Thank you, Shelley. Moving on to our digital initiatives. We continue to grow, expand and enhance our digital footprint. As part of our omnichannel customer experience, we progress on increasing engagement with our customer base and service through online service appointments, online payment and the use of videos. Online payments have increased 76% since the fourth quarter of 2019, our online BDC appointments increased 49% to 475,000 when compared to the fourth quarter of 2019. We also strive to be a leader in online reputation including online customer reviews and star ratings on Google. 94% of our Q4 Google reviews were positive, in addition to these we generate clicks by providing flexible buying options to allow customers to proceed at their own pace in buying their next vehicle. In 2021, we retailed 10,500 units or 4% of our US unit sales via the preferred purchase tool and 14% of our customers used the tool to initiate their buying journey. We also sold 3,000 vehicles using our buy online tool in the UK during the quarter. We’re also working with MINI, BMW, Nissan, Lincoln and Porsche retailing tools at this time and we expect to launch a pilot with Toyota and Lexus with their programs in Q2. We feel aligning with OEM partners allows us to provide a consistent look and feel, participate in joint marketing efforts and benefit from the future developments of these integrations. Before closing, I’d like to highlight our record performance for the recently completed year in 2021. We retailed 460,000 new units while increasing our use to new ratio to 1.35 to 1. We completed acquisitions representing $1.3 billion in expected annual revenue and we increased our revenue by 25% to $25.6 billion including a 23% increase on a same-store basis more than doubled earnings before taxes to an all-time record of $1.6 billion. We increased income from returning operations by 119% to $1.2 billion. We reduced selling and G&A expenses as a percent of gross profit by 760 basis points and we generated strong cash flow from operations of $1.3 billion and reduced long-term debt by $216 million. We returned $436 million to shareholders through dividends and stock repurchases. Also, 35 Penske US dealerships were named by Automotive News to be the best 100 dealerships that work for including six of the top 10 dealerships, 12 of the top 25 and Audi of Turnersville is ranked number one in the country. Penske had more dealerships on this list than any other automotive retailer. We issued our inaugural ESG report demonstrating our efforts towards sustainability. In closing, we had a terrific year. I’d like to thank our team for their outstanding contribution and our success in 2021. And I look forward to the future, I remain confident about the opportunities I see across our diversified enterprise driven by a strong balance sheet, diligent capital allocation on priorities and our human capital. I want to thank you all for joining the call today. I’ll turn it now back over to the Operator. Thank you.

Good afternoon, Roger. So, on the balance sheet, you're in great shape. I’m curious how we should think about capital allocation you now have done a combination of acquisitions, buybacks, debt pay down? How should we think about that as we approach forward into 2022?

Rick, let me have Shelley answer that. Okay, Shelley go ahead.

Sure. Rick, so when we look at our capital allocation, we spent approximately 50% this year on growth either between CapEx and our acquisition. We spent another 15% reducing our debt, we talked many times about how we’re disciplined buyers and we’re waiting for the right opportunity. So, we repaid $216 million of our debt, and then returned about 35% of that cash flow to our shareholders through dividends and share repurchases as we mentioned. So our approach remains disciplined. We wait for the right opportunities. And we had a lot of them this year, and we’ve got more in the pipeline coming up for next year.

Let me just say, I think we’re going to continue to focus on our diversification obviously through our acquisitions, whether it be retail, auto, be Australia. PTS, PTG and certainly as Shelley said, our top priority is shareholder return.

Great. So you’re coming off record 2020, a new record in 2021, just curious how you see the drivers for growth in 2022 and can you in fact, grow on top of 2021?

Well, I think when you think about growth, let’s just talk about the new and used car side. I think supply is going to generate the amount of growth we can get from new and used car volume. I think because of the short supply, when you look at our business today, Rick go back a year ago, we had 18,000 new cars in stock a year ago and today we have 2,000. And I think that just shows you the pivot that’s taken place as far as supply. And we don’t know when that’s really going to slow us down. I think right now we’re delivering everything that’s on the truck. But we’re even down 500 units from December 31, at the end of the year. As we see growth, we think we’ll have acquisitions somewhere around 5% of our 2021 total revenue of $26 billion. So that would equate to about $1.3 billion and we’re hoping that our same-store growth will be somewhat between 4% and 5%. That’s what it was in the fourth quarter. I think overall, right now we’re seeing the tightest market on new and what’s happened when you think about the last two years from the SAR perspective, we’ve had about 4 million units come out of the marketplace which would probably generate another 50% maybe more of used vehicles. So we’ve had to pivot to buy cars from customers and the drive-throughs, call customers, buy cars on the curb. And I think that’s going to be something we’re going to have to continue to do. But I’m not sure how deep that well is. I think parts and service are going to continue to grow because there are more miles driven and I think that’s going to be key. One thing that is good news is, we’re seeing a spring back in the UK because remember, they were shut down between January 1 and the middle of April last year. So we’re going to see some benefit out of that when we look at it. So I think the order book, when we look at it for March, which is the registration month is up about 25% from last year. So that should give us some good runway here in Q1.

That’s great. Thanks for the color. And good luck.

Thanks Rick.

Your next question will come from John Murphy with Bank of America. Please proceed with your question.

Good afternoon, Roger, Shelly, Tony. How are you?

Great, John, how are you?

I have a question similar to what Rick asked. We often hear concerns about whether you might be overstepping with the commercial dealership business as an NNPTS. I'm interested in your thoughts on this. I believe there is potential for growth and structure over time, rather than focusing solely on the outlook for 2022. Specifically, what is your perspective on the new vehicle business and the PTS side? How do you view the current situation? Are there indications that you might be overstepping, or is there a chance for long-term growth?

Well, I think one of the things that we have in PTS that’s truck driver leasing and logistics businesses, we have a backlog of vehicles around order over 54,000. Now all of those aren’t really for new customers, but a lot of them are and I think we’re short of rental vehicles when you run at 87%, 85% to 87% utilization. So that’s certainly going to drive more business. And we’re seeing more mileage driven on our PTS lease and rental units, which obviously is a variable revenue piece for us that will also drive profitability. The only thing that I see that might impair maybe some of the bottom line might be is used truck sales. We just don’t have the volume of trucks that we’re going to sell off until we get this backlog of new vehicles come in. And we were up $100 million during 2021 and we expect that to come back during 2022 based on just availability of trucks. The market is still very hot on these types of vehicles, especially the vehicles that we put into the market is huge. So we see our rental leasing business continuing to grow. There’s no question that our commercial rental is really off the charts when you’re looking at it. It was at 49%. And I think the CPI adjustments that we make on all of our leasing businesses and logistics have economic escalators on an annual basis. I think that’ll be key. And I think, on the other hand, when you think about premier truck. Now that’s our freight liner business. John, you asked about that also. They are sold out for 2022. And with the acquisitions that we’ve made, and the growth that we’ve made during the year, that’s going to drive considerable revenue for us in 2022. And when you look at Act, which represents the marketplace for the heavy trucking business, they say that really we don’t see any lift from the standpoint of some electric off the gas and less business during 2022 and 2023. So we see that business strong, used truck prices are also at all-time levels. So you could maybe see some backing off of that. But as long as there’s no volume or any supply, we’re going to see higher margins. So overall, now, we have acquisitions in that space, which obviously we continue to do in our diversified portfolio.

And I’m sorry, on the light vehicle side, Roger, there’s a lot of push that groceries are way too high. And when volume comes back, they’ll go back down. But I mean, it seems like it’s kind of a seesaw, like volume and groceries are coming under pressure. The use as you said will grow and parts and service will continue to grow. So how do you think about sort of the formula around this idea that you may be over-earning in the new vehicle business, the vehicle dealerships in total or are there lots of offsets?

You’re talking about the new vehicle retail car business, not the truck business, correct?

Well, I was asking about that, on that as well. Yes, I’m sorry, I asked a lot of questions, Roger, sorry.

Yes. No problem. As you think about the availability of new units, we had 18,000 units at the end of last year at this time, and we have 2,000 and that’s down 500. So I would say that’s going to continue to put pressure on margins that keep them up, because we’re selling in the pipeline. And when you’re selling in the pipeline, vehicles coming in, you’re going to have ability to get more content on those vehicles and probably make up higher margin with the customer. The question is used trucks or used cars, because we just don’t want to see the supply of them at this particular through the normal channels. And we really shifted from auctions now to buying cars from consumers, but parts and service will continue to grow. But I don’t see anything in the light vehicle market now other than the supply chain. This is going to change the structure and where we’re going from the standpoint today because we have plenty of demand. As I said earlier, in the UK alone, we’re up 25% when we look at March, which will be a registration month which is key. I think the bigger issue that we have to execute across all of our businesses is our people and I’ve heard people talk about everything, but human capital and I think for the people on the line would understand that we’re just having a tough time, at this particular time to maintain the number of key people that we need to carry on the business in a professional way. We’ve accelerated our training. We’ve certainly accelerated our acquiring of new candidates. But again, people have learned to live differently. And in the type of businesses we’re in, it’s going to be something that’s going to challenge us and I think it’s going to challenge the OEMs also because you hear many of these don’t have a number of people in the day to build the trucks, cars that they need. So I think that’s going to be something that’s going to be more apparent. The good news is what we’ve been able to do is right size our business. Since COVID started, we’re down about 9% on the same-store basis, so that maybe is too much color, but that’s what I wanted to be sure I got that in.

Well, that’s incredibly helpful and just lastly, on inventory. I mean, if we step beyond the short term inventory constraint of chips or whatever else is inducing this and get back to a time when the automakers have the ability to produce as they would like. How do you think they’re going to run? I mean, obviously, you’d like a bit of inventory rebuilt, but maybe not back to the heady levels of pre-COVID. I’m just curious, what’s your sense of what they’re going to do when things are normal, and they can act as they wish?

Well, number one, I think we got to look at capacity. What’s the current capacity to build the hot trucks and things they need. So they’re going to have to supply and demand. But another phenomenon will take place is, when you look at the floor plan support, you look at customer support, and you look at the incentives that are being paid over the traditional years where we had normal business, the OEMs are digging deep in their pocket. Now they’ve seen a real benefit by backing that off. In fact, I think that’s helping them look rationally down the road that will help them find the R&D that’s going to be necessary when we look at electrification. So hopefully, they got a taste of that. And that will be a slow return and they’ll keep the day supply in the 30 to 45 days and we won’t obviously be where we are today in single digits. But I think we can manage that carefully brand by brand.

That’s it, all right. Thank you very much. Appreciate it.

Thanks, John. Operator you there? Can you hear us Operator?

Hello, can you hear me?

Yes, we can.

All right. Your next question is from Michael Ward from Benchmark. Please proceed.

Thanks very much. Good afternoon, everyone. So Roger, if you look back over the last 20 years or so, the dealer model has continued to kind of evolve. As you look out over the next 10 years, what do you think are some of the bigger opportunities that Penske has as it evolves even further? Is it consolidation in the auto retail or the retail truck? Is there another leg to the stool? What do you think about as you look out 5 to 10 years?

Are you asking me this question because I’m the oldest guy on the phone here, I wonder.

It’s because you’re the most admired.

I think from a PAG perspective, when you go back to really 1999, 2000, we were 100% retail automotive and only a domestic U.S. company. I think that we’re going to continue to grow internationally, taking our expertise around the globe. And that could even from the standpoint of looking to grow our special used car shop type business. I think the truck rental and leasing continues to grow. We opened up in Australia. And obviously, as we look at Continental Europe, the opportunity to buy stores there will continue to be attractive to us. So we have opportunities to add, I think, a finance company at some point maybe. I think we got more used opportunities, we look forward. And I think overall, we’ll continue to invest as Shelley has said, for growth, and that’s 50% of our cash flow. So I see the same trajectory. I don’t see us jumping into many things that will be way off our landscape, the truck leasing and logistic business with 360,000 trucks today. I think, if I look 20 years from now, I hope they have 700,000. But we’re growing now at 20,000 to 30,000 a year and we expect to be close to 400,000 at the end of 2022 and certainly at the end of 2025, we’d like to be at 500,000. So this just shows you with our own footprint that we have today in the business we have, there’s a big extension of opportunity to revenue and profit.

Make sense. Sounds like a lot more growth in front of you. Shelley on page 34, shows your cash flow from operations in the last two years. It’s been like $1.2 billion, $1.3 billion each year. And it looks like 2022 and 2023 could be similar type levels. You kind of outlined the allocation, your balance sheet set in such good shape. And you’re tying it to where Roger was just talking about. Do you or would you have an appetite for one of these billion-dollar-plus type acquisitions if the right one came along?

Yes. When we talked about capital allocation, we talked about paying down our debt that’s to put us in the best position possible when an opportunistic investment comes around. And yes, as long as the price is in line with what we’re willing to pay and it fits with our strategy, we certainly have the dry powder to do it.

No question. Thank you. Thank you both very much. Thanks so much.

Your next question will come from Stephanie Moore with Truist. Please proceed with your question.

Hi, good afternoon, everybody. I wanted to touch a little bit, maybe as a follow up to the last question. And if you wanted to, Roger maybe provide some insight on what you’re seeing, with the introduction of EV, the threat of the direct to consumer model and kind of how you see that panning out over the course of the next couple years? Again, I think your insight would be very helpful. Thank you.

Well, when we look at electric vehicles there’s no question that more and more we’re reading about it, there’s more activity at the OEMs. I think the infrastructure is still a key problem, how much is going to be subsidized by the government from the standpoint of the U.S. market, I’m not going to talk about Europe and the rest of the world. But to me, I think as we look at 300 million units in the car park today and we’ve sold about 85 million units over the last three years, I think on average 98% of those have been ICE. So the bad park is less than 2%. So as we look at this, I think each manufacturer has committed at least verbally that they will have a fully electric vehicle in most of their model lines. And I think that the key thing here is, they’re going to have to connect with the dealers in order to be sure they have an infrastructure that meets the customer requirements when he joins the dealer. However, when I look at this, I think it’s going to take time because right now the cost of an electric vehicle is considerably higher than an ICE. Now it’s mandated in states and cities and what have you; I guess costs won’t make a difference. But we think that it’s going to come, I think it’s going to take longer than people expect. And they’re going to have to get the pricing, I think today’s range anxiety has pretty much been mitigated by some of the vehicles that have come to market. But I think when you look at Tesla and you look at Rivian and people like that, that are going direct I think that’s a particular couple of OEMs. But when you look at the existing OEMs, let’s go back to Hummer, GM just announced that they took orders and deposits. But those vehicles are all being delivered through the dealer network. And when we were the distributor for Smart a few years ago, remember we took 30,000 deposits on reservations for Smart. But again, we repurpose those once the cars were built to the dealer network. So I think this go direct thing probably has blown up a little bit higher than it will be because of the franchise network that we have today and the way it’s being managed through the laws of retailing in the automobile business. So again, I think right now, the startups are really overblown. I think it’s going to be part of a product line. As I said earlier, we got the franchise laws, there’s no question. And at the end of the day, I think it’s going to be up to the customer; do you want to pay more? Range anxiety is in good shape something you’re buying these from the standpoint of de-carbonization, which obviously makes a difference. But overall, I think it’s going to take time. And I think we’ll see ICE engines here for quite a while. And I think hybrids are going to continue, as you see the numbers when you look at hybrids. Hybrid has been a big part of this. And I think that’ll continue to play a role here for the next three to five years.

Absolutely, that’s really helpful, and especially here to the used side for the retail automotive business. It looks like inventory levels are definitely manageable and as you said, where we stand today. Could you maybe talk about some of your sourcing capabilities and how that has changed over time and how you view your position both in the US and UK for this year with used inventory?

Well, when we look at our inventory between today, the end of the year, and as we sit here today, it’s about flat. So we’ve been able to and this is in the US only I might say, they’re able to stay in that but what’s really happened is, we’ve seen quite a change where our trades are 52% of the used cars, we get their vehicles lease returns of 14 and I think at the end of the day our auction numbers are down from say roughly 25% down to below 20%. And I think overall, lease returns have been pretty much the same because they come back on a one-to-one basis. When you think about the UK on the other hand, we see that opportunity the same way because they’re sourcing, it’s really been when you’re looking at car shops specific, I’m going to talk about car shop here, the old in 2020, we were about 54% from auction. Today when we looked at 2021 complete and we’re a little bit, the mark is a little bit changed because of the first three and a half months we were out. We were at 66%. But that has changed considerably now because our Sytner auction is down. And obviously we’re buying more cars at the curb. And I think that’s what we’re going to see as we go forward both in the US and the UK. But it’s going to be availability, and that’s going to put prices up. And remember, a lot of our vehicles, used vehicles are financed or leased primarily finance. And there’s a cap on those what the finance company will be able to finance. So that’s going to put ultimately, a damper on these big margins that have been made, if the cost of sale is going up.

Well, that’s it for me. Thanks so much.

Your next question will come from Rajat Gupta from JPMorgan. Please proceed.

Great. Thanks for taking the questions. I had one question on F&I, clearly and highly elevated levels today around $200. How should we think about a normalized level there once prices move back to normal? And have there been any structural changes that will take maybe penetration, impact of rates that can often, eventual declining prices or just curious or what’s like a normalized new normal level there once you’re back to normal prices? And I have a follow up.

Yes. Let me say this, I think what’s happened during this short supply of vehicles, the F&I process, obviously, our reserve is about 40% of the total F&I income and product is 60%. So there’s more product being sold add-ons to the vehicles today, maybe than there was in the past. So that’s driving more F&I when you look at it, on reserve. So to me, that probably is some of the shift, but we’ve done a big job in training. I think that our markups are pretty much the same. The captive is about 75 basis points, and our preferred lenders is close to 100. Now, we received flats on most of our leasing. So our subprime business really is only 6%. So I think we’re doing a better job. We’ve always trailed, really, some of our peers. And that’s because we have such a big penetration of leasing which I think makes a big difference. But overall, I just have to say we’re selling more products and not just F&I income, but more products in the sale during this pandemic, as people want to buy particular cars.

Got it that’s helpful. And then, maybe on car shop, given the supply situation that has evolved over the last couple of years unlikely to ease anytime soon. Given more of the historical reliance on auction versus trade-ins, like you have the franchise stores, is there any change you’re thinking around the 40 store network over the next couple of years? Do you think that’s still viable? Just curious how you’re thinking about that given the supply dynamics?

Well, let me say this, I think there’s no question that from a car shop situation in the UK, we’ve seen using the Sytner auction, those vehicles have come down considerably here in the fourth quarter, and where we are here in January, because most of the dealerships are keeping the trades even if they’re non-branded and selling those directly. So we’re seeing some input there. But off-street purchases, we look at car shop have gone from 6% to 30%. So I think that shows, it bodes well from where we are but that’s the big change from what I can see from the standpoint of sourcing. And we did use a lot of auctions in the UK. But again, we’re going to be purchasing, I call it on the curb. And when you look at the quarter, we did between 17,000 and 18,000 units, and our revenue was over $400 million and our earnings were approximately $9 million. So when you look at it, I think it’s balancing, we’re going to really need to rebalance during Q1 and Q2 because of the shutdown, because of COVID in the UK, and also here in the US, which makes obviously made a difference. And again, we were really impacted from the standpoint of shutdown down and car shop, no question for 3.5 three months last year in Q1, Q2.

Got it that’s helpful. Great, I will get back in queue.

Your next question is from David Whiston with Morningstar. Please proceed with your questions.

Thanks. Good afternoon. Roger, you mentioned a labor shortage earlier. Is that across the whole company or were you just referring that to car shop or particular geographic market?

I’m saying this just generally, today you have attrition in the retail auto business because a lot of the compensation is variable and people have worked from home, they’ve seen other ways that they can add to their income. So number one, we see that and then entry level technicians coming in, people in the body shops, truck drivers, etc, all of these things are under pressure. And what we’ve had to do is really not upgrade, but add additional recruiters across the whole country, whether it’s in truck leasing, rental, or logistics, or overall business. So I see that it’s a big challenge for us. And we’ve added significant investment not only in people but in training in order to be able to keep people loyal to the company and also to attract them going forward.

And earlier on PTS, I think you were discussing that earlier. It sounds like you’re pretty optimistic on continued robust equity earnings growth. But I mean, this quarter has doubled plus 62%, kind of more like low double-digit, are we still talking north of 20%, 30%, even next year and for 22?

I can’t really give you that number here just on the phone. I mean, obviously, they’re going to continue to grow. It obviously is the comparables that you’re going to be looking at quarter-to-quarter. But on an overall basis, their growth has been outstanding, their market share, as I said, were up to 360,000 vehicles, and there is no slowdown in the commercial rental and the consumer rental, we get a little bit of debt, when some of these trucks come back from UPS and FedEx after Christmas. But it’s ironic that we’re seeing those going right back out. And obviously, some of those don’t bring the margin that we had from a one-way basis. And I think the truck market is going to grow, we've got a strong economy only going to see lower gain on sale, because we don’t have enough units. The profit per unit, I don’t think will deteriorate much at all, there will be just the number of units that we’re going to be able to have available to retail or sell from PTS.

And just one question on the balance sheets, it’s probably for Shelley. For 2025, I think they have a change in our call provision on September 1, do you have any interest in moving that maturity even as to 2029 or even next decade?

No, not at this time, the premium and the low interest rate where we’re at we think we’ll take advantage of that longer term for some time.

Okay, thanks.

All right, thanks.

At this time, there are no further questions in queue. I would now like to turn it back over to Roger Penske for any closing remarks.

Thank you, Operator. Thanks, everyone for joining us. We had a great year in 2021 and look out for 2022, it looks favorable. I think our brand mix, our people, diversification we have across all of our businesses is structured properly. And now we have to execute. So we’ll see after the first quarter. Thanks.

This concludes today’s conference call. Thank you for participating. You may now disconnect.