Welcome to the AutoNation's First Quarter 2014 Earnings Conference Call. [Operator Instructions]. Today's conference is being recorded. If you have any objections, you may disconnect at this time. Now, I will turn the call over to Robert Quartaro, Senior Manager of Investor Relations for AutoNation.

Thank you. Good morning and welcome to AutoNation's first quarter 2014 conference call and web cast. Leading our call today will be Mike Jackson, our Chairman and Chief Executive Officer; Mike Maroone, our President and Chief Operating Officer; Cheryl Scully, our Chief Financial Officer; and Jon Ferrando, our Executive Vice President responsible for M&A. Following their remarks, we will open up the call for questions. I will also be available by phone following the call to address any additional questions that you may have. Before we begin, let me read our brief statement regarding forward-looking comments. Certain statements and information on this call will constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks, which may cause the actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause actual results to differ materially are contained in our press release issued earlier today and our SEC filings, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. Certain non-GAAP financial measures as defined under SEC rules will be discussed on this call. Reconciliations are provided in our press release, which is available on our website at investors.autonation.com. And now, I'll turn the call over to AutoNation's Chairman and Chief Executive Officer, Mike Jackson.

Good morning and thank you for joining us. Today, we reported first quarter adjusted EPS from continuing operations at $0.75, a 10% increase compared to $0.68 for the same period in the prior year. This is our 14th consecutive quarter of double digit year-over-year growth and adjusted EPS from continuing operations. First quarter 2014 revenue totaled $4.4 billion compared to $4.1 billion in the year ago period, an increase of 7% driven by stronger performance in all of our business sectors. In the first quarter, AutoNation's retail new vehicle unit sales increased 6%, although 4% on a same store basis. Our coast-to-coast branding roll-out which began in February 2013 has now passed the one year anniversary, and has been embraced by our customers and our associates. AutoNation is very well positioned with an optimal brand and market mix, and a disciplined cost structure. We continue to drive solid results across all our business sectors. I will now turn the call over to our Chief Financial Officer, Cheryl Scully.

Thank you, Mike, and good morning ladies and gentlemen. For the first quarter, we reported adjusted net income from continuing operations of $91 million or $0.75 per share, versus net income of $83 million or $0.68 per share during the first quarter of 2013, a 10% improvement on a per share basis. Our first quarter 2014 results exclude after-tax net gains of $5 million or $0.04 per share related to business and property dispositions. There were not adjustments to net income in the prior year period. Adjustments to net income are included in the reconciliations provided in our press release. In the first quarter, revenue increased $267 million or 7% compared to the prior year and gross profit improved $43 million or 7%. SG&A as a percentage of gross profit was 70.8% for the quarter, which represents a 50 basis point decrease compared to the year ago period. Net new vehicle floor plan was a benefit of $11.3 million, an increase of $5 million from the first quarter of 2013, primarily due to higher floor plan adjustments. Floor plan debt decreased approximately $185 million during the first quarter to $2.8 billion at quarter end, due to lower inventory balances. Non-vehicle interest expense decreased to $21.6 million compared to $22.3 million in the first quarter of 2013 due to lower debt balances. At the end of March, we had $285 million of outstanding borrowings under the revolving credit facility, and a total non-vehicle debt balance of $1.8 billion. This was a decrease of $36 million compared to December 31, 2013. The provision for income tax in the quarter was $60.3 million or 38.7%. During the first quarter, we repurchased 2.4 million shares fir $115.7 million at an average price of $47.92 per share. AutoNation has approximately 400 million of remaining board authorization for share repurchase. As of April 16th, there were approximately 190 million shares outstanding. This does not include the diluted impact of stock options. Our leverage ratio decreased from 2.3 times at the end of Q4 to 2.2 times at the end of Q1, as we continue to generate strong cash flow. The leverage ratio was 2.0 times on a net debt basis, which includes used floor-plan availability and our covenant limit is 3.75 times. Capital expenditures were $34.5 million for the quarter. Capital expenditures are on an accrual basis, and exclude operating lease buy-outs and related asset sales. Our quarter end cash balance was $69 million, which combined with our additional borrowing capacity, resulted in total liquidity of $982 million at the end of March. Our capital allocation strategy has not changed. We remain opportunistic, with a focus on investing to produce strong returns and long term shareholder values through our solid pipeline of potential acquisitions and new store opportunities, as well as share repurchase. Now, let me turn you over to our President and Chief Operating Officer, Mike Maroone.

Thanks Cheryl and good morning. AutoNation delivered record first quarter adjusted EPS from continuing operations and operating margin of 4.2% when adjusted for business and property dispositions and grew revenue and gross profit across all business sectors. We are pleased with these results, particularly given the soft start to the quarter from an overall industry perspective, due to harsh winter weather. As I continue, my comments will be on a same-store basis when compared to the period a year ago, unless noted otherwise. For the first quarter same store, total gross profit for variable operations increased 6% and on a per vehicle basis was up $117 or 4% to $3,352 per vehicle, driven by solid contributions from used vehicles and customer financial services. Combined new and used same store unit volume was up 3%. Relative to new vehicles in the quarter, same store new vehicle revenue of $2.4 billion increased $131 million or 6% on new vehicle sales volume of 69,700 new vehicles, an increase of 2,565 vehicles or 4%. New vehicle gross profit of $144 million grew $2 million or 1% in the quarter. Gross profit per new vehicle retail of $2,060 was up $50 or 2%, largely due to continued pressure in the import segment, where the environment remains very competitive for both volume and growth, particularly for Nissan and Toyota. At March 31, our new vehicle inventory was at 61 days compared to 62 days a year ago and at year end. Turning to used vehicles; in the quarter, same store retail used vehicle revenue of $932 million increased $32 million or 4% on 51,100 used vehicles retailed, up 600 units or 1% with unit volume increases in the premium luxury and domestic segments, offsetting a volume decline in the import segment. Revenue per vehicle retails $421…

Thanks Mike. Certainly, the last 10 days of March, we saw business was exceptionally strong. We see the same intensity continue into the month of April, which gives us optimism that in the second quarter, we can regroup some of the disruption that occurred in the first quarter, because of weather, which gives us the confidence to confirm our forecast for the full year, industry growth between 3% and 5% breaking through 16 million units. Thank you for listening to us and we will now take questions.

(Operator Instructions). The first question is from Gary Balter with Credit Suisse.

Thank you and Mike and Cheryl, congratulations first of all, on another strong quarter.

Thank you, Gary. Welcome.

Thank you. Just one question, maybe with a follow-up. Just parts and servicing, customer pay was up 2% in the rollouts. What are the efforts to improve that, and are you seeing like [indiscernible], we were on the spike in SAR, so we are assuming that as we age in a couple, this year and next y ear, you are going to see a pick up, more in the warranty and then gradually in customer pay. Are you seeing that trend start to develop?

Yes Gary, its Mike Maroone. As we mentioned, this was our 15th consecutive quarter of improvements in customer pay. The vehicles that are zero to five years old, that population is growing rapidly. We are estimating it as up 9%. It’s a little bit offset by the six to 10 year population, as we still have a bit of a hangover from the 2008-2009 downturn. But we expect mid single digit growth over the next few years. We are very optimistic about the business. We made investments in collision, in service capacity, and the express service roll out is an important one for us, if we just refresh our capabilities to serve customers that are in the maintenance mindset, as we compete with the independents.

Have you given any numbers on the difference when you do put in the express service capabilities in the storage versus the ones that you haven't yet rolled it out into?

I don't think we have shared that. And what that is, is that's an upgrading of those capabilities. It's broader than oil changes, its into real basic maintenance and we don't have [indiscernible] to share today.

Okay. And then just finishing up and then I will turn over to somebody else. Mr. Jackson, you had highlighted at the Auto Show, your concerns on inventory level for the manufacturers. Obviously, your inventory is in a very good shape. Do you feel that the industry as a whole has pulled back in and have been listening to your words of wisdom?

Gary, I think we are definitely in a better position both as a company and an industry, than we were back in January. Its either they listened to me or the epic winner, gave him a great deal of concern. Don't know which one made a greater impression, but certainly they were more prudent in their floor planning on production, and while its not absolutely ideal for the industry, I certainly feel better than I did back in January.

Okay. Thank you.

Thank you. The next question is from Elizabeth Suzuki with Bank of America.

Hi, good morning. Can you talk a little bit about the dispositions you made in the quarter? Were they just underperforming dealerships and do you expect any additional dispositions for this year?

Yeah Elizabeth, well that was the divestiture of our customer lead distribution business, so that was not store related on the dispositions that was related to the customer lead generation business.

Okay, great. And just one quick other one. Are you expecting to see any bump in parts and service revenue in gross margin from the GM and Toyota recall, since you have a fair amount of exposure to those brands and more broadly, do you think the size and frequency of recalls is structurally increasing?

This is Mike Maroone. The recall business actually has been fairly consistent in terms of its contribution. Its only 3% of our customer care growth, so its not a big factor. Certainly, there's pressure on all manufacturers and there has been a flurry of activity with GM and Toyota, but I think its still a small part of the business. I think it will continue to be part of the business, as we are certainly pressured in those areas.

Great. Thank you.

Thank you. The next question is from James Albertine with Stifel Nicolaus.

Great. Good morning and thanks for taking the question, and may I offer my congratulations to Cheryl on her recent announcement and appointment as no longer interim, but now the CFO.

Thank you, Jamie.

So very quickly, could we dig in a little bit on the used side notice, the 8% -- I think it was 8.3% growth in gross profit per unit. Maybe give us a little bit of background detail as what was driving that during the quarter?

Jamie, its Mike Maroone. We really have worked hard at delivering and promoting a market pricing strategy and delivering that. Worked really hard to educate our customers on the value proposition, including providing data too on market pricing. But we do feel that we have made some improvements in the operating side, but the other factor clearly was, inventories were extraordinarily tight in January and February, and I think that that, when we were unable to acquire the quantity of inventory, we really want to work in the margin side, and really pleased that our retail gross was up 10% on a same store basis, but certainly, would like to pick up the volume a little bit more.

Okay. So something below 8% is -- but still positive you think, is sustainable, as we start to see the volume kind of rebalance into the second quarter?

Yeah, we clearly feel that we can sustain those efforts, whether they are at that level or not, I don't want to make that prediction. Lets hope that [indiscernible] over the next few quarters, but we worked really hard on our margin management.

And then just, as a quick follow-up to that, is there anything with respect to the acquisitions that you've integrated over the last year or two, that would have shifted the mix of your used channel? So maybe more premium luxury that could be driving that higher or otherwise, or is it still too small to have had an impact? Thanks.

Well, we have been very aggressive in the premium luxury segment, and that growth was about 9% on a unit basis. So it was by far the strongest growth on the used vehicle side. So I think it did have some impact there. We were softer on the import segment of course.

Got it. Thanks again.

Thank you. The next question is from Rick Nelson with Stephens.

Good morning.

Good morning Rick.

You've [indiscernible] stock buybacks in the March quarter, if you could comment there on what you're seeing in terms of acquisition pricing, is it still a reflection of how things are getting aggressive at that point?

Hey Rick, it's Jon Ferrando. On the acquisition side, we see a solid pipeline of acquisitions that we are currently evaluating, and we feel like we are well executed to position. To execute on deals, not only in discussion today, but the pipeline that we will see over the next several years. Our advantages include our access to capital, our resources and expertise on deals. We have the ability to get deals done with manufacturers. We have the facility and the expertise to deal with a lot of sellers that come to market with a facility upgrade that they are facing. We can navigate that well. We certainly included in our valuation, and then also sellers' view -- a lot of the sellers do care a lot about the future for their employees, and the unparalleled clear opportunities we can offer is an advantage for AutoNation. So that is putting us in a position to have deals under discussion. At the end of the day, we have got to come to a agreement on price and the price bandwidth has narrowed since the big dislocation back in 2008 to 2010. so those discussions are a bit easier and more rational, but we still have a -- we will have a strong discipline on price and what we are going to pay on deals.

Thank you for that. Also, looks like your unit sales outpaced the industry, where you're into the rebranding. Do you think that has been a driver there and do you think we could see the AutoNation brand on the premium luxury stores in the future?

Rick, this is Mike Jackson, we are certainly thrilled with the success of the brand launch over the past year, that's clearly going to break by customers and our associates. I think its still too early to declare its taking share for us. What we do see though, and as you recall, one of the major factors as to why we decided to take this step, is we felt that in the digital world, having one name and one brand to put our resources behind, would be a significant advantage, and there it has exceeded our expectation with our traffic increasing compared to a year ago, digitally, by 20%; and that the AutoNation sites generate more sales than all our third party relationships combined. So that's caused us to decide to accelerate our investment in the digital brand, AutoNation, and the digital capabilities of our sites, on a magnitude of $100 million over the next several years -- over $100 million over the next several years. And so, we are ahead of schedule and we are excited about the possibilities, but to the moment, where we would say, its taking share for us. I still think that somewhat over the horizon, but we are absolutely convinced we are on the right track.

Thanks for that. Also, I'd like to ask about the sales strengths that [indiscernible] on March. How much of that do you think is fueled by incentives and as the inventories were lower, as the OEMs back off of incentives, do you think the type of pace we saw in March is sustainable?

Rick in my opinion, while there was some technical enhancements at certain incentives due to the 10-week sale, while the building of the inventory and the realization that, you need it to get going, by the industry. I don't think that was it. I think you could have had those same incentives in February, they wouldn't have made a weighted [ph] difference. It really was a hibernation on the part of the consumer, due to an epic winter, and once the consumer finally came out, yes there was great selection, somewhat improved incentives, but that was not the deciding factor. And also, usually, we see a big fall-off in intensity when you have a period like the end of March and then you start a new month. But that didn't happen this time, and business has been very strong in April, right from day one. So that to me says, now there is something more going on here, namely the people who simply postponed in January, February and early March are now back in the marketplace. And so that gives me the confidence again to confirm our breaking through $60 million plus streak, the 5%, and I think you're going to see a strong spring for the industry.

Thanks a lot and good luck.

Thank you, Rick.

Thank you. The next question is from David Lim with Wells Fargo.

Hi, good morning everyone. Can you hear me?

We can.

Great. So the question that I wanted to sort of follow-up on is, I know that you mentioned Mike about the $100 million that you are going to invest over the next several years. Apparently, there was an article out saying that you're trying to not necessarily displace the third party leads, but in theory, if you were to displace a third party leads, how much would that save you on a per vehicle basis? Are we talking about $200 to $300 per unit, those that would have been generated by let's say TrueCar or another third party provider?

First, when we look at the investment of our marketing, resources and how it generates business, third party lead providers are our most expensive business. And that was one of the reasons a year ago, that we looked at it and said, there were increasing prices every year, and they are taking the money we are giving them and building their brand, and if you just play that out over the years, we become more dependent upon them and we have to continually pay higher prices and this can't be the answer. So you combine with that, that I think the third party lead sellers, while they do have a certain value for consumers, there is a disconnect and a disruptive hand-off between the third party providers, sellers and retailers, that's not very efficient and not very customer friendly. So it was those factors with which we decide to launch the brand AutoNation and enhance our investment in digital, and what we foresee in the future is that, we can give a more seamless integrated experience for our customers, because I don't view the world as an online world and a brick and mortar world, I think the customer wants one experience with the retailer, that's seamless between their interactions with digital and brick and mortar, and clearly, mobile, where they bring the devices right into the stores, confirm that. So we are in a unique position to do that, and that we have the scale and success when we launched the brand, and we have the footprint of stores to pursue that. Now, to your question, what happens on the cost side, I am not viewing this as a cost cutting period by taking money away from third party providers. I am simply saying, I'd rather take that money…

So all in all, I mean, this initiative that you're taking, if we are looking at the longer time horizon is, its going to obviously help you drive the top line revenue for new cars, and also possibly the gross profit per unit for new cars. Would that be a fair assessment?

Yeah, but we are viewing digitally and the brand in a much more and much broader point of view. This will include capabilities in used car, service, parts, finance, insurance. So we are really looking at the whole spectrum of how we interact with our customers, and we are also going to be looking to broaden the brand attributes of AutoNation and move into different business fields with branded products from AutoNation, whether that's service contracts, warranty contracts. We are full of ideas. So it was beginning a year ago. We saw the opportunities, we are thrilled with where we are. After a year, we have more ideas and more conviction today than we did a year ago, and clearly though, in digital, what we want to deliver within a year from today, is that customers, when they go to an AutoNation site, in the digital world, they can select specific vehicles, get a smart choice, fair price from AutoNation, buy that vehicle online by putting down a deposit in a transaction, that vehicle will then pulled from our inventory. Customer is issued a certificate that they have purchased that specific vehicle for that specific price, and when they arrive at the AutoNation dealership, we welcome Mr. or Mrs. Smith and say, here is your car, its right here. We have a copy of your certificate, and then we expand those capabilities to all the other parts of the business. So, we are on our way down that journey and its not that we are looking to save the cost savings by cutting off third parties, to the extent that we shift the business to the AutoNation sites that money would be reinvested, rather than third parties selling their brands, we will be taking that money, and building our brand. That's the way I think about it.

Got you. One last question, SG&A to gross profit, definitely impressive this quarter. I think it was like the best Q1 since 2006. What more can you do to even further lower that?

Well, we continue to be very focused on all elements of costs. There are a number of things from [indiscernible] initiatives that show service centers, certainly gross profit influences that as well, and we continue longer term. There's variability, seasonality in that. We continue to target below 70% and there is several initiatives we have in place that we can continue to focus on. And that's at the same time, while we are making these investments in digital as well.

Great. Thank you very much. Appreciate it.

Thank you. (Operator Instructions). The next question is from Brian Sponheimer with Gabelli & Company. Brian Sponheimer - Gabelli & Company: Hi. Good morning everyone. Thank you for having me on. Can you hear me?

Yeah. We can hear you fine Brian. Welcome. Brian Sponheimer - Gabelli & Company: Okay. Just want to dig into the segment performance, particularly what you're seeing in the import segment, and how long you expect the negative pricing, particularly for Nissan and Toyota to be a headwind?

This is Mike Jackson, I will give you an overview and then Mike Maroone will get into the specifics. If we look at the marketplace, truck sales were very strong. That is a period of just traditional strength at the domestics, trucks have moved over 50% of the marketplace. So that has gone well. Then we look at the growth in the premium luxury that's bifurcated economic recover. We have premium luxury, its very strong; overall, faster than the volume market and the manufacturers investment and the cadence and the type of products that they have coming is absolutely amazing. Then if you look at our Asian business, the mid-car segment is overall slow, its not growing the same as the rest of the marketplace, and customers in that segment have more choice than ever, and I would say, yes, we now have a market share battle on [indiscernible] that's underway, that is very intense. And there is a lot of competitive pressure at retail. Mike, why don't you talk about it?

Well, the pressures we called out is all through the sector. It really is highlighted by real pressure in Nissan and Toyota, and both are a little different situations. Toyota is a lot of dealers doing some very deep discounting, selling vehicles at a loss, and certainly that's not our business model, but we are in the business to compete and want to win that customer. With Nissan, they have built a business model around volume based incentives and continue to raise the targets. And so you have got retailers really chasing those targets, hoping and praying to hit the levels and they start deep discounting from unit one. So it’s a competitive environment, it has been that way for a while, maybe getting a little bit worse. Thank god its offset with us by a very strong position in premium luxury, and when we look at the business, we really look at our overall gross margin, and our variable gross overall is up $117 over prior year. So yes, we have got pressure in the import segment. We have got big opportunity in the other segments, and the domestic segment is much more rational than import at this point. Brian Sponheimer - Gabelli & Company: That's quite a change versus where we were about eight or nine years ago. Would it be wrong to say that your gross profit improved per unit and on the domestic side as well as in the premium luxury?

No, that segment was off very slightly. Nothing like the import side. It was relatively flat, but it was off a few bucks. Brian Sponheimer - Gabelli & Company: Mike Jackson, you've got obviously a lot of influence with your vendors. At what point do you speak to the fact that this no good for the brand, this is no good for the companies, and this is exactly what the domestics did 10 to 20 years ago?

I have had that conversation, and I have been having it -- my concern has been there for some time, and at the moment, I don't see the exit door. So we are continuing to have the conversation, but I cannot say that I see the turning point at this time. Brian Sponheimer - Gabelli & Company: I appreciate the color. Have a nice quarter, thank you very much.

Thank you.

Thank you. The next question is from David Whiston with Morningstar.

Good morning. An electric vehicle question. I am just curious, what are AutoNation's, Mercedes, BMW and Porsche buyers saying to your sales reps about Tesla and how are those customers responding to the new plug-in offering from BMW and Porsche relative to Tesla, and do you think Tesla is costing you some business at the margin?

We have a number of customers who have bought Tesla as an additional vehicle. Second, third, fourth, fifth, something like that. Now they are putting it in their portfolio and are using it on a local basis. Generally speaking, they have very favorable comments about the car. They like the design. They like the way it drives. We have taken some intrigue with the comments -- the user interface with the big screen, we have the touch screen. Everything is not what they want to do and the fact that its really for local use, they can't really use it over the road. Its somewhat limiting, but overall, they have a favorable impression of the car. By the way, so do I. It's a good vehicle.

Right. And do you expect high sales at your stores though, from the offerings coming in from BMW and Porsche in those segments?

I think, the BMW I3 and I8 and the Mercedes E Class are going to give choices to the customers interested in electric that have not been there before. I think electric vehicles in the high end luxury are the natural place for that segment to develop from everything I have seen and heard and spoken about. The battery costs are still too high, to really be able to make it and economically rational decision for the volume market. That feels to me like its still a few years out, and there are those who say, hmmm, that they will never arrive and that fuel cells costs will come down faster than battery costs and that ultimately for the volume market, its going to be fuel cells, not pure electrics. Plug-in electric hybrids are somewhere in between, and pure electric and I am not sure how fast that market is going to develop.

Okay. That's very helpful. Appreciate it. Just a balance sheet question for Cheryl. You've got $800 million of debt coming due late 2016. I just want to know, do you plan to pay all of this off, refi all of it, part of it, just trying to gauge how this debt will impact company's ability to keep doing acquisition, CapEx, buybacks?

Yeah, we are in a terrific liquidity position, we have close to $1 billion of liquidity. We certainly continuously refi at appropriate points. We pick our points in the market. We have an incredible banking group. Some of that involves some OEM captives as well. So we have broad receptivity [indiscernible]. We are the only investment grade credit in this space, and we will certainly plan to refinance that into a terrific facility well in advance of the renewal.

Okay. Thanks so much.

Its not a constrain on any level of acquisition for us. In fact, we could get additional capital, if desired or needed than complete acquisitions or share repurchases at the appropriate time.

Okay, thanks. Appreciate it.

Thank you everyone for joining us today.

Thank you.

We have one more, sorry.

Your final question today is from Patrick Archambault with Goldman Sachs.

Sorry Patrick.

Made it in under wire. Thank you. A couple have been answered, but two left. One is, just on the -- kind of following up on the discussion about used margins. Not everybody is a fan of the used to new ratio, but that ratio had been rising through I think almost all of last year, on a year-on-year basis in the first quarter. It declined a little bit year-on-year. Just wanted to know, is that kind of part and parcel with kind of some of the constraints that you spoke to and is there a little bit of a trade-off, I guess, between margin and volumes that we have to be thinking about going forward?

Patrick, Mike Maroone. I think there is opportunity involved, and I really think that we are going to continue to work hard to source vehicles, so that we are not totally dependent on that new vehicle cycle. I think there is almost unlimited opportunity on the used side, and I don't think we have to give up a ton of margin to get there. Its very different than the new vehicle business. Every single used vehicle is different, and if we acquire it properly, recondition it to our AutoNation standards and deliver the right experience, I think that we have big time opportunity. So we don't feel constrained and don't want to be constrained from new vehicle trade, availability and want to supplement that with the things that we talked about earlier. And its well underway, we just want to get better faster.

And then, you know, just kind of building on that like the outlook for inventory acquisition costs, just with leasing and everything else. How do you guys think about that?

There is a lot of vehicles coming off lease and we liken though, a lifetimes, three year old, four year old, which is a real sweet spot and also a lot of the trades that are coming in are extraordinarily high miles, as people still recover from the disruption of the 2008-2009-2010 timeframe. So it’s a nice complement to what we have. But certified pre-owned business is really growing quickly. For us, certified pre-owned was up 12% in the quarter, is up 32% of our sales. That nearly new vehicles got opportunity. The off-leased vehicles had opportunity, and they are coming in pretty good quantity, and we still have the high miles, cheaper inventory that is still in very high demand, and turns very quickly.

Got you. Okay, that's helpful. Then one last one for me. Forgive me if I kind of missed the discussion, but on the parts and service margin, which certainly came in ahead of what we were thinking. Can you tell us a little bit more about that, how -- I feel like there had been some pressure at some point, as maybe you were getting into other segments, but in aggregate, that's done very well. So maybe just directionally, some color there?

I am really pleased with our customer care teams. Alan McLaren leads that team and I think they have done a real good job of working on pricing, responding to local market pricing. We had some people in headquarters that worked centrally to try and make sure that we are competitive and we are taking advantage of the opportunities in the market. But our real goal is to serve that customer across all of their maintenance deeds from basic oil changes to routine maintenance to mechanical breakdowns and collision. I really like our effort there. Rolling out our updated express service initiative is very important to us, and we have 180 stores done later on, doing about 30 stores a quarter. So we are making really good progress. We have got 110 done. So that's a big piece of it, and we just want to capture all the customer business and really believe in our brand and our mantra of delivering a peerless customer experience.

So not really a mix shift, more just good pricing and blocking and tackling?

I think its just good pricing, blocking and tackling, and of course, we want to grow the customer pay business and the collision business, and I think we are doing a good job in that area.

Okay. Terrific. Thanks a lot guys.

Now this is it, thank you everyone for joining us today.

Thanks everyone.