Ladies and gentlemen, good afternoon and welcome to the Penske Automotive Group Fourth Quarter 2007 Earnings Conference Call. (Operator Instructions) I would now like to introduce Tony Pordon, Senior Vice President of Penske Automotive Group.

A press release detailing Penske Automotive’s fourth quarter results was released this morning and is posted on the company’s website at www.penskeautomotive.com. Participating on the call with us today are Roger Penske, our Chairman; Bob O’Shaughnessy, our Chief Financial Officer; and J.D. Carlson, our Controller. At the conclusion of our remarks today, we will open the call up for questions. We will also be available by phone to answer any follow-up questions that you may have. Before we begin, I would like to remind you that statements made in this conference call may include forward-looking statements regarding Penske Automotive’s future reportable sales and earnings growth potential. We caution you that these statements are only predictions which are subject to risks and uncertainties including those relating to general economic conditions, interest rate fluctuations, changes in consumer spending and other factors over which management has no control. Our actual results may vary materially from these predictions. These forward-looking statements should be evaluated together with additional information about Penske Automotive, which is contained in our filings with the Securities and Exchange Commission including our 2006 Annual Report on Form 10-K. During this call, we will be discussing certain non-GAAP financial measures included adjusted income from continuing operations and adjusted earnings per share from continuing operations. Adjusted fourth quarter 2007 earnings exclude $4.5 million or $0.05 per share of after tax impairment charges. For the year, adjusted earnings exclude the $12.3 million or $0.13 per share sub-debt redemption charge we recorded in the first quarter as well as the Q4 impairment charges. We believe such non-GAAP disclosure improves the comparability of our financial results from period to period, and is useful in understanding our financial performance. At this time, I would now like to introduce the Chairman of Penske Automotive Group, Roger Penske.

Thank you, Tony and good afternoon everyone and thanks for joining us this afternoon. 2007 was a great year for the Penske Automotive Group. Our results continued to showcase the strength of our business and the benefit provided by our brand mix and diversified revenue streams. Our business sold nearly 300,000 units in 2007. That represents a 10% improvement over 2006. New was up 7.5%, and used was up 15.8%. We had a solid top line growth of 16%, and our adjusted earnings per share from continuing operations increased nearly 9% to a $1.53 per share. I would like to point out that our 2007 results also included $5.5 million or $0.04 per share of expenses incurred in the connection with a launch of the Smart Fortwo in the U.S. and in the fourth quarter we had a $0.02 impact there from those additional expenses and $0.04 for the entire year. Further our business generated 7.9% same-store retail growth, posting positive comps in both the United States and the international markets. For the year U.S. was up 2.7% and international was up 20.9%. 2007 marked the ninth consecutive year of same-store revenue increases for Penske Automotive. These results showcase several benefits that I would like to highlight for you this afternoon. First, the auto retail business model is resilient. The gross profit from our service and parts operation, which is less cyclical than the vehicle business, generates more than 40% of our gross profit. Second, pre-owned vehicle sales which tend to increase when new vehicle sales decrease, are an important element in the business model. Our 2007 results show this very clearly. Third, we have a variable cost structure that we believe allows us to react to the changing market dynamics over time. And finally, our international operations provide a…

(Operator Instructions) We have a question from the line of Rich Kwas - Wachovia.

I had a question on the swing factors for your guidance for ‘08. What are the big factors that would get you to the lower end of that range to $1.63? And then what are the positive factors that will get you to the higher end of that range?

Well, I think if you look at same-store comps we were projecting flat, both here in the U.S. and also internationally. If that was moved up, obviously that would add to the bottom line. Expense controls which we are working on from a standpoint of comp as a percentage gross profit certainly plays in. And also the traction that we would get on Turnersville and Inskip as they get more mature over the next year, because basically we have them in right now probably for about $0.04. And I think that F&I could decline based on lower volumes in both new and used so that could be downward trend. And then if we didn’t get the distribution of the Smart car into 20,000 or 25,000 that obviously could be a negative. On the other hand, if we hit those numbers it could be at the higher end. And we have nothing in there for additional benefits from the standpoint of interest rates so that could work both ways really.

And how do you feel about Turnersville and Inskip right now and where do you kind of expect those facilities to be at the end of 2009?

Well if I look at it, if I kind of give you some impact on Turnersville we were up almost 600 units, Parts and Service gross was up 21% and really, profit improved. We went from a loss of $1.8 million last year to a loss of $800,000 in the fourth quarter. And the good news is that our fixed coverage went up couple of points almost to 55% but again that could go as high as 70 once we get the traction in Parts and Service. So, to me, another key component will be getting the comp to gross which to date, we made a 300 basis point move to the positive during the year so I think these things will all bode well. As I said we are looking at $0.03 to $0.04 out of these stores. I think, at Inskip, we were up about 300 units year-over-year and our Parts and Service grew almost 10%. And I think as I look at the business, we really have an opportunity there now that we have all of the facilities complete that we will be able to meet that target between the two key locations where we had the investments during the last really almost 3.5 years. So this should be break out year for us.

On the acquisition front it seems like your guidance of $300 million in revenues from acquisitions, it seems a bit understated relative to kind to your normal run rate. What do you see in the market, and is there anything kind of limiting your decision making on going out and becoming more aggressive?

Well, we have a pipeline right now in the UK, and we have a pipeline here in the U.S. And we are in the process of negotiating those deals and hopefully we can meet those targets. Obviously, we will be opportunistic if we see something that fits our core strategy and also geographically, where we can combine back office and management but I think that we have got to really look at our stock price buyback, versus our ability to purchase at the right multiples, acquisitions in the marketplace.

And our next question from the line of Matt Nemer - Thomas Weisel Partners.

So just to start, the used business was really strong and I am wondering if that’s primarily in the central region, or sort of what’s happening there from a processes standpoint.

Well, I think when you look at overall, we were up in revenue, almost 11% in the U.S. and we were also up over 9% in the UK. I think what we did, we took our First Look program that Whit initiated in the central area, and over the last 90 to 120 days, we have been really been focusing on, quite honestly wholesaling less cars. In fact our wholesale per unit went up, probably a loss for about 40 bucks during the fourth quarter, where we are now retailing these vehicles, which is giving us more F&I and also giving us more revenue and profit on the used side. So, we see that as a real way to give us some ability to offset any down cycle we might be in on the new side.

On the other side of the equation it looks like SG&A expense held you back a little bit. Clearly there is Smart Car in there and then Rent, and it sounds like Sirius was a headwind for you as well. Are there any other factors in SG&A that we should be aware of? Can you give us a sense of what’s going on there?

I think Sirius through the year was probably a penny to a penny and a half negative for the year and when you look overall on SG&A obviously the cost associated with Smart about $0.04 was a drag, $0.02 in the last quarter. But I think we were flat overall. Obviously that scenario we are continuing to try and get the metrics better. One thing you got to be aware of it in a cycle where your new car business is somewhat down and the retention of people, there is some guarantees and other things that have to take place at the lower levels to keep some of your people so they don’t move on and I think we probably invested in some of those dollars during the last quarter.

Can you give us an update on trends in the UK? The January registration numbers looked very strong but that’s obviously not what we are reading in the media. So I am just wondering what’s happening on the ground in the UK?

Well as we talk to our guys and we look at January, we felt we were on our plan. The big test will be, and we will be able to give it better after the first quarter, what happens in the registration month in the month of March which is really the entire quarter is driven by that month. We tend to make money in January. We go a little bit backwards in February. Then there is a big registration, people almost wait to take their cars in March. We see that market fairly good. The economy grew almost 3% last year and inflation is running about 2.2%. We talk about housing in the UK. I think overall if you look at the total market it’s down. But inside London, inside the M25, real estate prices are still strong. And when we look at what we call the NADA, it’s really in the UK the Society of Motor Manufacturers, that they say there will be no decline in registrations in 2008. So, in ‘07 was the sixth highest year on record and I think that overall market was up 2% and the fourth quarter was up 4.6%. So we feel pretty good about the market and I think our position with the brands that we have, we’re really in good shape with execution and we have done some consolidation of our offices. I think the management team is well entrenched there and the used picture, our F&I penetration, really the lift we got in F&I this quarter was really the fact that the UK was up 2% in penetration.

Are there any large acquisition opportunities over there? We are hearing about one of your public peers in the UK, there is some activity regarding potentially a buy out by one of the other public players.

Well, Pendragon you must be talking about, that’s the big player over there. We are not involved in any of that to be honest with you and at the present time from the standpoint of acquisitions, we are going to be very selective. There will be glue-ons where we have capability and brands that we think are on the upswing. So I feel real good about the approach our guys are taking over there.

Our next question is from the line of Ed Yruma - JP Morgan.

Can you talk a little bit about the experience of your stores in California? Some of your competitors continue to complain about weak traffic trends.

Well it’s interesting, I knew that question would probably be one. When I look and I will give you some specifics. If we look at units sold year-to-date in the West and that would include Arizona, California, we would be down 3%. But if you look specifically at Southern California we would be down 19% on units sold. When you look in the East, we are up 3% in the East and in the Central we are up 8%. So, we are seeing some traction in certain parts of the country but there is no question about Southern California. When we look at unit sold and that’s through last weekend, we were down 19%.

And to kind of piggyback on Matt Nemer’s question? Talk a little bit more about the expense cuts that you potentially could do in ‘08 should the vehicle market soften?

Well, I think obviously expense cuts we are going to look at advertising. There is quite a shift. Going to the internet we learned a real lesson there with Smart, what the power of the internet was, and I think that that’s going to be the key. The other thing that we were going to get the benefit of certainly is the additional gross profit out of Parts and Service because of the penetration we have made on our new vehicle. And we have a variable cost structure; I think we have talked about that before, that it’s open. It’s like an elevator, as our gross goes down, we are going to see the SG&A go down because of our variable comp structure. And that goes through sales, it goes through service and parts and really when you look at it, I think that’s one of the benefits of the business. Yet we continue to have the ability on the used car side and we are going to look very carefully at doing less wholesaling and more retailing of lower price units. We have seen the cost of sales that our friends at CarMax have and they continue to be able to do a great job in that level of customer, say the $12,000 to $14,000 to $16,000. We are talking about an average selling price; I think I said earlier, over $32,000. So, we got some real room there, which help us drive some of our costs down.

If Smart should remain strong throughout the year, is there any opportunity to increase your allocation either at the end of this year or some time next year?

Well, we are limited and we had talked to you of 16,000 to 20,000. I think as we talked about this and we have squeezed everything we can out of the plant. They are running full bore. This car has had great reception on a worldwide basis. So, we are just hoping to get our 20,000 to 25,000 and that’s a little bit of when we talk about our guidance. You could be up 2,000 or 3,000 and that could affect us but so far we are going to look at 5,000 in the first quarter. That would annualize to 20,000. So, they got to kick it up for the rest of the year.

Our next question is from the line of Joe Amaturo - Buckingham Research.

Could you just discuss from a product standpoint what makes you so optimistic about as it relates to your 2008 guidance in the U.S. and particularly in the UK? And what’s going on in the UK with respect to some pre-buy activity?

Well let me talk about product mix. Certainly we are excited with the 1 Series coming with BMW. That’s going to be excellent. As you know, that comes in and we’ll have that this year. In the UK, we see the Audi product very strong; our penetration there has gone up significantly. You have got the Clubland which we will have in the U.S., that’s a small Mini product which will certainly make a difference. The all-new A4 which will be launched during this year, another Audi product and again, we see that the premium luxury, remember one of the aspects to our business is, that leasing in the premium luxury which is 65% of our revenue, 50% of that is lease. So, interest rates going down are going to help lease payments, and hopefully we will see these customers coming back, because typically on a lease you’re 36 to 42 months, where as I saw in the Wall Street Journal here, a week or so ago they were showing 72 to 84 months on a finance contract, so we see that being a benefit also.

With respect to acquisition multiples, where are they currently? Are they coming under pressure and how do they compare to where the market is valuing your stock currently.

Let me just give you the multiples that I see in the marketplace. There has certainly been a shift from the public, at least the majority of the public companies are looking at premium luxury brands and, I would say those have stayed the same but I don’t see any deterioration in the brands that we are looking at this particular time. I think we have said 5 to 6 to 7 times in a luxury and 4 to 6 times in the volume foreign and that’s what we are experiencing. And when you look at the UK, we probably look at anywhere from maybe a 20% to 30%, maybe even 40% discount on those numbers.

I think Sirius was a drag in the fourth quarter, could you just quantify what impact that had to F&I on a per unit basis?

Well, I would have to go back, I think there was $800,000 in revenue difference between the quarter a year ago and this year was probably somewhere, I am taking a guess here, probably $5 to $7 per unit.

And our next question from the line of Rick Nelson - Stephens.

Roger, you mentioned that you are starting to see some resistance at the high end in terms of new car purchases. I am wondering if you can provide some color there. And then, are you seeing any impact at all in service and parts?

Let me just comment on service and parts. We continued to grow; in fact our margin went up 110 basis points during the quarter. So we see that quite positive. When you look at overall, our service and parts revenue on a same store basis was up 5% and to me that shows that we continue to have traction. That’s because we have got capacity and for the year I think we are up almost 7%. As we look at the areas that there has been a slowdown, internationally we have seen Porsche down in the UK which would be some resistance at this point. Some of that has to do with Cayenne availability and I think that one of the reasons is where, these marks that don’t have aggressive lease programs you start to run in to some of that headwind.

And you had talked about the benefit from lower rates on floor plan interest expense. Are you seeing any changes at all in terms of manufacturers’ assistance?

We don’t get a lot of manufacturers’ assistance. We should have that number. I don’t have it. I will get Tony to get it for you, what it was for the last quarter but it typically runs $5 to $6 million per quarter for us. I am not close enough to each individual brand to tell you whether there has been any positive action. I don’t want to give you a bad answer. Maybe someone here can give you that later on. I just don’t want to give you a bad answer.

And the roll out of First Look, can you update us there?

Well that’s going great. We think it’s a terrific product and we have seen the benefits. It gives us inventory control. It gives us the right cars. We have the ability to adjust sale prices on a weekly basis, and also as we do trade-ins. What’s really happened, it has taken away the ability of the used car manager to bundle a good used car he would wholesale with some product that he had taken in that hasn’t been on the right side of it. And I think that not only First Look, it gives us the ability for us to really go forward across the entire country and to me that’s important.

And the region where that’s in place?

Whit Ramonat was the big contributor to that but now we have it in the Southeast and we are moving it out into the West, out into Arkansas. And to me these are products which we have to have in order to be sophisticated as we go forward in order to get the maximization out of the used car business.

And our next question is from the line of John Murphy - Merrill Lynch.

First on divestitures, just wondering if you could give us your take or your philosophy on divestitures because they seem to be ramping up a little bit here? Are you cleaning out the dogs or are you just necessarily richening the mix of the dealerships that you own? And I was just wondering who you were actually selling these dealerships to.

What we are doing is we are selling dealerships. As you look across the last several quarters and even the last couple of years, we haven’t had big gains and big losses. We have been able to manage our ways out of those and I think that as we look here in the U.S. probably between $275 million of our $370 came out of the Big Three.

So you are basically clearing out of a lot of your Big Three or Detroit Three exposure?

Well I wouldn’t say all of it for sure because we have some great brands in certain places. But we had one store in Florida that we didn’t need. We had some opportunities to move out of in Southaven, Mississippi. In fact we coupled in one case, a domestic with a foreign nameplate because there was a market that we didn’t have any scale. We couldn’t get the consolidation. We had CapEx we had to do and it made a lot of sense to do it. In many cases we have had the opportunity to sell these to dealers who were in that particular area. And as we are looking at the OEMs, they are looking at some of these divestitures that they could use these potentially to help them with their minority quotas. And there is no question as the OEMs rationalize you read the paper. Ford, GM and Chrysler are all at these points trying to divest it or even in Chrysler’s case trying to make an alpha point where they can take the Jeep brand, the Dodge brand, the Chrysler brand, and put it together. So we have helped them in some of those cases.

Then if we could take a look at Parts and Service, and your margins there continue to drift upwards and expand. Is there anything more going on than just increased capacity utilization in your service bays in your auto malls? Or is there something unique there going on, between mix of warranty versus customer pay and I am getting the impression you are getting economies of scale that other dealers just can’t get. I’m just trying to understand what the limit is there and how far you can take this.

Well I think number one, there is no question that there is a mix change to customer labor from warranty. Also we have really gone into heavy Saturday and Sunday services where we are offering the quick service and with that we get some high margin on that business which certainly helps. And remember once we get scale, these service writers and the people who are writing this service and the things we have were basically variable. But I see better utilization and with the facilities we have, I think the productivity is much, much better.

Do we get to a point where you see a 60 handle on this gross margin?

Get to 60, you say? I think we have got some stores today that are over 60. And remember if you own a premium luxury car, you are probably not going to take it into a small shop to get worked on. And when you look at BMW, where they have a Full Circle program; we are getting those customers back in because BMW really pays for that. So that’s a real benefit too. So to me I think there is a migration in many, many cases where we see the customer wanting to go back to the OEM and that’s a benefit. Also with our body shops, we have I think 41 body shops today and we are getting directly into the dentless repair business, which helps us in our margins. So I wouldn’t say it’s one specific action item. I am sure our peers are doing some of the same things. But we see it where we have a mall, we might have a major body shop, we will also have a quick repair site, where we can do dents and fenders and bumpers all in a day when the car is in for service.

On credit trends, I understand that on a net basis you are not seeing any big changes but are you seeing any changes in lenders backing away and maybe the captives stepping in to backfill or any change in terms that are out of the ordinary?

Well, I can tell you that, today as we look across the broad spectrum of our captive finance sources, I see strong buying. And the big thing that I am watching is there any deterioration in buying used because that’s so important, that we have the benefit of the used car. And I think the credit worthiness of the premium luxury customer might be higher today, but we are not trying to put deals together that are with marginal credit. And again I talk about the leasing side, what we have done, we have looked at our preferred lenders, we’ve probably had, don’t hold me to this; we could’ve had 120 banks that we were doing business with. And what Ramonat and the team on the financial services area decided that what we would do, is reduce those down to under 20, so we give them more volume, and based on that we get more benefit from the standpoint of rate, and also our ability to get some override here at the corporate level.

And our next question is from the line of Rex Henderson - Raymond James and Associates.

First of all I want to focus on the guidance, can you give us any quantification of what the contribution of Smart Car and that operation is as to your earnings guidance for next year?

We’ve said $0.08 to $0.10 and lot of that has to do with us hitting the mark at the 25,000 units. And again as we are ramping up our people and some things we have to do in the marketplace, we have got Smart One in our sales site, and it’s really keyed on, are there any product issues? Is there any issue over in production where they can’t get pieces. We read here in the automotive news where certain vendors have issues and can’t produce product and that shuts the lines down. At the moment remember we are a distributor. We only can sell those cars when they show up at the port. So that would be one that is a variable as far as I am concerned.

Another is can you quantify what the EPS benefit of lower rates is versus this year.

I think that based on, in our guidance we have the current interest rates and I think we said every 25 basis point reduction is about a penny. That’s going forward though. Remember I said our guidance is based on the current rates.

With rates down say 200 basis points, 225 basis points, you are looking at $0.07, $0.08 in benefit year-over-year?

No, I would think it will be lower than that. I can’t quantify it right now.

I wanted to get over to a little bit about cost and the expense structure which we have talked about some already. Do you have any idea of what your fixed coverage ratio is; that is Parts and Service gross profit versus fixed operating expenses in the stores and where you are now and where you would like to be?

Well I think if you looked at the company on a worldwide basis at the dealership level, we are at about 63%. And if you include the corporate expenses on top of that we would be down probably somewhere around 61% to 61.5%. But we have stores today that are over 100%. But as you add in the CI that we are mandated to do and as you look at Mercedes coming in, we have got this Autohaus concept that’s going to be a big cost to every Mercedes dealer going forward. Those add to costs which certainly drive that fixed coverage down. But every place, and you look at out in Phoenix and San Diego, those places are running I think north of 80% now and they have had huge expenditures back three to four years ago. So we see it paying off once we get the traction in the service department.

So would it be fair to say that 80% fixed coverage ratio would be a target for you longer term?

I think I’ve got to get to a number with a seven on it first.

On credit availability, any change in terms on the lower rated borrowers in the used car business. For lower rated borrowers, are they requiring more down payment or just making any adjustments of the kinds of offers they are making?

Again this is a question it would be hard for me to answer, how far down you go on the credit scoring, what has happened as far as that buyer is concerned. I would assume that with the volume that we do with these captives, because we are vertically integrated. I think that less than 10% of our business is sub-prime. So those would be deals that would have to have some support. But I don’t think at the moment, I haven’t heard anything directly. People have said, “Wow, Toyota or Nissan or GM or someone is much tougher at the lower levels.” Because what we have tried to do, have a few select other suppliers from the standpoint of non-OEMs and then we go vertical with the OEMs and to me it’s an aggregate. I look at the loss ratios every month, in all the captives on our business. And I would say at the moment I don’t see a deterioration that would think that the buying habits at the banks or the OEMs would get tougher on us at least in the next quarter. That could change as this whole market changes.

And our next question comes from the line of Jonathan Steinmetz - Morgan Stanley.

First question is on the used side. Your per vehicle retail’s held up very well. They were up 25.06% versus 24.36%. Can you just give a little bit of color on how that looked domestically versus internationally? And I don’t know if you have this number but, what’s your large pickup and large SUV exposure as a percentage of total, because that’s the area of Manheim that are pretty weak.

Other than our domestics, we don’t have a large amount of trucks. Obviously there is SUVs. We have seen some deterioration in SUV from the standpoint of the market. But remember the majority of those, if you are thinking of X5, you’re thinking of the GL, you think of the Audi, the Q7, these vehicles, most of those are leased, so we don’t really see the residual deterioration there. And I think that when you look at the average gross profit in the U.S. in the fourth quarter was down roughly $100 and it was up about $300 in the UK. So again we get the benefit, in fact in the first quarter this year, in the UK we bought several hundred BMWs right at the end of the year because it was an opportunistic buy. And when we spread those out over the 15 locations that will be a real opportunity as we clear the first quarter. So, I think that it’s inventory, I think that the mix that we have, and we have to be in the used car business. In fact most of the manufacturers today are requiring us in many cases to take the used cars that come off lease, but they will mark them to market for us, so we don’t have a high risk there.

Just so I’m clear what you said on the BMW side, you bought some basically nearly new stuff that you will sell used in the first quarter and it’ll come through the P&L in the first quarter.

That’s right, absolutely. Those would be factory cars, demos, etc., and what they always want to do is move those out and I think our guys did a great job over there. And in the past we would have to have pre-registration cars which would dump into this year as used cars. We didn’t have that this year. We were able to buy these cars as used and give us a better pricing on them. Plus you get the benefit of the full support on the finance rates because they give you those vehicles as new vehicle rates from the standpoint of financing. CPO by the way, it continues to be strong. There is lots of advertising and in many cases they almost give you a new car warranty if you have a CPO within a certain limited mileage.

If I could switch to the service and parts side for a second, on the 5.5% comp that you posted, can you also talk about the breakout, U.S. versus international. And talk about how customer pay looked relative to warranty?

I’d have to guess on customer pay and warranty. I’ll get Tony to give you that. But we think if you exclude the Full Circle programs, meaning where the customer brings his car in because he bought the maintenance, you pull that out, there is no question that we probably are 60%, 65% customer labor, maybe going to 70% from the standpoint of warranty, 65-35. And when you look at same-store, our revenue in service and parts, we were up 3.4% in the U.S. and 9.9% internationally. So again, giving us, really its 5-5.5% is very positive. And that’s again because of our capacity. And that to me is key. And even if you exclude the foreign exchange, you are sitting 3% plus, 3.2%, 3.3%.

And so lastly, if I were to just drill down a little further on the 3.4% U.S. comp that you gave on the Parts and Service side. Is it the large campuses that are notably higher than that, and that are what are driving that? Or is it very brand specific, where there are a few brands that are powerful. How would that look one layer deeper?

I don’t have that info and I’ll get Tony Pordon to give you that back. I can’t give you that detail here.

And our next question is from the line of Scott Stember - Sidoti & Company. Scott Stember - Sidoti & Company: Could you maybe just talk about the UK, seems like for the most part of the last couple of years you guys have been outperforming the market as a whole over there. Could you talk about trends in the fourth quarter? And also how you are shaping up versus the market so far this quarter?

Well I think from the standpoint of the UK, we’ve got the right brand mix. There is just no question about it. We have been premium luxury; I think we are 92% or 93%. We have some Chrysler Dodge Jeep which are integrated with our Mercedes stores and with the rest of it it’s all premium luxury. In our volume foreign we have some Toyota and I think we have one Honda store at this point. So primarily it’s mix. And there is no question that our ability to consolidate, just talking about this buy on used cars, when we can walk in and make a buy like that on used that really resonates throughout the whole network from the standpoint of BMW. Scott Stember - Sidoti & Company: And as far as the acquisition, the revenues of $350 million in incremental revenues, that includes incremental revenues from 2007 plus new acquisitions yet to be announced?

No, that would be what we are looking at obviously, with our revenue today, its new revenues that we would have on an annualized basis. Now we would have ten months of it, or eight months or nine, depending on what it is. So that would be the new line. And look that number could move up. And I think we have been pretty consistent over the years, but again we are looking at our balance sheet and again weighing acquisitions to stock buyback. And also, I’d rather be in a good credit position as we look out over the next 8 to 12 months. Scott Stember - Sidoti & Company: Housekeeping on the asset impairment charge in the fourth quarter, could you elaborate a little bit?

Basically, we had the $6.3 million on a pretax basis. And as you know back in 2000, we invested in CarsDirect which is now called Internet Brands. They had a public offering in the fourth quarter, which was fairly choppy. And based on that, we elected not to sell any of our stock. We had to mark it to market. We think there is a long runway with those guys. And in fact our Smart One sales side, they have been the engine room for that so. Of the charge on a pre-tax basis was about $3.5 million and the balance, we had one section of stores that we have put in the DO line, discontinued that we were going to sell. We’ve made some reengineering. We’ve cut some costs and other things. And we decided to put them back above the line. So, because of that we had a catch up on depreciation which was about 2.8 million. And that would be the total.

And we go next to the line of Matthew Fassler - Goldman Sachs.

First of all, if you could talk a bit about the F&I trends. Perhaps what you saw in the U.S. versus UK?

Well, of course, again our captives have really worked well with us. From an F&I perspective, we were up 2.3% on a same-store basis in the U.S. We were up 37% in the UK; we were up almost $257 a unit. That’s because our penetration was up 2% over there. And we are much more proactive now on the aftermarket products. Things that we had sold over here, they really are just getting into, the clear shield, the gap and some of the other products that we sell here. And I think that that’s really working well. Mike Pierce is heading that up, has made a huge impact on that. And again we have picked selected vendors on the finance side that we can aggregate more volume for them plus then we get better rates because of our scale.

Can you talk about your new and used comps ex-currency, I guess, on a global basis would be helpful?

Well as you look at new vehicle, we reported 1%. And if you excluded foreign exchange, we’d be negative 0.3%. And on used vehicle we’ve said 10%, and for the quarter, we’d be 6.2%. And I just said service and parts 5.5%. And after foreign exchange we had 3.2% and F&I 10.9% and 8.8% after FX. So that should give you a pretty good indication of the impact. Again for the quarter though was $66 million in revenue and less than a half a cent. And I think if you looked at it over the entire year, it was about $0.04, or $400 million and 4%, and $0.04.

Obviously the tax rate looks to be a bit of a moving target even without some of the one-off items you had this quarter. What should our thought process be for 2008?

We think it could be 100 to 150 basis points higher for next year.

And our next question from the line of Don [Mitter] - Bear Stearns. Don [Mitter] - Bear Stearns : Regarding Smart Car I am happy to say, Roger and Tony, I am seeing the car in Beverly Hills and West Los Angeles.

Well that’s great. They have done a great job out there and I didn’t get a chance to say it on the call but since you brought it up. We are doing a callback, a CSI feedback and on a small group. This is please rate your overall experience with your Smart Fortwo so far. On a 100%, we had 68% said extremely satisfied and 31% said very satisfied. So, that’s pretty good feedback. We are seeing, as I said earlier in the call, we hope to have 2,000 of these vehicles on the road retail, by the end of February. Don [Mitter] - Bear Stearns : Well this weekend has a large charity in town, and they have Smart cars being put up either as a door prize or an auction item. So that ought to help on your exposure. My question on Smart car though, will they end up in the rental fleets, will the rental guys have them Roger?

Absolutely not, I mean we think right now there is such a demand from a retail perspective. We are going to try not to take that juice if we can help it. At this particular point, we have not designated any vehicles. There might be a company fleet or something. But they would be sold through the dealer and they would be hopefully at full MSRP.

So our next question will be from the line of [Nick Phillips] - Golden Asset Management. [Nick Phillips] - Golden Asset Management : I was wondering if you could just talk a little bit about the terminated Rallye acquisition. And is there anything we need to draw from that, whether its company specific or industry specific?

Well, Nick, obviously that was one that we had hoped to complete. And really, quite honestly there is even some ongoing dialog. But we went to full contract there. We were doing our due diligence. And I think at the end we had the ability to pull the plug, and we did that based on the contract. We had not in any case, in any OEM submitted any paperwork. So this wasn’t an OEM related situation. And as I said, that there has still been some discussions on a going forward basis. There is nothing to read out of there that would be negative on either side.

And our next question from the line of Derrick Wenger - Jefferies.

The CapEx I think you gave it, $195 million in ‘07, the gross figure. What was the gross figure you are targeting in ‘08?

Well, the net figure is around $50 million. And then the gross number, I am not sure. Let me get Tony to give you that. I am not sure what it is. If we were at $195 last year it would be down $15 to $20 million this next year.

Thank you, we have no further questions. I’ll turn it back to our speakers for additional comments or closing remarks.

Okay everyone thanks for joining us in the comments and look forward to talking to you after the first quarter. Thank you very much. Bye-bye.