Good morning and welcome to the Sonic Automotive Third Quarter Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer period. (Operator Instructions) As a reminder, ladies and gentlemen, this call is being recorded today, Monday, October 21, 2013. 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 & Presentations on the left side of the menu. 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 expectation 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 the actual results to differ materially from the statements made. These risks and uncertainties are detailed in the Company’s filings with the Securities and Exchange Commission. Thank you. I would now like to introduce Mr. Scott Smith, Co-Founder and President of Sonic Automotive. Mr. Smith, you may begin your conference.

Thank you, Lisa. Good morning and welcome to Sonic Automotive's third quarter 2013 earnings conference call. I'm Scott Smith, the Company’s Co-Founder, President and Chief Strategic Officer. Joining me today on the call is Mr. Heath Byrd, the Company’s Chief Financial Officer; Mr. Jeff Dyke, the Company’s Executive Vice President of Retail Operations; Mr. C. G. Saffer, the Company’s Chief Accounting Officer; and Mr. David Smith, the Company's Vice Chairman. As we disclosed in Sonic's press release issued earlier this morning, we are currently in the process of evaluating the impact of a positive tax gain relating to the extinguishment of Sonic's 5% convertible senior notes in various transactions occurring in 2011 and 2012, including the allocation of this gain, if any, over prior reporting periods. Once this process is completed, Sonic will issue a new press release disclosing net income and earnings per share amounts for the third quarter 2013. Accordingly, please understand that management will refrain from answering any questions on this conference call related to net income, earnings per share, or any other metric that may be affected by the final calculation and allocation of this tax gain. I'll begin the call with a brief review of the quarter, then I'll turn the call over to Heath for a financial recap, then Jeff will give the operational recap, with summary comments from me, then we'll open the call for your questions. With that, please turn to the Slide titled 'Overall Results'. It's a great day for Sonic Automotive. We're pleased with our operating results for the third quarter. Our revenue was up 5.4%, our new vehicle revenue was up 5.5%, volume was up 2.5%, our pre-owned volume was up 3.8%, F&I revenue was up 6.8%, Fixed Ops revenue was up 7.8%, gross profit was up 7.1%. SG&A was 78.1% including initiative expenses that we'll talk about shortly. With that, I'd now like to turn the call over to Heath for more color on financials. Heath?

Thank you, Scott. Good morning, everyone. As Scott mentioned, revenue was up 5.4% at $2.2 billion, driven by 5.5% increase in new, 6% increase in used, 7.8% increase in Fixed, and 6.8% increase in F&I. This growth in revenue resulted in gross profit of $326 million, an increase of 7%, outpacing the growth in revenue. Next slide please. SG&A; SG&A was up 80 basis points compared to last year. Increases were related to the stock remediation, development of One Sonic-One Experience, and development of our pre-owned initiative. Next slide provides more color on those expenses. On this slide, you can see the walk from Q3 SG&A percent to adjusted SG&A percent related to the base business, which you'll see at 60 basis points lower than last year. Expenses related to the pre-owned initiative equalled $1.7 million for the quarter and $4.5 million year-to-date. Customer experience expenses, $1.5 million for the quarter, $4.6 million year-to-date. SOX remediation expenses, $1.4 million for the quarter, $3.6 million year-to-date. So total spend for all initiatives for Q3 was $4.6 million and $12.7 million year-to-date, all going through the SG&A. Q3 flow-through will equal 34% adjusted for these initiatives. Next slide. Capital spent, total for year-to-date stands at $127.5 million. This includes the acquisition of five dealerships which brings us to 31% ownership. With mortgage offsets, total cash used was $74 million. Estimates for the year remain the same at $66.4 million for real estate and $105 million for facilities, store level CapEx, and IT spend. Next slide please. Debt covenants; this slide shows that we're compliant with all the covenants at the end of Q3 and we expect to be compliant going forward. Next slide. Share repurchases; on this slide, you can see our activity year-to-date is 642,000 shares and we have additional authorization of $135 million. So overall, we're very pleased with the Q3 performance. We continue to hit or exceed our internal goals even with the incremental expenses associated with the initiatives related to stocks, pre-owned and customer experience. Based on year-to-date results and our forecast, we are adjusting our annual earnings guidance to the higher end of the previously announced range. We are now targeting 2013 fully diluted earnings per share from continued ops at $1.96 to $2.03. And with that, I'll turn the call over to Jeff Dyke.

Thanks Heath and good morning everyone. I'm proud to present the third quarter operating results on behalf of the team at Sonic Automotive. As you can see from this slide, new car volume was up 2.5% for the quarter with PUR increasing $99 and gross increasing 7.5% as we continue to tweak our True Price model. Our statistical team is working around the clock on our SIMS new car pricing model which we expect to launch in the first quarter of 2014. We have proven we can move pricing to create share and margin and we'll continue to make adjustments as we get closer to our new car SIMS launch date which will significantly improve our pricing model. I would also add that our customer base loves the True Price model, as feedback is outstanding and our CSI continues to improve. As we announced today, True Price is an important ingredient to our customer experience launch next summer, so I'm very pleased with our progress. Third quarter was our largest volume third quarter in Company history on a same-store basis as we enjoy improvements in our playbook execution and improvements in the SAAR. I also want to point out that we are among the leaders in new car volume throughput per location at 101 units per store for Q3 and we'll start to track this performance and provide quarterly updates moving forward just as we do for pre-owned. We ended the quarter with a 55 day supply as we begin the fourth quarter and are geared for a great close to the year. Next slide please. I'm very proud of our continued improvement in pre-owned. Q3 2013 marked the largest volume pre-owned quarter in Company history. We're getting closer to our 100 units per month goal, per store per month…

Thank you, Jeff. Q3 was obviously a very busy quarter for us. Financially Q3 was our 16th consecutive quarter, four years, of quarter-over-quarter revenue growth. We're beginning to see sequential traction in our True Price strategy and our inventories are positioned for a successful Q4. We closed our first acquisition since 2008 with the Murray Mercedes-Benz of Denver and Murray BMW of Denver adding nearly $200 million in revenue. We believe it's important to reiterate our investment priorities for everyone. We will continue to invest in our base business, which is our pre-owned specialty retail concept, and our Sonic customer experience One Sonic-One Experience. In addition, owning our real estate and strengthening our balance sheet. We believe that our equity is undervalued and will continue to opportunistically acquire stock in the market as our excess cash allows. We are pleased to announce our pre-owned specialty retail concept and our sonic customer experience. These two initiatives have been used in the planning and investment. We are targeting their launch in the second half of 2014. There's been significant investment supporting these initiatives running through our SG&A for several years. We believe that these investments in our base business will yield a competitive advantage and fuel our future growth with variable to barriers or significant investments in the form of goodwill for new franchised dealerships for many years to come. The business environment continues to be favorable, and as Heath stated earlier, we are adjusting our annual earnings guidance to the higher end of the previously announced range. We are now targeting 2013 fully diluted earnings per share from continuing operations at $1.96 to $2.03. Before we open the call to take your questions, this is a fantastic day for Sonic Automotive as I mentioned in my opening statements. We really have positioned our Company for a predictable, repeatable and sustainable growth. We are back in growth mode. I'd like to thank our associates, our manufacturers, and vendor partners for making Sonic Automotive one of America's greatest companies to work and shop. It's truly an honor and a privilege to lead our great Company. With that, we'll now take your questions.

(Operator Instructions) Your first question comes from the line of Rick Nelson with Stephens Inc.

I wanted to ask you about the guidance. It appears that you're raising your fourth quarter expectations. Wondering if you could comment there, how the third quarter came in relative to your internal forecast?

Rick, this is Heath. We haven't changed our internal guidance on fourth quarter, and we feel like our cadence has always been a little off from the external guidance, fourth quarter as you know is the biggest opportunity for us with December almost in two months. But our forecast for fourth hasn't changed materially from the beginning of the year.

Thanks. And then the SG&A, you point out had [taken out] (ph) 140 basis points differential between what was reported and adjusted for some of those costs. How much of that difference do you believe is truly temporary, since like some of these costs, I don’t know Sarbox for example, are going to continue?

First of all, just for clarity, our guidance, our new guidance does include the actual 78% SG&A. We're not going to call off these initiatives as one-time initiatives. So make sure about that. Secondly, of course [True Price] (ph) will continue to grow once it gets operational. That cost will continue. The SOX remediation this year has been $4.5 million so far. I truly believe you're still looking at about $3 million of spend next year as it relates to our internal controls, and then of course customer experience will also continue as we get prepared for the rollout in July of 2014.

Okay. And if I could ask you about the rebranding strategy, where you anticipate that might cost, and if you can provide some more color on that as the Sonic name kind of go on all of your nameplates including the luxury stores?

Rick, it's Jeff Dyke. We're in the middle of working with our manufacturer partners on that. Our branding initiative will be a sub branding initiative as we wrote in our notes in our releases. You're not going to see where you see AutoNation putting their name real big all over the facility that competes with the OEM brands. You won't see us doing that. We'll stick with the names that we have in the local communities where we've invested in those names, but you're going to see a Sonic Automotive company on the facility and we're in the middle of negotiating with our OEM partners exactly how that's going to fit into all of that, but we fully intend to have that happen on all of our facilities whether that's high-line import or domestic.

And is that expense Jeff, built into the numbers that you laid out for next year?

Yes, Rick, it's built-in. It's a nominal expense from a signage perspective. And then of course there'll be a marketing and advertising campaign, but the rollout of One Sonic-One Experience is going to take some middle of next year to the end of 2015. So the big advertising and marketing expenses will be primarily geared towards 2015 and we'll include that in our forecast at that time.

Rick, this is Heath. I'll reiterate that. Obviously, branding expense, additional customer experience expense, our pre-owned initiative expense, and any lingering SOX remediation expenses, all of that will be in our guidance for the next year.

Okay, thanks a lot and good luck.

The next question comes from the line of Patrick Archambault with Goldman Sachs.

I had I guess this one just on the guidance as well. The item that you are working on, the tax gain, right, I think you said that it applies to retroactive periods rather than 2013. So I guess it's safe to say that there is no impact of the tax gain on the guidance, correct? Like I mean even if it did apply to 2013, I suppose it would also be a one-time?

If it did apply to 2013, it would be a one-time. Again the issue is related to the extinguishment of those converts in 2011 and 2012. However, obviously balance [indiscernible]. So you've got to determine which period to apply that number. But you are correct, if it did apply in 2013, it would be a one-time callout.

It wouldn't be part of the guidance, okay. My other question was, because a couple of mine were answered in the last series of questions, but also in terms of the new vehicle sales which was up I think it was 2.5% on a volume basis, same-store sales, that was considerably below where the market was for the quarter and I believe it's the second quarter where that's happened. If I have it right, I think first quarter you were pretty close to what your brand exposures would have suggested you would've done but you kind of underperformed them pretty significantly in Q2, and now in Q3, how much of this is due to some of the initiatives that you have going, are you substituting margin for volume, is there something that just kind of a new way of doing business that we have to get used to, substituting volume for profitability, or is there some transitional issues here that ought to just roll out and eventually you ought to come back to closer to market growth?

This is Jeff Dyke. We expect as we get better with our True Price pricing model, that we'll be more in line with the market as we move forward or above the market, and we launch One Sonic-One Experience. All of these things sort of go together. So, it's really important that we learn how to manage in our true price environment prior to the launch of One Sonic-One Experience next summer. So, you can expect things to move around a little bit. Obviously we moved our margins up in the quarter having one of the best margin quarters that we've had in years other than December ending quarter. So, we are very pleased. It was a record Q3 for us in terms of new car volumes and we did all that with the ability to move our pricing around and to deal with what's going on store level-wise with our True Price model. So we had a huge third quarter last year in terms of volume. So when you look at year-over-year percent increases, they don't tell the story as much as the amount of throughput that we have going through the stores. I think it is important that we all look at that as we move forward. We are among the higher groups with the number of units that we are selling through our stores and if you go do the math whether it's new or used our combined volume in new and used is higher than anybody, maybe even CarMax, probably the highest other than CarMax. So, with the margin that we got, we feel pretty darn good about where we are, especially with what we've put our stores through in terms of moving to our True Price model.

Understood. I guess like is the limited number of dealer points perhaps like a constraint which is why you're moving back towards acquisitions or should we think about it that way?

Not at all. We see lots and lots of upside. We did about 101 units on average per store per month in new. There is no reason why we can't do 150, even higher than that, as One Sonic-One Experience rolls out. And I think if you read all the press releases that we've put out there, we've been working around the clock, there's been years worth of work to get to this point, and as the technology rolls into the store, this is a major disruption in the life of an associate for Sonic Automotive at the store level. So, we are very pleased with what our team has accomplished so far, and sometimes you got to slow down to speed up. We are really, really changing how cars are sold inside our Company and we think that we are positioning ourselves for the future, and the type of buyer that's going to come on into this industry moving forward.

Patrick, this is Scott. You mentioned acquisitions and growth, and I really want to reiterate that we are pursuing our growth opportunities in the pre-owned field right now. Just like you look at CarMax, it has maybe 4% of the national industry with virtually unlimited access to the market. We believe that there is a tremendous opportunity in the pre-owned industry for Sonic to take our pre-owned strategies that we have been working on for years and provide a different and unique customer experience. As you know, pre-owned market is at least three times bigger than the new market and we have built these technologies to dovetail the Sonic Automotive and the specialty retail pre-owned model to work in conjunction with each other. So we believe that we are the best of the franchised dealers in the pre-owned undisputably. I think CarMax is the best overall. I think that they've obviously done a fantastic job and they have 20 years of experience on the organization, but with this, we're easy, everybody would do it, and I think our team has proven that we can do it and that we know what we are doing in pre-owned. As we develop this out, I think we will be opportunistic in our acquisition of new vehicle dealerships but it's not the primary area that we are focusing on for growth going forward.

Okay, great. Thanks a lot guys.

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

Another question on the 4Q guidance as well. I'm just having a little bit of a hard time trying to bridge the gap between the $0.52 that you gave in the last quarter – I mean last year in the fourth quarter, and the high $0.60 number you are guiding to at the midpoint of the guidance for the fourth quarter. I know you had acquisitions in there but can you just talk about what are you expecting in terms of the new vehicles are maybe [indiscernible] the gross, having some of the components of that pretty big step up in earnings?

This is Heath. I think you're going to see the same. The SAAR is levelling out to some degree. I think we saw 15.2 million in September, for the quarter it amounted to 15.6 million, and our models have always been projected on that range for the fourth quarter. I think maybe the disconnect is, obviously until we have the third quarter EPS number out and available, it's hard to do the walk for the model and I completely understand that. The good news is obviously our Q is due November 11, and this will be resolved and we will have another call to discuss the EPS well before the 11th, and then I think it becomes clearer on why we are maintaining and actually narrowing our guidance to $1.96 to $2.03.

Understood. So we'll wait for that call then. And also can you quantify any recall impact that may have flown through the warranty business in 3Q, was there anything large like it was in 2Q?

No, it was spread across, I think it was spread across a lot of different lines, from Lexis to [indiscernible] to BMW, Honda, it was spread across several different lines, but not much greater as a percent of our overall revenue than it has been, but certainly bigger on a year-over-year basis because there was very little warranty last year. So the percent looks increased, looks bigger than the numbers really are.

Understood. Thank you.

The next question comes from the line of Scott Stember with Sidoti & Co. Scott Stember - Sidoti & Co.: Last quarter you gave some statistics about the percentage of stores that were not 100% adopting the true pricing methodology and it sounds like you have certainly moved along the learning curve nicely with some of those stores. Can you talk about where you are now versus last quarter? I think you said 30% or one third of the stores, it sounds like they are quite bigger than that right now?

It is. We got about half of those and some of that came with some people leaving and some of that came with some people beginning to understand what we're trying to accomplish, and this announcement today will help even more the stores kind of center and focus on One Sonic-One Experience and where we're headed. We've obviously been quiet with all of the strategies that we've been trying to develop and we are very excited about the announcements that we have made today and our stores have made remarkable progress over the quarter. It doesn't mean that we are not going to invest [indiscernible] in there. It's really, really difficult to handle the pricing model without the statistical analysis like we have on the pre-owned side and that will all be developed shortly and sometime throughout the first quarter we'll really start to see some levelling out of our pricing strategies as we move forward. So, we are playing around with it, we are very pleased with the margin growth, actually very pleased with the volume that we have in the quarter, both on the new and pre-owned perspective. So, we are appreciating notice and we are definitely getting better at managing this, and we're going to continue to improve. Scott Stember - Sidoti & Co.: Okay, and could you talk about how the core used business within your new stores, how the methodology works with this whole process, how they stand once you start getting these standalone stores up, how the two stores, the concepts will coexist with these each other?

It's not unlike a CarMax and a Sonic Automotive store operating today. They're going to operate completely independent of each other, but you are moving into great – and we're building two separate organizations to run both, but we are going to use the great economies of scale in terms of the technologies that we build and the processes that we develop. So we've got a team that's going to run the standalone pre-owned concept and the team that is going to run our core business. And right now, you would think that sharing of inventory and all these things might be primary on our Board but they are not. We have the experience, we have the expertise, we have the ability to purchase and trade for inventory and we are building a brand new standalone business that's going to live and thrive all by itself. There is a huge, huge market on the pre-owned side as you are well aware of for lots of competition. I mean CarMax is out there, Scott said, and the market they do business in, they come in 4%, 5%, something like that, they have got 1% of the U.S. market and there's just too much open, too much upside with the experience that we have and the technology we have developed not to affect that, but they are going to stand alone, stand on their own two feet, and we are going to run the business as totally separate. Scott Stember - Sidoti & Co.: Okay, and on the margin side, on the new, there's been talk about accelerated pricing pressure on midline imports. Can you talk about what your experience was during the quarter on that?

Yes, our margins are actually going up, and they are going up because the experience is a little bit different. When the customer can come in, our guests come in and they don't have to negotiate, they don't have to go through all the crap that the traditional dealer puts the customer through, that mousetrap if you will, the consumer is willing to pay a little bit more and we're actually starting to see that, and we haven't even come close to rolling out One Sonic-One Experience yet, but just the language and the processes that our team is using in the store, if you ever had the opportunity to go into one of our stores and experience it, even now you should, it's just different and it's going to become a whole lot more different, and we believe as we move forward with One Sonic-One Experience that we're going to command higher margins. CarMax does and they are a true one price model, and so we believe that we're going to continue to get better at managing our margins and we'll continue to see that in October as we move forward. Our new car margins have been pretty solid and our team is getting better and better at pricing. So, we are going to exchange a little bit of margin that's going to be pushing up when you bring in upgrade or experience that is really good experience that the consumer likes when they come into an automotive retail dealership and the process that we are going to offer our guests. Scott Stember - Sidoti & Co.: Alright, just last question real quick on October, could you just talk about how things have been shaping up on the new side?

Volumes are good, and as I said we're managing our margins. I've been pleasantly surprised with October in terms of new car margins. Volumes are very good on the pre-owned side, margins are okay, we have got little work to do between now and the end of the month but we'll be fine, but overall, we are having a nice October. Scott Stember - Sidoti & Co.: Great. That's all I have. Thank you.

The next question comes from the line of Bret Jordan with BB&T Capital Markets. Bret Jordan - BB&T Capital Markets: Couple of questions sort of around this used strategy. I think your press release said you have separate added facilities to support manufacturer partner brands. Are these going to be all-brand used retail store fronts in the Denver market like as you look at your fixed strategy, are you going to be all-brand service at the same time? I mean it seems like CarMax has their finance operation initiatives with a fair amount of overhead. Unless you're going to run a finance operation, what are you doing ex the unit sales to absorb the effect?

The model is being built a lot differently than the CarMax model but we'll sell all brands. We're priced to stay away from the Ferraris and Lamborghinis of the world, but other than that, with price point ranging from $14,000 to $18,000, somewhere in there, and service all brands. But it's more than that, it's the retail experience that they're going to get when they come to the facility. This is a very unique concept. This is not a big box on a 10 acre lot where you have got 1,000 or 1,500 cars sitting out there in a very traditional model. It's a non-traditional model and I don't want to get into some of the details just yet but we are very, very excited about where we're headed with this concept. It's something we've been working on for many, many years. It's not something that we came up with in the last two years and we have been working on this model ever since this team came together and we're just now in a position to be able to launch it because we didn't have the technology quite honestly built and the processes built to be able to deliver it. So it's a different model than CarMax, very different, but it's going to take advantage of the same big opportunities in the pre-owned industry. It's just huge, and other than them, there is really nobody out there taking advantage of that. So a lot of room there and we are going to go in and take advantage of it. Bret Jordan - BB&T Capital Markets: I guess as you're not going to participate in the warranty side of the business on these used cars, is there a strategy to drive customer pay service, is it like it would be either going to be a lower-cost service offering or are you going to promote tires, is there some way to bring these customers back for your service versus the independent they may have gone to?

Bret, this is Scott. Just before Jeff answers the operational side, we will be participating in service contract in driving the customers back. Our plans currently are not to get into owning our own captive finance company, but you can't rule that out somewhere down the road. When CarMax started, they had partners in there that helped them get it started. They didn't just come out with a [CAF] (ph) trade out, a box with complete ownership. So if something is down the road you may be able to grow into, and of course you dovetail that into our new car business, and we only do $6 billion in revenue on the Sonic Automotive side, so I got to think that there is an opportunity down the road for automotive contracts and doing a secure financing.

So from an operations perspective, one thing I would challenge you to think about is anything automotive and is the wide breadth that is available to soliciting that when we say that. So again, I don't want to give away any of the things that we're working on but we have a very, very good model. It's not dependent upon having 60%, 70% of our income coming from a financial source and we're very excited to launch it. It is one that is not as capital intensive as you might think and one that we believe we'll be able to leverage in terms of the skill sets that we have created at Sonic Automotive for the last five, six, seven, eight years. So it is really going to be something special, I'm very excited. We've got – there's no barrier to entry for us. We've got all the expertise, we have the capital, we have everything that we need in order to really take advantage of this market. Bret Jordan - BB&T Capital Markets: Thank you.

The next question comes from the line of John Murphy with Bank of America Merrill Lynch.

I know this question has been asked in a number of ways and people are kind of coming up with different numbers, but if you look at the fourth quarter, roughly I mean we're looking at a fourth quarter that's somewhere in the $0.62 to $0.68 range. Would it be fair to kind of be thinking about this generally in our model sort of as mid-$0.60 number and we'll get an update on November 11, I mean could we just have a kind of call to something here?

You know obviously I've got limitations on what I can do with that. Until we have the EPS comes out for Q3, then as I mentioned before, it will be easy to map it to our new guidance. I would tell you that our fourth quarter forecast internally has not changed materially from the first year – I mean beginning of the year to now. So we're not expecting some large, something extraordinary to happen in the fourth that we didn't foresee in the first quarter.

And John we did our forecast internally for our quarters all year long as we did last year and the year before, and there's always been a little bit of a misnomer Q3 to Q4 in Sonic Automotive. The street is always thinking we are going to do more in the third quarter than we do in the fourth quarter, and we always tell everybody every year, look, we'll always do more in the fourth quarter than the third quarter. It's five years in a row we've done that and five years in a row we've hit our numbers. So, I just challenge somebody to listen to it at some point in time from quarter to quarter. If you go back and look at the transcripts from last year, I gave this exact same speech.

Got you. So something in the $0.60 number probably is something we should think about but you guys can't bless us yet, but we'll get there on November 11. I appreciate that. Then just on the One Sonic-One Experience, as you look at the benchmarks, I mean one of the key that sort of stood out to me in the press release is 45 minutes or less to close a deal, to get somebody in and out, up in and out, and that's a big deal. Where are you right now and what are sort of the best in class benchmarks because that seems like that could be a real game changer?

It's going to be a major game changer and right now we are a hell of a lot higher than that because we don't have our processes in place to handle it, and if you don't have one associate in your store that can take a customer through the entire transaction, that means F&I, that means the trade evaluations, and you don't have the technologies and the culture to go along with it, you can't do this. Best in class is probably CarMax. They are below an hour once you have made a decision on a car and everybody else is in the back of the pack. We believe that once the customer makes a decision what car he's going to buy, it’s tough for them. They're going to be able to sign in an iPad and get the heck out of there if they want to and we're going to do it, and we've put that benchmark of 45 minutes out there, my internal benchmark is a hell of a lot faster than that, and it's going to make a big difference. The consumer is going to have to at least consider purchasing a car at Sonic Automotive in the markets that we are in because of the experience. It's going to be that different. And it's not something that you can wake up tomorrow, our competition can't wake up tomorrow and say, well, we are going to go do this too. It's taken years and years to develop the applications and to develop the culture at the store to even accept this stuff. And you guys know this, you have been looking at our calls forever, you've been talking about culture and playbook and process for a long time, and today I'm very proud. If you go into a Sonic Automotive store, you know it's a Sonic Automotive store in fact not even on the store. And tomorrow, Sonic will be sub-branded somewhere on the facility, and we'll be delivering a standard that is a specialty type retail standard of experience that you get, not unlike when you go into a Ritz Carlton or anywhere else that puts the customer, guest experience at a very high level. Not to say that we don't do that today. We have great customer satisfaction scores. Those are scores that are measured against the industry averages and standards and those are no longer good enough. We are going to raise the bar here at sonic and we're going to provide something that is very, very different than what we provide today.

And the $45 million investment that you have made over the past few years, how much more are we looking at going forward? I know you gave us some SG&A dollars on the pre-owned specialty store development side, but what should we be thinking about sort of the ongoing investment here? Is it something similar to what we saw this quarter as a run rate?

Yes, I mean I don't see that run rate changing up or down for the next several quarters. We've still got a massive training effort that's going to start in the middle of the next summer. Our checking department is grown from five, six, seven people six years ago to north of 30 today and that's going to grow a little bit more. We are going to do all of our training internally. And so, this is a massive effort, and there's just expense that goes along with it. But we have included that in all of our guidance numbers and we'll continue to include that in 2014, and quite honestly, we are looking to have a great 2014. So, there is expense to go along with all those stuff. We're making adjustments to handle that as we move forward and I don't expect to have any major changes up or down from a long Sonic One Sonic-One Experience perspective.

Okay, that's very helpful. And then on the pre-owned side and the development of these stores, I mean you keep citing CarMax as sort of the best-in-class and they obviously do a very good job on the used car side and are very large. I mean is that what you are using as a benchmark in kind of thinking where you could ultimately go? I know this is still at the early stages but I mean is there the opportunity to have 100 used car stores down the line or is this really just something that will be a smaller bolt-on in some markets where you have new car stores, because I mean the opportunity is huge but I'm just trying to understand what you are kind of envisioning or thinking what the end game could be?

You get it, John. Think bigger than that is what I would tell you. This is a huge opportunity and this is a team that we have put together on the pre-owned side that has a ton of experience of doing this, and think bigger. We are thinking bigger. CarMax is a great big company and we've got a lot of respect for them. They've done a good job but they are all by themselves, and it's time for a new player in this arena. And we believe that 100 stores is a possibility at the tip of the iceberg but we are going to go. This has become a national brand and we're going to go from coast-to-coast, from the South to the North, and take advantage of the massive opportunities that's out there, and we all know it, it's there, but not everybody has the expertise to be able to do this and that's what's special about our Company. We have put the people together that have the experience. We don't have any barriers to entry here. We are not out looking for experience to build all this. We have it, we've had it, and we've been just quietly, and the word patient comes to mind, we've been very, very patient in developing our processes and the techniques, technologies in order to bring this to life and I think you're going to be very, very surprised when we open up towards the latter half of 2014 in the Denver market and what you see out of that city.

It really sounds exciting. One last sort of detailed question, and I apologize, maybe I'm not understanding the accounting, is there something where the floor plan interest expense wasn't disclosed in the quarter because it has some tie or there's some wash moving back and forth in sort of in some of your floor plan offset accounts or something like that that would be tied to the convert buyback, I'm just trying to understand why the floor plan interest expense wasn't in the quarter?

They're not connected at all. And obviously our balances are going up. It's offset a little bit by reduction in interest but the fore plan and the tax gain mentioned earlier in the call have nothing to do with each other.

Okay, so we'll get – I mean is it safe to assume the fore plan interest expense beginning to swing around too much was relatively consistent with past couple of quarters?

That's correct, and of course the other interest expense is lower due to our taking the 9s out with the 5%. That plays into the math I think if you want to get there.

Okay, great. [indiscernible] later. Thank you so much, guys.

The next question comes from the line of Bill Armstrong with CL King & Associates. William Armstrong - CL King & Associates: So you've got a lot on your plate obviously and your True price still getting unimplemented, the one-to-one, the One Sonic-One Experience concept, why pick now to now launch kind of a new front with the standalone pre-owned concept, what's driving that decision to do that now rather than a couple of years down the road after you've really gotten the core business really, really humming?

This is Jeff Dyke. The answer is, why not. I mean we've been developing this team – it's not like we are picking right now, we are picking right now to announce it to you but we have been developing this concept now for many years, and we're out buying property, people are beginning to pick up on what we are doing, and so it is important to announce it to the investment community and to everybody in why we are doing it like I said, and I think it's really important for everybody to note, this is not something in the last three quarters we came up with. This is something in the last five, six, seven years that we came up with and we are ready to roll out, and why not. The market is huge, it's untapped, other than one major player. We've got the independent resources in terms of personnel to manage this and there's no better time. If we could have done it any faster, we would have announced years ago, but in order to do this right, in order to get it right, it takes the patience to make it all happen. So we're very, very excited about it and it has no bearing on – other than the technology which we're developing for both sides of the Company, it really has no bearing on the day-to-day operations of what we are doing on the Sonic side, on the new car side. They are just two separately, independent run businesses with two separate leadership teams running them. William Armstrong - CL King & Associates: Okay. And with One Sonic-One Experience, it sounds like we're seeing obviously less haggling on prices, I guess one salesperson guiding the customer through the process and then hopefully a much shorter process. I mean if I'm just a consumer, I have no idea that you guys are doing this and I walk into your store to look to buy a car, what are the top three or four things that I'm going to notice through the experience that's going to make me say, wow, this is really great and I recommend it to my friend?

First of all, one person, and if you go into a dealership today, traditional dealership right now, you're dealing with a sales associate, a sales manager, an F&I person, and probably several other people along with that 40 pieces of paper that you're going to sign in order to buy a car. So right off the back, you're going to meet one individual who is trained to help guide you through whatever it is that want to do when you are at our store. So, we are putting the customer in charge and we are not going to be in charge, and that's very, very different from what you've seen traditionally in the industry. Second is, I don't know if you saw it or not, but what I'll suggest that you should do is in the write-up that [indiscernible] in the release, there is a video link, and that video link will really highlight to you all the differences of what we have today and what we are going to have tomorrow. I think it really captures the essence of what it is that we are doing with One Sonic-One Experience, but much shorter timelines, much less down to maybe one or two pieces of paperwork that we are working on right now in terms of the consumer have to sign, and we're trying to bring that to zero, fresh facilities in terms of having [indiscernible] in our facilities that have more or less a progressive insurance model where consumers can go in and view pricing up and down the street all over the market wherever they want. We are going to be an open book, very good transparency for the consumers, so we can try and build trust. And when we do that, and transparency equals margin, and when the consumer is comfortable, you know this they're going to spend more to enjoy a process and we're going to give them an experience that we're going to give them that they can't get anywhere else. And we have spent – out of that $45 million, millions of that money has been with consumers going around the country looking for what is the right dealership that can provide all these experiences, just where are they. And we haven't been able to find it anywhere. I mean maybe the closest is CarMax and they don't sell new cars to maybe a large extent. So we are very excited about bringing something that is truly specialty retail type experience that is focused on the gusts instead of the consumer through our processes that we traditionally have in a dealership. William Armstrong - CL King & Associates: Okay, great. Thank you very much.

(Operator Instructions) The next question comes from the line of Jordan Hymowitz with Philadelphia Financial.

Two quick questions. One was, somebody may have asked this, but could you break out the expenses for the well-priced initiatives the way that Lithia did when they tried something similar?

No, it's going to be included in our guidance all long, it has been included in our guidance all these years.

But assuming that's going to lose money for the next couple of years, why not break it out as a separate line item so people can track, and Lithia used to do that?

We have a totally different model from Lithia, Jordan.

But when they were going to start standalone used car stores, remember?

Yes, I remember they held to it in Denver and that it was a disaster and that it happened in 2008 but it was a completely different set of circumstances.

And Jordan, this isn't a test. We have already tested everything for the last three, four, five years on the retail side of our Company, and so this is an infiltration and we are planning on starting in Denver and then moving to many other markets as quickly as possible. So we're going to have a great standalone business here and we'll be able to certainly tell you how that business is operating from an SG&A perspective, from a profit perspective, as we get up and get running, but we'll include all of that in our guidance as we move forward.

But it won't be broken out, it will be incorporated in the main number?

That's correct, that is correct for the time being.

Okay. Second question is, you guys used to have a captive finance company. Someone else asked about whether you would study that again. Could you restart that company if you wanted to and could you remind us what that company focused on when you had it?

Jordan, it's Scott. That company was sold several years ago. Dave Cosper helped to put that deal together and it was primarily a sub-subprime business, and I think the opportunity for us down the road would be more similar to what you see at CarMax. If you read all their documents, there's a ton of history in there, that can show you loss ratios, et cetera. We would not be looking to get back to the sub-subprime area. I think it's a shallow end of the pond that we don't want to fish in.

Thank you and I like the fishing analogy.

This concludes the Q&A portion of the call. Is there any closing remark?

No. I think I just want to thank everybody for listening to us today. I hope that we've provided more transparency for you, that you understand that we are moving forward into becoming a growth company again in the pre-owned industry. We're very, very excited about this. We look forward to sharing more information with you as we continue to go forward and we look forward to hopefully having everybody back on a call here before November 11. With that, have a wonderful day. Thank you.

This concludes today's conference. You may now disconnect.