Penske Automotive Group, Inc.

Good afternoon. Welcome to the Penske Automotive Group first quarter 2026 earnings conference call. Today's call is being recorded and will be available for replay approximately one hour after completion through May 6, 2026 on the company's website under the Investors tab at www.penskeautomotive.com. I will now introduce Anthony Porton, the company's Executive Vice President of Investor Relations, and corporate development. Sir, please go ahead.

Thank you, Krista. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's first quarter 2026 financial results was issued this morning and is posted on our website along with a 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 is Roger Penske, our chair and CEO, Shelley Hallgrave, our EVP and chief financial officer, Rich Shearing from North American Operations, Randall Seymour of International Operations, and Tony Piccioni, our vice president and corporate controller. We may make forward-looking statements on today's call. about our earnings potential, outlook, and other future events, and we also may discuss certain non-GAAP financial measures such as EBITDA and adjusted EBITDA. We've also prominently presented and reconciled any non-GAAP measures for the most directly comparable GAAP measures in this morning's press release and investor presentation, again, both of which are available on our website. Our future results may vary from our expectations because of risks and uncertainties outlined in today's press release under forward-looking statements. I direct you to our SEC filings, including our Form 10-K and previously filed Form 10-Qs for additional discussion and factors that could cause future results to differ materially from expectations. At this time, I'll turn the call over to Roger Penske.

Thank you, Tony. Good afternoon, everyone, and thank you for joining us today. We're pleased to report a solid and productive first quarter. During the first quarter, PAG delivered over 123,000 new and used vehicles and nearly 3,600 new and used commercial trucks, and that generated approximately $7.9 billion in revenue. We earned $324 million in earnings before taxes, and $235 million in net income and generated earnings per share of $3.56. The first quarter results include a $60 million gain on the sale of a dealership partially offset by $13 million in certain disposals and other charges as we continue to optimize our dealership portfolio. Excluding these items, adjusted earnings before taxes was $276 million, net income was 201, and earnings per share was $3.05. This was a difficult comparison for the prior year period, and challenging market conditions impacted year-over-year performance. We also continue to grow our footprint. In February, we acquired two high-performing and strategic Lexus dealerships in Orlando metropolitan area of central Florida, one of the fastest growing regions in the US. These acquisitions complement the two Lexus and two Toyota dealerships we acquired in November 2025. Combined, these six dealerships are expected to generate $2 billion in estimated annualized revenue. We also repurchased 170,000 shares of common stock for $26 million. We increased the dividend to $1.40, which yields approximately 3.4%, the highest yield in our peer group. Looking at the details for the quarter, same-store retail automotive new units declined 5%, and used increased 1%. Units retailed were impacted by weather-related challenges and a difficult comparison to March 2025 when tariffs caused pull-ahead sales and lower BEV sales in the U.S. associated with the elimination of the BEV tax credit. Gross profit per new unit retailed was $4,783, up $94 sequentially, Gross profit per use unit was $2,076, up $306 sequentially. Our service and parts revenue and gross profit was a Q1 record. Same store revenue increased 4.6, and related gross profit increased 5.7%. Service and parts gross margin was up 60 basis points. The retail commercial truck segment Q1 unit sales declined 953 units driven by reduced order intake during Q3 and Q4 2025 following the implementation of tariffs and weakness in the freight market. However, we are encouraged today with the trends we are seeing across the commercial truck market. In recent months, We've seen an increase in new truck orders and expect the timing of these deliveries to take place in the second half of 2026. PTS equity income increased 24%. Growth in the full service leasing revenue, improved fleet utilization, lower operating and interest expenses resulting from continued fleet reductions, including maintenance and our depreciation, We're partially offset by continued challenges in the rental and lower gain on sale of trucks. At this time, we'll turn the call over to Rich Sherry.