Penske Automotive Group, Inc.

And gentlemen, welcome to the Penske Automotive Group third quarter 2021 earnings conference call. Today's call is being recorded and will be available for replay approximately one hour after completion through November 3rd, 2021 on the company's website under the Investors tab at www.penskeautomotive.com. I will now introduce Anthony Fordham, the company's executive vice president of investor relations and corporate development. Sir, please go ahead.

Thank you, Jerome. Good afternoon, everyone, and thank you for joining us again today. A press release detailing Penske Automotive Group's record third quarter 2021 financial results was issued this morning and is posted on our website along with the presentation designed to assist you in understanding the company's results. As always, I'm available by email or phone for any follow-up questions you may have. Joining me for today's call are Roger Penske, our chair and CEO, Shelley Holgrave, our chief financial officer, and Tony Ficcione, our vice president and corporate controller. Our discussion today may include forward-looking statements about our operations, earnings potential, outlook, future events, growth plans, liquidity, and assessment of business conditions. We may also discuss certain non-GAAP financial measures, such as earnings before interest, taxes, depreciation and amortization, or EBITDA. We have prominently presented the comparable GAAP measures and have reconciled the non-GAAP measures in this morning's press release and investor presentation, which are available on our website, to the most directly comparable GAAP measures. Our actual results may vary because of risks and uncertainties outlined in today's press release, which may cause the actual results to differ materially from expectations. I direct you to our SEC filings, including our Form 10-K, for additional discussion and factors that could cause results to differ materially. I will now turn the call over to Roger Ponsky. Roger Ponsky All right.

Thank you, Tony. Good afternoon, everyone, and thank you for joining us today. I'm pleased to report all-time record third quarter results for PAG, including the best quarter in the history of the company. Our total revenue increased 9 percent to $6.5 billion. an income from continuing operations before taxes increased 53% to $476 million, an income from continuing operations increased 44% to $355 million, and related earnings per share increased 45% to $4.46. Although unit sales were impacted by supply shortages in both our retail automotive and commercial truck dealership operations, earnings growth was driven by a 39% increase in retail automotive, 135% increase in commercial trucks, variable gross profit per unit retailed, also 4% increase in retail automotive service and parts gross profit, and a 230 basis point reduction in SG&A to gross profit, and 15 million in lower interest costs. coupled with an increase in commercial truck dealership EBT of 106% and an 83% increase in earnings from Penske Transportation Solutions. This demonstrated the continued strength of our investment and the benefit provided by our diversified business model. Looking at our retail automotive operations on a same store basis for Q321 versus Q320, Units declined 8%. However, revenue increased 7%. Gross profit increased 18%, including 180 basis point increase in our gross margin. Our variable gross profit increased 39% to $5,769 per unit compared to $4,152 last year. Looking at Car Shop, we now operate 22 locations and expect to open one additional location by the end of the year. We recently added locations in Layton Buzzard and Wolverhampton in the UK, and our Scottsdale location opened this week. During the quarter, Car Shop unit sales increased approximately 1% to 18,451 units. Revenue improved 24%. to $438 million, and gross profit per unit increased 12% to $2,668. Our current annualized run rate is approximately 70,000 to 75,000 units, representing revenue of $1.6 billion and an EBT between $45 and $50 million. Turning to the retail commercial truck dealership businesses, our premier truck group represented 11% of our total revenue in the third quarter. Retail revenue increased approximately 26%, including a 6% on a same-store basis. On a same-store basis, retail gross profit increased 40%, including a 10% increase in service and parts. Earnings before taxes increased 106% to $48 million, and the return on sales was 6.7%. The Class 8 commercial truck market remains very strong. And during the third quarter, North American Class 8 net orders increased 28%. And the backlog increased 179% to 279,000 units, representing a 13-month supply. Based on the current industry forecast, retail sales are expected to increase over the next two years. and provide tailwinds to our commercial truck and truck leasing businesses. Turning to Penske Transportation Solutions, which we own 28.9% of PTS, which provides us with equity income, cash distribution, and cash tax savings. PTS currently operates a fleet of over 350,000 vehicles. For the nine months ended September 30th, PTS generated $8.2 billion in revenue and $949 million in income, or a 12% return on sales. In Q3, PTS generated $2.9 billion in revenue, an income of $409 million, or a 14% return on sales. As a result, our equity earnings in Q3 increased 83% to $118 million. Our full service leasing and contract sales were up 8%. Our commercial rental revenue is up 51% and our utilization hit 88% with an additional 14,000 units on rent. Our consumer rental is up 27% and our logistics revenue increased 27%. Our gain on sale of used trucks is up 143% as the strong freight environment and a supply shortage of new trucks is certainly driving a demand for used vehicles. I now would like to turn the call over to Shelly Holgrave, our Chief Financial Officer. Shelly?