Good morning ladies and gentlemen. Welcome to Group 1 Automotive's Fourth Quarter and Full Year 2024 Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call over to Mr. Pete DeLongchamps, Group 1's Senior Vice President, Manufacturer Relations and Financial Services. Please go ahead, Mr. DeLongchamps.

Thank you. 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 that we will refer to on the call this morning 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 made 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, conditions of markets, successful integration of acquisitions and adverse developments in the global economy and resulting impacts on 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 on today's call, Daryl Kenningham, our President and Chief Executive Officer; and Daniel McHenry, Senior Vice President and Chief Financial Officer. I'd now like to hand the call over to Daryl.

Thank you, Pete. Good morning, everyone. Our U.S. team delivered outstanding results in the fourth quarter and our U.K. team has been hard at work integrating the operations of our growing U.K. footprint. I'll start with an update on the integration of our U.K. business and the broader U.K. market dynamics. We continue to be pleased with the acquisition of Inchcape's retail dealerships. I believe we’re better positioned in the U.K. market than we've been at any point in our history. We're poised to capitalize on the additional scale, geographic diversification and an outstanding brand portfolio. Integrating 54 stores and 2 corporate organizations has been a huge effort. We carried some incremental SG&A through the fourth quarter in the U.K. and we've completed many of the difficult tasks and expect others will finalize in the first quarter and throughout 2025. And as always, based on business conditions, we will continue to refine and adjust as needed on a real-time basis. Our integration work included the initiation of the U.K. wide restructuring plan. This plan consists of workforce realignment, strategic closing of certain facilities, systems integrations and other efforts. Our systems integration included a conversion of the legacy Inchcape dealer management system to our existing U.K. DMS. The in-store portion of the conversion did disrupt our operations for a period of time while being completed. It impacted results for those acquired stores. We've installed a leadership team steeped in the U.K. motor trade and are extremely focused on performance. We've made a number of process changes to focus on just that. A couple of examples. In the Inchcape retail stores, technician productivity was significantly behind our legacy Group 1 stores. So we modified compensation plans to focus and reward throughput. We move decision-making on many day-to-day activities from the corporate office to the Inchcape stores. Examples include used car acquisition, pricing and valuation, shop equipment procurement and technician hiring. This will allow the Inchcape retail stores to be more nimble and responsive to the marketplace, an absolute must in today's U.K. environment. And we certainly have guidelines, technology and training in place to help them with that transition. Turning to the broader U.K. market. We continue to see a challenged macroeconomic backdrop. Government-imposed zero emissions vehicle mandates have proven difficult to achieve and are expected to further challenge new vehicle sales in 2025. The overall market fell short of the 2024 mandated goal of 22% BEV mix. The market will need to see a further shift toward EVs in order to achieve 2025's target of 28%. And currently, lower-margin fleet sales in the U.K. account for a majority of EV sales. Because of our size now in the U.K., we've been able to significantly strengthen our presence with great brands like BMW, Volkswagen, Audi, Porsche, Mercedes-Benz, Toyota, Land Rover and Ford. A close relationship with those OEM partners based on performance and commitment is critical to our growth focus and ability to overcome the broader U.K. market challenges. While we're not pleased with our U.K. results in the quarter, we are confident that the leadership, process and integration actions that we've taken will result in improved performance in the year ahead. Now turning to our U.S. business. We saw record new vehicle units sold and a sequential improvement in PRU. New vehicle volumes outpaced the industry and same-store used volumes were up 5% in a quarter that is traditionally new car focused. Our F&I business performed well in the quarter, up $109 PRU as new vehicle finance penetration improved. Used vehicle finance penetration held steady and combined with improved product penetrations that resulted in a $27 increase in UV PRU, a positive change from previous trends. Parts and service revenues reached a record for the quarter with same-store growth of nearly 9% and customer pay same-store growth up more than 8%. We also saw a nice increase in customer counts in the quarter. We continue to view aftersales as a differentiator at Group 1. We believe it is the most underinvested area of our business and adding human capacity is the critical leverage in performance. In 2024, we increased our technician headcount on a same-store basis by 7% in the U.S. And due to our creative scheduling and productivity, we have plenty of physical capacity to continue adding technicians well into the future. We will continue to invest in aftersales. An example is our capital program to install air conditioning in nearly all of our U.S. shops and it's on track to be completed by the end of 2025. As we've previously discussed, shops with air conditioning have much higher technician retention. Now shifting to capital allocation. Properly allocating capital will always be our highest priority. While we regularly evaluate other business adjacencies, in this environment, we believe staying focused on the new vehicle retail franchise business is the best use of our shareholders' capital. Part of that is certainly the return profile but part of it is also being a great partner to our most important partners, the OEMs. They need their networks more than ever. And in turn, we need them more than ever. So we don't compete with them and we intensely focus on driving performance metrics that determine acquisition eligibility, such as sales effectiveness and customer retention. As a result, our approvability is quite strong across nearly all of our OEMs. That allows us to engage in acquisition discussions on nearly any brand with the confidence that we will be approved. The diversity of acquisitions in 2024 with brands like Lexus, Honda, Mercedes, BMW, Toyota, Porsche, Land Rover and Audi are all examples of our ability to acquire outstanding brands in desirable markets because we perform well on the OEM eligibility metrics. And we will continue to balance acquisitions, dispositions with repurchasing our shares. In 2024, while we grew the company 24% due primarily to acquisitions, over the past 3 years, we've repurchased 25% of our stock and we will continue to focus on balancing those capital opportunities. Lastly, a few thoughts on the evolving U.S. landscape. There's a great deal of conjecture at the moment about Washington and the impact of the new administration's policies on retailers and OEMs. While we don't know the outcome of the impact on changes in things like EV subsidies, taxes, tariffs or interest rates, we feel the best way to capitalize is to ensure that Group 1 stays nimble and focused on execution. We have to be ready to compete on whatever playing field exists with whatever set of variables were presented. Over the past several years, I believe Group 1 has demonstrated the agility and flexibility that will allow us to win in any competitive environment. Now, I'll turn the call over to our CFO, Daniel McHenry, for an operating and financial overview.

Thank you, Daryl and good morning, everyone. In the fourth quarter of 2024, Group 1 Automotive reported adjusted net income of $133.9 million, quarterly adjusted diluted earnings per share from continuing operations of $10.02. Current quarter total revenues of $5.5 billion, an all-time quarterly record and all-time quarterly records across multiple business lines, including new vehicle sales of $2.9 billion, parts and service revenues of $680 million and F&I of $226 million. Fourth quarter adjusted net income and adjusted diluted earnings per share from continuing operations excluded $33 million of impairment charges, primarily attributable to franchise rights intangible assets for 4 of our dealerships in the U.S. In the full quarter of 2024, we reported adjusted net income of $530.6 million. Full year adjusted diluted earnings per share from continuing operations of $39.21 and full year total revenues of $19.9 billion, an all-time annual record. An all-time annual records across all of our business lines, including new vehicle sales of $10 billion, used vehicle retail sales of $6.2 billion, parts and service of $2.5 billion and F&I of $829 million. Starting with our U.S. operations. We achieved an all-time quarterly record on new vehicle revenues of $2.3 billion, with new vehicle units sold up 14% on a reported basis and over 8% from same-store. This reflects the resiliency of demand and our operational effectiveness as well as the value received from driving volume from our new dealership acquisitions. While new vehicle GPUs monitored from the prior year, we are pleased with the sequential quarter performance, increasing $55 on a reported basis. Used car volume in the fourth quarter grew by 7% and 5% year-over-year on an as-reported basis, respectively. GPU held fairly consistent, down only $40 and $39 on a reported and a same-store basis, respectively. Pricing increased in the fourth quarter versus comparable prior year and sequential quarters. We are pleased with our ability to maintain volume levels and whole pricing. We believe this is a testament to our processes, discipline and use of technology with the pricing of used vehicles. Our F&I revenues of $196 million were also a quarterly record for the U.S. Our fourth quarter F&I GPU of $2,415 increased 3% on a sequential quarter basis and year-over-year, respectively. The performance by our F&I professionals has been outstanding to maintain GPU discipline. Shifting gears to aftersales. Aftersales fourth quarter revenues and gross profit outperformed sequentially and year-over-year. The fourth quarter saw a 6.5% increase in the number of repair orders. The only activity decline was our lower-margin collision work, which was more than compensated for higher-margin warranty and customer pay. The average same-store dollars per repair order was up over 7% in the fourth quarter. These gains demonstrate our ability to add aftersales capacity on a same-store basis. Our overall same-store non-technician U.S. headcount has declined 10% from 2019. However, our technician headcount is up 18% over that same period. Wrapping up the U.S., let's shift to SG&A. U.S. adjusted SG&A as a percentage of gross profit increased 27 basis points sequentially to 64.6%, demonstrating our continued focus on managing costs below pre-COVID levels. Our execution in the quarter was outstanding and we will remain laser-focused on exploring operational efficiency gains to maintain this positioning. A final note on the U.S. In the fourth quarter, we received $10 million in insurance proceeds relating to the CDK outage in the second quarter of 2024. This amount was recognized as other income in the statement of operations. Turning to the U.K. In terms of headline results, acquisition activity fueled an all-time quarterly record in total revenues, leading to an 85.3% year-over-year increase. We were pleased to be able to maintain gross profit on a same-store basis thanks to improvements in aftersales year-over-year and used vehicles. Sequentially, new vehicle GPUs improved $348 on a reported basis, respectively. Same-store retail used vehicle units sold decreased 2% year-over-year. However, GPUs improved by almost 12%, leading to improved gross profit performance. Same-store wholesale losses per unit improved compared to the prior year quarter, evidencing our efforts in 2024 to better manage our used car inventory in a tough U.K. market. The fourth quarter was a challenging quarter for the U.K. in terms of SG&A management. U.K. same-store adjusted SG&A as a percentage of gross profit and as reported adjusted SG&A as a percentage of gross profit worsened sequentially by 760 and 1,100 basis points, respectively. We recognize that we still have some challenges to overcome in the U.K. as a whole and we will continue to focus on cost control and business process efficiencies as we execute our business integration activities. Our integration activities related to Inchcape have been ongoing and principally include efforts at workforce alignment, system conversions and operational efficiency. We anticipate substantial completion of integration activities by the end of the first quarter. Turning to our balance sheet and liquidity. Our strong balance sheet, cash flow generation and leverage position will continue to support a flexible capital allocation approach. As of December 31, our liquidity of $1.2 billion comprised of accessible cash of $323 million and $893 million available to borrow on our acquisition line. Our rent-adjusted leverage ratio as defined by our U.S. syndicated credit facility was 2.79x at the end of December. Cash flow generation through the full year of 2024 yielded $683 million of adjusted operating cash flow and $504 million of free cash flow after backing out $179 million of CapEx. This capital was deployed in the same period through a combination of acquisitions, share repurchases and dividends, including the acquisition of $3.9 billion in revenues through December 31, $162 million repurchasing approximately 518,000 shares at an average price of $311.67, resulting in a 3.8% reduction in our share count since January 1 and $25.5 million in dividends to our shareholders. During the fourth quarter, we repurchased 80,300 shares at an average price of $398.30 for a total cost of $32 million. During the first quarter of 2025, under a Rule 10b5-1 trading plan, we repurchased 32,900 shares at an average price per common share of $419.30 for a total cost of $13.8 million. We currently have $462 million remaining on our Board-authorized common share repurchase plan. As of December 31, approximately 60% of our $5 billion in floor plan and other debt was fixed, resulting in an annual EPS impact of only about $1.15 for every 100 basis point increase in the secured overnight funding rate. For additional detail regarding our financial condition, please refer to the schedules of additional information attached to the news release as well as our investor presentation posted on our website. I will now turn the call over to the operator to begin the question-and-answer session.

The first question today comes from David Whiston with Morningstar.

I know there's a lot of uncertainty regarding the Trump administration's tariffs right now. Given what happened to GM stock yesterday, many of us would appreciate any indication you can provide about potential tariff impacts. Is there any cooperation being discussed with the OEMs? As a dealer and importer, you're typically responsible for covering the full cost of these tariffs. Are there any arrangements being considered for sharing the costs associated with these tariffs?

David, this is Daryl. All the OEMs are talking about the impact and they're all, I guess, for lack of a better word, war gaming potential outcomes and what that means to their own sourcing and production plans. At this point, we haven't had any discussions with the OEMs around what kind of an impact that might look like on pricing or our costs as retailers. They are communicating regularly that they're looking at it and making adjustments but nothing specific yet.

Okay. On new vehicle affordability, I'm just curious, as you know that was a big concern last year. We had a big surge in December. I think a lot of people were probably relieved with the election over. But I'm just curious going forward in '25, do you think the affordability problem is lessened because the election is over? Or is it still a really key concern for customers, especially in the U.S.

I’m not sure if it’s due to the election or not, but our transaction prices remained stable, and we were happy with our gross numbers and same-store sales growth. This suggests that consumers are generally in good shape, and we are satisfied with those results. I don’t have any signs indicating that conditions will worsen. In fact, there’s a possibility for improvement if there are changes in tax rates or interest rates.

The next question comes from Rajat Gupta with JPMorgan.

I wanted to follow up on the earlier comments about the U.K. Given some of the challenges related to the EV mandates, it seems like the situation is deteriorating in the fourth quarter. What are your expectations for new and used car sales in the U.K. for 2025? Additionally, what impact could this have on GPUs? On the topic of the U.K., I'd like to ask about the restructuring actions you've implemented. It appears you are currently operating with annualized SG&A expenses of around $650 million. What should we anticipate the new run rate to be after these restructuring actions are finalized?

Rajat, this is Daryl. I'm going to address your question about new vehicle demand while Daniel will discuss SG&A. Most forecasts in the U.K. indicate growth in 2025, and the core retail business seems solid. Currently, the introduction of EVs through the fleet channel is putting pressure on overall margins, which needs to be addressed. I believe it will be resolved, especially considering the political discussions in the U.K. that are shedding light on how to tackle this issue and its impact on the industry. We are hopeful that resolutions will emerge, leading to a more balanced mix of retail and fleet sales along with a more natural distribution of EVs. Although the specifics are still unclear, there appears to be enough commitment and ongoing discussion to suggest that change is forthcoming. Now, I'll hand it over to Daniel for his insights on SG&A.

Rajat, I think as we discussed on our last earnings call, it should have been no shock this quarter. It has seen that our SG&A as a percent of gross was at a higher level. Some of that involved that we carried double cost in the quarter for some activities and some of our headcount as we exited some of the colleagues from the business. Equally so, Inchcape had a large outsourced accounting center that we onshored and we had some costs for the accounting center offshore and trying to employ employees in the U.K. to take those duties up on the 1st of January. In terms of our go forward, this year, SG&A as a percent of gross adjusted was 83%. Our expectation is that we would take at least 300 basis points out of that going into next year. It could get better than that as we continue to execute on our cost reduction plan for 2025. But if you use that for your base model, that would be my expectation.

The next question comes from Daniela Haigian with Morgan Stanley.

I just want to ask again about the trends in SG&A to gross. I know you discussed already in prepared remarks and just now about U.K. is higher as a result of the Inchcape integration but we also saw a sequential increase and year-over-year increase in the U.S. And so in what areas are you seeing the most cost inflation? And what components do you feel there's opportunity to be more efficient?

Daniela, this is Daniel. There was some increase in headcount SG&A as a percent of growth, small amount. Some of it was due to margin reduction in terms of the margin on new vehicles year-on-year as a percent of growth as opposed to absolute dollar.

Got it. Okay. And then my second question is more so just about January trends thus far. What are you seeing new, used and state of the consumer just to kick off 2025?

Well, January is not finished yet, and we will be prepared to discuss that at the end of the quarter. You've seen the industry forecasts that have come out.

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

You just had a first question, Daryl, on pricing and GPUs. I mean we saw, for the first time in a while, a sequential improvement in new GPUs. Obviously, the fourth quarter has some relatively strong seasonality with Lux being a little bit stronger. But just curious, as you think forward into 2025 and maybe even beyond, obviously, there's a great debate of where these GPUs are going to settle. It seems like we're kind of reaching an asymptotic limit on the downside here. But just curious your thoughts of how much of that benefit was typical seasonality and/or how much do you think we're kind of starting to scramble on the bottom here?

I generally agree with you, John. If we’re not at the bottom, we’re getting close. The fourth quarter didn’t significantly boost GPUs, but there was some impact from the year-end push with luxury items. The day supply numbers heading into the fourth quarter varied quite a bit. Some brands had a lot of stock while others were very tight, and we managed to keep TRUs flat or slightly up on a reported basis. So, I believe we are likely near the bottom. It feels that way considering the vehicle content customers have. Transaction prices are much higher than they were before COVID, largely due to the equipment in the vehicles. We’re also seeing some brands rationalize their production, which helps as well.

Got it. That's helpful. And then just a second question on parts and service. 7% tech growth, I think, is what you guys said in 2024 which is pretty impressive to get that kind of hiring done. What are you thinking for the pipeline of hires for technicians? Because that seems like that is almost the only gating factor on growth on parts and service.

We're not lowering our expectations, John. Our targets are the same in '25 as they were in '24 and they're probably more aggressive than the U.K. And we feel like we have an opportunity to do that. We're trying to put some things in place. We're doing things like the air conditioning project which we believe will lead to higher retention in those shops. It does in the rest of our shops. And we've got some other things that we're working on to try to improve retention in our higher defection brands and shops and experimenting with different kinds of compensation plans and retention programs and recognition programs and mentoring programs. We don't see us stopping that. And at this point, we know we've got to be creative and continue to evolve in that. We can't just rely on what we did a year or 2 years ago to do that. So that's our focus and that's what we're going to continue to do. And one key to this is keeping your shops full. Techs want to work at places where they can get work. And we keep our shops full because of the way we schedule our customers. So that's a real key as well.

The next question comes from Jeff Licht with Stephens.

Congrats on a great quarter. I hate to beat on the U.K. thing, obviously, especially with the U.S. results being as strong as they were. I think some of us were a little surprised at some of the line items in the U.K. You'd highlighted some pretty big things in terms of the DMS changeover, the technician productivity pushing the decision-making process down to the dealerships. I was wondering if you could just elaborate more. I mean, obviously, you've hit the SG&A point, the 300 bps for next year. But just maybe giving a little more color just in terms of magnitude of just how kind of impacted negatively things are right now and how you would see that going the other direction and just how much opportunity is it to go the other direction in 2025.

Well, I think there's quite a bit of opportunity. The business we bought, the brands are terrific and they're in great geographies. The way they manage their business was different than us. We tend to put more decision-making in the stores because we feel like our general managers have to have flexibility to react to the marketplace and that's a better way to serve customers. The Inchcape was more centralized. They had a lot more of their decisions centralized and even things like just replacing a lift or hiring a technician had to go to the corporate office for approval. If you wanted to reprice a used car, you had to have approval in writing from the corporate office. We don't think that's the proper way to manage a retail business. We think putting guidelines and technology in place to help the operators make those decisions is the best way and then let them make those decisions based on the customer needs at the moment. And so we've moved all of that in the half of our business that's Inchcape out to the stores. And they're not going to wake up day 1 and be great at it. But I can tell you, just throughout the quarter, we saw improvements in those actions that resulted from those actions. And I feel like we're going to continue to see that. So I think there's a significant opportunity there. I'm as convinced today that we've got a great business there that can really develop and produce good returns for our shareholders. I certainly believe that. So it doesn't mean there's not work to do. There certainly is.

And a quick follow-up for Pete, if I could. Relating to the conversations that are always ongoing with the OEMs, obviously, a lot has been going on in the back half stop sales. Inventory is normalizing as you talked but it's not quite there yet. The EV mandates. Just curious, Pete, how conversations with the OEMs are evolving as we go into 2025? And what are they most focused on and vice versa?

I don't think we can generalize about the OEM focus. However, if you look at the days’ supply, there's been a significant balance, particularly with those OEMs having higher days’ supply. We still see low numbers with Toyota and Lexus. Looking ahead to this year, the OEMs are optimistic, reinforcing Daryl's earlier point about the importance of our relationships and performance to support continued growth. In discussions with all the OEMs, their outlook for this year appears very positive.

The next question comes from Bret Jordan with Jefferies.

Could you give us a little bit more color on the BEV impact in the U.K., I guess, as you're forcing them through the fleet channel on the unit GPUs and BEV versus ICE over there and maybe where you see that as the mandate is looking for 6 points higher in BEV this year?

The margin impact is something we can provide more details on. Sending vehicles through the fleet channel mainly serves corporate fleets in the U.K., which differ from rental car fleets. Most companies maintain corporate fleet programs for their employees; however, these programs are generally subsidized and tend to offer lower prices and margins. Consequently, our incentives have been directed more towards those fleet buyers due to their larger volume, which is the underlying issue.

Bret, it's Daniel here. The additional thing out there on the fleet market is you don't traditionally get any F&I income on that fleet business. In addition, there's not really traditionally a trade that you take with that fleet vehicle. So that just makes it a much more difficult trading environment than what a standard retail deal would make.

Okay, great. Regarding parts and service in the U.S., are you seeing any benefits from the Toyota Tundra engine replacement yet, or is that expected to start in 2025? Also, what’s the expected cadence? It seems like there could be some seasonal advantages leading into early 2025.

We will definitely see a positive impact in 2025 from the existing warranty. The warranty numbers are currently quite high. Importantly, about one-third of customers who come in for warranty service end up making additional payments for their repairs. This high trend in warranty is beneficial for our customer pay business. I believe this is one of the reasons we experienced an 8% increase in customer pay during the quarter. I expect the benefits from the warranty to continue throughout the year.

The next question comes from Michael Ward with Freedom Capital.

Just one more question on the U.K. there. If you take the Inchcape business and the SG&A, it looks like it was like 96% in 4Q. Is there anything structurally that prevents that business from getting down to the overall corporate average in the U.K.

Mike, it's Daniel. I don't think there's anything structurally that prevents that from happening. If anything, my expectation would be that the Inchcape Group should be slightly better than the legacy Group 1 stores. Now, the simple reason behind that is a big differentiator between the U.S. and the U.K. as the rents are structurally higher in the U.K. than they are in the U.S. The Inchcape business tends to be more in the North of England versus the Group 1 legacy business in the South. And rents in the South of England just are structurally higher than the North. So my expectation would be that it should be as good, if not better, than the legacy Group 1 businesses as well as the brand mixes of the Inchcape stores tend to be slightly higher gauged towards luxury than the legacy. So all in all, I would say, absolutely as good as, if not better, than the legacy U.K. business.

Okay. So therefore, you had about $10 million of redundant SG&A costs then in 4Q with Inchcape and that affected your overall SG&A as well as the U.K. portion.

I think that's fair, Mike.

Yes, Mike, one of the ways we're assessing the U.K. business is that we believe Group 1 had an excellent fourth quarter overall. When looking at it from any broad perspective in terms of EPS growth and performance against expectations, we had a truly strong quarter, even without significant contributions from the U.K. As we move past major integration activities and start reaping their benefits in 2025, this will only enhance our position compared to where we are now. Some of the integration efforts have been quite disruptive; every employee in an Inchcape store has been equipped with new technology, and we've overhauled all the networks and the DMS. Each store was essentially shut down for five days during this process in late November and December, which had a considerable impact. However, we anticipate that as we progress further into 2025, we will begin to see increasing positive developments from our business there.

That's what it sounds like. Second question, on Page 13 of your slide deck, Pete, you're not going the woods the F&I side to it. It looks like you've had steady improvements in a lot of the different take rates. If I look at that, it seems to me that back about 6 months ago or so, there were some concerns that maybe F&I was going to normalize a little bit. It seems to me that you are at another high level. And if anything, as some of the captive finance comes back a little bit, we might see that drift a little bit higher in 2025. Is that a fair assumption?

I believe the real opportunity, Mike, as we see lower rates, is to boost the used car penetration, which has leveled off at 63% compared to a traditional figure of 68%. We've actually noticed that captive financing has helped new vehicle financing rise to 75% and 76%. We see potential for growth in this area in the upcoming year. Additionally, we have implemented our product offerings as we have discussed in the past. Our team has been effective in maintaining strong product penetration and has even seen increases in several of the products we offer. Therefore, we are satisfied with our F&I performance this year.

The next question comes from Ron Jewsikow with Guggenheim Securities.

Maybe just starting off on parts and service because the print was very strong this quarter. Is there anything we should be aware of surrounding kind of the 7% increase in revenue per repair order? I guess does warranty work or does the current scope of warranty work carry a higher revenue per RO? Or is that just a sign of kind of customer willingness to pay and your ability to pass through kind of tech cost and general inflation?

I think some of it may relate to the latter. However, when combined, about half of our benefit in parts of service this quarter was due to an increase in customer counts in our stores, which we are pleased to see. Regarding the specific dollar increases, the average mileage continues to rise across our service drives. As this trend continues, we can expect higher dollar repair orders since older vehicles require more repairs. I believe that is what is driving this increase. We are not implementing any significant pricing increases, as that is mostly behind us, and I don't think the current environment is conducive to it.

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

Just a follow-on question related to aftersales. Daryl, you mentioned targets for 2025 are unchanged from 2024. Can you just remind us what those targets were for last year?

I was specifically referring to the fact that this past year we added around 300 technicians in the U.S., and we have no intention of lowering our expectations for the future. Additionally, we don't believe that physical limitations related to our store count will hold us back, since one-third of our U.S. stores have more technicians than stalls in the dealership. Therefore, the number of open stalls is not what we consider when evaluating our future hiring potential for technicians. We plan to continue hiring at the same pace we've maintained in the past, which is what I was indicating. I'm not sure if that fully addresses your question.

It does. And then just looking at inventory levels, it looks like 67 days of used in the U.K. Does that need to come down?

Glenn, it's Daniel. December is usually a slow month for used vehicle sales in the U.K., while January is quite the opposite, as it tends to see strong sales. We analyzed our inventory at the end of December and divided it by the number of vehicles sold that month, which makes the December figures appear higher than they truly are.

Seeing no further questions in the queue. This does conclude our question-and-answer session and concludes our conference call. Thank you for attending today's presentation. You may now disconnect.