Good afternoon, ladies and gentlemen. Welcome to the Penske Automotive Group's Third Quarter 2015 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through November 5, 2015. It's on the company's website under the Investor Relations tab at www.penskeautomotive.com. I'll now introduce Anthony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, John. Is everything okay, we had a cut off there for a second? So everything all right?

Please go ahead.

Okay. Thank you. Thank you everybody and thank you for joining us. A press release detailing Penske Automotive Group's third quarter 2015 financial results was issued this morning and is posted on our website along with the presentation designed to issue in understanding our performance. Joining us for today's call are Roger Penske, our Chairman and Shelley Hulgrave, our Controller. On this call, we will be discussing certain non-GAAP financial measures such as earnings before interest, taxes, depreciation and amortization or EBITDA and EBITDAR, which adds back rent expense to EBITDA. We have reconciled these measures in this morning's press release and investor presentation, which is available on our website to the most directly comparable GAAP measures. Also, we may make some forward-looking statements. Our actual results may vary because of risks and uncertainties outlined in today's press release, which may cause the actual results to differ materially from expectations. Additional discussion and factors that could cause results to differ materially are contained in our public SEC filings, including our Form 10-K. At this time, I'll now turn the call over to Roger Penske.

Thank you, Tony, good morning everyone and thank you for joining us today. We've reported third quarter results, which included the best nine months in our history and certainly a record third quarter. For the third quarter revenue increased 12.8% to $5 billion, while income from continuing operations increased 13% to $86.7 million and related earnings per share increased 12.9% to $0.96. The revenue increase was driven by a 7.3% increase in retail units sold and by acquisitions, most notably from our U.S. commercial truck dealership business. Since 40% of our revenue is generated overseas, principally in the U.K., the significant year-over-year decline in the U.K. pound against the dollar impacts our comparable results. Excluding foreign exchange, revenue would have increased 16.9% to $5.1 billion. Foreign exchange negatively impacted earnings per share by $0.04 in the third quarter. During the quarter, 83% of our income was derived from Automotive Retail business, 8% from our U.S. Commercial Truck dealerships and 9% from Other, which includes Australia and our joint venture investments. Based on our continued strong financial results, the Board of Directors recently approved a cash dividend of $0.25 per share for the third quarter. Let me now turn to the specifics of our performance. A revenue mix during Q3 was 61% U.S. and 39% International. Approximately 92% of our total revenue was generated through our Retail Automotive dealerships. Overall, gross profit group improved $82 million or 12.6% and overall gross margin was 14.7%. SG&A to gross profit improved 30 basis points to $77.3 and overall gross profit flow through was 25.1%, including 34% for our Automotive Retail dealerships. Operating income increased 14% to $146 million and operating margin was 2.9%. Our operating income includes nearly $51 million of rent expense for operating leases, which impacts operating margin by approximately 110…

[Operator Instructions] And first we'll move to John Murphy with Bank of America Merrill Lynch. Please go ahead.

Good morning, Roger.

Good morning, John.

Just, first question, I mean, one of the reasons that the results were a little bit lighter than we were looking forward was really foreign currency and obviously that's a fleeting factor. I'm just curious, as you look at that and look into 2016, when you think the pressure from ForEx may ease. And if you could just remind us that this is all translational and there's no real transaction risk here at all.

That's correct. And I think when you look at the FX, as we get into the fourth quarter, we're going to see that that there's a lot of – we're getting much closer, I think $1.53 versus $1.56 if you look at December of '14. So then we'll start to close up. We have no transaction risk on any of this at all.

Okay. And then a second question, I mean, you've got yourself in, North America and the U.S. market, Europe and Australia in a number of different businesses. So there's opportunities to allocate capital in a number of places. As you look for the 2016, where do you think you know the best allocation of capital is going to be? It sounds like the Truck business is a real burgeoning part. I mean, it's obviously been a part of the business for a long time, but a real burgeoning opportunity for you. Is that where you think you'll be making more acquisitions or do you see stuff on light vehicle side as well?

I think first we've got to meet the OEMs requirements for our CapEx in corporate ID, I think that's point number one. We've continued to increase our dividends each quarter and we would expect to do that as we go forward. In our EBITDA with $650 million we expect for the year. So when I look at the markets themselves from a new vehicle manufacturer franchise, I think that today some of the pricing is getting probably a little stiffer than we had seen it in the past. There's still I think some good deals out for each of us, peers have opportunities in our own markets where we have strength and contiguous opportunities I think will continue to grow. The truck side of the business in the U.S., there's a consolidation going on by Freightliner. You've seen that they've even represented in some of their press releases that they're looking for consolidation. We see that as a continued opportunity as we go into the truck side. But when you look at Western Europe, we've been able to grow there nicely as we've gone into Spain, we've gone in Germany and Italy and we see opportunities there now. People are knocking on our door with acquisitions. So we'll balance our capital spend on acquisitions, I think between all the markets by setting in market where we might have our foot on the brake might be Australia because of the current economic situation there. Because China as you know has really given Australia somewhat of a cold here over the last several months with the commodity prices going down. And I think that at this point, our power system is very strong and when you'd back up on this, I'm looking at businesses where we don't have the cycles really impact us over the long-term. And when you look at our business here in the U.S., on the car side 40% of our gross profit comes out of parts and service. On the truck side, it's 70%; both in the U.S. and also the distribution business in Australia where our power system business is 90%. So I think that we'll obviously look at those from the standpoint of continued growth, but our focus today is probably 60/40 international, U.S. and there's no question that from an opportunistic standpoint we're going to look at all of these markets. Italy has been very good for us and we have some opportunities there also. So what I would say it's pretty much a range in all markets where we have scale and we can execute on opportunities where we can utilize some of our back office capabilities and our good people. So again acquisitions, CapEx and dividends would be the focus.

Then just lastly, when you look at the gross profit per unit you put up x, 4x, it was up $15, which is pretty impressive relative to what we're hearing from other folks out there. I mean, could you explain how you're getting that $15 increase, some of it the international exposure in the U.K. is doing better than what you're seeing in the U.S.? And if you are sort of seeing some underlying pressure on grosses, where do you think that's coming from?

Well, I think when we look at our business, we've been trying to drive our guys on GP and not just run for volume. And I think that as we looked at the markets, during the quarter, we had some softness in the Northeast in our premium brands, both in Audi, Mercedes and BMW and also somewhat in San Diego. But again, we held our gross margins in the premium side, there has been some pressure from Audi as they have gone to more of a push strategy rather than a pull that they had in the past. And I think that's having some impact. But the focus today is, on the gross profit, we've always held it. I think our mix is making a difference because we have more premium luxuries and maybe volume foreign or domestic, which would make a difference. So overall I think we're in pretty good shape when we look at almost 8% on our new in the quarter. And I think that's going to be an area that we're going to focus on as we go into the fourth quarter.

Have been a good strategy. Thank you very much.

Thanks, John.

And we'll go to Bill Armstrong with C. L. King & Associates. Please go ahead.

Hey, Bill.

Good morning, Roger. Just kind of as a follow-up to that. We keep hearing about that there is an oversupply of BMW vehicles both in North America and Europe as a slowdown in Chinese demand is kind of causing the OEM to divert vehicles over to these markets, are you guys seeing that? And you are using any margin pressure in BMW in particular?

Well, if I look at my BMW inventory comparison to December, we would be up from about $200 million to $245 million in the U.S. and certainly overall. But we always tend to grow that inventory as we look at into the fourth quarter because they have a tremendous amount of incentives and different programs it would drive that in Q4. When I look at internationally, I'm always looking at the end of the year on this number because Bill we've got to look at where we end up. We're actually down $48 million on BMW, if we look at December in 2014. So in balance on our BMW business we're about flat if we look at the overall business, both internationally and domestically.

Okay and that's good to hear. And then on parts and service on the retail side, gross margin were basically flat year-over-year. You have previously been reporting some nice increases. Any concerns there or anything to call out as to why they didn't expand?

Well, we're at 59 plus percent, which is I think pretty much at the top of the mark when you look at the business. At the end of the day with less used cars retailed, we had less reconditioning, which we have a higher margin, could have driven it. But I think overall, when you're looking at 59 plus, I wouldn't expect much more than that. I think we've kind of grown into that area and to me that that's a good metric.

Agreed, okay, thank you. That's all I had.

Thanks.

And we'll go to James Albertine with Stifel. Please go ahead.

Jamie, how are you?

Good morning. Thanks for taking the question. I'm sorry if I missed this, but wanted ask a point of clarification. Can you tell us what your front-end margin was during the quarter and how it compared last year to last year?

You're talking on new or used?

Well, the combination really. So new and used an F&I over your new and used retail units.

Well, if we looked at, if we looked at new, that's taking all premium volume foreign and domestic. We're at 7.5% for the quarter versus a year ago same quarter we were at 7.7% and we were down 60 basis points on used from 6.6% to 6%. And I think that without foreign exchange when you look at our business from an F&I perspective, we were up $31 per unit. So the foreign exchange had some impact overall. Without foreign exchange we were up $2 on F&I.

Okay. Great. I think on PGR [ph] basis as well, I think it was roughly flat, if I did my math correctly. But certainly we can follow-up on that after the call.

Okay.

And also Roger, if it's okay, I wanted to maybe dig in. You had some interesting comments on the used inventory side. Wanted to understand thought process that move into the fourth quarter? And then if you can maybe separate for us in the U.S. business some of the margin trends that you saw in the third quarter and so how you performed on a year-over-year basis. That would be really helpful. Thanks.

Well, I think if we look at used, it kind of followed the lower new car premium volume in the Northeast. And I would say that's a whole Northeast, so we were actually down on units, probably around 500 units in used in the Northeast. But gross profit when you look at it, was up overall about almost $200 per unit. In the central, we had an increase where we didn't have that impact on used. From a sales perspective, we were up to 700 units and we were down a little bit on their used gross profit probably around $90. And in the West we were flat on gross profit and really flat on units. So again, I think the San Diego market had some impact on the used car side too, because out on the new car sales we don't generate some of those trades that we would sell. So there's some, I think some tie in there, but overall I think what we have to do is start early and look at our strategy for inventories on used cars. And I think if I look I said earlier in the call we were down I think about $13 million if you look at our business from December. And the good news is our wholesale loss is down about $70 per unit in the quarter. So the trend is down on wholesale loss. I think managing our inventory down is going to be key because there will be a lot of cars coming off lease. I think residual will take somewhat of a beating as we get into Q4 getting into the first quarter Q1, so we want to have our inventory balance properly.

That's extremely helpful. I appreciate that and best of luck in the fourth quarter.

Thank you.

Our next question is from Rick Nelson with Stephens. Please go ahead.

Thanks, good morning.

Hey, Rick.

Roger, want to know if public kind of appears in the commercial truck dealership segment, it was calling for a pretty big decline in sales next year. Curious what you're thinking about that forecast and how that affects your business and your appetite for exclusivities [ph].

Well, I think you, Russia is the really comparable that you'd look at out in the market. He's a very good operator. His brands are international and Peterbilt, which primarily international has a small piece of the overall on highway market and Peterbilt is, I think probably being impacted somewhat in the oil and gas side where Freightliner is really the biggest player in the market with Western Star and with Freightliner together, they're almost 40% of the market and they picked up a couple of share points during the quarter. And I think that the market from our perspective, from our brand we think remained strong. And remember Freightliner is really for over-the-road trucker. Primarily a lot of the big fleets and they haven't bought, in fact if you just look at Penske truck leasing we're going to buy 13,000 Freightliner trucks this year, tractors, so our buy is up. We think that with them taking share and with our sales up, there's no question that we'll see that strong move in 2016. Our premier truck business as you look at it is in strong markets in Dallas, it's in Fort Worth, it's in Oklahoma and also in the East in Georgia and Tennessee and where we have good vertical integration with that brand. One thing you don't get with Peterbilt and/or Navistar you don't get the engine transmission and axle integration, which we have with Freightliner where we have a engine transmission and actual driveline, which is all proprietary and with that that generates a strong parts and service business. So we see that as a plus, the strength of our locations. And quite honestly when I look at the return on sales, we have some of our location as high as 5% overall. I think for the quarter we were about 3.8%, so again when we look at parts and service gross 70% of the overall growth, I think it's a great space to be in. And in these fluctuations of markets that parts and service growth is going to drive us through, you've seen that even in the auto side, when we had the downturn, how important that was. So I think that 2016, there might be somewhat of a slowdown overall in the overall sales. But I think Freightliner with the strength they have and the quality of the product and technology, I think they're going to be a leader as we go forward. So to me, we have the ability to conquest a number of new accounts. We've picked up U.S. express, we've picked up covenant people in the Northeast that we didn't have. Those are going to drive volume for us. So I would say the lights are green for us in 2016 from a overall standpoint.

Thanks a lot for that color and then shifting to car business. Your sales do flatten out here; I know you've got those 10% growth target. Do you think you could achieve that through some segments of the business like service and used and --?

No. I think we've been running - I think we have to be careful, I think our, when you look at parts and service and we go to compartmentalize this. We got U.S., we got international and we got the truck side. I think that we're going to see our parts and service continue to grow because of 0 to 5 year population of cars in the marketplace. I think that's good from the standpoint of new and used cars. We have an overall revenue target growth of 10%, at at least and we want to grow the bottom line in our EPS. I mean, I can say that, that's a general number. But we would certainly have that as a number to manage towards. So to me ex exchange, we're up 8.5% on a same-store basis this year and I would expect that we would operate on the same basis. Some of our benefit might come up because the truck business grew more. Certainly when I look at Western Europe, when you look at the markets in Western Europe from the standpoint of Spain and Italy and Germany, those markets are up and we've seen a tremendous continuing growth in the U.K. you've seen that I'm sure from Group 1's acquisitions over there too. When you look at it overall, the international market is really up 17% and comparable comp in the quarter, in the last quarter would have been 18%. So you know I think that continues to grow. So when we take all the pieces and put them together, I don't think that our number should be unrealistic.

Thanks a lot and good luck.

Thanks, Rick.

Our next question is Paresh Jain with Morgan Stanley. Please go ahead.

Good morning, Roger, Tony.

How are you?

Good and how are you?

I'm great.

I want to stick with acquisitions at the inorganic growth opportunities. So the first question there, you've obviously been monitoring Spain and Italy for some time and you already have some presence through JVs there. What you need to see to have more confidence and perhaps a bigger presence in those markets?

Well, I think its people. I guess, human capital side, I mean, is really the most important because we have to have good people to run those businesses. And we're developing a great team both in Italy, Spain and Germany and as we do that, we are continuing to grow. There's many opportunities in Spain and Italy. The OEMs are knocking on our door every single day to take a look at opportunities. And I think that we'll continue to grow. We have a couple of the opportunities that are maybe closer in right now that we're going to look at over the fourth quarter and hopefully maybe have some news as we get into Q1. But to me, we think it's a strategy. We've got a good team in Europe and there's no question that they're fragmented markets. We don't have any franchise loss from a standpoint of ceilings hitting too many - having too many franchises. And quite honestly what we see is that many of these families have lived out of these businesses in these foreign countries, own the real estate and really have found out, they haven't been able to run the business profitably. But they're willing to hold on to the real estate. Lease it at very realistic numbers compared to the U.S., we then put working capital in and buy these businesses at low multiples. So to me there's a tremendous amount of opportunity to consolidate.

Understood. And then staying on acquisitions here. Obviously there have been some warning signs on Class 8 productions here. But you seem to be more confident about Freightliner's exposure. But does that in any way pause, the inorganic growth opportunity with CVs. Because you're still in the early stages of consolidation, it perhaps makes a lot of deals come to you?

Absolutely. I mean, we have I think three right now that we're talking to that have interest for us to potential purchase and I think that will continue. And remember the Freightliner brand is grown to be the leader in this market and they continue to grow. Their technology is the best, the integrated powertrain from the engine transmission and axle is a real plus because that drive that customer back into the shop. And I think with our experience having owned Detroit Diesel we have a very good understanding and we have access to some very good people who have joined our organization to drive that. So I think it's opportunistic, yet I think the consolidation is being supported by Freightliner in certain contiguous markets. And to me when you think about today, 85% of all the freight that moves in United States is by truck and that's been pretty much the same for as long as I can recall. So I think that continues to be a real opportunity for us. And the market going up or down, I don't think it's going to affect Freightliner, at least it won't affect our U.S. retail business because we're really just getting started. From the standpoint of our team, connecting with customers and our markets that we were doing business with and I think we have a reputation as the premier truck group now that we can gain some share. There's a huge parts business that follows us, which is the something with all these units in operation, it's a little bit like the 0 to 5 year car park. On the car side, we got all these trucks now that Freightliner has put in the market. Someone has to take care of these and we're in a perfect spot. And many of the big fleets, we even do their own service, still have to buy the parts from us, whether it's warranty or customer labor, so we're in the right spot.

Understood and that's a very good color. One last housekeeping one for Tony. We typically see an uptick in other equity income in 3Q versus 2Q. What was different this time?

Paresh that was the consolidation of the premiere truck group franchises into - out of equity income and into the consolidated results, which took place starting in November of last year.

Got it. Thanks so much.

Our next question is from Brett Hoselton with KeyBanc.

Good morning. This is actually Irina Hodakovsky on for Brett. How are you this morning?

Irina, how are you?

Good. Thank you. Roger I wanted to ask a couple more questions on the new and used vehicle gross profit per unit ex FX headwinds. Someone mentioned earlier on the call, the BMW anecdotal commentary about surrounding the inventory competitive pressures there. Just sequentially, when I look at 2Q versus 3Q, when FX was more or less flat, even a little bit positive. I'm still seeing a pull back in new vehicle gross profit per unit and used vehicle gross profit per unit. Wondering if you can kind of reconcile that for us, so we can understand excluding FX, what are we seeing in the market?

Well, I think our peers have said before there is a push for volume, there's no question about it and then. We have to hit certain targets to get into the bonus levels and that's driving some of that behavior. But again, I think when we look at ours, our strategy still is to maintain good growth. And I think when you look at today at almost 8% on new and we're 6% on used, so I think we're in good shape.

All right. Thank you very much.

Sure.

And next we'll go to Michael Montani with Evercore ISI. Please go ahead.

Michael, are you there?

And Mike Montani, if you're on mute possibly.

Yes, hey guys can you hear me? Sorry about that.

We thought we lost you. Go ahead.

No, no. I'm here. Great. So I wanted to ask you know first off if I could do it on the service side, could you just provide some incremental detail there to get into a little bit, how customer pay was versus collision and also some of the recon work, obviously strong growth there. Just want to understand kind of how the drivers of that growth?

Well, when you look at our customer pay, we were up 3.7%, our warranty was up 17.3, and our get-ready was up 13.1%, our bodyshop was about 1%. And I think that when you look at our business, 52% of our customer ROs were at 0 to 5 vehicles and 67% of our warranty ROs were 0 to 5 years, so you know, it's strong. I think one thing you look at, you've asked the question why is your warranty business up 17% and you're up just under 4%. One thing you have to realize in the premium luxury, we have a number of full-service OEMs. All our BMW business has come back and a we do free service and that charge back to the manufacturer goes through warranty we have that now in Land Rover and Jag and some of the other manufacturers. So that probably drives a little bit higher warranty because actually the quality of the business of the vehicle today is better now. We have the recalls and they continue to drive some business into our shops. But I would say that some of the full-service fee, ToyotaCare, which you we have for the first two years is also driving that warranty number up.

Okay. Great. That's helpful context. And then one question that's a bit of housekeeping, but I feel like it needs to be asked because this is where the miss came this quarter was my number, which was just the SG&A. If I look I guess, a year ago SG&A dollars were relatively similar in the third quarter versus the second, you know but they stepped up a little bit sequentially this time, which is a bit more consistent with your history to be fair. So I guess the question moving forward into the fourth quarter, should we expect kind of a seasonal kind of shift there? Or is there anything to keep in mind because of acquisitions you might have done or different refreshes or initiatives you have at the dealership level, just to know about in terms of SG&A dollars?

Well, I look one thing you got to look at, I'm just going to talk about third quarter to fourth quarter. Obviously third quarter is stronger from an overall growth perspective. And there are certain fixed costs, which don't go away with lower volume. When I look at SG&A, we were up about 1% on our comp to gross is a comparison. And we had approximately $1.5 million to $2 million more in rent, we had our escalators that kicked in during the third quarter of this year and our medical was up about $3 million. So you take those together, they had an impact on us from the standpoint of SG&A to gross. But I think as you look at the fourth quarter, I would assume that the SG&A to gross numbers and we had I think it was in the 78, if I recall. We'd expect that we'd get some traction. We got 30 basis points in the quarter. This quarter I'd expect us to get some traction on that in the fourth quarter, also unless the growth just go down due to the competitive pressure from the OEMs.

Okay. Great. And if I could just ask a compare contrast question. If you look at the U.S. and the U.K. markets, just given your presence there. It's been so competitive in the U.S., which is no secret. But can you just sort of help us understand, Roger, what you're seeing competitively? And also in terms of OEM supply, in the U.K. market versus the U.S. both on retail new as well as of retail used units at the moment?

Well, let's think about, when we think about the U.K. we've had I think over 40 consecutive months of sales increases for premium sales. They represent 26% of the market, if you go back probably four or five years we've had almost 600 basis points of increase in market share. So that continues as we see the OEMs at least the international OEMs are coming down. They got from 7 Series to 1 Series, you've seen from S-Class down to A and B Class. Those are all things that are helping us drive it. I would say this that you've got two markets; you've got the retail market in the U.K., you got the business fleet. And the retail market's up about 3% and the business fleet market's up, probably around 11%. Now to my understanding and I'm watching this closely, that some of the fleets have backed off on both wagon right now. In the U.K. we haven't seen that in Germany to be honest with you, it's ironic. But in the U.K. we've seen some slowdown. Our order intake, if we looked at the last four weeks, we were maybe running at an order intake at about 45. We had the announcement, we went down to about 15 and back of the 35 and I think were down under 20 this last week. I've been watching it. So there's been impact on Volkswagen. But Volkswagen as much as, such a small piece, I'm really not concerned about Audi. On the other hand we've had very little at all from the standpoint of the submission problem. But overall remember, we don't have in the U.S., we don't really have demonstrators. But in the U.K. we have to carry a number of demonstrators to meet our targets for our margins…

That's great context. Thanks a lot.

And we'll go to Brian Sponheimer with Gabelli. Please go ahead.

Hey, Brian.

Hi, good morning. Thanks. Yeah, just a few questions for me. Roger, you mentioned Volkswagen earlier in the call and your exposures more on the Audi side? I guess, the A3. Can you just talk about it, any feedback from your dealers or perhaps their customer's on kind of how they're thinking about the diesel options?

Well, let me put it in perspective. We have two VW stores in the U.S. We have four in the U.K., plus we have two in Northern Ireland and then we have about 10 VW, SEAT, Skoda stores in Germany. Right now I think the biggest impact has been from the fleet buyer who, this is the fleet business buyer who say's hey, we're green, we want to be - we want to look at this a little differently. So we're seeing some of those people backed off. The retail customer today is really I don't think he's concerned because we communicated with the customer. The factories have sent letters out to them. Each of the - in fact both here in the U.S. and both Volkswagen and Audi have given some capital that we can use for loaner cars, for taking trades back in, this is similar to what Toyota did, when they had the acceleration problem, I think it's a good thing, a good customer - really goodwill piece that's available to us. And that's been done in the U.S. As I said that overseas impact in the U.K. we really haven't seen that much in Germany and it's amazing, when you look at it here in the U.S. we have 67 vehicles, which were placed on stop sale. Of that 51 were Volkswagens and 16 were Audis and when they're on stop-sale, until we get the fix, we wouldn't sell those to customers. In the U.K. and in Germany, if you sell one of those vehicles to a customer, you give him a piece of paper and say this vehicle, it has this issue on it. The diesel, but yet we will call you and make the fix when it's not a safety issue, they make that quite clear. This is not a safety issue, it is more of an emission situation, which will be dealt with. And I think they're trying to get their arms around. It's a big job for them, but we as a company right now are not being impact to any great extent.

All right. I appreciate. Thank you very much. And just talking about the used market, any softness from a gross perspective that that goes beyond just typical sort of supply/demand?

I guess the cars coming off lease are maybe a little higher residual values. The expectations of some of the manufacturers, which - when you buy these vehicles in order to meet some of the metrics, were probably paying a little bit over market, which has some pressure on overall gross, I would say that would be my only comment. The rest of it is trying to buy vehicles, right. The best way to buy them is trade them.

Right. Certainly. Last one for me, just on - you mentioned Freightliner, then were looking to consolidate, the Freightliner dealer base. What's the kind of pressure or I guess, the carrot or the stick that they're getting to sellers to open up to actually selling the franchise?

I think it's been a business. It's been really and I don't say this negatively, but it's really have been an owner operator type business over time and in some of the - there's not legacy family members that would want to pick up these businesses. And the costs to build these sites and the expectations for dynamometers in your shops and as you now go to have a rebuilding of engines and transmission. Obviously, it's key from the standpoint of investment and I think some of the guys are saying look, it's time for me to move on. We've seen that on certainly, we've seen that on the car side. But Russian has been out in front of that. You think of the number, Navistar number, Peterbilt dealers that he's been able to pull together over the last several years has been amazing. But I see Freightliner right now trying to have a strong network across the country, where we will invest. Freightliner had some of their owned locations, which they've sold, some used truck locations. They've sold out over the past few years, but I think they're being selective. It's their goal and when they do this, is try to sell to contiguous owners and that's something they've made quite clear to us. So we've got a base now in the Texas and Oklahoma market. We have a base now in the East and the Georgia and Tennessee markets. So we would look to see if we can expand in those. And I think the good news is, they really only have one dealer in each market. They really are being very careful not to over dealer, which I think is key when you look at the overall opportunity.

Thank you very much for the color. Best wishes.

Thanks.

And with no further questions, Mr. Penske, I'll turn it back to you.

All right, John, thanks. And everybody thanks, we'll talk to you next quarter. Thanks.

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.