Good day, and welcome to the Asbury Automotive Group Third Quarter 2015 Earnings Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Matt Pettoni, Vice President and Treasurer . Please go ahead, sir. Matt Pettoni - Vice President & Treasurer: Thanks, operator, and good morning, everyone. Welcome to Asbury Automotive Group's third quarter 2015 earnings call. Today's call is being recorded and will be available for replay later today. The press release detailing Asbury's third quarter results was issued earlier this morning and is posted on our website at asburyauto.com. Participating with us today are Craig Monaghan, our President and Chief Executive Officer; David Hult, our Executive Vice President and Chief Operating Officer; and Keith Style, our Senior Vice President and Chief Financial Officer. At the conclusion of our remarks, we will open the call up for questions, and I will be available later for any follow-up questions you might have. Before we begin, I must remind you that the discussion during the call today is likely to contain forward-looking statements. Forward-looking statements are statements other than those which are historical in nature. All forward-looking statements are subject to significant uncertainties, and actual results may differ materially from those suggested by the statements. For information regarding certain of the risks that may cause actual results to differ, please see our filings with the SEC from time to time, including our Form 10-K for the year ended December 2014, any subsequently filed quarterly reports on Form 10-Q, and our earnings release issued earlier today. We expressly disclaim any responsibility to update forward-looking statements. It is my pleasure to hand the call over to our CEO, Craig Monaghan. Craig? Craig T. Monaghan - President, Chief Executive Officer & Director: Good morning, everyone, and…

And we can take our first question from Rick Nelson with Stephens, Inc. Your line is open.

Thanks. Good morning (0:10:54). Craig T. Monaghan - President, Chief Executive Officer & Director: Good morning, Rick.

Like to ask you about the margin on the new car side and your expectations that you can maintain cap margin. Is that kind of coming sequentially or year-over-year? Shouldn't we see an increase in the margin in the fourth quarter, given the premium/luxury mix? Craig T. Monaghan - President, Chief Executive Officer & Director: Rick, it's Craig. I'll start and then maybe David can jump in. It's obviously the numbers that we released today that we have seen some margin pressure in the new vehicle side and it's coming in a couple different areas. Primarily, we think a big piece of it came from midline import where, with gas prices where we are, we think that that's a major contributor to the pressures that we continue to see there. We don't see that kind of pressure with our domestic stores, but we did see some pressure in the electric side as well. And you're absolutely right, fourth quarter is a much heavier luxury quarter for us. Fourth quarter, we typically see some improvement in margins. And when we're saying that we expect that we can hold margins here through the fourth quarter, and we're looking back at what we've seen historically, and that gives us some confidence that we think we can hold at these levels. David, do you have anything to add? David W. Hult - Chief Operating Officer & Executive Vice President: I would just say, I mean, the third quarter is that selling season sell-out with the model year change-over, and our goal is to chase market share. And we won with all our brands in market share except two, which builds a nice future for our fixed operations and customer growth.

I got you. And in the service and parts side of the business, strong comps there. Warranty was a big driver; I'm curious how recalls affected that and the sustainability of that warranty number? David W. Hult - Chief Operating Officer & Executive Vice President: Rick, this is David. I think, it's something that we've seen the last couple quarters. There has been more recalls this week alone, and last week as well. I don't see anything changing any time soon. And I think this is our new current reality for a little while.

Got you. And does the warranty, in fact does that crowd out some of the customer pay opportunity? David W. Hult - Chief Operating Officer & Executive Vice President: It does and it doesn't. It does put pressure on your human capital, but it also creates an opportunity to sell some customer pay work when they come in.

And finally, if I could ask about Q auto, is the plan to nurture these three stores, at what point do you determine whether you kind of push forward with unit growth? Craig T. Monaghan - President, Chief Executive Officer & Director: Rick, that word nurture is a great – that's a great term. I would tell you that we're very much committed to Q. We are still learning. We are experimenting with different things, we are – one of the things that we're looking at is having a sub-brand on the Q name in, potentially in our local markets. So for example, you could see Q a cogent family automotive store. We – as we reported, we had a $0.01 loss in the quarter, we think relative to the opportunity that we see there, that's a small price to pay for what we still believe has very, very serious upside potential, and we'll be sticking with it.

Okay. Thanks a lot, and good luck. Craig T. Monaghan - President, Chief Executive Officer & Director: Thanks, Rick. David W. Hult - Chief Operating Officer & Executive Vice President: Thank you.

And we can take our next question from Brett Hoselton with KeyBanc Capital Markets, Inc. Your line is now open.

Good morning, gentlemen. Craig T. Monaghan - President, Chief Executive Officer & Director: Morning, Brett.

Let me follow on with Rick's question on Q auto. At what point in time do you anticipate kind of making a – maybe a more substantial change in your approach to Q auto? Is this something that you're just going to kind of work with, with three stores for another six months to a year and kind of evaluate it or is this – is there is a possibility that within six months, you could say, you know what, we're going to start to open up more stores? Craig T. Monaghan - President, Chief Executive Officer & Director: Brett, I think we – it's hard for us to say whether it's six months to a year. We're learning every month. I go back to – we still feel very strongly about it. We think we'd be remiss not to continue to work with it, but we're going to learn as we go. You could – depending on what we see in analysis, it's – for some of the stores in Florida, now that the snowbirds are coming back, we've got a broader customer base. I think we've just – I liked Rick's word – we're going to continue to nurture it. It is not consuming a tremendous amount of capital. We've got a great team that's working on it. We like the progress that we see. And we just think that – we see it from the other way; we'd be remiss not to continue to work with this. When we see – we will give you a heads up. If we're getting ready to open additional stores, we'll let you know. But at this point, we want to just continue with these three while we continue to refine the model.

And then, how should we think about gross profit throughput as we move forward? It would seem that the Q auto would become more of a tailwind as opposed to a headwind, it's been this year. And so, it would seem that the gross profit throughput would potentially be improving as we move through the next year, but how do you think about gross profit throughput? Craig T. Monaghan - President, Chief Executive Officer & Director: Are you talking specifically about the Q stores or about the business in general?

The overall business. Keith R. Style - Chief Financial Officer & Senior Vice President: Brett, this is Keith. Good morning. We continue to target that 50% range on throughput. For the quarter, we were about – we were just slightly below that – 38%, 39%, so right in our target range. I would say that in the market we're in, with the pressure on new margins, I think that's a pretty good job, with 39% throughput. As far as Q auto and the impact, it will have a slight – it will help us out slightly next year compared to what we had for the full period of this year, but it's still a very small amount. It's just three stores out of a portfolio of a total of 87 including those stores, so it's a small amount. So, I don't expect anything terribly meaningful going forward from Q auto with respect to throughput.

And the divestitures that you made, the three divestitures that you made, is there any way that you can kind of quantify the earnings impact apart from the special items in the third quarter? I mean what kind of earnings would those stores have contributed? Keith R. Style - Chief Financial Officer & Senior Vice President: Yeah. Brett, this is Keith. We don't plan to disclose what the earnings contribution was from those stores. I will say we did provide the revenue amount of $135 million in annualized revenue. So, that would give you an understanding of about what we divested out from a revenue standpoint.

And then how do we think, about on a go-forward basis, is this a – are you kind of looking through your current portfolio and planning on making some other divestitures or is this kind of just three unique franchises that you felt opportunistic? Craig T. Monaghan - President, Chief Executive Officer & Director: Brett, it's Craig, I'll take that one. I mean it's – I think as with any portfolio, we're constantly reevaluating what makes sense, what makes – what might not make sense. And where there is an opportunity to divest of a store, where we think we can take that capital and redeploy it to higher returns, it's something that we will always consider.

And then finally, how do we think about the pace of share repurchase and the pace of acquisitions going forward? I mean, your acquisition pace was about $400 million over the past year. Your share repurchase pace was about $400 million over the past – I think four quarters. How do you think about both of those on a go-forward basis? Craig T. Monaghan - President, Chief Executive Officer & Director: The way we're thinking about it is really from a leverage perspective, to start. I mean we've been very clear that we want to maintain leverage in the 2.5 times to 3 times. That creates, if you would, capacity for either share repurchase or acquisitions, again once we take care of our core capital requirements. And the way we think about that is very simple; I mean we're looking to make investments where we can get the greatest returns. And when we find acquisitions that make economic sense that that's what we will go after. And we've been able to make these acquisitions at significant discounts to where we trade. So, we feel like when we make those buys, we gain an arbitrage opportunity on day one and then as we can bring synergies to those operations, we get incremental benefits later on. If we can't find acquisitions that make good sense, we've got a wonderful option of always buying our stores via share repurchase, and that will always be our fallback.

Okay. Thank you very much, gentlemen. Craig T. Monaghan - President, Chief Executive Officer & Director: Thank you. David W. Hult - Chief Operating Officer & Executive Vice President: Thank you.

And we can take our next question from Bret Jordan with Jefferies. Your line is open.

Hey, good morning. Craig T. Monaghan - President, Chief Executive Officer & Director: Good morning.

Couple questions. I guess, as you looked at some of the margin pressures on the service side, you're mentioning customer retention. Could you talk about any specific promotions that you're doing in that space and is it sort of an ongoing tire initiative that you started a couple of years ago? Keith R. Style - Chief Financial Officer & Senior Vice President: I would say we started focusing on it at the beginning of the year. And it was kind of a three-prong approach going after our independents, going after retaining our own customer base and going after acquisition customers. And to do that, you have to be priced competitive with the independents and we chose to do that. And an example, our customer pay gross, it was up 6% in the quarter. But when you think about it from a customer standpoint on a same-store basis, we were up 22,000 customer pay RO count – repair orders over the quarter. So, we had 22,000 additional customers coming during the quarter that we hadn't seen before. So, we're pretty proud of that number and see that continuing to grow.

Okay. Great. And a question on the Q auto, and as you look at customer, as you look at ongoing service in that channel, what's the success level of retaining the used vehicle buyer in the service pay after the sale? Craig T. Monaghan - President, Chief Executive Officer & Director: At this point, it's not a material part of that business. One of the things that we have learned with Q is that when we come out of the box with a brand that never existed before, you've got a challenge. We just don't have that much recognition, we don't have that many cars on the road that we sold, so we've got a very lower unit operation number. We see that business growing over time, if you would, the parts and service business at Q. But at this point in time, it's a very small part of the business.

Okay, great. Thank you.

And we can take our next question from Steven Dyer with Craig-Hallum Capital Group. Your line is now open.

Thanks. Good morning, guys. Craig T. Monaghan - President, Chief Executive Officer & Director: Morning. David W. Hult - Chief Operating Officer & Executive Vice President: Good morning.

Couple quick ones, kind of a two-parter, as you look at the pressure on midline imports, if we were to assume that gas prices are to stay in this level for a while, is there a point where that margin pressure anniversaries itself or lets up going forward? Craig T. Monaghan - President, Chief Executive Officer & Director: This is Craig, I'll take a shot and Dave or Keith may want to add to it, but, we've been feeling the impact of these low gas prices for some time. We saw our margins, I think, begin – it felt like they began to stabilize in this quarter, certainly versus last quarter, and I think we may seeing exactly what you're talking about.

And then related to that, as you look at the acquisition landscape, does it make acquiring maybe a domestic franchise or series of franchises anymore appealing, are you looking harder at that to try to diversify a little bit more away from that? Craig T. Monaghan - President, Chief Executive Officer & Director: Absolutely. The last three acquisitions we did were all Ford stores. We've had tremendous success with those acquisitions. We like them for the reasons you pointed out. I'd add too it allows us to diversify into the truck business, our business is very heavy car today as opposed to truck. There are franchises that trade at a lower price point relative to many of the other stores in the marketplace. And our experience has been they worked out quite well for us, and you might expect to see us continue to target domestic stores in markets where trucks are a substantial part of the business.

Great. Okay. Thanks, guys. Craig T. Monaghan - President, Chief Executive Officer & Director: Sure thing.

And we can take our next question from Michael Montani with Evercore ISI. Your line is now open. Michael Montani - International Strategy & Investment Group LLC: Hey, guys. Good morning. Just wanted to first ask on Q auto, and apologize if I had missed this, but did you give what the profit impact was for this quarter and any outlook for 4Q? Craig T. Monaghan - President, Chief Executive Officer & Director: We said that we'd lost $0.01 in the quarter, and we said that we're continuing to work with Q auto, that we're committed to it, that we want to drive these three stores to profitability. And we feel like we're making great progress and are absolutely committed to the endeavor. Michael Montani - International Strategy & Investment Group LLC: Wanted to ask about the service side. You mentioned the 22,000 customer count increase in new customers, which is – it sounds strong. But I guess how can we contextualize that either in percentage terms or can you share kind of progress you might be making on actual retention rates themselves? David W. Hult - Chief Operating Officer & Executive Vice President: This is David. That obviously varies a lot by brand. But when you look at it overall from a percent standpoint, it's between 8.5% and 9% increase year-over-year. Michael Montani - International Strategy & Investment Group LLC: Okay. That's strong. Just on the U-side, the gross profit per unit there are a bit more resilient actually than I had expected. But then, the outlook for a low single-digit used unit comp to continue is also a little bit lower. So, can you just help discuss kind of puts and takes there, and how you think about managing gross profit per unit versus potentially getting an incremental…

And we will now take a question from Paresh Jain with Morgan Stanley. Your line is open. Paresh B. Jain - Morgan Stanley & Co. LLC: Morning, everyone. A couple of questions. First on acquisitions; the leverage ratio and the liquidity available still leaves enough room for you to do more sizeable acquisitions, more platform deals. Are you even looking at such deals outside of Asbury's current footprint, the current geographic footprint? Craig T. Monaghan - President, Chief Executive Officer & Director: Yeah, we are. There's been a lot of conversation in the marketplace. There have been a number of platform owners who've been talking about potentially selling their businesses and we've been engaged in those conversations. Some of those have been outside of our traditional markets, but large enough on their own, if you would, in their own footprint that would make sense for us to consider a conversation. We – but I would say that in many instances, their price expectations are – were higher than what we felt was reasonable, and for that reason, you didn't see us get anything done on that size during the quarter. Paresh B. Jain - Morgan Stanley & Co. LLC: Got it. And then one on the used strategy with Q auto. The peer-to-peer online dealer model continues to gain traction, but more importantly, it is bringing a lot of transparency, not only on the pricing front, but also in terms of gross profits. Is that a concern at all when you're thinking about Q auto strategy? Craig T. Monaghan - President, Chief Executive Officer & Director: No. We also notice that there is a lot of activity in the used market, a lot of new entrants. They're small at this stage of the game, but it's clearly a market that many others are finding more and more intriguing. I would go back to one of our fundamental concepts. We send somewhere around 35,000 cars to auction every year. We believe that many of those vehicles end up on our competitors' lots, and we would love to figure out a way to retain those vehicles in our systems and retail them ourselves to generate incremental profit. And we don't think what anybody else is doing online or anywhere else really matters. We think this is an opportunity that exists within our own system, and we're committed to figuring out how to make that work. Paresh B. Jain - Morgan Stanley & Co. LLC: Got it. Thank you. That's all I had. Craig T. Monaghan - President, Chief Executive Officer & Director: Sure thing. Thank you. Craig T. Monaghan - President, Chief Executive Officer & Director: With that question, that concludes today's discussion. We appreciate you all for joining us today and look forward to taking to you at the end of fourth quarter.