Good morning and welcome to the Sonic Automotive fourth quarter earnings conference call. (Operator Instructions) As a reminder ladies and gentlemen, this call is being recorded today, Wednesday, April 1, 2009. Presentation materials, which management will be reviewing on the conference call, can be accessed on the company’s website at www.SonicAutomotive.com by clicking on the For Investors tab and choosing Webcasts and Presentations on the left side of the monitor. At this time I would like to refer to the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. During this conference call management may discuss financial projections, information, or expectations about the Company's products or markets or otherwise make statements about the future. Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the Company's filings with the Securities & Exchange Commission. I would now like to introduce Mr. Scott Smith, President of Sonic Automotive.

Good morning ladies and gentlemen. I’m Scott Smith, Co-Founder, President and Chief Strategic Officer. Welcome to Sonic Automotive’s fourth quarter 2008 conference call. Joining me on the call today are the company’s Vice Chairman and Chief Financial Officer, Mr. Dave Cosper; our Executive Vice President of Operations, Mr. Jeff Dyke; and Greg Young, our Vice President of Finance. If you will turn to the first slide please, today I will be discussing an overview of the quarter and then I will turn the call over to Dave Cosper for a detailed financial review. Jeff Dyke will follow Dave and give an update on some same store performances as well as operational trends. I will then summarize and make some closing comments and we will open the call up for your questions. If you will turn to the next slide, entitle Quarter End Review, my opening comments today will be brief. I don’t need to tell anyone just how difficult the operating environment was in the fourth quarter. The trends projected in this slide illustrate just how dramatically and quickly the new vehicle market declined and the new vehicles have been in a freefall ever since. Used vehicle valuations were extremely volatile during the quarter as well. As you will hear on our call today, our operations are doing quite well. In fact, I would say that we have the best overall operating team in alignment that we’ve ever had. Currently our impending debt maturity is our biggest focus. The situation that we find ourselves in today is not the result of Sonic’s inability to service our debt or a reflection of our ongoing ability to generate cash. Rather, it’s a result of a weak capital market condition and the current inability to look to the capital markets to refinance our…

I have to agree with Scott, it’s been an extremely challenging time in the automotive industry but amidst the lower volume and all the non-cash charges there are many positive and encouraging signs in our business. This slide shows our financial results, adjusted for impairment and other unusual charges. As you can see, on this basis we lost $4.8 million in the fourth quarter from continuing operations. For the full year we earned a profit of $42.0 million, or $1.05 per share. Revenue and profit fell sharply in the fourth quarter as the economy deteriorated quickly. Over the next several slides I will talk more about how this impacted our business and how we responded. But before I do that, let me make a couple of comments about cash. One, our cash balance is unchanged during the fourth quarter. Two, our revolver balance increased by only $2.0 million, so essentially flat. And three, during the quarter we bought back $20.0 million of debt. So notwithstanding the poor operating environment and the large non-cash charges, our cash generation was reasonably strong. Next slide, please. This slide shows detail on several items included in our report and SG&A numbers. Clearly, on any measure, our SG&A as a percent of gross deteriorated in 2008, particularly in the fourth quarter. Revenue fell off faster than we were able to take costs out. On an adjusted basis, SG&A was 80.9% for the full year and 90.3% in the fourth quarter. Given the cost reduction actions we’ve taken, SG&A fell to about 86% of gross in January and February, on even lower industry volume. So I feel we’re making great progress on costs. Please turn to the next slide and we can talk about this. This slide provides a summary of actions we have taken on…

Today I will be commenting on our same store results for Q4 and will provide you some color around our operational performance, as well as some Q1 data. Total same store revenue for the quarter declined 28.2% compared with last year. Our volume declines contribute to the majority of our year-over-year shortfall. Our retail revenue was down $350.0 million, or 35.1%, accounting for roughly 71% of the overall revenue decline. Our retail volume of 33.1% made up the majority of this decline. Used retail revenue was off approximately $46.0 million, $19.0 million of which can attributed to the margin decline, while the other $27.0 million was due to volume declines. F&I revenue was down 31.1% while F&I per unit was down $92, or 8.9%. The majority of the overall F&I revenue decline can be attributed to the decreased retail volume. Fixed operations revenue was down 4.8%. The majority of our fixed operations declines can be attributed to our Detroit three dealerships. Next slide, please. Diving a bit further into our fixed operations performance, as you can see from the slide, customer pay revenue was down 2.1%, the majority of which was Detroit Big Three driven. Our progression during the quarter was a bit mixed. We project our performance will be flat in Q1 and see opportunity in subsequent quarters as we continue to execute our fixed operations play book. As we outlined at the end of Q3, the grid pricing overall has been completed in all stores. With these pricing modifications in place, we have begun menu installations which will be completed at the end of Q2. Same store warranty revenue was off 5.6% and while many brands experienced a decline, our Mercedes and BMW stores accounted for over half of the overall decline. For Q4, same store fixed operations…

As I take a step back and look over the last quarter, I am pleased with the progress that we are making in such a difficult environment. As we mentioned earlier, all-time low turnover and all-time high CSI scores prove that the opportunities we are offering to our associates and the products and services that we’re offering to our customers have never been better. Our ability to adapt and our progress in fixed ops and used vehicle areas were very positive. As I look forward over the peer group in their earnings releases, I have taken a lot of pride in noting that we have either finished first or second in nearly all the operational metrics. It is difficult out there but we will continue to execute our strategies. We will continue training our people, offering the best customer experience, taking market share, finding and cutting unneeded expenses, and continuing to make Sonic Automotive the best in the industry. Following the lead of some of the other public retailers, due to the uncertain environment, we will not be providing guidance in 2009. But we do see a tough year, with the SAAR likely to come in between $9.0 million and $10.0 million and difficult new car margins. However, we think the used vehicle demand and margin should be steady and fixed ops should be stable as well. Before taking your questions, I would like say thank you to each and every one of our outstanding associates who keep working so diligently to make our success possible. It would be easy in this atmosphere to complain, point the finger, assign blame, but that’s not what’s happening here. As Jeff mentioned, we are online and we are focused and for that I’m extremely proud. Thank you, guys. It’s an honor and a privilege to lead our company. At this time I would like to open the call to your questions. Rick Nelson – Stephens Inc.: Can you discuss the options that are available to you to deal with the near-term maturities? Any color you can provide would be helpful.

I see you didn’t take my comments to heart there. We are looking at every option available out there. We are working closely with our partner, having discussion with all of the concerned parties and we got the amendment approved in the near term and I felt good about that. But beyond that I really can’t provide anything. We put a lot of detail in our K and that’s really what I would have to have you take a look at. But, frankly, we are looking at everything, and we’ll see. Rick Nelson – Stephens Inc.: Question on the cost cuts, the $125.0 million that you discussed. Is that for the entire company or is that for—I realize you pushed a lot in disc ops, that includes some of those feelers, or is that a continuing operations number?

It’s total company wide. And we split that out into two pieces because some of those costs come out just naturally, with volume. And I’ve always thought that, what that piece is really not that complex to get, it’s just part of our business model. So we tried to structure that between what was more structural savings and ongoing. And that’s really the $75.0 million versus the $125.0 million. Rick Nelson – Stephens Inc.: Can you provide us an estimate as to what would be in continuing operations?

I would guess 80%. Rick Nelson – Stephens Inc.: In terms of the asset sales, I’m wondering what you’ve sold recently and what sort of multiples you are getting on dispositions and are you indeed seeing blue sky and what sort of dealers have you sold?

It’s been a little tough right now in the environment. And I kind of view it as our stock has been depressed with the debt overhang and that has the same impact on assets. I think the same things that are impacting our stock price impact that. And we sold 10 franchises in 2008 and I think that went extremely well. There was a little bit of blue sky. We’ve got a couple of deals pending and I actually was pretty pleased with the blue-sky multiple on one of those. But I don’t want to get stuck into a distressed value kind of concept. Our intent is to de-lever over time and I think that over time when we show that we can make money in these dealerships—we are very valuable as a company. Rick Nelson – Stephens Inc.: You talked about 86% SG&A to gross profit for January, February. Where do you think that number needs to be to be profitable for the full year, or were you indeed profitable in January, February?

It’s a little early to call on that but I think that we’re pretty close to break even. For those two months. Now we’ve got that accounting change.

The change in the accounting for the convertible debt, that’s going to skew some of the numbers in the first quarter and some of those estimates, the impact of that are in the 10-K.

It was interesting, the cost came out very quickly and the gross was actually—it was a tougher selling environment in January and February. March, we’re just getting a look. I’m closing the books there but we ramped up very nicely in March, similar to what we’ve seen in past year. You know, a normal seasonality uptick in March. It’s just off a lower base. But as Jeff mentioned, the sales are going extremely well, and particularly on the West. Rick Nelson – Stephens Inc.: I guess the March sales data will come from the OEMs this afternoon. Any initial thoughts of what we’ll see in March? And also, on the used car business, I realize the prices are rising for used cars and the gap is narrowing between used and new. Are you seeing any slowdown in the used car business of late?

Let me start with that. We actually were surprised at some of the early indicators on how low the SAAR is. I saw one at 8.8, another one at 9.1, so I don’t know where that will shake out. We were thinking it was closer to 10. But we want our guys to be thinking it’s a 15.0 million SAAR and just sell the hell out of it. Our used car margins were actually pretty high. They were like 9.6%, something like that.

In that ball park.

For the first quarter. So, that’s pretty good, that’s encouraging.

Our new car business coming out of March was very encouraging and our used car business is just excellent. It’s going to be our second best month in the history of our company. And the big opportunity for us is trading for cars and finding inventory. Today maybe half of the inventory that sits on our lot we’re out having to buy and we’re getting real aggressive in doing that and using the Internet, not only as a source but as a retail source. So we are making a lot of great progress there and our business continues to get better. March was a good month. Rick Nelson – Stephens Inc.: And on the finance side are you seeing any find at all?

It’s about the same. Everybody has got to deal with the exact same pressures on the finance side so there’s no competitive issue there. We’re dealing with it. It’s the way the business was run years and years ago and we’re dealing with it today. And it’s about the same. I don’t see any differences there.

I’m hoping that government, that help program is going to help some of the captives get some more funding capability. Particularly for GMAC because they’ve been tough. Rick Nelson – Stephens Inc.: The pending potential bankruptcy of GM and Chrysler, how do you think that affects your business and what do you think on the finance side there, GMAC and Chrysler Financial? How that will affect your floor plan lines, etc.

I’ll start with Chrysler. We’re so small on that. I think it would be insignificant for Sonic Automotive. We’re pretty big with GM, of course. GMAC is a separate company. I read the papers just like you. I guess a bankruptcy for GM is possible but that does not necessarily mean GMAC has an issue because they are 51% with Cerberus and a stand-alone company with its own funding. If I were in their shoes, and I think back to my Ford Credit days, I mean, I think I would keep those loans out there and keep the dealers going a very profitable business. If the government does the kinds of things it says it’s going to do, I think it’s going to be very good for GM. And so we’re pretty optimistic. Rick Nelson – Stephens Inc.: You are in bigger dealers probably at the end of the day.

I think so. And our dealers, they’re not the smaller one. We’ve got them big domestics in areas where we make money. Texas and Oklahoma.

I just wanted to circle back around to you on valuations and kind of what we’re seeing. Dealerships that are basically beach front properties that have great brands and great markets and great facilities are still bringing all the money. Transactions, believe it or not, are happening out there. Some of the stores that require facility projects, such as Mercedes, those are still somewhat depressed from where they’ve been in the past but generally good dealerships making good profit are bringing good multiples.

Your next question comes from Colin Langan – UBS. Colin Langan – UBS: Can I confirm, I want to make sure I’m reading the 10-K properly. It said that you had about $140.0 million available under your revolver but the way I read it is that you cannot use that to address your May maturities and that any asset sales would first need to address the outstanding amount on the revolver before it addresses the May maturities. Is that correct?

That’s pretty close. The amendment expires May 4 and the debt matures May 7. But essentially you’re correct. Colin Langan – UBS: That means from the 4th to the 7th some of that cash could technically become usable, is that what you’re getting at?

I would go back to the 10-K where we talk about that fairly extensively and what would happen on May 4 and the need to negotiate a new amendment with the syndicated credit facility at that time. Colin Langan – UBS: And also you decided 35 franchises have been selected to be discontinued ops. That is part of your effort to raise cash here? Is that a logic—and what is the thought process behind those new dealerships that are being discontinued? Which ones are you choosing or is your mix going to look different after this divestiture?

Annually, in the fourth quarter, we have taken review of the stores for strategic fit with our business. To answer your last question, no. We’re not going to look different than what we have in the past. We’re going to maintain our luxury and import focus. We think that’s a strength as well as some of the stronger GM brands. You know, we took a little sharper pencil to it and as I mentioned earlier, I think we want to, over time, look to de-lever the company. But we’re not in any fire sale mode that you might infer from that, at all. Colin Langan – UBS: Okay, because that is about 20% of your franchises, today with what you’ve added—about right?

Yes. Colin Langan – UBS: And if those were profitable, again, I want to make sure I’m understanding, the discontinued ops actually help, contribute a positive sixth sense to earnings after charges?

That’s a little hard to reconcile with all of the impairment charges and everything rolling through. So let me follow up with you on that one after the call. Colin Langan – UBS: Do you have any estimate for how much you expect to generate through these sales and the timing of them?

No, not that we really want to get into right now. Colin Langan – UBS: The potential dilution, if you strike a deal, how would that impact the different classes of shareholders? Would the dilution be to the common shareholders, or class A and B?

It would certainly depend on the nature of the deal but we do have two classes of stock but they’re both common shares and share in the wealth of the company equally. It’s just a matter of the voting rights of the class B.

Your next question comes from Dale [Loore] – FAC. Dale [Loore] – FAC: You had mentioned the Southern California markets and its strengths and weaknesses and I’m wondering how that compares to your Northern California markets, particularly the San Francisco Bay Area stores.

Actually, both markets are doing well. We recently had some structural changes out there and so the Southern California has just been maybe a month or two on our processes ahead of Northern Cal. But both Northern Cal and Southern California markets are doing extremely well, especially on the pre-owned side and on new car market share. Dale [Loore] – FAC: And system-wide do you anticipate, in the coming year, any store closures?

No, we don’t have any. We’ve closed two stores, a Saturn store in Northern California and a Volvo store in Atlanta and we don’t have any other stores. We had multi stores in the marketplace and so it was a good business decision for us to make those decisions. And supported by the manufacturers. And we don’t have any plans to close any other stores. Dale [Loore] – FAC: And as the industry continues to go through these upheavals and withdrawals, are there any potential merger or acquisition talks, on the upside or downside?

Probably not. We’ve got our hands full at the moment. And I think most others do as well.

Your next question comes from Jordan Hymowitz - Philadelphia Financial.

My first question is, you knew all along that you had debt maturities due. You have some very valuable dealerships. Why weren’t they actively on the market over the past six months, let’s say, to be sold?

I would say there was a fairly abrupt decline over the last six months in the operating environment and I think that our decisions relative to that topic kind of track the external operating environment. And outside of that I would go back to the 10-K and some of the issues that we were dealing with here as we came out of the fourth quarter relative to the going concern opinion and the need for the amendment and all of that.

And the strategy, as I mentioned, has been really two-fold. One for the capital markets to open and like most companies would expect to refinance in the market, or two, use the revolver. And I don’t anybody really anticipated the markets freezing as they have. It hasn’t happened in my lifetime. So those things sort of cut the legs out of that strategy.

Second question is, why the change that you can’t use the credit facility to pay back the 2009 debt? I always thought you could. I mean, what did you give up or why is that not a possibility anymore when I always thought it was a possibility.

I think we cover that pretty extensively in the 10-K and the need for that short-term amendment that goes through May 4. I think that was one of the bigger drivers in the availability under the revolver.

What page is that? It only came out last night and it’s pretty big.

I would say go to the Liquidity and Capital Resource section and I think we laid it out in the most detail in that section.

Third question is you said on an operating basis you are about to break even in the first quarter.

Yes.

Yes, prior to the change in the accounting for the debt.

We’ve got to see where it shakes out for the quarter. We haven’t had a chance to close the books, of course.

But it would be fair to say if the SAAR new and used are around the same level in January and February for the full year that you would be approximately break-even and we could use a wider range for approximately?

I think with everything that we’ve got going on and what we said on the prepared comments in not giving 2009 guidance, we’re probably going to let it stand with that.

Yes, we’re the only ones that gave guidance for the fourth quarter, as you recall, and that was somewhat problematic.

And my final question, on a completely different topic, is GMAC is now being a little more active in financing more cars. Are they doing a better job financing other brands or do you think they’re more likely to look to finance brands other than GM cars at this point?

I think they’re aggressively financing GM cars and looking to stay away from a lot of the other.

Certainly on floor plan.

Not on floor plan. Retail finance.

And retail financing. I don’t know, maybe used or doing some others. I doubt they’re buying a lot of new other brand business.

Your next question comes from John Murphy – Merrill Lynch. John Murphy – Merrill Lynch: On the assets that you’re retaining in continuing ops, or your ongoing business, what is the level of unencumbered assets? Is there anything in the real estate portfolio that are unencumbered?

Not really. Most of the hard assets act as security under the syndicated credit facility. And that as you know, it’s only been in the last two years or so that we’ve been shifting from a leasing strategy to an owning strategy on the real estate. So the real estate that we’ve picked up in the last couple of years has mortgages attached to them. So I would say the broad answer is no to that question. John Murphy – Merrill Lynch: And then if we think about $125.0 million in cost saves, depending on how you parse it out exactly, assume roughly 80% stays at the continuing ops ballpark, what is your break-even level if you achieve all those cost saves? And is there a level that you’re really trying to shoot at? I know there’s a lot of moving parts on used parts and service but what’s the level you think you can get to break even with those cost savings?

Well, we’re kind of seeing where we’re at break-even right now, given our discussion of the first quarter. A lot of these cost savings are being phased in over time. A lot of them happened in Q4 and they’re continuing as we speak. So I think we’ll shoot through these levels that we’ve achieved here. Because we’re looking at efficiencies everywhere we can get them and so, I guess that’s how I would answer that question. John Murphy – Merrill Lynch: So we’re looking, really, in the low 9.0 million unit range is where you’re—looking at January and February and how March will likely shake out?

Where it’s been running, yes. John Murphy – Merrill Lynch: On inventory and what kind of risk you are looking at potentially with this resolution of the GM and Chrysler situation, if it goes awry and we end up in Chapter 11, or worse case scenario, Chapter 7. Is there any provisioning or any way that you’re thinking about dealing with those inventories?

I think on used inventories it’s not a very big number and it’s not all those specific brands. In other words, you may have a Toyota in a GM lot. Plus we’ve got ability to move those inventory units to other stores. I just personally don’t think it’s going to be that big of an issue. I think the government has come out very strong on the warranty side. It was a very strong comment. The warranty is now stronger than it’s ever been; it’s got the U.S. government behind it. I think that is designed to send a very strong signal to customers that it’s okay to buy these cars that you want to buy anyway. So I really don’t see that as being a huge issue. John Murphy – Merrill Lynch: On inventory, there’s a lot of pictures floating around on the Web and we certainly see them when we’re driving to the airport near Newark and all these port lots and lots all over the place. In the shopping malls and stuff, like they used to in the old days, of these excess inventories, these new vehicles. And from what we can tell, what we’re being referred to on dealer inventory, inventories look like they’re leaning out and you are clearly leaning out your new vehicle inventory. Are you aware of any incremental or excess inventory that is in transit that you are not accounting for, that they companies are trying to push on dealers? Is there something weird going on there right now?

Absolutely not for us. We are aware of all our inventory on our lots and all of our inventory incoming and any inventory that we’ve ordered. We control that all centrally and absolutely, we know where all our inventory is and we account for that in our day supply numbers. John Murphy – Merrill Lynch: I recognize that you fully know what you have but is there anything that the auto makers have on their books that’s in transit that they’re trying to push on dealers right now. But you guys are clearly pushing back on that, which is the right thing to do. It just seems like there’s this bubble of inventory that’s building behind the scenes, that’s not on dealers’ lots or on your books that the auto makers are sort of stashing in these lots. Not in your business, but is that something that you’re seeing in the channel?

I know their pipelines are full and obviously you’ve seen the ports are full, but other than that, no. Nothing more than the usual. And they’ve got, obviously, production cuts going on now probably more than ever before.

Pretty responsible, I would say. John Murphy – Merrill Lynch: On these assurance programs, that Hyundai sort of launched earlier this year, everybody seems to be piling on. Even some of the larger dealers are putting on their own programs. What is your general take on that, on spurring demand? And it’s clearly another form of an incentive. Is this ched n now probably more than ever before.ng in these lots. is ers have on their books that'ompanies are trysomething that will really help support the SAAR, in your mind, or is it something that might just create a temporary bump and then we’ll see a pull back like we’ve seen in the past incentive programs?

It has helped Hyundai a little bit, I think, but who know? I mean, it’s another program. And it’s something we’re looking at. Other retailers have gotten in, other manufacturers. Ford and GM, you’ve seen as of yesterday dove in. We’re looking at it. And long term, is something that stays around? I don’t know the answer to that. But it’s another program that helps incenting customers to come into the stores.

Your next question comes from Stuart Smith – FAC.

I know you touched earlier on your Internet marketing strategy, how aggressive are you going to be for the remaining 2009 year?

We are very aggressively attacking it. It’s really the staple of our business right now, from both a new and used car perspective. And fixed operations. And it’s probably at the top when it comes to operational focus for us and improving volumes. And I think you saw that in one of the slide that I did for new car market share and used car volume in January and February were just really, really decent and a lot of that is because of how aggressive we have been on the Internet.

Couple that with the fact that I think print advertising being so costly and I think nowadays just ineffective, I think it’s a great way to go.

Well, I’ll take it a step further. It’s not just print. It’s television and radio and we’ve cut our advertising basically in half and we’re focusing the dollars that we do have heavily on the Internet and it’s really driving our business. And that’s from coast-to-coasts, north and south. Our business is really doing very well from an Internet perspective, and it’s going to get better.

I recently read an article and in the article it said—I think it was the Wall Street Journal—that for the first time since World War II there are the fewest amount of dealerships in America, yet there are more drivers on the road. I think you guys are doing a great job and I think if you can pull through this 2009 and the light at the end of the tunnel does indeed come through, 2010—how do you see yourself positioned with respect to competitors, like Auto Nation?

I appreciate the comment. We are very well positioned. From an operational perspective, this company is performing better than it’s ever performed. It’s just getting through the liquidity issues that Scott and David talked about, but operationally speaking, I don’t care if it’s used cars, new cars, the Internet, what’s going on in fixed operations, our business is headed in the right direction. We continue to get stronger each quarter.

But you make a great point about some dealers do fall off. At it is happening at an increasing rate; we’re seeing that. Demand isn’t going to change as a result of that, therefore through-put through the remaining dealers is going to increase. And that’s going to help margins, it’s going to help fixed operations. It’s going to help everything, so I think all of us will be stronger.

I think I’ll add one other thing to that, too, is that we’ve had also a huge focus on our training and because our turnover is reduced down to what I think, from a comparative basis, might be best-in-class at a trend of 29% for the year, it makes the training stick. And it’s really bringing all of our Play Books and our processes in the stores together. So we look forward to getting through the opportunities here and letting our operations take hold.

With respect to your training, I have visited on the West Coast several of your locations and you do, indeed, provide good training. They are all very pro-Sonic people. I felt like in many dealerships I was walking into a basketball game. They were really helpful, friendly, and very upbeat. I commend you for doing that. That’s a great thing.

Thank you very much. We appreciate that.

Your next question comes from Paul Carey – Fountain Capital Management. Paul Carey – Fountain Capital Management: I was wondering, along the lines of what John Murphy was asking about, in terms of incentives, what about that Cash for Clunkers program? Is that actually causing people to stay away until those details come out? Or are people just not aware of that or have you seen any impact from the talk about that program?

I don’t think we’ve seen anything. I’m not sure people are aware of it. Especially the folks who might be interested. I think the program is great, we’re strong with support of it. I think it’s worked well in Europe, in raising overall demand for vehicles.

It was up 20% in Germany.

And it’s got a lot of other benefits. The older cars tend to be much more polluting and gas inefficient and if you can put these people in new cars I think it helps everybody. It helps the environment. And it helps us. Paul Carey – Fountain Capital Management: Have you guys sought any kind of legal opinion on what the impact potential is on your franchise agreements if one of the manufacturers were to enter into bankruptcy, how your claims on that would fit and kind of where you would fall out in that process?

We’ve actually done some evaluation on that. We’re not prepared to go into it on this call but I think we would fit very nicely. Paul Carey – Fountain Capital Management: The franchise agreement likely would remain in force then? Even in a bankruptcy situation. Is that your understanding?

I don’t know. I know our legal people have taken a look at it. I don’t know all the facts. I just personally think they’d be nuts to mess with great dealerships like the ones we have. Paul Carey – Fountain Capital Management: I was wondering if you could speak to the level of engagement of the CEO over the last, call it two months, versus level of involvement, call it 18 months ago.

Bruton is very engaged. His office is located in the Ford store right next to our corporate offices and he’s there virtually every day that he’s in Charlotte, including Saturdays, and some Sundays. And I’ve spoken to him four times today. So he’s very engaged. Always has been engaged. You ought to come by and visit him. You can walk right straight in his office. He doesn’t have an assistant there. You don’t have to go through 12 people to get to him. You can just walk right in.

Your next question comes from Joe Gagan - Atlantic Equity.

I have a couple of questions around the repair business. I see on the service and parts and repair the revenues were down from $248.0 million to $237.0 million and there’s been a lot of talk about how repairs will go up because people aren’t buying new cars or new used cars. Do you know why the service and parts went down when there has been a lot of talk about people fixing their cars instead of buying new cars.

What’s happening now is our customers, especially the domestics, are pushing off the heavy line work and some of the heavier maintenance work that needs to be done and they’re doing all the lighter work. And there is a kind of a two-sided story there as well. We’ve got opportunity in our fixed operations as we’ve been calling out for the last two quarters and our Play Book that we’re executing now, our trends are getting better and better. The first quarter we called out here that we should be about even, year-over-year, and that’s progressively better than what it’s been over the last few quarters, so there are certainly opportunities from a Sonic perspective. And then the consumer is not spending as much money. And we’re seeing that more prevalent on a domestic Cadillac line than we are, for example, BMW or Mercedes Benz, where they’re actually maybe spending a little bit more money. Now, less our body shop business for the first quarter, we should be somewhere in the plus 3% range in that perspective.

But it’s interesting, within that, our oil change, quick lube, those kinds of things, are up 20% to 25%.

Why is that?

Consumer behavior. They’re, “Oh, my God, I’m going to get it changed so nothing goes wrong.” And as Jeff said, I think they’re pushing back on the larger repairs and doing the smaller one.

Now, do you think that your BMW and the foreign car repair business is doing better because there’s less competition from independents in the foreign work?

Maybe. Some of those smaller shops are shutting down. But, again, our RO count is up. It’s just that the average ticket is less. And the customers is just not spending as much money.

I’ve heard before that to some degree over the last year or so that the manufacturers are pushing back on some warranty claims. Given what’s going on with the manufacturers, how it’s gotten really bad over the last six months or a year, is that accelerating, that problem, where people put in warranties and they are refusing them?

It’s no different than it was a year ago or two years ago. You have to have your ducks in a row and submit the right paper work and they’re great to work with. And when you don’t they’re not. So there has just been no issue or change there.

Your last question comes from Josh Givilber – Nomura. Josh Givilber – Nomura: I have a quick question on your SG&A expenses. You broke it down in your press release and I guess the other area, it went from $49.9 million to $64.9 million, and I know $3.9 million of it was the lease breakage cost. I was wondering what the other increase was?

There was a fair amount of hurricane and hail storm damage. If you look a little further into the tables it give you some more of that detail. There was probably about $8.0 million or so of hurricane and hail damage for the full 12-month period. Josh Givilber – Nomura: This is just in the fourth quarter.

Okay, I’m with you. In the fourth quarter, I would probably have to get back to you on that one, and dig into the details a little bit more on that one.

I would just like to thank everyone. All of our fellow shareholders and bond holders, everybody that participated on the call today.

(Operator Instructions)

This concludes today’s conference call.