Welcome to the Penske Automotive Group fourth quarter 2008 earnings conference call. The call today is being recorded and will be available for replay approximately one hour after completion through February 24, 2009. Please refer to the Penske Automotive press release dated January 28, 2009 for specific information about how to access the replay. I would now like to introduce Tony Prodon, Senior Vice President of Penske Automotive Group.

A press release detailing Penske Automotive Group’s fourth quarter results was released this morning and is posted on our website at www.PenskeAutomotive.com. Participating with us on the call today are Roger Penske our Chairman, Bob O’Shaughnessy our Chief Financial Officers and J.D. Carlson our Controller and as always at the conclusion of our remarks we’ll open the call up for questions and I’ll be available afterwards to accept any questions you may have by dialing my office. Before we begin I’d like to remind you that we may make forward-looking statements relating to Penske Automotive on this call. We caution you that these statements are only predictions and are subject to risks and uncertainties relating to general economic conditions, interest rate fluctuations, changes in consumer credit and spending and other factors over which management has no control. Our actual results may vary materially from these predictions. Any such statements should be evaluated together with the information about Penske Automotive in our public filings including our annual report on Form 10K. During this call we will be also discussing certain non-GAAP financial measures including adjusted income from continuing operations and adjusted earnings per share from continuing operations. As outlined in our press release, our results for the fourth quarter and full year in 2008 and 2007 included items we have identified as being unusual in nature. The adjusted earnings discussed on this call exclude those items. I would like to point out that the press release we issued this morning contains a reconciliations of actual earnings to adjusted earnings for all relevant periods. We believe addressing the adjusted earnings improves the comparability of our financial results from period to period and will be useful to you when evaluating our financial performance. At this time I’d like to turn the call over to Roger who will have some comments.

Today we reported a loss from continuing operations of $5.55 per share for the fourth quarter. This loss includes after tax charges of $502 million or $5.52 per share including $493 million relating to intangible asset impairments. Despite the charges it’s important to note that Penske Automotive Group is in compliance with all of the financial covenants included in its credit agreements. I’d like to point out that we have included a summary of our debt covenant compliance in our press release this morning. As you all know the fourth quarter was extremely difficult and our revenues declined 29%. We experienced a significant decline in traffic, vehicle sales due to the overall weakening of the economy, consumer confidence and credit markets in the US and overseas. In fact, during the fourth quarter US new vehicle industry unit sales declines 35% and market registrations in the UK declined 27%. Our business experienced similar declines. As I look back over the quarter, October business was weak but November was substantially weaker. December improved somewhat compared to November in part due to increased incentive programs offered by manufacturers. As business conditions deteriorated during the fourth quarter we accelerated the cost reductions we highlighted to you during our last call. Let me provide you at this time some additional detail on the charges we recorded during the quarter. Adverse markets conditions, deteriorating credit markets and the decline in our stock price during the fourth quarter caused us to write down our goodwill and franchise value pursuant to FASB 142. As I noted a moment ago the after tax non-cash charge for this was $493 million or $5.42 per share. We also continued our efforts to improve our operational efficiency and cost effectiveness. As part of these efforts we consolidated or relocated franchises in certain…

(Operator Instructions) Your first question comes from Joe Amaturo – Buckingham Research. Joe Amaturo – Buckingham Research: Just a clarification, did you say that the PTL investment is going to yield about a $10 to $15 million distribution in the first 12 months?

That’s correct. Joe Amaturo – Buckingham Research: In addition, just so I understand this correctly, you said that there’s going to be a $20 million cash tax benefit in ’09 versus ’08?

We get the benefit of the accelerated appreciation because of our ownership on assets there. It will be less in ’09 but that’s what we picked up in ’08, yes. Joe Amaturo – Buckingham Research: So you’re probably looking at $10 to $12 million year-on-year improvement in cash all else constant?

I think what I’d rather do is have Bob O’Shaughnessy – you might give him a call and let him answer that. You’ll get a more precise answer. Joe Amaturo – Buckingham Research: At the end of 2008 did you have any debt outstanding against your used vehicle inventory?

We have typically probably 20% to 25% of our used vehicle inventory financed on a worldwide basis. Typically these are the more expensive buybacks that we have either coming through the premium manufacturers or some opportunistic buys we make in the UK. Joe Amaturo – Buckingham Research: Then the last one, I noticed that rent expense went up about $10 million in 2008 versus 2007, could you give us a sense – I know you’re not giving guidance but where that’s expected to be tracking in ’09?

I think the majority of the rent of expense would have gone up through the addition of cap ex that we’ve done and I would assume that it’s going to level off and maybe be up 3% to 4% for the year might be realistic but, it’s not going to be anymore than that.

Your next question comes from Matt Nemer – Thomas Weisel. Matt Nemer – Thomas Weisel: My first question is on the cost cuts that you’ve talked about of $100 million, what percent of that or what dollar amount would you consider to be fixed versus variable? Then, how much more room do you think there is to go if we’re in this for a little while longer?

I would say the costs we’ve taken out now are structural. Obviously, when we look at headcount reductions of almost 10% you’d say about 60% of the reduction has come from headcount, marketing and advertising down approximately $30 million and that’s a lever that business would increase and we would certainly add to that if necessary. We’ve certainly got more room there. Corporate expenses were down over $10 million. We eliminated the 401K match which is probably $6 million and we’ve got some consolidations that we’ve done in the marketplace not only in the US but also internationally which will generate more fixed cost out. Inventory reductions will take some costs out as we go forward. To me, if we’re in the same type of environment we still have more room and I guess we’re accessing those today in every single market and what we can do to consolidate jobs, take out offices where we’re able to consolidate back offices has been quite successful for us to take out structural cost on a continuing basis. Matt Nemer – Thomas Weisel: That moves in to my next question which is given what you did in the Phoenix market in terms of combining some stores and rationalizing some real estate, is there an opportunity to do that with other stores in other markets?

Well, that one was obvious to us based on the market share and the sales rate of Jag and Land Rover. I think where we have markets with contiguous brands, we certainly would look at that but in most cases we don’t have two points in the same market. Now, internationally we have markets where we have four or five points and those are typically geographically spaced so they’re not really competitive it just gives us a bigger footprint but I know the guys, Gerard and his team are looking at that in the UK to see if there’s any opportunity there also. Matt Nemer – Thomas Weisel: Then just a quick question on PTL, from an income statement earnings standpoint it looks like it went from about $9 million to just over $3. Can you give us a little more color on what the change was? I’m assuming that some of that is seasonality but is that core business showing some erosion as well?

Let me say this, the third quarter is always the best because it’s the strongest part of our one way business. You have all the kids going back to school. We go typically from June through September as the strongest part of our consumer business. Then, as you get in to the fourth quarter and its cyclical your logistic business kind of tails off in December because many of the companies shutdown for the holidays and obviously this year there was a little bit more of that due to the current economic conditions. But, I don’t think that there’s anything there that would be a situation that we wouldn’t be dealing with. A defleeting as we see less rental business we have the opportunity to defleet and in fact what we’re doing where people don’t want to sign up for longer term leases we can take units out of the rental fleet and lease them for a period of say two to three years rather than a typical five or six years. So, there’s lots of leverage there and I think that we’ve been able to take the fleet down quite a bit on the rental side because that’s the variable piece. The majority of our revenue is fixed by contracts anywhere from three to five years. Then, we have the ability during lease times is to go out to companies that want to really take out manpower, we can take over the maintenance on their vehicles and utilize our purchasing power and our systems in order to reduce their costs. Matt Nemer – Thomas Weisel: But on the long term side of that business, on the long term contracts, anything that we should be thinking about in terms of churn rates, particularly for customers that maybe have bankruptcy protection that have been able to get out of some leases? Is there any concerns along those lines?

We looked at our delinquencies and quite honestly the only area that we would see some uptick is on the pure rental side and that business is down and it’s only about 15% of our overall revenue. On the consumer side we get paid by credit card or check or cash at the time of execution of the rental so I don’t see any risk there. Contract maintenance was up about 11% last year year-over-year so we are taking advantage of our capability there where people want to take out some of their captive shops and take the people out we’ve got the benefit just to walk in and utilize our shops for that work.

Your next question comes from Rich Kwas – Wachovia. Rich Kwas – Wachovia: On used vehicles, ASP down dramatically year-over-year and down pretty significantly sequentially. What’s kind of going on on the mix side?

Well, I think if you look at the transaction price I think we were down about $15,000 per unit in the US. We have this retail first mentality to try and reduce wholesale loss and also to generate more used business and that generated about a $400 less per unit on a gross profit basis. In these times you’re going to have some pressure on margins and we certainly saw that in the US. In the UK basically we had the fx which had a bigger effect both on the sales price and also on the gross profit but these downturns – I’m looking at the margin more than the revenue side and we’re trying to manage those the best we can. Quite honestly, we have to be careful, as we’ve seen these markets deteriorate on the used side obviously, we have some of our inventory carrying has been a little bit higher and where we’re trying to operate in a 60 day window on used, you have to move these vehicles so in some cases you’ve got to take losses or retail it at a lower selling price in order to move the vehicle and that’s just the dynamic in the market. Rich Kwas – Wachovia: Are you seeing any benefit from the improvement in wholesale values of late where you’re able to generate a little more profit? Is that starting to come through at all or is it still too early?

I would say that if someone asked me is there a bright light out there, I would say it has to be in the used car business. Point number one we were seeing the wholesale values, the auction values just drop, drop, drop, we’ve seen those stabilize and on many of the cars that we’re dealing with in our brands, Toyota and Honda just to mention a few, we’ve seen those values actually go up. As we go to the auctions now to try to buy vehicles from the OEM auctions we’re seeing higher prices. I think that’s a positive. Now, that’s really taking the place in some cases of new vehicle sales because there’s such a difference as you buy these one year and slightly used new vehicles there’s a big discount between a new purchase and a purchase of a used one so it’s more attractive to the consumer. In the UK we’ve made some very I would say beneficial purchases from certain of the manufacturers and I’m talking hundreds of vehicles which have turned out to be quite beneficial to us as we move here in to the first quarter. So, I think residuals are up there’s no question that’s going to help the finance companies if they have to take less losses on some of their repos because the market is better. That might get them to extend their arms a little farther with the customer. Rich Kwas – Wachovia: Then finally on the UK business, there’s been some discussion around the UK adopting some kind of [scrappage] plan similar to some of the other European countries. What’s your sense for how likely that is to occur? Then, if that were to occur how much benefit would that accrue to you give your luxury focus?

Well, at the moment we have this benefit here in the US up to $50,000 there’s a sales tax that’s going to be able to written off I believe. But, in Germany today they have what they call cash for clunkers I guess you call it. These are cars that are nine years old and we get the benefit of that. I have not had any information would be that that is going to happen today in the UK from a standpoint of the premium luxury. There’s no question that it’s helped in Germany with our Toyota joint ventures there and Audi, we’re seeing a benefit so it really goes OEM to OEM based on what the amount is and what the year cars would be utilized in this type of an event. Rich Kwas – Wachovia: So it doesn’t sound like there’s something near term?

I’ll have Tony get back to you. We’ll talk to Gerard because he’s here for our board meeting and then get that information. But, I’m glad to see that the stimulus package here in the US gives us some interest deductions on vehicles up to $49,000 because that covers a broad range of the cars that we’re going to sell.

Your next question comes from Matt Fassler – Goldman Sachs. Matt Fassler – Goldman Sachs: I want to start off on the SG&A front or the expense front, if you could just clarify for us the $100 million of expense cuts that you discussed today, does that compare to $50 million which I think was the number you used on the third quarter call? And, of that run rate, I know you achieved that run rate, I’m not sure if that is as of today or if that is as the end of Q4? So, in other words I’m trying to figure out how much you achieved in the fourth quarter and how much we should model in showing up for the first time next year?

I want to be sure that the $100 million we talked about in the press release to me is real as we would move through Q1 and through the balance of ’09. I think there was maybe some disconnect on whether it was $24 million, I think we had $24 million that we had taken and primarily that was on the people side and we anticipated taking another $25 million out throughout the fourth quarter. So, I would say these people are out, these are comp plan changes if they are not people deleted from the work forces. I look at the number, we’re down as I said almost 10% in total worldwide headcount. Matt Fassler – Goldman Sachs: Second question, on capital allocation, you did buyback a little bit of stock in the fourth quarter. I’m not sure if that was early or later on in the game?

That was right early, really I think it was one block trade and that happened in October. Obviously, as we cut out our dividend and other things we were not in the market to buy back stocks at that point. Matt Fassler – Goldman Sachs: I guess now that the stock is down around $6 give or take, is capital allocation for you going to be driven by stock price or perhaps the price of the convert? Or, is it going to be driven more by essentially the sense of posture given how tough the environment is?

The first thing I want to do is look at liquidity and I think we’ve demonstrated on the call that our bank lines, the financial capability of the company internationally and domestically we’re in fine shape. We’ve got a board meeting coming up, we continue to talk about where we’ll spend our money and is it going to be in stock, is it in buyback of either the sub debt convert of the 7.75% and I think we’ve got to stay tuned on that. Obviously, I want to be sure as I said and I was criticized for this I think back some time in the third quarter that we didn’t start buying back either debt or stock and I think it was the right thing because I had no idea that we were going to be entering in to the type of environment that we have today. So, I would say that I had the caution light out on that. But you know there’s a benefit on the debt side, we’ll certainly look at that. We’re also looking as we have made one very small acquisition in the UK, one that is strategic for us so we want to keep our powder dry but I’ll have a better feel for that as we get through this first quarter. Matt Fassler – Goldman Sachs: I also want to take a quick look at gross margin rate, somebody raised essentially [inaudible] retail sales and gross profit numbers. As you think about the selling environment today and you and everyone else exited the fourth quarter a little bit heavy, as you think about what it will take to move vehicles here do you see the fourth quarter margin rate as kind of being a new reality or is that a bit extreme? It was obviously down quite sharply year-on-year in both new and used.

If you traveled with me the first thing I talk about is gross and gross margin. I would hope that the margin I think is just as we look at the market and people who are on variable compensation are trying to deal with the public and get sales because typically they’re on variable compensation so we’ve got to do a better job of managing the expectations of the sales people and the customer. Our inventory and I think you’ll see this throughout our peers is coming down substantially and I don’t think by lowering the price that I’m going to move the merchandise any quicker. In fact, I’m hoping to get higher margins on used cars. I think our inventory is in great shape when you look at where we are. In fact, we need used cars right now both domestically and internationally and I would expect that these margins would move up hopefully during this first quarter. But again, we’re seeing times we’ve never seen before so I don’t want to give you a bad answer. Matt Fassler – Goldman Sachs: Then one final question, on the Smart side obviously with fuel prices having come down a little less urgency for fuel efficiency and compact vehicles. Are you still seeing a backlog there and do you think that you can match ’08 sales numbers in 2009?

I think Smart is doing the same that everybody else is. I don’t think that if this market is down 20% or 25% during 2009 we’re going to see the same impact. The only thing we have as an accelerator right now as we’re sitting with about 31,000 reservations. The point is can we match these reservations for the customers who are in line. You know we have Smart Express now so we’re obviously looking at new ways for lead generations. We’ve been very active at probably about 15 local auto shows around the country and I think that the programs we have are in place. Ironically, when you think about it we went in to the market with a BRABUS model, only had an allocation of 1,800 and sold it in less of a day. So, there are co-op programs that we have with our dealers and to me, we’re going to have a year that’s going to be in the same environment that everyone else is. We’ve seen it with MINI, MINI is one of our competitors and there’s no question that they’re seeing the pressure also in the days supply. Our days supply was at 30 days at the end of the year so that was in pretty good shape.

Your next question comes from N. Richard Nelson – Stephens, Inc. N. Richard Nelson – Stephens, Inc.: You talked about choppy results month-to-month in the fourth quarter, can you tell us what you’re seeing in the early going of 2009? I know you mentioned used cars are picking up, any other color would be helpful.

Well, I think we would have to say that both domestically and internationally that the used car business is certainly better. I haven’t seen a big uptick quite honestly on the new car side both the US and internationally and I think if we sustain our parts and service business and our margins stay there that would pretty much be the environment that I would see for the quarter. Now, remember we’ve got this overhang today with the current situation in Detroit and I think that has with all this noise that people are just waiting to see what’s going to happen not only on the domestic side but also from the standpoint even in the foreign nameplate. Once those answers are there I think that’s hopefully going to give us some momentum. To me, as we look different parts of the US, we’ve seen the Northeast be tougher than we had expected it to be but it’s certainly an impact of what’s going on in the New York area. Our Phoenix business has not really rebounded. We’ve done the consolidations there, we’ve got office consolidations. So, what we’re going to hope to do is get the benefit of these cost reductions and manage our way through the next couple of quarters. N. Richard Nelson – Stephens, Inc.: The cost cuts, the $100 million program was that backend loaded during the fourth quarter where the big benefits are coming here as we look in to 2009?

There’s no question. The people are out, the comp plans are changed, many of the marketing and advertising commitments we have you just can’t unwind those overnight, those run out so we have not made any longer commitments. We’re utilizing the Internet a lot more from the standpoint of used cars. I would say that the cost reductions have taken place. I was able to just on a quick basis kind of look at December to January, look at January to February and there’s no question that when you add up the different components that we’re getting that there’s cost reduction. N. Richard Nelson – Stephens, Inc.: A question also on the F&I business, I do see a fairly big decline in F&I per unit. I’m wondering if you can speak to that?

Well, I think what you’ve got to imagine is today on F&I that the amount financed has gone down number one. From our perspective the sale price of vehicles both new and used is down and the ability for us to over allow and then just an additional 1,000 or 2,000 or 3,000 across the network is a substantial amount. There were lots of what I call flats that were paid by the OEM finance companies which give us less revenue on the finance line and our reserves. I think that when they look at the credit profile of the customers, the stipulations are certainly tougher so the rates that we’re able to charge are somewhat impacted. Then, we had a huge fx impact in the UK from the standpoint of probably $75 a unit if you looked at it overall. N. Richard Nelson – Stephens, Inc.: And the declines in new and used cars same store, how much of that would you attribute to reduced traffic and how much of it is lack of availability of finance?

Well, let me say this, traffic is down. I don’t talk to a car guy here in the US and even internationally that say traffic is down. I would say closing ratios are tougher too, people can’t get financed in some cases so there’s no question that we have to deal with that. But to me overall this past weekend in the US, President’s weekend was pretty decent for us in all brands around the US. I don’t have a clear picture of the UK. But, there’s less traffic, credit requirements are tougher. I think people that are out there buying are really maybe even with consumer confidence being where it is today, they’re being much more cautious so, “Do we really need to buy a car today?” Then with this overhang of the domestics and what’s going to happen and I might be waiting if I was a buyer to find out are there going to be any more government initiatives that would drive business, I might want to take advantage of that.

Your next question comes from John Murphy – Merrill Lynch. John Murphy – Merrill Lynch: Just one question on the cost savings as we step forward and the macro is very difficult to call right now but it does seem like things are getting tougher. A $100 million is a big number but is there anything more in there, any more levers that you can pull either harder or different levers? It looks like the advertising you were talking about $20 to $30 million, there might be more room there. Is that something you would be focused on or what would the other items possibly be?

I think we have to be careful, we have to be visible in these markets. There’s some push back from our GMs and some of our AVPs on how deeply do we want to cut this but obviously it’s a lever that we can push harder and take more cost down and we’ll do that. Also, as we look at the number of sales people that we have in these dealerships as we go forward, we’re going to look at what’s the volume and we know what an average sales person should sell so if the market stays at this level there will be more human capital that can come out and we would expect to do that on an ongoing basis. The other thing that we’re going to have is we’re going to have lower inventory. There’s going to be no question now interest rates are down we’re getting the benefit of some of the lower LIBOR rates but we would continue to take inventory out. I think the key thing we have to do is manage our fixed growth. I don’t want to reduce the number of people on our service [inaudible], we need to upsell there which is very important to us as we go forward. So, to me at the end of the day we’ve got to look at area structural costs across our business, could we do some consolidation, those are all things that we can look at as we go forward. John Murphy – Merrill Lynch: You just sort of led me in to my second question on parts and servicing, we saw a little bit of deleveraging there because of the weakness in revenue. Is there something you could specifically do to ramp up revenue significantly? What can you do in parts and service? You made a big investment in that business and I’m just wondering if there’s additional actions you can take or is it just a question of the cycle and waiting until the consumer starts spending again on customer pay.

I think if you look at the size of our parts and service business and you take the fx out, we really demonstrated how strong and how important that is in the retail business model because at the end of the day what really had to take place was you had your internal which is obviously the pre delivery inspection and some of the reconditioning. Today we’re probably doing less reconditioning on used cars because we don’t want to get the cost of sale too high so that scenario maybe impacts us slightly on our fixed side but I feel good about that. What we need to do is look at vehicle inspections that lead to upsell and there’s no question that as we go forward we’re going to do a lot of Internet impact selling with the consumer on the service side. One thing that I think is key that we continue to forget is many of these premium luxury players have sold a full service package and have extended warranties and I can tell you it’s very hard not to take your new BMW, your new Mercedes not in to the dealership to get worked on either under warranty or what I would call on a consumable maintenance inspections. So, I see those operating in line with where we are today. By the way, our margin really held quite well when you look at overall the impact of what we’ve seen. You’re going to see a lot of these small mom and pop shops close up and the dealerships are going to get the benefit of that too where you might have gone to with your Porsche to the local guy, you’re going to come back to the dealership. John Murphy – Merrill Lynch: Once again you led me in to my last question just real quick. There seems to be a slightly more favorable view from the auto makers towards the larger public groups and there have been some loosening of framework agreements and the like and some restrictions there. Do you feel like there’s a shift here that you guys are becoming even greater partners than previously because of the stress we’re seeing in the market and that might be an opportunity?

Well, I think the fact that we have access to the capital markets and we have the benefit of the credit lines we’ve established, the subordinated debt markets that if this market changes we have got – I think all of our peers have got excellent relationships with the OEMs. Sure, we have time-to-time that we don’t agree with them on certain things but the majority of times we do and I would say that they would look to us in troubled situations. With the situation in the UK where VW Audi came to us and we had the opportunity to make a purchase in the Northern part of the UK and I think that’s going to continue to happen and I certainly will say to you that opportunistically within our guide lines we’re going to continue to partner with all manufacturers and if there’s a consolidation of the domestic market here over the next there to six months there might be some very attractive deals available to us here. Our doors are wide open with all of the manufacturers and I think it’s the same with us.

Your next question comes from Scott Stember – Sidoti & Company. Scott Stember – Sidoti & Company: Could you talk about what the impact of foreign exchange was for the quarter and the year?

Well, it was $180 million in revenues for the quarter and I don’t have it for the year. Why don’t you get a hold of Bob after the call and we’ll give that to you. But, it was $180 million in revenue for Q4. Scott Stember – Sidoti & Company: And you don’t have the earnings? BB It was neutral to fourth quarter earnings, a little bit beneficial. Scott Stember – Sidoti & Company: Can you just talk a little bit more about the used car situation in the US? Are you actually seeing as we speak right now customer traffic picking up on that side as well or are we just talking about pricing helping?

I think we’re saying I think the used car business is better. People are just saying, “Look I’m not going to spend the money,” and there’s such a delta today between a new and used car and many of the finance rates on some of these year old or 14, or 15 month old new cards are very attractive. The issue today is everybody’s selling used car so it’s putting pressure on the ability to get some of these vehicles so we’re in a situation where we’re out trying to buy at the auctions. I think the CPO programs that have been promoted by the OEMs we’re seeing incentives even from them to move CPOs so that’s only positive. Remember, one other thing that I maybe forgot to mention earlier, it just came to mind is that there’s a tremendous amount of lease vehicles coming off the premium luxury portfolios and the benefit we have as dealers with those OEMs is we get first choice of those and that’s going to help us drive some of this used car potential volume as we go forward because the first thing the OEM want is let’s get this back to a selling dealer or to a dealer that is in the same OEM team and then move these vehicles in to the market. What that does is it raises residuals, it helps as I mentioned earlier the OEM if they were going to take a loss it helps them from a loss perspective. There’s a lot of effort going forward on trying to see off lease cars to the consumer that’s driving it and that ends up being a benefit with a margin that comes back to the selling dealership. So, there’s lots of levers taking place now in used. Scott Stember – Sidoti & Company: As far as parts and service do you have the customer pay for the US if you wanted to strip out the foreign exchange component.

I don’t have that in front of me right now. Tony says it’s essentially flat.

Your next question comes from Rex Henderson – Raymond James. Rex Henderson – Raymond James: A couple of quick questions regarding the charges first, can you tell me were those intangible write downs were those on US dealers, UK dealers or both? And, kind of the balance between the two.

Well, there was no impairment, there was some slight franchise impairment in the UK but a very small amount. The majority of the charges were in the US market. Rex Henderson – Raymond James: So given that should we be worried about potential for a write down on the UK dealerships going forward?

That’s a good question. As you know, we had a triggering event in the fourth quarter with the credit markets deteriorating the way they did and when they do that you’ve got to look at cash flows, you then have to look at forward comparisons or looking at what the market is going to do in ’09, ’10, ’11, ’12 and ’13 and then you have certainly the weighted average cost of capital has to come in to it. With all these calculations we looked in the US made the impairments and we did the same tests. KPG and Deloitte Touche how are our auditors, they reviewed the numbers that our people put together and at this point we don’t see that there is any impairment for the UK and did not take impairment during the fourth quarter. Rex Henderson – Raymond James: The other thing was a few minutes ago I heard you or somebody say that the currency impact on revenues was $180 million but currency was a slight positive to earnings. Does that mean that the UK reported a slight loss? Is that what I can conclude from that?

The UK had a loss for the quarter, yes it did. One other thing Rex, the reason that we don’t have the higher write down or a write down in the UK is because the multiples that we paid for businesses over the last six or seven years was lower, remember we talked about on the calls before that it was in the US. Look, you always have a risk though of impairment as you go forward. But, if we would have been on the edge I’m sure the auditors would have recommended that we would take an impairment but the stock price is always also a governor that comes in to play as we go forward. Rex Henderson – Raymond James: Finally, I want to talk a little bit about the inventory levels. You said you were down I think $240 million since the end of the third quarter but your day sales were at 99 on the new side. How much further do you think you have to come down on inventory to get comfortable that your inventories are appropriate for this current sales pace?

We’ve got to get the new down to 75 and I think our 39 to 40 days on used is probably pretty realist when you look at it on a 30 day turn. I haven’t done the calculation, I just did a mid month reduction inventory but I think we need to be down in the 65 to 75 days on new. Rex Henderson – Raymond James: Can you get here by the end of the first quarter or will it take longer than that?

I would tell you this, we have charged our guys with day supply reduction. I wish I could tell you that that is going to be the answer but I guess we’ll have to wait until the end of the quarter but we’re looking at sales rate – you know, the sales rate drives that tremendously. The good news is that 2008 inventory is down to just a few number of units so we’re not sitting with a lot of stagnant inventory. To me it’s interesting when you talk about inventory five or six months ago you couldn’t get Prius so you go out and order a bunch of Prius and you turnaround now and you have them in inventory and they’re putting $1,000 bonus on them to try to sell them so this market has changed so fast it’s very difficult to hope. But, I can assure you that we’re going to be better when we get to March than we were in December, that’s what I will say for sure, both domestically and internationally. Rex Henderson – Raymond James: One final comment, I wanted to thank you for putting the covenants for both the US and the UK in there. It’s very helpful and provides a lot of clarity and confidence.

Well, we were asked by you and a number of other of your peers to do that and I think it’s good and we tried to explain what all these numbers were with and without the charge. It’s such a difficult time for all of us and we obviously hope that this cloud over our business starts to move on here shortly.

Your next question comes from [Carl Dorff – Dorff Asset Management]. [Carl Dorff – Dorff Asset Management]: I want to say on the last question what I was curious about, can you give any more clarity on the write offs of the intangibles, which dealerships and why? Was it a function of the level of profitability in the different dealerships? Was it any particular brands in particular that was hit the most and of the intangibles that are still left how much of those, could you break it out, how much is in the UK?

As I said we took no impairment other than a small amount of franchise from a standpoint of the international or the UK. We have tested the US based on 142 from a cash flow and we don’t do it by brand, we do it by section. Here in the US we have east, central and west so that covers all of the brands in those particular markets and the UK is operated as a separate segment itself. But, to me the intangibles that we have written off have been significant and we don’t expect that to hit us further in the US unless there’s a further deterioration in the marketplace and then the stock price. [Carl Dorff – Dorff Asset Management]: Of the $974 that’s left how much of that would be UK approximately?

Probably in franchise value in the UK would be about $50 million. [Carl Dorff – Dorff Asset Management]: So that’s still mostly US intangibles?

That’s correct. You have goodwill at the end of the year in the UK of about $300 million US not Pounds. [Carl Dorff – Dorff Asset Management]: What would impact the goodwill potentially in the UK, if anything?

Carl it would be cash flow, it would be the market deteriorating further but we had plenty of room, let me say this that was lots of discussion between the accounting people who we deal with and looking at the test and there’s no question as you know the discount rate, the weighted average cost of capital moved probably 300 to 350 basis points at the end of the third quarter to the fourth quarter and this had the impact, probably the biggest impact on us as we had to make our adjustments here.

At this time we have no additional questions. Please continue.

I think that’s it for the day. Thank you very much and I hope we have a better report next quarter. Thank you very much.

Ladies and gentlemen that does conclude your conference call for today. We do thank you for your participation and for using AT&T Executive Teleconference. You may now disconnect.