Welcome to AutoNation's Second Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen only mode. After the presentation, we will conduct a question-and-answer session. Today's conference is being recorded. If you have an objection, you may disconnect at this time. Now, I will turn the call over to Mr. Andrew Wamser, Treasurer and Vice President of Investor Relations for AutoNation. Sir, you may begin.

Thank you and good morning. And welcome to AutoNation's second quarter 2015 conference call and webcast. Leading our call today will be Mike Jackson, our Chairman, CEO, and President; Cheryl Miller, our Chief Financial Officer; Bill Berman, our Chief Operating Officer, and Jon Ferrando, our EVP responsible for M&A. Following their remarks, we will open up the call for questions. Robert Quartaro and I will also be available by phone following the call to address any additional questions that you may have. Before we begin, let me read our brief statement regarding forward-looking comments. Certain statements and information on this call may constitute forward-looking statements within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve risks, which may cause the actual results or performance to differ materially from such forward-looking statements. Additional discussions of factors that could cause actual results to differ materially are contained in our press release issued earlier today and our SEC filings, including our most recent annual report on Form 10-K and subsequent quarterly reports on Form 10-Q and current reports on Form 8-K. Certain non-GAAP financial measures as defined under SEC rules will be discussed on this call. Reconciliations are provided in our press release and on our website located at investors.autonation.com. And now, I'll turn the call over to AutoNation's Chairman, CEO and President, Mike Jackson. Mike?

Good morning and thank you for joining us. Today, we reported record second quarter earnings per share from continuing operations of $1, a 20% increase as compared to EPS from continuing operations of $0.83 for the same period in the prior year. This is the 19th consecutive quarter of double-digit year-over-year growth in EPS from continuing operations. Second quarter 2015 revenue totaled $5.2 billion compared to $4.8 billion in the year-ago period, an increase of 9%, driven by stronger performance in all our business sectors. Total gross profit was an all-time record at $819 million compared to $745 million in the year-ago period, an increase of 10%. Operating income was a second quarter record at $220 million compared to $198 million in the year-ago period, an increase of 12%. In the second quarter, AutoNation's retail new vehicle unit sales increased by 6%, or 4% on the same-store sales basis. Last week, Honda Financial Services announced the new policy for dealer reserve that does not affect the dealer economics, but achieves the CFPB's goal of reducing dealer reserve discretion. We applaud Honda Financial Services for developing an enlightened solution that could become a template for the industry. Regarding our digital initiatives, we have accelerated the rollout of AutoNation Express. First phase, the rollout, identifying and reserving a specific vehicle online has been well received by the marketplace and our associates. AutoNation Express encompasses our continued commitment to delivering a peerless customer experience. I'll now turn the call over to Chief Financial Officer, Cheryl Miller.

Thank you, Mike. And good morning, ladies and gentlemen. For the second quarter, we reported net income from continuing operations of $115 million or $1 per share versus net income of $101 million or $0.83 per share during the second quarter of 2014, a 20% improvement on a per share basis. There were no adjustments to net income in either periods. In the second quarter, revenue increased $436 million or 9% compared to the prior year, and gross profit improved $74 million or 10%. SG&A as a percentage of gross profit was 69.4% for the quarter, which represents a 100 basis point decrease compared to the year-ago period. Net new vehicle floorplan was a benefit of $16 million, an increase of $2 million from the second quarter of 2014, primarily due to higher floorplan assistance. Floorplan assistance increased due to higher new vehicle sales and an increase in the floorplan assistance rate per unit. Floorplan debt increased sequentially approximately $319 million during the second quarter to $3.3 billion at quarter-end, primarily due to increased borrowings on our new and used floorplan facilities, which was driven by higher inventory levels, supporting current sales trends and newly-acquired stores. Non-vehicle interest expense increased slightly to $21.6 million compared to $21.3 million in the second quarter of 2014 due to higher debt balances. At the end of June, we had $2.1 billion of non-vehicle debt, an increase of $73 million compared to March 31, 2015. In addition to our fixed rate debt, this balance includes $800 million of outstanding borrowings under the revolving credit facility and $299 million of commercial paper. The provision for income tax in the quarter was $71.6 million or 38.3%. During the second quarter 2015, we repurchased 796,000 shares for $50 million at an average price of $62.78 per share.…

Thanks, Bill. We believe the auto industry remains healthy and we're reconfirming our 2015 sales forecast of 17 million units. With that, we'll be happy to take your questions. I'm calling in from New York, so I'll direct the traffic on the questions to the team in Fort Lauderdale, but let's begin.

Thank you, sir. Our first question is Mr. Colin Langan of UBS. Your line is open.

Oh, great. Thanks for taking my question. Can you give color on the – when you mentioned Honda's Finance has no impact on your profit, but you also made a comment that there is additional income in addition to the cap. How does that mechanism work?

This is Mike Jackson. I think the Honda agreement is very enlightened, it's something that while in principle everyone agreed that discrimination or unintentional disparate impact is not something that should exist in auto retail, how to get there was quite a contentious dilemma. And I think the Honda solution is quite enlightened in that by putting caps in place that are dramatically reduced, the amount of discretion that exists on the individual transaction at the store level was dramatically reduced, and in principle AutoNation moved in that direction a decade ago. But when the cap is only 100 basis points to 125 basis points, the economics would change, and that's not acceptable as a solution and everyone agreed, CFPB lenders and certainly retailers that the added value that dealers have on indirect lending is significant and that the compensation we're receiving was fair and justified, and this was not about changing that. So there is additional compensation system that comes to the dealers for having originated the loan that is built into the base rate from Honda. So we've looked at it. We say this gets us whole back to where we are, and addresses CFPB issues, and I think it's workable for the lenders. So AutoNation is publicly supporting this direction. We will work with Honda closely on working on any bugs in the system to make sure we achieve this goal. And we will urge other lenders to take a close look at this as a template for a solution and pledge to those lenders if they go in this direction, they will have AutoNation's full support.

And as a follow-up, I believe industry data says that there is about 100 basis point markup on new, but about 200 basis point on used. So do you think there will be separate rules for used or an adjustment made or is that a risk to the used F&I profit?

So Honda is in the midst of having a series of meetings across the country where they're just rolling this out. I think there are detailed questions that are still unanswered and there could be some changes. So I don't want to get too deep into the weeds on exactly how it all is going to work, but I can tell you, I've looked at it, and I've spoken to Honda's, I've spoken to CFPB. I believe this is a very workable concept and a structure and with a little movement here and there on some details, it's going to work.

Okay. Thank you very much. One last question. Just any color on the decline and what was driving the decline in margins on new? That's it. Thank you very much.

I think – this is Mike Jackson, again. I think, again, gas prices are significantly different what everyone thought they would be couple years ago. So this has led to a tremendous shift in consumer demand. If you look at the year-to-date industry sales figures up 4.4%, that's 10% in trucks, 9% in luxury vehicles, and car sales are actually down. There's a mismatch between installed capacity and what the marketplace is demanding. So there's quite a bit of pressure around midsize sedans, which is a traditional strength of Japanese manufacturers. So that's a challenge. These things happen from time to time. We'll work through it. But that's what's going on. Bill, would you like to add any more color to that? William R. Berman - Chief Operating Officer & Executive Vice President: Yeah, Mike. The only other thing I would add is there are some additional pressure coming from stair-step, coming from certain manufacturers as well as entry-level Premium Luxury vehicles are having an adverse effect on PVR. But like I said earlier, we're looking at total variable PVR and for the seventh consecutive quarter, we've been able to grow that, and last quarter was an additional $30.

Okay. All right. Thank you very much.

Thank you. Our next question is Mr. John Murphy of Bank of America Merrill Lynch. Your line is open.

Hi, John.

Good morning, guys. Good. How are you?

Excellent.

A first question, it sounds like the AutoNation Express in your online efforts have been really pulled forward and accelerated here. I am just curious how that correlates to your spending, your investment that you've highlighted on that and what kind of benefits we might be able to see more quickly in the second half of this year and going into 2016?

So, John, I think that's a correct assumption. And in our plan for this, you always have contingencies for challenges and difficulties that you can't foresee. In this case, though, we saw the opportunity to move faster, and so we did, and I'm not going to quantify how much money that is, but we made additional investments in the second quarter. Also, as I laid out years ago that we would reduce our dependency on third parties and there would be a vetting process to determine who we could partner with in the long-term on third parties, but that we expect to ultimately be in the high single-digits. We came to a fork in the road with TrueCar which was 3% of our business in the second quarter, and that money will be reinvested in the AutoNation brand and AutoNation Express going forward. So it's strategically all good news. I think we are on the right path for our company. I'm absolutely convinced of it, but we need the flexibility and freedom depending on circumstances to either speed up or slow down depending what we're confronted with. But we are very pleased and I have to congratulate Bill and his team for fully implementing AutoNation Express first phase six months ahead of time, quite an effort.

Okay. And does that mean that the bulk of the $100 million has been spent or that is still over the next couple of years that there is still a big chunk to come in the next couple of years?

Yes, there is still far to go, John. So phase one, the next phase that we'll take out nationally is we'll buy your car. That's already through pilot, that will roll out in the rest of this year. And then we'll be in pilot phase towards the end of the year for financing and customer care, and then move that out in 2016. We intend to fully make our site transactional for every phase of the business, and we think combined with our brand positioning to attract consumers to our sites, give them a good experience. The most important thing is onsite, they want to be able to do something, the sites need to be transactional. This combination of a strong brand with consumer empowered transactional sites that is seamlessly integrated into the dealerships is something no one else in the industry is doing. And we're convinced that it will be a significant competitive advantage for us in the long-term. And how we have to make those investments from quarter and quarter will speed up and slow down depending upon the challenges and opportunities that we have.

Okay. Thank you. And then, just a follow-up to Colin's question on the new vehicle gross pressure, I mean, is this really something where you think it is really just a mix shift, because there's a lot of concern in the market that it portends some pressure on demand in general. I mean, just curious on what you're seeing there and if you think demand is fundamentally showing up and not being incented by these cuts in gross?

By the way, we think about it, John and I was very clear with the team several years ago that total variable gross is our final report card. And then we have a lot of different ways to get there. But I want to see and the company wants to see a steady increase in total variable gross. And then, how the various pieces move within that is interesting and we'll talk about. But at the end of the day, we have to put the whole pie together and we've shown we're very successful in doing that. Front-end grosses will move around new cars depending like we just already talked about the gas situation, used cars this year we're pushing for volume. But if you then take those opportunities and are able to package it with your Financial Services and products and come out ahead, I think it's a good business plan. And so, we've consistently demonstrated the ability to do that. And so, that's the big picture for me that I'm saying. I think our total front-end gross is stable to – I've observed the fact that seven quarters in a row we've improved it, so there's something going on there. And there it is.

Okay. And then just lastly, Cheryl you alluded to floorplan assistance being increased and rates being increased. Just curious, why that's happening with inventory levels largely balance and demand coming through. It just – I'm just not sure why there would be an increase of floorplan assistance coming from the automakers. Just curious, why that happens?

Some of that's mix shift, so I would say that varies depending on what products are out there that we have out there. Our focus within floorplan certainly is to make sure we're running the inventories in a disciplined way to take advantage of the assistance per unit, but also to keep down the interest expense cost. So we're very focused on our partnerships with the captives and bank lenders on the interest expense side as well as making sure we manage the inventory there as well. But as you know, the OEMs have an ability to look at that assistance per unit and that's something that as interest rates move up, which at some point they will. So whether that's September, December, into next year, that's another variable that the OEMs have that they can continue to look at.

Okay. So it's more of mix than an actual rate change at this point, but there could be a rate change going forward is what you're saying?

I'd say it's a combination. Some of them have moved it per unit, some of its mixed, and then I think going forward it's something that we'll continue to see how the OEMs evaluate that, particularly in a rising rate environment future.

Great. Thank you very much.

Thank you, John.

Thank you. Our next question is Paresh Jain of Morgan Stanley. Your line is open. Paresh B. Jain - Morgan Stanley & Co. LLC: Good morning, everyone. A follow-up on the CFPB impact now, Mike, AutoNation is certainly welcoming the Honda solution, but there seems to be still a lot of resistance in the broader dealer community. So if I'm looking at it from a different angle, any potential negative impact here perhaps could be far worse for the smaller dealer groups that on average have one or two stores and don't have the same levels to pull as AutoNation and other dealer groups to offset that impact. So do you think this could hurt their multiple and create some acquisition opportunities, since a lot of times valuation is what holds up deals from getting done?

I think in principle you have a point. And while this is still very controversial within the total dealer organization and you saw both NADA and AIADA come out with strong statements opposing this. I think for smaller dealers the ever increasing regulatory burden in principle – and by the way, you can look at that for all business, whether we're talking about how you keep track of over time? How you deal with healthcare? The regulatory environment now here around the CFPB, it's a regulatory burden for smaller companies. In principle, in America it's getting more and more difficult. And also, there is a large number of dealers who have not narrowed their bandwidth on their financing reserves, have not installed disciplined caps, and so they have much further to go to get to a solution like Honda. Now, I can't begin to tell you whether that's going to change the acquisition environment. I will tell you though that this regulatory burden and difficulty of doing business and the complexity of the demands from the OEMs. You need a PhD to keep track of these incentive programs. It is making the world much more difficult and you need a certain size, and a certain structure and a certain discipline to be able to manage it all. So I think the willing sellers are going to be standing there for quite some time. Paresh B. Jain - Morgan Stanley & Co. LLC: No, that makes sense. On AutoNation Express, and I apologize if I missed this earlier, I understand you may not be able to share specific numbers on the performance impact, but can you highlight certain metrics that you are internally tracking? Is it about conversion? Is it about transaction time, market share? Just wanted to understand how you prioritize and rank your goals with Express initiative.

So it's a one-two punch and that cannot be missed. First, we're building the brand, AutoNation and the metric, I can give you there is that the awareness and consideration for doing business with AutoNation in a relatively short period of time just over two years has already exceeded all the legacy brands. It's just a tremendous launch and embraced by the marketplace. The next metric we look at and we've changed our marketing to drive much more traffic to AutoNation sites is what is the yield or what is the business generated from AutoNation sites by raising the visibility of our brand in all the ways you do in the digital marketplace. And then, how do you approve the experience that you have ever higher customer satisfaction, higher closing rates. And again, I'll just give you there a very broad metric from before we started this effort, AutoNation's digital sites generated less than 10% of the business, and now we're over 20% of the business. So that's a doubling since the brand launch and the investments to improve the experience on the AutoNation site. So you look that report card and say, yeah, this is working. Paresh B. Jain - Morgan Stanley & Co. LLC: Got it. And lastly, just a housekeeping one, depreciation kind of saw an uptick this quarter, what was the driver for that and how sustainable is it?

That would be Cheryl's specialty. Cheryl?

Yeah, Paresh, this is Cheryl, welcome to the call. The majority of increase is actually driven by recent renovations and acquisitions as well as accelerated depreciation on a corporate asset. But going forward, we expect depreciation will be more in line with Q1 of 2015. And keep in mind that on digital, the majority of digital is actually expensed, so we were pleased with our ability to keep SG&A as a percentage of growth improving versus last year and below that 70% metric despite the increased digital investment. Paresh B. Jain - Morgan Stanley & Co. LLC: Very helpful. Thank you.

Thank you. Our next question is Mr. David Lim of Wells Fargo. Your line is open.

Hi. Good morning. I wondered if – again, follow-up on the gross margin question. But on a yearly basis, we have seen declines since 2012. I guess the question is what are the factors that could possibly turn that around where we could see some incremental gains coming into the future? I mean, you have talked about mix and some stair-step programs, but what would actually turn the industry around for you guys?

You can get cadence launches from manufacturers, particularly in Premium Luxury where certain products when they arrive for the first year or two could actually impact the entire margin of the company. So they are nice to have, but it's incidental and you can't say that's a strategic shift. I would say, in principle, the pressure on front-end margins I expect to remain. It's a competitive marketplace. You have stair-steps are being embraced by additional marketing companies and that is a downward pressure, and you have pressure from third-party – from certain third-party sites that put pressure on front-end margins. So it's a very competitive marketplace. So I'm not calling a turn in the front-end gross margin. I'm not – if it happens, we'll certainly point it out when it does, but I'm not sitting here looking forward at an environment where I say, I see how we can do that, not that we aren't trying, but I'm not predicting it. And that's why a couple of years ago, we said, look, we've really got to have a strategy that we look at the total front-end variable gross on a transaction, and we've implemented that strategy and we're executing it successfully.

Got you. The follow-up question I have there is are you seeing additional OEMs, I think you alluded to this, additional OEMs offering stair-steps? And also on – is a larger percentage of sales for you as well as the industry really relying upon the leases? And if so, are you seeing OEMs playing with the residual values when they come to the lease calculation?

So, as far as stair-steps, I've sort of come to terms that there is now three certainties: debt, taxes and stair-steps. I've railed against them and all of their sins, but they're not going away. And you have some practitioners who have gotten highly skilled at. Even though I don't like the practice, they actually run it in a very professional way, and you have others where it's absolutely a loose cannon rolling back and forth across the deck. And you have a couple of newcomers to the party. So there it is, I don't think they're going away. And leasing, we like leasing, I have no issues with leasing. I think auto financing, whether it's longer-terms leasing, is in fantastic shape, people pay for their cars, the record is clear, and leasing does set up a recurring buying cycle, which is very worthwhile. Bill, you have anything to add? William R. Berman - Chief Operating Officer & Executive Vice President: Yeah. I would add. Our leasing penetration has gone up slightly, about 200 basis points on a year-over-year basis. Like Mike said, I am a big fan of leasing. And there doesn't appear to be any really incentivization of the residuals and they're pretty on-base to the industry standards. Most of the incentives have come in on the finance side of leasing. So we don't see any real impact when it comes to any kind of overhead on our residual values.

Great. Just two more questions quickly. We noticed that your inventories had a little uptick on a quarter-over-quarter basis. I think some of that was explained, but I was wondering if you could give additional color? And then, finally, when you talk about the Honda settlement, I think you are alluding to the fact that Honda would give some sort of fee or it's baked into the original cost of loan. But if we stripped all of that out, would it go back to, let's say, 150 basis points or 200 basis points above when it comes to dealer reserve? Thank you.

On Honda, I don't understand the question. So there is compensation in the base buy rate that is going to come to the retailer. And then we have a range of markup of 100 basis points to 125 basis points depending on term. And we will put both that compensation into dealer reserve, as you referred to it, and when you combine both...

Yes.

...we come out to the same place that we are today. That's the easiest way I can explain it.

Got you. So what I was trying to understand is that same place, is that like 200 bps in the old methodology or how should...

Oh! I see what you're saying. So our old caps were 250 basis points, the old system that we are operating under, and our average dealer reserve is 90 basis points.

Got you. And can you talk about...

Bill, you talk about the inventory, please. William R. Berman - Chief Operating Officer & Executive Vice President: Yeah. The inventory being ramped-up two things. First and foremost, it's driven by acquisitions from last year. So, obviously, intrinsically that brings up the inventory as well as an increased inventory going into the selling season. We have no issues on a day supply or by any particular brand.

Okay. Great. Thank you so much.

Thank you. Our next question is Mr. Rick Nelson of Stephens. Your line is open.

Thanks. Mike, can you address the TrueCar situation and what you think that means for your business?

So, TrueCar generated – the leads generated 3% of our business. We were operating under a contract that had acceptable terms. That contract expired end of February, beginning of March. TrueCar had demanded in the new contract that we give them all our customer information. In old contract, we gave TrueCar no customer information, we gave them anonymous data, but we gave them no customer information. This is an unprecedented demand, they weren't asking for the 3%, they were asking for 100%. And we've never given. I don't know what company gives away 100% of their customer information. I think it also, if we said yes, definitely would have created privacy issues that would have been cumbersome for us to implement, in that we would have had to gotten permission from our customers to give this information to TrueCar and we really didn't want to intrude into a sales transaction by saying oh! Mr. Smith you've never heard a TrueCar, but do you mind if we send them all the information on this transaction. That's something we really – we really wanted to protect the privacy of our customers. And TrueCar was making this demand saying, this is how they operate with all their dealerships. And while I certainly didn't investigate that, other than to say, I don't think that's true. I think they operate quite differently with other companies. I think this is a new demand that we cannot agree to. So I think it was a demand that we could not agree to that was based on a false premise. And if you arrive at that point with a company, you should really just go your separate ways. That's what we've done. We think our brand is strong enough, our digital capabilities are strong enough that we will be fine. And TrueCar is now on our rearview mirror.

I got you. So you think you can offset that volume by reallocating spend to drive volume elsewhere?

Oh! Rick, I thought I would be at this point years ago, that at some point, a third-party would make a demand that was unacceptable, was an overreach. And we better have a way to go when that day comes or else you're really in trouble. So I believe our brand and our digital effort is strong enough that we will be able to go forward and put TrueCar in the rearview mirror.

Great. Thanks for that color. I'd also like to ask Bill about regional performance, strengths, weaknesses, and in particularly Texas, Florida, California if there is any outliers there? William R. Berman - Chief Operating Officer & Executive Vice President: Okay, Rick. Yeah, this is Bill. Actually we had strong performance out of all three states that you just called out: Texas, Florida and California. We've had no negative impact in Texas with declining oil prices. If anything, it's put more disposable income into our consumers' hands and we had very solid growth out of all three of those markets. Across the country, all three of our regions are performing at a very high level and pretty much across the board.

Great. Thanks a lot and good luck.

Thanks, Rick.

Our next question is Mr. Brett Hoselton of KeyBanc. Your line is open.

Good morning.

Good Morning.

Two quick questions. First of all, M&A outlook, have you seen any notable or material changes, maybe in terms of the volume of deals and or valuations?

Jon, could you please take care of that?

Yeah. Sure, Brett. It's Jon Ferrando. We've been....

Hey, Jon.

...pretty consistent the last couple of years in calling out that we're expecting a good pipeline of potential opportunities the next few years. We have been able to execute on that with over $2 billion of annualized revenue acquired since late 2012. Through the first six months of this year, we've closed five acquisitions with $320 million in revenue with a good brand mix including Premium Luxury. So we feel like, we've been able to execute on opportunities in the marketplace, I would say, currently we continue to see a solid strong pipeline of potential deals out there and we are well positioned for a number of reasons to continue to execute on acquisitions that will provide a strong return on capital. So we'll continue to be prudent. We see good opportunities and we're well positioned to execute.

Thank you, Jon. And switching gears, as we look out over the next year or two, interest rates are likely to rise. And my question is simply, how do we think about the impact of interest rates on your earnings, in other words, what are maybe some of the more significant impacts, areas of impact on your earnings?

Well, we fully – this is Mike Jackson – we fully expect interest rates to begin rising later this year. It will be different than most interest rate increase cycles. And in that – it'll go slower and stop sooner. That's what we expect. We think that's entirely manageable and you can't expect these extremely low interest rates forever and it could actually be a very healthy sign for the economy that you're telling everyone, this crisis is over. And I think we will go on selling high 16 million, 17 million vehicles in a more normal interest rate environment. Inflation appears to be far away. So above average rates are something over the horizon from this point of view. As far as to quantify exactly what the cost is of 100 basis points, do you have that, Cheryl?

Yeah. I would note there is a couple of places this impacts us. If you think about from a customer perspective, for instance, if you have a 1% increase in interest rates, that's less than $15 a month, on the average $30,000, 60 month length (43:26). So we always think first about impacts on customer and as Mike said, in a slow steady rise, that's going to be very manageable. We've got $2.1 billion of corporate debt, that's roughly 56 footing (43:35). And then we've got $3.3 billion of floorplan, which flows, but to Jon's point earlier and discussion that we had, you have assistance on that, so you can manage inventory levels, can see where the OEMs go with that fixed rate assistance on a per vehicle basis to help offset that. The underlying theme though in – this is cyclical business, we've been through interest rate cycles and rises before we think it's manageable, we think usually the customer is tend to be better positioned, which is part of why the rates are rising. And overall for the economy, we think it's a healthy thing, we're prepared for it. An example of the things that we do in light of it is commercial paper program. So we were able to secure, $300 million of financing at a market rates which are substantially lower than our revolver. So we're looking for ways to continue to reduce spreads and look at alternative instruments where possible to help lower our blended rate, where we can. And I think that's the great thing about a strong balance sheet is the ability to make sure that we're hitting pockets of the market. There is a lot of capital out there. So we're going to hit pockets of the markets, where we can be flexible and opportunistic at lower cost rates.

Thank you, Cheryl. Thank you, Mike.

Are there any more questions?

Yes. Our next question is Mr. Brian Sponheimer of Gabelli. Your line is open. Brian C. Sponheimer - Gabelli & Company, Inc.: Hi, good morning. Thanks for having me on.

Hey. Brian C. Sponheimer - Gabelli & Company, Inc.: Mike, you've been ahead a lot of industry trends over the course of the last decade. And I guess I just wanted – potentially peel back the onion on why you think we have another two years to three years of $16.5 million to $17 million SAAR and I guess we'll just take it from there?

I've seen the argument for $18 million, $19 million, I've seen the argument for $14 million, $15 million. I don't believe either of those. I think, it's high $16 million, $17 million is trend. I think the average age is still pushed out to 11.5 years, 11.6 years. Interest rates are still going to be very reasonable for consumers. I've seen the product portfolio from the manufacturers, it's extraordinary, the best ever. And it looks like gas prices are going to be low for extended period of time. So, it's hard to say anything past three years. But I think we still have several years to go, of high $16 million, $17 million and it's too far away horizon to say, how many. When will it end? When inflation rears its head and the Federal Reserve begins increasing interest rates above normal aggressively to tamp down inflation, there will be the downturn in housing and there will be a downturn in auto sales. I am absolutely convinced, Cheryl said it earlier, we've remained in a cyclical business. And that is not going to change. We'll be prepared for it. We will outperform in it. If our stock falls out of significant favor during that period, we'll view it as a buying opportunity. So we really have – we really think we can create shareholder value anywhere in the cycle, anytime in the cycle. But I think its high $16 million, $17 million. If you want to – so we all can manage $18 million, $19 million, okay so let's not even talk about that. Those who argue for $14 million that say two things that car sharing is going to have a significant impact on the marketplace, I think car sharing has its place in the marketplace. I think it's…

We've seen no impact. Have you, Jon, anything to add on that?

No, no, impact, haven't run into them on acquisitions and we see very good pipeline with a lot of activity out there. If anything it may have increased sellers that are interested in exploring the marketplace.

So, you know I said it at the time, I've met Warren a few times, I've talked to him about the car business a few times. I admire him as an investor, he is a value investor. So he's certainly a credible buyer in the marketplace absolutely. But is he going to rush in and overpay for stuff? I don't think so. And we see no sign of that yet. Brian C. Sponheimer - Gabelli & Company, Inc.: All right. Thank you very much.

Thank you. Our next question is Mr. David Whiston of Morningstar. Your line is open.

Thanks, good morning. Mike, you actually gave some very helpful commentary on one of my questions on car sharing. Longer term, though, are you open to that possibly being a threat that you could bring the SAAR well below 14 million or you think that's just still way too far out to even think about this?

I think that's way too far away. Again, I'm not in denial and I think there is a role for car sharing, especially in certain urban settings. And I think people – everyone is open to it. I mean, everyone has embraced to Uber, it's not a generational thing. It's a great way of doing things. But to say that it's going to take 3 million out of the annual selling rate of new vehicles, I just can't get there at all. So that's my point of view. And we'll see. So far, my batting average on these things is pretty good. So we'll see.

Okay. Thanks. And moving on, you guys have had a lot of success in the AutoNation 40 Under 40 polls, the best dealers to work. How do you retain rising mid-level talent like that once you identify them?

We offer something quite unique in the industry, not only a professional career opportunity, but fully supported by a talent development process that is centered on AutoNation University, that is a big investment on our part by the company in the talent within the company, Jon Ferrando led the effort, created and it's the – the courses are taught by ourselves, Bill Berman did a session this morning. I did one yesterday. Jon, why don't you talk about it a little bit?

Yeah, we've – we launched the AutoNation University years ago. We're putting our GM talent and potential talent through it. For a number of years, it's been very successful, it's – our flagship development program, we think it helps us attract great talent into the company when we go out and acquire businesses that's a great selling point for sellers that we offer tremendous careers and we back it up for great talent by making major investments in people and AN University is one example of it. It is a large investment, it's five weeks of their time throughout a year along with mentorship along the way. So we're able to attract, retain and develop great talent through the investment. And in fact, Bill and I've been working on a number of ways to expand that to other positions within the company as well as with Cheryl on the finance side. So we continue to expand our university development offerings to talented people that want to go further with their career. William R. Berman - Chief Operating Officer & Executive Vice President: And David, this is Bill. I'm actually one of those that came up through the company, I'm hired on 17 years ago in my early 30s through an acquisition and nearly, I think 90%, 95% of our senior leadership in the field has come up through that program from our RPs to our market presidents all the way down to our store level GMs, so to Jon's point, we identify talent early in the pipeline and then with different training courses, grow and mentor them throughout the process.

And I'm sorry, what was that percentage you gave? William R. Berman - Chief Operating Officer & Executive Vice President: 90% of our market presidents and our regional presidents, all came from through GMU.

Okay. And that's very helpful. Thank you. My last question is what are your plans for the commercial paper proceeds or is that just done because of the lower cost of capital that Cheryl talked about earlier?

Really lower cost of capital. So its general corporate uses. It could be anything from repo to acquisition, CapEx, et cetera. So it was opportunistic from a pricing standpoint relative to the rates that we're paying under our broader revolving credit facility.

Okay. Thanks for all the detail.

We have time for one last question.

Last question is Mr. David Tamberrino of Goldman Sachs. Your line is open. David J. Tamberrino - Goldman Sachs & Co.: Hey, great. Thanks for squeezing me in here. On the parts and service, looks like it was still a pretty solid comp, but it was decelerating from the fourth quarter 10% and then 8% in the first quarter. Do you expect that to continue to decelerate in the back half of this year? And then, just on the back of that, can you explain the gross profit margin expansion in P&S that you saw year-over-year and what the mix impact was as a result? Thanks.

Bill, you want to take that, please? William R. Berman - Chief Operating Officer & Executive Vice President: Yeah. So, absolutely, so no we do not see a continued decline. Some of that's just seasonality. We will sit here and be able to grow in the mid-to-high single digits on a go-forward basis, and as far as the margin in growth, couple of different factors that are driving that; R.O. count, mix of work, increase in CP drivers and also increase in our parts gross and our parts dollars per R.O. David J. Tamberrino - Goldman Sachs & Co.: That's helpful. And then, just one last one on the used margin we saw it down, I think about 70 basis points year-over-year, and you would expect at least we would have with off-lease supply growing that you might see lower wholesale pricing as a result, is that not coming to fruition and what's really driving that the compression in used margins? Thank you. William R. Berman - Chief Operating Officer & Executive Vice President: So, Mike I can take that. So I think it's a little bit of a blip, last year we had a much lower inventory level, so it gave us the ability to go after margin more. Currently, we're focused more on driving volume and we have a little bit of a blip last quarter, I do not see that continuing. The nice thing about used cars to your point as we get more off-lease vehicles coming in, it will lower our buy – or what we can buy the vehicle for and it should be able to maintain or even help grow our margins slightly. There is always 30 days, 60 days lag on that where you ebb and flow with the marketplace. But going forward, we see good growth in used car volumes and PVRs. David J. Tamberrino - Goldman Sachs & Co.: Thank you. That's very helpful.

Thank you, everyone for joining us today. We really appreciate all your questions. Thank you very much.

This does concludes today's conference. Thank you all for joining today.