Welcome to AutoNation's Third Quarter 2016 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the presentation, we will conduct a question-and-answer session. Today's call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the call over to Mr. Andrew Wamser, Treasurer and Vice President of Finance for AutoNation. Sir, you may begin.

Thank you, operator. Good morning, everyone. And welcome to AutoNation's third quarter 2016 conference call and webcast. Leading our call today will be Mike Jackson, our Chairman, CEO and President; Cheryl Miller, our Chief Financial Officer; Bill Berman, our Chief Operating Officer; and Jon Ferrando, our Executive Vice President responsible for M&A. Following their remarks, we will open up the call for questions. Robert Quartaro and 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 a brief statement regarding forward-looking comments. Certain statements and information on this call 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. And now, I'll turn the call over to AutoNation's Chairman, CEO and President, Mike Jackson.

Good morning, and thank you for joining us. Today, I'm pleased to share the next phase of our customer focus, comprehensive brand extension strategy. In 2013, we launched the AutoNation retail brand, a pivotal moment in the Company's history, which set the stage for AutoNation Express, AutoNation Customer Financial Service products, and now AutoNation USA standalone pre-owned vehicle sales and service centers. AutoNation USA is the next step in establishing AutoNation as the most recognized brand in auto retail. We have identified 25 AutoNation USA sites in our existing markets, of which five are planned to be opened in 2017. Several building blocks for AutoNation USA have already been put in place in our existing franchise stores with tremendous success. One Price, our negotiation free pre-owned vehicle pricing strategy, AutoNation Precision Parts, and AutoNation Auto Gear branded parts and accessory lines were each launched in the third quarter. One Price allows consumers to shop over 20,000 pre-owned vehicles on our website with transparent hassle-free and fair pricing. Consumer and associate feedback has been phenomenal. Consumers have said the buying experience was very easy, simple, no hassle, just fair pricing. Employees have said it enhances the overall customer experience. As part of the continued brand extension strategy, we are expanding our AutoNation Auto Auctions, AutoNation collision centers from coast to coast. Our plan is to open four additional auctions over the next two years. We also plan to acquire an additional 18 collision centers over the same period. We expect that these investments in the next phase of the Company's brand extension rollout will exceed $500 million in the aggregate over the next several years. The next phase in the Company's history represents an attractive opportunities that we expect will generate significant long-term shareholder value. Turning to our third quarter results, today we reported EPS from continuing operations of $1.05, which matched our third quarter record achieved last year. Revenue for the quarter totaled $5.6 billion compared to $5.4 billion in the same period a year ago, an increase of 4%. AutoNation's total retail new vehicle unit sales for the quarter were down 1% and on a same-store sale basis, down 6%. Today, we also announced the acquisition of three premium luxury franchises, and the award of three premium luxury franchise add-points which include our first BMW franchise in South Florida, and our first Jaguar, Land Rover franchises in Texas. We also acquired our 70th collision center in Westmont, Illinois, a suburb of Chicago. The combined anticipated annual revenue from these acquisitions and add-points is $430 million once the add-points are fully operational. I now turn the call over to our Chief Financial Officer, Cheryl Miller.

Thank you, Mike, and good morning, ladies and gentlemen. For the third quarter, we reported net income from continuing operations of $108 million or $1.05 per share versus net income of $119 million or $1.05 per share during the third quarter of 2015. Effective as of the third quarter of 2016, AutoNation will only report its financial results in accordance with GAAP in its earnings releases and SEC reports and will not include non-GAAP or adjusted measures. In the second quarter, revenue increased $214 million or 4% compared to the prior year and gross profit improved $6 million or 1%. SG&A as a percentage of gross profit was 70.7% for the quarter which represents a 220 basis point increase compared to the year ago period. The increase was driven by gross profit pressure from certain manufacturers' disruptive marketing and sales incentives in the new vehicle marketplace. We believe that the continued pressure on gross profit from these incentives as well as expenses related to the brand extensions announced today may increase our SG&A as a percentage of gross profit by 100 basis points sequentially in the fourth quarter. The provision for income tax in the quarter was $67 million or 38.3%. Net new vehicle floorplan was a benefit of $14.9 million, a decrease of $2.2 million from the third quarter of 2015. The decrease was primarily due to increased floorplan balances and higher interest rate partially offset by higher floorplan assistance per unit. Floorplan debt decreased sequentially approximately $263 million during the third quarter to $3.5 billion at quarter end primarily due to lower new inventory balances, partially offset by increased borrowing on our used vehicle floorplan facilities. Non-vehicle interest expense increased to $28.9 million compared to $21.4 million in the third quarter of 2015. A $7.5 million increase in…

Thanks, Cheryl, and good morning, everyone. Today we are excited to announce and share our comprehensive brand extension strategy. I'll start with AutoNation USA, our standalone pre-owned vehicle sales and service centers. Our plan is to open five AutoNation USA stores in 2017. We've also identified 20 additional sites over the next several years within our existing markets. Customers will have the opportunity to purchase an AutoNation certified vehicle and service that vehicle at any AutoNation USA store. AutoNation USA will utilize AutoNation Express, the Company's digital platform, which allows customers to dramatically reduce their transaction time by offering a seamless end-to-end experience where they can search online for inventory, select and reserve a vehicle, value their trade, prepayment options and apply for financing. One Price is negotiation free pre-owned vehicle pricing strategy, which we've already begun to roll out in our current franchise locations, will also be the pricing strategy at our AutoNation USA stores. One Price allows us to leverage our centralized capabilities such as centralized pricing and appraisals. Initial customer and associate feedback has been exceptionally positive. One Price offers customers a transparent and stress-free buying experience and will be fully implemented in our existing locations by the end of the second quarter of 2017. AutoNation USA will implement our new sales associate non-commission based pay plan as well. The new pay plan has four simple metrics that give us a strategic advantage in recruiting associates. Our new pay plan offers salaries and paid training. It's competitive, it's a plan that is based on rewarding behaviors that drive productivity while delivering a peerless customer experience. AutoNation USA stores service now centers will utilize AutoNation Precision Parts, an AutoNation branded line of high quality, competitively priced maintenance and repair parts for the vehicle reconditioning and customer repairs. We…

Thank you, Bill, and good morning, everyone. We're pleased to announce the addition of six premium luxury franchises and a collision center, with combined anticipated annual revenues of $430 million. Three of the premium luxury franchises are add-points, awarded to us by the manufacturers, and the other three premium luxury franchises and the collision center are acquisitions. Starting with the acquisitions, in October, we completed the acquisition of BMW of Vista, our second BMW store in the Northern San Diego market, and our 15th BMW store nationwide. As part of our AutoNation brand extension strategy we also completed the acquisition of Westmont Body Werks in our Chicago market, our 70th collision center. In the fourth quarter, we expect to close on the acquisition of Jaguar Land Rover Bethesda, our 10th store in the Baltimore-DC market and our eighth Jaguar Land Rover store nationwide. The store has the largest Jaguar Land Rover showroom in the United States and fits well with the strong premium luxury demographics, in that part of the Baltimore-Washington DC corridor. We also announced the order of BMW of Delray Beach, and Jaguar and Land Rover, West Houston add-points. BMW of Delray Beach is our first BMW franchise in South Florida, and our 25th premium luxury franchise in Florida. Jaguar and Land Rover in West Houston is our tenth premium luxury store in Texas. The add-points will be large premium luxury stores located in excellent auto retail locations with very attractive luxury and growth demographics, both of these add-points are expected to open in 2018. In 2016, we've completed our announced the acquisition award of 49 franchisees, which are expected to generate approximately $1.5 billion in annual revenue once fully operational. As of today, we represent 35 manufacture brands and our store portfolio numbers, 372 franchises, and 262 auto retail stores, along with 70 collision centers in 16 states. Looking forward, we will continue to actively pursue acquisitions and new store opportunities with a focus on enhancing brand representation within our existing markets, and markets that can be supported by our existing management infrastructure. We will continue to be selective and prudent with our capital, with a focus on investing to produce strong returns and long-term shareholder value. I will now turn it back to Mike Jackson.

Thanks, Jon. This year and through the third quarter, certain manufacturers continued disruptive marketing and sales incentives which resulted in multi-tier pricing that were unfair for consumers as well as retailers. In the third quarter, these marketing programs had a significant negative impact on new vehicle volume and gross profit per vehicle retail. These disruptive incentive programs are damaging to the OEM brand, and in my view unsustainable. Retail sale volume for manufacturers who use these toxic marketing programs are significantly below market, with let's say the market, basically, at retail flat for the year, and the irrational players being down 6%. And I also observed that they're eroding the three-year residual value of their brand, whereas the rational marketers have a three-year resale value of 50%, the irrational marketers are at 43%. This is undermining resale value of their existing customers and therefore their brand. These certain manufacturers must find a rational and disciplined approach that does not erode their future brand value. Having said that, this is an exciting time for AutoNation with the launch of AutoNation USA, and our comprehensive brand extension strategy. We have built an outstanding industry leading brand, and we remain committed to achieving and sustaining operational excellence by continuing to create a peerless customer experience. With that, we're delighted to take your questions.

Thank you speakers. We'll now begin the question and answer session of today's conference. One moment for the first question. And our first question comes from John Murphy of Bank of America-Merrill Lynch. The line is now open.

Good morning, guys.

Hi, John.

Just a first and probably obvious and simple question, Mike, as you're going through this process in launching all these new initiatives. I guess, really, just a very simple question is why now and what's driving this decision, is it something that is sort of hampered, a pressure you're seeing in your core business, something you're kind of seeing your competitors do that is pretty good and how does this differ from the old cradle to grave strategy of the late 90s that wasn't that successful?

Thanks, John. Well, I view, if I look at the automotive retail marketplace for retail new, it's less than $15 million; for retail pre-owned, it's approaching $40 million; so you also have to take into consideration that the new vehicle market is definitely cyclical with one to three phases: growth plateau and decline. Now, you can be in plateau quite some time, but it brings – plateau brings a whole another set of issues, so if I go back five years ago, anticipating that plateau would eventually arrive, I said I need a strategy that we can take much more of our destiny in our own hands and continue to grow the business. Now to be able to do that successfully, I felt we needed two foundational elements. One was a brand that was well known in the marketplace already. And a digital capability that we knew could deliver sales. So we've done both of those steps successfully with the AutoNation brand. And with our AutoNation Express launch, it now delivers almost 30% of our sales from those sites. So having taken that step as preconditions, in order to give us the confidence that these stores would turn profitable quickly, we knew we needed a value equation for the consumer and an outstanding experience. We know the customer craves fairness and transparency and price. And that means they need to be One Price. So then we said, well the brand has to be in alignment between our existing franchise business and this extensive business, therefore, we have to One Price our existing pre-owned business. So that started already this year, as a conditional element and has gone extremely well and we will have all AutoNation franchise pre-owned One Price sometime at the beginning of next year, but certainly by the…

Okay, that's very helpful. And Mike, I mean, given that you have the brand established and you're looking to go longer in the lifecycle of the asset or to a second consumer or third consumer, I'm just curious how far do you go down or how far out you go in the extension of the life of the vehicle. I mean I know you kind of – you are just talking about five years to six years, but is there an opportunity to go deeper to sell the asset and then service the asset and leverage what you've built right now? And then we think about sort of this extension that you are heading – sort of extension you are manufacturing right now, I mean, when will the payback period come into play because we are talking about big dollars here. I'm just curious, as you build out these collision centers, or acquire collision centers and build out the stores, I mean we're just trying to understand what the payback period will be. And if it's really successful, I mean do you keep going deeper and deeper in the asset life, or the life of the asset?

Absolutely, John, you're spot on. So we intend to be involved with customers on vehicles that are up to, if not beyond, a decade old. And we know these vehicles very well, who owns them, where they are, why they drop off, and we absolutely intend to attract them. So, as far as the payoff, here's the way I think about it. So if you look at our performance in financial products, it's already exceptional. And a big part of that growth and why it's sustainable is because of the AutoNation financial products. So it's – the payoff was immediate for having built a brand. So, what are the extensions that have immediate benefit to the company? Parts, because these parts, these AutoNation parts, are going to be available in our franchise stores, as well as the AutoNation USA stores, the benefit is immediate. We have significant batteries, wiper blades, filters already in there, and we are in negotiation with supplier for hundreds of more parts that will be available both in our franchise business and in the AutoNation USA store. The benefit of that is immediate, both for the customer and for AutoNation. Of course, we will continue to offer OEM parts, and, of course, we will use them for all warranty work or all customer care work that the manufacturer pays for, but beyond that, we will offer our customers choices. And we think there'll be a high adoption rate, just like we saw in the service contract. And, oh, by the way, we will then be able to have this supply of parts on a much better cost basis for our reconditioning in our USA stores and in the customer care aspect of our USA stores. So there's an immediate benefit for that. Same thing with accessories.…

And our next question comes from Paresh Jain from Stanley Morgan. Your line is now open. Paresh B. Jain - Morgan Stanley & Co. LLC: Good morning, everyone. I just have one question on – again a follow-up on AutoNation USA. When we look at the public dealer space, it's kind of split here on having standalone used stores, which obviously involves a lot more brick and mortar spending. And then there are new entrants focused completely on online transaction and taking massive SG&A cost out of the selling process. And they're gaining some traction too, but it obviously requires a lot of marketing push. The question is, given AutoNation's unique positioning here, why not leverage your brand and digital capabilities through a bigger marketing push in the near-term for online-only businesses and gaining share through an asset-like model with much lower SG&A cost rather than a brick and mortar strategy?

So, we have all that. Now, I have the brand AutoNation, and you can't attract millions of leads to your websites without a brand. All right? It's one of the reasons why we took down local market brands that were 100 years old and went to AutoNation. And if you look at AutoNation as an automotive retail site generating business, it is extraordinary what we've achieved in two short years. Now to your point on the cost side, we will absolutely take AutoNation Express, extend it into the store as an operating system, as the enterprise operating system. However, we're still convinced that brick and mortar plays a role, that it is an expensive item that people are purchasing and they want the flexibility to change their mind. But you got to get them there in a cost-effective way and have a cost-effective experience that moves at a speedy pace. So we think we have all that thought through and there's no question in our mind that we will be able to compete. And by the way, the one-price across the entire enterprise as we are now doing means that you're centralized pricing and you're centralized purchasing, and you have an auction system to support it all. All of that is either done or underway. So all those risks and costs have been borne – have been taken. And now we have the bulldozers moving on the sites, and that gives us a high degree of confidence that it will present the consumer with a compelling value equation with a brand that they trust that we've been able to attract to the store and deliver to them in a very cost-effective way. Paresh B. Jain - Morgan Stanley & Co. LLC: Understood, that's a good color. And just a quick follow-up on the size of the store. Can you comment on that and because it – again, when you look at some of your public peers they're gravitating more towards smaller format stores. Is that something AutoNation would be doing or what kind of size – store size we could expect from AutoNation?

So, we'll just describe the size of the store and you can judge whether that's big or small. Bill, could you please describe the typical store?

Sure, Mike. Paresh, they are between four acres to six acres, the building footprint will be between 30,000 square feet to 35,000 square feet, total capital acquired inclusive of property is in the $12 million to $14 million range, obviously depending on what market we're going to be operating in. Paresh B. Jain - Morgan Stanley & Co. LLC: Got it. Thank you so much.

And our next question comes from Bret Jordan. Your line is now open.

Hi. Good morning, guys.

Good morning, Bret.

On the labor model, on the AutoNation USA, I guess, given the fact you're going to go to aftermarket parts. Are you also going to be just charging similar labor rates for the franchise? It seems like most used car buyers are looking to save money on the service side, yet you're pushing service. And I guess from a same job level we'll be pricing – pricing will be different with the franchise?

Hi. This is Mike Jackson. I resent the aftermarket term or whatever it is, it's going to be AutoNation parts from outstanding suppliers with a brand that the consumer can trust. Bill, why don't you discuss a little bit how you see the customer case business?

No. Absolutely. Thank you, Mike. And Bret, the way we're looking at it, it's going to a value proposition to our consumer. They'll be able to have the experience of a new car franchise dealer, but at a price point that more closely resembles independent and outside repair facilities. So it will be a value proposition, to Mike's point, we'll be able to sit here and leverage our AutoNation branded parts, our AutoNation Auto Gear and then have a price point once again that is more competitive towards the independent and provide the customer the value proposition.

Okay. And then on those parts, I guess how do you manage the supply chain? Obviously a lot of parts in the automotive space, not the aftermarket of course, turned fairly and frequently, and I guess how deep are you going to go in direct sourcing the parts, and are you warehousing, are you direct importing these products, and I guess could you describe the supply chain around that?

Now, this is Mike Jackson. We're going to start with the most straightforward parts we can, namely batteries, wiper blades, filters, and that's already done. And then step by step, we're in discussion with all the various suppliers where we lay the market opportunity, the value creating of what the consumer wants. And you can see that expanding into hundreds of parts or it could be thousands of parts. But that's going to be something that develops over the next several years, and it's a little bit difficult to say how we're going to structure all that from an operating and distribution point today, but we'll find the optimal line and pursue it.

Okay. And then one housekeeping, what did you say your collision growth was in the quarter?

It was 1%.

Okay. Great. Thank you very much.

Thank you. And our next question comes from David Tamberrino. Your line is now open. David Tamberrino - Goldman Sachs & Co.: Yeah. Good morning. Thank you for taking our questions here. I think the first one is just on your one-price initiative, just trying to understand what type of impact you may be expecting from that on your average selling price and your gross profit per unit going forward.

We expect no change on volume or pricing is our working premise, but having happier customers and happier associates and taken cost and complexity out of the transaction and to be able to put in place a different play plan and an associate with a different skill set. We have done several markets so far, Bill will call out which ones, and that's basically the result we have, you could maybe describe it even more optimistic on that, but I would say it basically is affirming that as a working premise. Bill, why don't you talk about – you go to every market and roll it out, why don't you talk about the reaction you get from the store associates and from customers and how it's performing?

Okay. Thanks, Mike. So currently we're in Corpus Christi, Houston, Texas, Las Vegas, Nevada, Phoenix, Arizona, we are in the process of rolling now the balance of Texas as well as Denver and to Mike's earlier point, we will have the entire country rolled out by the end of the second quarter of next year. The response from the field has been overwhelmingly positive both from our associates, management and even most importantly from our customers. To Mike's point, we have seen no degradation in our volume or on our PVRs and in a lot of cases we're actually seeing a little bit more productivity out of our salespeople because they're not having to kind of do the back and forth on the used vehicles and the transaction times have come down significantly. David Tamberrino - Goldman Sachs & Co.: Understood, that's very helpful. And then maybe my second one. Mike, you've been very outspoken on the state of the industry and OEM discipline and the state of incentives and stair-step programs, again today some more comments. I'm curious to get your thoughts on what impact do you believe that's been having on the pace of sales and what's your early thoughts are heading into 2017 from a U.S. SAR perspective as it looks like at least from our perspective that sales are being somewhat pulled forward from incremental incentives and stair-step and leasing penetration levels.

So, I go back at my Automotive News World Congress speech at the beginning of the year and I said those manufacturers who pursue stair-steps that results in multi-tier type pricing, it will be a disaster and very disruptive in the marketplace. So, most manufacturers did not go down that road, most manufactures, I give them credit, are running the business in a very disciplined way successfully with an eye on the future, and I see nothing to alarm me. Those who embraced stair-steps, whatever you want to call them, in the short-term, yes, you get a pull forward in sales, but over an extended period and certainly by the third quarter, it's an extended period, you clearly, it's indisputable that these multi-tier pricing systems are so unpopular with the vast majority of customers and retailers that your business begins to decline. So if I bifurcate the world into disciplined and undisciplined, or rational and irrational, and look at the numbers, basically retail or the disciplined rational group is flat and it's down 6%. For the stair-steppers -and if I look at retail values for the stair-steppers, it's eroding significantly, meaning it's unsustainable. Now, I salute a company like Ford Motor Company that endeavored with their steps. They stepped away and taken a much longer disciplined view, they're to be congratulated. The one practitioner who is still absolutely convinced that stair-steps is the way to go is Nissan, and obviously a very contentious situation at the moment. And the end of that story, I don't know, but I do know it's very disruptive to the Nissan business. I will have to see what happens there. But I think in principle, I think this is the big message. In principle, the whole industry has watched this story unfold in 2016. And once you see the resale values, GAAP remained as large it is, if not growth, 700 basis points difference. You cannot make the case that stair-steps work, and then what you see is they start dumping more into fleets to try to cover up the fact that it's not working at retail. My view is unsustainable, but there is – and there's movement away from them by certain manufacturers, I don't expect others to get in in a significant way. But how it plays out with Nissan, I don't know. David Tamberrino - Goldman Sachs & Co.: Very helpful. And then just any early thoughts on where we're tracking to, and then what you think the industry looks like from a new perspective in 2017?

I think it looks a lot like 2016 with more movement towards trucks. I think I've said this before, I said at the beginning of the year, I think the demand for trucks is over 60% of the market, and the only restriction has been product – installed productive capacity. So I think all the manufacturers agree with that and have been adapting their production as much as possible to be more in alignment with the marketplace. And that is certainly good for the industry overall to have versus more profitable for the manufacturers on the truck side than on the car side. And to have a better alignment what – between what people want to buy and what you're producing is always better. But I think it's basically a plateaued environment and when I say plateaued, that's a couple of points up, a few points down or flat, something in a narrow corridor, it is most likely what we're looking at. Hopefully, with – no, I wouldn't even say – I'm confident there will be fewer practitioners of extreme stair-steps in 2017. And most importantly, I hope there is a much better availability of Takata airbags David Tamberrino - Goldman Sachs & Co.: Understood. Thanks for your thoughts.

And our next question comes from Michael Montani [Evercore ISI]. Your line is now open.

Hey, good morning.

Good morning.

Just wanted to ask if I could, on the $0.5 billion of investment, can you split out what's overhead versus CapEx in that? And also, what are we – how should we think about the SG&A ratio for the next year or two years as well as CapEx needs for the next year or two years, Mike?

So, the $500 million is all capital. So, if you – that includes the five stores that we will open next year and the other 20 in development, it includes expanding our collision footprint by 40%, don't go by rooftops. We're expanding our collision production potential over the next several years by 40%. And we're building an auction system. So, the $500 million covers those 25 stores, the additional collision capacity and the additional auctions. On the SG&A side, the cost of building the brand, AutoNation Express, et cetera, is already in our numbers. There is certainly some cost at the moment into next year with all the training, development, systems to extend into the stores both the franchise – changing the franchise business and the existing stores as Cheryl already said, there'll be some impact on SG&A, whether she wants to add something there. But there is a tipping point that we'll go through where the brand extensions and the operating profits they create for us versus the cost of opening stores, you cross over and after that it's all very beneficial with outstanding returns. Our recalculation on the $500 million is it is significantly above what it cost us to acquire a franchise business. Cheryl, you want to talk about SG&A?

Yeah. The other thing I would add is just the base cost of business we're keeping very tight, but we're continuing to be bullish on the brand extension strategy, so we're going to put some cost there in the ramp-up phase. As Mike pointed out, we expect collision and other businesses, we've been in the long time, we understand the ramp of that, that's very quick. The parts expansion margin opportunities will be very quick over the next several quarters. You're going to see some pressure in SG&A. But as we continue to run the other costs tight, we talked about a sequential 100 basis points lift in SG&A as a percentage of gross profit. May see some of that push into the beginning of next year and then you'll start to see some of the brand extensions kick in. So on the next call we'll give further guidance on that.

Okay, thanks. And just can you flesh out a little bit, Cheryl, maybe the CapEx? I think $250 million or so was the run rate. Is that still relatively steady or is there going to be an incremental step up we should know about?

This is Mike Jackson. The way I think about it, first, our ability to generate cash and capital is very compelling. And our first investment of capital will be in the existing franchise business to keep it absolutely as it needs to be, and in our brand extension, that is the AutoNation brand extension. That is our clear focus. We'll keep an eye on our investment grade balance sheet. I like that very much. If there is a significant share repurchase opportunity, we wouldn't hesitate to take it, or if there is a significant acquisition opportunity that fits into our footprint and our strategy, we would be open to it. But, that's how I think about it. Cheryl, anything you want to add?

Yeah. I would just add that on base CapEx we continue to be prudent. We look at the brands and markets where we think it makes sense to continue to invest and so there's really no changes to the base capital strategy. So I'd add that with AutoNation Express and the different programs with respect to the brand extensions in Auto USA, we're being prudent, we're doing most of that in existing markets. So, in certain cases you can repurpose, or look at existing land and different things there to control the total capital investment. Again, the potential for $500 million is spaced over a number of years and we'll continue to pace that out as we identify sites and as we look at our base CapEx plan. So, I think the big message is we have $850 million of liquidity today, great access to the capital markets for future, and we feel extremely well positioned, really supported by the fact that the base model kicks off a lot of cash, and keep in mind that with Auto USA we have a service component in there as well, which is very cash generating.

Thank you.

And our next question comes from Bill Armstrong from C.L. King Associates. Your line is now open. William R. Armstrong - C.L. King & Associates, Inc.: Good morning. Thanks for taking my question. On the AutoNation USA, where would you be sourcing the inventory? Will this come mainly from auctions and consumers or would some of the existing stores supply some of the inventory, either initially or on an ongoing basis?

It'll be all of the above. Obviously, we're going to need a lot more inventory. And we've worked very hard to build a central acquisition team to do that. Then we can supply incremental product both to our existing AutoNation franchise business and the AutoNation USA stores. It's the reason we're building an auction system for what we do acquire in trade, that we have a very good way to balance inventories, and I think – I'm not worried about supply. I think we have that pretty well thought through. Bill, anything you want to add?

Yeah. What I would add is, once again because of our centralized capabilities we have access to inventories that not everybody else has. We will be buying from auctions to a limited extent. There'll definitely be the we'll buy your car component, which is to sit here and attract inventory from consumers that are not looking necessarily to purchase a vehicle. Plus, we have our current source of inventory which comes from trade-ins from our existing stores. Plus, with the influx of cars coming off of lease over the next 12 to 18 months, there'll be additional inventory that's going to come in at the existing new car franchise. Of course we'll not be able to handle all of it, and we'll be able to use that inventory to help supply our USA stores. William R. Armstrong - C.L. King & Associates, Inc.: Got it. And then on the expansion of your in-house auctions, I think you've got one right now in Southern California. What's – I guess, what's the rationale for that? Is that to try to maybe get better GPUs on your wholesale cars or is it more to supply the AutoNation USA or all of the above?

This is Mike Jackson. We're finding the auction system that we have in California gives us outstanding market information and gives us the highest value for the vehicle that is not appropriate for us to retail. So, that auction is very profitable for us. So, I think building a auction system across the enterprise to run this integrated AutoNation pre-owned one-price system is a key component. And we think, yes, it will be profitable in and of itself. William R. Armstrong - C.L. King & Associates, Inc.: Okay. Because most of the public dealers don't make money on wholesale or they lose little bit money and then the obvious exception is CarMax, who makes about a $1,000 per vehicle. So it seems like there could be an opportunity there.

We think centralized valuation was an auction system; it is the holy grail to achieve that goal. William R. Armstrong - C.L. King & Associates, Inc.: Got it. Thank you.

And, our next question comes from David Whiston [Morningstar]. Your line is now open.

Thanks. Good morning. Couple of questions on few different areas, first for sure on the balance sheet regarding the April 2018 note maturities and then the mortgage bullet next November. Do you intend to pay those from cash on hand or refi?

Yeah. Say from the mortgage perspective that that's not a material maturity for us, given the $150 million of liquidity we certainly have opportunities to refinance that in an existing way if needed. So, beyond that I think with respect to note maturity is certainly that's something that we look out well in advance. We have continuous capital market discussions, and we will elect a great time in the market that results in a good outcome for investors and ourselves. So we continue to keep an eye on these maturities, but we don't view any of those as causing any liquidity issues or considerations given the relative size of those. And we continue to obviously be very well received in the investment grade market. I will highlight that we are the largest A3, P3 commercial paper issuers, and certainly investor appetite for the AutoNation brand and name remains extremely strong.

Okay. Thank you. And on AutoNation USA, I'm not clear on the age spectrum of the inventory to be retailed. Are we talking mostly late model or the whole spectrum?

Now, it will definitely be late model. We start with our CPO, manufacturer CPO program in our franchise business, that will remain there and a big part of our business, then you have vehicles that are somewhat older that do not qualify from an age or mileage point of view for the CPO programs within the franchise business. And we will have an AutoNation certified program within the AutoNation USA stores, but they will be of an older age and higher mileage than what's in the franchise business, so it's a different market segment.

I would like to thank everyone for joining us today. We're at the time limit that we have been allotted for. Thank you for all your questions, very much appreciated. Thank you for joining us.

That concludes today's conference. Thank you all for joining.