Thank you, Anthony, and good morning, everyone, and welcome to today's call. The earnings release we issued this morning and a related slide presentation that includes reconciliations related to the adjusted results we will refer to on this call for comparison purposes have been posted to Group 1's website. Before we begin, I'd like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the conference call, statements made by management of Group 1 Automotive are forward-looking statements that are pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve both known and unknown risks and uncertainties, which may cause the company's actual results in future periods to differ materially from forecasted results. Those risks include, but are not limited to, risks associated with pricing, volume, inventory supply due to increased customer demand and reduced manufacturing production levels due to component shortages, conditions of markets and adverse developments in the global economy as well as the public health crises related to the COVID-19 virus, and resulting impacts on the demand for new and used vehicles, and related services. Those and other risks are described in the company's filings with the Securities and Exchange Commission. In addition, certain non-GAAP financial measures, as defined under SEC rules, may be discussed on this call. As required by applicable SEC rules, the company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website. Participating with me today on the call are Earl Hesterberg, our Chief Executive Officer; Daryl Kenningham, President and Chief Operating Officer; and Daniel McHenry, Senior Vice President and Chief Financial Officer. I'll now hand the call over to Earl.

Thank you, Pete, and good morning, everyone. I'm pleased to report that for the quarter, Group 1 generated adjusted net income of $188 million from continuing operations. This equates to adjusted earnings per share of $12 per diluted share, an increase of 27% over the prior year and ties to the previous quarter for our all-time best quarterly earnings per share result. Our adjusted results exclude non-core items totaling $9 million of after-tax gains, which primarily resulted from the sale of the dealership franchise in real estate during the quarter. These results were largely due to continued strong new vehicle margins that were able to more than offset weak supply, continued double-digit same-store growth in our Aftersales business, significant contributions from our recent acquisitions and record profitability from our UK region. One of the challenges we faced in the US in the quarter was a decline in industry used vehicle price levels. This required quick action by our team to rapidly sell through our existing inventory, so we could restock at the latest market price levels. This action enabled us to slightly increase sales in a market which declined double-digits. However, our used vehicle margins declined sequentially from roughly $1,900 a unit in the second quarter to roughly $1,600 in the third quarter. Our ongoing used vehicle stocking level of approximately 30 days supply enables us to react very quickly to market changes of this nature. Consumer demand in the UK remains steady and new vehicle availability is still constrained. Our new vehicle order bank remains at nearly 17,000 units, which is consistent with the end of June and represents more than a six-month backlog based on our 2022 sales pace. As a reminder, our UK business mix is predominantly luxury brands, and those consumers are more resilient during times of economic uncertainty. We continue to believe that pent-up demand built over the past several years due to both Brexit and the very strict pandemic lockdowns will help drive strong UK vehicle demand well into 2023. We're also seeing continued strength in the state of Texas. The market once again collectively outperformed our total US same-store growth in new vehicle sales, used vehicle sales, after-sales and net profitability. Texas demographic trends continue to be a positive tailwind for the company due to population growth, reasonable cost of living, low taxes, and a friendly business environment. We believe our geographic exposure is both a near-term and long-term advantage for our company and shareholders. Finally, our company-wide after-sales performance continues to be a key profit driver. We delivered over 10% consolidated same-store gross profit growth on a local currency basis, which is even more impressive given the tough double-digit growth comps from last year's consolidated results. Our after-sales initiatives and recruiting efforts continue to drive outsized growth in this segment. To provide some color on our US second quarter performance, I'll now turn the call over to Daryl Kenningham.

Thank you, Earl, and good morning, everyone. As of September 30, we had 5,000 US new vehicle units in stock. That represents a 15-day supply, a slight increase from June. Inventory increases mainly in our domestic brands and import brands remain very constrained. As a reminder, 30% of our US business is Toyota and Lexus, which continues to be very tight at a combined 5-day supply. Despite fewer new car sales in the quarter versus a year ago, our same-store used retail sales increased 2% in an industry that was down 12%. Our organic sourcing efforts continued successfully during the quarter, including 10,300 vehicles acquired from individuals through AcceleRide. As a franchise dealer, we also have a distinct advantage over used operators due to our numerous organic sourcing channels available only to us, including our service drives, lease returns, and OEM closed auctions. Although the quarter presented a challenging used vehicle pricing environment, we maintained our discipline with a 31-day supply of used inventory. As Earl mentioned, this allowed us to quickly rebase our inventories at current market prices. Our US after-sales performance was outstanding once again, generating double-digit same-store gross profit growth, despite facing mid-teen growth comps from a year ago. For our technician recruiting and retention efforts, we increased our same-store technician headcount by 14% versus the third quarter of 2021. Following a very strong 2021, our customer pay business generated 11% same-store revenue growth compared to a year ago, and their collision revenues increased 21%. We foresee our after-sales business continuing to be a strength over the course of 2022 and into 2023. Our F&I business was up $174 per retail unit in the quarter. We're seeing improved product trend penetrations nearly across the board. We continue to maintain cost discipline, despite the normalization of used vehicle margins. Our third quarter adjusted SG&A as a percentage of gross profit was 60.6%, an increase of roughly 1 percentage point over the first half of 2022 and down from over 70% in the pre-pandemic third quarter of 2019. Lastly, I'm happy to say that our customers continued to vote yes on AcceleRide. We sold an all-time record 7,600 vehicles through AcceleRide in the second quarter, and in the first quarter, 11% of our US retail sales, also an all-time record. Just as important is that 74% of our customers used AcceleRide in their transaction in some way in the month of September. We're also looking forward to our full integration of AcceleRide with our DMS, CRM, and credit software. We continue to test it in several dealerships and expect a full rollout in the months ahead. Our early results are very positive, and we expect this will provide faster and more transparent transactions for our customers. I'll now turn the call over to our CFO, Daniel McHenry, to provide a balance sheet and liquidity review.

Thank you, Darryl, and good morning, everyone. As of September 30, we had $21 million of cash on hand and another $218 million invested in our floor plan offset accounts, bringing total cash liquidity to $239 million. We also had $551 million available to borrow on our acquisition line, bringing total immediate available liquidity to $790 million. Through the first nine months of 2022, we generated $730 million of adjusted operating cash flow and $647 million of free cash flow after backing out $83 million of capital expenditures. This capital was deployed through a combination of acquisitions, share repurchases, and dividends. This year-to-date, we have spent $460 million, repurchasing nearly 2.7 million shares at an average price of $171.1, and over the last 12 months, we have repurchased 20% of our share float. Our share count as of today is approximately $14.6 million. This significant repurchase activity in addition to the acquisition of over $2.5 billion in revenues over the last 12 months illustrates our commitment to accretive capital allocation. Our rent-adjusted leverage ratio, as defined by our US syndicated credit facility, was 1.8 times at the end of September. Our strong balance sheet will continue to allow meaningful and balanced capital deployment. Finally, related to interest expense, our quarterly floor plan interest of $6.5 million was an increase of $2.2 million from the prior year, due to both higher vehicle inventory holdings and interest rates. Non-floor plan interest expense increased by $6.5 million from the prior year, primarily due to the debt raised in conjunction with the Prime acquisition. As a reminder, the majority of our debt has been fixed through interest rate swaps. As of September 30, 77% of our $2.7 billion in floor plan and other debt was fixed. Therefore, the go-forward annual impact to EPS is only $0.32 for every 100 basis point increase in the secured overnight funding rate or SOFR which is the benchmark rates referenced in our floor plan and mortgage debt instruments. For additional detail regarding our financial condition, please refer to the schedules of additional information attached to the news release as well as the investor presentation posted on our website. I will now turn the call back over to Earl.

Thank you, Daniel. In 2022, we have continued our focus on high-quality external growth actions with the purchase of six dealerships that are expected to generate $740 million of annual revenues. These dealerships add to our existing scale in the Austin, Albuquerque, and Shreveport markets in the US and the South end market in the UK. Growing our US and UK businesses remains our top capital allocation priority. However, our balance sheet cash flow generation and leverage position will continue to support a flexible capital allocation approach, which will likely include further share repurchases in addition to the 20% of our outstanding shares we have repurchased over the last year. This concludes our prepared remarks. I'll now turn the call over to the operator to begin the question-and-answer session.

Thank you. We will now begin the question-and-answer session. Our first question will come from Daniel Imbro with Stephens. You may now go ahead.

Yes. Hi, good morning, guys. Thanks for taking my questions. My first question was sort of the new side of the business. Obviously, days inventory is very steady. You talked about a forward order book of demand here. What does that look like compared to a few months ago, if I think about how much of your inventory is maybe pre-sold here in the US? And then thinking about seasonality on the new side, typically, GPUs step up in the fourth quarter. I'd say now is anything but normal, but how should we think about that seasonality playing out in this environment in light of the order book that you're seeing today?

Daniel, this is Daryl. I'll cover the US aspect, and then Earl will address the UK situation. In the US, to start with the conclusion, the OEMs are feeling positive about the fourth quarter, with slightly increased inventories, particularly for certain brands. I truly believe we will see some benefits from this. Many of the supply chain challenges the industry has encountered over the past one and a half years are mostly resolved now. We're observing a smoother flow of vehicles, which will benefit the fourth quarter, and we're still seeing a retail SAAR under 12 million units in the US. There is still significant demand. Our pre-sold units in the US are roughly the same as they were in the second quarter, indicating that demand remains strong. In the UK, as mentioned before, our new vehicle order bank hasn't changed significantly and stands around 17,000 units. Over the last two or three quarters, we're selling just over 7,000 units each quarter, showcasing a healthy backlog. A key factor supporting this in the UK is the influx of new models, especially from luxury brands, that include either plug-in hybrids or battery electric vehicles. The UK market has a unique dynamic that encourages more new vehicle purchases due to a tax system favoring plug-in hybrids, battery electrics, or alternative fuel vehicles. A major segment of the UK market, which corresponds to fleet in the US, operates as a user chooser market where the individuals who drive the vehicles are responsible for the tax. As time goes on, it will become increasingly beneficial for them to opt for new vehicles with battery electric or plug-in hybrid technology. This trend continues to replenish our order bank.

And, Daryl, did I miss it? Did you mention the seasonality GPUs? Like, regular seasonality would say, things improve. But, obviously, it sounds like production is going to improve. So would you guys assume new GPU maybe sets down a bit in the fourth quarter, just given that comment on volume?

Hey. It's hard for me. I haven't predicted GPUs correctly, and I hate to guess. But what we believe is that relationships with our captive finance partners will support a lot of business.

That makes sense. And for my follow-up question, I want to ask on AcceleRide. Specifically curious, as you continue to scale it and we see penetration jump, do you see usage jump? What have you learned about the long-term cost saving opportunities? Is it more than you thought it might be? Is it less? Just trying to understand, as more of the consumer does this online and what does that mean for the long-term SG&A profile of the business?

Well, I believe that over time, what you will see is a change in the selling model for customers and perhaps how we staff our stores, schedule our teams, and the type of people we hire and the skill sets. As a retail business, we've staffed to cover the hours that we’re open. In today's world, we're staffing more for the appointments that are set and driven through AcceleRide. That has a significant impact on how we will staff. We're seeing that the productivity improvements are consistent with what we’ve seen since the implementation of AcceleRide, and they continue to hold even as I start to increase. But, yes, I believe that we'll see a different staffing model moving forward. I think it's not overnight; it's not a light switch, but I do believe that it will evolve.

Daniel, it's Daniel here. I think there's one thing that I would add in addition to what Daryl said. I think it will also help us having the integration of AcceleRide, our DMS, CRM, and credit software all in one place as well. I believe that will give us further synergies once we roll out throughout our stores.

Our next question will come from Michael Ward with Benchmark. You may now go ahead.

Thanks. Good morning, everyone. I think two areas of your business that seem to be outpacing the rest of the market are the F&I and service? Just today, I think you're saying that your technician count is actually increasing. It sounds like you're getting a lot of retention. Somehow, they all seem to be connected. Can you talk about some of the things you've done over the last several years that are building on that and what it means going forward?

Mike, this is Daryl. I'll speak to service. We firmly believe we have to be available when our customers want to do business with us. We try not to limit our schedules in our shops. We try to be open as much as possible and have as many appointment slots as available. That's different than some of our competitors who limit appointment slots. We also have several retention programs in place for technicians. We ensure that our pay is at or above market with our technicians, which is strategically one of the most important things we can do to be successful in after-sales moving forward. Over the last few years, we've seen that human capacity will drive our volume. We can provide customers with a reason to come into our stores, but if we don't have people to work on the cars, that doesn't help. That's where we focus significantly. And you know all about our four-day work week and that scheduling process and using more technology to drive efficiency in our shops as well.

Mike, on the F&I, we're very pleased with the performance as we continue to improve our processes. The fact that we increased $17 for the quarter and $218 same-store, this reflects continued process improvement, and we're very pleased with how our product penetration rates have increased. We have not seen any headwinds with lending whatsoever, so we're bullish moving forward on the F&I business.

As you integrate these different acquisitions, how fast can they come onto the GPI system, whether it's AcceleRide or your call center? I mean, how fast are they brought in? And are they able to see a pretty quick improvement in service revenue?

Mike, this is Daryl. We try to integrate them as quickly as possible on all of our technology, our phone systems, AcceleRide, on everything we do. Sometimes we pace that out a little bit depending on if the DMS has to change because that's a huge change in a store. If the DMS has to change, we might take a month or two to do that, but generally, we try to get them on as quickly as possible.

Our next question will come from John Murphy with Bank of America. You may now go ahead.

Good morning, guys. Just a first question for you, Earl. Is this the last conference call you're going to be doing as CEO, I believe?

Yes, by popular demand, it will be the last one I'm doing. It's my 70th and final one. Yes, John.

Well, congratulations on a very long, great run in Group 1 and the industry, and Daryl you've had a great run, but we’re expecting a lot more. So congratulations to you, too. I hope that doesn't count against my question count here.

That was the easiest question I've ever had, John.

Yeah. Well, congratulations really. It's been a great run. On after-sales, to follow up on Mike's question. Daryl, as you think about capacity utilization, how do you think about that now and where you're at and where you ultimately can go? I mean, we know that the four-day work week has been very helpful. But I mean where are you and where do you think you can go in the service base?

Well, we have stores, John, where we have 10 service bays and 17 or 18 technicians. We have another store: one of the stores in New England, I was at a couple of weeks ago, we had 29 service bays and 45 technicians. We feel like while we may not be at that ratio at every store, we can definitely have more technicians than physical stall count. It doesn't mean we won't invest in more brick-and-mortar for service capacity. Where we do see the need is especially in some acquisitions we do. We tend to find the acquisitions are underbuilt for after-sales, especially for our taste. We will invest there, but we feel like there's more upside. I would also say, in the UK, I think we have a lot of upside.

Yeah. This is Earl. I do think one of our big growth opportunities in the future, which Daryl is fully aware of, is we are not yet at the same level of after-sales sophistication in the UK than we are in the US. The brands we have there, such as Audi, BMW, Mercedes, and Land Rover, will really support a lot more service business for us if we can implement some of the general concepts that we've able to implement in the US in after-sales.

Okay. That's incredibly helpful. And just one follow-up on the F&I PVR. Can you give us a breakdown of the components of that $21, $25 because I think there's a lot of concern that rates might be rising, and that's going to compress your F&I PVR or pricing might come down, compressing F&I PVR. What are the major components of that $21, $25? So we can understand the risk or opportunity may ultimately be there?

Sure, John. This is Pete. About one-third of the business comes from origination of financing loans; the rest of it comes from product sales. It's been like that for a long time. We're very happy with that equilibrium. The key is to keep that one-third rate steady, while the rest comes from increased product penetration. We still have room to run.

Our next question will come from Rajat Gupta with JPMorgan. You may now go ahead.

Great. Thanks for taking the question. Maybe just to address what the economy and the uncertainty surrounding there. You've heard mixed commentary from private and public dealers regarding underlying demand trends. I'm curious to get your take on how you're feeling about the health of the consumer in general and demand trends into the fourth quarter, maybe into next year as well. And perhaps for planning purposes, if a doomsday scenario plays out, and 2023 is a recessionary year, can you provide a perspective on how we should think about the earnings power of the company? What are the key variables that would factor into those assumptions? I have a follow-up. Thanks.

This is Earl. I'll start with that. We can't deny that on a broad basis, consumers are under pressure with inflation at this level in this type of economic turmoil. However, the majority of our business is with higher income people, not just luxury brand business, which dominates in the UK and is a big part of our US business. When you look at the vehicles that OEMs are building and our average sales price, which is somewhere near the $50,000 mark, we are dealing with people who have the means to continue to buy vehicles even though monthly payments are significantly above where they were two or three years ago. The backlog of vehicles in both markets we operate in tends to be categorized as expensive vehicles. Additionally, most of the used cars we sell are at the higher end of the market, generally three years old or younger. Our franchise business model allows us to navigate these challenges, as Daryl mentioned, vehicle affordability is primarily a financing matter. Captive credit companies of our major partners are very powerful. The combination of that and the cushion between supply and demand will provide some stability. Clearly, we expect some normalization will occur, and we have prepared for it. Our business is flexible enough to continue to adapt. So we don't have any significant trepidation about next year or anything like that. Our core businesses, namely after-sales and new vehicle sales, are expected to remain strong in the near term.

Rajat, it's Daniel here. There are a number of things I would add to what Earl said. The core of our business is our parts and service business. Looking back to the '08 recession, that business contracted far less than any other element of our business. It was kind of mid-single digits contraction. I think that will bode well for us if we do enter a recession in 2023. Furthermore, we've grown our company with our capital allocation through share buybacks, that will help us maintain our EPS as well as growing nearly $3 billion in revenues over the last 18 months. I believe this combination will help us weather any recession. Let me make one more point. Both of the markets we operate in, the UK and the US, are already operating at recession-level sales figures for the last three years, with the UK maintaining 1.6 million units of industry sales and the U.S. around 13.3 to 13.5, which is about 2 million units below historical averages even in an average economy.

Got it. Before I ask my follow-up question, I also wanted to echo John's comments and congratulate both Earl and Daryl on their future endeavors. On SG&A, you mentioned in the past a 300 basis points structural reduction versus pre-pandemic levels when GPUs would revert to normal. Is that still a good framework? You mentioned earlier that productivity is sustaining and integrations around the DMS and credit applications are happening. Some of your peers have also talked about a higher degree of permanent reduction. I'd like your latest thoughts on what the levels of SG&A growth could be to arrive at a more normalized number when GPUs revert.

Sure, Rajat. It's Daniel. If you look back to where we were pre-pandemic in 2019, overall, we were running at around 74%. Currently, we're sitting in the early 60s. We don't foresee our SG&A returning to about 70%. As margins fluctuate, I do believe it will settle between the 6% and 7%.

Our next question will come from Ali Faghri with Guggenheim. You may now go ahead.

Hi, everyone. Thanks for taking my question. Your new car GPU remained strong in the quarter. Are you seeing any signs of more significant GPU compression in September or October? And when do you expect new GPUs to fully normalize? One of your competitors stated last week that new GPUs would likely normalize by mid to late 2023. Do you have differing views on this?

Ali, this is Daryl. We are observing some minor compression. Our results indicate that from quarter to quarter. When will it normalize? I'm not certain. I think the OEMs are exercising more discipline on supply and producing high-quality earnings at current production levels suggests they will continue driving this model. Forums of distribution channels being overloaded, I believe, are behind us. Even in brands showing slightly higher days supply than in the second quarter, those days supply remain relatively reasonable at around 20 days, rather than six or seven. That gives customers more choice and helps satisfy needs quickly. So, we're pleased with that. However, I can't predict which quarter or month it could happen; it remains uncertain.

To add to that regarding the US part of the business, pre-COVID, Group 1 Automotive maintained 29,000 new vehicles in inventory. We've indicated for a year that we've been below 4,000 in inventory. Today, our inventory stands at 5,000. As for our 25% of the company being Toyota and Lexus, last week a General Manager informed me that their dealership had only seven Toyotas on the ground whereas pre-COVID, they maintained 1,000. So yes, there are brands that may normalize quicker than others, but we're still nowhere near pre-COVID inventory levels.

That's really helpful perspective. For a follow-up on F&I, although it remains strong in the third quarter, can you discuss how much of the improvement in F&I per unit versus 2019 is structural versus cyclical? What’s your outlook for F&I per unit into 2023 as new and used car average transaction prices inevitably normalize, potentially impacting consumer purchases of insurance products?

First, I'm not sure if normalization in ATPs will be achievable. When considering vehicle prices, customers desire advanced technology, and I don't foresee significant headwinds from that standpoint. Therefore, I think we should view this as structural. If you look at our performance history with F&I, it has been very stable and increasing over the past 15 years. We remain bullish on our F&I business, and based on your modeling, feel confident about the current levels.

Great. Thanks for taking my questions. And Earl, congratulations on your retirement and best of luck.

Thank you so much.

This concludes our question-and-answer session. I'd like to turn the conference back over to Earl for any closing remarks.

Thanks to everybody for joining us today. The team looks forward to updating you on our fourth-quarter earnings call in February.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.