Hello everyone, and welcome to the AutoNation Incorporation Fourth Quarter 2023 Earnings Conference Call. My name is Bruno, I'll be operating your call today. [Operator Instructions] I'll now hand over to your host, Derek Fiebig, Vice President of Investor Relations. Please go ahead.

Thank you, Bruno, and good morning, everyone. And welcome to AutoNation's fourth quarter 2023 conference call. Leading our call today will be Mike Manley, our Chief Executive Officer; and Tom Szlosek, our Chief Financial Officer. Following their remarks, we'll open up the call for questions. Before we begin, I'd like to remind you that certain statements and information on this call, including any statements regarding our anticipated financial results and objectives, constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks that may cause our actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause our actual results to differ materially are contained in our press release issued today, and in our filings with the SEC. Certain non-GAAP financial measures as defined under SEC rules will be discussed on this call. Reconciliations are provided in our materials and on our website at investors.autonation.com. With that I'll turn the call over to Mike.

Yes, thanks Derek, and good morning, everybody. Thank you for joining us today. I'm on Slide 3 and I'm going to provide some opening remarks before I hand over to Tom, who is going to take you through our fourth quarter results in greater detail. Now, as we know, there continues to be mixed economic signals in the economy, and concerns over affordability. But from our perspective, consumer demand for new vehicles remains robust. During the quarter, our total new vehicle revenue increased 7%, and unit sales increased 5%. And this reflected strong import growth, as well as the seasonal uplift in Premium Luxury sales. New vehicle margins continue to decline, but the rate of moderation in the fourth-quarter, which is approximately $120 per month was more modest than earlier quarters. Total new vehicle inventory levels of 76 days increased from 19 last year and 31 in the third quarter. We have 66 days of domestic brands, 29 days of luxury and 24 days of import brands. Inventory levels are expected to continue to grow in 2024, and as such, we expect to see a continued moderation of new vehicle margin, which we anticipate will be roughly the same pace as we experienced in Q4. Turning to used vehicles, same-store units decreased 8% a year ago, while total units were down 4%, which reflects the growth of AN USA stores in the year. The more recent sequential comparisons have a slightly better than the market. Now, we're managing several critical variables in the used market at the moment. Firstly, we continue to see tight availability and this has been with us throughout 2023 and will no doubt continue into 2024. And notwithstanding the inventory availability was seeing used vehicle depreciation, which is broadly back to normal than historical levels. Mix…

Okay, perfect. Thanks, Mike. I'm turning to Slide 4, to comment on our fourth quarter P&L. Total revenue increased slightly, as growth in new vehicle and after-sales revenue more than offset lower used vehicle revenue. As expected, gross profit was down 5% and margin was 18% for the quarter. As strong growth in after sales partially offset declines for new and used vehicles, which I'll address in later slide. Adjusted SG&A increased 5% to $791 million, with stable core spending and incremental costs, related to our growth initiatives. This resulted in adjusted operating income of $368 million for the quarter, which decreased 22% from a year ago. Below the operating line, our fourth quarter results were impacted by higher interest expense, for both floorplan and non-vehicle debt, and benefited from lower income tax expense. The fourth quarter floorplan interest expense of $47 million was up from $20 million a year ago, a reflection of higher rate, and inventory level as expected. As a reminder, we reflect floorplan assistance received from OEMs in gross margin. And in the fourth quarter, the increased assistance helped to offset partially, the increase in floorplan interest expense. Interest expense for non-vehicle debt was $46 million for the quarter, up from $38 million a year ago. The increase reflects increased borrowing and higher rates. Income tax expense for the quarter was $62 million compared to $91 million in 2022, reflecting. lower taxable income and a modestly lower income tax rate. All in this resulted in adjusted net income of $216 million compared to adjusted net income of $319 million a year ago. The impact of our share repurchase activity partially offset the EPS effect of the lower net income. Total shares repurchased over the year decreased our average shares outstanding by 14% to 42.9 million shares…

Yes, thanks Tom. Yes, we thought it would be helpful just to provide some thoughts regarding 2024 and how we see things may be progressing. On the new side of the business, as we know vehicle supply is going to continue to return to pre-pandemic levels. And I think leasing and retail incentives are clearly going to pick up through the year but I think will remain below pre-pandemic levels in total. So inventory levels will continue to increase over the course of 2024, but we expect demand to be robust. Battery electric vehicle product introduction and customer interest in these vehicles is clearly going to be a key dynamic this year. As widely reported, bad PVRs consistently fell during 2023 and in most instances, are lower than similar combustion engine vehicles. And as with all things, it's about balance and it does appear OEMs are adjusting their plans and actions to match demand more closely. And frankly, this will be well received. Hybrid are doing well in the marketplace, and we have good exposure to this portion of the market based upon our brand mix, and we expect our new margins to continue to moderate over the course of 2024, but at a somewhat slower pace than we experienced in 2023. Used vehicle market will likely remain constrained, as late model used vehicle availability remains limited and additional new vehicles are available. The key is going to be our effectiveness as always in purchasing pricing and turning our inventory, and we're going to remain nimble in our approach to those things in the market as it develops. I expect our CFS to continue to perform well even with pressures coming from overall monthly payments, vehicle mix and OEM actions to support unit sales. And as you've seen, it's a very consistent and clear strength of our organization. After-sales has been and will remain a significant area of focus for us. You saw the results in our Q4 outcome and after strong growth in 2023, obviously. Our year-over-year comps will moderate, but we expect this area of our business to continue to grow attractively. And we will, as always, be focused on managing the controllable variables, which includes cash flow and capital deployment. And with that, Tom, let's hand it over to Derek to get some questions.

Yes. Bruno, if you could please remind the audience how to get in queue for question-and-answer please?

Sure. [Operator Instructions] We do have our first question registered, comes from John Murphy from Bank of America. John, your line is now open.

Good morning, guys. Just wanted to ask the first question, Mike, on after-sales. I mean it's obviously a bright spot. It seems like the efforts there to do higher techs is really paying off. You keep talking about share of wallet increasing. It seems like the area where your share of wallet for consumers is -- there's obviously the most opportunity other than getting to the second and third turn of the used vehicle. So as you think about this in 2024, maybe even just beyond in sort of a strategic standpoint, what do you think you need to do to continue to drive that significantly higher? Is it just a function of hiring more techs? Is it an increase in connectivity? Is it getting involved in the second and third used vehicle turn? What's the key strategy there? And what are the opportunities to drive that faster or farther?

So John, it's probably a combination of all of the above. If I think about our franchise business firstly, we have a penetration in the vehicle parks that were responsible for our areas of operation that are franchises represent probably around 50% plus minus. And what we know is that customers move on to other sources for that service, when the vehicles get seven years old or they're 25 miles beyond the radius. So there's a lot of opportunity within the territories that we have. And then we're providing channels and access to our customers who would have migrated to a different source for their servicing and repairs through things, such as our mobile service, which, as you know, is a new addition to us. So I think partly in terms of our installed assets, we have sufficient bay capacity. We saw -- from my memory I think it was a 5% or 6% increase in our technicians during the period. There is opportunity for us to continue to grow that, adding services onto it, and then we'll backfill with mobile services for those customers that don't, for whatever reason moved away from the franchise environment. So that's going to be a big focus for us this year. There's plenty of opportunity. It's not easy to unlock, because once a customer is migrated, they obviously form a relationship, and that leads me to the last thing, and that is we have a fantastic brand. I think last time we checked our brand, which we do relatively regularly. It was the most known automotive brand in the United States. And I think we can do a better job of communicating all of the products and services to our customers, to help them understand that we can increasingly look after a broader set of needs that they have, not just for themselves, but also in their family.

Okay. That's helpful. And then just a second question on the used-car business, obviously, GPUs are down. It sounds like there is a little bit of mix going on, also sort of a little bit of inventory management. Is this the kind of thing that you think is really a function of the next couple of quarters and then you get back to normal GPUs or is there something happening here sort of cyclically or secular basis that we keep these numbers low?

No, absolutely. As Tom mentioned, I think one of the things that, as we came into 2023, our inventory levels were very low, and we felt that we missed out on some of the marketplace. We put in place a number of initiatives middle of last year through the end of last year to enable us to source the vehicles that we need, and we did that very, very effectively. At the same time, I think some of the market dynamics were changing. One of the things that had increased dramatically during the COVID period was the percentage mix of vehicles above say, $35,000 and Tom gave you the mix. And we're seeing those customers who maybe came into the high end of the used car market because they couldn't get new, now returning back to the new car market with lower transaction prices and more incentives to manufacturers. And what we need to be is very, very agile to make sure that as the market changes, and I think it will continue to change, that we are ahead of those mix changes. And we have some work to do. We did -- we started that work in -- before the end of last year, continued through January. I think that work will be largely completed by the end of Q1, very early Q2. So in my mind, it's transitory. The good news is that each one of those unit sales comes with phenomenal CFS performance and obviously is going straight into our after-sales database for us to be able to look after them. So every customer comes now with -- from our perspective, with a great opportunity not just with a sale.

So, Mike, when you get the turn and earn back being efficient, would it be fair to say that, that $1,800 range on PVR is something that we should think about sort of mid-to-long term as we get through the course of this year and beyond?

Yes, I think that's a very -- I think that's an achievable number for sure, yes.

Great. All right. Thank you very much.

Thanks, John.

Our next question comes from Daniel Imbro from Stephens, Inc. Daniel, you may proceed with your question.

Yes, hey good morning, everybody. Thanks for taking my questions. Mike, I wanted to start maybe on the new GPU side. Obviously, a little bit lighter moderation, your commentary suggested that's going to continue in 2024. Curious if you can say about how the OEM conversations are going? Are you seeing any change in tone, especially at some of the brands where inventory maybe has built. And then I'm curious, given your experience on the OEM side, what levers do you think pulled? Do you see them cut MSRP? Kind of how do you think they navigate through some of the heavier inventory situations out there?

Yes, thanks, Daniel. Well, even though -- and I mentioned this in my opening commentary, until the time we're seeing some increases in terms of retail incentive rates and leasing back up to 23%. We're still not at the levels that we had seen before. And I think as we begin to see inventory build, we will see continued action in that area from the OEMs leasing in my view by the end of this year, early next year, we'll be back to pre-pandemic levels. And I think we've seen much more subsidized finance with obviously with the interest rates that we have and that will continue as we get deep into 2024. When I think about overall days of supply obviously, it's very different depending on the manufacturers and the brand partners that we have, but clearly still well below in many instances, the level we saw. And from my point-of-view, as the industry develops this year, I think we will truly see hopefully, how the manufacturers are thinking about the balance of their inventory, and prevailing market conditions because we talked a lot about this when we were deep in the pandemic. I think this year we're going to see how each OEM is going to address that and some will be more disciplined, some will be less.

Got it. That's helpful and then maybe Tom on the finance side, I think Mike and you both mentioned, you've rolled out AutoNation Finance into all the franchise stores. Curious if you could maybe provide some stats around the loan growth in the quarter maybe Q4 reserves, you're taking your provision for losses. And then how those loans are performing, as we think about the changing consumer credit backdrop today?

Thanks for the question, Daniel. As everybody knows we bought AutoNation Finance in October 2022 we closed. It started out entirely as a third-party lender mostly to subprime. We've over the course of the last year completely converted that to now supporting AutoNation exclusively, both AN USA stores as well as the franchise stores. Very little in terms of subprime. So it's really gone through a nice transition, we love the platform, we love the team. The trends have been very, very strong. We've got as I said improvement in the origin mix with all AutoNation customers, FICO scores have improved between 50 and 100 basis-points in terms of what we're originating. On the credit quality trends 30-day delinquencies have been really strong. I mean in the third quarter, we were probably 7.5% delinquent. That's improved by about 200 basis points through the end of January. So team is doing a nice job in what is not an easy environment for consumer credit. So we're happy with that. The penetration rates amongst our stores where we're present has been growing, has been very strong. So it's about $450 million portfolio, and that is after a sale of chunk of the business in the third quarter, which was -- it's about $80 million. We're excited about 2024. We think the originations could double and we just couldn't be more pleased with how the business has developed over time.

Appreciate that. Just a quick accounting follow-up. Where do those CECL reserves, as the loan balance -- you said they're going to double the loan growth. I guess where does that flow through the income statement as we think about modeling out the growth in the finance business?

It's all in that one line other income and expense on P&L. While growing like I said, it's probably not material enough for us to break that out. I think at some point we'll address that depending on how the growth is, but it's all basically collapsed in that one line.

Great. Thank you so much, guys. Best of luck.

Our next question comes from Rajat Gupta from JP Morgan. Rajat, your line is now open.

Great, thanks for taking the question. Thanks for all the color on 2024 expectations around the new business, the used as well. But curious, is there a range you're targeting for SG&A to gross for the year in context of the study, new GPA decline, some of the pressures in the U.S. business, how should we think about SG&A to gross for 2024. I have a quick follow-up. Thanks.

Yes, Rajat. The way that we're thinking about this is, obviously in what I would call our core businesses. The things that we've put in place over the last few years continues to have I think clear benefits. Our SG&A also includes some of the investments that we've been making progressively in the last two years. So the percentage that we see doesn't represent the core businesses in sales. But I think the range that we sit in now is the range that we're going to continue to target going forward. And it will fluctuate, as I said, based upon the additional investments that we are making, for example, in mobile services, for example, in our parts commerce business as we grow those businesses. So that's kind of my view on SG&A at this time.

Yes. The thing I would add to that is, as Mike mentioned, we do have some investments in AN USA as those stores rollout, you don't get to a full run-rate of profitability for about a year, so that can dampen the SG&A rate and also the investments that Mike has mentioned, strategic investments. And also advertising is -- we've seen some inflation there. I would say we probably would be in longer term basis, mid 60s kind of level relative to gross profit. But we are paying close attention. As we mentioned, we've done some -- we've taken some modest actions in the fourth quarter to address and take advantage of some delayering opportunities in the regions, as well as to economize some of those support functions. So it's a pretty important area for us we continue to drive productivity where we can.

Got it, got it, that's helpful color. And just on capital allocation. Obviously, we've seen looks like very steady and like pretty elevated look buybacks over the last few years. Curious like how that toggle between M&A and buyback looks today based on what you're seeing in the pipeline for deals and related multiples. Curious if we should expect any shift in strategy there, maybe more get toward M&A versus historically buyback. Thanks.

Yes, it's great question. Thank you. The greatest job is that we generate a lot of cash. So it gives us optionality. And you're probably very familiar with how we've allocated capital over the last two or three years. I don't think there is any material change in how we're looking at it. The focus is on maximizing shareholder return. When we do see allocation opportunities, whether it's internally the CapEx or to M&A opportunities we think we're pretty disciplined in terms of our analytical evaluation, and our cooperation of synergies. And where the deals look like, it would be accretive and meet our hurdle rates and we'll go after them aggressively. But we also have had great success with share repurchases and feel that that's going to continue to be an important part of our capital allocation playbook.

Are you seeing any changes in our existing multiples [indiscernible] last few months? Any change in turn or any increasing propensity like for sellers to offload. Curious, like if you think in the market you've seen that shifted on the M&A side.

Can you clarify you're muffled a little bit in your question, I'm sorry.

Yes, I just wanted to ask like, have you seen any changes in the multiples or devaluation of some of the assets that are out there in the market from an M&A perspective. Over the last few months.

Yes, as you can imagine sellers tend to have amnesia when it comes to where the prices used to be before. In all these run-ups in the last few years. But I don't think there's been any market change in valuations, maybe here and there, but we're not seeing anybody walk away from last year's crisis per se or anything like that.

No, but it's also true to say that, our conversations around the basis for people's valuations are heavily pointed in the last 12 months and trading conditions in our view moving forward. And as we move frankly throughout last year and as we move further into this year, obviously the TTM is going to reflect the reality of the fact that there's a normalization in margins and ultimately it will impact values. And that's something we're very much looking for and something that we're talking to people about. But as Tom said, at this moment in time, obviously, people are holding on as much as they possibly can to 2022.

Got it, got it. That's helpful color. Thank you and good luck.

Our next question comes from Michael Ward from Freedom Capital. Michael, your line is now open.

Thanks very much. Good morning, everyone. Mike, I think in your comments you mentioned that on the parts and services side complexity has led to higher content. Can you quantify either some of the content you're talking about or the retention rates you're getting on the parts and service side, with the increased complexity vehicles.

So the work that [indiscernible] has been doing with his team shows us that, even though the frequency of service and repair in our -- so let me say service. I'll come back to repair comment in a minute. Drops loyalty goes up fairly significantly. And the time that the vehicle is in the shop goes up significantly. So as we were thinking about this transition to electrified vehicles, we were very concerned as many people were about to drop-off from the parts and services that hasn't been what we've experienced so far for those two reasons. In terms of repair, obviously, the profile of that is changing. Some of the repairs now have done remotely. And we really I think are still looking at that and learning about that. But at this moment in time, if we look at the population of our customers and their vehicles, the combination of higher loyalties and longer time in shop is outweighing has been better than our expectation. Let me put it that way.

Along with that, could you give an update on RepairSmith and where that stands and what are your growth objectives with it as you go forward?

Yes, absolutely. Well, we've rebounded RepairSmith, which was not unexpected that is now AutoNation Mobile Services. It's integrated -- it's progressively being integrated alongside AN USA because as you know, many standalone used car sales don't have an after-sales provision. And in the same way as we aligned AutoNation Finance with AN USA, we were aligning RepairSmith to be the provider of refurbishment and service maintenance warranty needs for those customers. We've opened up now our relationships with multiple fleet customers across the country and introducing mobile services to those guys and expanding the products that the fleet offers. I would say at this moment in time, there's a lot of work for us to do. That integration work will probably continue through the balance of this year. We see a lot of growth that we now need to drive up our returns.

Just last, one last question on the M&A front. You took a look at Pendragon, does that suggest that as you look out over the next couple of years that expansion outside of the U.S. could be in the cards?

I think it goes back to Tom's comments, I thought he summed it up really well. We are looking at opportunities that come across. That's been a very, very consistent way. We liked what we saw with Pendragon at the price that we had indicated in the marketplace. And at that point we thought it was good, but clearly that move was not for us. So I would tell you that we have an eye to a number of opportunities at this point in time.

Beautiful. Thank you very much.

Our next question comes from Bret Jordan from Jefferies. Brett, your line is now open.

Hey, good morning guys. On the mobile services question, I guess you're talking about expanding the products offered. Could you talk maybe a bit about the logistics of the mobile services, what can you do in that format and I guess from a staffing standpoint, cold, rainy days, probably not appealing to work outdoors. But what are you seeing as far as building up that model?

Yes. Well, the good news is that, if you think about our geographic footprint, we are in -- we are largely -- the vast majority of our business who is in states, where you can operate full 12 months without certainly six plus months. But I take your point. So obviously, services, maintenance and repair work is given. We are in the process of expanding to tires. We are in the process of expanding to glass. And as you know, we have a very good business in our collision centers and that will include calibration. So there are multiple things that these bands so quick can do. And that's effectively what we're doing. We had already done some pilot work on glass which was successful, in some of our Texas businesses, so that's going to be expanded throughout this year. Tires, there is a demand for tires, which can easily be done from a properly equipped van. So there is quite expansion in terms of products that you -- that we can offer. And as you can imagine, as we grow AutoNation USA and they are as successful as they have been in terms of CFS, many of those CFS products are associated with extended warranties or maintenance contracts, and we're now able to completely fulfill them ourselves rather than those customers may be migrating to a competitor to have that work done. So I'm very excited about mobile services. It's a business that we -- as I said centering in those markets where we already have density in a customer base is now associated clearly with our brand, which I think does bring a degree of credibility, which is important when you think about around timing effort on someone's drive and I think it will help us. So let's see how we develop it this year.

Okay, thanks. A quick question on domestic DSO at 66 days, could you talk about the sort of spread between the manufacturers and that inventory exposure and obviously, I think there has been a lot of talk about Stellantis maybe increasing their promotional level or decreasing pricing. Are you seeing anything that's sort of changing as far as I guess promotional cadence reasonably?

I'm not seeing any changes from my perspective. I think we're coming into traditional months where all of the domestics will focus heavily on their own trucks. That's normal, that I think is something that will continue this the different seasons in the year is not going to change. I think that if you think about the percentage of sales by vehicle segment, it is natural that those OEMs who have a very high percentage of sales in trucks, whether it's medium or heavy are going to have a higher day supply purely because of the selection required. And even though the length of the day supply has increased, it is significantly lower than it's been historically.

Great. Thank you.

[Operator Instructions] Our next question comes from Douglas Dutton from Evercore. Douglas, your line is now open.

Hi team. Thanks for having me on. Congrats on the quarter. Two quick questions from me. Just first on the new vehicle PVR point and the normalization, that we continue to see, is it fair to think that there may actually be a higher trough cycle over cycle, maybe remaining at about a 20% to 30% premium over 2019 levels. I'm just curious if perhaps you are beginning to see some structural reasons that a decrease to pre-COVID levels may not be the reality. Given the rate of change on profit per unit has begun to slow like Tom mentioned as the fourth quarter was actually the best sequential in three quarters.

Yes, Doug, welcome. Lot of moving pieces in that question, as you know, one of the things that, I think we have to really watch closely this year is what's happening with battery-electric vehicles and hybrid. And as you know, all of the OEMs at this moment in time are working towards a set of GHG targets, which vary by state and that may well change depending on what happens later this year, and as we move forward. But there is and has been a significant impact on margin as battery electric vehicles have continued to grow in terms of the share that they represent. I mean their increased share roughly doubled from the end of 2022 through to 2023. And as a result of that, that had an impact on the combustion. I will not talk about margins, obviously. So the answer to your question is, truthfully, I expect a return to very similar margins to 2019. And by the way, that would include the impact in my view of battery-electric vehicles and hybrid electric vehicles. How that happens is very much going to depend on, how the OEMs are thinking about the mix of the beds, the hybrids and the combustion engines through the balance of this year and how they're going to achieve that target. It's a very -- it is not an easy question to answer, so that's my best effort. But I would say what we are doing in our business is to really focus on those areas where we have more control and more opportunity and those areas CFS, used, as we talked about, obviously after-sales and how we can provide more products and services to the customers that we have won over many, many years of being in the marketplace. And then to make sure that our new vehicles, we're not an outlier, either with lower margins or poor market-share. We obviously control our costs, because to a large extent how the new vehicle market developed as you can completely understand even though we're a very large player in this industry. We're still a tiny player in terms of the total new vehicle market. So I think we have to be realistic about the things we can do.

Okay, that's helpful color. I appreciate you giving the detail there. Just to be crystal clear here, a slightly lower growth from EVs as a lot of us now expect for at least 2024 through maybe 2025, 2026 would actually be a positive, that's the correct way to think about that?

Yes, based on the margins we saw developed last year. That's exactly how I would think about it.

Okay. Thanks, team.

Our next question comes from Colin Langan from Wells Fargo. Colin your line is open.

Great, thanks for taking my questions. I think you mentioned in your comments, as CFS is supposed to be strong I mean how should we be thinking about that because I mean I think that there's more leasing, I think that puts a little bit of pressure on -- there's possible normalization of vehicles, maybe on mass market, we might put pressure on that, does that still going to be up year-over-year? Or should we think about just moderating a bit as we go into next year?

Yes. Thanks for the question, Colin. Yes, in my commentary I was referencing a little bit higher lease penetration in the CFS comments. I think on balance, leases are accretive to what we're trying to accomplish, yes. I mean maybe you sell a little bit fewer products on a CFS perspective, but it's not massive. I mean it is outweighed by the fact that we have a shot at getting the used car once it comes off-lease. It also helps with vehicle affordability. We have typically third party finances taking a residual risk. So it's a net-net a win-win for us on leasing. And I would think of it that way, we've been able to manage through with CFS over the years with higher leasing volume.

Got it. And then just going back to your comments to the last question on expecting profitability to sort of normalize to pre-COVID 2019 levels. Is that already pretty much there on the domestics? If I look at the Q4 margin, the percent margin looks pretty similar to pre-COVID. So is that kind of driving some of those thoughts is that -- those companies that have already kind of restocked a lot of the inventory are already kind of back to normal levels?

Yes, the answer to your question is that, it's pretty much there for some of our OEMs.

Got it. All right. Thanks for taking my questions.

You're welcome.

We currently have no further questions. So I would like to hand the call back to management team for closing remarks. Over to you.

So firstly, thanks. Thanks for your questions. I'm just going to touch on the margin question that I've received earlier. One of the things that I think is relevant and important as you think about our performance going forward. AN USA is a valuable addition to our Company, our organization, particularly where we have areas of significant density. Where used vehicle margin does not perform in the same way for obvious reasons as our franchise businesses. So when you think about $1,800 that we discussed, don't think about that in the context of AN USA. The way that they source their vehicles is very different. The way that they can attach manufacturer and OEM programs is significantly different. So their whole business model, including the capital invested is very, very different. So as you think about my comments on $1,800 margin, make sure you factor in the impact of AN USA on our average margins going forward, because they will not and have not been at that level. And I don't anticipate that any time going forward. But with that said, when I think about 2024 just but it's clearly going to as have its normal mix of headwinds and tailwinds. But for me, after a very significant year in 2023 a planned leadership transition, I'm feeling positive about our development as we enter this year. We have Jeff Parent joined our Group, as you know, as a Chief Operating Officer. Tom came in last year. CMO joined us, Rich Lennox, who joined earlier in 2023. So from my point of view, our leadership team, that year of transition, which was planned is now complete. And I think all of the members that we've added bring vast experience to AutoNation. And these guys along with their colleagues who sit on our executive leadership team certainly going to help us build on our success and position our Company well for the future. And really, that enables us, I think, to really look at how the investments that we've made in various parts of our businesses are performing and understand how we can get to a period of growth in some of those and in others, how we can make sure that we're driving up our margins. So with that, thank you for joining the call. We'll see how the year goes, and I look forward to talking to many of you between now and most of you next quarter.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.