Good afternoon and welcome to the Penske Automotive Group First Quarter 2024 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through May 7, 2024, on the company's website under the Investors tab at www.penskeautomotive.com. I will now introduce Tony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead. Thank you, Leah. Good afternoon, everyone, and thank you for joining us today. As you know, a press release detailing Penske Automotive Group's First Quarter 2024 financial results was issued this morning and is posted on our website, along with a presentation designed to assist you in understanding the company's results. As always, I'm available by email or phone for any follow-up questions you may have. Joining me for today's call are Roger Penske, our Chair and CEO; Shelley Hulgrave, our EVP and Chief Financial Officer; Rich Shearing, North American Operations; Randall Seymore, International Operations; and Tony Facione, our Vice President and Corporate Controller. Our discussion today may include forward-looking statements about our operations, earnings potential, outlook, acquisitions, future events, growth plans, liquidity, and assessment of business conditions. We may also discuss certain non-GAAP financial measures such as earnings before interest, taxes, depreciation and amortization, or EBITDA, and our leverage ratio. We have prominently presented the comparable GAAP measures and have reconciled the non-GAAP measures to the most directly comparable GAAP measures in this morning's press release and investor presentation, which are available on our website. Our future results may vary from our expectations because of risks and uncertainties outlined in today's press release under forward-looking statements. I also direct you to our SEC filings, including our Form 10-K and previously filed Form 10-Qs, for additional discussion and factors that could cause future events to differ materially from expectations. At this time, I'll turn the call over to Roger Penske. Thank you, Tony. Good afternoon, everyone, and thank you for joining us today. During the first quarter of 2024, PAG delivered 126,800 new and used vehicles and over 4,500 new and used commercial trucks. We increased revenue by nearly 2% to $7.4 billion. Our gross margin was 16.7%, which increased 40 basis points when compared to Q4 last year. We generated $295 million in income before taxes, $215 million in net income, and earnings per share of $3.21. During the first quarter, our U.S. and U.K. retail operation faced headwinds from port holds, product recalls, supply and production issues on premium vehicles that impacted product availability. Additionally, a strike at a plant in Mexico that builds the Audi Q5 SUV impacted availability as well. Income and earnings per share were also negatively impacted by higher interest costs for the quarter of $17.4 million, driven primarily by an increase in interest rates and higher inventory levels and lower equity earnings from the company's investment in Penske Transportation Solutions. Lowering equity earnings from PTS were driven by lower commercial rental utilization, lower consumer rental revenue, that's one way, higher interest rates on average debt balances, and a lower gain from sale of used revenue-earning equipment vehicles, partially offset by improved results in our full-service leasing business and our distribution center logistics management business. Looking at corporate development during Q1, we added 24 automotive franchises, including 19 in our international markets and five in the U.S.. Estimated annual acquired revenue is $1.1 billion. We also closed one CarShop location in the U.S.. In 2024, in April, we entered into an agreement to acquire two Porsche dealerships and one Ducati motorcycle dealership in Melbourne, Australia, which is expected to close in the second quarter of 2024, obviously subject to customary conditions. Let me now turn the attention to automotive operations. During the quarter, total automotive units delivered increased 4% to 126,864 units, which includes 8,932 agency units in the U.K. New units increased 6%, and used units increased 2%. We continue to take forward orders with pre-sold activity averaging between 10% and 20% in the U.S. depending on brand or region, and 36% of the new vehicles sold in the quarter in the U.S. were at MSRP. While 87% of the BEVs sold in the quarter required significant discounting, we estimate 90% of the BEVs sold were leased. In the U.K., the forward order book is healthy at 19,000 units versus 18,000 at the end of December and 22,000 at the same time last year. Same-store retail automotive revenue increased 1%; however, our service and parts increased 5%. Customer pay was up 5%, warranty was up 6%, our collision repair business was up 6%, and all continued to grow during the first quarter. Gross profit per new unit retail declined only $302 sequentially, while gross profit per used unit retail increased during the quarter sequentially when compared to Q4 last year. Let me now turn to Penske Transportation Solutions. At March 31st, PTS managed a fleet of over 442,000 trucks, tractors, and trailers compared to 418,000 at March 31st last year. Although the overall fleet size increased, we reduced our commercial rental fleet by 4,800 units during Q1 of 2024 due to lower utilization and a continued weak freight market. In Q1, PTS operating revenue increased 3% to $2.7 billion, full-service contract revenue increased 12%, our logistics revenue increased 4%, but our rental revenue declined 13%. PTS generated net earnings of $112 million. Our share of the PTS earnings was $32.05, which declined by $48 million compared to Q1 last year. The decline in PTS earnings over the prior year was due to, number one, a $49 million increase in interest expense from higher rates related to bond refinancing and higher outstanding debt, a $66 million decline, and the gain on sales of used trucks. We sold 11,667 used trucks in Q1 of 2024 compared to 36,000 for all of 2023 to expedite the disposal of older units. Our rental revenue fell 13%, and utilization rate fell 310 basis points when compared to Q1 of 2023 as weak freight rates and lower one-way consumer rental demand, higher maintenance costs of $12 million compared to Q1 last year, but importantly, the sequential increase was only $3 million as we continued to replace the older fleet and lease extensions. Our new units on order we have placed with various OEMs are down 50%. That's really from 60,000 to 30,000. We have nearly 12,000 units currently for sale compared to 8,400 at the end of March last year. As we look at Q2, we expect a sequential increase in earnings from PTS from the reduction in the rental fleet to 4,800, which improves utilization coupled with new replacement vehicles and reducing maintenance expense. Let me turn it over to Rich Shearing now. Thank you. Thank you, Roger. Our Premier Truck Group dealership business represents 43 locations in North America and is an important part of our diversification. We are one of the largest commercial truck retailers for Daimler Truck North America. During Quarter 1, Class 8 net orders increased 18%, while retail sales declined 6% from the strong pace of 2023. At the end of March, the current backlog was 162,600 and represents approximately five to six months' worth of sales. Premier Truck Group sold 4,500 units in Q1, down 12% overall, driven by new retail sales down 23% but used up 60% for the quarter. However, a strong mix of new units and our fixed operations business drove an increase in gross margin of 190 basis points. Same-store SG&A to gross profit remained well-controlled at 59.2%, and fixed absorption was 130%. Premier Truck Group produced a solid Q1 EBT of $51 million and a return on sales of 6.4%. We believe commercial truck demand will continue to be driven primarily by replacement needs, and we also see strength across private fleets, vocational segments, and Class 6, 7 medium duty. As we look towards 2025 and 2026, anticipated emissions changes should drive a strong order book in retail sales. I would now like to turn the call over to Randall Seymore. Thank you, Rich. I will now cover our business in Australia. Penske Australia offers products across the on- and off-highway markets, including in the trucking, mining, power generation, defense, marine, rail, and construction sectors, and supports full parts and after-sales service across the region. Service and parts represents approximately 75% of our gross profit, so our focus on increasing units in operation is a key driver of the business. In fact, in the month of March, it was the single best month in the history of our business in Australia with a return on sales of 7.6%. During the three months ended March 31st, 2024, the Australian and New Zealand heavy truck market increased 4.8% and 2.7% respectively from the same period last year. In off-highway, our power system operations continue to grow with turnkey solutions for hyperscale data centers, battery storage, mining, and military applications. We continue to be a leader in critical standby power, especially for data centers, and continue to make significant deliveries of generators into prime power and hybrid applications. In addition, we have started to deliver large-scale battery energy storage solutions with recent government contracts adding to more than $50 million to the existing pipeline. Our current order bank for hyperscale data centers and battery storage systems combined is over $550 million for 2024 and beyond. I would now like to turn the call over to Shelley Hulgrave. Thank you, Randall. Good afternoon, everyone. I will review our cash flow and balance sheet and discuss our capital allocation strategy. I'm pleased to report that we generated $456 million in cash flow this quarter, and our trailing 12-month EBITDA was $1.55 billion. At the end of March, our long-term debt was $1.68 billion, up approximately $50 million from the end of December. $1.05 billion of the long-term debt represents our subordinated notes, with $550 million maturing in September 2025 and the other $500 million maturing in 2029. The average interest rate on these notes is 3.6%. We have the intent and ability to refinance the 2025 notes. Under U.S. GAAP, we do not plan to present the 2025 notes and current liabilities through maturity. We also have $360 million in mortgages and $193 million in other borrowings at our international subsidiaries. Debt to total capitalization was 25.7% and leverage sits at 1.1x. As you can see, our balance sheet remains strong, safe, and secure. Our approach to capital allocation balances investing for growth through capital expenditures, investing in diversified and opportunistic acquisitions, and returning capital to shareholders through dividends and securities repurchases. Since the end of 2022, we have raised the dividend 5 times from $0.57 to $0.87 per share, representing a 53% increase. During the first quarter, we paid $59 million in dividends, invested $103 million for growth through capital expenditures, and repurchased approximately 221,000 shares for $33 million. It's important to reiterate that we have the ability to flex our leverage up to 4x on a lease-adjusted basis. New vehicle inventory increased $50 million from the end of December. Total inventory was $4.4 billion, up $100 million from the end of December. Floor plan debt was $3.9 billion. Importantly, we had a 40-day supply of new vehicles and a 36-day supply of used. Day supply of new vehicles for premium was 41, and volume foreign was 29. The day supply of new battery electric vehicles in the U.S. was 91 days. At this time, I will turn the call back to Roger for some final remarks. Well, thank you, Shelley. With the acquisitions we completed during the first quarter, we continue to demonstrate the flexibility we have with our capital allocation. These acquisitions strengthen our premium brand footprint in our international markets and are expected to generate approximately $1 billion estimated annual revenue. Most recently, our geographical diversification provided us with the opportunity to expand our partnership with Porsche. Today, we have 22 Porsche stores throughout the network. We recently entered into an agreement to acquire two Porsche centers, one in Brighton, the other in Porsche Center at Doncaster, along with a Ducati Melbourne in Australia. For over 10 years, we've strategically built a diverse commercial vehicle and power system business in Australia, and with this significant acquisition, we will leverage that existing infrastructure and our significant experience in the retail automotive industry to drive growth with the Porsche brand in Melbourne. Our results continue to demonstrate the benefit of our diversification across retail automotive, commercial truck, cost control, and disciplined capital allocation strategies. I remain confident in our model and the performance of the business. Thanks for joining us today and your continued confidence in PAG. Ladies and gentlemen, if you would like to ask a question, you may press 1, then 0 on your telephone keypad. You will hear acknowledgment that your line has been placed in queue. You may remove yourself at any time by pressing the 1, 0 keys again. Once again, to queue up for a question, please press 1, then 0 on your telephone keypad. First, we go to John Murphy with Bank of America. Please go ahead. Hey, Roger. Good afternoon, everybody. Roger, I just wanted to touch on first on the new GPUs, which are obviously a very hot topic for everybody for quite some time now. They're holding up better than people have been fearing. I'm just wondering if you could talk about that being brand mix driven, luxury mix driven, or your management on focusing on keeping these GPUs where they are. Just curious if you could talk about that. Why don't I have Rich Shearing talk about the U.S., and then Randall can talk about international, Rich? Yeah. Thank you, John. Look, yeah, I think you touched on it. The first thing I would highlight is certainly our premium mix. We definitely think that plays a role in the grosses. And so then if you look at the new side in the U.S., sequentially down $364 and used up $323 sequentially. So I think as Shelley touched on our day supply as well, so that's been a very key focus for us to make sure that we're turning the inventory that we are getting. And then, frankly, I think our operating team has done a fantastic job too of balancing the volume of achieving the OEM scorecard compliance with the best deals that are out there that are available. And you see that, obviously, in the numbers. I think also, John, what we've been able to do is we've come out of COVID. We've looked at our sales team, and we've really taken the utilization, and obviously, the productivity has gone from 12 units per salesperson to 14. So I think we have our best people on the front line now, which is making a difference. And I do agree, certainly, with Rich that the premium luxury side has given us that opportunity. And yet, we had headwinds with the Porsche brand. They were down 26% in the quarter. We were down or they were down 26%. They were down 23%. So we even had some impact on higher gross units. And from a BEV perspective, we're discounting those about $6,000 below MSRP. So that had additional headwind. When you look at it overall, that would have increased our margin overall during the quarter. Randall, why don't you kick in? Yeah. It's a similar story in the U.K.. I mean, new gross all-in was down $265 per unit, which isn't bad. And if you look at BEV in the U.K., which represents 19% of all of our new car sales, our BEV gross per unit was about GBP 1,400 less per unit than ICE. So a little bit of that headwind. But I think look at the other point here. It's a common conversation with the team running the dealerships about gross profit, and keeping the inventory where it is at a 40-day supply certainly helps that. So it's a massive focus every day. And also the mix. So, John, when you pull it all together, you take the U.S. and you take the U.K., we were down $302 on a company-wide basis on new, but up $428 on used. So I'm really glad to report that for the quarter, but it was a byproduct, I think, of keeping our day supply down and our premium mix properly in line to be able to get the maximum gross. And then sort of another sort of similar hot topic on the SG&A front. I mean, I think we had a $30-$35 million step-up sequentially in dollars, but it's 70.7% SG&A to gross. It's still 6-700 basis points back from where we were pre-COVID. So things are certainly remaining under control here. I'm just curious, Roger, where you think you want to manage that to sort of mid- to long-term. I mean, you've been good at paying people well and keeping turnover low. So that's one reason to keep SG&A a little bit higher than other folks. But just curious how you're thinking about that now, and particularly with the acquisitions on Ryb rook and the other dealerships, if that could get a little bit more inflated over time and then get work back down. Well, I think one point you hit was your human capital aside. Our turnover is only 18% through the end of the first quarter, which is world-class. Let me let Shelley give you some color on SG&A, okay? Sounds good. Hey, John. Yeah. As Randall mentioned, it's a daily battle, and our teams are doing a great job controlling expenses. So we were very proud to report that on a sequential basis, we were down 30 basis points. You mentioned that we were up overall in SG&A, but when you look at it on a same-store basis, we were only up $5 million year over year. And so when I take a look back at that, there were about $4 million of expenses related to our acquisition and a legal settlement that we had in the quarter. And so really, SG&A was relatively flat, and that's the byproduct of our teams just grinding every day. We remain committed to keeping headcount below pre-COVID levels. Our executives are scrutinizing all our new hires. We're managing those pay plans. We want to keep those employees, but we also don't want to have any leakage when it comes to grosses. We've got an executive leadership team that's focused on streamlining and efficiencies across the board. So the other expenses that we did incur, we had an increase in vehicle maintenance in the quarter of about $4 million. That's our service loaner business. We look at that as very productive. We had an additional $34 million in service and parts gross profit, and that's the result of a lot of efforts, service loaners being one of them. One of our teams was able to bring down the days outstanding in terms of when we could get an appointment for a service loaner appointment from 14 to seven days. So it's really paying dividends. And maybe if I could sneak one last one. And I mean, Australia seems to be a growing focus, and you've been there for a while. So I mean, I wouldn't necessarily conflate it directly with sitting there in the U.K. But I mean, do you kind of view this, Roger, as a growth platform where we're going to be hearing more and more about acquisitions in Australia? And you don't want to. I wouldn't say control the market, but you could be a big, big player in the market in many ways down there, even outside the power business and the dealership business as well. Yeah, John. It's Randall. I'll take that one. Look, for the past 10 years, we've had other opportunities to get into automotive retail and made a strategic decision to focus on the core of the commercial vehicle and power system and really grow that. But with this opportunity with Porsche, it was a significant one we've been working on for several months, and we're able to get it over the line and certainly view that as a springboard for more opportunities. In fact, we've already had some knocks on the door. But having 1,300 people over in that part, 1,300 people there, we can leverage the infrastructure that we have from a finance standpoint, legal, HR, IT. So it's a tuck-in then that we can continue to grow. The Australia market, just as a population and Melbourne being one of the best places in the world, we thought it was a great first step. Great. Thank you very much, everybody. Thanks, John. Next, we move on to Michael Ward with Freedom Capital Markets. Please go ahead. Hey, Mike. Thanks very much. Good afternoon, everybody. Hello, everybody. Hello. Randall, there's been a couple of significant transactions in the UK market over the last six months with yourselves and Lithia and Group 1. Is there something going on in the market that we're not seeing, and are the franchise restrictions similar in the U.K. as they are in the U.S.? Do you have more room to grow there, more opportunities, or are you about done as far as expansion? Yeah. Look, I think we're going to continue to be opportunistic there. Yeah, the franchise laws aren't nearly as strong as they are here. But if you look at the premium brands and how we've positioned ourselves, being 20% plus of the Mercedes business, 16% of the Porsche business, we're 20% plus of the BMW business. We've got that core in the culture there, and we want to continue to grow. And look at some of these other acquisitions that's happened from the publics. It's a good market, but some of that brand mix just didn't fit right into our wheelhouse. So we want to continue. We're 98% premium in that market, and we just want to continue to be that way moving forward. I think one of the other things, Mike, is we looked at obviously, we're on the Pendragon deal, but it got to pricing that was higher than we wanted. And obviously, I think Lithia saw the benefit there, no question about it. Group 1 with the Inchcape. Look, they have good brands. They have premium brands. But for us, taking our mix from, say, 90% down to 75% in premium, we think was a mistake. And that's one of the benefits we have because we got major market share, as Randall mentioned, when you think about each one of the key premium brands there. So obviously, the multiples, at least when these took place, were lower than the multiples are in the U.S. right now. So that would certainly think that you'd see where they'd look at it. We have $9 billion of annualized revenue in the U.K. now. It's a great car market. We've got a terrific management team. I think we have almost 10,000 people operating in the U.K. now. So look, as Lithia and Group 1 come in, look, there's plenty of room there. It's like they're our hero. I think shows that people realize the market is a good it might be validates our being there as long as we have, to be honest with you. Yeah. And I think the upside might be, near-term upside is probably better than the U.S. as far as industry sales. Shelley, there are two things just for clarification. The first one, you kind of mentioned that SG&A included a legal settlement. Can you quantify that? I'm coming up with like $30 million or $40 million. Is that the right number? That was a one-time type penalty. Is that right? No, no, no. So the $30 million was total overall. We had a shareholder lawsuit that we disclosed publicly in the first quarter, and it was about $1.5 million, Mike. Okay. And then the second thing. That's $1.5 million. Okay. It was $1.5 million, and that you did not call that out as a one-time item, but it's included in the SG&A. Yeah. That's correct. I also add, Mike, we had some acquisition costs, which we just don't call those out as unadjusted earnings. We just take that. But I think Shelley wanted to make that comment because if you look at that on a same-store basis, we were really flat. Relatively flat. Right. Okay. And then the second thing, Shelley, you mentioned about the 2025 notes, and you said you're going to allow them to come current, or are you in the middle of refinancing? I didn't quite catch that. No. So we wanted to stress that even though we have the 2025 notes due September of 2025, under standard U.S. GAAP rules, come September, we'd be required to classify those as current liabilities. But when you have the intent and ability to refinance them, as we do with the $1.7 billion of availability that we have currently in dry powder, you don't have to classify them as current. So we'll continue to keep them in long-term debt. And with the rate being where it is versus the rates right now, that really is more of a true story, so. Right. Makes sense. Thank you. Thank you very much. Same. Next, we go to Rajat Gupta with J.P. Morgan. Please go ahead. Great. Thanks for taking the question. I just had a question on PTL first. You mentioned you expect earnings there to be up sequentially quarter-over-quarter. Would it be possible to give us a little more granularity on a range around the dollars or a year-over-year number on how we should think about that, and then just the cadence beyond that into the second half? Any kind of four-year guidance related to that would be helpful just with our models. And I have a follow-up. Thanks. I think I understood the question asking is, as we look into Q2 and beyond, what are the generators going to give us a sequential increase in profitability? Is that correct? Yeah. In the trucking business, the PTL business. Yeah. Well, look, number one, we'll have a reduced rental fleet. At this point, we had 4,800 come out during Q1. We'll continue to de-fleet as we can as the market will allow us to sell used trucks into the market with profit. And that'll help our utilization. ACT put out a statement last week that said that they expect the freight rates or freight to pick up, am I correct, Rich, Correct. in the second quarter. So that certainly will help us. I think also from the standpoint remember, you got to go back and tell the story when we had 60,000 units on backorder back in March of 2023. Today, we got 30,000. So we've pushed a lot of those units through the system. The new units coming in, which have to replace the roughly 25,000 or more extension we had, so we won't have the higher maintenance on those older units. And in fact, we only had 2,500 units that we extended in Q1 of this year. So that'll be key. And obviously, as we look at the one-way business, and if we get some benefit in interest rates, that'll certainly help us. We also have 12,000 units available for sale versus 8,000 roughly last year. And we'll continue to work through those. So I see the continued increase in market share we're getting on full-service leasing. I think we're right-sizing our rental fleet to go forward, which will be positive. And remember, 50% of our rental revenue comes from our leased customers. And with all of these businesses somewhat lower in revenue, they're using less extra trucks. So that's been obviously hit us from the standpoint of revenue. We think that'll pick up as we go into the second and third quarter. Overall, I think the reduction in people, I think we're looking at our T&E. We're looking at our CapEx from a standpoint of facilities. All of those things will have a benefit. And again, reducing the growing balance sheet. We had $350 million of increase in balance sheet in Q1. We expect that to stay down and will be well below what it was last year even with a big buy of new trucks coming in. And Rajat, we're buying no more rental trucks in the rest of the year other than what we got in the first quarter. So when you put all that together, I can say that our expectations, talking to the team, we would expect a sequential increase in the bottom line for PTS in Q2. Got it. And any granularity on the degree? Is it double-digit, single-digit? Because it's pretty, there's always seasonality in the business. So is there a way for us to baseline that assumption? I don't want to give you a number here on the phone, but I can assure you I'm pushing for as much as we can, and we would hope to continue that momentum as we look at our comps in three and four for the rest of the year. Got it. Got it. And that's helpful. And then just to follow up on the used car GPUs, very nice improvement here from the fourth quarter, both in the U.S. and U.K. How should we think about the sustainability of those levels here into the second, third quarters? Obviously, fourth quarter has a seasonal headwind, but just curious, how should we think about the progression here and also on the units for the used car business? Thanks. Hi, Rich. What the feeling is here as we go forward, Rich, on used GPUs? Sure. Yeah, Rajat, I think a couple of things to keep in mind. So the affordability, we're seeing some improvement there. If you look at our average sales from an average sales transaction price, it peaked in 2022 at over $30,000. That's come down to under $27,000 now. So we anticipate that that's going to continue to trend down as the market normalizes. Then you look at the sourcing side, we're seeing that what was difficult in the past relative to trade-ins from a negative equity standpoint, closed auctions, those channels are starting to open up again. And traditionally, those have been some of our highest profitability sourcing channels. So we anticipate that continuing as well. Of course, the team needs to continue to be disciplined on what we're purchasing. So we're looking at that. With some of our technology and some of the vendors we use, using algorithms to make sure we're putting values on these cars that we know are going to turn to profitable units. So we've seen good stabilization in that aspect. Price corrections, I think, will continue as we go into Q3, Q4. Yeah. I would say to add on to the U.S., day supply, when you're looking at 37 days, we really when you look at it, we have in the U.S., 37 days on new, and they're really 29 days on used. So keeping that inventory current. So as used cars start to age, I think we're in good shape. One other benefit, we've seen CarShop really make a big step forward in margin in the U.S. as we've been able to access more cars. Obviously, we've seen a several hundred million, a hundred dollar benefit on that here in the U.S. So Randall, what about you from the U.K.? Yeah. Similar story. I mean, we were up $725 per unit on used gross in Q1 versus Q4 sequentially. And remember, we were fighting those headwinds in Q4. The pricing in the market was down 10% over Q4. So that certainly stabilized. And it's really managing day supply and age. I mean, I'd love you to sit in one of our meetings as we go through used inventory. And our goal is to have zero over, you know, 90 days and hardly any from 60-90. And the team's just all over this. So as we turn it, keep it fresh, price it right, get it through reconditioning quickly, we're going to get more gross profit in a stable market. And that's exactly what we're doing. Rajat, one other thing to add, Go on, Richard. Sorry. Go ahead. Go ahead. Sorry, Rajat. One other thing to add that I failed to mention is the changes in the loaner fleet. So if you look at our loaners going back 12+ months ago, used vehicles were the predominant makeup of the fleet. As we've been able to take those out, we put new cars into that fleet now. We're able to turn those much faster. They turn into great used cars. And we're able to put new car programs, depending on the OEM, on a lot of those that will help us from a gross profit per unit perspective. Yeah. I think just, Rich, in BMW alone, we have 2,000 loaners. And if we can turn those 2x or 3x, it's 4,000-6,000 more used cars that we can put into the market 0-4 years old, which as Rich said, get all the new car program. That'll be a huge benefit for us now that we're starting to get some supply of ICE vehicles. Leasing is also up. From the standpoint, Shelley, what is it? We're up from what year to year? We're up 8% year-over-year, up to 32% of our new sales. So it's some. And we're getting some lease returns now, which are also good opportunities for us. And I think we're starting to see that the BEV units are available to buy in the market. We're making more money on those than we are on the ones that we sell new. So interesting. Our guys are being very selective as we trade those, or we buy them in the open market. Got it. Got it. That's really helpful. And I'll definitely take up your offer on sitting in one of those meetings. So thank you. Thanks, Rajat. Thank you. Next, we go to David Whiston with Morningstar. Please go ahead. Hey, David. Hey, everyone. Just two questions. First, on capital allocation for the rest of the year, you do seem pretty interested in doing acquisitions so far. So just curious about how to balance thinking about spending between buybacks and more M&A for the rest of the year. Hey, David. It's Shelley. I can take that. We haven't enjoyed a lot of shareholder returns the last couple of years when it comes to our cash from operations. Typically, we'd like to stay in that 50/50 range between growth and shareholder returns. It has been weighted more heavily. I think last year was 65/35. But to keep a 50/50 between growing through acquisitions and then shareholder returns is how we like to do it. We want to grow revenue 10%. We're going to do 5% at least through acquisition. And we're going to really push the teams to grow 5% on an organic basis. And so that's how we think of it here. Now, it's all going to depend on the opportunities that come our way. We're going to be selective. But we certainly are entertaining a lot of things as we're able to look across many markets. We've talked a lot about our diversification. So we bought internationally. We've talked about going into Australia, which could be a great new market for us on the retail side as well as the business opportunities that Randall mentioned that we have there already. We've been very active in truck acquisitions. There's just a lot of opportunities, but it gives us the opportunity to be selective as well. So it's all going to depend on what opportunities come our way. I think, David, also, we got to realize that the purchase prices and multiples were at the highest they've ever been over the last 24 months. We're seeing those come down now, which makes some opportunities more attractive to us. And we're going to look at those. I think that we have a pipeline of deals we're working on, which would be acquisitions. We want to grow at least 5% through acquisitions. Hopefully, 5% through organic growth would be kind of our mission plan. But I think there's opportunity there for us as we go forward on the acquisition side. We've raised our dividend, Shelley, I think, what, 57% since 2022? That's right. A big number. So we continue to see the dividend increase. And certainly, when you look at our capital allocation just in 2024, our dividends were about $60 million. And you look at our CapEx, which some of this, about $25 million is land, was over $100 million. And then, of course, our share repurchases at $33 million. So somewhere around $250 million that we've done. And that's kept our when you look at our leverage, it's still 1.1: 1. So I think we're safe and secure from an overall company standpoint. And I want to stay there too. I don't want to go way off too much in the standpoint of share buyback, or I think we want to be leveling ourselves from the standpoint of acquisition. But there's opportunity out there for sure. Thanks. And speaking of opportunity, you talked about the Ford and Stellantis acquisitions in your press release. It's unusual, though you do still do it once in a while in terms of buying Detroit 3 brands. So I was just curious, were those stores just at very compelling price, or is there a geographic reason you wanted to buy them? I think it was up in Massachusetts. I think it was more opportunistic, I think, and it would tuck right into Rhode Island. But I think we look at right now, we're sitting with 1% from the standpoint of our big three volume. And I think there's opportunity there. We're seeing some of those prices coming in line where we would expect them. So in the right place in the right market, we're going to take a look even on the domestic side. Okay. Thank you. We have a follow-up from Michael Ward with Freedom Capital. Please go ahead. Mike, go ahead. Thanks again. We're about one year into the agency model in the UK, and I'm just wondering what your thoughts are on it and how is it working out? Yeah. Hey, Mike. It's Randall. I'll take that. So yeah. So if we rewind the clock to the beginning of 2023, the first quarter was a big challenge from a system standpoint, available inventory standpoint. And I think Mercedes-Benz UK has done a nice job collaborating with ourselves and the entire dealer body. And those systems, and let's just call it the ease of doing business for both the dealer and more importantly, the customer, is in place now. So we were able to increase our volume significantly in Q1, and obviously, the gross being fixed gross. And we get one more percentage point on EVs, so that actually helps. And over the past year, as we've matured that agency model as well internally, we've been able to reduce our cost base. So we measure closely a retained profit per unit on new. So the gross profit, less controllable, direct expenses. And that number is the best it's been since we've owned Sytner, with exception to 2022, which I think we would all call an anomaly here relative to the car market. So in representing over 20% of all Mercedes sold in the UK and then the acquisition of those London stores in late 2022 with the population there has been significant because 90%+ of all cars sold are sold within each dealer's primary market area. So they're not going geographically other to a neighboring dealer. They're going right there because there's no negotiation on the price. And look at it, at the end of the day, there's less competition. So our conversion rate has actually improved 6 percentage points over the last year as well. So I think our team in the U.K. with Mercedes has done a really nice job in conjunction with Mercedes-Benz U.K., and we're just going to get more efficient. So I would say right now, it's been looking like a win for us this year. Great color. Thank you very much. Thanks, Mike. For closing remarks, I'll turn the conference back to Mr. Penske. Thank you, everyone, for joining us. Good quarter. We're looking forward to Q2 and your support. Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for your participation. You may now disconnect.