Greetings, and welcome to Asbury Automotive Group's Fourth Quarter 2023 Earnings Conference Call. This conference is being recorded. I would now like to turn the call over to your host, Mr. Chris Reeves, Vice President of Finance and Treasurer. Thank you. You may begin.

Thanks, operator, and good morning. As noted, today's call is being recorded and will be available for replay later this afternoon. Welcome to Asbury Automotive Group's Fourth Quarter 2023 Earnings Call. The press release detailing Asbury's fourth quarter results was issued earlier this morning and is posted on our website at investors.asburyauto.com. Participating with me today are David Hult, our President and Chief Executive Officer; Dan Clara, our Senior Vice President of Operations; and Michael Welch, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open up the call for questions and will be available later for any follow-up questions. Before we begin, we must remind you that the discussion during the call today is likely to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature, which may include financial projections, forecasts, and current expectations, each of which are subject to significant uncertainties. For information regarding certain of the risks that may cause actual results to differ materially from these statements, please see our filings with the SEC from time to time, including our Form 10-K for the year ended December 2022, and any subsequently filed quarterly reports on Form 10-Q and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, we provide reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on our website. We have also posted an updated investor presentation on our website at investors.asburyauto.com, highlighting our fourth quarter results. It is my pleasure to now hand the call over to our CEO, David Hult. David?

Thank you, Chris, and good morning, everyone. Welcome to our fourth quarter and year-end earnings call. 2023 was a productive year, with meaningful growth from M&A and growth within our stores, a reflection of our hard work that was recognized with several accolades. This year, we were ranked 18th on Forbes' list of America's Best Midsized companies. We were recently named one of America's Greatest Workplaces 2023 by Newsweek, receiving a 5-to-5-star rating based on company reviews. Koons was also awarded by Newsweek, one of the few auto retailers alongside us named for this distinction. We were honored to be named 2024 Best Companies to Work For in the retailers' industry by U.S. News and World Report. These are great affirmations of our journey to be the most guest-centric automotive retailer. It must start internally before you can see it externally. Now for our consolidated results for the full year of 2023. We delivered $14.8 billion in revenue, had a gross profit margin of 18.6%. Our adjusted SG&A as a percentage of gross profit was 58.5%. We generated an adjusted operating margin of 7.3%. Our adjusted earnings per share was $32.60 and our adjusted EBITDA was over $1.1 billion. In addition to the Koons acquisition, we repurchased 1.3 million shares for $258 million, and we produced an adjusted operating cash flow of $705 million. Looking to the future, we are committed to deploying capital to its best and highest use to strengthen our balance sheet and run strong disciplined operations. The world has evolved significantly since we initially laid out our vision for growth in December of 2020, and we are very pleased with what we have achieved so far, including $11 billion of acquired revenue and the strategic entry into markets we have circled for many years. We have strong convictions for this vision of smart growth. This vision acts as a strategic framework for how we think about our business, serving to inform our decision-making along the path to $30 billion or greater in revenue. This framework allows us to continuously adapt to macro factors that may impact the timeline for our journey, but not how we think about achieving it. To us, we believe it is more realistic to consider it a matter of when rather than if. As we prioritize discipline and balanced capital allocation, being good operators of our business by accelerating same-store growth and seeking opportunities through M&A activity. We plan to deploy capital when the opportunity arises, such as with Koons. We were fortunate to make a great acquisition in a great market with an outstanding group of team members and leaders. Going forward, we will continue to seek acquisitions of this caliber. We plan to optimize our portfolio for markets with strong demographics and friendly state franchise laws and assets with quality operators and performance. There are additional details about our updated vision and framework in our investor presentation. Before I hand the call over to Dan, I'd like to once again express my appreciation for all our team members for their continued focus on the guest experience and their hard work. Thank you all very much. Now Dan will discuss our operations performance.

Thank you, David, and good morning, everyone. I'll start off by once again thanking our team members who are focused on delivering the most guest-centric automotive retailer experience and ensuring our success. Now moving to same-store performance, which includes dealerships and TCA unless stated otherwise. Starting with new vehicles, our same-store new day supply was 43 days at the end of December, an increase of 7 days from September. As a reminder, December is a good sales month for us, and it has a positive impact on day supply. We continue to see wide variation among models and disparity in combustible hybrid and electric vehicles day supply, even within the same brands. We don't know what 2024 will bring, but we will continue to manage day supply as best we can. Our new vehicle business generated solid performance. For the quarter, same-store revenue grew 10% in the quarter and 7% for the year. New units volume grew 7% in the fourth quarter and 3% overall. New average gross profit per vehicle was $4,272 in the quarter. New vehicle gross margin was 8.3% this quarter and 9.2% for the year. Turning to used vehicles, used retail revenue decreased 12% for the quarter and full year as unit volume was down 10% in both the quarter and full year. Used retail gross profit per vehicle was $1,666 for the quarter, driven by a constrained environment to cost-effectively source quality vehicles. Our same-store used DSO was 32 days supply. We're looking at 2024 as a tough year to acquire pre-owned vehicles with a small pool of lease and rental fleets to source from. Shifting to F&I, we delivered an F&I PVR of $2,295 in the quarter, compared to $2,621 last year, a reflection of higher interest rates pressuring consumer payments. The deferred revenue headwind of TCA contributed $142 to the PVR decrease in the same-store F&I PVR number year-over-year. And this headwind will grow throughout 2024. For the full year, same-store F&I PVR was $2,308. In the fourth quarter, our total funding yield per vehicle was $5,438. Moving to Parts and Service, our Parts and Service business revenue was $499 million, comparable to the prior year quarter. Gross profit was $278 million, in line with the prior year quarter, and we earned a gross profit margin of 55.6%. Non-converted stores, total Parts and Service gross profit was up 4% for the quarter. Stores that went through the conversion brought the company down to flat in the quarter. We believe in the first quarter, we will see an uptick in our business. For the year, we generated 5% growth in same-store revenue and gross profit, with a full year gross profit margin of 55.3%. Finally, Clicklane is progressing well, posting a 32% growth in total retail units year-over-year versus the prior year quarter. We are pleased by the shift we have seen in new vehicle penetration, which grew to 51% of total Clicklane units in the fourth quarter versus 42% in the prior year. We remain committed and focused on the growth of Clicklane and are excited about the path forward. As time has gone on, it has become a more integrated part of our dealership model, which is to serve our guests in the many ways they choose to shop. And so it makes sense to speak about it within the larger scope of our performance going forward. I will now hand the call over to Michael to discuss our financial performance.

Thank you, Dan. To our investors, analysts, team members, and other participants on our call, good morning. I would like to provide some financial highlights for our company. For additional details on our financial performance for the quarter, please see our financial supplement in our press release today and our investor presentation on our website. Overall, adjusted net income for the quarter was $146 million and adjusted EPS was $7.12 for the quarter. Adjusted net income for the fourth quarter of 2023 excludes net of tax $88.1 million of noncash asset impairments, $900,000 of noncash fixed asset write-offs, and $1.8 million of professional fees related to the acquisition of the Koons automotive companies. These items increased 2023 fourth quarter diluted EPS by $4.42. Adjusted net income for the fourth quarter 2022 excludes net of tax expenses related to a significant acquisition that did not materialize at $2 million and gains on dealership divestitures net primarily related to the North Carolina stores of $153 million. The tax rate for the quarter was 26.6%, which included a one-time deferred tax impact related to an increase in our estimated future state effective tax rate due to the acquisition of Koons. We had to revalue our net deferred tax liability for this increase in the state tax rate. The impact was $1.4 million or $0.07 per share. On an adjusted basis, our fourth quarter tax rate was 25.5%, and we estimate our tax rate for the full year 2024 to be 24.8%. For the full year, TCA generated $91 million of pretax income. For 2024, we anticipate TCA pretax income to be between $20 million and $40 million, a decrease between $1.90 and $2.60 per share due to the increased deferred revenue impact of recently implemented stores and states with OLED policies rolling off. We completed the rollout to all of our markets in 2023, except for Florida and Koons. We expect to complete the remaining stores by mid-2024. We believe 2024 and 2025 will be the most impacted with TCA headwinds until the effect of revenue deferral is behind us. For the full year, we generated $705 million of adjusted operating cash flow, which enabled us to repurchase shares and make a sizable acquisition. Excluding real estate purchases, we spent $142 million on capital expenditures in 2023. Free cash flow for the year was $563 million. We expect CapEx through 2026 to be elevated relative to prior years, partially driven by a higher store count from our M&A activity over the past few years, which is creating a higher near-term need for CapEx and facility relocations. We plan for approximately $250 million in CapEx per year. We ended the quarter with $460 million of liquidity comprised of cash, excluding cash at total floor plan offset accounts and availability on our revolving credit facility. As a reminder, we utilized existing balance sheet liquidity, including our floor plan offset accounts, to acquire Koons in the fourth quarter. For the quarter, we had $8 million of floor plan expense interest, mostly incurred after the closing of the deal in mid-December. We will have an elevated amount of floor plan interest expense in 2024 since we will have a lower balance in our floor plan offset accounts. Our pro forma adjusted net leverage was 2.5x at the end of December, and we anticipate bringing leverage back to approximately 2x by the end of 2024. That said, we will remain opportunistic with capital allocation, including share buybacks and acquisitions. Finally, I would like to extend my thanks to our valued team members and leaders for a strong year through the growth process and look forward to what 2024 and beyond brings. Thank you. This concludes our prepared remarks. We will now turn the call over to the operator and take your questions.

Our first question comes from Daniel Imbro with Stephens.

David, one sort of maybe a longer-term one. You mentioned as you thought about long-term targets, the world has obviously changed. I think the slides talked about M&A multiples, but there is a little bit less disclosure around Clicklane. I guess can you just talk about the progress you're seeing on Clicklane? If you still feel like, longer term, the contribution you previously talked about is achievable? And if there are challenges, maybe where you're seeing them with that product?

Sure, Daniel. I'll do the best I can, and then Dan can jump in if he wants. We love the software. We love the tool. We love the option it gives our guests to acquire a vehicle in a very transparent and fast manner. The ebbs and flows as it grows and adoption from the consumers is going to vary by brand, and in some cases, by states with us that we've seen so far. We were, I think, going through COVID very optimistic that it was going to be a good higher percentage of our sales than what it currently is today, but we still think it's a very valued tool, and it will continue to be a part of our business and grow over time as consumers get more comfortable with purchasing a vehicle online. As we all know through the COVID times, everything was really selling at a 1 price or MSRP. Now that the prices are softening and normalizing a little bit, that creates more of a negotiation standpoint, which would certainly challenge Clicklane going forward. We have built algorithms on both new and used for pricing within the markets to make sure that we have the vehicles priced appropriately so there isn't a defection over price. But that is something we're entering new territory with this with Clicklane. So we'll have to monitor it as we go.

Daniel, this is Dan. I'll just add that we are very committed to continuing to grow Clicklane and are pleased with what we're seeing. One thing to note is that since we launched Clicklane, we've always mentioned that the credit quantity we receive there is higher than at our stores, and this has continued. Last quarter, we observed the highest credit score of the year. Since Clicklane's inception, that credit score has consistently been at 740. With the inventory of new cars returning, we're beginning to see a shift towards a higher percentage of new cars. Consumers continue to appreciate the faster transaction time compared to the traditional vehicle acquisition process. I'm excited about the future and agree with everything David has said.

And one last thing to add. When we launched it, it was solely an online tool and consumers went through it online. Now that we've built showroom models, the customer is starting their journey sometimes online at home, sometimes in the showroom, sometimes putting their personal information, social security in there and doing the financing before coming in to finish the deal. It's really just engagement in the software that's increasing. But from our standpoint, we don't count the sale if they didn't give us all their personal information, social security. So if they just were in there looking at the tool and getting pricing that didn't count for us. They had to give us their personal information, put their social in there.

No, all makes sense. And Dan, maybe as a follow-up, I think in your prepared remarks, you mentioned you expected to see a pickup in Parts and Service in the first quarter, if we heard that right. Just given the ongoing challenges with the integration, can you discuss what gives you that visibility? And while the comps were negative on the integrated stores, do they improve through the quarter? Have you seen those green shoots yet? Just any color there would be great.

Yes, I’m happy to address that, Daniel. I did mention that in my remarks. To answer your follow-up question, yes, we are beginning to see progress in the stores. When considering the Liege Miller stores we acquired on the West Coast, there's a significant number of stores, staff, and talent, but they were not equipped with the technology necessary for modern business operations. Enhancing the guest experience is a central aspect of our integration efforts. It requires time to train and develop our team to effectively use the new technology and present it to customers. We have been working hard on this, and we are starting to see improvements. That’s why I indicated that I expect a stronger first quarter, as mentioned in my remarks.

And Daniel, just to follow up on that, January is over now. We saw a nice increase in January year-over-year across the company. So that gives us some hope that we're headed in the right direction. It's that time of year or two, and we've got a lot of stores in Denver and Salt Lake, weather is a challenge as well. So I don't know what weather is going to be in store for us for the rest of the quarter, and we certainly had some in January, but we've seen some nice progress in January. We frustrated a lot of our team members in the fourth quarter when you convert software and go through all that, and it never goes smoothly. So you're frustrating your guests, you're frustrating your employees, and it's just a painful process to go through. But we're pretty much on the other side of that at this point.

Discussion around just the shifting was that, and just to clarify on your comments on the January improvement?

I'm sorry, Dan, you cut out. All I heard was January improvement.

Sorry. Yes, was there any calendar benefit in there? There's been some discussion around just the holiday timing this year through 4Q. Was that any part of the improvement you just talked about in January, do you think?

No, I wouldn't say that because we experienced some negative impact in January and had some lost days due to the weather. So I feel like that's not an issue.

Our next question comes from John Murphy with Bank of America.

I got on about 5 minutes after the call started, so I hope I'm not covering stuff here that you covered. But I mean if we think about the used business, you had gotten close to 1:1 or actually a little bit above that, but more recently, you've been sort of in the just below 0.9:1. I'm just curious if that's a function of market dynamics, acquisitions or it is just the kind of thing that we could look at recovering 324, David?

John, I'll start. And this is David and Dan can jump in. I would say we've had a conservative approach on acquiring inventory and may be too conservative. We've been right or wrong, more focused on gross profit than we have volume. We need to take a more aggressive stand at acquiring vehicles. Naturally, when we acquire or purchase a vehicle, our gross profit is lower than when we take it in trade. And as a reminder, when your trades are coming in and the average age of the trade is 12.5 years, sometimes a lot of the trade-ins that you have just aren't for retail sale. I expect in '24, it's still to be challenging because there's not a lot of fleet vehicles coming off. There's not a lot of off-lease vehicles. So it'll still be a tight pool to pick from. But I think it's time that we take a more aggressive stance on creating more volume.

John, I agree with David. We're adopting a more aggressive approach. We recognize the advantages of increasing our volume. When you add reconditioning parts and services, you boost the number of units in the market, which also enhances financing and insurance opportunities. Therefore, we are committed to pursuing a more aggressive strategy as we head into 2024.

And then just a second question on SG&A. It's a little bit mean and not necessarily fair because you are at 61% and change. You're doing very well in absolute terms and relative to some of your peers, but that was a little bit of a slippage relative to where you have been. Just curious, David, what you think the drivers of that small slippage, once again, absolutely, it's good performance. But that slippage relative to where you have been. And was there maybe some distraction as the Koons deal was going on that maybe let things slip a little bit, and we could see some improvement in 2024. I mean what's going on there?

Sure, John. This is David. No, Koons acquisition had nothing to do with it. We're optimistic about the number because some of it was self-inflicted, trying different things on our end. We took a more aggressive stance on loaner vehicles and depreciation. And quite honestly, we spent a lot more in advertising in the quarter than what we normally spend per car. So those are two controllable expenses that we have. So when we think about the personnel costs and other expenses that we have, we were comfortable where we came in and consistent with our past, but those two line items that I mentioned really had an impact on overall SG&A. Michael, I don't know if you want to comment.

Yes. I mean I think we're comfortable kind of 59% to 60% range is still a comfort level that we have for next year. The other thing is if fixed ops come back, that just provides more gross profit to cover some of those fixed expenses. And so the decline in fixed ops also impacted the SG&A number.

Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.

Just want to go over to new vehicle GPU, I guess any notable changes by OEMs thus far in 2024? And then kind of second to that, I guess, what's your expectation overall for the pace of GPU normalization?

Sure, Ryan. As you can imagine, the days supply for us looked low in the quarter. But as Dan stated, it was really the pickup in sales in December that brought down the day supply. We still had Honda and Toyota in the mid-teens for a day supply. So naturally, you can imagine the margin held up there. We had a higher days supply in Nissan, so that certainly impacted the margin. We have hard day supply in Lantus. That impacted the margin with Infinity. But with some other brands like Alexis, Mercedes, and others including Porsche and Land Rover, margins we felt really held up well. And as you can obviously see, significantly above 2019. So we really think we're in a pretty good space for our new car business, both on gross profit and volume. But the story varies by brand, certainly.

And just on your comment on expectations for '24. This glide path we've seen a kind of $300 a quarter. We expect that to kind of continue through '24 as inventory continues to build.

Our next question comes from Rajat Gupta with JPMorgan.

Great. I just had a couple of follow-ups to know some of the previous questions. The 59% to 60% SG&A comment for 2024, could you quantify like what kind of new and used GPU assumption are those based on and maybe even like new or used unit growth assumptions that underlying that expectation? And I have just a quick follow-up.

Yes. As we mentioned regarding the new margin, we have observed a decrease of $300 per quarter. We anticipate that this trend will persist in 2024, resulting in a consistent decrease of $300 each quarter. This is our expectation for the upcoming year. For used vehicles, we expect to maintain current performance levels, and we aim to increase volume slightly, which will keep the margin steady rather than declining. Regarding SAAR, we have identified a range of approximately 15% to 16%, and we expect new vehicle volume to be in the high 15s. The key factors influencing this are the $300 decrease per unit for new vehicles each quarter, the stability in gross profit for used vehicles, and the growth in new vehicle sales in line with our SAAR expectations in the high 15s.

I understand. That's useful information. Regarding the Tekion question, I see there's been a transition. It appears that the stores won't implement the Tekion rollout universally. Once everything is finalized, could you provide specifics on the potential savings or efficiencies we might expect? Are there any numbers available regarding that? Additionally, should we consider any overlapping expenses during this rollout process?

At this time, we're not comfortable providing a specific number, but I want to mention that due to the minimal bolt-ons, we'll primarily be working from one DMS or software application, which we expect will positively impact our SG&A expense. In the third quarter, we plan to launch four stores in our shared service center on the East Coast. We expect to operate these through the end of the year to iron out any issues. If everything goes smoothly, we aim to begin rolling out the rest of the company at the start of 2025. The recent Koons acquisition will be the last to convert, which we anticipate will happen in early 2026. We're making good progress with Tekion and are confident in our collaboration. We expect to have all our stores launched by January, concluding with Koons in early 2026.

And so from an expense savings perspective, that would be not much in '24. So it's more of a '25, '26 play for the expense savings. There will be some cost for kind of implementation of those things this year. A piece of that will be capitalizable. So there'll be a couple of million dollars of expense for just the rollout this year building out the system.

Our next question comes from Glenn Chin with Seaport Research Partners.

So just revisiting some earlier comments. So first, on the Larry H. Miller stores. It sounds like TCA has been incorporated, but would you consider the Larry H. Miller group those stores fully integrated now?

So on TCA, they were already fully integrated with LHTM as part of the So TCA, the integration was more TCA coming into the legacy Asbury stores as we rolled that out across the stores. And so always been It's the legacy Asbury stores that have been rolling in. We have Florida left to do this year. And then acquiring Koons will roll Koons on midyear this year as well. So those are the last two to kind of come on.

That's great. I misspoke, I apologize for that. But otherwise, are they fully integrated into Asbury now?

Yes. Glenn, this is Dan. Yes, the LHM stores are fully integrated into Asbury.

The DMS conversion primarily occurred in the third quarter and continued into the fourth. We also introduced Parts and Service software as an addition to our DMS. Currently, only a small number of stores are still in the process of rolling it out, but it's a minimal quantity.

Okay. Very good. And then just going back to parts and service, was there any discernible impact from the UAW strike?

I would say it was not significant. We experienced some challenges in maintaining the guest experience due to the unavailability of parts, but overall, I would say there was no major impact.

But like our peers, we certainly had some impact with parts. But quite honestly, we had some impact with parts on OEMs that don't have union issues. So it was just an odd end of the year from a parts standpoint, ebbing and flowing with when we're receiving parts.

Okay. Very good. And then just lastly, on your leverage target. It sounds like you're targeting below 2x by end of the year. But I mean, is that a revision to your longer-term target, which I think historically is in what, 2.5 to 3x?

No. I mean the 2.5 to 3x is kind of when we get back to a normalized SAAR and normalized new vehicle margins. So that's still not a revision from that. We want to work our way back down to 2x to be ready to do sizable acquisitions and share buybacks, but also this year, as I quoted in the script, if we see something from a share repurchase perspective or an acquisition, we wouldn't be afraid to spend money on that. So if we don't see those things, we'll work our way back down to 2x, but if something comes up that makes sense from a capital allocation perspective, we're not afraid to spend the money on those items this year.

Our next question is from Bret Jordan with Jefferies.

One, could you talk a bit about what you're seeing on the battery electric vehicle side from an inventory and maybe GPU? And the follow-up question I'm going to ask is really on GPU by brand. You've talked about Stellantis and Nissan being kind of back to relatively high inventory levels. Are those GPUs looking like pre-pandemic levels? Or is the new base above the historic profitability?

I will discuss the gross profit per vehicle, and Dan will cover the electric car details. It's a great question, Bret. The brands you mentioned, Nissan, Stellantis, and Infiniti, have notably influenced the decline in profit per vehicle. However, all three remain significantly above the levels of 2019, which indicates they have maintained very healthy gross profits. Overall, their numbers are good, but when compared to their peers in the domestic, luxury, and import segments, they fall short.

Dan, I’ll try to answer all the questions you asked about electric vehicles. It's an important topic, so I hope to provide the insight you're looking for. If I overlook anything, please let me know. Currently, electric vehicles make up about 5% of our total inventory. Keeping that in mind, our electric vehicle day supply for the fourth quarter was 91 days, with around 54 days of supply in the used car segment. We observed an increase from the third quarter to the fourth quarter, particularly in new cars, where we saw about a 33% rise. There's nothing particularly new to report, but EV sales are beginning to slow down and inventory is starting to build up, and we are managing that as effectively as we can. Did I overlook anything you’d like me to elaborate on?

Yes, if you could just sort of talk about, I guess, how you see the trajectory of GPUs on the battery side?

Yes. So the early adopters of EVs, I think that's what we have been facing or serving at the dealership level. And now that, that phase is behind us, there's a lot more, what's the right word, a lot more aggressiveness from a pricing standpoint. So expect the GPUs to be lower than our ICEs and when we're working deals or working leases, which most of these vehicles are being leased and that puts a little bit of pressure on the OEM or the lender institution from a residual factor, we're having to get pretty aggressive in discounting cars much more than we do traditional combustion engines.

Our next question is from David Whiston with Morningstar.

Can you talk a bit about what the franchise and goodwill impairments for the special item?

Yes. So that's mostly related to our Stellantis and Nissan stores. With interest rates going up, that kind of increases the WACC in our calculation we have to do for our annual impairment testing. But that's primarily related to our Stellantis and Nissan stores in our company.

Okay. Looking at your debt profile, 2 questions on that. First, you've got a lot of bonds due 2028 to 2030. So if you're not already at a point like this, you might be soon at the point where you can't just keep piling debt into those 3-year timeframes to do more deals in the future. So are your hands tied in big M&A? Or do you just want to issue bonds that mature after 2032?

Yes. I mean, we think with our cash flow that we generate on an annual basis, that provides sufficient capital to go out and do M&A and share buybacks. So we're looking more at those bonds in those years as a refinancing opportunity not to continue to add more debt onto those bonds. So we use our free cash flow to kind of do our activity. We do have some mortgages when we bought the Koons acquisitions. We did not mortgage that real estate. And so we do have the option to put all mortgages for that property. We typically mortgage the properties when we bought; in this case, we did not mortgage it just to kind of keep the debt level at a lower level.

And then sticking on debt, the 2026 maturities, the mortgage debt over $600 million, you look to just refi that all at some point with a bond? Or do you want to just retire that debt eventually in 2 years?

No. We'll most likely just flip that, continue with the mortgage. We have a good facility with our bank group. And so we'll just refinance that with our bank group on the mortgage side.

Okay. This concludes our call today. We appreciate you joining us for the fourth quarter earnings and year-end. We look forward to speaking with you after the first quarter. Have a great day.

This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.