Rick Galloway: Yes. No, it’s a great question. I mean you look at the free cash flow, you think year-over-year, when you combine three items – interest, CapEx and Uni-Select [ph] transaction costs, $250 million come down off of last year’s number, where we were at roughly $1 billion, making all of that up and delivering a fantastic result. It’s a little bit higher than $150 million if you think about the trade working capital. It’s more like $180 million as we go into Q3. It’s things like our vendor financing program that the European team does. The operational excellence initiatives span way beyond just the P&L side, they go to the balance sheet side as well. The team is doing a fantastic job driving the performance.
They’re up 12% versus year-end, up about $35 million on the vendor financing program, up 10% in payables. And so driving that over and over again is something that we see as a continuous improvement. So I would tell you, the performance is good, really solid performance year-over-year, and that trade working capital really is the catalyst behind driving that performance.
Brian Butler: Okay. And if I can maybe slip one last one in. How much debt do you expect to repay in the fourth quarter?
Rick Galloway: To repay?
Brian Butler: Yes. How much debt paydown?
Rick Galloway: We should have roughly about $150-ish million. About $150 million debt pay down in the fourth quarter.
Brian Butler: Okay. Thank you.
Operator: Our next question comes from Bret Jordan from Jefferies. Your line is now open.
Bret Jordan: Hey guys. Second round here. You gave us the auto claims number year-over-year. Could you give us the total loss rate for Q3?
Nick Zarcone: Yes, total losses, at least according to our best sources that we have here, Bret, was approximately 20.6% in Q3 of 2023, which was up a bit from both 2022 and 2021. So total losses were up a bit. That in part is why we think repairable claims was down 4.6%, right, because you had a few more total losses. As we’ve always said, we’re agnostic to the total loss rate. Because in reality, the more cars that roll through the auctions, creates more pine opportunities for our salvage operations at reasonable prices. The key, we believe, is what’s powering the overall demand for products. And while repairable claims may be down a little bit, APU is going north. And APU is going north in part because the average number of parts required to repair a vehicle is at an all-time high of 15.7 parts in the third quarter.
Obviously, the industry is fully recovering from our aftermarket parts availability. As we said, our fulfillment rates were back to over 93%, which is pretty close to our target. And then you’ve got things like the benefit of the State Farm program, which will take a little bit of share away from the OEs as well. So our sense is that our same-day organic of 5.8% outstripped what we believe would be the net impact of all the other headwinds and tailwinds, giving us confidence that we’re continuing to take share.
Bret Jordan: Okay. And then one quick question. In the prepared remarks, you talked about FinishMaster having a slightly higher MSO mix. Could you give us more color on that? Is that – is pricing on FinishMaster products lower on average than your traditional paint business?
Nick Zarcone: There’s no doubt that the way that the accounting works and the way the contracts are – and that the margin on MSO business is less than the margins on a non-MSO. Because it’s basically a service quotient to service fee, if you will, even though we have to record the full value of the product that are sold. And as I mentioned in my comments, MSO volumes were a little bit higher as a percent of the total than they’ve been in the past. And that, quite frankly, that happens every time one of the MSOs buys an independent shop, right? It switches from – it switches the volumes. All in all, we’re happy with the – with where we stand with the paint business.
Bret Jordan: Okay, great. Thank you.
Operator: Our next question comes from Daniel Imbro from Stephens. Your line is now open.
Daniel Imbro:
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