Good afternoon. Welcome to the Penske Automotive Group First Quarter 2026 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through May 6th, 2026 on the company's website under the Investors tab at www.penskeautomotive.com. I will now introduce Anthony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead. Thank you, Krista. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's first quarter 2026 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 is Roger Penske, our Chair and CEO, Shelley Hulgrave, our EVP and Chief Financial Officer, Rich Shearing from North American Operations, Randall Seymore of International Operations, and Tony Piccioni, our Vice President and Corporate Controller. We may make forward-looking statements on today's call about our earnings potential, outlook and other future events, and we also may discuss certain non-GAAP financial measures such as EBITDA and adjusted EBITDA. We've also prominently presented and reconciled any non-GAAP measures for the most directly comparable GAAP measures in this morning's press release and investor presentation, again, both of 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 direct you to our SEC filings, including our Form 10-K and previously filed Form 10-Q for additional discussion and factors that could cause future results 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. We're pleased to report a solid and productive first quarter. During the first quarter, PAG delivered over 123,000 new and used vehicles and nearly 3,600 new and used commercial trucks. That generated approximately $7.9 billion in revenue. We earned $324 million in earnings before taxes and $235 million in net income and generated earnings per share of $3.56. The first quarter results include a $60 million gain on the sale of a dealership, partially offset by $13 million in certain disposals and other charges as we continue to optimize our dealership portfolio. Excluding these items, adjusted Earnings Before Taxes was $276 million, net income was $201 million, and Earnings Per Share was $3.05. This was a difficult comparison for the prior year period and challenging market conditions impacted year-over-year performance. We also continue to grow our footprint. In February, we acquired two high-performing and strategic Lexus dealerships in Orlando metropolitan area of Central Florida, one of the fastest-growing regions in the U.S. These acquisitions complement the two Lexus and two Toyota dealerships we acquired in November 2025. Combined, these six dealerships are expected to generate $2 billion in estimated annualized revenue. We also repurchased 170,000 shares of common stock for $26 million. We increased the dividend to $1.40, which yields approximately 3.4%, the highest yield in our peer group. Looking at the details for the quarter, same-store retail automotive new units declined 5% and used increased 1%. Units retailed were impacted by weather-related challenges and a difficult comparison to March 2025 when tariffs caused pull-ahead sales and lower BEV sales in the U.S. associated with the elimination of the BEV tax credit. Gross profit per unit, new unit retailed was $4,783, up $94 sequentially. Gross profit per used unit was $2,076, up $306 sequentially. Our service and parts revenue and gross profit was a Q1 record. Same-store revenue increased 4.6%, and related gross profit increased 5.7%. Service and parts gross margin was up 60 basis points. In the retail commercial truck segment, Q1 unit sales declined 953 units, driven by reduced order intake during Q3 and Q4 2025 following the implication of tariffs and weakness in the freight market. We are encouraged today with the trends we are seeing across the commercial truck market. In recent months, we've seen an increase in new truck orders, expect the timing of these deliveries to take place in the second half of 2026. PTS equity income increased 24%. Growth in the full service leasing revenue, improved fleet utilization, lower operating and interest expenses resulting from continued fleet reductions, including maintenance in our depreciation, were partially offset by continued challenges in the rental and lower gain on sale of trucks. At this time, we'll turn the call over to Rich Shearing. Thank you, Roger. Good afternoon, everyone. In U.S. retail automotive, same store new and used unit sales were affected by two major winter storms, Liberation Day tariff announcement, and pull forward of retail sales in March of last year, and lower BEV sales from easing emissions regulations and the elimination of the BEV tax credit at the end of September 2025. During the quarter, 25% of new units sold were at MSRP compared to 29% in Q1 last year. Same-store service and parts revenue increased 3.2% and gross profit increased 3.4%. Customer pay was up 4%, warranty was up 5%, and collision repair declined 4%. Our U.S. automotive technician count is up 3% when compared to the end of March of last year, and our bay utilization is 84%. Turning to Premier Truck Group, during Q1, Premier Truck retailed 3,583 new and used trucks, generated $695 million in revenue and $128 million in gross profit. On a sequential basis, compared to Q4 2025, new unit gross increased $111, and used unit gross increased $4,624. New unit sales were down 26% and were in line with the overall North American Class 8 market. The recessionary freight environment and market uncertainty associated with tariffs and the status of emissions regulations impacted new truck orders during the last half of 2025. As Roger mentioned, in recent months, we have seen an increase in new truck orders. In fact, Class 8 orders increased 91%, and the industry backlog grew 33% to 175,000 units in Q1 when compared to March of last year. We expect this increase in order activity to result in higher new unit sales in the second half of this year. Service and parts revenue increased 5% as average daily activity continues to grow and service backlog is beginning to increase. Service and parts gross profit represented 73% of segment gross profit during Q1. Turning to Penske Transportation Solutions, we are also encouraged by the stronger financial performance of Penske Transportation Solutions. During Q1, operating revenue declined 4% to $2.5 billion. Lease revenue increased 2%, rental revenue declined 17%, and logistics revenue declined 3%. PTS sold 9,319 units in Q1, ending the quarter with a fleet size of 387,500 units, compared to 435,000 at the end of December 2024. Gain on sale declined by $26 million in Q1 2026 compared to Q1 2025. As PTS continues to right-size its fleet, higher fleet utilization, lower operating costs for maintenance, depreciation, and interest expense contributed to an increase in earnings. Overall, our equity income from PTS increased 24% to $41 million. I would now like to turn the call over to Randall Seymore to discuss our international operations. Thanks, Rich. Good afternoon, everyone. During Q1, international revenue was $3.3 billion, which is up 6%. International new units were up 2%, and used increased 3%. Same-store service and parts revenue increased 7% as our strategies to increase customer pay drove a 10% increase, which was more than offset the 3% decline in warranty. In the U.K. market, Q1 automotive registrations increased 6% to 615,000, driven by private and retail demand and an increase in Chinese OEM sales. While we were encouraged by Q1, the U.K. automotive environment remains challenging as inflation, higher taxes, consumer affordability, and the government mandate towards electrification impacts the overall market. During Q1, our U.K. same-store new units delivered were flat from lower sales of several German luxury brands and the elimination of the Motability programs for these luxury brands. Same-store used units increased 3%. Gross profit per unit increased $500 sequentially when compared to Q4 2025. Turning to Australia, our EBT increased 15% compared to Q1 last year. In automotive, our three Porsche dealerships in Melbourne continue to gain market traction through implementing our Porsche One Ecosystem process. This process has driven higher customer satisfaction with all three dealerships in the top five, including the top position nationally. Although we had a decline in new unit sales associated with the transition of the Macan to an all-electric vehicle, we had a strong mix of higher-end vehicles. Our focus on pre-owned and after-sales continues to drive the business. In the Australian commercial vehicle and power system business, we are diversified with revenue and gross profit split approximately 2/3 off-highway and 1/3 on-highway. The off-highway business continues to grow. The current order book has exceeded our full-year business plan, with strength seen in energy solutions, mining, and defense sectors. We have over AUD 600 million in secured orders so far for 2026. The engines and support we provide will be critical as this segment evolves. We continue to see the potential for our energy solutions business to generate at least AUD 1 billion in revenue by 2030. Over the last several years, our focus has been to increase units in operation to grow the recurring service, parts, and remanufacturing aspects of our business. This focus is starting to pay off. One of the major mining customers operates a 125 MW power station with 20 Bergen engines that we installed four years ago. As part of the major maintenance interval, we have begun to remanufacture 300 cylinder heads, which will generate approximately 15,000 hours of work for our business. I would now like to turn the caller over to Shelley Hulgrave to review our cash flow, balance sheet, and capital allocation. Thank you, Randall. Good afternoon, everyone. We remain committed to a strong balance sheet and a flexible and disciplined approach to capital allocation while driving our diversification strategy, implementing efficiencies, and striving to lower costs. SG&A expenses increased by 1.5%, which is lower than the rate of inflation, while gross profit declined 1.7%. SG&A as a percentage of gross profit for Q1 2026 was 74.3%. Adjusted SG&A to gross profit was 73.3%. Q1 SG&A to growth was impacted by employee benefit costs up $4 million, payroll taxes and other U.K. social programs up $3.5 million, rent and real estate taxes up $7 million, and lower automotive units and the impact from lower sales of new and used commercial vehicles at Premier Truck Group. During Q1, we generated $215 million in cash flow from operations and EBITDA of $397 million. During Q1 2026, we invested $63 million in capital expenditures. This is down from $85 million in Q1 2025. We completed acquisitions of two Lexus dealerships, representing $450 million in estimated annualized revenue. We increased the cash dividend to $1.40 per share, representing the 21st consecutive quarterly increase. On a forward basis, our current dividend yield is approximately 3.4%, with a payout ratio of 39% over the last 12 months. We repurchased 170,000 shares of common stock for $26 million. As of March 31st, 2026, $221 million remained available for repurchases under our securities repurchase program. Since the beginning of 2023, we have returned approximately $1.6 billion to shareholders through dividends and share repurchases. At the end of March, non-vehicle long-term debt was $2.6 billion, and leverage was only 1.8 x, despite completing several large acquisitions over the last six months. Floor plan was $4.1 billion, and we had $425 million in vehicle equity. For the quarter, total interest expense increased $2 million. Floor plan interest decreased $4 million due to our cash management and lower interest rates, while other interest expense increased $6 million, primarily from higher borrowings for acquisitions. We estimate a 25 basis point change in interest rates would impact interest expense by approximately $15 million. Our effective tax rate was 27.4% in Q1 2026. The prior year results have been recast for the acquisition of Penske Motor Group using common control, as disclosed last quarter. As a reminder, PMG was a partnership prior to our acquisition and was not subject to income tax. Q1 2025 does not reflect federal or state income taxes, had PMG been included in our taxable group. Therefore, period-over-period comparisons of net income and Earnings Per Share may not be directly comparable due to the change in tax status of PMG. The impact to the effective tax rate would have been approximately 100 basis points, and the impact to earnings per share would have been $0.05. Total inventory was $4.9 billion, up $77 million from December 2025. New vehicle inventory is at a 44 day supply, including 46 days for premium and 29 days for volume foreign. Used vehicle inventory is at a 39-day supply, with the U.S. at 33 days and the U.K. at 42 days. At the end of March, we had $84 million in cash and liquidity of $1.2 billion. At this time, I will turn the call back to Roger for some final remarks. Thank you, Shelley. As mentioned, we added two Lexus dealerships to PAG during the first quarter. Today, I'd like to welcome our new teams at Lexus of Orlando and Lexus of Winter Park to our organization. As I said earlier, we had a solid first quarter. I continue to remain optimistic about our business. New and used retail automotive grosses remain strong. Service and parts continue to grow. Our diversification remains our key strength of our business model. The recovery in the commercial truck market is underway. Expect to increase new truck orders to benefit the second half of the year, and our retail truck dealerships and PTS investment should benefit. Again today, thanks for joining our call. We will take questions. Thank you. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you'd like to withdraw your question, again, press star one. Your first question comes from Michael Ward with Citigroup. Please go ahead. Hey, Mike. Thank you. Hey, everybody. Thank you very much. Good afternoon. I hope you all are doing well. Weather had a significant impact on the industry in January and February in the U.S. Can you quantify at all how much you were affected, and were you able to get any of that back? Hey, Mike. This is Rich ard. Good question. I mean, as I mentioned in my prepared remarks, two significant storms, both, you know, one in January, one in February, impacted. The first storm in January I think was almost 2,400 mi in, you know, its length. Mm. It impacted our businesses from Texas all the way to the Northeast. We had either delayed openings, multiple-day closures, you know, as we had to deal with the cleanup. February wasn't as bad, but did impact pretty significantly the Northeast. Now, the good news is, obviously the competitors around us in those markets also, you know, suffered the same challenges. We don't think consumers were running to their dealerships to buy cars while we were struggling. Certainly from a fixed growth standpoint, you know, there was lost business there, 'cause that's time you just can't get back. We had the added expense of the snow removal, and then we attribute the fixed gross loss to about $4 million-$5 million. In total overall, about a $6 million impact to our earnings in Q1. Wow As related to the weather. Okay. Thank you. Shelley, you called out. I don't know if you were calling out or just the cost on the SG&A side of $15 million. It sounds like some of those will be recurring, I guess the rent and the health in the U.K. What? Are those one-time in nature? Are they now recurring? What were you kind of alluding to with that? Hey, Mike. Yeah, a little bit of both. Certainly, you know, rent increases we see year-over-year. You know, health benefit plans, we certainly hope those costs go down, but that doesn't seem to be the trend. I wanted to highlight the fact that the U.K. social programs, this is the last quarter before we anniversary those, so it's a bit, you know, incomparable compared to Q1 of 2025. Like I said, we'll see that anniversary here in Q2. Okay, that's about 30 basis points-40 basis points, right? It's approximately? Yeah. Okay without those, that our SG&A to growth would be in that 71%-72% range that we had talked about. you know. Okay still comfortable in that low 70s range. Okay. Thank you. Just lastly, it looks like you've been doing some portfolio rebalancing. If, usually you don't see much movement in the retail automotive revenue mix, but you see a couple of good changes year-over-year. I'm just wondering if that's a trend we can look to more. Are those gonna be your focus brands, continue to focus on the luxury and the volume foreign, that's the strategy, correct? Well, Mike, let me say this. We actually sat with our board probably 18 months ago to determine what was gonna be our strategy on brands, locations, not only domestically, but internationally. We felt that we would look at our low performers, and then we looked at what were the expectations of the manufacturer from a CapEx perspective, and then what could we grow that business? We determined there were probably a number of locations that we would need to sell in order to get a return that we would want on top of that. Because of our commitment to go forward with Penske Motor Group, we had to commit to sell two Lexus stores, one in Warwick, and one in Madison, Wisconsin, which we completed. Obviously, that gave us the opportunity to buy the Orlando stores and the PMG stores. Along with that, we took out a number of other smaller locations, some larger, some in the U.K., and that generate about $325 million-$350 million worth of free cash flow back on these stores, which we sold. Which obviously we used some of that money to pay to buy these other key stores that we're going forward with. We'll continue to prune the portfolio. We're still in the acquisition business. I think we made the decision in the U.K. to reduce our number of Sytner Select stores from 14 to six, which is paying off. We're taking those locations and adding the Chinese brands in the same showroom. Overall, I think the strategy has worked, and we've kept our leverage, as Shelley said, from around 1.5 to 1.8. Am I right? That's right. I think it's been a good move, and we'll continue. I think I see our peers doing the same thing, because today. Yeah The cost of doing business is so high, and some of these smaller locations with all the controls you need and the high cost of the best people, we just can't see the numbers give us the returns we want. All of us are obviously looking for locations, at least we are, where we can add on in key markets. Mike, this is Tony. Just page nine of our earnings presentation is a key chart in the deck. Yeah ... what our total revenue mix is, right? You can see there in particular, premium 72%, volume non-U.S. is 22%. When you look at the Toyota, the Toyota Lexus number, it has jumped up to 18% of our overall business from an automotive standpoint. OEM with the acquisitions and the OEM presence that we have. Yeah. Yeah. Proactive plan. Looks like you're just pulling it off. Thank you very much. Appreciate it, everybody. Thanks, Mike. Your next question comes from the line of Rajat Gupta with JP Morgan. Please go ahead. Great. Thanks for taking the question. Hey, Roger. Hey, everyone. Just wanted to follow up on PTL on, you know, pretty nice earnings growth, you know, in the quarter despite the lower gain on sale. Obviously a lot of those improvements are coming from just lower maintenance, debt, you know, fleet costs, et cetera. I'm curious how we should think about the trajectory of PTL earnings for the remainder of the year. Any kind of guardrails you can give us for the full- year? I think number one, we've come from roughly 430,000 units de-fleeted to 387,000 at the end of the quarter. That's obviously reduced a significant interest cost in our depreciation. It's been impacted positively with that. The good news is that our fleet utilization on the rental side, which were before we were down to 71%, it's now moved up to 76%. I think we've seen that the operating side of our business has been excellent during the quarter and really in Q4 also, because our gain on sale obviously has been down $26 million in the quarter. we are able to pick that back up through utilization, through lease revenue and some of our logistics businesses, which provided an overall pickup in our profit, their profit from $120 million to $142 million. We've got lower operating expenses, obviously, as I'd mentioned, maintenance, depreciation, et cetera. It's operations. I think you'd think about interest, depreciation, gain on sale is down, but still higher than it was a year ago. we're seeing rental utilization up about 500 basis points. Got it. I mean, it looks like a lot of these trends are sustainable, like at least from like a cost and earnings perspective, you know, through the remainder of the year, on a year-over-year basis. Rajat, could you repeat that, please? I was trying to say that a lot of these trends seem sustainable through the remainder of the year, you know, at least from the cost side, you know, when you look at the year-over-year trend. Are you talking about PTS? Yes. We're continuing. We probably have another 3,000 or 4,000 units that we'll take out easily during this year from a fleet perspective. We'll continue to grow. Also, we're seeing with the revenue coming back on rental, we can take some of our off-lease equipment and replace that at that point. I think the older trucks are out now, which were providing much higher maintenance. We're seeing that maintenance and tire maintenance much, much better. I think that the customer acceptance, this is a key one for you. We're starting to see people signing up for long-term leases. Say there was a pause over the last 90 to 120 days with emissions, with costs, et cetera. We weren't getting the traction. Q1, we saw our lease signings going up, which bodes well for us for the future because these leases are three, four, five years with economic escalators. Got it. Just to follow up on the parts and service business, more on the international side, pretty strong numbers overall. But it looks like if you look at it, excluding the FX benefit, you know, growth was probably flat to slightly up. I'm curious as to sort of if that's correct and, you know, what kind of initiatives are in place to maybe accelerate that growth going forward? Thanks. Hey, Rajat, it's Randall. If you take the FX out, that's correct. In the U.K., we were slightly up. In, as an example, Italy, we were up 11%, Germany up 20%. It's really on the back of customer pay focus because warranty's actually down. Remember, internationally, we don't get the markup on parts like we do here in the U.S. You only get 10% margin where on warranty on the parts, whereas customer pay, it's the same. It's the mix and the focus on customer pay that's driving it, you know, with the higher margin business. Got it. What portions of international is U.K. versus non-U.K. in your numbers there? Italy was up 11%, Germany was up 20%. I meant like just mix of services, just mix of your business, in terms of contribution, in UK and non-UK. Rajat, I'll get that back to you, offline after the call. Understood. Okay, great. Thanks. Thanks for all the color and good luck. All right. Thank you. Your next question comes from the line of Jeff Lick with Stephens. Please go ahead. Hey, Jeff. Good afternoon. Thanks for taking my question. Hey, Roger, how are you? Good. A question for Rich. Rich, you know, as we get into this part of the year, kind of, you know, April through the rest of the year, you know, lapping against last year. You know, last year at this time, luxury started to lag, you know, the broader auto sector and, you know, with the exception of April and, I mean, of August and September with the EVs. Just kind of curious how you're seeing things now as the year plays out, you know, 'cause you guys, you know, are a bit unique in that you have easier compares. Just kind of curious, you know, how you're thinking about, you know, the rest of the year on the new luxury, then maybe also talk about as we lap the EVs compare, what? Anything to think about there. Yeah. I'll touch on the last comment you made relative to EVs. If you look Q1 this year versus Q1 of 2025, our EV sales were down 61% this year compared to last year. Certainly, you know, out in our West Coast and California, there's still a certain level of demand for the BEVs. The consumer out there, we haven't completely replaced that with hybrids or ICE. That was a tough, you know, compare year-over-year. We thought that the Iran conflict would drive some near-term or short-term demand in BEVs that we just haven't seen materialize. That escalation in fuel prices hasn't overcome the consumer's concerns about, you know, battery electric vehicles, either from a range or infrastructure charging perspective. I don't see really a material change occurring in BEVs the balance of this year. You know, I think it's kind of stabilized post the tax credit going away in that 4% to 5% of the overall, you know, retail sales market. Coming back to the luxuries, you mentioned, or someone did earlier, the tough compare, certainly in March, you know, we were to SAR 17.6 million, April was at SAR 17 million. We've got some tough comps year-over-year. You know, you look at the premium luxury market, you know, certainly the sales are a little bit down in those brands. If I look at, you know, Audi in Q1 was down about 30% overall as they're, you know, launching some new models that need to come into the marketplace. BMW about 15%. You know, Porsche with the Macan going away, we knew that this year, next year until they relaunch, that model will be a little more challenging, so we're down about 18% with them. Mercedes, you know, about the same as BMW, down about 15% overall. The good news that I would say is that the OEMs have now adjusted to the, you know, what the tariff impact is gonna be on their business. You know, certainly I think they were holding back money on incentives and programs, certainly in the latter half of last year. I'd say they're back in the market. I wouldn't say the incentives are great, but they're good. You know, and the products they're producing are still very desirable. We, you know, we attend these, you know, annual dealer meetings, and every single one of them has a bevy of new products that are gonna be launching in the market this year that I think are gonna be highly desirable. I think from a model mix and brand mix, you know, with our 72% premium luxury, we're still in a good position there. Anything to call out with service and parts with respect to warranty, that you're lapping stop sales at, especially on the luxury side? You know, our fixed gross overall was up about 3.5%. We talked about the impact from the storms. You know, an encouraging nugget in there is our customer pay ROs. You know, we talked about that last couple calls. We've been really focused on that segment too. You know, the recalls, they continue to happen. If you look at Toyota, they increased the Tundra recall on engines to the 2023 and 2024 model year units. BMW's got a starter recall that was recently announced. Audi on their three-litre engine, you know, has piston replacements, which is about 30-hour job. We're doing a proactive software campaign too on the Q5 product. Look, I know the OEMs would prefer not to have these recalls, they continue to have quality leakage into the marketplace. Excellent. Well, thanks very much and best of luck in 2Q. Take care, Roger. Thanks, Jeff. Thanks, Jeff. Your next question comes from the line of John Babcock with Barclays. Please go ahead. Hey. Good afternoon. Thanks for taking my questions. Just a quick one on the truck market. I know you're expecting an increase in truck orders, particularly in the second half. Just curious on the sustainability risk. I mean, I'm sure there's probably a portion of the truck demand that's probably driven by expectations for higher prices, you know, with some of the regulatory changes. I'm just kind of curious if you think this is something that, you know, you think is long-term sustainable truck demand, or if this is something that you think is temporarily driven by some of the short-term factors like regulations. I certainly think there is some short-term influence on the truck orders, similar to what we saw with lack of truck orders in Q3, Q4. Last year, John, I think once there was some finality on what the EPA 2027 guidelines were going to look like, and customers could understand what the rule set was going to be, you know, that's what drove the order intake here in the first part of this year is Roger quoted up 91% on Class 8. I also think, you know, we had a near-term bump in particular for Premier Truck Group with tariff announcements in February. There was a grace period that was granted to customers that if they placed orders by the end of, by the beginning of March, they could avoid that tariff price increase, which was between $1,000 and $1,500, depending on heavy duty or medium duty. There's some things structurally that I think have been going on that we've talked about, you know, for the last 18 months with the administration, right? The Department of Transportation and FMCSA have really been cracking down on illegal carriers and non-domiciled CDL holders, that has had an effect of tightening capacity. You see that in the spot rates up 30%-40% year-over-year, that's driving higher utilization of the legal operators on the road. We're seeing that manifest itself in our parts and service revenue up just over 4% in that business. That's the first time in six quarters that we've seen growth in our, you know, our fixed gross profit there. When you look at the freight rates increasing, we're seeing that drive near term used truck demand as well. Our volume sales are trending upward there and our gross profit, as you saw in the quarter, was up almost $4,000. I think if you follow any of the publics, you know, J.B. Hunt, Covenant Transport that have reported, they would reiterate that they feel that the changes are structural and not temporary in nature. All right. Thanks for that all that color. Now just on the M&A side of things, you know, you've increased exposure, you know, to Texas, Toyota and Lexus recently. As, you know, on a go-forward basis, you know, should we think about expanding brands? Are there certain geographies you want to tack on to? Also, how are you balancing that with leverage and, you know, what's your comfort level of leverage right now? I think our leverage gives us all sorts of opportunity, point number one. Point number two, we're sitting with 70%-plus premium luxury and 21% or 22% volume foreign. We're focusing obviously on the mix of that, our business in those particular areas, probably more critically and looking for opportunities. I think our goal obviously is to maintain, as Shelley said, our dividend, you know, our buyback and our CapEx. We think by eliminating some of the stores that we have allowed us to reduce our CapEx hopefully by $100 million this year, that's going to give us the opportunity to continue to focus. I would say internationally, we've also done some pruning of our businesses there. I think at the end of the day, you know, we're focusing on investments in Australia, in the defense area, in the power system and power generation. Obviously the returns that we're getting from Premier Truck Group, their Freightliner business, they're market share leaders, and we'd be looking for other locations, you know, in the U.S. and Canada, to represent them as those have been turned out to be quite good. I think what's key is we'll look right now, like the stores we did in Orlando, the right brand, certainly the right location and profitability. I think we have, we have the luxury of not being in a hurry. When you put $2 billion of revenue on, now we've got to continue to integrate those into our company, which I think we're doing well and we'll again look for ones with a brand. Look at Toyota and Lexus right now. The lowest day supply of the industry. Are we talking under 20 days when you think about it? Some of the Lexus stores under 10, and they could continue to keep the product tight. That to me is gonna be critical. They're saying that's the way they're gonna operate in the future. We're getting some of that already also. When you look at Land Rover, you look at Porsche, and our business is down not because we're down, it's because of supply of the vehicles we want, and that's being impacted by tariffs, et cetera. We're going to be cautious. There will be people that are confused out there that own these businesses, some of the smaller operators. If they're contiguous to our circles, you know, we're going to pounce all over those if we can. That's a long answer. I'm sorry. Yeah. No, thanks. That's perfect. Appreciate it. Your next question comes from the line of Mike Albanese with StoneX. Please go ahead. Yeah. Hey, guys. Thanks for taking my question. Could you guys just comment on what you saw in Q1 regarding Chinese models and taking share in international markets? You know, is there a house view on how you think about the implications to premium luxury? And I mean, do you think about leaning into, you know, building exposure with these models or just kinda continue to take it slow and monitor? Thanks. Let's let, Randall is the expert on. In fact, just came back from the auto show in China, so he's the most current that we have on the phone. Why don't you give what we're doing, what's we're seeing in the U.K. and Europe? Yeah, Mike. You know, obviously, the Chinese brands are gaining share in Europe. In fact, you know, the markets that were in U.K., Italy, and Germany, they've more than doubled. In fact, if you look at Australia, last year, the Chinese brands were 15%. Year- to- date this year, through the first quarter, they're up to 23%. We've put our toe in the water in the U.K. and in Germany, starting really effectively the beginning of the year. We started late last year, but this is our first full quarter. We've got 11 locations between the U.K. and Germany right now, four different brands. I would say, first of all, our strategy has been to put these brands into existing facilities. In the U.K., we have our Sytner Select, which is our big box used car retail. We're able to put the brand, you know, there, with a, call it a minimal CI spend, and we're in business. We don't have additional fixed expense. We can sweat the asset a little bit more. You know, frankly, first blush so far has been positive. You know, we're going to take a walk before run approach. You know, in these big box used car retail, we get about 400 guests per week. You know, these Chinese OEMs are eager to partner with us more. You know, that's one of the reasons I went to the auto show, is really to understand the difference between these brands. You can't just throw an umbrella, say Chinese brands, just like any Western brands. Each of them have their pros and cons. Look, we're gonna expand where it makes sense, but we're gonna be, let's say, eyes wide open, cautious as we do it. Great. Thank you. Probably just follow up to that, you know, it probably matters brand by brand, as you alluded to. But could you just comment on what you're seeing in terms of, you know, unit profitability on these vehicles? Yeah, it differs slightly. I would say in the U.K., Geely and Chery have both been good to deal with. You know, one concern, like with any brand, gotta make sure they don't over-inventory you, that they're not gonna over-dealer the market, you know? 'Cause then it's just a race to the bottom. The other challenge you think about, you open a brand-new store standalone, you don't have any fixed operations. You know, instead of running at 75% fixed absorption, it's 0, right, at the beginning. Now, over time, that will increase, but that's, you know, that's to get a return on that investment. In Germany, we have BYD and MG, and we just started those, I'd say it's too early to tell. I'd say when you look at the margins in the big boxes, we're probably getting a couple thousand GBP more on the Chinese brands than we are with our used vehicles we're selling in the same store. Right now, it could be Christmas. We don't know what's gonna happen as we go forward. Look, the product's good. We're not seeing any consumer pushback. The mix has been about 50% retail, 50% fleet. Obviously, they're gonna put some in fleet to seed the market and get some volume up and awareness in the marketplace. You know, I think their approach has been sensible overall. Again, as a dealer, you just caution that they don't saturate the market. Okay. Just my last question on this front, is there anything we should be thinking about in terms of implications on aftersales with these brands? I mean, is it the same process, getting them in the service lanes and the same, you know, general RO that you would get on? Yeah premium luxury or. Yeah, go ahead. Look, it's a good question more from the standpoint of, hey, are they prepared, and hence are we prepared, you know, that we've got all the right safety stock from a parts standpoint, that when the customer does come in, that we can handle them efficiently. That's one big message I had with these OEMs as I met with them, and they seem to understand that we haven't had any challenges yet. It's been so minimal, Mike, relative to the number of customers we've had come in. Sure You know, I can't say dollar per repair order. One thing is these cars have seven-year warranty on it. We think, you know, the customer's going to be stickier. Rather than having a three or four-year warranty, they'll keep coming back. Well said. Thanks, guys. We don't know what the used car buyer is gonna be either. No. Not going to Then also is the captive finance companies, you know, which lead the brands around the world that have the best captive finance are the ones that we see are best for us. Right now, they're using banks and other things in order to support it, then they will buy down the rate to be competitive in the market. Those are all things. We don't have units in operation. That's why Randall decided if we were gonna do it, we're gonna put it in places where we already have revenue, and we have a parts and service, it's just a different car goes on the lift in the morning versus- Those select locations where we have full fixed operations in each of them. It's, again, we're just, we're utilizing our assets better. We're trying them in a different market to what's going on in Germany versus what's happening in the U.K. Right. You might talk a little bit about Australia. Yeah, from a Chinese standpoint? Yeah. Well, look at, we're, we don't have any Chinese brands there now. Like I said, it's up to 23%, and that's one market where, you know, Australia's pinched a little bit more with lack of fuel. They've only got two refineries there. They're dependent on imports. Their fuel price went up more than most countries, and they've seen significant increase in BEV sales along with the Chinese sales. You know, think about it. They went from 15%-23% in just one quarter, and those customers now are getting a taste of the quality of those brands. It's, you know, it's a disruptor for sure. Your next question comes from the line of Daniela Haigian with Morgan Stanley. Please go ahead. Hi, Daniela. Hi. Thank you for taking the question. Switching gears a little bit to a more thematic question, the trend of energy and autos converging on a global scale is getting a lot of interest from investors. Could you speak a little bit about your Australia, New Zealand segment and any opportunity there? Well, thanks, Daniela. It's Randall again. First of all, I'd say, you know, the energy business is vital, you know, across the world. Particularly in Australia, the data center business is exploding. And we have a 75% market share in data center backup power for the power range of 1,250 KW and higher, which the majority of them are. That's just, you know, our business pipeline there is extremely strong. We're very tight with numerous customers, and that's good news. The bad news with that is you sell the engine and it sits there, right? You go, you do maintenance on it once a month, but it doesn't run, so you don't have that after-sales annuity. Where we're focused is to continue to grow our prime power strategy and units in operation. As an example, you know, four years ago, we built a power station with our Bergen engines in the northwest of Australia, which, for our biggest mining customer, 175 MW stations, 15 engines, 20 cylinders per engine. These are massive engines, 18 L per cylinder, these are. These run 70, 8,000 hours a year. We're in the cycle right now after they got this commissioned, where the 16,000 hour maintenance interval, you have to take the heads off and remanufacture them. We have all that capability and expertise to remanufacture these heads in country as part of Penske Australia. Out for those 15 engines or 300 cylinder heads, that's about 15,000 hours worth of work. Our strategy is to do more, get more units in operation that are prime power, and we've got that whole vertical strategy and approach and solution for those customers in the market. It's a key strategy without a doubt for us. Great. Thank you. Your next question comes from the line of Alex Perry with Bank of America. Please go ahead. Hey, Alex. Hey, guys. Thanks for taking my questions here, and congrats on the strong quarter. I wanted to ask about the outlook in the U.K., sort of ex the Chinese brand, sort of, you know, sort of the core outlook in the U.K. Just one piece on the Chinese brands. Are you expecting to con-- I know you said earlier you're gonna take a measured approach there, but will you continue to add doors there? Just wanted to get your thoughts on the U.K. sort of, you know, outside of what's going on with the Chinese brands. Yeah, I think we're going to be measured is the right word, but it was interesting, again, meeting with all these OEMs and understanding the strengths and what some of their strategies are and how that aligns with our strategies. I think we'll continue to evaluate two things. Number one, which brands make sense, most sense to continue to partner with? Number two, where we have available facility infrastructure, again, with the strategy is saying, we already have it, let's put it there. You know, because again, with the lack of units in operation, you don't have that after sale. You know, the cost to get in is minimal. Then look at we're going to, as usual, be good partners with these brands and want to grow and help them understand the market better. They're going to limit us based on over-dealing. Yeah. We start to see what the discounting is because we don't, we don't wanna handle a vehicle we can't make any money on. Correct. Yep, that makes a lot of sense. Just on inventory levels across the network more broadly, can you just talk about, you know, how you feel about inventory levels? It sounds like, you know, there's certain brands, Toyota Lexus, where you're light, anywhere you think you're over at inventoried. In the brands that you're light, you know, how much do you think that that's sort of, restricting the sales velocity and any line of sight into those improving? Alex. Rich here. I'll speak to the U.S., and then Randall can cover internationally. Just as a top side from an overall perspective, on new, we ended the quarter 43 days and on used, you know, 33 days. The new compared to 52 days a year ago. We're down from a day supply standpoint, you know, nine days. You know, you've got to look at both the day supply and the model mix within the inventory that you have by brand. Even though we would say that Toyota Lexus, you know, is great from a day supply standpoint, we would prefer to have, you know, maybe more RAV4s in that inventory and less Tundras, as an example. You know? You've got to look at it from both perspectives. Certainly, you know, they are the healthiest in maintaining that supply versus demand balance. We talked last year, you know, we felt Honda may be overproduced a little bit, and our days supply crept up there. You know, they had a plant closure earlier this year that has got them back more in line. You know, we've still got to balance the BEV mix in there. You know, we've seen that come back up, you know, after the tax credit went away at the end of September, and we had that sell through. We were down to 12 days supply on BEV. We're up to 78 days supply now, you know, and that's higher than certainly our overall new car average is and certainly higher than we would, you know, want it to be. I think from a used perspective, we would prefer to have more used right now. There is demand in the used car market, but we've been disciplined again on our sourcing of used cars. We could go out and buy more used cars, but it would have the counter effect of lowering our grosses, you know, on the other side of the ledger. We've stayed within our wheelhouse of zero to four-year old used cars, you know, not going up market in the 8+, you know, year range for used cars. That's a little bit of color on the U.S. Randall? Yeah. Look it, very similar in the U.K., our new car supply is 40 days. You know, give you an idea, the lowest day supplies Land Rover at 35 days, and the highest is Audi at 45 days. The, you know, the band's pretty small with all the brands in between. Our used car supply is 42 days. Similar to the U.S., it's difficult now, but I would say our team in the U.K. has done a fantastic job with acquisition of used and proper appraisals. The available gross we have in our used cars right now is as best it's been in months. Anyway, we feel we're in very good shape. That's incredibly helpful. Best of luck going forward. Thanks, Alex. Thanks. Thanks, Alex. Your next question comes from the line of David Whiston with Morningstar. Please go ahead. Hey, David. Good afternoon. Hey there. On service bay utilization, you talked about it being, I think, 84%. I was just curious, what prevents that from being not being 100%? Is it purely labor shortages or other variables? Yeah. There's a combination of techs, you know, 'cause that is a measure of tech ratio to bays. Our tech count is up 3%. Our guys will tell you, we're, you don't want, and we're probably never gonna have a 100% bay utilization, 'cause in order to achieve that, you'd need to Randall's comments earlier, have every part you need at the time you need it. Invariably, that's never the case. You're in process of having a car torn down, waiting on a part that's tying up a bay, or you, in the case of battery electric vehicles, you've got a flat bay and you've, you need a bay next to it to reinstall the battery. We feel pretty good at 84%. You know, we probably can tick that up a few percentage points more, but with the flexibility we need for the type of work we do, growing north of 90% would be a challenge. Yeah, I think Rich also, these bigger jobs where we're taking engines out of Tundras and things like that, you almost need a second bay next to your. Correct ... operating Yeah in order to be able to do the work. Yeah. That, it's flexible. We are, you know, to put it in perspective, we're adding, we're going to 100 bays at Longo Toyota in California. We're building a new full dealership with 100 bays in Hutto, Texas, outside of Austin. We're adding another 30 bays to Central Florida. Toyota will get us to almost 100 bays. You know, our commitment because of the, you know, it's an operation for this brand, make this a real opportunity. Talk about where growth will be and, you know, depending on its warranty. Look, we like the warranty work, but the customer comes back because you got a car that's not in for warranty every day. I think that's key, and that's where Toyota, in many cases, leads the market. There's no question that our biggest push when we talk about investment is some of the showroom CapEx that's required, because in many cases, that means we got to tear up our buildings. We just did this in San Diego at Lexus, and we spent, what, almost a year, you know, new furniture, et cetera, et cetera. I think it's done great, we have to go further than that. This is some of the questions that we have today. What is the store making? What's expectation of the OEM? We're pushing back to them in a good way, trying to explain to them we need to spend more in parts than service. Let's make the showroom smaller. Let's put more cars outside and work on more inside. I know it's opposite of what the thinking is, you know, we have Bill Brown Ford, number one Ford dealer in the country. We could put 3 cars in the showroom, they sold 600 cars this month. You know, what are we doing? We're expanding the service. There is no question the back- end, and that's why we like Rich's business in Premier Truck. What are you, 120%, 130% fixed coverage? It's, it's Premier Truck. Yeah, we're 127%. 127%. How many trucks you have in the showroom? We got zero. All right. Sorry for getting off base, David. Thank you. That does conclude our question and answer session, and I would now like to turn the conference back over to Mr. Penske for closing comments. Thanks for joining us. We'll see you next quarter. Thank you. Ladies and gentlemen, that does conclude today's call. Thank you all for joining, and you may now disconnect.