Today's call is being recorded and will be available for replay approximately one hour after completion through August 5th, 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, Leah. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's second 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. Joining me for today's call are Roger Penske, Chair and CEO, Shelley Hulgrave, EVP and Chief Financial Officer, Rich Shearing, North American Operations, Randall Seymore, International Operations, and Anthony Facione, Vice President and Corporate Controller. I'm also available by mail, email, or phone for any follow-up questions you may have. We may include forward-looking statements on today's call about our earnings potential, outlook, and other future events. We may also discuss certain non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted earnings before taxes, adjusted net income, and our leverage ratio. We've also prominently presented and reconciled any non-GAAP measures to their mostly directly comparable GAAP measures in this morning's press release and our investor presentation, both of which are available on our website. Non-GAAP measures should be considered in addition to, not as a substitute for, the comparable GAAP measures. Our future results may vary from expectations because of risks and uncertainties outlined in today's press release under forward-looking statements. As most of you are likely aware, the company received an unsolicited, preliminary, and non-binding proposal from Penske Corporation and Mitsui & Co. to acquire the remaining shares of the company's common stock they do not currently own for cash consideration of $210 per share. The board of directors has established a special committee of disinterested and independent directors authorized to retain its own legal and financial advisors to evaluate the proposal. We have no further comments and will not be taking any questions on this matter at this time. However, I do direct you to our SEC filings, including our Form 10-K, our previously filed Form 10-Qs for additional discussion and factors that could cause future events to differ materially from expectations. Now I will 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 strong second quarter in financial results. During the quarter, PAG delivered 125,000 new and used vehicles and more than 5,400 new and used commercial trucks. We increased our revenue by 6% to $8.5 billion. We generated sequential increase in earnings before taxes, net income, earnings per share when compared to the first quarter 2026. Earnings before taxes were $354 million, net income was $260 million, and earnings per share were $3.96. Second quarter results include approximately $30 million from the gain on sale of dealerships as we continue to optimize our portfolio. Excluding the gain on sale, adjusted income before taxes was $323 million, net income was $238 million, and earnings per share was $3.62. Cash flow was strong, allowing us to reduce our long-term debt by $141 million and increase our quarterly dividend to $1.44, representing our 23rd consecutive quarterly increase. Let's take a look at the details of the quarter. Same store retail, new and used units increased 5%. Gross profit per new unit retailed was $4,782, down $1 per unit sequentially. Gross profit per unit retail used was $2,095, up $19 sequentially. Our service and parts same store revenue increased 2% and related gross profit increased 3%. Service and parts gross margin increased 60 basis points and sequentially 80 basis points quarter-over-quarter. Turning to the retail commercial truck segment. New and used truck units retail increased 2%. In fact, according to industry reports, North American Class 8 orders increased 170% in the second quarter compared to the same period last year. We expect to see the benefit from the strong order book in the second half of 2026. I was also pleased with the increase in profitability of PTS. During the second quarter, equity income increased 7% to $57 million, and net earnings were $207 million for the quarter. Growing into full service leasing revenue improved fleet utilization. Lower operating and interest expenses resulted from continued fleet reductions and were partially offset by continued challenges in rental and by lower gain on sale of used trucks. At this point, I'll turn it over to Rich Shearing to discuss our North American operations. Thank you, Roger, and good afternoon, everyone. In the U.S., our retail automotive same store new and used unit sales increased by 3%. During the quarter, 24% of the new units sold were at MSRP, which is consistent with the first quarter of this year. Same store service and parts revenue and gross profit increased 2.5%. Customer pay was up nearly 4%, warranty was flat, and collision repair declined 2%. Our U.S. automotive technician count is up 2% when compared to the end of June of last year, and our bay utilization is approximately 84%. Turning to Premier Truck Group, during Q2, Premier Truck retailed 5,431 new and used trucks. Same store new units declined 8% and used increased 65%. New units retailed improved sequentially by 53% to 4,276, compared to 2,786 in the first quarter of 2026. The increase in used units is primarily driven by an improved rate environment from a tightening in overall market capacity and improved spot rates. Used vehicle gross per unit was strong, increasing more than $2,000 on a sequential basis when compared to Q1 and nearly $1,900 when compared to prior year. Premier Truck Group generated $928 million in revenue and $143 million in gross profit, and gross margin increased 20 basis points. As Roger mentioned, throughout the first half of 2026, we have seen a stronger order book develop for the Class 8 market. In fact, Class 8 market orders increased 170% and the industry backlog grew 105% to 186,000 units in the second quarter. We expect to see the benefit from the strong order book in the second half of 2026 in the form of retail sales. Service and parts revenue increased 5% as average daily activity continues to grow and service backlog continues to increase. Turning to Penske Transportation Solutions, we are also encouraged by the stronger financial performance. During Q2, operating revenue was flat with the prior year quarter, lease revenue increased 1%, rental revenue declined 12%, and logistics revenue declined 2%. PTS sold 9,170 units in Q2, ending the quarter with a fleet size of just under 380,000 compared to 414,000 at the end of June 2025. As PTS continues to right size its fleet and dispose of older, higher mileage trucks, the gain on sale declined $13 million in Q2. However, higher fleet utilization, lower operating costs, and lower interest expense contributed to a 7% increase in equity earnings. As a result, the equity income increased to $57 million from $54 million. I would now like to turn the call over to Randall Seymore to discuss our international operations. Thanks, Rich. During Q2, international revenue was $3.2 billion, which is up 10%. Same store new units increased 8% and used units increased 7%. Same store revenue increased 10%, while same store gross profit increased 6%. Same store service and parts gross profit increased 5% as customer pay was up 3%, but warranty declined 7%. Looking at the U.K., in Q2 our new vehicles delivered increased 14%, which was in line with the overall U.K. market increase of 13%. Gross profit per unit increased sequentially by $303 when compared to Q1 2026. Same store used units increased 9%, and gross profit per unit was $2,228, which was down only $29 per unit on a sequential basis. While we were encouraged with the performance in Q2, the U.K. automotive environment remains challenging as higher taxes, consumer affordability considerations, the reduction in Motability programs, and the government mandate towards electrification impact the overall market. Turning to Australia, in automotive retail, our three Porsche dealerships in Melbourne continue to gain market traction through implementing our one ecosystem process. This process has driven a seamless experience for our customers, resulting in top customer satisfaction scores for all three of our Porsche dealerships in Melbourne. During Q2, new unit sales were impacted by the switch of the Macan model to a BEV-only powertrain. However, a strong model mix of new vehicles sold, coupled with a 10% increase in used units, showcased the ability of our business to flex with market conditions. Also, pleasingly, fixed operations gross profit increased by 11%. Turning to the Australian commercial vehicle and power systems business, we are diversified with a revenue split approximately two-thirds off-highway and one-third 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 remain a market leader in the over 1,250 kilowatt horsepower, high horsepower market. During Q2, our off-highway revenue increased 63%, and the future order pipeline remains strong as we secured over $300 million of orders in Q2, bringing the order book to nearly $660 million in secured orders for 2026. I'd now like to turn the caller 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. For the six months ended June 30th, 2026, we generated $418 million in cash flow from operations and EBITDA of $829 million. During the first half of 2026, we invested $134 million in capital expenditures. This is down from $147 million for the first half of last year. We completed acquisitions of two Lexus dealerships, representing $450 million in estimated annualized revenue. We increased our cash dividend from $1.40 to $1.44 per share, representing the 22nd and 23rd consecutive quarterly increases. On a forward basis, our current annualized dividend is $5.76, with a yield of 2.9% and a payout ratio of 40% over the last 12 months. We repurchased 265,000 shares of common stock for $43 million. Since the beginning of 2023, we have returned approximately $1.6 billion to shareholders through dividends and share repurchases. At the end of June, non-vehicle long-term debt was $2.5 billion, and leverage was only 1.7 times, despite completing several large acquisitions over the last eight months. We also reduced long-term debt by $141 million during the second quarter. Floor plan was $4.4 billion, and we had $412 million in vehicle equity. For the quarter, total interest expense increased $6 million. Floor plan interest decreased $5 million due to our cash management and lower interest rates, while other interest expense increased $11 million, primarily from higher borrowing costs as a result of acquisitions. We estimate a 25-basis-point change in interest rates would impact interest expense by approximately $15 million. Our effective tax rate was 26.2% in Q2 2026. The prior year results, Q2 2025, have been recapped 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. Q2 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've been approximately 100 basis points, and the impact to earnings per share would've been $0.05. Turning to SG&A, expenses increased by 3% during the quarter. SG&A as a percentage of gross profit for Q2 2026 was 71.8%, compared to 69.8% in Q2 last year, but was 250 basis points lower sequentially when compared to the first quarter of 2026. Q2 2026 SG&A expenses were impacted by higher costs for personnel expenses, including employee benefits, information technology expenses, rent and rent-related costs, and vehicle maintenance costs. Total inventory was $5.1 billion, up $295 million from December 2025. New vehicle inventory is at a 51-day supply, including 58 days for premium and 28 days for volume foreign. Used vehicle inventory is at a 44-day supply. At the end of June, liquidity was approximately $1.4 billion, including $70 million in cash and $1.3 billion of availability under the U.S. and international credit agreements and revolving mortgage facilities. At this time, I will turn the call back to Roger for some final remarks. Thank you, Shelley. We had a solid quarter. I remain optimistic about our business. Our diversification remains a key strength of our business model. Our recent acquisitions of Toyota and Lexus dealership in California, Florida, and Texas demonstrate our ability to identify and incorporate significant acquisitions into our portfolio. New and used retail automotive grosses remain strong, and service and parts continue to grow. The recovery in the commercial truck market is underway. We expect the improving freight conditions to benefit both our commercial truck dealerships and also PTS. Again, thanks for joining us for the call today and your confidence in PAG. Let's turn it over to the operator. We will now begin the question-and-answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of John Babcock with Barclays. Your line is open. Please go ahead. All right. Good afternoon. Hey, how are you? I guess just the first question, this is really more on the trucking business. You talked about the sheer magnitude of the growth and the Class 8 order books, and I was just wondering if you could maybe give some color in terms of how we should think about how that ultimately converts into sales. In other words, like kind of the cadence, how it typically flows through. Is that the kind of thing that flows through over a year, over 18 months, or is that something that we should expect to hit more near-term than that? Yeah, John, Rich here. You look at the backlog, it's 186,000 is what it's grown to with the ramp-up in the orders year to date. That represents about an eight and a half months worth of production. As you know, we're exclusively tied to Daimler Truck North America, and they have manufacturing plants both in Mexico and the United States, depending on the type of vehicle that they produce. Generally, from order intake to delivery, depending on where their first production slots availability is, it's a 45- to 60-day kind of timeline from when the truck order would be placed to when we receive that truck at our dealerships. Obviously, each month they're producing units that are intended to come to our dealerships. If you look at this order ramp-up through the first half of the year, we anticipate the majority of those orders that we've taken to convert into retail sales in the second half of this year. If you look at Premier Truck Group's backlog, it's about 10,400 units. Some of those will probably spill into the first part of next year, but the majority of those will deliver in the second half of this year. Got you. Has the strength of the growth in those order books been pretty recent, or has that been building, or how should we think about the trend there? It started to build in December, which is about three to four months late than the normal order cycle would generally take place. You look at Q2, they were up 170%. June, the orders were up 231%, and year to date, through six months, they're up 117%. Essentially, the majority of the manufacturers are at their production capacity for this year and sold out. We'll see those, that order intake probably curtail a little bit the second half of this year as the manufacturers start to publish the calendar year 2027 pricing. As a result of that, though, it's going to keep our used truck demand elevated, because the availability of new trucks from an order book and their ability to produce this year, additional new trucks will be muted. Rich, also, I think we had, what, 6,000 deliveries in the first half? Correct. We're expecting 10,000. That's correct. the second half. Correct. Quite an increase, and I think we feel good about margins staying pretty much consistent based on the mix of our business. Yeah, you saw that in the press release that our used gross per unit up almost $2,000, both sequentially and year-over-year. On Penske Transportation Solutions, given where supply and demand are today, where do you think that fleet size ultimately normalizes? Well, I think basically where you see the de-fleeting, really, we had over 88,000 rental trucks and we brought that down. I think we're at a point now we actually are in pretty good shape because what's happening is the utilization today is almost 80-plus%, where it was down in the low 70s. That drove our decisions to de-fleet, and of course, that's reduced our total debt almost $2 billion when you look at year-end forecasts. Obviously, maintenance is down, interest is down, and we've taken out some mechanics because with a reduced fleet. I think when we're going to grow it back, based on our lease business and our logistics business. I think when you look at the number of trucks we've sold in the first six months was 18,500, which was lower than it was in the past. Okay. Thanks for the color. I'll get back in queue. Yeah, thanks. Thanks, John. Your next question comes from the line of Michael Ward with Citigroup. Your line is open. Please go ahead. Hey, Mike. Thanks very much. Good afternoon, everybody. Thanks for taking the question. Mike. Randall, your comments on the U.K., it sounds like you had a pretty good quarter in the second quarter. You remain kind of cautious on the market outlook. Is that fair? Well, look, it's just a turbulent market right now, Mike. With the ZEV mandate and with the government change there, it's a little bit of a question mark what they're going to do. The mandate's 33% on the ZEV, and we're only at 25%. Next year, it goes to 38%. That puts pressure on the OEMs, that also dictates what channel they sell the cars through. The second point is, the Chinese brands have doubled their market share from 7.5% to over 15%. In fact, in June, they were over 16%. Look, we feel good the way we've structured our team there. We've gone from random to market area, and look at our brands. Our BMW Premium was good in Q2, so we think we've got more opportunity on the after-sales side. It's just the macro environment's just not easy. It's just going to continue to be changing every quarter. It's not like we've hit a base and we're starting to turn positive. That would be a false read at this point. No, I think we've hit our pace, Michael Ward. I think it's just the uncontrollable macro items have been difficult. They'll probably remain that way. You could say it's a new normal. Yeah In Q2, we showed our resilience being able to operate and perform in that environment. I would say. Yeah When we look at the Chinese doubling their market share, correct, year-over-year. Correct That's primarily in the lower cost vehicles, and we're 90-some% premium luxury. At the moment. Premium luxury I don't think that's going to be an issue for us. What do you think, Randall? Correct. Yeah, Mike, the Chinese brands sold 171,000 units for the first half of the year. That's up from 79,000 last year. 100,000. It's meaningful. Wow. Randall, talk about what our strategy is and what we're adding those to our franchise deck. We're sweating assets. Current facilities we have, all of our Sytner Select locations have Chinese brands in them. Then where we have separate facilities that are existing, maybe as an example, we had a Jaguar Land Rover dealership where we no longer have Jaguar, and there was a standalone Jaguar dealership next to it, and we're going to put a Chinese brand in there. You just can't afford, after sales, without used cars, no fixed absorption, essentially. You're living on new cars. Of course, over time, that will improve. Look it, they've been aggressive on pricing, on payments. They've subvented the rates. Inventory has been a mix depending on the brand. Look, our toe's in the water and margins are acceptable. Yeah, a total of 10 locations, and I would say we're strategically and pragmatically growing that. I think as I look at it, Mike, we don't know how many dealers are going to put in. What's going to be the volume aspirations? They don't have a captive finance company, so they're relying on subsidizing banks and other things, and that's always a question when you're dealing against MB Financial, Audi Financial, et cetera, where we have lease programs. We've got programs on certified vehicles. There's a big stretch there. The kind of people they have in the field, and we're going to have to build a fixed business. Right now, it's just really get ready and that's it. Well. When you look at capital allocation, do the comments that are with the U.K. and also when Rich was talking about the PTG business, it seems like most of the focus on the acquisition side of the allocation has been U.S., Toyota, Lexus. Is there anything that's tilting the scale, or are you going to just continue to be the same wherever it makes the most sense? I think, you know that, Mike. It seems to me like the truck market is going nuts, right? So Yeah. Truck market is certainly attractive, and that's why we remain committed to being flexible. We talk about that a lot, and it's just about allocating our capital wherever it makes the most sense. The opportunities that we had with PMG and again with Orlando, with great brands in great markets, that was really attractive to us. The acquisition market is very healthy. You saw we continued to increase our dividend this last quarter. We're making investments internally. Yeah with our CapEx. Continuing to fire on all cylinders and remain flexible so that we've got the best use of our capital. We also paid down $141 million worth of debt. Yeah We improved our leverage state and we'll continue to look at what makes the most sense for our cash. We've made a couple of key commitments in Europe and Germany, which we feel fit with the structured store group we have up in Aachen, which is in northern Germany, which has been quite profitable for us. We added a Ferrari location in Modena this past year, which has been very positive for us, and the three stores in Melbourne from a Porsche standpoint. We're certainly open for business. Is PTG exclusive to Daimler, or are you allowed to go off-brand? Do you want to go off-brand, I guess? Yeah, Mike, we're exclusive. We have a framework with them, that prohibits us at the moment from acquiring brands that compete with the product lineup they have. So, light duty stuff, four, five, where they don't produce trucks- Yeah to participate in that. We have an Isuzu franchise in Canada. Look, they're 40% of the market. Yeah. They continue to be successful. They produce a truck that's got the lowest total cost of ownership. It's reliable. We've got a presence both in Canada and the U.S. We're one of only three dealer groups that have that ability. We've got some headroom to grow. And- Oh, you do? Okay here in Michigan, in our backyard here, you may have heard this week, too, they just opened the Gordie Howe, Detroit River Bridge crossing. Yeah, the bridge. Yeah. It's going to help goods significantly from a congestion standpoint where you had the Ambassador Bridge and the Blue Water Bridge. This is going to really help trade go back and forth between. We'll see what happens with Canada, right? Yeah. Yeah. All right, you still have plenty of room within the Daimler- Yeah network throughout the U.S. and Canada to grow. Correct. Yeah. It's been a good relationship, and I think that- Yeah they notify us when there's opportunities, and we get back to them. They've been very helpful. Of course, one of the key things is that our finance partner It was Daimler and Toyota. They stepped up at every ounce that when we do an acquisition, they're side by side with us. I'd say, they've served us well back to when we had Chrysler, DaimlerChrysler, right, Shelley, doing our financing- Yep I don't know how many years ago. Well, thank you very much. Thanks, Mike. Thank you. Thanks, Mike. Your next question comes from the line of Alex Perry with Bank of America. Your line is open. Please go ahead. Hey, Alex. Hey, guys. Sorry about that. Thanks for taking my questions here. I wanted to ask on actually the Australia, New Zealand energy solutions business for you guys. Seems like a pretty unique business. Maybe just remind us how significant that business is, how big could that business scale to over time, and what would be the key drivers there? Thanks. Yeah. Thanks, Alex. Randall here. Our business in Australia is one third on-highway, which is our over-the-road truck distribution and retail business. Two-thirds off-highway. Mining is a big chunk of that, defense, rail, marine. As you said, energy solutions. We've got about 1,300 people, of which 500 are technicians. We have a very good footprint and infrastructure there. We're in all the capital cities, and then spotted in other places where we've got business, particularly in mining. The energy solutions business in the backup power for data centers, 1,250 KV and higher, we've got 75% plus market share. Australia is the number two market in the world from an AI token export standpoint. The investment continues. Our pipeline continues to grow, and as we deliver, we're replacing the pipeline. It's accretive growth. We've stated, I think on the last couple of calls, that we feel we can hit AUD 1 billion in data center revenue by 2030. With the current demand and with our market share and the relationship we have with both the customers, and frankly, supply of the engines is probably the biggest challenge, but we're working hard with our partners there. We definitely see a path to achieve that target. That's really helpful. Then maybe just shifting, I think the new commercial trucking side was asked about earlier, but just as we think about the used commercial truck demand, that sort of already turned this quarter. Maybe talk through the strength that you're seeing there. Are you seeing operators sort of take advantage of the higher freight rates? Could this lead to an increase in GPUs on the used truck side? How do you sort of expect the used truck business play out through the balance of the year? Thanks, Alex Perry. Rich Shearing here again. I think you picked up on it. The used truck demand increase is driven by what we're seeing in the spot rate market. If you look at dry van, reefer, flatbed, those rates are anywhere between 40% and 50% up over where they were a year ago and their highest level since 2021. Whenever you get that kind of escalation in rates, there's people that jump into the market to take advantage of that. Generally, those buyers with the one to two trucks or the owner-operators are used truck buyers. That's what's driving that demand. As I mentioned in my prepared remarks, we're up 2,000 sequentially and year-over-year. I anticipate that demand continuing as we go in the second half of the year. There's going to be customers that try to avoid the new truck price as well because just like on the auto side, we've seen price escalation on new and used trucks. The used truck, especially late model, low mileage, is a highly desirable unit. Our challenge as a dealer is going to be sourcing those trucks to keep up with the demand. I'd also say that as we look at PTS, we've seen a $2,000 to $3,000 to $4,000 increase where we're getting on our used trucks, which is a huge help to us as we continue to de-fleet, and that's been one of the areas on day cabs, which has been really losers for us, and that's turned around. The used truck market is much better, and I think it's given us the opportunity to be able to bring our fleet in line from the standpoint when you look at mix and age. That's incredibly helpful. Best of luck going forward. Thanks, Alex. Thanks. Your next question comes from the line of Rajat Gupta with JPMorgan. Your line is open. Please go ahead. Thanks, Rajat. Hey, everyone. Hey, Rajat. Just had a question on SG&A to gross. Pretty nice improvement sequentially this quarter. With all that we heard on the call with respect to PTG coming back, generally like stability in other areas of the business, is it fair to assume further improvement on the SG&A to gross level from here? Because I think one of the reasons why as It's Rajat at Shelley. I think I got most of your question, you're right. A nice sequential improvement, 250 basis points. We saw about a 400 basis point improvement from PTG quarter one over quarter two. Certainly the improvement in their business, all of the efforts that they made to contain costs while business was in a freight recession, certainly has helped as they've experienced better service and parts now and certainly those grosses that Rich talked about. There were some Q1 costs related to some weather events that we didn't have here in the second quarter, we also had some other headwinds, some uncontrollable, certainly around fuel costs, some employee benefits. Then there were other costs that we actively pursued, like investments in information technologies and other areas like that. I think we're still comfortable in that low 70s range that we've been talking about post-COVID. You saw us get back to a pretty nice level here in Q2, we still remain comfortable in the low 70s. I think when you look at it, Rajat, when we look at PTG, which is the Freightliner business, our unit gross actually went down from 66% to 59% in the quarter. In the U.S., we're at 68%. If you just look at our retail auto business, which we can compare with other of our peers, yet the U.K.'s at 79%. When you put that mix together, that's where we are still, down 250 basis points for the quarter. Got it. That's helpful. Just one quick one on U.S. Go ahead. Sorry. I was just asking on new GPUs. Could you give us a sense of how the U.S. business did on new GPUs sequentially? Any color you could provide on the outlook there. Thanks. Yeah, Rajat, Rich here. I think used demand has been good. I think similarly, acquisition continues to be a little bit challenging. The positive news there, I would say, is we kind of hit the valley last year on our lease and loan maturities. That's continued to improve throughout this year, and will continue to get better as we go into the future and into next year as well. Those obviously are cars that we have a higher chance of bringing back into our dealerships and either converting into another sale or getting the lease that's turned back in, even if they go somewhere else. We saw a high percentage of those in the quarter turn into CPO sales. We're 42% in the U.S. I continue to believe that there's a portion of the market where a new car customer five, six years ago, as a result of the price escalation, is now a used car customer. Five years ago, or actually it's almost seven years ago now, used car sales price is $25,000. It's $41,000 today, and that $41,000 is what the new car price was seven years ago. I think we see our margin holding up there. It's been 5% over the last five to seven years, and as long as that pricing stays pretty consistent, we've just got to make sure we're buying right and holding on to the gross at point of sale. Yeah, Rich, I think when you look at all-in gross on used sequentially, we're in the $3,700-$3,800 all in gross, which is terrific. Driving some of that, I think, is our premium mix. When you think about Toyota, and you think about Honda, you think about Lexus, Porsche, Land Rover, remember, we're not in the high volume area. Obviously, we are with Toyota, but the premium mix gives us a lot more stability because we're out racing for big numbers. Understood. Thanks for all the color, and good luck. Thank you. Thanks, Rajat. Your next question comes from the line of Daniela Haigian with Morgan Stanley. Your line is open. Please go ahead. Hey, Daniela. Hi. Thanks for taking the question. I had a question on the Australia power system. As you shift units and operation towards this prime power piece over backup power to build that recurring service remanufacturing tail, how should we expect that to move segment margins over the next two to three years, and how does that shift impact the service opportunity? I think on the product actually selling the engines, the margin's pretty consistent. The big difference is standby power. You go do maintenance once a month on the engine. It's not running. On prime power, obviously, it could run anywhere from 5,000 to 8,000 hours per year, depending on how they want to share load or if it's in front or behind the meter doing any peak shaving. That prime power just gives you that long-term annuity. These Bergen engines that we're selling, those will run for 30-plus years. When you get the cycle of the various maintenance, repair, and then even we do the remanufacturing on those engines, that's where the real annuity is. This full change to prime power in this space is It's in the cycle now, I would say, at the beginning stages of it. This is where we're working on these solutions with our customers, and we hope to grow that business for sure. Talk about Fortescue. Yeah. We supplied 16 engines in the northwest of Australia in a mining area. This is off the grid by 1,000 miles. These engines run close to 8,000 hours per year. We installed those engines, they started running about three years ago. Now we're at a 16,000-hour maintenance and overhaul cycle. Those margins are healthy. We're taking care of those customers. We have technicians domiciled on site. This is one thing, this happens to be powering various mine sites, but it's the same principle as if you're powering a data center and you start getting into these, like I said, 16,000-hour, 32,000-hour maintenance and remanufacturing cycles, and it's a strong business. We really are the exclusive distributor for them in that part of the world. Correct? We're looking for opportunities here in the U.S. We haven't identified any yet where we could partner with them either on the sales side or on the service side. This is a real opportunity, and Fortescue is really the one that has that mine. I think the technology there, and these engines are amazing when you think about it. If you look at power availability, and even when you look at the smaller engines, the MTUs, which are doing the standby, ultimately some of those can be on prime power, too. It's not that they're just built for standby. Yeah, we run numerous on prime power now in different applications. Yeah. Yeah. When you look at the mining, we didn't touch that, but we've got 800 mine haul trucks running, probably the largest fleet in the world, with MTU engines in them. Those have continued to run. They run about 30,000 hours over their first cycle, then we have two other cycles to get to 100 to do the reman on those. We're doing maintenance on those as we go forward. I think the technology is there. We're looking at hybrid opportunities as we go forward. The defense, when I think about defense, we're looking at patrol boats, destroyers, all the things that are taking place with the Navy. Plus, we're in the process of repowering the Collins class submarine. Our expertise, and with the 12 locations we have in the capital cities in Australia and with 1,300 people, we really have a massive capability from a technical standpoint. On top of that, we can service the equipment. With that, we end up with single-source service contracts on many of the products we're selling. We see that as a growth factor for us as we go forward. That is super helpful. Thank you for all the color there. My second question was a little more tactical. That segment, commercial vehicle and power systems, lot of growth opportunities over time. Year-over-year, it looks like revenue grew by more than gross profit. It was up 40% versus gross is up 30%. What was the driver of a bit of margin compression there? Was it mix? Was there something with energy? Well- Yeah. Thank you. It's all mixed. When you sell these big engines- Okay You got big capital product and our after-sale service and parts gross grew 10%. It didn't grow as fast as the revenue did on selling the engines for energy solutions. They both grow, just your revenue grew faster because of the mix. Thank you. Appreciate it. Your next question comes from the line of Jeff Lick with Stephens Inc. Your line is open. Please go ahead. Hey, Jeff. Good afternoon. Hey, Roger. Come a long way, Roger. 20 years ago, you were talking about the new Lexus SUV launch. Now we're talking about Collins class submarines, it definitely moving along. I'm not sure what 20 years from now I'll be talking about. We'll see. It'll be something. Yeah, right. I wanted to double back on the new unit same store sales up 3.7%. First question is, did the Longo stores and then also the U.K., did they perform above that, meaning that they were actually additive to that number? Just given that your peers have not put up positive new comp units, if you can really just talk what's driving that. Well, I think the U.K. was up for sure. They were up, what were they up? Fourteen. What, 14%? Yeah. I think, Rich, you had talked about it before. Our premium luxury was flat, which would include Lexus at Longo. On the Toyota side, volume foreign, we were up 6%. That's a big number when you think about the volume we're doing with Toyota and Lexus now, or Toyota and Honda. Yeah. Our domestic was up 15%, that's really not a big factor. It was really across the board led by the U.K., which was powerful. We're lucky it's not a registration month either, which is also good. Just as a follow-up. Obviously you guys over-indexed to the lease penetration and we're now seeing lease returns up 20, 30, 50% in certain weeks. Could you talk about that? I'm guessing that's a source of supply obviously, but a source of demand as well. Is that driving ups and are you guys capitalizing on that? Well, we have to. The answer is yes, the lease returns are increasing. Toyota this year is forecast for us to be 4,200 units, going to 5,600 next year. Lexus, not quite up as much, 2,500 this year, 3,100 next year. BMW 9,500 this year, 10,700 next year. Audi, they've got almost 4,600 lease returns this year for us, and 58% of those come in the second half of the year. Obviously, each of the OEMs have retention metrics as a KPI, and we've certainly got to hit those. I would say our objective is to be higher than what they want to hold us to, because as I said earlier, those are generally good used cars, and obviously, we want to convert those people into either another new car. The challenge for some of them is the equity position, and I think that's where we've talked about it in the past. A number of years ago, when the market was super hot, we didn't sell above MSRP. If they're our customers, we should be able to get them out of that car without the negative equity situation. If they're coming to us, and they bought those vehicles from another dealer, we are seeing some challenges with the consumer in a negative equity position. With the rates where they're at, the payment walk can be somewhat challenging. Wouldn't you say, Rich, that the captive finance guys, they want to keep that business? Correct. We're seeing the finance companies tipping in to help us along with the sales company to maintain that customer. Yes. Either we recruit him to a new vehicle, we sell him the vehicle, obviously a re-lease one. It's a big focus for us because it's a customer we already have. Again, CPO, when we CPO those, it's more parts and service for us. We still have upside with the lease penetration. It's at 32% for the quarter, and historically, we've been with the premium luxury in the mid-40s. Thanks very much for taking my question, best of luck in Q3. Thank you. Thanks, Jeff. Your next question comes from the line of Joe Spak with UBS. Your line is open. Please go ahead. Hey, Joe. Thanks. Good afternoon. Hey, Tom, I used to sort of at a high level think about PTG new and used trucks and PTS as somewhat of a almost sort of natural hedge in the business to that part of the market. In listening to you speak today, it actually sounds maybe a little bit more pro-cyclical, and I'm wondering if that's what you guys are seeing as well based on how you're currently positioned in each of those markets or each of those businesses. I'm not sure I completely understand the question, Joe. I would say, if I look at both of those businesses and we look at where the freight environment has been the last three and a half, four years, it's definitely been a more challenging environment. As we came out of COVID, you had a V-shaped recovery and people moving away from durable goods spending to more services that doesn't require a truck to move them. That has had a fairly long down cycle. We're definitely, I think, turning the corner now into an environment where the freight should improve. Capacity is tightening. The DOT and FMCSA are taking the necessary measures to get the non-CDL, non-English speaking CDL holders, illegal CDL holders out of the market, which is definitely helping. I think there's still some upside if the housing market improves. Obviously, if a lot of this manufacturing spend comes to fruition that the administration's been advertising, that's going to drive a lot of freight demand as well. For sure. When you think about it, the fixed coverage today at PTG is about between 125%-130%. Correct. Yep. These are vehicles that are people are running five, six, 700,000 miles. The parts and service help us through the peaks and valleys. There's no question. Don't you think? Yeah. Any kind of tailwind, you can see what it's doing on new trucks. We can see used truck values as they've gone up. When you think about PTS, you really got to break PTS down probably in three buckets. First, you have your lease bucket, which is your leasing. I hope my number is right. Somewhere probably around 60%-65% would be leasing. These are three, four, five-year contracts with economic escalators on an annual basis. These are tied together. Of course, you can't break them without paying a penalty. Then, of course, you have your logistics business, which is about $3 billion out of the $13 billion. You have rental. The rental is what's been, we drove that rental up much bigger than any other company in the country. That came down like a bomb. We had to really defleet, and that's where we took out probably 20,000 or 30,000 of our units. Our flexibility is really key. We can take off lease units as we go forward that are lower mileage and put them into rental too. I think that, and vice versa. I think the key thing is on our consumer, which is a rent it here, leave it there. Those units are now available to be run locally rather than just one way. I think the flexibility is good. Again, when we finance these, there was long five, six, 7-year bonds, and we're getting some pretty good rates on that from a standpoint of financing. This is just about this truck market and the freight market and the whole CDL situation, allowing now our customers to run more because of the new plants being built. I think the PTS future, we think is good. You can see their numbers. They did, I think, $207 million in the quarter. You can't just take that times four, but still, that's a big number for us as we go forward. Okay. Thank you. Then just as a second question, you guys are already pretty tight on Toyota and Lexus volumes. With the earthquake over in Japan and some Lexus output getting disrupted, I guess that sort of maybe helps pricing, but the net of pricing with maybe a little bit softer volumes, is that at all material or you don't expect any sort of impact from that event? Based on what we know right now, Joe, we don't think it to be material. The latest information we have is that the plant will only be shut down through this Friday. Okay. I think it's precautionary measures. They were 93 miles away from the epicenter of the earthquake, obviously they want to do the appropriate inspection of their facilities and make sure it's safe for their employees. That's what we understand the disruption to be. Okay. Appreciate it. Thank you. You bet. Your next question comes from the line of David Whiston with Morningstar. Your line is open. Please go ahead. Hey, David. Thanks. Good afternoon. Hey, Roger. Hey, everyone. I guess just looking at the external environment, in all your end markets and the macroeconomic environment, can you talk at all about what is your preference in the second half of the year between acquisitions versus buybacks? Well, I think from an acquisition standpoint, we're going to continue the same cadence as we have through this first six months. I don't feel that we're going to do anything any different. To me, it's the same business right now, and we've got to run it appropriately. David, we're going to follow the consistent process of having a flexible approach to allocating capital across all the different buckets. We've been doing that for a very long time. I think it's worked well for us, and we will continue to do that as we approach the future. We've got certain CapEx requirements that we have to do across the entire enterprise. Right. Okay. On the rebound in Class 8 demand, is onshoring from tariffs at all helping truck demand? I think it's too early to tell. I would say if some of the projects that have been advertised come to fruition, that's going to drive significant freight volume and freight weight that needs to be moved. I think manufacturing, housing, and consumer spending are the three big drivers of the freight environment. Housing is muted. Manufacturing has been pretty good, if you look at the PMI Manufacturers Index. Consumer spending is not as robust as it has been, but it continues to be healthy. Okay. Thanks. You bet. Thanks, David. There are no further questions at this time. I will now turn the call back to Roger Penske for closing remarks. Thanks, everyone. We'll talk to you soon. Thanks, Leah. Thanks, everyone. This concludes today's call. Thank you for attending. You may now disconnect.