Lithia Motors Inc (LAD) 2023 Q4 法說會逐字稿

Greetings, and welcome to the Lithia Motors Fourth Quarter 2023 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Amit Marwaha, Director, Investor Relations. Thank you, Amit. You may begin.

您好，歡迎參加 Lithia Motors 2023 年第四季財報電話會議。 （操作員指示）謹此提醒，本次會議正在錄製中。現在我很高興向您介紹主持人，投資者關係總監 Amit Marwaha。謝謝你，阿米特。你可以開始了。

Thank you for joining us for our fourth quarter and full year 2023 earnings call. With me today are Bryan DeBoer, President and CEO; Chris Holzshu, Executive Vice President and COO; Tina Miller, Senior Vice President and CFO; Chuck Lietz, Senior Vice President of Driveway Finance; and finally, Adam Chamberlain, Chief Customer Officer.

感謝您參加我們的 2023 年第四季和全年財報電話會議。今天與我在一起的有總裁兼執行長 Bryan DeBoer； Chris Holzshu，執行副總裁兼營運長；蒂娜·米勒，高級副總裁兼財務長； Chuck Lietz，Driveway Finance 資深副總裁；最後是首席客戶長 Adam Chamberlain。

Today's discussion may include statements about future events, financial projections and expectations about the company's products, markets and growth. Such statements are forward-looking and subject to risks and uncertainties that could cause actual results to materially differ from the statements made. We disclose those risks and uncertainties we deem to be material in our filings with the Securities and Exchange Commission. We urge you to carefully consider these disclosures and not to place undue reliance on forward-looking statements. We undertake no duty to update any forward-looking statements, which are made as of the date of this release.

今天的討論可能包括有關未來事件、財務預測以及對公司產品、市場和成長的預期的陳述。此類聲明具有前瞻性，並存在風險和不確定性，可能導致實際結果與聲明有重大差異。我們在向美國證券交易委員會提交的文件中揭露了我們認為重要的風險和不確定性。我們敦促您仔細考慮這些揭露，不要過度依賴前瞻性陳述。我們不承擔更新截至本新聞稿發布之日所做的任何前瞻性陳述的責任。

Our results discussed today include references to non-GAAP financial measures. Please refer to today -- to the text of today's press release for the reconciliation of comparable GAAP measures. We have also posted an updated investor presentation on our website investors.lithiadriveway.com, highlighting our fourth quarter results. With that, I would like to turn the call over to Bryan DeBoer, President and CEO.

我們今天討論的結果包括對非公認會計準則財務指標的參考。請參閱今天的新聞稿文本，以了解可比較 GAAP 指標的調整。我們也在我們的網站 Investors.lithiadriveway.com 上發布了更新的投資者演示文稿，重點介紹了我們第四季度的業績。說到這裡，我想將電話轉給總裁兼執行長 Bryan DeBoer。

Thank you, Amit. Good morning, and welcome to our fourth quarter and full year earnings call. In Q4, Lithia & Driveway grew revenues to $7.7 billion, up 11% from Q4 of last year and generated adjusted diluted earnings per share of $8.24. 2023 was a record year for us as we reached just over $31 billion in total full year revenues. Results in the quarter were driven by continued strength in new vehicle sales with same-store units up 10% and aftersales revenues up 3%. This was offset by lower new vehicle GPUs continuing to normalize, declining approximately $150 sequentially per month, in line with our expectations for new vehicles.

謝謝你，阿米特。早上好，歡迎參加我們的第四季和全年財報電話會議。第四季度，Lithia & Driveway 營收增至 77 億美元，比去年第四季成長 11%，調整後攤薄每股收益為 8.24 美元。 2023 年對我們來說是創紀錄的一年，我們的全年總收入略高於 310 億美元。本季業績的推動因素是新車銷售持續強勁，同店銷量成長 10%，售後營收成長 3%。這被新車 GPU 的下降繼續正常化所抵消，每月環比下降約 150 美元，符合我們對新車的預期。

Our manufacturer partners continue to replenish inventory at a steady pace. With manufacturer incentives, both lower subsidized rates and cash rebates continued to support consumer demand across a variety of brands and models. Used GPUs came in near decade lows while F&I GPUs were essentially unchanged. With our unprecedented acquisition growth and the expansion into adjacencies with Driveway, GreenCars, Driveway Finance Corp, Pendragon Vehicle Management and a strategic partnership with Pinewood Technologies, our key strategic design elements are all now in place. This positions us perfectly for 2024 and beyond to focus our attentions on what we do best, execution.

我們的製造商合作夥伴繼續穩步補充庫存。在製造商激勵措施下，較低的補貼率和現金回扣繼續支持消費者對各種品牌和型號的需求。二手 GPU 數量處於近十年低點，而 F&I GPU 數量基本上沒有變化。隨著我們前所未有的收購成長以及向 Driveway、GreenCars、Driveway Finance Corp、Pendragon Vehicle Management 的鄰近地區擴張以及與 Pinewood Technologies 的策略合作夥伴關係，我們的關鍵策略設計元素現已全部到位。這使我們能夠在 2024 年及以後將注意力集中在我們最擅長的事情上：執行力。

Our team remains acutely focused on delivering revenue growth and profitability across all business opportunities. The LAD strategy is built on our vast store network made up of the industry's most talented people, highest demand inventory and a dense expansive physical network. This foundation is driven by our culture that challenges our teams to operate with autonomy and respond nimbly to local market dynamics to achieve industry-leading performance. Expanding our store network and leveraging our many strategic adjacencies increases the touch points throughout the customer's life cycle while also equipping our stores with the tools necessary to improve productivity, loyalty and ultimate profitability.

我們的團隊仍然高度專注於在所有商業機會中實現收入成長和獲利能力。 LAD 策略建立在我們龐大的商店網路之上，該網路由業內最有才華的人才、最高需求的庫存和密集、廣泛的實體網路組成。這一基礎是由我們的文化推動的，這種文化要求我們的團隊自主運作並靈活響應當地市場動態，以實現領先業界的績效。擴大我們的商店網絡並利用我們的許多策略鄰接點增加了整個客戶生命週期的接觸點，同時也為我們的商店配備了提高生產力、忠誠度和最終盈利能力所需的工具。

The LAD ecosystem is designed to expand our total addressable market and market share through omnichannel solutions and adjacencies that are there for customers wherever, whenever and however they desire. This will drive us from approximately 1.9% market share today towards our previously stated target of 5% and more importantly, a ratio of EPS to $1 billion of revenue of 2:1.

LAD 生態系統旨在透過全通路解決方案和鄰接來擴大我們的總目標市場和市場份額，無論何時何地，以何種方式為客戶提供服務。這將使我們從目前約 1.9% 的市佔率向我們先前設定的 5% 目標邁進，更重要的是，每股盈餘與 10 億美元收入的比率達到 2:1。

Moving on to our financing operations. Driveway Finance Corporation, or DFC, posted another strong quarter with a smaller-than-expected loss of $2.1 million while receivables grew to $3.2 billion. The DFC team has demonstrated success navigating through the fluid interest rate environment while maturing its capital structure and liquidity position. We are excited to see this adjacency continue to mature as it looks to achieve breakeven later this year while improving liquidity as we manage the pace and quality of originations. Both Chris and Chuck will be sharing further details on operational results of both vehicle and financing later in the call.

繼續我們的融資業務。 Driveway Finance Corporation (DFC) 公佈了另一個強勁的季度業績，虧損 210 萬美元，低於預期，而應收帳款則增長至 32 億美元。 DFC 團隊已成功應對流動的利率環境，同時使其資本結構和流動性狀況趨於成熟。我們很高興看到這種鄰接關係繼續成熟，因為它有望在今年稍後實現收支平衡，同時在我們管理起源的速度和品質的同時提高流動性。克里斯和查克都將在稍後的電話會議中分享有關車輛和融資營運結果的更多細節。

At the heart of our strategy is expanding customer solutions that are simple, convenient and transparent. Our network is being designed to be within 100 miles of consumers to provide an easy and convenient delivery solutions for our customers. Over time, the leveraging of this network with our omnichannel solutions will generate more attractive and diverse impressions, more memorable experiences, better returns on capital and a unique ecosystem that provides differentiated and deep value for our customers.

我們策略的核心是擴展簡單、方便和透明的客戶解決方案。我們的網路被設計為距離消費者 100 英里以內，為我們的客戶提供簡單且方便的配送解決方案。隨著時間的推移，利用該網路與我們的全通路解決方案將產生更具吸引力和多樣化的印象、更難忘的體驗、更好的資本回報率以及為我們的客戶提供差異化和深層價值的獨特生態系。

We exercised patience and discipline during the fourth quarter, bringing us to $3.8 billion in annualized revenues acquired in 2023. 2024 has also started off strong with our successful completion of the Pendragon transaction at the beginning of this month. This transaction forms a strategic partnership with Pinewood Technologies, adds a highly profitable fleet management business, both new adjacencies, and the U.K. motors business with 160 stores across the United Kingdom and over $4 billion in total revenue. This is an exciting new chapter of diversification and growth as we round out our presence in the United Kingdom. I'd like to personally welcome all our new Pendragon associates and Pinewood Partners to the Lithia family.

我們在第四季度保持了耐心和紀律，使我們在 2023 年獲得了 38 億美元的年化收入。隨著我們在本月初成功完成 Pendragon 交易，2024 年也有了強勁的開局。此次交易與 Pinewood Technologies 建立了戰略合作夥伴關係，增加了高利潤的車隊管理業務（兩個新的鄰接點）以及英國汽車業務（在英國擁有 160 家門市，總收入超過 40 億美元）。隨著我們在英國的業務不斷完善，這是多元化和成長的令人興奮的新篇章。我謹親自歡迎所有新的 Pendragon 員工和 Pinewood Partners 加入 Lithia 大家庭。

Acquisitions are a core competency of LAD, and we remain disciplined and opportunistic as we look for accretive opportunities that can improve our business. As a reminder, we target a minimum after-tax return of 15% or greater and acquire for 15% to 30% of revenue or 3x to 7x normalized EBITDA. Life-to-date, our acquisitions have yielded over a 95% (inaudible) rate and after-tax returns of over 25%. As GPUs normalize and liquidity tightens, we expect valuations to become more realistic as well. Our robust acquisition strategy has opened up new markets in mobility verticals, creating considerably more opportunities for us in the future. However, for the foreseeable future, we are fine-tuning our targets to focus 90% of our M&A dollars to automotive in the United States.

收購是 LAD 的核心競爭力，我們在尋找能夠改善我們業務的增值機會時保持紀律和機會主義。提醒一下，我們的目標是最低稅後回報率為 15% 或更高，並收購收入的 15% 至 30% 或 3 至 7 倍的標準化 EBITDA。到目前為止，我們的收購收益率超過 95%（聽不清楚），稅後回報率超過 25%。隨著 GPU 正常化和流動性收緊，我們預計估值也會變得更加現實。我們穩健的收購策略開闢了行動垂直領域的新市場，為我們未來創造了更多機會。然而，在可預見的未來，我們正在微調目標，將 90% 的併購資金集中到美國的汽車產業。

In addition, now that we have realized the scale necessary to find, fund and operate new adjacencies, we will evaluate share repurchases with parity to acquisitions. Past practices prioritized acquisitions as more beneficial strategically than buybacks, but at our current size and scale, we are now returning to a balanced deployment of free cash flows to drive the strongest possible returns. We continue to monitor valuations of both, being patient for strong assets priced within our acquisition hurdle rates. We expect pricing to take some time to normalize and now estimate annual acquired revenues, excluding the Pendragon acquisition, in the range of $2 billion to $4 billion a year. Our near-term target of $50 billion in revenue remains within our sights, and our team is confident in our ability to achieve this while doing so in the most prudent fashion possible. Our team is experienced in executing and integrating acquisitions, and we remain committed to achieving strong returns as we build out our network.

此外，既然我們已經實現了尋找、資助和營運新鄰接點所需的規模，我們將按照與收購同等的方式評估股票回購。過去的做法優先考慮收購，因為策略上比回購更有利，但以我們目前的規模和規模，我們現在正在回歸自由現金流的平衡部署，以推動盡可能強勁的回報。我們將繼續監控兩者的估值，並對定價在收購門檻範圍內的強勁資產保持耐心。我們預計定價需要一段時間才能正常化，目前估計每年獲得的收入（不包括對 Pendragon 的收購）在 20 億至 40 億美元之間。我們仍能實現 500 億美元收入的近期目標，我們的團隊對實現這一目標充滿信心，同時將以最謹慎的方式實現這一目標。我們的團隊在執行和整合收購方面擁有豐富的經驗，並且我們仍然致力於在建立網路的過程中實現豐厚的回報。

Moving on to the overall execution of our long-term strategy. Since the launch of our plan, we added important foundational adjacencies and have now acquired over $22 billion in revenue. In addition, the strategic partnership with Pinewood Technologies allows us to leverage technology to stitch together our strategic adjacencies, modernize the customer experience and someday realize considerable cost savings in our technology stack. We are excited to begin the journey with the implementation of the Pinewood Dealer Management System, or DMS, in our U.K. operations this year. Beyond the U.K. and next year, we are excited to be part of the North American partnership with Pinewood Technologies, continuing to grow our own Driveway customer experiences and creating simple, transparent and aligned customer and associate experiences.

接下來是我們長期策略的整體執行。自我們的計劃啟動以來，我們增加了重要的基礎性鄰接項目，目前已獲得超過 220 億美元的收入。此外，與 Pinewood Technologies 的策略合作夥伴關係使我們能夠利用技術來整合我們的策略鄰接，實現客戶體驗現代化，並有一天在我們的技術堆疊中實現可觀的成本節省。我們很高興今年能夠在英國業務中實施 Pinewood 經銷商管理系統 (DMS)。除了英國之外，明年我們很高興能成為與 Pinewood Technologies 的北美合作夥伴關係的一部分，繼續發展我們自己的 Driveway 客戶體驗，並創造簡單、透明和一致的客戶和員工體驗。

Shifting to our omnichannel platform. Our MUVs across our digital channels were up 16%, reaching 13 million per month. Digital transactions, including Driveway, grew to nearly 38,000 in the fourth quarter, up 27% compared to last year. GreenCars, the leading sustainability vehicle education channel, continues to grow as a lead generation channel and contributed over 1 million MUVs, up 102% over last year. Sustainable vehicle sales now account for 16% of our new vehicles in Q4, up from 11% in the same period last year.

轉向我們的全通路平台。我們數位管道的 MUV 成長了 16%，達到每月 1,300 萬。包括 Driveway 在內的數位交易在第四季度增長至近 38,000 筆，比去年增長 27%。 GreenCars 是領先的永續發展汽車教育管道，作為潛在客戶開發管道持續發展，貢獻了超過 100 萬輛 MUV，比去年增長 102%。第四季度，永續汽車銷售目前占我們新車銷售的 16%，高於去年同期的 11%。

With our customers at the center of our design, join me in welcoming Adam Chamberlain to the call and congratulating him on his expanding role as our Chief Customer Officer. His decades of experience and proven track record driving results will lead our continued transformation of the customer experience, combining our foundational elements to create deeper customer loyalty and increasing market share and profitability.

我們的設計以客戶為中心，請與我一起歡迎 Adam Chamberlain 參加電話會議，並祝賀他擔任我們首席客戶官的角色不斷擴大。他數十年的經驗和良好的業績記錄將引領我們不斷轉變客戶體驗，結合我們的基本要素來創造更深的客戶忠誠度並提高市場份額和盈利能力。

Now that all the foundation elements of our plan are in position, attentions turn to improving margins and lowering our SG&A through a combination of growth, efficiency, diversification and scale. These elements are now well underway. And when combined with our newest adjacencies of fleet management and a strategic technology partnership, we are well positioned for both further growth and realizing the profit potential of a more holistic life cycle relationship with our customers. Weaving these elements together and assuming a normalized SAAR and GPU environment, we now can clearly see a pathway to $1 billion in revenue, ultimately generating $2 in EPS.

既然我們計劃的所有基本要素都已就位，那麼我們的注意力就轉向透過成長、效率、多元化和規模的結合來提高利潤率和降低銷售管理費用。這些要素現在正在順利進行中。當與我們最新的車隊管理和策略技術合作夥伴關係相結合時，我們已做好進一步發展的準備，並實現與客戶更全面的生命週期關係的利潤潛力。將這些元素編織在一起並假設標準化的 SAAR 和 GPU 環境，我們現在可以清楚地看到一條通往 10 億美元收入的途徑，最終產生 2 美元的每股收益。

Key factors underlying our future steady state and now totally within our control are as follows: first, continuing to improve our network by realizing the considerable revenue and profit potential within our existing stores by increasing our share of wallet through greater customer life cycle interactions, leveraging our cost structures, personnel productivity gains and growing each store's new, used, and aftersales market share. The result is to achieve an SG&A as a percentage of gross profit in store operations that's below 55% in a normalized GPU environment.

我們未來穩定狀態的關鍵因素現在完全在我們的控制範圍之內：首先，透過擴大客戶生命週期互動來增加我們的錢包份額，在我們現有商店內實現可觀的收入和利潤潛力，從而繼續改善我們的網絡，利用我們的成本結構、人員生產力的提高以及每家商店的新、二手和售後市場份額的增長。結果是，在標準化 GPU 環境中，SG&A 佔商店營運毛利的百分比低於 55%。

Second, continue focusing on acquiring larger automotive stores in the higher profitability regions of the South Central, Southeast and Midwestern United States. Combined with further growth in our digital channels, we expect to reach a blended U.S. market share of 5%. Third, financing of up to 20% of units with DFC and maturing beyond the headwinds associated with CECL reserves. As a reminder, our first adjacency DFC remains on track to achieve profitability during the latter half of this year.

其次，繼續專注於收購美國中南部、東南部和中西部利潤較高地區的大型汽車商店。結合我們數位管道的進一步成長，我們預計美國綜合市場份額將達到 5%。第三，透過 DFC 為高達 20% 的單位提供融資，並在與 CECL 儲備相關的不利因素之外到期。提醒一下，我們的第一個鄰國 DFC 仍有望在今年下半年獲利。

Next, maturing contributions from our horizontals, including fleet management, DMS software, charging infrastructure and captive insurance. Fifth, through size and scale, we continue to drive down vendor pricing, improve corporate efficiencies to save costs and lower borrowing costs as we pass towards an investment-grade rating. Combining both store operational improvements with higher-margin adjacencies and the other design advantages discussed, ultimate SG&A as a percentage of gross profit will fall below 50%.

接下來，我們的橫向貢獻日益成熟，包括車隊管理、DMS 軟體、充電基礎設施和自保保險。第五，透過規模和規模，我們繼續壓低供應商定價，提高企業效率，以節省成本並降低借貸成本，同時邁向投資級評級。將商店營運改善與利潤率更高的鄰接點以及所討論的其他設計優勢相結合，最終銷售、管理及行政費用 (SG&A) 佔毛利的百分比將降至 50% 以下。

And finally, ongoing return on capital to shareholders through dividends and opportunistic share buybacks. Please refer to the LAD investor presentation for further details and reconciliations.

最後，透過股利和機會性股票回購為股東帶來持續的資本回報。請參閱 LAD 投資者介紹以了解更多詳細資訊和對帳情況。

As we approach the middle of the decade, we are well positioned to maximize our unique and unreplicable mobility ecosystem that is ready to deliver more frequent and richer customer experiences throughout the ownership life cycle at global scale. Our strategy, combined with our experienced and focused team will continue to expand market share, leverage our size and scale and grow our complementary adjacencies to produce an ultimate long-term profit to revenue ratio of $2 of EPS. All elements of our original design are now securely in place, and we look forward to focusing all of our attentions on execution to establish new levels of performance for our industry. With that, I'd like to turn the call over to Chris.

隨著我們進入本世紀中期，我們已做好充分準備，最大限度地發揮我們獨特且不可複製的移動生態系統，該生態系統已準備好在全球範圍內的整個所有權生命週期中提供更頻繁、更豐富的客戶體驗。我們的策略，結合我們經驗豐富、專注的團隊，將繼續擴大市場份額，利用我們的規模和規模，發展我們的互補性鄰接關係，以實現每股收益 2 美元的最終長期利潤與收入比。我們原始設計的所有元素現已安全到位，我們期待將所有註意力集中在執行上，為我們的行業建立新的績效水平。有了這個，我想把電話轉給克里斯。

Thank you, Bryan. I'd like to begin by congratulating our 2023 class of Lithia & Driveway Partners Group winners, better known internally as LPG. These leaders and their teams achieved the highest performance levels among their peers in 2023 with outsized market share, exceptional customer service, strategic innovation and best-in-class execution. Our LPG group is the North Star for all of our retail locations to learn from and replicate as we continue to deliver operational excellence and attainment of profitability potential at each location.

謝謝你，布萊恩。首先，我要祝賀 2023 年 Lithia & Driveway Partners Group 得獎者（內部更名為 LPG）。這些領導者及其團隊在 2023 年憑藉著龐大的市場佔有率、卓越的客戶服務、策略創新和一流的執行力，實現了同業中最高的績效水準。我們的液化石油氣集團是我們所有零售店學習和複製的北極星，我們將繼續在每個零售店提供卓越的營運並實現獲利潛力。

We now have 160 LPG partners, meaning over 40% of our eligible store leaders have attained this coveted status, and we look forward to all of our teams achieving LPG status in the future.

我們現在擁有 160 個 LPG 合作夥伴，這意味著我們超過 40% 的合格商店領導者已獲得這一令人垂涎的地位，我們期待我們所有的團隊在未來獲得 LPG 地位。

Executing on our vision to build out a vast automotive ecosystem across 3 of the largest English-speaking countries in the world is well underway. We remain committed to our mission of Growth Powered by People and a high-performance culture led by entrepreneurial leadership at the local market level, which has been a differentiator in our strategy for over a decade. Empowering our teams to serve their customers and deliver best-in-class services wherever, whenever or however they desire continues to be keys to our success.

我們的願景是在世界上最大的三個英語國家建立一個龐大的汽車生態系統，這個願景正在順利實施。我們仍然致力於實現「以人為本的成長」的使命，以及由本地市場層面的企業家領導力引領的高績效文化，這一直是我們十多年來策略的差異化因素。讓我們的團隊隨時隨地為客戶服務並提供一流的服務，這仍然是我們成功的關鍵。

Moving on to the fourth quarter results. We continue to see resilience in the auto retail consumer as they pivot their buying needs in new and used vehicles in lockstep with OEM incentives, the recovery of new vehicle inventory, credit availability, scarcity of later-model used vehicles and the demand for aftersales as the vehicle car bar continues to age. On a same-store basis, new vehicle revenues were up 10%. This was driven by unit volumes increasing 10% and nominal changes in ASPs. New vehicle GPUs, including F&I, were $6,215 per unit, down $1,510 or 20% year-over-year as we expected this and discussed throughout 2023. We anticipate the downward trend in GPUs to continue through 2024, eventually resulting in total GPUs including F&I at $4,500, which is near our historic levels.

繼續看第四季的業績。我們繼續看到汽車零售消費者的彈性，因為他們將新車和二手車的購買需求與原始設備製造商的激勵措施、新車庫存的恢復、信貸可用性、新型二手車的稀缺性以及售後需求保持同步。車輛車槓繼續老化。以同店計算，新車收入成長了 10%。這是由單位銷售增加 10% 和平均售價名目變動所推動的。包括F&I 在內的新車GPU 售價為每台6,215 美元，年減1,510 美元，即20%，正如我們預期的那樣，並在2023 年全年進行了討論。我們預計GPU 的下降趨勢將持續到2024年，最終導致包括F&I 在內的GPU 總數價格為 4,500 美元，接近我們的歷史水平。

The main driver behind the GPU trend is driven by new vehicle SAAR continuing to normalize, which is expected to end 2024 near 16 million units in the U.S. Same-store volumes are positively highlighted by large improvements in import and domestic brands, which were up 12%, while domestic volumes improved just over 4%. We're also constructive on SAAR normalizing in the United Kingdom and Canada eventually getting back to 2019 levels, which leaves 20% and 15% in expected recovery, respectively.

GPU趨勢背後的主要驅動力是新車SAAR持續正常化，預計到2024年底美國銷量將接近1600萬輛。同店銷量因進口和國產品牌大幅改善而得到積極凸顯，同比增長12% %，而國內銷量僅成長了4% 多一點。我們也對英國和加拿大的 SAAR 正常化最終恢復到 2019 年的水平持建設性態度，預計將分別實現 20% 和 15% 的復甦。

New vehicle inventory day supplies rose to 65 days compared to 55 days at the end of Q3, and 47 days at the end of Q4 2022.

新車庫存日供應量增加至 65 天，而 2022 年第三季末為 55 天，第四季末為 47 天。

Moving on to used vehicles. Revenue was down 11% and units were down 6%. ASPs continued to decline, down 5% to $28,000 versus $29,400 in the prior year. Used vehicle pricing continues to moderate in line with the recovering supply of new vehicles. Sales of certified vehicles were up nearly 2%, while our core vehicle segment, which accounts for more than half of our used vehicle sales, was down 10% as the impact of COVID production constraints is working through the supply chain. As a reminder, around 10 million vehicles were lost in production in 2020 to 2023 due to COVID-impacted factory shutdowns and supply chain issues.

繼續討論二手車。營收下降 11%，銷量下降 6%。平均售價持續下降，與去年的 29,400 美元相比下降了 5%，至 28,000 美元。隨著新車供應的恢復，二手車價格持續放緩。經過認證的車輛銷售量成長了近 2%，而占我們二手車銷售量一半以上的核心車輛細分市場下降了 10%，因為新冠疫情生產限制的影響正在影響整個供應鏈。需要提醒的是，由於受新冠疫情影響的工廠停工和供應鏈問題，2020 年至 2023 年約有 1,000 萬輛汽車停產。

Value autos, which are higher-mileage vehicles and generally over 9 years old, were down 3%. Our top-of-funnel OEM new car status gives us significantly more access to inventory than used-only dealers, which coupled with Driveway and our omnichannel selling arm, will continue to be a significant advantage for years to come. Used vehicle GPUs, including F&I, were $3,789, down 7% from last year and well below our historic average. Our teams are reacting to a volatile used car marketplace in response to the massive rebound in new car inventory that continues to add new vehicle supply. As the average APR and used vehicle loan vehicle loan is almost 11.7%, the outlook for lower consumer borrowing rates will eventually serve as a tailwind for consumers and relief in their monthly payments.

價值汽車（即行駛里程較高且車齡一般超過 9 年的汽車）下降了 3%。我們的漏斗頂部 OEM 新車地位使我們比二手經銷商有更多的庫存管道，再加上 Driveway 和我們的全通路銷售部門，在未來幾年將繼續成為一個顯著的優勢。二手車 GPU（包括 F&I）售價為 3,789 美元，比去年下降 7%，遠低於我們的歷史平均水平。我們的團隊正在對動盪的二手車市場做出反應，以應對新車庫存的大幅反彈，並持續增加新車供應。由於平均年利率和二手車貸款接近 11.7%，消費者藉貸利率下降的前景最終將成為消費者的利多因素，並減輕他們的每月還款額。

Used vehicle inventory day supply rose to 64 days compared to 58 days last quarter and 58 days in the prior year. Our aftersales business, which makes up 42% of our gross profit rose by 3% and gross margins were 55%. Customer pay, which accounts for 60% of the aftersales business was up 3%, while warranty sales, which made up 30% of the business rose by 6%. The average age and size of the vehicle car park is at record levels. And with the advancement in technology and product offerings for consumers, we can expect greater complexity and higher cost for repairs. We continue to meet this high-margin demand by finding innovative ways to attract and grow talent while offering state-of-the-art facilities for our technicians to confidently call their professional home.

二手車庫存天供應量增加至 64 天，而上季為 58 天，去年同期為 58 天。佔毛利 42% 的售後服務業務成長了 3%，毛利率為 55%。佔售後業務60%的客戶付費成長了3%，佔業務30%的保固銷售成長了6%。停車場的平均使用年限和麵積均創歷史新高。隨著科技和消費者產品的進步，我們可以預見到維修的複雜性會更高，成本也會更高。我們透過尋找創新的方式來吸引和培養人才，同時為我們的技術人員提供最先進的設施，讓他們自信地稱其為專業之家，從而繼續滿足這種高利潤的需求。

Finally, adjusted SG&A as a percentage of gross profit, excluding Driveway's cost, was 62.8% versus 65.1% on a consolidated basis, which was similar to the prior year. Over the past 10 years, we have managed to extract nearly 500 basis points from our total SG&A. As we look to the future and work to find ways to gain additional leverage and benefits from our 460-plus locations across the globe, we are confident on our ability to create a high-performance omnichannel network that is truly best-in-class in operating leverage.

最後，調整後的 SG&A 佔毛利的百分比（不包括 Driveway 的成本）為 62.8%，而合併基礎上的 SG&A 為 65.1%，與前一年相似。在過去 10 年裡，我們成功地從 SG&A 總額中提取了近 500 個基點。當我們展望未來並努力尋找方法從全球 460 多個地點獲得額外的影響力和收益時，我們對創建一個真正一流的高性能全渠道網絡的能力充滿信心。經營槓桿。

As we started, our LPG group has set the bar for our organization of what is expected and, in simple terms, moving our non-LPG to LPG performance levels has a massive impact on profitability. Specifically, moving non-LPG stores up 1 segment of performance will add 500 to 800 basis points of incremental leverage in the model. This would equate to approximately $250 million to $400 million in additional profitability or $7 to $10 in EPS on today's performance and is a key to unlocking the $2 in EPS for every $1 billion in revenue that Bryan has discussed.

當我們開始時，我們的液化石油氣團隊為我們的組織設定了預期的標準，簡單來說，將我們的非液化石油氣性能水準轉變為液化石油氣性能水準會對盈利能力產生巨大影響。具體來說，將非液化石油氣儲存量提高 1 個部分的績效將在模型中增加 500 至 800 個基點的增量槓桿。根據今天的業績，這相當於約 2.5 億至 4 億美元的額外盈利能力或 7 至 10 美元的每股收益，並且是 Bryan 所討論的每 10 億美元收入實現 2 美元每股收益的關鍵。

In summary, our plan is well underway to build an international ecosystem in personal transportation that provides a variety of products and services that meet a broad set of consumers' mobility needs wherever, whenever and however they desire. Our tenured and experienced team is set up to achieve high-performing results in a lean operating model while continuing to execute our plan that will deliver best-in-class returns to our shareholders. With that, I'd like to turn the call over to Chuck.

總而言之，我們的計畫正在順利進行，旨在建立個人交通領域的國際生態系統，提供各種產品和服務，隨時隨地滿足廣大消費者的出行需求。我們的資深且經驗豐富的團隊旨在以精益營運模式實現高性能成果，同時繼續執行我們的計劃，為股東帶來一流的回報。說到這裡，我想把電話轉給查克。

Thanks, Chris. The financing operations segment continued to move towards profitability, narrowing our quarterly operating loss to $2.1 million, down from $4.4 million last quarter while our portfolio ended the year at just over $3.2 billion. As we prioritize increasing yields and managing risk through our underwriting, we saw a sequential decline in origination volume to $429 million.

謝謝，克里斯。融資業務部門繼續實現盈利，將我們的季度營運虧損從上個季度的 440 萬美元縮小至 210 萬美元，而我們的投資組合在年底剛剛超過 32 億美元。當我們優先考慮透過承保提高收益率和管理風險時，我們發現發行量連續下降至 4.29 億美元。

Shifting to our operating metrics. The weighted average APR on loans originated increased to 10.3%, up 30 basis points from the prior quarter and 210 basis points from a year ago. As a captive lender sitting at the top of the funnel, we were able to achieve this without impacting credit quality. The weighted average FICO score of 734 on loans originated in the quarter was 2 points higher than the prior quarter while front-end LTV was essentially flat at 95%. DFC's penetration rate during the quarter was 9%, primarily due to the negative impact on LAD's growth in retail units overseas. If we consider only retail units sold in the U.S., the only market DFC currently operates in, our penetration rate increases to 10%. Now that our yield is aligned with the market, we expect penetration will increase in 2024 and beyond as we look to scale.

轉向我們的營運指標。發放貸款加權平均年利率增加至10.3%，較上季上升30個基點，較去年同期上升210個基點。作為位於通路頂部的專屬貸款人，我們能夠在不影響信貸品質的情況下實現這一目標。本季發放的貸款加權平均 FICO 得分為 734 分，比上一季高出 2 個百分點，而前端 LTV 基本持平，為 95%。 DFC 本季滲透率為 9%，主要是由於 LAD 海外零售業務成長受到負面影響。如果我們只考慮在美國（DFC 目前營運的唯一市場）銷售的零售單位，我們的滲透率將增加至 10%。既然我們的殖利率與市場保持一致，隨著我們尋求規模擴張，我們預計 2024 年及以後的滲透率將會提高。

Our future growth has endless possibilities, including launching a new vehicle leasing product as well as exploring supporting LAD's expansion into other geographies and mobility verticals. In the fourth quarter, net interest margin increased to $33.2 million, driven by increasing portfolio APR and relatively flat funding costs. In Q4, we closed our sixth ABS offering, and we now have 86% of our portfolio funded through ABS term issuance and warehouse facilities, and later today, we are closing a very successful seventh ABS term offering.

我們未來的成長具有無限的可能性，包括推出新的車輛租賃產品以及探索支援 LAD 向其他地區和移動垂直領域的擴張。第四季度，由於投資組合年利率上升和融資成本相對平穩，淨利差增加至 3,320 萬美元。在第四季度，我們完成了第六次 ABS 發行，現在我們 86% 的投資組合是透過 ABS 定期發行和倉庫設施融資的，今天晚些時候，我們將非常成功地完成第七次 ABS 定期發行。

Net provision expense increased slightly from the prior quarter to $23.8 million as we saw seasonally higher charge-offs in the fourth quarter. The allowance for loan losses as a percentage of loans receivables stayed flat at 3.2%. 30-day delinquency rates increased 50 basis points from the prior quarter to 4.6%, consistent with seasonal expectations and down 80 basis points year-over-year. This reflects strong performance from our servicing team as well as increasing our overall portfolio credit quality.

淨撥備費用較上一季略有增加，達到 2,380 萬美元，因為我們看到第四季沖銷季節性較高。貸款損失撥備佔應收貸款的百分比維持在 3.2% 不變。 30 天拖欠率較上一季上升 50 個基點至 4.6%，與季節性預期一致，年減 80 個基點。這反映了我們服務團隊的強勁表現以及我們整體投資組合信用品質的提升。

As we prepare to transition from the start-up period, I am very proud of all DFC has accomplished since we launched this initiative in May of 2020. DFC will quickly start to prove the financial benefits of this adjacency as well as show a clear path to realizing the full scope of DFC's contribution to Lithia & Driveway. Beyond stand-alone profitability, we can see how a mature DFC support LAD's long-term objectives to reimagine the vehicle sales and ownership experience and make meaningful connections with the consumer throughout their entire vehicle ownership life cycle.

在我們準備從初創期過渡之際，我對自2020 年5 月啟動這一舉措以來DFC 所取得的所有成就感到非常自豪。DFC 很快就會開始證明這一毗鄰地區的經濟效益，並展示一條清晰的道路實現 DFC 對 Lithia & Driveway 的全面貢獻。除了獨立盈利能力之外，我們還可以看到成熟的DFC 如何支持LAD 的長期目標，即重新構想汽車銷售和擁有體驗，並在消費者的整個車輛擁有生命週期中與消費者建立有意義的聯繫。

DFC has been built to be successful in the full range of market conditions regardless of short-term volatility. We remain confident in DFC's ability to deliver long-term earnings growth to LAD and achieving our end-state financial goals with a fully scaled and seasoned portfolio. With that, I'd like to turn the call over to Tina.

無論短期波動如何，DFC 都能在各種市場條件下取得成功。我們仍然相信 DFC 有能力為 LAD 帶來長期獲利成長，並透過全面且經驗豐富的投資組合來實現我們的最終財務目標。說到這裡，我想把電話轉給蒂娜。

Thanks, Chuck, and thank you for all those joining us today. In the fourth quarter, we reported adjusted EBITDA of $400 million and nearly $1.8 billion for the full year 2023. Results in the quarter were driven by continued strength in new vehicle sales and aftersales, offset by lower new vehicle GPUs with returning supply and higher floor plan interest expense. Our focus on maturing our adjacencies resulted in improved profitability at Driveway and DFC. Although early, we are well positioned to see positive contributions this year.

謝謝查克，也謝謝今天加入我們的所有人。第四季度，我們公佈的調整後EBITDA 為4 億美元，2023 年全年則接近18 億美元。該季度業績的推動因素是新車銷售和售後的持續強勁，但被回歸供應和更高樓層的新車GPU 減少所抵銷計劃利息支出。我們致力於完善週邊地區，從而提高了 Driveway 和 DFC 的獲利能力。雖然為時過早，但我們今年已經做好了充分準備，可以看到積極的貢獻。

We ended the quarter with net leverage, excluding floor plan and debt tied to DFC, of approximately 1.8x, relatively flat from the prior quarter. We continue to maintain our financial discipline even with planned growth and target leverage below 3x. During the quarter, we generated free cash flows of $242 million, an increase of 10% compared to the previous year. We define free cash flows as EBITDA adding back stock-based compensation less the following items paid in cash, interest, income taxes, CapEx and dividends.

本季結束時，我們的淨槓桿率（不包括平面圖和與 DFC 相關的債務）約為 1.8 倍，與上一季相比相對持平。即使計劃成長和目標槓桿率低於 3 倍，我們仍將繼續維持財務紀律。本季度，我們產生了 2.42 億美元的自由現金流，比前一年增長了 10%。我們將自由現金流定義為 EBITDA 加上以股票為基礎的薪酬減去以下以現金、利息、所得稅、資本支出和股息支付的項目。

We managed to generate another year of strong cash flows and balanced with consistent capital allocation, we can preserve the quality of our balance sheet while supporting our growth initiatives and navigating various cross currents in today's environment. Our capital allocation strategy of 65% toward acquisitions, 25% toward internal investments, which includes capital expenditures and the balance of 10% toward shareholder return remains relatively unchanged. However, with nearly $22 billion in acquisitions completed since 2020, we are making some tactical shifts to be responsive to the market environment. As Bryan outlined earlier, we will continue to assess valuation trends and balance our M&A expectations in the near-term but being opportunistic in our share repurchases.

我們成功地創造了另一年強勁的現金流，並與一致的資本配置保持平衡，我們可以保持資產負債表的質量，同時支持我們的成長計劃並應對當今環境中的各種逆流。我們的資本配置策略為 65% 用於收購，25% 用於內部投資（包括資本支出），其餘 10% 用於股東回報，且保持相對不變。然而，自 2020 年以來完成了近 220 億美元的收購，我們正在做出一些戰術轉變，以響應市場環境。正如布萊恩早些時候概述的那樣，我們將繼續評估估值趨勢並平衡短期內的併購預期，但在股票回購中保持機會主義。

In the fourth quarter, we repurchased nearly 143,000 shares for a weighted average price of $241 per share. We have approximately $467 million available under our current authorization. We remain nimble and will look to deploy capital in ways that drive strong returns. Our vision and ability to deliver on synergies through acquisitive growth remains unchanged, and our strategy is flexible with the consistent cash flow generation of our vehicle operations business, coupled with measured investments in adjacencies. The team has the necessary infrastructure and tools to drive revenues and margins toward our long-term target of achieving $2 in EPS per $1 billion in revenue and are focused on execution and divesting the acquisitions we've completed over the past few years.

第四季度，我們以每股 241 美元的加權平均價格回購了近 143,000 股股票。根據我們目前的授權，我們擁有約 4.67 億美元的可用資金。我們保持靈活性，並將尋求以帶來強勁回報的方式部署資本。我們透過收購成長實現綜效的願景和能力保持不變，我們的策略靈活，車輛營運業務持續產生現金流，加上對週邊地區的謹慎投資。該團隊擁有必要的基礎設施和工具，可推動收入和利潤率實現每 10 億美元收入實現 2 美元每股收益的長期目標，並專注於執行和剝離我們在過去幾年完成的收購。

Our culture and business is designed to grow and deliver consistent strong performance. Coupled with the diverse and talented members of our team, this gives us the necessary foundation to achieve our plan and to continue driving value for our shareholders. This concludes our prepared remarks. With that, I'll turn the call over to the audience for questions. Operator?

我們的文化和業務旨在發展並提供始終如一的強勁業績。再加上我們團隊中多元化且才華橫溢的成員，這為我們實現我們的計劃並繼續為股東創造價值提供了必要的基礎。我們準備好的演講到此結束。接下來，我將把電話轉給觀眾提問。操作員？

(Operator Instructions) Our first question is from John Murphy with Bank of America.

（操作員說明）我們的第一個問題來自美國銀行的 John Murphy。

Bryan, I just want to ask a first question on Pinewood. We're hearing a lot of folks transitioning to Tekion. You're talking about Pinewood. It seems like we're finally getting this evolution or maybe revolution in DMS across the industry. As you think about the implementation of Pinewood throughout your entire platform, is this more sort of a cost and efficiency focus change? Or is this the kind of system that is going to help you leverage and get into these lifetime revenue streams and adjacencies in addition to this cost-cutting? I'm just trying to understand where this is going.

布萊恩，我只想問關於松林的第一個問題。我們聽到很多人轉向 Tekion。你說的是松林。看起來我們終於在整個產業的 DMS 中實現了這種演變或革命。當您考慮在整個平台上實施 Pinewood 時，這是否更像是成本和效率重點的變化？或者，除了削減成本之外，這種系統還能幫助您利用並進入這些終身收入流和鄰接關係嗎？我只是想了解這是怎麼回事。

John, this is Bryan. Thanks for the question today. I'd start with that Pinewood system is what we would consider the top of the heap in global DMS systems, that its functionality is far and above what we see here in the United States. I think it's also imperative to point out that Pinewood's user base is the same size as Tekion today, okay? And that's before they begin to develop additional uses and move into the largest market in the world, which is North America.

約翰，這是布萊恩。謝謝你今天的提問。首先，我們認為 Pinewood 系統是全球 DMS 系統中的佼佼者，其功能遠高於我們在美國看到的系統。我認為還必須指出的是，Pinewood 的用戶群與今天的 Tekion 的用戶群規模相同，好嗎？那是在他們開始開發其他用途並進入世界上最大的市場（北美）之前。

So we look at it as 3 key elements, okay? First and foremost, we're just a partner in the parent, so keep that in mind. This is Pinewood's business. It's a savvy business that's ready and primed to grow. So we look at their ability to grow user base outside of North America as priority #1, and they obviously look at that the same. Secondarily, we do look at that the idea of it coming into the United States opens up additional user base for them as well. But for us, there's 2 big advantages. One is it allows us the ability to glue our multiple adjacencies together the way that we see fit, okay, and as that ecosystem begins to develop, okay? So that's pretty crucial knowing that the 2 major players in the United States are truly more behind the scenes type of functionality, where really, we're looking for an environment where customers and associates coexist and work to reduce productivity with our associates because the consumers typically want to do that stuff themselves.

所以我們將其視為 3 個關鍵要素，好嗎？首先，我們只是父母的合作夥伴，所以請記住這一點。這是松林的事。這是一家精明的企業，已經做好了成長的準備。因此，我們將他們擴大北美以外用戶群的能力視為第一要務，他們顯然也這麼認為。其次，我們確實認為它進入美國的想法也為他們開闢了額外的用戶群。但對我們來說，有兩大優勢。一是它使我們能夠以我們認為合適的方式將多個鄰域粘合在一起，好嗎？隨著生態系統開始發展，好嗎？因此，了解美國的兩個主要參與者確實更多的是幕後類型的功能，這一點非常重要，實際上，我們正​​在尋找一個客戶和員工共存的環境，並努力降低我們員工的生產力，因為消費者通常想自己做這些事。

So yes on trying to glue together the ecosystem. And then lastly, if we assume a 25% inflation in the cost per user that Pinewood currently charges and apply it to our data stack today, we save about 50% on our tech stack, okay, about 50%. So it is a large cost savings while still adding greater functionality to the system. And it is priority #1 of why the Pendragon acquisition was so meaningful and so strategically targeted by us.

所以，是的，嘗試將生態系統粘合在一起。最後，如果我們假設 Pinewood 目前收取的每用戶成本上漲 25%，並將其應用於我們今天的資料堆棧，那麼我們的技術堆疊將節省約 50%，好吧，約 50%。因此，這可以節省大量成本，同時仍可為系統添加更多功能。這就是為什麼收購 Pendragon 如此有意義且具有策略目標的第一要務。

And then if I could just sneak in a second question. I know this has given you a little bit of a hard time even though SG&A performance has been good. In the quarter, SG&A was up about a little over $83 million and gross profit was up just shy of $52 billion. So SG&A growth is outstripping the growth in gross profit and it was kind of a similar dynamic for the year. As we think about incremental gross over time, how should we think about sort of the flow-through of SG&A to gross incrementally? Because it seems like it's growing faster than gross is. So I think that's something we want to slow down obviously over time.

然後我可以偷偷地問第二個問題嗎？我知道這給您帶來了一些困難，儘管 SG&A 績效一直不錯。本季度，SG&A 成長約略高於 8,300 萬美元，毛利成長略高於 520 億美元。因此，SG&A 的成長超過了毛利的成長，今年的情況也類似。當我們考慮隨著時間的推移增量總收入時，我們應該如何考慮 SG&A 到總增量的流量？因為它的成長速度似乎比總成長速度還要快。所以我認為隨著時間的推移，我們希望明顯放慢這種速度。

Yes, Johnny, it's Chris. I think the biggest impact that we have right now that we're dealing with is used cars. I mean, used car gross is right now significantly below historic levels. And right now, trying to really procure and get the core product that we need, which is kind of those 3- to 7-year-old vehicles, it's a firefight. The benefit we have as being a top-of-funnel new car dealer is 70% of our trades are coming in from consumers, but we still have to fill our pipeline in used car operators with vehicles that are outside of our customer channel, which creates pressure on gross, and we compensate our teams selling a lot of vehicles right now that just are lower on gross profit contribution.

是的，強尼，是克里斯。我認為我們現在處理的最大影響是二手車。我的意思是，二手車總量目前遠低於歷史水準。現在，試圖真正採購並獲得我們需要的核心產品，也就是那些 3 到 7 年車齡的車輛，這是一場交火。作為漏斗頂端的新車經銷商，我們的好處是我們 70% 的交易來自消費者，但我們仍然必須用我們客戶渠道之外的車輛來填補二手車運營商的渠道，這對毛利率造成壓力，我們對目前銷售大量車輛的團隊進行補償，但這些車輛對毛利的貢獻卻較低。

So I think when things normalize and you go back to the overall structure that we have, and we have a slide that kind of represents kind of what our top tier is able to accomplish right now in that SG&A closer to 50%, we've got to do the work now with our operations team and move kind of the lower bucket of stores that aren't getting that kind of leverage up. And that's where we really believe we can continue to maintain an outlook of getting to 55% SG&A to gross, somewhere near-term, midterm, but that's an execution opportunity for us.

所以我認為，當事情正常化時，你回到我們擁有的整體結構，我們有一張幻燈片，代表了我們的高層現在能夠完成的工作，SG&A 接近 50%，我們已經現在我們必須與我們的運營團隊一起完成這項工作，並轉移那些沒有獲得這種槓桿作用的較低級別的商店。這就是我們真正相信我們可以繼續維持在短期、中期達到 SG&A 佔總收入 55% 的前景，但這對我們來說是一個執行機會。

Our next question is from Daniel Imbro with Stephens Inc.

我們的下一個問題來自 Stephens Inc. 的 Daniel Imbro。

This is Joe Enderlin on for Daniel. In the slides, it looks like you removed the timeframe from your 2025 targets. How should we be thinking about the timeframe here now? And what changed in your thinking?

我是丹尼爾的喬恩德林。在幻燈片中，您似乎刪除了 2025 年目標的時間表。我們現在應該如何考慮這裡的時間框架？你的想法發生了什麼變化？

I would start with it, obviously, we're less than a year out from the start of '25, so we would be inferring specific guidance and it's not something -- it's not typical practices of our company to provide guidance. But maybe more importantly than that, the goals that we've established for ourselves are to build an ecosystem that is unreplicable, and that foundation is now solidly built, okay?

我首先要說的是，顯然，距離 25 年初我們不到一年的時間，所以我們會推斷出具體的指導，但這不是我們公司提供指導的典型做法。但也許比這更重要的是，我們為自己設定的目標是建立一個不可複製的生態系統，現在這個基礎已經打好了，好嗎？

So the idea of trying to achieve $50 billion in revenue isn't really the target. The target has now moved to be more about what can that ecosystem produce in terms of customer experiences and ultimate touch points throughout the life cycle with the consumer to create $2 of EPS for every $1 billion of revenue. So the $50 billion is obviously in our sights. And unfortunately, with where the market is pricing acquisitions today and where we're trading, the acquisitions are more costly than we can buy our own stock back. So if you heard in the prepared remarks, we're looking at buybacks versus M&A at parity.

因此，試圖實現 500 億美元收入的想法並不是真正的目標。現在的目標更多地轉向生態系統在整個生命週期中與消費者的客戶體驗和最終接觸點方面能夠產生什麼，從而為每 10 億美元的收入創造 2 美元的每股收益。所以500億美元顯然就在我們的視線之內。不幸的是，根據當今市場對收購的定價以及我們的交易情況，收購的成本高於我們回購自己股票的成本。因此，如果您在準備好的發言中聽到了，我們正在同等看待回購與併購。

And in today's environment, what we're seeing is that these one -- these single-point stores and even the smaller groups are bringing massive multiples like selling for as much as 10x to 20x normalized earnings. When the lookback is a 3-year lookback, that's just not something that we're going to chase, okay? And I think as such, we're revising what our M&A targets are post Pendragon at $2 billion to $4 billion annually, which will get you into the -- probably into the mid-$40 billion in revenue range in '25. We can probably get there in '25, assuming that the marketplace softens up a little bit and looks past the 3 years of elevated earnings from GPUs.

在今天的環境中，我們看到的是，這些單點商店甚至更小的集團正在帶來巨大的倍數，例如以高達 10 倍到 20 倍的正常化收益出售。當回顧是三年回顧時，這不是我們要追求的，好嗎？我認為，因此，我們正在將 Pendragon 後的併購目標修改為每年 20 億至 40 億美元，這將使您在 25 年的收入範圍可能達到 400 億美元左右。假設市場稍微疲軟，而 GPU 營收成長的 3 年已經過去，我們可能會在 25 年實現這一目標。

Got it. That's super helpful. As a follow-up, and you guys have pushed further into the U.K. market with the acquisition of Pendragon. Could you maybe provide some current thoughts on the U.K. market? Peer results have come in softer than our previous expectations. Are you seeing any headwinds there in the used market or how has that market trended in recent quarters?

知道了。這非常有幫助。作為後續行動，你們透過收購 Pendragon 進一步進軍英國市場。您能否提供一些目前對英國市場的想法？同行業績低於我們先前的預期。您是否看到二手市場有任何阻力，或者該市場最近幾季的趨勢如何？

Yes, Joe, it's Chris. Yes, I mean, I think typically, kind of the issues that we are contemplating in the U.S. are also impacting the U.K. Used car market has been adjusting pretty rapidly with the new car inventory recovery. And I think fourth quarter was difficult, I think, for used cars just because you're chasing a number that's coming down. But I think there's also a lot of synergies that the U.K. stores are seeing and what we do in the U.S. and the way that we think about the different segments of vehicles and going after kind of value auto product and figuring out how to get synergies across the brand. And I think with the size of the network that we've built there, lots of opportunity. And the last thing is in my prepared remarks, I mentioned that there is a larger recovery than what you're going to see in the U.S. getting back to a normalized SAAR in the U.K.

是的，喬，是克里斯。是的，我的意思是，我認為通常情況下，我們在美國考慮的問題也會影響英國二手車市場，隨著新車庫存的恢復，二手車市場一直在快速調整。我認為，對於二手車來說，第四季很困難，因為你正在追逐一個正在下降的數字。但我認為英國商店也看到了很多協同效應，我們在美國所做的事情以及我們思考車輛不同細分市場的方式以及追求有價值的汽車產品並弄清楚如何在各個領域實現協同效應品牌。我認為，憑藉我們在那裡建立的網路規模，有很多機會。最後一件事是在我準備好的發言中，我提到復甦的幅度比美國恢復正常化的 SAAR 更大。

Joe, one incremental piece of information. Chris and I were out there for a week, what, 10, 12 days ago now. And we spent time with Neil, our operational leader, both Pendragon and Jardine, as well as his key generals. It's surprising that the Pendragon group, especially Evans Halshaw, that Gary, the leader of that, they have a good grasp of the used vehicle market. And I think it's very clear that our ability to grow within that market is out there.

喬，一則增量訊息。克里斯和我在那裡待了一個星期，大概是 10、12 天前吧。我們與我們的行動領導者尼爾（Neil）、潘德拉貢（Pendragon）和賈丁（Jardine）以及他的主要將領一起度過了時光。令人驚訝的是Pendragon集團，尤其是Evans Halshaw，其領導者Gary，他們對二手車市場有著很好的把握。我認為很明顯，我們在該市場中的成長能力是存在的。

And as a side note, we ended up walking through each and every store within the 160 locations and have a pretty good strategy on how to optimize their network as well, as well as retain and motivate those people to be able to reach higher in the United Kingdom.

順便說一句，我們最終走遍了 160 個地點中的每一家商店，並就如何優化其網絡以及留住和激勵這些人能夠在行業中取得更高的成就制定了一個非常好的策略。英國。

Lastly, I would say that our growth in the United Kingdom is pretty well accomplished, okay? So we're nicely positioned in the United Kingdom with pretty close to 8% market share or something with most of it being a luxury, which is quite nice. And obviously, our attentions now turn back to the United States with automotive, and 90% of our mergers and acquisition dollars will be going to that.

最後，我想說，我們在英國的發展相當不錯，好嗎？因此，我們在英國的市佔率非常接近 8%，或大部分都是奢侈品，這非常好。顯然，我們的注意力現在又回到了美國的汽車產業，我們 90% 的併購資金將流向該領域。

Our next question is from Rajat Gupta with JPMorgan.

我們的下一個問題來自摩根大通的 Rajat Gupta。

I just had a couple. Firstly, on the buyback strategy shift. In the event you ended doing more buybacks versus M&A or similar amounts over the next couple of years, how much should we think you can take leverage to on the balance sheet versus 1.8x adjusted you are at today? Is that a different benchmark that you will be looking at relative to when you were doing M&A? Just curious on your thoughts there. And I have a follow-up.

我剛喝了幾個。首先，關於回購策略的轉變。如果您在未來幾年內結束了比併購或類似金額更多的回購，我們認為您可以在資產負債表上利用多少槓桿，而不是今天調整後的 1.8 倍？與您進行併購時相比，您會考慮不同的基準嗎？只是好奇你的想法。我有一個後續行動。

Sure, Rajat. This is Bryan again. I think it's important to define that just because we put M&A and buybacks at parity doesn't mean we believe that we'll be able to do buybacks or M&A. The market will dictate both of those. And we believe and we know definitively that M&A is a core competency of Lithia Motors and Driveway and that we always are able to find acquisitions. As such, even though we have the Pendragon acquisition, we have other deals in the hopper that are going to make the year round out quite nicely, that are domestic deals in the United States with highly attractive franchises in areas that we've targeted our growth that will be there.

當然，拉賈特。這又是布萊恩。我認為定義這一點很重要，僅僅因為我們將併購和回購視為同等，並不意味著我們相信我們能夠進行回購或併購。市場將決定這兩者。我們相信並且明確知道併購是 Lithia Motors 和 Driveway 的核心競爭力，而且我們總是能找到收購機會。因此，儘管我們收購了 Pendragon，但我們還有其他交易，這些交易將使今年全年表現相當好，這些交易是在美國的國內交易，在我們瞄準的領域擁有極具吸引力的特許經營權。將會有成長。

Now when we think about buybacks, ultimately, it is still the last thing that we want to do with our money because the only reason we would be buying back is because we believe that our share price is more valuable than what it's trading at. So that balancing act, we'll try to give you color as to where we sit today. But today, if you noticed, we bought back $40 million or so of shares in the quarter, primarily because when acquisitions are at 10x and we can buy our shares back at 7x, we're going to buy our shares back, okay?

現在，當我們考慮回購時，最終，這仍然是我們最不想用我們的錢做的事情，因為我們回購的唯一原因是我們相信我們的股價比其交易價格更有價值。因此，為了實現平衡，我們將盡力讓您了解我們今天的立場。但今天，如果你注意到的話，我們在本季度回購了大約4000 萬美元的股票，主要是因為當收購價格為10 倍時，我們可以以7 倍的價格回購我們的股票，我們將回購購我們的股票，好嗎？

So the market will ultimately dictate it. So for our ideas of how to diagnose, I think we're going to stick with probably $2 billion to $4 billion in domestic U.S. automotive growth is key, okay? And that should get us to about 50% to 70% allocation of our capital to M&A, okay, and then you can balance out that 20% is probably the difference that falls into the buyback pool.

所以市場最終會決定它。因此，對於我們如何診斷的想法，我認為我們將堅持美國國內汽車產業成長 20 億至 40 億美元是關鍵，好嗎？這應該會讓我們將大約 50% 到 70% 的資本分配給併購，好吧，然後你可以平衡掉 20% 可能屬於回購池的差額。

Got it. And then on the leverage, where do you think you can take the leverage on the balance sheet to from 1.8x? Could you go as high as 3x?

知道了。然後在槓桿方面，您認為資產負債表上的槓桿可以從 1.8 倍提高到什麼程度？你能達到 3 倍的高度嗎？

Yes. Rajat, this is Tina. I mean, we target being below 3x levered, which is the financial discipline we've always had. I think that will continue to hold true. It gives us space to do some constructive work, whether it's M&A or buyback, but we want to keep that disciplined balance sheet.

是的。拉賈特，這是蒂娜。我的意思是，我們的目標是槓桿率低於 3 倍，這是我們一直以來的財務紀律。我認為這將繼續成立。它為我們提供了做一些建設性工作的空間，無論是併購還是回購，但我們希望保持嚴格的資產負債表。

Our next question is from Ryan Sigdahl with Craig-Hallum Capital Group.

我們的下一個問題來自 Craig-Hallum Capital Group 的 Ryan Sigdahl。

Two on Driveway. So first, in past quarters, you've given the impact or quantified it, whether it be SG&A to gross profit ratio of, say, 300 bps, or the dollars, but curious if you're willing to do that in Q4. And then secondly, how do you think about the investment in Driveway and digital in 2024? And what primary KPIs you're watching either pull back or lean into marketing and customer acquisition spend there?

車道上有兩個。首先，在過去的幾個季度中，您已經給出了影響或對其進行了量化，無論是SG&A 與毛利潤的比率，例如300 個基點，還是美元，但很好奇您是否願意在第四季度這樣做。其次，您如何看待 2024 年對 Driveway 和數位化的投資？您觀察到哪些主要 KPI 會縮減或傾斜到行銷和客戶獲取支出？

Sure, Ryan. If you noticed in the script, that we ended up blending it together with vehicle operations because that is just truly another channel that is important for us. We are -- it's important to us that the burn rate becomes something that's manageable. Our burn rate year-over-year is down about 30%, 35%, with another 30% to 35% expected by the end of the year. But it does create an ecosystem that we believe is the center of the Lithia & Driveway universe.

當然，瑞安。如果您在腳本中註意到，我們最終將其與車輛操作混合在一起，因為這確實是另一個對我們來說很重要的管道。我們——對我們來說重要的是，燃燒率變得可控。我們的燒錢率年減了約 30%、35%，預計到年底還會再下降 30% 至 35%。但它確實創建了一個我們認為是 Lithia & Driveway 宇宙中心的生態系統。

Now today, we sit with about 13 different functions that are there in the Driveway customer portal. And we intend to build that out with 118 different touch points throughout the life cycle with our consumers, that they can exist and coexist in both Driveway as well as our traditional store base as the ecosystem to be able to put things at people's fingertips that they need during their ownership life cycle, okay? And that is deep.

今天，我們在 Driveway 客戶入口網站中擁有大約 13 個不同的功能。我們打算在消費者的整個生命週期中建立 118 個不同的接觸點，讓他們能夠在 Driveway 以及我們的傳統商店基地中存在和共存，作為一個生態系統，以便能夠讓人們觸手可及的東西在其所有權生命週期中需要，好嗎？那是很深的。

About 1/4 of those are monetizable touch points, okay? The other 75% is truly -- it's just value-adds and that's when we talk about the deep value-adds. We're looking at it from the customer perspective. So Driveway, you'll see in a separate selling channel, that's one price and is home delivery and it's convenient and transparent and so on. But you're also going to see the functionality within that website add those additional 100 or so functions to be able to provide that to all users within the Lithia & Driveway ecosystem to be able to access that and subscribe to different things and schedule their service and pay their payments in the finance company or vice versa and know what the valuations of their trade-ins are.

其中約 1/4 是可獲利的接觸點，好嗎？另外 75% 是真正的——它只是增值，這就是我們談論深層增值的時候。我們從客戶的角度來看它。所以Driveway，你會在一個單獨的銷售管道中看到，這是一個價格，而且是送貨上門，方便、透明等等。但您還將看到該網站中的功能添加了大約100 個左右的附加功能，以便能夠向Lithia & Driveway 生態系統內的所有用戶提供這些功能，以便能夠訪問該功能並訂閱不同的內容並安排他們的服務並在財務公司支付款項，反之亦然，並了解其以舊換新的估值是多少。

And I think as we think about the longer-term vision, it's really Driveway as a customer-facing solution that someday we'll integrate with the Pinewood solutions and help us build an ecosystem that customers are used to and believe is infectious and wants to be there a couple of times a week rather than once every 3 to 5 years.

我認為，當我們考慮長期願景時，Driveway 確實是一個面向客戶的解決方案，有一天我們將與 Pinewood 解決方案集成，幫助我們建立一個客戶習慣並相信具有傳染性並希望的生態系統每週去那裡幾次，而不是每三到五年一次。

Our next question is from Colin Langan with Wells Fargo.

我們的下一個問題來自富國銀行的 Colin Langan。

If I look sequentially, it was a bigger step down in new GPU. How should we think about that trending as we go through this year? I think you noted -- you think your comments said that you kind of eventually expect to get to sort of precrisis levels. Should that be over the next couple of quarters or any thoughts on the pace of that?

如果我按順序看，新 GPU 的下降幅度更大。今年我們該如何看待這個趨勢？我想你注意到了——你認為你的評論表明你最終希望達到危機前的水平。這應該在接下來的幾個季度內進行嗎？或者對此進度有什麼想法嗎？

Colin, this is Bryan. So I think the easiest way to think about it, let's talk about what we believe is steady state and normalized. We think that total deal average is around $4,500, about $2,500 on the front end, and that's blended, new and used, okay, and just under $2,000 on the back end. Today, we sit at almost $1,200 above that on new and we sit about $500 below that unused, okay? So that balancing act will come back in. We achieved about -- we dropped about $150 a month over the last quarter, which is a little bit accelerated rate from where we originally were looking at throughout the last year. We assume that by now we would be back to normalized state.

科林，這是布萊恩。所以我認為最簡單的思考方式是，讓我們來談談我們所認為的穩態和標準化。我們認為平均交易總額約為 4,500 美元，前端約為 2,500 美元，這是混合的，新的和二手的，好的，後端略低於 2,000 美元。今天，新的價格比我們的價格高出近 1,200 美元，而未使用的價格比我們的價格低約 500 美元，好嗎？因此，這種平衡行為將會重新出現。我們在上個季度實現了每月約 150 美元的下降，這比我們去年全年最初預期的速度有所加快。我們假設現在我們將恢復正常狀態。

Now the other thing to keep in mind is that Q4 and Q1 are typically seasonally a little bit tougher quarters, okay? In fact, Q4 is usually the weakest in terms of GPU. So we do have some seasonality on our side. So I would say that over the next quarter or 2, we should see about a $100 drop per month. But I would say that once we get into the second half of the year, whatever is left will normalize by year-end, okay? Because I think if we go through another seasonally slow period, which will be in fall of next year, it should be back to some type of normalized level.

現在要記住的另一件事是，第四季和第一季通常是季節性比較困難的季度，好嗎？事實上，Q4 在 GPU 方面通常是最弱的。所以我們確實有一些季節性。所以我想說，在接下來的一兩個季度，我們應該會看到每月大約下降 100 美元。但我想說，一旦進入下半年，剩下的一切都會在年底前恢復正常，好嗎？因為我認為，如果我們經歷另一個季節性淡季，明年秋季，它應該會回到某種正常化水平。

And I think as Chris mentioned, it would sure be nice to be able to be at that level, so we could truly be able to see what's effectively happening within different franchises in different areas of the country to be able to truly manage performance, whereas it's been a little tricky managing performance over the past couple of years just because GPU's been behaving so differently by manufacturer and by region.

我認為正如克里斯所提到的，能夠達到這個水平肯定會很好，這樣我們就可以真正能夠看到該國不同地區的不同特許經營權中有效發生的情況，從而能夠真正管理績效，而在在過去的幾年裡，管理績效有點棘手，因為GPU 的表現因製造商和地區而異。

Got it. That was very clear, very helpful. On the used side, you did mention those were sort of lows. How should we think about that? Does that sort of bounce back as you get sort of the inventory realigned? Or is that going to drag on through the rest of this year or is it a short-term or long-term sort of issue?

知道了。這非常清楚，非常有幫助。在二手方面，您確實提到這些是低點。我們該如何思考這個問題？當你重新調整庫存時，這種情況會反彈嗎？或者說，這種情況會持續到今年剩餘時間，還是短期或長期問題？

Colin, it's interesting because you'd think with the shortage in supply, that margins would be quite stable. But I think everyone is chasing inventory, which is driving the ultimate price cost up more, which is affecting margins. And then there -- when you go through the typical seasonality of the winter months, you typically go into that panic mode that I don't want my inventories to be out of line when I hit the spring months and selling season. So typically, by the end of February, start of March, we start to see recovery in the used car market and would hope to see that in the next couple of weeks. And I don't know if Chris or Adam has any additional color on that.

科林，這很有趣，因為你會認為在供應短缺的情況下，利潤率會相當穩定。但我認為每個人都在追逐庫存，這導致最終價格成本進一步上漲，從而影響利潤率。然後，當你經歷冬季的典型季節性時，你通常會進入那種恐慌模式，我不希望我的庫存在春季和銷售季節時超出預期。因此，通常情況下，到二月底、三月初，我們開始看到二手車市場復甦，並希望在接下來的幾週內看到這種情況。我不知道克里斯或亞當是否對此有任何額外的看法。

No, well said, Bryan.

不，說得好，布萊恩。

Okay.

好的。

(Operator Instructions) Our next question is from Kate McShane with Goldman Sachs.

（操作員說明）我們的下一個問題來自高盛的 Kate McShane。

This is Mark Jordan on for Kate McShane. In your slide deck, it notes that you expect same-store sales growth in the low to mid-single-digit range in the near-term. Can you break that out for us and how we should think about pricing and units for both new and used?

我是馬克喬丹 (Mark Jordan) 為凱特麥克肖恩 (Kate McShane) 代言。在您的幻燈片中，它指出您預計近期同店銷售額成長將在低至中個位數範圍內。您能否為我們解釋一下這個問題以及我們應該如何考慮新的和二手的定價和單位？

I think pricing, in terms of like new vehicle, we're seeing good tailwinds, this is Tina, by the way, in terms of growth with that, with the imports coming back in terms of volume, we saw a strong growth in that as we hit the fourth quarter, and I think that will continue somewhat as supply continues to normalize across the different brands that we have.

我認為定價，就新車而言，我們看到了良好的順風，順便說一句，這是蒂娜，就增長而言，隨著進口量的回升，我們看到了強勁的增長當我們進入第四季度時，我認為隨著我們擁有的不同品牌的供應繼續正常化，這種情況將會持續下去。

From a used vehicle perspective, as we've mentioned in the last couple of quarters, that's been a tougher market. And from an ASP perspective, they've been relatively high. And so sequentially, we've seen those be pretty flat as you're thinking about modeling those out. Bryan, did you have some additional commentary?

從二手車的角度來看，正如我們在過去幾季所提到的，這是一個更艱難的市場。從平均售價的角度來看，它們相對較高。因此，當您考慮對它們進行建模時，我們已經看到它們非常平坦。布萊恩，您還有其他評論嗎？

I think short-term, we're looking at new in the mid- to high single-digit range. On used, we're looking to be flat, okay, year-over-year, okay? Now we're a little bit below that right now at the minus 6%, but we think with the coming selling season, we should be able to recover as we lap those comps.

我認為短期內，我們正在尋找中高個位數範圍內的新產品。在使用方面，我們希望與去年同期持平，好嗎？現在，我們的成長率略低於該水平，為負 6%，但我們認為，隨著即將到來的銷售季節，我們應該能夠在完成這些比較後恢復過來。

Our next question is from Chris Bottiglieri with BNP Paribas.

我們的下一個問題來自法國巴黎銀行的 Chris Bottiglieri。

One quick clerical question and a bigger picture question for that. But the first 1 is following up on the changing the slide deck. It looks like you kept the -- reiterated the $50 to $55 in the near-term plan but then cut the SG&A to gross, the operating -- and cut operating margins at least at the midpoint. So just trying to understand if you're targeting the higher end still or you're just giving a range or why the EPS didn't change mathematically?

一個快速的文書問題和一個更大的問題。但第一個是跟進幻燈片的變化。看來您在近期計劃中重申了 50 至 55 美元，但隨後將 SG&A 削減至總營業額，並至少在中點削減了營業利潤率。因此，只是想了解您的目標是否仍然是高端，或者您只是給出一個範圍，或者為什麼每股收益沒有數學上的變化？

Chris, so I think what Chris is referencing is Slide 14. It's an important new slide of the slide deck because it reconciles how we get to $2 of EPS for every $1 billion of revenue. Where we're looking at short-term, why don't we take that offline, we can help you with your model and be able to achieve that.

克里斯，所以我認為克里斯引用的是幻燈片 14。這是幻燈片中重要的新幻燈片，因為它協調了我們如何為每 10 億美元的收入實現 2 美元的每股收益。當我們著眼於短期時，為什麼我們不把它離線，我們可以幫助您建立您的模型並能夠實現這一目標。

I would like to go back through of what our crosswalk is to get to the $2 of EPS. It's important to know this. And everything that happens until we normalize in GPUs, yes, we're going to always be rolling up our sleeves and driving to execute and achieve the highest results. But our focus is on how to achieve and weave together the ecosystem to achieve $2, okay? So our stores today, the $22 billion that we purchased over the last 4 years, 3.5, 4 years, we believe between those and the existing store base should be able to produce another $0.30 to $0.40 for every $1 billion of revenue, and that's coming from being in better markets, being in less regulated markets like the Southeast and the South Central and improving the performance in the stores, meaning grow the people, okay, and incentivize them to be able to grow market share and reduce costs, okay?

我想回顧一下我們的人行橫道是如何達到 2 美元的 EPS 的。了解這一點很重要。在 GPU 標準化之前發生的一切，是的，我們將始終捲起袖子，努力執行並實現最高結果。但我們的重點是如何實現並編織生態系統以實現 2 美元，好嗎？因此，我們今天的商店，我們在過去4 年、3.5 年、4 年裡購買的220 億美元，我們相信，在這些和現有商店基礎之間，每10 億美元的收入應該能夠再產生0.30 至0.40 美元的收入，而這一點即將到來進入更好的市場，進入監管較少的市場，如東南部和中南部，並提高商店的業績，這意味著增加人員，並激勵他們能夠擴大市場份額並降低成本，好嗎？

Alongside that is DFC, well on its way to profitability later this year, okay? And most importantly, through the pains of most of the CECL as well as the seasoning of the portfolio, which is quite beneficial. That's another $0.20 to $0.25 per share at normalized steady-state position at a 20% penetration rate, okay? So keep that in mind.

除此之外，DFC 也將在今年稍後實現獲利，好嗎？最重要的是，經歷了大部分CECL的痛苦以及組合的調味，這是相當有益的。在滲透率 20% 的標準化穩態情況下，這相當於每股 0.20 至 0.25 美元，好嗎？所以記住這一點。

We also just added a fleet management company. Even though we have 1 in Canada and a little 1 in Detroit, this is a real fleet management company with 30,000 to 40,000 units under contract that they're managing, they're selling and they're bringing back into their organization. We believe that fleet management can be another $0.10 to $0.15 of lift in the long-term, okay? It's a highly profitable business. The Pinewood Vehicle Management or PVM is highly profitable, just like Pinewood Technologies is highly profitable, okay? So we're not looking for additional burn rates of any kind, okay? We're looking at how to get rid of those burn rates, and we're well on our pathway to do that.

我們也剛剛增加了車隊管理公司。儘管我們在加拿大有 1 家，在底特律也有 1 家，但這是一家真正的車隊管理公司，他們根據合約管理、銷售並帶回其組織中的 30,000 至 40,000 輛汽車。我們相信，從長遠來看，車隊管理可以再帶來 0.10 至 0.15 美元的提升，好嗎？這是一項高利潤的業務。 Pinewood Vehicle Management 或 PVM 利潤很高，就像 Pinewood Technologies 利潤很高一樣，好嗎？所以我們不是在尋找任何形式的額外燃燒率，好嗎？我們正在研究如何消除這些資源消耗率，而且我們正在努力做到這一點。

Other adjacencies, and you can see what those are listed as in the slide deck, add another 5% to 10%. And we believe there may be more upside in those adjacencies. We just haven't been able to put our fingers on all that but will in the coming quarters and years. Lastly, the remaining 10% or so comes from scale advantages i.e., cost savings on Pinewood if we're able to move to that system someday, okay? Cost of capital, okay, moving to IG rating and saving 50 to 75 basis points in our overall interest costs, okay?

其他鄰接，您可以看到幻燈片中列出的內容，再增加 5% 到 10%。我們相信這些鄰近地區可能有更多的好處。我們只是還無法掌握這一切，但在接下來的幾季和幾年裡將會實現。最後，剩下的 10% 左右來自規模優勢，即如果我們有一天能夠轉向該系統，就能節省 Pinewood 的成本，好嗎？資本成本，好吧，轉向 IG 評級，並在我們的整體利息成本中節省 50 到 75 個基點，好嗎？

Those type of things as well as the possibility of buybacks, even though we don't believe that needs to be the driver to get to the $2, okay? So keep that in mind, Chris, as we think about it, but I think that's where the executive team is focused, while the operational teams are really focusing on how do they get to the $50 to $55 or $60 as soon as they possibly can.

這些類型的事情以及回購的可能性，儘管我們不認為這需要成為達到 2 美元的驅動力，好嗎？所以請記住這一點，克里斯，當我們思考這個問題時，但我認為這是執行團隊關注的重點，而營運團隊真正關注的是如何盡快達到 50 美元到 55 美元或 60 美元。

Our next question is from Bret Jordan with Jefferies.

我們的下一個問題來自布雷特·喬丹和傑弗里斯。

Can we talk a bit more about the credit business, maybe what you're seeing year-over-year in loss reserves? I think your FICO scores have improved and your delinquencies may be down, but obviously a bigger loan portfolio. I mean, maybe -- I guess, really what you're seeing in the underlying consumer health. And then also on the recovery side from repos, what you're seeing in repo volumes and how those are winding up as you sell them out.

我們能否多談談信貸業務，也許您在損失準備金方面逐年看到的情況？我認為你的 FICO 分數有所提高，你的拖欠率可能會下降，但顯然貸款組合更大了。我的意思是，也許——我想，這確實是你在潛在的消費者健康中看到的情況。然後，在回購的恢復方面，您在回購交易量中看到了什麼，以及當您出售它們時，這些交易量是如何結束的。

Yes, Bret, great question. This is Chuck. So first and just sort of a general market sort of overview, we see the same things that everybody else sees, which is the consumers are under some degree of stress, and that delinquency rates have either got right to or slightly above sort of pre-pandemic levels for 30-day delinquency. But I think that really goes back to sort of DFC's strategy and real power of being top-of-funnel captive finance business.

是的，布雷特，好問題。這是查克。因此，首先也是對一般市場的概述，我們看到了與其他人看到的相同的事情，即消費者承受著一定程度的壓力，拖欠率要么正好達到或略高於預期水平。30 天拖欠的 大流行水平。但我認為這實際上可以追溯到 DFC 的策略和作為漏斗頂部自保金融業務的真正實力。

And then back in 2022 first quarter, we were able to dramatically increase our credit quality, over 50 points of weighted average FICO from 2 years ago. And that's really standing us a good stead relative to withstanding sort of some of the impacts of some of this negative noise that we're seeing in the economy. So our portfolio is performing very well. We had a recent ABS issuance in the market this quarter that should go off very well and was very well received by the marketplace. And we feel that, that's a big contributor to how we are managing our portfolio.

然後回到 2022 年第一季度，我們的信用品質大幅提高，加權平均 FICO 比 2 年前提高了 50 個點以上。相對於我們在經濟中看到的一些負面噪音的影響而言，這確實為我們提供了良好的支撐。所以我們的投資組合表現非常好。本季我們最近在市場上發行了 ABS，應該會表現良好，並受到市場的好評。我們認為，這對我們管理投資組合的方式做出了巨大貢獻。

To answer the second part of your question, which is the repos, our recovery rates were stressed probably the last 12 to 15 months with some of the industry experience of the lack of repo agents and repo and recovery being limited by the distance of which they would go to recover vehicles. We have overcome that and our recovery rates are either at or slightly above the market rate. It's still something we watch very closely and keep an eye on, but we feel comfortable that our recovery rates are in line with the market.

為了回答你問題的第二部分，即回購協議，我們的回收率可能在過去 12 到 15 個月裡受到壓力，因為缺乏回購代理以及回購協議和回收協議的距離限制了一些行業經驗。會去回收車輛。我們已經克服了這個問題，我們的回收率達到或略高於市場水準。這仍然是我們非常密切關注的事情，但我們對我們的復甦率與市場一致感到滿意。

Our next question is from Michael Ward with Freedom Capital.

我們的下一個問題來自自由資本的麥可沃德。

Bryan, I think you mentioned in your comments that you saw SG&A expense as a percentage of growth going down below 50%. And I think you guys have already talked about used vehicle gross as normalizing, moving higher. What are the other components of that? Does that assume that you get a higher profitability from DCF? Is that folded in there? I assume there's some SG&A costs in there for the ramp-up of DCF. What are we looking at there?

Bryan，我想您在評論中提到您認為 SG&A 費用佔成長的百分比低於 50%。我想你們已經討論過二手車總量正在正常化、走高。它的其他組成部分是什麼？這是否假設您可以從現金流量折現中獲得更高的獲利能力？是折在那裡的嗎？我認為 DCF 的增加會產生一些 SG&A 成本。我們在那裡看什麼？

It does. So we get to 55% operationally within our core businesses, which is vehicle operations. So that includes Driveway, GreenCars and all the Lithia core stores, okay?

確實如此。因此，我們的核心業務（即車輛營運）的營運比例達到了 55%。這包括 Driveway、GreenCars 和所有 Lithia 核心商店，好嗎？

And you have stores at that level today, correct?

現在你們也有這個等級的商店，對嗎？

We have stores, lots of stores at that level in normalized times. Lots, okay? And remember, we purged almost 50 stores over the last, what, 6, 7 years that were stores that typically were -- had SG&A of above 85%, 90%, okay? So about 1/4 of our stores today operate in the mid-50% range in normalized times, okay? We believe that the network has been built with such good quality stores that we believe that's the normal, okay? And that's where our ability to execute and utilize our world-class performance management systems like what we call our SPS, which is our core guiding document for performance management.

我們有商店，在正常時期有很多這個級別的商店。很多，好嗎？請記住，我們在過去 6、7 年裡清理了近 50 家商店，這些商店通常 SG&A 超過 85%、90%，好嗎？那麼，在正常情況下，今天我們大約 1/4 的商店的經營範圍在 50% 左右，好嗎？我們相信網路已經建立瞭如此優質的商店，我們相信這是正常的，好嗎？這就是我們執行和利用世界級的績效管理系統的能力，例如我們所說的 SPS，它是我們績效管理的核心指導文件。

And that's how we really drive the results. And it's built on the back of both market share, loyalty as well as profitability to achieve higher performance. And that is really the secret sauce of what Lithia has always been able to do and will do once again to achieve that 55%. The rest of the 5%-plus is coming from higher-margin businesses like fleet management, okay, and DFC as well as a few of the other adjacencies and then obviously some scale advantages and cost that we expect to be able to realize in the coming years.

這就是我們真正推動結果的方式。它建立在市場份額、忠誠度和盈利能力的基礎上，以實現更高的績效。這確實是 Lithia 一直能夠做到的秘密武器，並將再次做到這一點，以實現 55% 的目標。其餘 5% 以上來自利潤率較高的業務，例如車隊管理、DFC 以及其他一些鄰近業務，然後顯然是我們期望在未來幾年內實現的一些規模優勢和成本。未來幾年。

Our next question is from David Whiston with Morningstar.

我們的下一個問題來自晨星公司的大衛‧惠斯頓。

Could you just give your opinion on when you think leasing penetration will be back towards close to 30%?

您認為租賃滲透率何時會回到接近 30% 的水平，您能發表一下您的看法嗎？

Yes, David, it's Chris. I mean, I think it's hard to highlight when that is because we don't control kind of the incentive base that the manufacturers support us with. But it's obvious that with the buildup of inventory especially in the domestic ranks, that contributions, whether it's in leasing or finance participation or even cash incentives are going to be the driving factor in that.

是的，大衛，是克里斯。我的意思是，我認為很難強調這一點，因為我們無法控制製造商支持我們的激勵基礎。但很明顯，隨著庫存的增加，特別是在國內庫存的增加，這種貢獻，無論是租賃還是融資參與，甚至現金激勵都將成為推動因素。

And I think throughout the back half of the year, we expect that to continue. And I think the other side of it is getting a clear line of sight on the residuals that they provide, which in this dynamic market that we've been dealing with the last couple of years with COVID and pricing and everything else, I think, is on everybody's mind, but a little outside of our control, David, but we'll continue to execute in the environment that we're in.

我認為在今年下半年，我們預計這種情況將持續下去。我認為另一方面是對他們提供的剩餘價值有一個清晰的認識，在這個充滿活力的市場中，我們在過去幾年中一直在處理新冠病毒、定價和其他一切問題，我認為，每個人都在想，但有點超出我們的控制範圍，大衛，但我們將繼續在我們所處的環境中執行。

There are no further questions at this time. I would like to hand the floor back over to Amit Marwaha for any closing comments.

目前沒有其他問題。我想將發言權交還給阿米特·瑪瓦哈 (Amit Marwaha)，以徵求結束語。

I want to thank everybody for joining us today. We look forward to speaking in the coming days and weeks. Have a good day. Take care.

我要感謝大家今天加入我們。我們期待在未來幾天和幾週內發表講話。祝你有美好的一天。小心。

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.

今天的會議到此結束。此時您可以斷開線路。感謝您的參與。