Tom Szlosek: I mean, when you — I’ll let Mike answer the specifics on Pendragon. But when it comes to that capital allocation in general, the first thing I look at when I look at AutoNation is we have a lot of cash, they’re capital to allocate. In other words, the cash generation is very strong. So we’ve got a lot of optionality, which I really like in, which is what attracted me to join company in the first place. And we can either reinvest in the business through CapEx and M&A and even delevering. And to the extent we think we need to, as I said, we’re comfortable with where we are at debt levels right now. And we also can return cash to our shareholders through dividends, which we don’t have and share buybacks, which, as I said, has been one of our primary emphasis in the last couple of years given the low interest rate environment.
Things moderate over time. And we have to be mindful that our number one objective is just maximizing shareholder value, and we’ll do that thoughtfully. Obviously, we’ll continue to reinvest in the business and where we think there’s opportunity also be thoughtful about returning to shareholders through share repurchase. And on the M&A front, I do think that opportunities are abundant. The trick is finding the ones that we think are good for our shareholders and where we can run them profitably and add value to the business. And we’re very active in looking at all sorts of different opportunities. So I’ll let Mike comment on the Pendragon one in particular.
Mike Manley: Well, by the way, I think that was a great answer question, I also there’s much more to add on Pendragon. I mean when we made up memory offer on that. obviously, compared to the offers that were out there at a time that we thought it was an appropriate thing, and we think they were good assets and we did our delivering and decided to not formalize an offer at that point, I think there’s nothing much the same yet to close, but bet’s continue to do exactly as you described them.
Daniel Imbro: And I guess squeeze in one more quick model clarifier. Tom, I think in your prepared remarks, you mentioned that the sale of CIG loans this quarter was an $8 million pretax gain. And if so, where was that in the P&L, is it an SG&A offset or is it getting reported below the line? Just where is that $8 million gain?
Tom Szlosek: I think it’s embedded in the — yes, can see this in other. It’s footnoted within in the financial statements, you’ll see it there. Look at the financial statement footnote one, Daniel. And you’ll see it there in the press release. It’s included in there, it’s net of other things going on.
Daniel Imbro: But the number was $8 million. Was that right, Tom?
Tom Szlosek: Correct, that’s correct, pretax gain $8 million.
Operator: Our next question comes from Bret Jordan from Jefferies.
Patrick Buckley: This is Patrick Buckley on for Bret. Could you talk a bit more on the used sourcing environment during the quarter. It sounds like you guys successfully increased spend there. Do you see further room to grow through additional dollar spend or is that pretty close to the optimal run rate?
Mike Manley: It’s a great question. I think the balance that we struck in the quarter is probably optimal going forward. The only additional thing that we have to factor in, which may not see a lot in the scheme of things is the four new openings of AN USA, just to make sure that we have incremental inventory to those. But I think we’ve got a good balance now in terms of we buy your car, what’s coming in, in trade. And as I said, we’re looking at each deal and giving credit if there’s a really good trade there to make sure that we can get not just the sale of whatever we’re selling, but also get a second sale out of the trade. So I would say optimal balance at this moment in time. And if we’re able to continue to get sequential growth, we’ll obviously need to get more inventory, but I’d say balance right now is the best answer I can give you.
