Good afternoon, ladies and gentlemen. Welcome to the Penske Automotive Group Third Quarter 2020 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through November 4, 2020 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, Jason. Good afternoon everyone and thank you for joining us today. Press release detailing Penske Automotive Group's third quarter 2020 financial results was issued this morning and is posted on our website along with the presentation designed to assist you in understanding the Company's results. As always, I'm available by email or phone for any follow-up questions you may have. Joining me for today's call is Roger Penske, our Chairman; J.D. Carlson, our Chief Financial Officer; and Shelley Hulgrave, our Corporate Controller. Our discussion today may include forward-looking statements about our operations, earnings potential, outlook, future events, growth plans, liquidity and assessments of business conditions in light of the COVID-19 pandemic. We may also discuss certain non-GAAP financial measures such as earnings before interest, taxes, depreciation and amortization or EBITDA. We have prominently presented the comparable GAAP measures, and have reconciled the non-GAAP measures in this morning's press release and investor presentation which is available on our website to the most directly comparable GAAP measures. 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. I direct you to our SEC filings, including our Form 10-K, for additional discussion and factors that could cause results to differ materially. I'll now turn the call over to Roger Penske.

Thank you, Tony. Good afternoon everyone and thank you for joining us this afternoon. I'm pleased to report all time record results for our business. In the quarter earnings before taxes increased 97% to $312 million. Income from continuing operations increased 112% to $246.5 million and related earnings per share increased 116% to $3.07. After excluding a tax benefit from various U.S. and Foreign Tax Legislation changes, adjusted income from continuing operations increased 99% to $231 million. And related earnings per share increased 102% to $2.87. Foreign Exchange benefited earnings in the quarter by $0.05. Obviously, this outstanding performance was driven primarily by 170% increase in retail automotive segment income as new vehicle, used vehicle financing, insurance and fixed operation margins all expanded. Our SG&A expense declined $29 million in the quarter and SG&A as a percentage of gross profit improved 1,010 points to 67.3%. Our success in this area can be attributed to a reduction in travel and entertainment, advertising, vehicle maintenance, administrative costs and personnel costs. We initially furloughed approximately 15,000 employees or 54% of our workforce in March. At the end of the third quarter approximately 3% remained on furlough, we've reduced our headcount by 14% as of today or 3,700 people to approximately 23,000 worldwide. Through the above efforts, we estimate approximately $125 million to $150 million in costs have been reduced across our various businesses. During the first nine months we generated $846 million in cash flow from continuing operations. Our net CAPEX expenditures year-to-date were down $87 million when compared to the same period last year. During the quarter, we repaid our $300 million 3.75 senior sub notes a maturity and we refinance $550 million of the 5.75% senior sub notes by issuing $550 million a new notes at 3.5% due in 2025. We'll…

Excellent. [Operator Instructions]. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of John Murphy from Bank of America. Your line is open.

Good afternoon, Roger.

Hey, John.

A couple of potential growth questions, firstly, on the used business. If you look at this with the SuperCenter’s even what you're doing in your franchise dealerships, what you got with Penske Transportation Solutions. And what you're doing online, it just seems like you have a lot of the puzzle pieces, that some of the other sort of pure online, Used Vehicle retail startups if you will have, and you haven't quite get them together at least, publicly with us is -- what are the efforts and the opportunities there over time, I know you're growing the physical footprint by 40%. But as you look at this, I mean you just got a lot of pieces. And it just seems like other folks are maybe tying up in a [indiscernible] you are or actually going after it a little more explicitly?

Well, let's first start, we really have a two pronged approach, I'd have to say number one we -- it's called a bricks-and-mortar with our SuperCenter’s. And obviously, that we're looking at our new to used ratio at 1.3 to 1. And when you look at the number of units 70,000 we sold in the quarter a portion of that, obviously was through our SuperCenter’s. And I think we'll continue that approach, John. And with the new technology and the things that we're working on, we need to also pivot and have an online pure online that we can market the brand and approach as we go forward. But as we all know, we can’t go all the way without using outside tools from the standpoint of delivering a pure online delivery. And that's something that we're focusing on. And I think if we got to look at our customization, how we personalize it, and certainly creating a connection for our customer all the way through the journey. Now one of the things that we're looking at, and we'll pilot probably here over the next couple of months, maybe into the first quarter would be to have a pure online model and have a test sites that we can look at. But one of the things that I'm looking at it, we have 1,000 locations across the country that are connected with Penske truck leasing or PTS, it would be very easy to use those from the standpoint of delivery locations across the country. So I feel that the customer coming to a location to pick up his car he bought online versus maybe have a truck show up at his front door might be different in a better personal experience. So we're looking at that, we're going to pilot it in certain areas. And that I think that we'll be able to be more open and exactly what we want to do from a functionality standpoint and the technology that we would use going forward. So I think you're right, but we're not behind. I think we're just trying to come out with a fastest car when we come out.

That's incredibly helpful. And then when we look at PTS that bond offering at 1% [indiscernible] of, very low cost of capital for PTS as well if PAG, I'm just curious as you have access to capital the way that you do in PTS and PAG, are there any plans to go out and maybe raise even more sort of incremental growth capital to drive the businesses or you're through the internal organic, cash generation? Do you think you have kind of all you can handle somewhat responsibly on growth, going forward, because it just seems like there's free capital and that often, means an entrepreneur like you can, can really go out there and really create some pretty good growth?

Well, I guess we got to look at, if we generate net cash for the year between $400 million and $500 million, whether we can duplicate that in 2021. I'm not sure. But, on the other hand, the Fed has said interest rates are going to be low for a while. I think I would pause right now with the COVID situation. And also when we look at what's coming up in the election, what are the taxes going to be? What are the other things and there might be real opportunities for us to buy things that are adjacent to us, retail dealership truck dealerships, and also, obviously we're looking at acquisitions at PTS. So we're still going to be in the growth mode from a purchasing standpoint or buy because we bought a $1 billion in ‘18 and $1 billion in ‘19. And I think that the cash flow was so strong at the particular time and we want to continue to pay down our debt to keep our interest costs lower, but obviously gives us a strong balance sheet, we can pivot and make a considerable acquisition if we'd want to. So I think that being safe and secure right now, from my perspective, certainly doesn't hurt us. But if something comes up that we need to move on, we can move pretty quickly. And just the street itself, when you look at the interest in the company, and I've realized its PTS not PAG, but we own a 30% of that through PAG, gives us a strong indication of what people think about our paper, and would give us flexibility. So again, let's take our interest costs down, my goal is to have our debt, probably in a position where we go back almost to ‘16 or ‘17. And we'd be in a position to be equal to where we were then, which obviously would be positive going into ‘21.

And then just lastly, thank you for that real quickly on SG&A costs. I mean this cost reduction is very impressive. I'm just curious if you how forward, you think, how much would you think is truly sticky and permanent? And how much of it is a portion of variable sales comp, that might come back over time?

Well, we have variable sales comp sales growth has come down, obviously, the compensation would come down. And I think that, when we look at cost reductions, what we're seeing is by reducing our sales force, we've been left with the best salespeople, what we're getting is better productivity from a sales perspective. And quite honestly, that's helped us not only from a growth perspective, but quality of sale and other things, the same thing. We're getting productivity from mechanics. But I see personnel being pretty solid. We have 3%, which is about 600 people still out. John, I think we'll see probably a good portion of those come back, but there'll be time back as we need them. But I think on the major pieces we've got back, so I would say personnel will say pretty much solid, I think from an advertising perspective, I think that we will be able to continue to have that at a lower rate as we use our digital tools. And vehicle maintenance is a big area, because based on our ability to get deal cars through the shop quicker, with our more experienced people, less loaner cars, less vehicle maintenance, better quality, less policy for our customers. And then again, our T&E when you think about travel and entertainment using the Zoom and what we're all using today to connect the reduce that significantly, I'm not sure what it was in the quarter, but I know it was several million dollars. So that should be able to give us some confidence that we can move the SG&A in an area where it is. And I think right now it's 67. We looked at a model, if we took $500 to $1,000 off the gross profit, it would move us probably into the 70%, 71% or 72%. So as we look at the model, I think that we're pretty strong on where we're going to be on our cost reduction, as it affects SG&A.

That's very helpful. Thank you very much, Roger.

Thanks, John.

Your next question comes from the line of Stephanie Benjamin from SunTrust. Your line is open.

Hi, Stephanie.

Hi, good afternoon. I wanted to touch a little bit about your commercial truck dealer business. In particular, you made a comment, Roger that expectations for units are now about 225,000 for 2020. I'm curious, because I'm also seeing in reports where there's some constraints and productions on the OEM front. So maybe, if you could talk a little bit about the supply and demand side of that business in the current environment?

Well if you look at the numbers for September, the orders were 30,000. If you annualize that, that would be 360. So there's definitely demand out there. I know that freightliner they're back up to a capacity. Some of these supply chain, however, is not kept up with the demand. So a lot of these fleets, maybe that we're pausing are now coming back into the market, which is a good situation for us from the standpoint of our retail truck business. But to me, I think there'll be some constraint on supply base really not because of production at the OEM plus more because of supply chain. And we look forward to a good market in ‘21 as we're seeing people coming in and really people that cancelled orders at the beginning of the year, because the lower expectations are now coming back and placing their orders back. So I think we're on the right side of the curve right now.

Great, thank you so much. And then switching gears, I want to talk a little bit about the U.K. business. Maybe you can speak to how that performance, how that business progressed throughout the quarter. What you've seen thus far in October, and how you feel it is positioned?

Well, let's really look at July, August and September, I think July, probably had some pent up demand. Remember, we were closed almost for two and a half months there. When you look at the business, so probably some pent up demand in July. The V actually goes down in August because it's looking forward to the registration month that's in September, but when you look at the market during the quarter, the market was down 3.4%. And we were up 7%, when you look at the brands that we represent. So we outperformed the brands, and we outperform the market. So I think it was pretty much homogenized the three -- to three months. And we think that overall, we had a very good quarter. Now you won't have the same bang in the fourth quarter because we don't have the registration, but we look at March and we look at September. But I think the overall when we look at the future, we're getting some COVID hits in certain parts of the country, which obviously we know how to handle if we have that internally in our business. And also Brexit hangs out there. But it looks like at this particular time, from a Brexit perspective, they're continuing to talk about it. And hopefully they'll have some confidence in what they where they come up from the standpoint of the negotiations and a trade deal. But deals in the both interests of both sides to strike a deal is no question. And I think there might be a moratorium on tariffs they're talking about look like Canada, let it look like Australia. The OEMs got to mitigate some of this, if there is a tariff, those are things I think that we have to look at going forward. But at this point, it's not disrupting any of the any of our business. So we look for a good October, November and December. I think that our used car business will certainly outperform what it did last year are superstores. So that should give us, a positive quarter based on where we are today what we can see through the windshield.

Got it. And then lastly, a high level I'd love to hear your thoughts, Roger about kind of the state of the new vehicle market here in the U.S., a lot of conversations about production constraints as well on that side and maybe your thoughts and when we think inventory levels will start to pick back up again. And then what that might mean for just the strength of the used market.

Well, let's just talk about, we just saw a node come across here in the last few hours at Toyota now is up to 94%. So they're not even at 100%. That's their plans here in the U.S. We see a short supply, obviously through Q4 going into 2021 on the premium luxury side where we're pretty much placed. And I think we're going to continue to see that the thing is to get the right mix of vehicles that we could sell, but there's no question overall trucks. And SUVs are certainly really hard -- still hard to get and those are the premium vehicles that we make our money on. I would say we're going to have a supply pressure to get the vehicles we want point number one, then on the other hand from a market standpoint, I think we got to think a little bit socially what's really happening, with a vehicle market and personal mobility. One of the things we get the benefit of is with being in Penske Truck Leasing and Solutions as we see what's going on with the mobility, of the public of people living in different parts of the country Portland, Seattle, San Francisco, Los Angeles, Detroit, New York and some of these cities. We can't get enough trucks back into those cities in order for people coming out. So there's definitely and we can look at it day-after-day that people are moving out of the metro areas out into the country or out into other areas, because we're seeing it from our truck demand perspective. In fact, if you have a -- want a truck to go to Chicago from Cleveland, we probably you can rent it for $1. I mean, these are the things we're doing to try to determine what the demand is. So I think that's going to drive the personal mobility a different way, which should create some more demand and use cars and also new cars now, not high luxury cars. But I mean, cars that we would use on a daily basis if you needed transportation, because I think combined transportation where two or three people are together, whether it's in a transit, public transit, whether it's a rental car, whether it's Uber or Lyft, I think there's some softness in those businesses, which will drive more automotive sales for us both in new and used. So I think these are things that personal use, will be help us drive a bigger part of the share of the auto business in the future. And I could be wrong. But there's definitely a flight to safety, I think, because some of the issues that people are dealing with in these bigger cities. Maybe that's not a good answer. But that gives you some insight.

No, that's really helpful. And I think its your mind doing, I think you've said this in the past. Did you get the percentage of the -- your locations that are located in suburban areas or have you been provided something along those lines to quantify in the past?

No we haven't, but we would not have businesses that are located inside the big cities, maybe there's a few but I think about San Francisco, we're out by the airport. We're really well placed because when you're in the truck rental and leasing business, we need to be close to the interstates and the highway. So we wouldn't be down in some of the deep metro areas. Now we have a few that would probably the legacy locations. But we can get that, so I'll get Tony to get that for you.

Got it. Thanks so much, everybody.

Thanks. Thanks.

Your next question comes from a line of Rick Nelson from Stephens. Your line is open.

Hi, Rick.

Thanks. Good afternoon. Roger, Tony.

Hi, Rick.

Question for you here about supplies. You got into this a little better than normal. Yes, where do you think the GP is? And take the expense ratios which shakeout do we go back to pre-COVID levels? How would you pay used or, are we potentially going to be at a higher level as we move forward?

Well, I think what we really have to look at there will be with more inventory, there's no question if you don't have the right inventory, then you're going to be selling vehicles just to dispose them because the OEM has made you take them. And I can't -- I don't want to comment on what the OEMs posture is going to be in Q4 into 2021. But I think, internationally, we see good discipline, not setting targets that are unrealistic, because I think the OEMs, and I hope the dealers have longer memories, so we don't need to give cars away. And we can get these margins that we've been getting obviously, we've been up about 800 on both new and used when we look at it across the board. So for me, I think that there'll be some deterioration. No, there's no question. What can we be at this level? The answer probably is no. So from an SG&A perspective, we're going to have to be sure that we maintain the cost out so we've taken. So I think overall, we did a test. Tony, did for me, looking at a $500 and $1,000 reduction in gross margin. And I think it adds probably about 300 basis points to our SG&A if you look at it based on the current situation.

Okay, great. That’s helpful. So you're throwing off a lot of free cash. You have been after the balance sheet reducing debt you pull a lot of costs out. Should we expect more of the same that you're going to continue to pile that free cash into reduced debt levels. I recognize you got a new reinstated of the dividends. So that'll, take some of the cash but are your plans they're going to be a while before we see acquisition, so you think are more eminent?

Well, I think really, we were certainly not in no acquisition mode when we started 2020, but when we got to, to mid-March we put our pencils down and said at this point, let's look at liquidity. Let's look at the marketplace and look at our balance sheet. And there's no question, at that point that we did that. And furthermore, then we looked at how could we reengineer our balance sheet from the standpoint of the debt we had, I think we successfully our finance team has been able to take that down. And we're seeing that we'll see the benefits next year now, from the standpoint of generating $300 million to $400 million to $500 million of free -- net free cash flow and our dividend is back, our 401-K is back. So that'll utilize some of that I think our CapEx still will be well controlled next year, so that'll give us additional capital to utilize. But to me, we got dividends, we got other things that we can do share buybacks, these are all areas or levers of opportunity, but we're going to continue to invest in the used car SuperCenter’s, as you know. And I think when we look at those, we've traditionally if you look at the quarter they generate probably somewhere around $3 million to $3.5 million. So the return is about 25% on a $10 million to $12 million investment. So that certainly is an area that we're focusing on and want to execute. We cannot execute however, at the speed of some of our other peers, we just can't because we're building larger sites, they have reconditioning, they have service because it wanted to be sticky to get repeat referral. And then we're going to invest in our digital the pure online piece, which is going to be more technology and obviously will take some of our capital, but I would say this, if there's anything that's out there, that fits our model, meeting key brands that we already have markets where we have scale and certainly from a retail truck perspective, the fact that we have this footprint today, we're very interested to grow that. So we would look at all of those as opportunities, but we're in a position to be able to go-to-the-market even get more capital if we have to.

Great, thanks. Finally, if I could ask a near-term question, how October sales might be tracking?

Well, I would say that October sales, it's a hard time this time of the month to say where we're going to be. I think we came off of a, a very hot September. We are absolutely out of vehicles right now, which so if you looked at our numbers, we probably would look like we're down somewhat. But single-digits, obviously, some brands might be more because we're just out of vehicles. So I think it's too soon to really tell you where that's going to be. But everybody's talked about availability. And I think I don't need to go over that again.

Presumably GPU is rock solid. Thanks a lot. Appreciate it.

Yes. Thanks Rick, yes.

Your next question comes from the line of Rajat Gupta from JP Morgan. Your line is open.

Hi, Rajat.

Hi, good afternoon. Hi good afternoon Tony. Good afternoon Roger. Thanks for taking my questions. I just had a broader question on electric vehicles how do you think the dealer channel is likely to be impacted going forward? As more will be the OEMs start to offer a one price? No haggle may go new into their website. I mean, how do you think this could change your profitability profile? On a new vehicle side? I’m doing services will still be a key source of income, but just a new vehicle sales profitability? Do you see any disruption? Maybe more efficiencies? GMC – GM yesterday talked about, trying to make some changes in the channel. So just curious as to, how do you see this playing out? And I have a follow-up? Thanks.

I guess you'd have to say it's taken Tesla 20 billion or more, to get where they are today to get to profitability. I think it's very difficult. They have a complete from top to bottom, meaning when you look at the total journey from manufacturer to delivery to service, and they're not using a franchise network, at this point, it would be difficult with the franchise laws we have in the U.S. I think that it would be difficult to go on a full scale. Now, maybe there's leverage that you have I don't know about but I think the GM would utilize the dealerships they would qualify to sell certain vehicles and there might be stipulations that you have to have for electrification, other things they I might not have in order to qualify. But from our perspective, these are all low volume. And remember, all of these boutique brands that are coming out excluding maybe a Hummer, but when you think about it. If you sold 10 or 15 or 20 or 25 a month, you have no parts and service, you got to have a facility. And then you think about the OEM having to support that either directly, it's going to take a lot of capital. And I don't think they're going to get the return that you would expect. So to me, I think that overall each are going to be boutique at the moment when we look at electrification and where it's going to be in 5 or 10 years, still with 300 million vehicles in the car park I think it's still going to be a long time before we see it 30% or 40% of the market. We're investing in electrification. We think that there is some very good vehicles out there, but they're typically high price. If you look at the premium luxury people primarily we're seeing maybe other than Volkswagen, we're seeing these high price large infrastructure. And again, what's the residual values on these? And if these new entrants, where are they going to have a captive finance company? Who is going to support the residual? So there's lots of questions before I think you're going to go to a separate channel.

Fair enough. Thanks for that. And just on the used SuperCenters. You gave us some numbers around the economics of the stores and how they're tracking. You're in the third quarter, it looks like meaning the return profile here is around 20%, 25% for the used SuperCenters. Like one of your peers that also has a stand-alone business, they've talked about returns like above 30%, 55% or so. Just curious as to what the difference might be? Why you could replicate something like that, or are we missing something there? Just curious, as to your thoughts on that and then you...

I think what we have to do is maybe some of the peers are using existing sites that they already have and they're repositioning those. These might be previous dealerships, as some of these used car sites. We have a different path. As we say bricks and mortar we are going to have significant sites that have the ability for service. I think I mentioned it before and also reconditioning and they'll be larger. So to build them it takes at least a year, and we think two to three to four months, they're profitable and I think overall, we will continue on that path. I don't want to over-commit and then not come back with the profitability, but we've seen it. Remember, we've got a mature and I'd say not mature, but a business that we've been running now for the last three years and growing, and it's been consistent. I think a bigger thing that we have to look at longer term is acquisition. No one’s talking about acquisition now, everybody's talking about how great this business is, but with acquisition, it's going to get tougher. The only benefit there is the residuals will go up on use will help finance companies help our OEMs. And again we'd be able to still get the margin or we bumping against new car prices on some of the lower vehicles. So to me at this particular time for me, I think 25% return certainly it would be good if we can sustain that and do it on a proper basis. I don't think that overall that we can grow at such speed at somewhere unless we have a bunch of business locations that we're not using, certainly when you look at the size that we're building in some of the locations. And you've seen CarMax has been very, very successful from the standpoint of building their network around the country. They have a few smaller stores, but in most cases these stores hold 300 to 400 to 500 vehicles and that's kind of our model, both internationally and domestically. So again, when you look at a 100,000 vehicles that we'll sell through our SuperCenters now in 2022 and now we can grow from there. And I don't want to start forecasting three, four and five, because I want to know what's going to happen, what's going to be the new norm in transportation, etc, as we go through November and into 2021.

Understood, makes sense. Thanks a lot and good luck.

All right, Rajat thanks.

[Operator Instructions]. Your next question comes from the line of David Whiston from Morningstar. Your line is open.

Hi, David.

Hey, Roger. Hey, Tony.

Hi, David.

Just, I'll keep the questions first one on service. It seems like for all the dealers it haven't come back yet, or at least haven't come back to the point that it's incrementally positive year-over-year in the orders. There must be huge pent-up demand, do you agree with that? And when do you see customers coming back?

Well, I think we've got to look at miles driven. My understanding from the data that I'm looking at some place is up in the north -- northern, western part of the country where miles are down, some of that's the fires etc. But again that's going to have some impact on it. We know for sure that our parts and service business is down. If you look at the aggregate of all the pieces, customer pay warranty and get ready in body shop. Body shops are off for us about 20%. And I think until we fill that work in process we'll see that continue to be a drag on our business and the impact of fires in California we know had impact. But again, the number of people we have work -- people are working at home, obviously will be a different social change for us when we look at miles driven, but for us what we've been able to do is take the level of service and take cost out and get more productivity. And I think that's going to be key, as we go forward, not knowing exactly what miles driven will be, but I guess we'll get more data on that over the next few months. Our warranty was flat and our customer pay was down about 2% for the quarter.

Okay, thank you. And then there's been some public comments recently about a concern on a impact of a no-deal Brexit. I think it was Mercedes in particular that raised an alarm recently. Is there any kind of EPS estimate you could get for 2021? Should there be a no-deal Brexit?

I don't have any data now. I'd get Tony to maybe get with you and try to come up with some of that. I think we're going to look if there is tariffs. I think that the opportunity obviously is the OEM, is the customer. We as dealers is going to take a part of that. But remember in the U.K., 68% of our business is used cars where 2-to-1 so when it comes new-to-used or used-to-new so we're talking about 32% of our business that could be impacted. So just touched that away. So I think we got somewhat of a cushion when we look at that. And there might be I -- situation where the OEMs even mitigate that increase and maybe the customer is going to take part of that too. Remember, we're premium luxury and we've had higher cost because of Gasoline, Guzzler and other taxes that they've been able to swallow without any real issue at this point.

Okay. And the question on a new -- New Vehicle segments so that's kind of developing now is just premium, all electric pickup trucks. We have the Hummer unveiled this week as, which in my opinion looked great, but there's also Rivian, Bollinger and Tesla in this space. I mean, you're really in touch with the premium luxury customer? Do you think there's a lot of demand for this vehicle segment if they're very expensive, just love to hear your thoughts on that segment and on the Hummer itself.

Well these won't be everyday drivers for sure, will they? So these are I call them boutique vehicles. And look, we make a lot of money on those in the premium luxury. That from the standpoint of Lamborghini and Porsche and Ferrari etc. I think that there's a certain niche for this. Remember when Lincoln had a truck that didn't go off so well, but obviously it wasn't electric. I think that it's going to be difficult to sell those ultimately once they go on without some incentives. And again then what's the residual value is going to be a lot of our premium customers buy cars and they lease them. Now, I don't know what the lease rates will be on some of these, but again, what's the distribution channel going to look like? Is it going to be separate? Are we going to handle those are dealers? I don't know there was a question earlier today on that, that's up in the air. But I think they're all boutique brands they're smaller volume and they really won't make a big difference on our bottom line one way or the other. I think, the OEMs obviously will be big stickers on those and they'll make good profits on them, but I don't think that, that will pay the dividend for them.

Yes, we do.

Okay, thank you guys.

All right. Thank you.

There are no further questions at this time. I’ll turn the call back to Mr. Penske for closing remarks.

Jason thanks for the support and everybody we've come through Q2 and in the Q3 with great success and we expect to carry it on to the rest of year. So look forward to talking to you at the next quarter. Thank you.

That concludes today's conference call. You may now disconnect.