Greetings, and welcome to the LKQ Corporation Second Quarter 2015 Earnings Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Joe Boutross, Investor Relations for LKQ Corporation. Thank you, Mr. Boutross. You may begin.

Thanks, Devon. Good morning, everyone, and welcome to LKQ's second quarter 2015 earnings conference call. With us today are Rob Wagman and Nick Zarcone. Please refer to the LKQ website for earnings release issued this morning, as well as the accompanying slide presentation for this call. Now let me quickly cover the Safe Harbor. Some of the statements that we make today may be considered forward looking. These include statements regarding our expectations, beliefs, hopes, intentions or strategies. Actual events or results may differ materially from those expressed or implied in the forward-looking statements as a result of various factors. We assume no obligation to update any forward-looking statements. For more information please refer to the risk factors discussed in our form 10-K for 2014 and subsequent reports filed with the SEC. During this call we will present both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP measures is included in today's earnings press release. And with I am happy to turn the call over to our CEO, Rob Wagman. Robert L. Wagman - President, Chief Executive Officer & Director: Thank you, Joe. Good morning, and thank you for joining us on the call today. At LKQ we are a mission driven company, and I would like to start this call by highlighting our recently updated mission statement. We want to be the leading global value-added distributor of vehicle parts and accessories by offering our customers the most comprehensive available and cost-effective selection of parts solutions while building strong partnerships with our employees and the communities in which we operating. We are well on our way toward fulfilling our mission statement. Our goal is to be the leading distributor, versus simply a parts provider. We are global, with nearly 28% of our revenue outside of North America.…

Thank you. We will now be conducting a question and answer session. Our first question comes from Craig Kennison with Robert W. Baird. Please proceed with your question. Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker): Good morning. Thanks for taking my question. Also thanks for slide presentation and guidance commentary. All of that has been very helpful today. Nick, first question on guidance, I just want to be clear, does it include either PartsChannel or Coast? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Yes, they do. We're not anticipating that either of those are going to have material impact, Craig, on the back half for the year. It's going to take some time to get them fully integrated and the like. And obviously with Coast, we have to wait to see the results of the tender offer. Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker): Thank you. And then with respect to the Tamworth DC, on slide 10 it looks like it'll cost $0.09 to $0.12 over the balance of two years. Could you frame the actual cost of the project and how much of that would be capitalized versus expensed? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Well – Craig, this is Nick. Ultimately we're going to lease the facility, but all of the kind of the inner workings, if you will, are going to be capitalized and then depreciated over time. It's a fairly large investment on our behalf, it's on the order of £75 million, so it's quite significant. We have to start paying rent when we take possession of the facility, which will be in early 2016. But it's going to take us some time to fit it out and get…

Thank you. Our next question comes from the line of Nate Brochmann with William Blair. Please proceed with your question. Nate J. Brochmann - William Blair & Co. LLC: Good morning, gentlemen. Robert L. Wagman - President, Chief Executive Officer & Director: Hi, Nate. Nate J. Brochmann - William Blair & Co. LLC: So, couple things. One, it was nice to see the uptick in the gross margins across the board, and I know that fuel obviously helped on the distribution expense. But minus the normal seasonality and any impact from future acquisitions that might come in a little bit negatively, and I know that we have a little bit of mix shift, but apple to apples, are you guys fairly comfortable that we can kind of continue on a more stable run rate on the gross margin line? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Nate this is Nick. I think you have to take a look at that on a business unit by business unit basis, and that's why we provided the additional disclosure with respect to gross margins. You will see there is some quarterly fluctuations in the overall margin structures of the business. We provided the, basically the gross margins over the last six quarters, so we can kind of take that into account as well. The back half of the year in North America, the margins tend to be generally consistent with the second quarter but obviously down from the first quarter; European margins as well. There's a little bit of fluctuation, and then – so we would encourage you to take a look at the historical seasonal patterns, because that's the best guidance as to where we may head in the future. Nate J. Brochmann - William Blair & Co.…

Thank you. Our next question comes from the line of James Albertine with Stifel. Please proceed with your question. Jamie J. Albertine - Stifel, Nicolaus & Co., Inc.: Great. Thanks, and good morning. Robert L. Wagman - President, Chief Executive Officer & Director: Good morning, Jamie. Jamie J. Albertine - Stifel, Nicolaus & Co., Inc.: Congratulations by the way on a nice quarter. And let me just add on, the slides, thanks to Joe and Nick and team for all your hard work there. They are tremendously helpful. If I may, looking at your guidance, it looks like your – you've tightened your net income guidance but haven't really move the midpoint there, and yet your net cash from Ops guidance is up by $25 million. So I wanted to get into a little bit more detail as to what's driving that? And then maybe to sort of fast forward to a free cash flow question, how many more years do you expect to have this elevated level of CapEx to support things like the DC in the UK, the DC in Washington state and so forth? And are there any other big opportunities to invest in your future growth, sort of globally? Thanks. Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: I'll start with the guidance. Again, we tightened up the range a little bit, essentially left the midpoint alone. The uptick on the free cash flow is basically a sense that our working capital needs are going to be less than we originally anticipated. And so we pulled in the net income range, $5 million off the top and up from the bottom. But it's really the working capital that's driving the $25 million uptick in free cash flow. All of our – most of…

Thank you. Our next question comes from the line of Ben Bienvenu with Stephens. Please proceed with your company – your question.

Hey, good morning, guys. Robert L. Wagman - President, Chief Executive Officer & Director: Good morning, Ben. Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Good morning.

Just quickly on the UK collision side, you've talked in the past about the pilot program with insurance carriers. Any update there, what kind of progress you're making and what that pipeline looks like? Robert L. Wagman - President, Chief Executive Officer & Director: Yeah, we're still at 17 carriers right now, Ben, in the program, which amounted to about 80% of the UK insurance base. So it's probably going to be at that number for a while. No one has pulled out of the program, and as I mentioned in my remarks, a 33% increase. So still getting traction and still heading in the right direction. As we've mentioned on previous calls, once we get our 322 built out, our three step to two step in the Netherlands, we will be introducing collision parts there with – many of the same carriers that write in the UK also write on the continent. So we are probably couple quarters away from launching some kind of program on the continent.

Okay, very good. Secondly, looking at the Unipart branches, how have those progressed since you've made those acquisitions? Are they comping in line with the chain? What does profitability at those look like? What your thoughts on the progress there? Robert L. Wagman - President, Chief Executive Officer & Director: Yeah, I'll talk about the – what we've been able to integrate. We've pretty much opened every one of those stores that we did, that we targeted. Remember, some – we closed two stores to make one, we either closed the ECP store or we closed the Unipart store brought in. That has been done. And we are starting to see the benefits of that. The employees are fully trained now our systems and taking phone calls, as we do in our normal course of business. As far as the profitability, it does kind of get melded in there into the overall mix, and – but we're very pleased with what we've done there, and as I said, we have 194 branches now, so we are certainly at the tail end of our build-out of 200 to 225, and we anticipate that being done in the next couple of years.

Okay. Great. Lastly from me, we saw some pretty severe flooding in Texas. I'd be interested to hear if those cars are showing up at auction yet, what they look like? I would think with your predisposition toward buying higher quality vehicles, those would be a good fit for you, but just any commentary or color there would be helpful? Robert L. Wagman - President, Chief Executive Officer & Director: Yeah, I'll go back to my days at the auction business. Those are great cars, as – in terms of their quality. Freshwater floods are really great because there's no body damage. We have not seen them start to flow through the auction yet. There is generally a lag of about 45 to 60 days before the pools can get access to the titles, but we do expect some really good salvage to be coming through.

Okay, great. Thanks guys. Best of luck. Robert L. Wagman - President, Chief Executive Officer & Director: Thanks, Ben.

Thank you. Our next question comes from the line of Bill Armstrong with C.L. King & Associates. Please proceeds with your questions. William R. Armstrong - C.L. King & Associates, Inc.: Good morning, guys. I'll also add my appreciation for these slides. I think there are very helpful. Are there any construction costs for the Tamworth DC built into the second half of 2015 in your guidance? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: There are some just ancillary costs related to the project, Bill, but nothing of significance. Again, right now it's under construction as you can see by the slide that we put into the deck. It's a pretty massive facility, but ultimately the landlord is incurring those expenses. Obviously there's some broader project-related activities as we continued to plan out for the outfitting of the facility and the like, but nothing material. William R. Armstrong - C.L. King & Associates, Inc.: Okay. In terms of the auction environment, can you talk about your average price that you paid per car for the quarter versus a year ago, and what you're seeing in the auctions overall in terms of supply and pricing trends? Robert L. Wagman - President, Chief Executive Officer & Director: Yeah, sure, Bill. This is Rob. Our salvage cost was basically flat. It was about $4 better a vehicle, but again we are buying a younger vehicle, so we know we're buying a better vehicle. On the self-service side of the business – really not so much in the auction, but we do buy some – we were down $81 to an average of – well, just under $400, which is all scrap-related. In terms of the volume at the auctions, very consistent. We track the number of cars at the auctions we visit; they're pretty much flat to slightly up. So plenty of availability. We're still only buying roughly 6% to 7% of the auction, so plenty of availability to keep driving the top line. William R. Armstrong - C.L. King & Associates, Inc.: Got it. Okay. And then in terms of vehicle miles driven, we know in the U.S. that we've had a pretty strong increase this year. Do you have any data for that in the UK or the Netherlands, by any chance? Robert L. Wagman - President, Chief Executive Officer & Director: We do not have that available. We know the SAAR rate is up, but we do not have miles driven on a European basis. But we'll have Joe get back to you on that. William R. Armstrong - C.L. King & Associates, Inc.: Okay. Sounds good. Thank you. Robert L. Wagman - President, Chief Executive Officer & Director: Thanks, Bill.

Thank you. Our next question comes from Jason Rodgers with Great Lakes Review. Please proceed with your question.

Yes. Just a question on ECP's organic growth rate for the branches open more than 12 months. It came down a little bit in the quarter versus historical trends, and I was wondering if there were any one-time factors there? Or is that the rate we should expect going forward, just given the maturity of the branches? Robert L. Wagman - President, Chief Executive Officer & Director: Yeah, couple factors going on there, Jason. Certainly when we bought the business in 2011 with 89 locations, the 90th, the 91st to the 100th branch were obviously the lowest-hanging fruit. So we're getting at the tail end of that, so that's having a little bit of impact there. There is a surge of new cars as I just mentioned, so that's going to be a little bit of a headwind for the time being, until those cars get out of warranty. One thing that I do want to add, and we show that 12 month and over, that it does include our paint locations now. So that does drag it down a little bit. And then just one last point on that. In talking to our suppliers, they say that the market is generally a little soft right now. They equate it to the new car sales going up a little bit, and just general market conditions. They do expect it to rebound, so I think you'll still see mid- to high-single-digit growth out of the stores open more than 12 months. You take the paint out of there, it's actually little bit higher. But we are expecting, with the new stores as well as the stores in general, still double-digit growth here for the balance of the year.

That's helpful. And then, how should be thinking about foreign currency and scrap for the second half for the year? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Sure. If you take a look at the slide where we've kind of set out the historical scrap prices, right, in Q1 the comparison was $224 versus $141; in Q2, $217 in last year, $140 this year; Q3 of last year was $215; so scrap remained pretty steady last year. And if you assume that it's going to stay in the $140 range, we would expect – we lost a couple pennies in the first quarter, a penny in the second quarter, there is chance that there is a half a penny to a penny yet in Q3. By Q4, where the comparison gets a little bit better – Q4 of last year was $187, so if scrap stays at $140, it'd be probably more of a rounding error, if you will. So maybe another half a penny to a penny. On the FX, you can go through the same analysis. Really for the first three quarters of last year, the currencies stayed pretty consistent. On the euro, $1.37, $1.37, $1.33 for the first three quarters of last year. The pound sterling, $1.66, $1.68, $1.67. And so, it was – we talked about $0.02 in FX last quarter, it was actually $0.016 and rounded up. This quarter was another couple pennies, but again it's a rounding up, so $0.03 for the first six months. We're probably going to be in that same range for Q3, so think about maybe a penny and a half, plus or minus. In Q4, both the sterling and the euro started to drop a little bit, so probably a little bit less in Q4. We thought originally FX would hit us for $0.04 to $0.05. Last call, you may remember we talked about that the $0.08 to $0.10 from scrap and FX was probably going to get flipped, probably $0.06 or so from FX, and that's not a bad estimate.

Thank you.

Thank you. Our next question comes from the line of Gary Prestopino with Barrington Research. Please proceed with your questions.

Hi, guys. I think I have – the last question here just asked the same question I was going to ask. We're still looking at those same ranges for FX and scrap to impact your EPS guidance for this year, correct? I think it was like $0.03 to $0.04 for scrap and $0.05 to $0.06 for FX? Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: That's correct. Again, scrap ended the quarter right around $137, $138. There's a lot of noise coming out of China about economic growth and the like, and there are some folks out there forecasting that, that scrap will get little bit softer here. We're assuming, at this point at time, a kind of a steady state on scrap. We'll have to see what the Fed does with interest rates and the impact that has to do on the dollar, but again, we're assuming that rates are going to stay relatively constant at $1.55 for the pound and about $1.10 for the euro.

Is scrap all really predicated on what goes on in China? Because I know Turkey is a big buyer of scrap, too. Are you hearing anything out of there? Robert L. Wagman - President, Chief Executive Officer & Director: Those are the two countries, Gary, you are right. I have not heard much out of Turkey, it's really China is the big one. The domestic mills seem to be doing okay. But Turkey and China will definitely drive the exporting, for sure.

Okay. Thanks.

Thank you. Our next question comes from the line of Brett Jordan (59:42) with Jefferies. Please proceed with your question.

Hey, good morning guys. Robert L. Wagman - President, Chief Executive Officer & Director: Morning, Brett (59:47). Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Good morning.

In the Benelux, what percentage of your revenues are two step versus three now? Maybe you can give us some color what the spread on the margin is in those channels? Robert L. Wagman - President, Chief Executive Officer & Director: We'll have to get back to you on that, Brett (60:03). Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: And part of it is, it's hard because once we make the acquisitions, it all gets integrated, if you will, into the – into our financial system. So it's not like we have a bunch of standalone P&Ls that we then roll up at the end of the month and the end of the quarter.

Okay. Thanks. And then I guess on PartsChannel, can you give us any color on what their productivity looked like versus your own aftermarket parts business? Robert L. Wagman - President, Chief Executive Officer & Director: I'm sorry, their productivity?

Yeah. Were they generally generating similar profits to you, or were they less productive because they had smaller scale? Robert L. Wagman - President, Chief Executive Officer & Director: I think we'll be able to pull their margin up to ours, Brett (60:45), and they did get us into a few new markets, interestingly enough. So yeah, their margins were generally a little bit lower than ours, and they will come up to our numbers.

All right, great, thank you.

There are no further questions at this time. I'd like to turn the floor back over to management for closing comments. Robert L. Wagman - President, Chief Executive Officer & Director: Thank you, everyone, for your time this morning. And we look forward to speaking to you in October when we report our Q3 results. Have a great day, everybody. Dominick P. Zarcone - Chief Financial Officer & Executive Vice President: Thank you.