Penske Automotive Group, Inc.

Good afternoon. Welcome to the Penske Automotive Group second quarter 2026 earnings conference call. Today's call is being recorded and will be available for replay approximately one hour after completion through August 5th, 2026 on the company's website under the investors tab at www.penskeautomotive.com. I will now introduce Anthony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, Leah. Good afternoon, everyone, and thank you for joining us today. A press release detailing Penske Automotive Group's second 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. Joining me for today's call are Roger Penske, Chair and CEO, Shelley Hulgrave, EVP and Chief Financial Officer, Rich Shearing, North American Operations, Randall Seymour, International Operations, and Tony Piccioni, Vice President and Corporate Controller. I'm also available by mail, email, or phone for any follow-up questions you may have. We may include forward-looking statements on today's call. about our earnings potential, outlook, and other future events. And we may also discuss certain non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted earnings before taxes, adjusted net income, and our leverage ratio. We've also prominently presented and reconciled any non-GAAP measures to their mostly directly comparable GAAP measures in this morning's press release and our investor presentation. both of which are available on our website. Non-GAAP measures should be considered in addition to not as a substitute for the comparable GAAP measures. Our future results may vary from expectations because of risks and uncertainties outlined in today's press release under forward-looking statements. As most of you are likely aware, the company received an unsolicited preliminary and non-binding proposal from Penske Corporation and Mitsui & Co. to acquire the remaining shares of the company's common stock they do not currently own for cash consideration of 210 per share. The Board of Directors has established a special committee of disinterested and independent directors authorized to retain its own legal and financial advisors to evaluate the proposal. We have no further comments and will not be taking any questions on this matter at this time. However, I do direct you to our SEC filings, including our Form 10-K, our previously filed Form 10-Qs for addition, discussion and factors that could cause future events to differ materially from expectations. And now I will 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 strong second quarter and financial results. During the quarter, PAG delivered 125,000 new and used vehicles and more than 5,400 new and used commercial trucks. We increased our revenue by 6% to $8.5 billion. We generated a sequential increase in earnings before taxes, net income, earnings per share when compared to the first quarter, 2026. Earnings before taxes were $354 million, net income was $260 million, and earnings per share were $3.96. Second quarter results include approximately $30 million from the gain on sale of dealerships as we continue to optimize our portfolio. Excluding the gain on sale, adjusted income before taxes was and the Board of Directors of the Automotive Group, Inc. Let's take a look at the details of the quarter. Same-store retail, new and used units increased 5%. Gross profit per new unit retailed was $4,782, down $1 per unit sequentially. Gross profit per unit retailed used was $2,095, up $19 sequentially. Our service and parts same-store revenue increased 2%. and related gross profit increased three. Service and parts gross margin increased 60 basis points and sequentially 80 basis points quarter over quarter. Turning to the retail commercial truck segment, new and used truck units retail increased 2%. In fact, according to industry reports, North American Class 8 orders increased 170% in the second quarter compared to the same period last year. We expect to see the benefit from the strong order book in the second half of 2026. I was also pleased with the increase in profitability of PTS. During the second quarter, equity income increased 7% to $57 million, and their earnings were $207 million for the quarter. Growing in the full service leasing revenue improved fleet utilization. Lower operating and interest expenses resulted from continued fleet reductions and were partially offset by continued challenges in rental and by lower gain on sale of used trucks. At this point, I'll turn it over to Rich Shearing to discuss our North American operations.