Good morning, ladies and gentlemen. Welcome to the Penske Automotive Group Third Quarter 2012 Earnings Conference Call. Today’s call is being recorded and will be available for replay approximately one hour after completion through November 9, 2012. An audio file of today’s call will be available on the company’s website under the Investor Relations tab at www.penskeautomotive.com. I would now like to introduce Tony Pordon, the company’s Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, Laurie, and good morning, everyone. A press release detailing Penske Automotive’s third quarter and 9-month results ended September 30, 2012, was issued this morning and is posted on our website. Joining me for today’s call are Roger Penske, our Chairman; David Jones, our Chief Financial Officer; J.D. Carlson, our Controller. Following today’s call I will be available by phone to address any additional questions that you may have. However, before we begin I would like to remind you that we will be discussing certain non-GAAP financial measures such as adjusted income from continuing operations attributable to common shareholders, adjusted income per share from continuing operations attributable to common shareholders and adjusted EBITDA on our call today. We have reconciled these items directly to our most directly comparable GAAP measures in our press release dated November 2, 2012. I refer you to that press release for additional information. The company believes that these widely accepted measures of operating profitability improve the transparency of the company’s disclosures and provide a meaningful presentation of the company’s results from its core business operations excluding the impacts of items not related to the company’s ongoing core business and improve the period-to-period comparability of the company’s results from its core business operations. Adjusted income from continuing operations and related earnings per share attributable to common shareholders for the third quarter 2012 excludes after-tax cost of $13 million or $0.14 per share associated with the redemption of the company’s 375 million of 7.575% senior convertible -- the senior subordinated notes in August. Adjusted income from continuing operations and related earnings per share attributable to common shareholders for the third quarter of 2011 excludes 11 million or $0.12 per share of net income tax benefits as noted in our press release. We have posted a presentation to the company’s website designed to assist you in understanding our financial results today. We urge you to refer to this presentation during our call at www.penskeautomotive.com under the Investor Relations section. Finally, we also may make some forward-looking statements on this call. Our actual results may vary because of risks and uncertainties including external factors such as consumer confidence, consumer credit conditions, vehicle availability relating to OEM and supplier operational issues, interest rate fluctuations, changes in consumer spending, macroeconomic factors and other factors over which the company has no control. Any such forward-looking statements should be evaluated together with the information in our public filings including our Form 10-K. At this time I’d like to turn the call over to Roger Penske who will take you through our third quarter results.

Thank you, Tony. Good afternoon, everyone, and thank you for joining us for our conference call today. I’m pleased to announce that Penske Automotive reported record third quarter results on an adjusted basis. Based on the continued strength of the U.S. and U.K. vehicle markets, total revenue increased 17.4% to $3.4 billion. Revenue was driven by a 23.6% increase in retail unit volume including 21.1% in the U.S. and 29% in our international operations. Adjusted income from continuing operations attributable to common shareholders increased 19.1% to $54.3 million and related earnings per share increased 20% to $0.60 per share During the quarter we strengthened our balance sheet by issuing $550 million of 10-year senior subordinated notes at 5.75% and used a portion of the proceeds to refinance our existing $375 million in senior subordinated notes. In doing so we reduced our interest rate by 200 basis points on extending our long-term debt maturities from 2016 to 2022. During the quarter we also redeemed the remaining senior subordinated convertible notes outstanding in cash and we extended our existing U.S.-based $375 million credit facility for an additional 12 months under the “evergreen” provision of that agreement. At September 30 we had $487 million of availability under our credit facilities. Based on the continued strength of the company’s results our board of directors recently authorized an increase in the cash dividend to $0.13 per share representing approximately 1.7% yield calculated using the closing price of our stock yesterday. Now let’s look at a few specifics behind the third quarter results. Total retail unit sales increased 23.6% to over 88,000 units and revenues increased 17.4% to just over $3.4 billion. On a same-store basis, worldwide revenues increased 11.7% including a 16.6% increase in the U.S. Excluding the effect of foreign exchange rates total same-store…

[Operator Instructions] And our first question from the line of John Murphy with Bank of America/Merrill Lynch.

First question. Just generally if you could comment on why you think the U.K. market has been so strong really in the face of a tough macro environment over in Europe. And really specifically why has it been so strong around the luxury brands which are obviously more discretionary purchases over there? Just curious on your thoughts in the U.K.

I think GDP in the U.K. if I’m correct has grown about 1% in the third quarter, and I think the U.K. government has provided roughly 375 billion in quantitative easing that’s in place right now, and we have the unemployment hit a new 15-year low. So I think those are some of the basic reasons. But also we’ve got a pent-up demand as we’ve had and have in the U.S., and furthermore with the traction that the premium luxury players have gotten, which I mentioned during my comments, that’s given us some wind in our sails from the standpoint of benefit. They also are now moving up and down where they’ve typically been premium luxury with high MSRP vehicles, they’re moving down into one-series, two-series and three-series which certainly has made a difference. You’ve got the Q3, x1 and Evoque from Land Rover that made a big difference. So I think it’s product, I think it’s the pent-up demand, I also feel the government stimulus has made a difference.

Okay. And then just a follow-up on that. Obviously you have strong relationships with the auto makers you’re dealing with over there. You’re dealing with them over here in the U.S. as well. I’m just curious. I mean you seem to have gotten really strong -- strengthened relationships with the premiums luxury in the U.K. I’m just curious if you’re seeing the same relative strength or cooperation or recognition of the strength of your brand in dealerships here in the U.S. with those same brands and actually with more of the mass market import brands and even the Detroit 3 at this point. Just trying to understand the relationships with the auto makers and how they seem to be improving, but I’m just curious what your thoughts are.

I guess, John, I always felt that our relationships were good both domestically and internationally. I don’t think they’ve deteriorated at all. In fact as we try to grow our businesses and meeting the CI requirements with our facilities, training of our employees, and when you look at our CSI metrics they’re best in class. We have low employee turnover. So I would say the relationships with the manufacturers not only internationally but would be similar here in the U.S. We have brand managers that drive that process on a day-to-day basis which I think has proven to be beneficial to us. So to me overall the relationships that we have had, we had Jim O’Donnell who obviously was heading up BMW in the U.K. came to the U.S. Ludwig Willisch is here now. He was in Germany. We knew him. So I think our global nature gives us the opportunity to have access to the senior executives across many of the OEMs in Europe, but overall, as I would say, all of the public retailers are really generating good morale and good feelings with the OEMs. I think initially they looked at us as maybe troublemakers, but today I would say that in every single case the guys are doing a great job, and I think we’re part of that group.

And then just a last question on gross margins and SG&A. Some of your competitors have indicated there is some real opportunity on potentially improving new vehicle grosses which are generally under pressure across the industry as well as cost-cutting SG&A cost. Just wondering if you see any opportunities on both those line items.

I’d have to say that my discussions after seeing margins at the end of the quarter have only been about gross margins was in our team both the senior level and also down at the dealership level. I think that some of our pay plans generated more compensation based on many of the J3 brands hitting some of these upper levels of unit volumes which drove a little bit more comp, probably about 40 basis points of SG&A during the quarter. I think as I look at grosses and margins as we go forward into the fourth quarter I feel that we’re at a level that we’re going to have to deal with. I think there are individuals cars, the Porsche will have more availability, there are certain car lines, the Q3, the 3 series and all-wheel drive will drive higher margins. So at the end of the day what I’m hoping is that we’ll stay stable and there might be some creep up, but I wouldn’t expect it to be too big.

Your next question from Rick Nelson with Stephens.

I’d like to follow up on what you had indicated about the U.K., the used to new ratio, 1.04:1. Are there best practices that you can take from the U.K. to bring those over to the U.S. to help the owner used car side in the U.S.?

We have a used car buying operation that is probably more robust by brand in the U.K. where we’re actually out -- probably have 21 buyers that do nothing but buy by brand which has helped us significantly. That would take a big group of people here in the U.S. with the geography we’d have to cover. But I think that if you look at the international markets typically used cars have always been a higher new to used ratio. It’s different in certain markets, but to me we do have the pre-reg models. This is where we register demonstrators at the end of certain time periods which those have to be sold as used where demonstrators here in the U.S. if we sold a demo it would be classified as a new vehicle. So there’s a little bit of noise in those numbers. But I think overall the focus on used because we just never had the new car volume. When you’re looking at 2 million units compared to what we have and the ability to have a profitable business you’ve had to have focus not only on new but used and also your parts and service. So I would say overall it’s just the marketplace, and I think the certified sales. In fact in some markets in some brands over there you can’t sell a used car at an OEM dealership without it being certified. I’m not sure I agree with that but those are some of the things that would be in play in the U.K.

Got you. Also I’d like to ask about the acquisition opportunity, the pipeline as you see it today, how that looks here in the U.S. and Europe and the BRIC countries. Where do you see the most opportunity?

Well, as I said, we’ve got annualized acquisition revenue of about $625 million, and that’s not just U.S. or internationally. We’ve had the benefit in Italy where we see very -- in some of these troubled markets it’s the right time to get in because you can make great acquisition, very little goodwill, and certainly the real estate side of it is very beneficial as we have seen profitability right out of the box in Italy. Certainly the acquisition that we made with BMW in MINI in Ontario was strategic because we’re in San Diego. We’ll be in Ontario and then also in Orange County, and then we signed a purchase agreement which we’ll close sometime this month on a Lexus and Toyota business in the U.S. which shows you that there is activity. And to me, we’re looking for businesses that are strategic, they fit within location and geography where we can utilize some of our scale, and to me that makes sense. I go back to a comment I made in the past. There’s 18,000 franchises, dealers here in the U.S. About 6% of those are represented by the public retailers. So there’s many people out that don’t want to meet the currency I requirements of the manufacturers. I’d have to say that it’s good fishing time for the public retailers. We think that the deals we want to get into are ones where we negotiate pricing. There’s not an auction. And I think most of us have contacts, and that takes place. There are some brokers which obviously try to set up an auction environment which sometimes pushes the price, but I think if you’ve got a store that’s in your market, it’s a brand that you have confidence with and have exposure and have people that understand, it you’re going to take a good look at it because the capital is available. Right now interest rates are low. We’ve loaded up our gun with money through 2022. So I feel pretty good about what we have. We lease the real estate. I’ve seen where there’s been leverage on SG&A on real estate. We have 5% of our real estate we own and that’s about $300 million. So you can see we’ve got a strategy that shows that we would lease rather than own, and I think that’s pretty much been our strategy from the beginning.

I got you. And finally if I could ask what your crystal ball tells you about the fourth quarter, particularly for the luxury segment. I guess last year we saw the big battle between the luxury makers. Do you see another year of that sort of competition?

Well, I guess you got to go back and re-look at the market. If you start out -- in October I think the market was up overall about 7%, and the luxury side seemed to take a bigger bite. They were up almost 11% and then we slowed down a little bit in the volume foreign. They were up about 8%, and then the domestic were up 4.5%. So to me the market is up, we still have this pent-up demand, we’ve got credit availability, and obviously I’m not sure what the East Coast is going to be like with the storm. There will be a lot of cars that have to be replaced, and I think there’s probably tens of thousands of cars that have been damaged. So that’s going to create an opportunity unfortunately as we go forward, but we’ll deal with that probably over the next 3 to 6 months as insurance companies come in and made settlements as people are worried probably about their homes. But I think the market is stable. I think margins will always be something we all have to manage on a going forward basis, but the U.S. market is good. I think when I look internationally the big thing for us then is what do the OEMs come to the party with in December because that’s always a big month where they’re trying to hit their targets and they typically offer some real incentives to the retailers. So I guess we’ll wait and see.

And we have a question from the line of James Albertine with Stifel, Nicolaus.

So a quick question. What are you seeing obviously through the third quarter here as it pertains to sort of the proliferation or the condition of trade-ins? And then separately any color you can provide on sort of F&I penetration rates across maybe FICO scores. What I’m trying to get at is based on what your data is telling you is it more or less -- is the 14.5 million to 15 million range we have seen here recently more or less driven by the increased penetration of a subprime consumer or more vehicles that are older on average coming back into dealerships as trades?

Well, one of the momentum obviously is the impact of the J3 coming back. I think we’re seeing higher mileage trades, there’s no question, and older cars. When you have a car park that’s 11 years old you obviously are going to see some of those trade, but we have the benefit today most of us are retailing where we wholesaled cars in the past. Our cost of sale on used has gone down about $2,000. During the quarter that’s demonstrating that we’re selling older cars in the marketplace. We’ll continue to do that because this is profit opportunity, an internal reconditioning margin opportunity plus a customer. So I think that over the next 12 months we’re going to see a lot more lease vehicles that are coming off leasing because remember leasing really stopped in 2008 and then it picked back up again. And I think in the premium luxury side that’s going to add a lot more vehicles for us as we look at 2013. When you look BMW or Lexus, Audi and Mercedes-Benz there will be a lot more vehicles coming off. So that’ll help feed our used car business, and those obviously will be good for us. In fact when I look at the leasing strategy today of the manufacturer there’s a lot more 2-year leases now. They want to see these cars come back in the market, and I think they’re holding residual values now. We’ll see whether they hold. Obviously at the end of the year you see some depreciation piling up from the standpoint of residual, but overall I think the trades are older, more mileage. There will be some competition as they go from 14 to 15 to 16. Where the used car prices will go down you won’t have the ability to see used cars. People want to jump into new. So I think there will be an inflection point here where maybe -- that our new-to-used or our used-to-new ratio will have a little harder time trying to get to 1:1.

That’s very helpful. Thank you for that additional detail. And as a follow-up in past quarters here you’ve talked about a supply and demand sort of imbalance particularly among I believe it was BMW and maybe they were a little bit off sides on getting the right 3 Series, whether it’s the xDrives in the Northeast or what have you to market as well as some demand in other parts of the world. So just wanted to get sort of an update as to where you see that as we have now entered the fourth quarter. Is it kind of more normalized? And are you seeing better allocation of the high-demand products comes to market?

I’m not sure what the real normal is, but I can tell you this, that we look at our availability just going from the end of September to the end of October our BMW inventory is about $50 million. Our Lexus inventory is probably up about $20 million to $25 million. Some of that has to do because we’re shut down at the end of the month in New Jersey. And Mercedes is up about $10 million. Our Porsche inventory will be much better than it was. So I would say overall we’re looking at on a same-store basis we’re up $300 million, and $200 million of that’s obviously the J3 and the balance would be the premium luxury. I know that BMW will push volume because we have plenty of bullets, and I think the X3 and cars like that certainly in the 3 Series are going to be strong. And Mercedes has a great lineup. Audi is strong. Our dealership in San Jose was #1 last month in the Audi network. So we’re starting to see the product we need to be able to perform. That was the good news in our results is that we did drive both new and used car on the same-store in overall revenues and products. So we feel good about going into Q4.

And we’ll go to Matt Nemer with Wells Fargo Securities.

First question is your F&I PBRs were down a little bit and I’m wondering, is that primarily mix? Or as you look at your luxury brands, maybe those were -- could you comment on whether those were up or down?

Well, I think the first thing you have to look at, we can’t really compare exactly to the U.S., but as we look at 38% to 40% of our revenue’s coming from the international markets. And then, specifically, in the third quarter, BMW really went to low rate financing and didn’t put money at the dealer or iCash that we could take advantage of on rates, because they were really low rate financing for the consumer. So that had a big impact in the U.K. and beyond that, Agnew’s, which is in Northern Ireland, we have not been able to negotiate. At least to date, we’re in the process of negotiating better rates for us on F&I. So I think that had some of the drag when we looked at quarter-over-quarter. We were down about $60 I think overall. But overall, I think that F&I is important. As you know, with leasing and with the premium luxury, we have a lot more leases. The margin on those from just the income margin, finance income margin is less. Obviously, we have the ability to sell other products. But when you think about today, BMW with full circle and some of the other manufacturers, add on 3 year, 4 year, 5 year extended warranties, is a little bit tougher. And we want our customers to leave the dealerships with a good product from the standpoint of the transaction, so they’ll come back.

So as you look forward into the fourth quarter, it’ll be a very competitive environment between the luxury brands and you have more leasing. Should we expect that, that F&I PBR could be flat to down for the next few quarters?

Well, we’ve been hovering around $1,000 as many calls as I can remember. Obviously, we’re doing more training and F&I. My eyes are wide open when I look at some of the peers that are doing $1,100 or $1,200. Now, they don’t have the international mix that we have, but I would say, it’s got to be a focus, but I think that’s probably where we’re going to be, at least as we model and look at our business plans for next year.

Okay. And then, just looking at the U.K. Was there any -- could you clarify the impact of any pre-registration activity and particularly with BMW?

Well, there’s pre-reg obviously, to get the certain quotas met every registration quarter. I can’t give it to you exactly by brand, but obviously there were some across all the lines. But most of those cars get sold because they’ve got good discounts on them, get sold in the first 30 days of the next quarter.

Okay. Then just lastly, I’m sure you’re obviously still assessing the damage, but as you look at the impact of the hurricane, what sort of a financial impact do you think we’ll see in the fourth quarter? And if there’s replacement demand, does that hit in Q4? Or do we see that really hit next year?

I think that people without cars are going to have to do something. We’re located with strong brands along the East Coast. I think we’ll see that in our New Jersey operations. It’s hard for me to quantify, to put certain costs in perspective, we’ve got $1.5 million deductible probably that we’ll have to eat in the fourth quarter based on vehicle inventory, and then another $100,000 or more on our facilities. So those are ones we know would be costs that will impact us. I’m not sure the loss of business, obviously as we look at the last week we’ve really been out of business in most of the New Jersey, central New Jersey businesses. Edison’s still without power, we’re out without power in Jersey City. When I think about Toyota and Lexus, they lot 3,800 cars at the port over the last several days they reported, and also that their parts operation is not open. So it’s hard to tell, but what I’d like to do is step back here over the next say week, and then be able to come out with some probably better number that wouldn’t just be an off the cuff guess or idea that I might have today. Because having been there and seeing what the guys are going through, and we’re spending money to get generator sets in, and having to bring fuel all the way from Pennsylvania to keep them going. So there’s some expenses that you don’t get reimbursed that we’ll have. But I think we’ll manage through it. The team is motivated, and we’re hoping to be open even with temporary lights in Jersey City tomorrow to sell cars.

Our next question from the line of Ravi Shanker with Morgan Stanley.

This is Yejay in for Ravi. First question, unless I’m mistaken, you guys didn’t do any acquisitions in the third quarter aside from the Hertz franchising announcement. But you guys saw a bigger tailwind than what we would have expected from acquisition units and revenue. Was that some of your previous acquisitions outperforming, ramping up quicker? Any color on what drove that?

I would think Agnew’s probably in the U.K. You know that was in Belfast that we announced there at the beginning of the year. That might have made quite a bigger impact. I don’t know if we’re getting some benefit. We’ve got Greenwich, we’ve got Crevier, and then MINI of Marin would be ones that just come to mind.

Got it. Second question, a bit more modeling focused I suppose. Could you talk a little bit about SG&A leverage? It seems like you guys had a roughly 20% drop group in gross profits to EBIT this quarter. Year-to-date you guys have been averaging I think 35%. Last year, it was more like 25%. Is this just normal fluctuation? Or is there something more structural going on here?

Well when we looked at SG&A for the quarter, I guess, I think there are 3 components of probably headwind that we had. The first, we had a couple of million dollars of stock-based compensation that had to be mark-to-market during the quarter, which was about 40 basis points of headwind. And then our variable comp went up on our J3 brands because basically we had much higher volumes than we normally would in a normal year. And some of the targets that the salespeople hit paid off a little richer than we might have expected. That was probably somewhere around 30 or 40 basis points. And then we stepped on the gas on advertising. As you saw, we took some market share. When you look at the market, it was up 15, and we were up significantly more than that. So when you add those up, it’s probably, in total, somewhere about 100 to 120 basis points. So to me, that would have given us the 100 basis points of leverage that we wanted. And also, when you think about on a same-store basis, our flow-through was somewhere between 35% and 36%.

And our next question from the line of Scott Stember with Sidoti & Company.

Could you just talk about how BMW did in the U.S. in the quarter? And how any potential brand shifts from luxury to mid-line import might have impacted your gross margin in the quarter?

Well, let me say that when we talk about, this talk about the volume in foreign, as we talk it, obviously the margins were down there. That really had impact for us from the standpoint of margin. But from a BMW perspective, on a same-store unit sale, we were up 2%. And it really, for the BMW brand, in the third quarter in the U.S. was flat for them. So we really outperformed the business. In the U.K. it was up 3%. So I think it was all driven by availability because we know from the standpoint of availability and we look at what was available to us in the third quarter, probably if you compare it to here it was down about 25%, and I think you’re going to see that we’re going to have about 25% more product available. When you look at, there’s probably about 85,000 vehicles to 90,000 that will be shipped by BMW during the quarter into the network. Obviously, we don’t get all those before December, but we have good availability. I think I said earlier, we’re up about $50 million in inventory so that’s going to drive I think some sales. So the good product coming in, x3, we’ve got x1, the 3 series, they’ve got some great product and I think that we’ve been starving for that in many areas. So we see that Crevier had a great month on the West Coast this past month, 369 new BMWs and 130 or so MINIs. So that just shows me that once you get the bullets, we have a real demand for them.

Okay. And that leads me to the next point, as you are selling more BMWs in the fourth quarter, heading into 1Q that would naturally alleviate some of the margin pressure in the new segment?

I guess, if you’ve got the inventory we’ve got to move it and we’re not going to wait for the highest margins. I think, my goal, and we’ve told our people starting several weeks ago that we need to get more margin and we’re going to drive comp plans to be able to do that. But to me, if I was looking, modeling the fourth quarter, we want to sustain what we have and if there would be a slight increase I would be very happy.

Last question. On the income from equity and affiliates, there seem to be some moving pieces in there with Germany and with the refi over at PTL. Could you just talk about what we can expect, or how shall we think of that line item on the year-over-year basis and the quarters coming up?

Well I think the fourth quarter should be consistent pretty much what we had last year. I can’t tell you about Germany. Obviously, they’ve had a little struggle that JV’s had in northern Germany, Frankfurt and up in Aukin [ph] during Q3 so I wouldn’t expect that to turn around at this particular time. I know one of the JV partners put in a Volkswagen Commercial Vehicle business which impacted their quarter, and that, we’d probably see that as negative in Q4. But from a truck leasing standpoint, our maintenance contract, maintenance and contract sales were up in the quarter. Rental continues to be strong. A lot of people are sitting back and not signing long-term leases on trucks because they’re more expensive. And they’re not sure what the economy is going to be so they’ll pay a little bit more on the rental side and then be able to turn them in. So to me overall I look at the financing costs at PTL we have a partnership which owns the operating company and we had some interest costs there when we were able to put some capital down in the operating company to have it become investment grade. And as you know, we’ve probably done about almost $5 billion in financing of trucks. It was a great time for us to step away from GE-supported financing to market financing similar to Ryder’s. So we had some costs associated with that. And those costs, we’ll still carry those as we go into the fourth quarter. So I would say there’ll be some maybe downward pressure.

[Operator Instructions] We’ll go to Simeon Gutman with Credit Suisse.

Roger, you mentioned earlier that it may be hard to get back to that 1 to 1 given the faster pace of growth for new. In light of that, what’s your instinct on the cadence or on the direction of used car pricing, meaning should we see it gradually taper off, I guess moderating from some of the strengths we’ve seen? Or do we have to see something sharper on the price side?

Look, I think we had -- used car prices have gone much, much higher than any of us expected. You know there’s 2 points there. As they’ve gone higher, you have somewhat of a cap on profitability because the advance rates on used cars when they get too high, the finance companies just won’t -- by the time you put financing costs and anything you’re selling from an aftermarket standpoint. And then what the market is, the finance companies really have the ability to offer the amount of financing they would provide for a particular deal is capped. So I see that we’ve been probably touching the limits there on advance rates. But on the other hand I think you’ll start to see some deterioration. Obviously we see it normally in the fourth quarter because of the year end. A lot of the used car guys need to just get rid of their cars and pay their banks. But to me we’re still going to look at digging deeper and selling lower into the lower cost of sales areas which will give us more volume. But with the new car business out there and the low interest rates available to the OEMs to provide low leases with higher residual values on some of their products I think it’s going to be -- that’ll give the SAR momentum going into next year and I think overall that monthly payments are really going to be the key thing. Can I get a lower monthly payment and a few dollars more and buy a new or used. So you’ve got a number of things. You’ve got higher -- the used car prices are high today with the advance rates being capped by the OEMs. The normal fourth quarter deterioration of views I think is key and then the availability of new cars obviously will make a difference too. Especially as we look at availability across -- all branches think that we’re about 400 million, 300 million on a same store basis. That means there’s product available. And that’s going to drive -- that’s going to put pressure on margins.

Okay. And then a follow-up on the gross profit discussion. In general, what’s been the philosophy or your own philosophy regarding the tradeoff between the margin or the gross profit dollar in sales? And are you seeing anything? I mean, competitively we know it’s always been competitive and prices are becoming more transparent. Is one of those factors becoming worse in general? Or is there a local competitor, competitors in general? Local markets getting stiffer? Could transparencies becoming greater? I’m just curious. Your thoughts?

I don’t think -- we’re in the premium luxury side and with the state franchise laws and the PMAs by the manufacturers, I think the inner brand competition -- I’m talking about luxury -- probably is less because as we look at -- if you look at premium luxury, we’re probably running in the 8%. You’re in the 7% to 7.5% on domestics and then the volume foreign because we’ve got these big slunk [ph] of cars I think has dropped down and we’re in probably somewhere in or around 7%. So I think inventory availability is driving some of the pricing, but also the Internet today would be our biggest competitor because you’ve got 2 car and other people who are giving the consumer information. In fact, what we try to train our salespeople sometimes the -- in fact the consumer comes in with more knowledge about the cars than our salespeople, which is a shame. But on the other hand, the OEMs are pushing volume and I really think that when we had no inventory what happened? Supply and demand. Something we all learned. Margins, margins went up. But I’d say Internet has some issue there from a standpoint of pricing. But I think we’re at a level that we can maintain and people still want to feel good about doing business in their neighborhoods and where they live and the way the markets are set up I think with the Big Three taking a substantial number of dealers out, their inner brand competition has gone down. But it’s something we have to deal with. We’ve been that way in the business for a long time and I think that we’re going to survive, no problem.

I’ll now turn it back to our speakers for any closing remarks.

Oh, that’s it. Thanks for joining the call and we’ll see you next quarter. Thanks.

Ladies and gentlemen, this concludes our conference for today. We thank you for your participation and for using AT&T Executive Teleconference service, and you may now disconnect.