deleverage quickly through the equity capital markets. As a reminder, our disciplined approach is to maintain leverage between two and three times as we quickly progress toward another sizable competitive cost advantage of achieving an investment-grade credit rating. Our capital allocation priorities for deployment of our annual free cash flows generated remain unchanged. We target 65% investment in acquisitions, 25% internal investment, including capital expenditures, modernization, and diversification, and 10% in shareholder return in the form of dividends and share repurchases. Our plan to achieve $50 billion in revenues includes nearly doubling our physical network of stores through acquisitions, which are accretive on day one. As we execute this strategy, our capital deployment strategy will prioritize using our free cash flows, debt, and equity efficiently while maintaining leverage between two and three times. Earlier this morning, we announced a $0.31 per share dividend. Our adjusted tax rate was 26.9% in the quarter and 27.5% for the year. Our quarterly tax rate was positively affected by the profitability mix of our state due to acquisitions and a reduction in non-deductible expenses. With over $1.4 billion in available credit and unfloored inventory, unfinanced real estate that could add an additional $471 million in liquidity, and over $750 million in EBITDA produced annually, and an adjusted leverage ratio of approximately two times, we are well-positioned for accelerated growth. Assuming an average equity investment of approximately 25% of our revenues, our available liquidity and annual free cash flows could add up to over $7.5 billion in revenues or more than 50% growth. We have made strong progress in our pragmatic investment in modernizing the consumer experience through Driveway and building the teams needed to support our growth. With our robust balance sheet and a massive capital engine, we remain confident in our ability to achieve our five-year plan of $50 billion in revenue and $50 of earnings per share. This concludes our prepared remarks. We would now like to open the call to questions. Operator? Thank you. If you would like to ask a question, please press Star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press Star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your headset before pressing the Star keys. Our first question is from Rick Nelson with Stephens. Please proceed. Thanks. Good morning. Good morning, Rick. Thank you. Bryan, about the acquisition pace and pipeline. It sounds like you've got $3 billion lined up soon to close, the release, and the call today. It sounds like $7 billion in acquired revenue might be a more realistic expectation for 2021. If you could clarify that, that'd be helpful. Sure, Rick. This is Bryan. I think first and foremost, we did a fair amount of acquisitions in 2020 and actually had a record year in terms of growth in our network. But we expect 2021 to be much more robust than that. As you mentioned, we do have $3 billion under definitive contract. We completed the almost $2 billion that we had previously announced on our Q3 call and our offering calls. As well as on top of that, we have additional transactions that are now under LOI stage. And the $7-$10 billion bucket of revenue that's in negotiations or priced right is still sitting out there. So we do think that it's going to be a historic year once again. And I would remind everyone that Lithia's practices historically have been that we don't confirm or deny acquisitions until they're completed. So a little bit different than many people do, but we think it's usually best for our network and the people in our acquisition or partnerships to be able to stay focused on their customers during any transitions that occur. Great. I'm curious about the approval process on acquisitions, how that's going. Are there any major challenges that you're coming up against with the OEMs? Yeah. Great Great question, Rick. It's Bryan again. I think if you think about the track record of almost, what, two and a half decades now of being public and being acquisitive, we have had definitive agreements on 254 transactions over our history, and we've completed 251 of those. So somewhere around 99% success rate, which would give indications of our ability to gain manufacturer approval. But our experience in that arena and partnerships with our manufacturers are strong and really don't have major limitations during any of the next five years or 50 & 50 Plan, which gets us into about 3-3.5% new car market share. We're still only at probably 20%-30% capacity of what the restricted manufacturers that have national limitations would allow us to get to. So keep that in mind that that's not really an issue. But also remember that one of the major differentiators of Lithia's model has always been to buy value-based investments that underperform. And you can always refer to what we have on page 20, which shows the lift in new vehicle sales, which shows the lift from below average performance to above average performance in terms of owner loyalty and retention. And I think that bond with our manufacturer partners has always been viewed as Lithia & Driveway as being a high-performing company that they want to buy stores and add value to the experiences for their consumers. Great. Finally, if I could ask you about digital penetration, where that stood in the fourth quarter and with this rollout now into these major markets, where do you see that going in 2021? Sure, Rick. Bryan, once again, if we think about the fourth quarter rollout of our digital initiative or Driveway, which is an in-home e-commerce solution, really that didn't go live in an end-to-end solution until towards the end of the quarter. So there's no real material results in that sense. I will share with you that January was our first full month of having sell-and-shop functionality on Driveway in an end-to-end solution. And we did see almost 300 transactions in that first month. Now, I would also caveat that in that we are still hyper-early stages. I mean, I think it's important to remember that we're in the iterative state where not only our care centers are learning, but our engineers are learning and iterating each and every day. And we're adjusting and have already had two releases in 2021 that added functionality or modified workflows for the consumers or for our valets to be able to adjust things. So keep that in mind as we think about our actual results in those arenas. We are expecting in 2021 to have about 15,000 transactions in both Shop and Sell in the Driveway application. And we're well on our way to be able to establish that. Lastly, in terms of the market rollouts, some of you may recall that we were discussing being in six of the five or six of the top 10 markets by the end of 2021. We now will be in four of the top 10 markets by April. Okay? Hyper-important acceleration of the strategy that came from demand from the network. Okay? And also the ability to procure more used cars as well as sell those vehicles through either channel. Okay? And we will have 12 major markets now released by the end of 2021. And we think that may still be a slightly conservative number because a lot of what we're asking is just to be able to accelerate the level of valet services rather than having one or two in each store that we have today. We're asking to have a full, robust valet team because the marketing dollars, when we do those 12 major market rollouts, we have to beef up the valet services in those markets because marketing dollars do attract consumers more readily within that specific locality or within that region. And obviously, we'll have good density in every region, really, other than Region 3, which is the upper Midwest, and a little bit of light coverage still in the Southeast, which is Region 6 for us. Great. Thanks. And good luck. Thanks, Rick. Our next question is from Rajat Gupta with JPMorgan. Please proceed. Hi. Good morning, everyone. Thanks for taking my questions. Just had one clarification and a couple of follow-ups. On the SG&A growth, if I heard correctly, did you say it was expected to be around 67% for 2021? Did I hear that right? Yeah. Hey, Rajat. This is Chris. Yeah, that's exactly right. What we're seeing right now is really a tailwind from the incremental gross profits that we're seeing on new and used vehicles, given some of the supply constraints that carried through the quarter, and so when we anticipate and look forward into 2021, I think normalizing some of the gross profit margins that we expect to see, that's going to put some pressure on our variable cost structure, which then, in turn, means that we're going to see an increase in our SG&A to Gross, and so for us to outrun the increase in expenses that will come or increase the SG&A to Gross calculation, we'll have to see about a 5% lift in growth on a same-store basis just to keep parity at that 67%, and we're going to work hard to do that. Got it. This does not assume or take into account the $3 billion that you expect to close in early 2021, right? Or does that take? Is it inclusive of that? Rajat, this is Bryan. No, it doesn't include future acquisitions. That's just a base and the acquisitions that we did last year. Okay? And what we've been kind of saying is that that 67% is really our jump-off point for the remaining four and a half years of our five-year plan, where ultimately, in the five-year plan, we get to low 60 percentile SG&A. Okay? And that will come through each of the different channels performing at certain levels, ultimately with the core getting back to that mid-60 percentile range that it was in 2014 and 2015 before we began to accelerate acquisitions with lower performance. Now, on the new acquisitions, most of them are performing in the 65%-70% range, about three-quarters of them. So we are buying higher quality businesses than what we typically had or had been purchasing in the past. So keep that in mind where there's only a quarter that are really those value investments that start out in the high 80th percentile SG&A, and it takes us four or five years to get those really into the sub-70th percentile range. Got it. That's useful color. And then I had a question on just the used vehicle side of things. The overall volume growth decelerated here in the fourth quarter. You gave some numbers in December. Could you help just break that apart in terms of what the linearity was through the quarter for the used vehicle business? Were there any specific pockets which were more weak, like California or Oregon, that might have heard that number? And then anything you can give us on how 2021 has started for you would be useful. Thanks. Sure, Rajat. I think it's important to note that we always balance volume with margins and what supply chains we see in the future. So we do sit at a 65-day supply in used, which is about the same-day supply as we were last year. So our procurement externally for the e-commerce engines, as well as with our 500, what we would call the virtual Center of Excellence buyers of high-quality used cars, are doing their jobs to get cars in line. And it's really looking at the marketplace and deciding whether you're going to achieve a little bit higher same-stores rate or whether you're going to hold it in terms of margin. Our stores appear to still be choosing to hold margin because though we were up 9% in revenue on a same-store basis in used, as you noted, we were basically flat in unit volumes in a market that was down a little bit. We think it's still the right answer. We are getting that lift through our e-commerce strategies, and we'll continue to see that. Ultimately, we do balance those two initiatives. I will also say through the quarter, we did see a lapse for almost two weeks that started on about November 20th, okay, which is right before Black Friday and Cyber Monday, where the wind came out of our sales. It was primarily due to California and the Northeast going back into lockdowns. Okay? That did affect things. And we were fortunate that moving into the early parts of December, that we were able to carry the strength in the quarter to get back to those levels. And I will say that in January, we were up nice mid-single digits, high single digits in both new and used, which is a big comp relative to the fact that COVID really started in March of last year. So if we can start to lapse comps in January and February at those levels, we're going to see nice results moving into the rest of 2021, where the comps are quite nice for Q2 and Q3, where sales were off and service was off pretty substantially. Got it. That's helpful. Just one quick last one from me on the SG&A side. Just specifically on marketing, ex-acquisitions, would you be able to quantify the amount of dollars that we should expect in terms of just year-over-year or related to Driveway that you're looking to spend, also keeping in mind the fact that you're accelerating some of the market rollouts here? That's all from me. Thanks. I'm going to let Chris answer that. But I'd also note that if you think about our January volumes, we were coming off January and February that were up 22% year-over-year from the previous year in same-store. So to be able to lapse a 22% comp in this kind of market in January, we think is quite impressive and is right on target with what we were hoping while still having a lot of wind at our back in terms of the vaccinations coming out and stimulus packages. Chris, do you want to answer his specific question on that? Yeah. I mean, related to marketing, I just say that we're spending about $22 million a quarter on a same-store basis. And we picked up about 153 basis points in SG&A to Gross benefit. And as we said, as we start to see the competitive nature of our inventory come back, which is going to drive up pricing, especially on the digital side, we anticipate going up probably about 10% or so in our ad spend on a same-store basis through the rest of the year. So remember, that's in the Lithia channel as well. Okay? In terms of the Driveway channel, that's got its own budgetary standards that are specifically tied to the volume levels that we achieve in Driveway to fulfill our promise that we're going to make sure that every incremental sale in Driveway is incremental EPS. So keep that in mind as well as you dissect the strategy and your planning. Got it. So the 10% increase includes or does it exclude the Driveway spending or that takes that into account, the total same-store spend, right? And that will include Driveway? Rajat, that's same-store, so that would not include Driveway. Okay? That's just our existing-store base. So our budget for 2021 for Driveway is about $10 million. Okay? With the acceleration of the rollout, it does require us to be able to get the Driveway brand name out and to be able to really sell, Shop, Sell, and Service, and the holistic approach to in-home e-commerce, transparent, empowered buying solutions. Okay? But we believe that the volumes are going to be there in both Shop and Sell to be able to create enough additional incremental lift to be able to get there. But you know what? Just like always, we'll balance that and ensure that we're effectively doing that. Got it. Okay. Thanks so much. You bet, Rajat. Last question is from Nick Jones with Citigroup. Please proceed. Great. Thanks for the questions. I guess I'd like to drill in a little bit more on Driveway. I guess the marketing, is that largely brand advertising? Do you have more kind of lower-funnel targeting in mind? I guess can you help me understand how Driveway is going to get marketed to be incremental versus cannibalizing people who otherwise would have gone to the dealership? Nick, this is Bryan again. So it is a combination of holistic brand marketing as well as targeted by Shop, Sell, and Service, with the focus on Shop and Sell primarily, as the service componentry will be driven by F&I subscriptions, as well as the network converting to in-home fulfillment over the next two years. Okay? So when we think about those marketing budgets, it's specifically by those 12 markets, major metropolitan areas in the country where we will specifically be pushing SEO and SEM within those markets. Our web crawlers will be attached to those marketing dollars to ensure that our keyword searches are there, as well as our organic, which includes the My Driveway portal, will be driving those marketing dollars to make them as effective as we possibly can. Okay? It is about $1,300 a unit that we're assuming, which is the majority of our 57% SG&A costs within our Driveway strategy. So it is a lot of money. Okay? But we plan on having it be effective. And so far in the Portland and Pittsburgh markets, it's been hyper-effective, and we've been able to build brand traction. Lastly, I would say that by having those 12 major markets in all six of the regions, we should have a, I'll call it a semi-national presence, that at the end of 2021, our brand name should be out there to most of the population. Okay? Meaning that there will be awareness on the brand and the offerings, as well as the guarantees and the effectiveness of the Driveway solution. So we think that it's a good strategy. It's a way to ensure that it's incremental because Driveway isn't branded through the Lithia network. It's branded independently as an e-commerce solution. And I think if you're thinking about how do we ensure that there's lift, okay, and that it's not cannibalizing the other channel, I think you need to think about it this way. And I think everyone should always be thinking about that the winners in the used car space will be those that can procure the highest demand and the greatest number of used cars because used cars are not a factory. You don't build them. You procure them. Okay? And I think as long as our buy and sell functionality are creating additional inventory, then whatever channel it's sold through, it's incremental lift to LAD as a whole. Okay? And I think it's an important delineation to remember that the reason we're building our network with new vehicle stores is we get about a third of the product that we get is off of new car trade, which is the highest-demand vehicles and has a $1,100 cost advantage over the vehicles that we buy from auction. Okay? And it's ultimately because we procure these cars, and they come into the 214 locations, and they don't move. They get reconditioned there. And most of the time, about 70%-80% of the time, they're sold within a 100-mile radius of that location. Okay? Massive competitive advantage in terms of where reconditioning is located and where you have to pay an auction fee or logistics cost to move things back and forth from consumer or to auctions or to reconditioning centers. Great. Can I ask a follow-up then maybe just on the SEO component? So if most of the cars are kind of staying local, how do you kind of build an advantage in SEO versus maybe companies providing nationwide industry selection and then also kind of having an upper-funnel content strategy, which drives more organic traffic? So I guess maybe there's two parts kind of one. Is the SEO optimization in-house, or are you outsourcing that? Sure, Nick. No, everything is. How do you get leverage kind of nationwide if most of the cars are staying local? Because that seems like that would limit kind of the SEO capabilities. Nick, let me go back through some. So everything is done in-house. Okay? So remember that all of our engineering is done in-house. All our web crawlers are built in-house. We've done everything from scratch. Today, we have 90 engineers sitting in our Driveway Innovation Center up in Portland. Okay? So more importantly than that, we need to go back to what is inventory and what are consumers buying. Okay? If you think about the scarcity of a used vehicle, okay, and why I say that 80% of vehicles stay within a 100-mile reach, okay, it's for a reason that those vehicles are plentiful. Okay? And they may move further than that today because the world isn't that efficient or flat or transparent. So people could be looking for a transparent experience, and they don't have one in their local market. So they may buy what's called a lower-mid-demand scarcity car, okay, whereas our inventory is much scarcer. In fact, 78% of the Lithia & Driveway inventory today is over four years old. It's four years and older. Okay? It's much different than our used car e-commerce competitors that have a lot of one- to five-year-old vehicles. We believe that even in the one- to five-year-old bucket, those aren't scarce vehicles. So if a consumer can find those, they can find 50-100 of them within a 20-mile radius, why would they pay to ship a car? Because everyone is charging now logistics costs for some range. Okay? So when we thought about our logistics pricing, we basically said within 100 miles, it's free, okay, from the vehicle. And remember, our inventories are more distributed. Okay? And then we basically charge an extra $299 if it's within the region, which could be up to 400 or 500 miles, especially if it's in the Northwest Region, which is very broad and expansive. Okay? And then $1299 if it's in a non-adjacent region and $699 if it's in an adjacent region. We're basically pricing cars so in alignment with scarcity that if a car is so scarce that a consumer wants to pay for the logistics cost, then more power to them. But to allow consumers to buy cars that are competitively priced in their backyard and then subsidize the logistics cost isn't a viable long-term model. Are you following me? Remember also that our inventory is a national level, and we now have 100% coverage of the country, including Hawaii and Alaska, within 400 miles and in Regions 1 and 2, which are the western regions. We have 100-mile density in one and about 200-mile density in Region 2. Okay? And that's growing. So we should be at a point where most cars are available to most consumers. Our general thesis is this. We believe that 95% of the cars should never have to leave a region in the future, so long as our inventory and selection is around 25,000-50,000 cars. Okay? And today, we sit at around that in the whole country. So we need more density. We need more selection to make sure that we have the offerings to consumers that are closer to them, that this idea of national delivery of vehicles. There is no reason to deliver vehicles that are not scarce anywhere outside of a 100-mile region or, at the absolute worst, one of the six regions. Great. Thank you. Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group. Please proceed. Great. Thanks, guys, for taking our questions. Just wanted to dig in on Driveway a little bit more. I know a lot has been asked, and I know it's early on the new side as well, a few weeks here. But anything you can dissect out of that on kind of buying interest, conversion rates, etc., on new vehicles on Driveway versus used? Sure. I'd love to. Ryan, this is Bryan again. I think first and foremost, if you go back to the discussion that we just had with Nick about scarcity, new cars are the same everywhere. Okay? So let's remember that. Now, there are scarce products in every product line, whether it's a Toyota Tacoma or whether it's a Jeep Wrangler, now a Ford Bronco or other products. There is scarcity that occurs that can create a more disparate distribution of vehicles. Okay? But ultimately, new vehicles don't have that ability to have a lot of demand outside that reach. So it is going to be more about what we would call affordability. Okay? And that affordability, we believe, will be the catalyst for expanded reach in new vehicles. Okay? Our affordability is primarily driven off the fact that 85% or so of the consumers on new vehicles finance. Okay? Our ability to now have leasing, which you can go online today on Driveway, and you can perfect the lease, and it's all done automatically. Okay? And that's something that we are the first to have. Leasing affordability in most mainstream cars is about 60% the monthly cost of what purchasing is, because the residual value helps cut into that payment, because you're not responsible for a good portion, the residual value of the vehicle, so you have that advantage, which we believe that leasing is an instrumental part of affordability. Okay? And you will find that we will be pushing leasing over the coming quarters, as well as captive manufacturer financing, so new vehicles are sold and financed about 50% of the time by the captive manufacturer, primarily because of incentives or subvented interest rates. Okay? And those subvented interest rates, everyone has the same basic model. It's just how do you disperse those? There's another key delineation in new vehicles that's important to understand, and it'll be something that we cut into the one- to three-year-old vehicle sales of our competitors when we build momentum in this arena. And that's affordability as it applies to disequity. Okay? New vehicles have a massive advantage over the low-demand and mid-demand used vehicles that a lot of our competitors today are using as a benefit in e-commerce because they can absorb disequity and still finance a consumer because right now, consumers really can't buy outside of Driveway new cars. But remember, new cars have something that is unique to new cars. It's called manufacturer incentives. Manufacturer incentives are qualified cash down. Okay? It helps absorb disequity. So when our average rebate or incentive is $3,000-$5,000, that advantage combined with the $2,000-$3,000 that a consumer puts down can get you into a position where you can absorb $5,000-$8,000 in disequity. Okay? Today, a one- to three-year-old vehicle that's low-demand, you buy for $2,000-$3,000 back of book. Okay? And that's what you can absorb in disequity. Okay? So in terms of financeability, new cars have different dynamics where national scale isn't quite as important because the vehicles are very similar. Okay? In year five, just to keep things relevant, we're actually at a 3.5 to 1 used-to-new ratio. Okay? We're only expecting to sell about 65,000 vehicles new in year five and about 215,000 used vehicles. Okay? So keep that in mind, and that's partly to do with the discussion that we just have that there's only so many new cars that you can penetrate outside your own market. And turn and earn from each of our manufacturer partners is a little different to be able to maximize that. And we're assuming about 120%-130% of average in each of our network locations to be able to achieve that. Hopefully, that gives you enough color, Ryan, and we can take it offline if you had other questions. Sure. Yeah, that's helpful. And then just one follow-up for me. You talked quite a bit about financing, etc. You mentioned, I think, in your prepared remarks, you want to grow kind of your in-house captive financing fintech to 20% of your Driveway transactions. Did I catch that right? And then can you remind me what your percent of kind of captive financing is today of your brick-and-mortar? Sure. So that was 20% of our entire business stream. Okay? Now, our manufacturer partners, our captive finance companies with our manufacturers, are hyper-important to our relationship, and they give you the subvented rates, which are hyper-important in leasing and financing. So we don't plan on attacking that at all. It's really in the non-Certified used cars and the older vehicles where we believe that that prime customer or even that sub or deep prime customer is something that we could look at, which today, our focus is really prime and subprime. Okay? We have been in the deep prime and subprime business for over a decade in Southern Cascade Finance. And what we really did is build our decisioning models over the last two years to move into the prime business, which is a hyper-low-risk type of environment. So we think that it's approximately 10-15 incremental profit dollars as an entire company in Lithia. And if you look at some of our competitors, somewhere between 30%-45% of their profits are coming specifically from their captive finance company. Okay? And you can take the 1,100 units each of the last three months and divide that into our unit sales and get you what our penetration rates are today. But we think ultimately, it's more around 20% of our total volume that we can achieve to then realize about 10% profit lift in our overall profitability model. Great. Thanks, guys. Good luck. Thanks, Ryan. Our next question is from John Murphy with Bank of America. Please proceed. Good morning, everybody. I apologize. I got on a little bit late, so I apologize if this is a little bit duplicative. But I mean, when you're talking about $1.4 billion of liquidity. Good morning. Sorry. The $1.4 billion of liquidity, you've done guys' math. You say you're buying at 20% of revenue. Maybe it's a little bit higher than that. Maybe it's a little bit lower than that. That would equate to the $7 billion you're talking about in 2021. So it implies that you're probably going to do another capital raise. Is that the right way to think about it, that you might go out there and do another equity deal given where your stock is? It seems like it would make sense. Yeah. Great question, John. Let me just clarify. So the $1.4 billion, the $7 billion related to that are 20% purchase price to revenue. isn't a target for 2021. It's illustrating that at $1.4 billion, you could buy $7 billion. Now, we did also comment that we have $3 billion plus some additional transactions under contract and LOI. So you can get to that assumption, but we aren't targeting $7 billion in 2021, even though we believe that that's achievable because you do still bump up against leverage ratios. And I think that's what's going to determine really whether or not we have to go back to the market and ask and reissue equity or debt to be able to cover that. And we really target that 2 to 3 times leverage. And I think if you watch that, and we'll make sure to be able to let you know where we always stand on that so you can see that. But it would make sense that if you take the $3 billion that we've now announced that's under contract and a little bit more, you are starting to put to work the original $1.3 billion that we got. And we're probably at around two-thirds of deployment of that capital, which is great. I would also remind everyone that whatever our volume is in acquisitions or network growth, this is what Lithia Motors has done for 25 years, and it's what we're built to do. People in integration, in our mind, is a core competency of Lithia Motors, and it's much different than most companies out there. So whether we do $3 billion or whether we do $10 billion, to us, it's just a matter of accretion and the ability to control leverage below that three times. Yeah. I would also note that you're buying stuff that's got earnings. So, I mean, it helps the leverage when you're making the acquisition, but that's - you're right. It all kind of depends there. You nailed it. You nailed it. I mean, we don't do acquisitions that aren't accretive, typically out of the chute, and obviously, on the high-performing ones, we're really targeting 12-18 months to get them to seasoned level, whereas that other 25% that's our typical value investing does take 3-5 years, so keep that in mind as you're thinking about forecasting, and we'll try to give you good insights on that. Yeah, and sort of another sort of - I mean, maybe a left-field question. I mean, the $7 billion revenue number just happens to equate to roughly what Asbury did in 2020. If you're going after big acquisition years like this, it does kind of lead us to think that at some point, you might do some kind of big acquisition like that or even a large private group. I mean, is something in one-fell swoop like that possible? I'm just curious. I mean, I know you've mentioned free cash flow payments, and you have room there. Just trying to understand what the actual targets could be if there's one of these and two of these are just not going to get you there. Yeah. That's a great question, John. I think what we think about is the $7-$10 billion that I was disclosing in the question before is not including any publics. Okay? We do believe that the best way to combat the entire industry is that the public should roll up. Okay? And whether or not that can or can't happen, we will tell you this: it's not restricted from framework agreements. We believe that we have strong relationships and our national limitations in those three or four manufacturers that do have a ceiling established. It doesn't preclude us from buying any of the other public or joining forces. I do also like the fact that many of them appear to be replicating some of the strategies that we've been focused on over the last three years. And we're pleased to see that, because I believe that the new car retailers, if we can cut off the stream of used vehicles to the used car new entrants in the space, and all they can really get is auction cars or late-model cars, the margins that we can make in the over-three-year-old cars are massive. That the new car dealers could have a stronghold on the space for decades to come, even if electrification changes thing or connectivity or all the other things that are in the back of all of our minds over the coming quarters, years, and decades. Yeah. And given your multiple on your stock right now, which at least by our estimates is a little bit of a premium to others, I mean, stock-for-stock deal could be possible. Is that correct? That is correct. And I would say that we really respect the three people that we believe geographically fit nicely with the LAD network and would round out our network almost at full capacity fairly quickly, where we could be even more discerning in terms of our network growth beyond that. So to us, it's more of how the new car groups rally to ensure even further stability. Now, LAD is going to be able to do that on their own, but we think it's more constructive to have scale now because the one thing that we don't do in our 50 & 50 Plan is. That is a base case. Okay? It's not an aspirational case that would include something like you're talking about, which is really a best practices or really leveraging the fact that you would have 100-mile density within the network a lot sooner, where you could start constructively managing costs and national marketing budgets and those types of things at scale. That isn't even something that's built into that five-year plan. So really great thoughts, John, and I think it is something. And I really wish that our peers would feel the same way and would see the value in us joining forces. And I will say this: that Chris and our operational teams are ready for it if we can do that. And we could still do the hypothetical $10-$13 billion, which is under contract, under LOI, or in that $7-$10 billion of negotiation or price-right ideas. So we spent the last three years reorging, redesigning the organization to do everything. Okay? So we understand that. And when we're buying better deals, our risk of integration is even lower than the 80% success rate we've had on these underperforming acquisitions. That's incredibly helpful. And then just lastly, I mean, I know there's some questions about Driveway cannibalizing existing consumers and all that. But I'm just curious. I mean, as you look at this, you're kind of alluding that you can go out in distance with Driveway a bit further than you might have traditionally. You can go down in vehicle age, right? You can go deeper into a market. So there's a lot of ways that you can see that this is largely a lot of it could be very incremental. I'm just curious, as you think about that, if you could dimension those two factors, maybe thinking about where traditional dealership reaches and where you could go with Driveway and then how old you could go in the vehicle age spectrum. And maybe, I mean, I think when you talked about your used mix, you said 20% are CPOs. So those are newer vehicles. The mid-age vehicles were 58%, and then 8-plus-year-old vehicles were 22%. I mean, in that spectrum, maybe thinking about maybe you could talk about it in that context of that age spectrum of how deep you could go as well. So distance and age, maybe, if you can talk about that. Sure. I think when you think about comparing and contrasting distance to age, I believe the older a vehicle gets, the scarcer it gets. So in theory, the bigger reach that an older vehicle would have over a one- to three-year-old vehicle, which in theory should have no real reach because supply is there. So yes, I do believe that. It's our design thesis five years ago that was cemented three years ago was all built around the premise of how do we make sure that we get our Value Auto vehicles or the eight-year-old vehicles and the four- to seven-year-old vehicles, which is our core product. And just to compare and contrast, the thesis was that we will always be able to price compete in the one- to three-year-old vehicles so long as we have the higher margin vehicles on our lot. Okay? Which means that we can go head-to-head with the e-commerce retailers because that's what they're going to be able to get. That's what they know how to recondition. Reconditioning is difficult on older vehicles. You have to have the technology, the diagnostic tools, and the expertise in technicians. And we sit here with over 3,000 technicians in our network today that understand drivability and how to repair vehicles, not replace parts on vehicles. So just to run through some numbers for everyone that are hyper-crucial, our Value Auto parts are over eight years old of our current sales volume that is now deployed through the Driveway channel as well. Though I will give you that condition is more disparate the older car gets. Okay? Meaning that consumers may be more apt to take us up on our seven-day return policy, which is more power to them. We'd love for them to do that. But we also think that they understand that older cars are just going to come at a little lower condition. But today, we sell 20% of our cars are Value Auto. We sell 58% of our cars are four- to seven-year-old vehicles or core. So for a total of almost 80% of our vehicles are what we would call mid and high-demand scarcity vehicles. Okay? To keep this in mind, with F&I, our Value Auto vehicles build a 28% gross margin. 28%. Core is around 16% gross margin. And Certified or one- to three-year-old are only around 13%-14% gross margin. Okay? So if you're thinking about how do you support making sure we're always price competitive in the plentiful vehicles, which is one- to three-year-old vehicles, you do it through selling four- to twenty-year-old vehicles. Okay? So that is the dichotomy. I would still go back to the fact that the scarcer the vehicle is, whether it's new, whether it's Certified, or whether it's used, the further the reach and impact it would ultimately have to be able to go to market with consumers. That's incredibly helpful. Maybe if I could just think of one last one just on inventories in the short term here. I mean, obviously, we're hearing a lot of concern around chip shortages and production disruption as a result of that. What are you guys seeing as far as deliveries and stuff that's on the come or on the trucks on the way to you? I mean, where do you think this kind of lands? Where on the first quarter, you might be even shorter, and that could help grosses that you think are kind of normalizing right now. But it seems like we're going to hit another short-term shortage here that might be helpful on the gross side. Yeah. You bet, John. On new vehicles, we were sitting at 71-day supply at this time last year. We're sitting at 50-day supply. So it's almost two days, and that doesn't include in transit. Okay? So we don't think that their inventory is a massive problem on new. Okay? We do have shortages in certain manufacturers like General Motors and a few others that are having some microchip issues and may continue to have persistence of microchip issues. So we'll manage that and balance that with margins. Okay? Remember, we troughed on new vehicle day supply back in the July/August timeframe around low 40s. Okay? So it's built since then. But also, our delta on our turn rate is also at a low seasonal time of year. Keep that in mind. Okay? In terms of new vehicle or used vehicles, we're actually sitting at 65-day supply, which is the same it was last year. Okay? So we're pretty pleased with that, which kind of makes it a pretty good deal. And remember, we're talking about mid- to high single-digit growth in January in the first month of the quarter. And we sure hope that with the stimulus package and further vaccinations, that releases consumers to be able to create greater demand based off that somewhat lesser supply than last year on new vehicles, but really the same supply on used vehicles. And we're pretty confident that we can keep our used supply nice and strong throughout any environment because we do have those 500 experts out in the field and now a number of Driveway experts that are buying cars at scale and fleets and stuff as well. Great. Helpful. Thank you very much. Our next question is from Brett Jordan with Jefferies. Please proceed. Hey. Good morning, guys. Hi, Brett. In the third quarter call, you talked about reevaluating or maybe changing the process on pricing for the Driveway services. And I was wondering whether or not that is something that you've completed and whether sequentially from third quarter to fourth quarter, you saw real changes in Driveway service bookings in the markets you're in. Oh, great memory and great question, Brett. So actually, on the service side of things, we're seeing initial stages of very little attraction from the consumers in those products. So we didn't redevelop the pricing. It's still sitting at the same level where we have maintenance. We actually raised the pricing back up to where we were and saw very little degradation in volume, which we thought was good. Where really today, it's sitting at people that are willing to pay a premium are doing it and those that aren't really that enamored with it today. We do believe that the easiest way to build volume there, which will ultimately drive costs down of our valets, is to be able to sell the F&I subscription services in-home. Okay? Remember, that rollout is combined with the in-home Service, Body, and Parts offerings that will be done in the Lithia network as well as through the Driveway channel. That's a two-to-three-year rollout. Okay? So we believe that the major Driveway service business will come from F&I subscriptions initially to be able to get us the volume necessary to drive down our costs and ultimately have that full lifecycle serviceability to a consumer in their home. So it's still there and it's still working, but the revenue dollars that we can generate and incremental EPS dollars are really going to be found in shop and sale. Okay. Great. And the question that you talked about pushing leasing more aggressively in 2021, I think I used to ask this question years ago, but what is your lease penetration? And is returned lease vehicles an improving source of inventory for your used mix? I mean, I'd imagine residual assumptions three years ago didn't anticipate the spike in used vehicle values. And are you able to source cars by coming in on lease returns? Yeah. Brett, that's a good question. So we lease currently about 25% of our new cars. And we think that that can grow. And hopefully, we can mirror that on the Driveway side as well. And I think the affordability will ultimately drive that. In terms of vehicles coming on lease, it's important for everyone to remember that those vehicles come to dealers before they ever go to auction. Meaning that most manufacturers say, "If we don't have to ship the car to auction and pay auction fees, we're going to give it to you," which is part of that $1,100 cost advantage. Okay? So off-lease vehicles, we still have a $500-$600 cost advantage of what others end up buying them from fleet agencies or from auctions. So that pipeline is fine. I will also caveat the note that I don't believe that used car values are that inflated anymore. They were inflated in late summer, and they have began to normalize throughout the winter months as expected. So I think the supply of off-lease vehicles will be close to LEDs as we move into next year. Now, in certain manufacturers, we could see overhang effect on one- to three-year-old off-lease vehicles depending on what their supply on new is. Okay? So we'll see how that plays out. But this microchip thing looks like it's a Q2 solution. And into Q3, we should see more normalized inventory levels. Okay. And then one final quick logistics question. I guess you said you're now selling nationally through Driveway in the new side. You found no regional sort of pushback from franchise dealers with you selling from out of state on the new side of the business? Great question. So though our marketing dollars aren't at a national scale, they're really only Portland and Pittsburgh today. New cars are available for delivery in-home across our network, which is national, and is available. And we saw no pushback from our manufacturer partners because they ultimately are looking at it as it's really just a Cars.com or CarGurus or TrueCar, which is a lead provider. We ultimately still do delivery with the home, and we still do a walkthrough with the consumer with a manufacturer specialist that can explain the product to the consumer. Okay? So a little different that comes out of the Driveway Care Center in conjunction with the fulfillment in the stores. So you could sell a Mercedes in Florida out of a franchise in California and not get pushback from other Florida Mercedes dealers kind of thing? No. There's no restrictions of any brand other than Lexus. That Lexus does not allow you to market only to markets that are not contiguous to your own. Meaning that if I'm in LA, I can only market in LA basically. Right? One contiguous AOR of responsibility. Okay? That doesn't mean I can't sell a car into Florida. I can still sell a car. I just can't market it. Meaning that in Lexus, I won't be able to have national scale marketing most likely within that one brand. You use Mercedes as an example. That is the only other manufacturer that limits your ability through the turn and earn system. Meaning that if you sell a car outside your market and you don't cover your own backyard effectively at 90% of average, they won't replenish the car. Okay? Now, none of our Mercedes stores are below 90%, so we get full replenishment even if we sell it outside of market. Every single other manufacturer will replenish your car and has no restrictions in terms of where you market. Now, there are manufacturers that limit what you can sell a car for, and there's what's called marketing covenants that say that you can't market a car below cost. Okay? Or price dump. Okay? Which I think is really important to the health and well-being of our gross margins on the new car side. Okay. Great. Thank you. Thanks, Brett. Our next question is from Adam Jonas with Morgan Stanley. Please proceed. Okay. Bryan, will someone get this dude at Gatorade? This is a long call. You sound fresh. Oh my God. It's an hour. We apologize to everyone on the call. Oh, shoot. Crap. All right. I mean, it's very informative. I'm riveted. Listen, Bryan, just one, and then let's wrap this baby up, shall we? Sounds good, Adam. So Tesla, I think we agree, represents to a large degree where the industry's going, future of the industry. And they don't use franchises. And when I talk to them, they're like, "We're never going to do it. Ever." Then you talk about all these other up-and-comers. You get Lucid, Fisker, Faraday, Rivian, and a lot of others behind it, as you know. And again, maybe there's one, but why aren't we seeing any of these startups use the franchise model? They all say never. Not happening, bruh, kind of thing. What am I missing? Maybe I am missing something. You're like, "No, Adam. There's lots of startups, and we're talking to them." And if I'm wrong, he'll tell me. Sure, Adam. But if I'm not, why are they not? Why are they going B to C for now? Are they all fools? No, I don't think they're all fools. I believe that their whole thesis on Driveway is that there's a lack of transparency in the dealer network. So why would they get into a negotiated-type environment, which they shouldn't? Are you following me? And I will also say. I'm just pleasantly surprised. I'm not saying I shouldn't be surprised because you're admitting that. It's very refreshing to hear. Keep going. I mean, I will say this. I mean, our whole design around the entire strategy, which includes GreenCars.com, is the general thesis that our manufacturer partners are slow movers in terms of empowerment and transparency with our consumers. And I love it. And it's not just them. It's that the dealer councils in our country are the ones that believe that they make all their money through negotiations. Okay? And it's not. We make our money because Honda and Toyota and our other manufacturer partners make great cars. Okay? And I really believe that. Now, I will also tell you this. I believe that all of the future world isn't just about BEV. I believe it's about zero emission. And I believe if we all look at Massachusetts or California or General Motors, they're talking about zero emission less than BEV. And it's because of one thing. I believe affordability will drive change. Now, our government and regulatory agencies have also now established a very clear 14-year target for our manufacturer partners, which I believe is the best thing that could have happened to our manufacturer partners. Okay? It's probably the worst thing that could have happened to the BEV companies. Because now, if you think about how Tesla grew, they grew off of credits from the traditional manufacturers. Okay? It's the majority of what they got. It allowed us now to move to an electrified world at 3% market share in our country. That's wonderful. It's who we are as a company. I believe in that. I want that to continue. But I will also say that any of the new Rivian entrants or these others that you're talking about, they don't have the advantage to be able to protect shareholders' investments with credits that they're going to be buying from the traditional manufacturers that are selling today the other 97% of cars. Because as soon as those manufacturers come to market with BEVs or hybrids in the interim that are much more affordable, or now even hydrogen fuel cell vehicles, which is what most of the primary traditional manufacturers believe is the long-term solution, not BEVs. Because BEVs still require physics that is a heavier car than what you need. Now, you have to get infrastructure for hydrogen fuel and some other things. But 14 years is a long time to be able to solve for infrastructure, the individual cars, and the ideas of range anxiety, as well as the ideas of sustainability of the batteries post-sale that I think all have to be taken into consideration as to what does our world look like in 2035. And I hope we're saying this in 2025, not 2035. But I believe the traditional manufacturers have yet to show what their strengths are, but they've held back in terms of automation, connectivity, and most importantly, affordability of zero-emission cars that will come to market over the next two or three years and change the face of competition in this environment as consumer affordability ultimately drives everything. So just some other things that we all should think about as we think about our future in automotive retail. All right, Bryan. Thanks. You're an automotive retail renaissance man. Now, go get a drink of water or something. I'm out. I love it, Adam. Thanks, buddy. Appreciate it. Our final question is from David Whiston with Morningstar. Please proceed. Thanks. Good morning. First on inventory. On the new side, I mean, given what's going on, 50 days is a pretty good number to report. How are you able to keep getting replenished? How are you able to keep getting product? Are your OEMs delivering on promised allocation? Because that's been a problem for your industry in the past few months. I don't know where that comes from, but we've now powered through the entire pandemic where inventory is believed to be a problem to me. I believe that we're always looking for something that can go wrong on the new car side, and we forget that those are massive days' supply in any inventory in any other industry that usually can power through cycles. Okay? And we all have to remember, new cars still make 11% margins today. And pre-COVID, we're making 10% margins. Okay? On a very high-dollar vehicle, I'm not sure other than it feels like that because we're a negotiated industry, and it's what we're really trying to transform, is to move into a more transparent industry. There's just a belief that there's got to be something wrong. But the new car industry is a hyper-strong, hyper-profitable, economy-insensitive environment. I think whether it was 2008 and 2009 where we saw none of the major retailers ever get to losses, and now powering through a pandemic, and even in Q2 of last year through this, I believe that this is almost a prophecy that's coming from the external world rather than us as retailers. I don't believe that inventory levels are going to affect us. You're going to see the flexibility in the model, which you saw. Okay? And enhanced margins of almost $800 even in Q4 when we were over $1,000 in Q3. You're going to see that ability to adjust the model that if inventories are a little tight, then we're going to make more money on it, and more is going to go to the bottom line, which ultimately just stabilizes earnings. Okay? It's nice to see that even one of our peers yesterday had pretty nice earnings relative to things. There's this idea that 30, 40, 50-day supply, those are good levels of inventory in most industries. Just keep that relative, and we'll be able to share more with you in the coming quarters. Yeah. I agree. I'm really glad to see the publishers are not chasing volume and focusing on profitability despite the hit to volume. I think it'll work out in the long term. You talked about the loans you're originating. Are these staying on balance sheet long-term? No, we don't. We plan on being able to pull those off balance sheet later this year, early next year. But we're going to need $500 million in receivables and some history to be able to show them what the full spectrum of credit looks like before we go to the ABS market to do that. So we do have some data. We can share that with our offline call with you as well if you'd like to know what our portfolio looks like and stuff as well. Okay. And then last question. Given a lot being talked about both on your existing 50 & 50 Plan and the well above $3.5 billion acquired revenue, and then you want to step further talking about consolidating amongst the publics, I mean, really, it just makes me wonder. Maybe your 50/50 goal is actually conservative. I mean, is it crazy to be thinking you'd be north of $50 billion by mid-decade? So I will say that we don't want to ever lead our investors or analysts down a pathway that we don't believe has a high probability of success. It's why it took us three years to come to the public to share our plans with you, even though if you go back and look, in 2018, Q1, we began to share the plan when we had solidified it. And so that strategy on page 11 of the investor deck in the 50 & 50 Plan, we do call it a base case. I mean, we have our own aspirational case. That's what Chris, Tina, Eric, and I are focused on a daily basis, and we hope to be able to delight. But we don't also want to overpromise. We believe that our likelihood of success on the 50 & 50 Plan is fairly high outside macroeconomic issues that are really outside of our control. But even in that space, we think that we've solved for affordability. We think we've solved for changing consumer demand, and we think we've solved for so many other things like electrification or shared autonomous vehicles or those types of things. So maybe with that, David, do you have anything further? No, that's it. Thank you very much. Okay. Thanks, David. That concludes our question and answer session. I would like to turn the conference back over to management for closing remarks. Thank you, everyone, for joining us today. We hope everyone stays safe and healthy as we close out this pandemic and look forward to updating you on the first quarter in April on Lithia & Driveway results. Thanks, everyone. Thank you. This does conclude today's conference. You may disconnect your lines at this time and thank you for your participation.