Good morning, ladies and gentlemen. Welcome to the Group 1 Automotive Fourth Quarter Earnings Conference Call. (Operator Instructions) This conference is being recorded today, Tuesday, February 26, 2008. I would now like to turn the conference over to Pete DeLongchamps, Vice President, Manufacturer Relations and Public Affairs.

Thank you, Brandi, and good morning, everyone, and welcome to Group 1 Automotive’s 2007 fourth quarter conference call. Before we begin, I would like to make some brief remarks about forward-looking statements and the use of non-GAAP financial measures. Except for historical information mentioned during the conference call, statements made by management of Group 1 are forward-looking and are pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve both known and unknown risks and uncertainties, which may cause the company’s actual results in future periods to differ materially from forecasted results. Those risks include but are not limited to risks associated with pricing, volume and the conditions of markets. Those and other risks are described in the company’s filings with the Securities and Exchange Commission over the last 12 months. Copies of these filings are available from both the SEC and the company. In addition, certain non-GAAP financial measures as defined under SEC rules may be discussed on this call. As required by applicable SEC rules, the company provides reconciliations of any such non-GAAP financial measures to the most directly comparable GAAP measures on its website. Now I’ll turn the call over to the President and Chief Executive Officer of Group 1, Mr. Earl J. Hesterberg.

Thank you, Pete. Good morning everyone and welcome to Group 1 Automotive’s 2007 fourth quarter conference call. In a minute, I’ll turn the call over to John Rickel to present our detailed financial results. After he is finished, I’ll address our 2008 outlook and guidance and then open up the call for questions. Before I get into the results, let me tell you what we observed during the fourth quarter. During the quarter, we continued to see both new and used vehicle market conditions deteriorate in most areas of the country, reflecting the macroeconomic conditions we are all hearing about. Higher gasoline prices, home heating costs, increased home interest rates and tighter credit availability have made the average consumer across the country more cautious in purchasing big ticket items. We continue to see ongoing weakness in California and Florida and a more difficult environment in the Northeast and Gulf Coast. As a result, we experienced new vehicle sales declines in our midline import and domestic brands with the largest declines at our Ford dealerships. F-Series truck sales fell consistently throughout 2007, ending the year with a 22% decline in December. Our used vehicle business was also impacted as we saw declines in used truck sales and declines in both our retail and wholesale profit margins. On the positive side, we had a double-digit increase in luxury brand sales. We also had continued solid improvements in our F&I and parts and service businesses during the quarter as a result of the initiatives we’re putting in place. Now for some comments on our fourth quarter financial results before turning it over to John for more of the details. We had a $16.1 million pre-tax charge related to asset impairments in the quarter that John will cover shortly. Excluding this charge, adjusted net…

Thank you, Earl, and good morning, everyone. For the fourth quarter of 2007, our net income was $5.5 million or $0.24 per diluted share. Results for the quarter included a $9.2 million pre-tax charge for the impairment of capitalized intangible franchise rights on six of our dealerships, as well as a $6.9 million pre-tax charge for the impairment of long-lived assets. After adjusting for the combined total of $16.1 million of pre-tax asset impairment charges, we realized net income of $15.7 million or $0.70 per diluted share. Adjusted for asset impairments in both periods, our diluted earnings per share for the fourth quarter of 2007 improved 4.5% from 2006. For the year ended December 31, 2007, our net income totaled $68 million or $2.90 per diluted share. During the year we experienced several one-time charges including $4.3 million for lease terminations, $7.6 million for asset impairments, $9.2 million for intangible franchise rights impairments, and $1.6 million for the redemption of a portion of our senior subordinated notes. Excluding the impact of these pre-tax charges, we realized net income of $82.5 million or $3.52 per diluted share. Adjusted for similar type items in 2006, our net income for the year ended December 31, 2007 declined 8.4% and our earnings per diluted share decreased 4.3%. Our total revenue improved $22.3 million or 1.5% to $1.53 billion in the fourth quarter of 2007 compared to 2006, reflecting increases in each line of our business except our used wholesale business. Our consolidated gross margin of 15.3% was down 30 basis points in the fourth quarter of 2007 from the same period a year ago, but the 30 basis improvement in parts and service margins was more than offset by declines in new and used vehicle margins, which I will cover in more detail shortly.…

Thanks, John. Now for guidance. Looking forward to 2008, we are forecasting overall weakness in the industry with the first half weaker than the second half of the year. The recent interest rate cuts by the Federal Reserve and the stimulus package from the government should be positives, but the unknown is the lead time required for these actions to impact the economy. As a result, we enter the year with a level of uncertainty that causes us to provide a range based on potential industry volumes of 15 to 15.5 million units. With the 16% decline in retail sales that has already occurred this cycle, we believe that additional downside risk below this level is limited. Given this outlook we are setting our 2008 full-year earnings guidance for a range of $2.95 to $3.25 per diluted share. Guidance is based on the following assumptions: Industry sales of 15 to 15.5 million units; Same-store revenues 3% to 5% lower; SG&A expense as a percent of gross profit at 78% to 79%, excluding any one-time items as lower sales revenues are expected to offset cost improvements; LIBOR interest rates at 3.5% throughout 2008; A tax rate of 38%; And an estimated average of 22.5 million diluted shares outstanding. Guidance excludes any future acquisitions and dispositions as well as the potential related one-time cost estimated at $10 to $15 million. That concludes our prepared remarks. In a moment we’ll open the call up for Q&A. Joining me on the call today John Rickel, our Senior Vice President and Chief Financial Officer; Randy Callison, our Senior Vice President of Operations and Corporate Development; Pete DeLongchamps, our Vice President of Manufacturer Relations and Public Affairs; and Lance Parker, our Vice President and Corporate Controller. I’ll now turn the call over to the operator to begin the question-and-answer session.

(Operator Instructions) Our first question is from Edward Yruma – J.P. Morgan. Edward Yruma – J.P. Morgan : Have you seen any impact in credit availability to your consumers? Is it much tougher to get subprime consumers financed and have rates ticked up?

As we’ve continued to monitor since August, we’re still able to get those customers financed. In the last two months or so it has probably become a little more difficult in that banks are looking for maybe a few more stipulations, more proof of employment; in some cases we’re seeing advance rates coming down a little bit, but by and large still not losing any sales over this and basically are able to get the customers bought. Edward Yruma – J.P. Morgan : Got you. On your used performance I know that you mentioned obviously that the weaker SUV sales. Some of your competitors have been able to re-merchandise or add more software to help drive some of the used performance. Do you view some of your weakness during the quarter as an execution issue or is it really just related to the brands and the geographies that you’re in?

I always think there is an execution issue. I always think we can do a better job and I saw some of that in the fourth quarter. Although by being a very truck-centric company because of our base of business in Texas and Oklahoma, I think we have a little more pressure maybe even than some other companies do. You saw in the fourth quarter the Manheim data that showed truck and SUV prices at auctions declining if not double digits close to double digits. Yet the way the business works is a lot of our trade-ins that come to a high percentage of our stores are full-sized trucks and SUVs and you know those things are worth less at the auction but you want to make a new car deal. When you have that used vehicle on your lot, you know there’s pressure if you take it to the auction where the values are declining. You also know the clock is running with our procedures that you eventually have to write it down so you retail that vehicle out for a lower gross margin. So it does become a bit of a vicious circle. That said, we do have market data that tells us when these things are turning down at the auction and I do believe in some of our operations, not just in our truck areas but across the country, that we could have reacted more quickly in wholesaling some of these vehicles before the market dropped as far as it eventually dropped. So I would not tell you that everything was beyond our control. We could have done a better job. Edward Yruma – J.P. Morgan : Got you, and two final housekeeping questions. First, if you could give me the amount of revenue that you’re projecting for the 2008 divestitures that’s represented I think by that $10 to $15 million in one-time revenue cost? And then the final element, your tax rate guidance is a bit higher than this year, if you could talk about the drivers there? Thank you.

We haven’t actually provided a revenue number to go with the potential dispositions. Basically it is going to depend somewhat on timing as these things come together and as we obviously would make the disposals we’ll announce it, but right now, we don’t really have a revenue projection. Tax rate of 38% basically reflects a couple of things. One, you’ll have a full year of the new Texas margin tax, which is probably a percentage point and the rest of it is basically the mix of the states that we’re doing business in.

Our next question is from Rick Nelson - Stephens, Inc.

I wanted to follow up on the increase in F&I. I’m calculating 13.8% growth in F&I per unit with more luxury stores coming into the mix, which I would think would have lower F&I per unit. What are the drivers there?

The primary driver is on the cost side still, particularly on our vehicle service contracts. We spoke to that in prior quarters and we saw the impact in prior quarters but we had a significant cost savings on VSC contracts which we sell a lot of. So, that’s the primary driver. Our F&I penetrations are up, but just a little. We are up to 70% financed reserve penetration in the quarter, which was up about 2% over the prior quarter of last year. But, primarily, it is still a cost side equation.

Okay. Thank you for that. A question also on the balance sheet: that 50% debt to cap, how does that affect your ability to do more real estate deals, acquisitions, and buy backs? Are the OEMs, do they have debt restrictions on approving acquisitions?

No, not that I’m aware of. The rating agencies, in particular, set the mortgage debt aside because it’s either that or an operating lease. Most of them capitalize operating leases and put it back on the balance sheet, anyway, which is why, I think, the more relevant measure is long term debt excluding that mortgage facility. Now at 45% that is above where we want to be on a going basis. It is basically driven by the timing of the four acquisitions in December, and we do anticipate that coming back down to a more normal 40% over the next couple quarters.

Okay. And, Earl, you’re halfway through the current quarter. I’m wondering what you’re seeing in terms of the overall operating environment? Much change from the fourth quarter pace?

Rick, I think that if we comment specifically about our company in the first quarter of this year that becomes forward-looking since we are dealing with the fourth quarter results here. But I can comment that I think 15.2 million was the SAAR in the industry in January. That was a 4% decline from the previous year and the reminder of that drop was the change in the seasonal factors and how they calculate the SAAR. But any way you cut it, 15.2 million wasn’t a very good January for the industry. And then you probably saw a Wall Street Journal article last week that projected the first half of February sales that were down more than double digit as I recall. I don’t think there’s any public indication that we all look at that things have up-turned here in the first whatever it is, 45, 50, 55 days of the new year. And then clearly every piece of economic information that you get, gasoline prices and the number of people upside down in their houses and things like that, there hasn’t been any positive information in a while.

The one positive would be interest rates and the decline in LIBOR. How does that affect EPS in terms of guidance?

That’s a valid point, Rick. I think we’ve calculated what a 100 basis point movement in LIBOR does for us, $0.12 or $0.13 a share, generally speaking. About half of our debt at least as we calculated it at the end of the year, Rick, is really floating and most of that floats with LIBOR because we do have some interest rate swaps in place and 8 ¼ bonds and so forth. I think generally speaking, you could assume about half of our debt floats with LIBOR as a basis.

Our next question is from Scott Stember - Sidoti & Company. Scott Stember - Sidoti & Company : Could you maybe talk about the parts and service? It’s obvious on the customer pay side that you’re really starting to have some success here. Last quarter you indicated that you primarily noticed some benefits from some brands like Honda and so forth. Could talk about some other brands and maybe talk about what inning you think you’re in as far as bringing parts and service up to where it needs to be?

I’ll let Randy give you the details but I think this is the untapped area of the business for companies like ours. I don’t think much past the third inning and what happened last year which muted I think some of the good work we’re doing is some pretty big warranty decreases. For the full year our customer pay I believe was up over 6%, in the fourth quarter it was up in the high four percents, but the warranty was down just a couple tenths less, I think 5.7% full year and 4.2% or something in the fourth quarter. So the warranty muted a lot of our great customer pay gains last year, but we’re very early into that. Randy does this day-to-day; I’m going to let him add a few comments.

I would have said we’re in the first inning, but somewhere between the first and the third. Our customer pay revenues as a percent of our total fixed revenues grew to 48%; that’s up from 46% same quarter prior year. That is very exciting for us. Our warranty revenues are down to about 18% of total revenues. Collision and wholesale parts have remained about the same as prior quarter. Earl mentioned the 6.3% increase in customer pay revenue, offset partially by the 5.7% decrease in warranty. We continue to see a decrease in warranty revenues, and the two biggest impacts for us continue to be Mercedes-Benz, which came off of the free service program in 2005, and then to a lesser degree, Nissan. On customer pay, which we can control, we don’t have much control over warranty as you know, we were up in all three lines: domestic, import, and luxury are all up. Domestic was up 4.6%, import 5.6%, and luxury 8.9%, so that is very, very healthy. The biggest driver there is Toyota, which was up a full 10%, with BMW second, which BMW impacted us by a $1.5 million increase in the quarter. Scott Stember - Sidoti & Company : Okay. And maybe talk about Ford, what we’re seeing right now so far and your expectations within your guidance. Obviously there have been some issues with truck sales, and we’ve seen how they’ve fallen off. Are we still assuming that things will continue to fall at the rate that they’ve been falling?

Yes, we’ve had a full year of weak F-Series Ford truck sales, so the comparisons should start to get a little better. And, of course, the hope that we have as a big Ford retailer is that when the new F-Series comes out in the second half of this year that maybe we’ll get a little bounce. At NADA, the new Ford leadership in the sales end of the business, apparently told the dealers that they’re going to be more aggressive in protecting their share in F-Series, and that’s what we want to hear as a big Ford retailer, particularly one with a lot of representation in Oklahoma, Texas, and Louisiana. So, my hope is that we’re getting near a bottom on the Ford business. The other issue with Ford is we’re selling some of these newer vehicles, Edges and Fusions, and they’re great products, but they just don’t gross like the old Expeditions, Explorers, and F-Series did. So, there’s been the same kind of mix shift for us in terms of gross profit that they’re probably experiencing at the factory. But hopefully we’re near the bottom on the Ford business and by the end of this year it will bounce up. Scott Stember - Sidoti & Company : Okay, one last question on the expense side. If I heard you correctly you said that advertising cost’s down 22% in the quarter. Could you talk about that and also talk about what we could expect as far as cost cutting for 2008?

We did have a decrease in advertising costs. That’s looked at and determined on a store-by-store basis. We don’t drive that specifically here with an absolute number. There could be some further savings, but again that’s a store-level analysis. I don’t want to imply that we’re driving that specifically to a target here. It’s very dependent on each store.

Our next question is from Rich Kwas - Wachovia.

Earl, could you comment on import grosses? If I recall, last year at this time, Q4 2006, you started to see some significant pressure on import margins or import grosses. You’ve now pretty much fully anniversaried that. What do you expect for 2008 and how do you see the mainline imports playing out on the gross side in 2008?

That is a good comment, because that was one of the most damaging financial factors in our year-over-year financial performance. I just looked at the year-end grosses by manufacturer, and there were substantial decreases even in the strongest brands, the midline imports, and it was damaging to our performance last year. Like the Ford situation. I think as you say we’ve now had a year of that. If they can hold to current inventory levels and not increase them any and start to work them back down a little bit, the midline Japanese imports are the ones that I’m speaking of primarily, my hope is that they won’t deteriorate further. But they deteriorated a great deal from 2006 to 2007, and it’s been a big factor. We keep those units moving reasonably well, but we didn’t bring in nearly the gross profit in the midline Japanese imports in 2007 as we did in 2006, and my hope is it will stabilize, and I think there’s a good chance of that.

In the guidance do you factor in stabilization in those grosses or do you expect some more deterioration?

I would say overall that we expect there to be a little more downward pressure in the entire market on new and used vehicle grosses, just because the macroeconomic factors seem to be still putting pressure on consumer confidence and traffic. When traffic stabilizes then you have a better chance of stabilizing the grosses.

Okay, and then following up on that on the used side, do you expect the used market in terms of margins and grosses to stabilize as the year progresses or do you expect first half to be under pressure and that continues into the second half?

I think that’s a good assumption. I think that’s all part of the macro first half tougher than the second half. I think there’s still pressure on volume and grosses in new and used in the first half, and that should get mitigated we believe as we get into the second half. By the second half, there will have been 18 months of pressure or more and even California, maybe 21 months, and so that’s when I would think things would come off the bottom.

Okay. And then in terms of Boston and the Northeast, you made a comment that things have been trending a little bit softer there. Any more color on that front?

We saw that in the second half of the year. We’re pretty big in the Northeast, in particular in Boston, and I don’t know if it’s because of the financial centers in Boston that are very much like New York with the financial businesses there being under some of this pressure. We have four fairly big Toyota dealerships in the general New England area, and through November, 11 months of last year, three of those primary market areas were down 6% in total industry sales within those primary market areas and the one in Manchester, New Hampshire was down 13%. I’m not talking about Toyota sales; Toyota gained market share in that region, but that was total industry volume. So 6% to 13% declines in the industry through 11 months of 2006 would be a rate much greater than what the U.S. experienced last year in total in terms of total industry decrease.

Would that be new and used or just new?

Those were just new registrations I was looking at, but you could pretty much assume that used would be coupled closely to it.

Okay, and then finally, John, on F&I, you’ve shown nice growth here on a same-store sales basis for the last several quarters. When do you start to comp the first stages of the benefits that you realized last year? Is that a first half phenomenon or should we expect that things continue to grow at a nice rate throughout the year?

Yes, basically a lot of the changes we started putting in place in the second half of 2007, so I’d say certainly we’ve got the first half to run and then you start to come up against those comps in the second half of the year.

Our next question is from Jonathan Steinmetz - Morgan Stanley.

A few follow-ups here. First of all, on the used side with the 35 days of inventory, could you talk a little bit about the composition of that used inventory? And specifically is it any more heavy toward large pick-up and large SUV than it would normally be?

We break that up between car and truck; the 35 days in total. Car is 34 days, which is up from 31 days third quarter of 2007 and up from 32 days fourth quarter of prior year. Truck is at 36 days current quarter, up from 33 days prior quarter and 30 days fourth quarter of 2006. And all those numbers are still below our target of 37 days across car and truck.

Okay. You’re saying you’re not especially concerned that you’re super full-size pick-up truck heavy is facing some inventory that may be worth a little less than it was before?

No, Jonathan. I think we took a lot of those hits. Our policy, which I’m sure is not completely unique, is leaving those things sit on the lot. You keep clenching those things through every 60 days or 90, and they go to the auction and you take your hit if you have a hit. The other thing that’s going to push inventories up a few days, which is why we’re willing to take a 37-day supply of used vehicle inventory, is for about a year and a half now we’ve been pushing more certified CPO business. And it takes a few more days to get those cars reconditioned and certified, so you have a few more in the pipeline that aren’t front-line ready yet. I think for quarterly we’re up to 28% of our business certified and for the year 24%. And that’s way up from where we were in prior years, so we’re still getting more and more into that business, and so you get some cars stuck in the pipeline there.

Okay. John, on the $60 million of CapEx here, do you see that as we look forward into 2009 and 2010 and you get past some of these larger projects, can that continue to go down and begin to converge towards that maintenance-type level, or is it going to continue to run at this rate?

It depends somewhat on the base of acquisitions and the type of stores that we’re buying. If the base of acquisition slows, yes, I think over time you can see it continuing to come down. But a lot of the spend is really driven by the acquisition activity. So that’s the wild card in it.

Okay. And on the F&I you talked a little bit about some of the drivers here, but was there anything in terms of either recognition of favorable loss experience on service contracts that flowed into that? Or preferred lender fee or anything like that that would have been bumping it up?

Actually it’s the opposite. We did take the charge I mentioned in my script of about $0.5 million for some settlements with the credit life companies on basically commission refunds that they owed customers. So, no, other than that there was nothing really unusual in the F&I area.

Okay. And last question, Earl. I think you mentioned 96 days of domestic brand new inventory. Are you still ordering aggressively? Or have you turned off the spigot in terms of orders coming in?

I sure hope we’ve turned off the spigot. We’ve been out reviewing this with our domestic stores, and we have to cut back on the orders, because at the moment I don’t think anyone is seeing a big spurt in domestic sales. So, yes, we have to adjust our ordering, and I’m confident we’re doing so.

Our next question is from Matt Nemer - Thomas Weisel Partners.

My first question is on the used business. The ASPs, the revenue per unit was a good bit higher than I expected, which is somewhat counterintuitive with truck down and wholesale down. Can you explain that?

Matt, I don’t know that I can give you a great explanation, but again, I think CPO figures into some part of that. I know we’re selling more certified vehicles every month and every quarter. So even on the car side, that’s going to take your transaction price up. That’s the only thought I have right off the cuff that would address it. I did notice the average transaction selling prices went up on new and used.

Got it. And then turning to SG&A, can you give us some outlook for the first half in terms of what you’re thinking on comp expense and ad expense within that full year assumption?

I don’t think we can give you a specific number in terms of 70 this or 70 that, but one of the important points of the discussion about a weak industry and our forecast of 15 to 15.5 million is that I don’t think we’ve quite caught up in terms of having our business sized properly yet. Maybe we did a little better in the recent quarter than we had in previous quarters, but I still don’t think we’re there. And we haven’t stopped working on getting our cost structure more aligned for this lower industry sales level. We’re going to assume it stays at this lower industry sales level until one of you call us and tell us that the recession’s over.

Let me try asking that a different way. Do you think the impact of reduced expenses was fully baked in the fourth quarter or can we actually see some even better expense control in the first quarter on those two lines, on comp and advertising?

The biggest worry to me and I’ll probably not answer your question another way, is what we’re fighting is these lower gross profit levels. There’s more room for us to continue to cut expenses. But the fear is that there’s still more downside in the new and used gross profit end of the business. And so we have more work to do, to say that. So we haven’t let up and we haven’t finished.

Got it. And then my last question is, I noticed that your floor plan assistance was down a little bit more than the unit decline. And I’m just wondering if there’d been any changes in those formulas?

No, really what’s going on there is much as anything is the mix shift. It’s more import and more luxury and less domestic. The domestics tend to be a bit more generous on the floor plan assistance.

Got it, makes sense. Thank you.

Our next question is from Jordan Hymowitz - Philadelphia Financial.

My question is first of all, follow up on Rick’s question that the debt levels in no way hamper an ability to do acquisitions with Toyota or anybody else?

No, with the OEMs specifically, not anything that I am aware of. We’ve disclosed where we’re at on the acquisition line, how much is available so there’s plenty of dry powder if we find attractive deals.

Okay. Second question is, I just want to make sure that it’s only Lexus at this point that you are either on acquisition hold with or maxed out every other manufacturer from what you said a couple weeks ago, you’re still able to do acquisitions with?

Actually we’re not maxed out with the number of Lexus points we can have nationally. I think there are two Toyota regions where we have the maximum number and I don’t know if they have 10 or 12 regions or something like that. There are 2 of the 12 Toyota regions where we have our maximum numbers. That’s the only place we’ve hit a maximum.

And have you been turned down by any manufacturer in the past three to six months from making an acquisition?

No we have not.

Okay, so basically then just the slowdown in the acquisition target is purely a function of rationalizing what you have now?

Rationalizing what we have now and the overall economic uncertainty, I think we just need to be a little more careful in these choppy markets.

Okay, and the guidance of $2.95, the low end implies a 15 million SAAR?

Yes.

Yes.

And is there a ball park rule of thumb or is it exacerbated to where like if the SAAR is 16 million, could I assume then a 3.50 number? Is there a $0.25, $0.30 swing for each 0.5 million or?

I don’t think it could be really linear just because you don’t know the composition of any level of industry volume whether it’s 15.5 or 16. You don’t know if there’s a lot of fleet in there. You don’t know if there’s a lot of distressed merchandise and huge incentives or pushing metal into the market or what the brand mix is. So it’s not completely linear to answer your question.

And final question, the industry (inaudible) off 16.5% in February, is that on the overall 16.2% SAAR from last year or is it just on the retail SAAR?

That would be, I think, on the total industry SAAR. I think that’s normally the way they look at it.

Our next question is from Brad Hathaway - J. Goldman & Company. Brad Hathaway - J. Goldman & Company : I just wanted to ask you about the debt levels because even if I remove the impact of the of the acquisitions in the mortgage lines, it looks like net debt increased roughly $60 million from quarter to quarter from Q3 to Q4 and since we don’t have a cash flow statement, I was just wondering if you could walk us through some of the major factors in that change? Thanks.

The mortgage piece we’ve talked about and I guess you’re excluding that from your comment, but mortgages we did draw about $20 million more on the mortgage line. The other big change would have been drawing on the acquisition line to fund the four dealership purchases in December. We drew $135 million down on our acquisition line. To some degree, we were a bit conservative on the level that we drew there. There was a lot of noise in the market in December, a lot of concern about actual short-term availability of cash in the last couple of weeks so we actually drew more on the acquisition line than was required and you can see that by the fact that we had $65 million of pay-down on our floor plan line. We actually had excess cash on hand and it was a deliberate strategy that we took during the quarter. So that was really the two big changes in debt in the fourth quarter. Brad Hathaway - J. Goldman & Company : I’m not sure if I entirely follow you. The cash declined from roughly $79 million to $34 million. And then, you had the other long-term debt increasing from $20 to $33 million. Those are the two things that I’m most curious about. What drove that move?

The cash was basically, at the end of the third quarter we had started to put in place a new banking structure. And as result, we actually had a bit more cash in the bank at the end of the third quarter than our normal process would have. Our best use for short-term cash, when we have excess cash on hand, is to pay down our floor plan borrowings. We basically get a return of LIBOR plus 87.5 basis points by paying that down. So that is our normal investment vehicle for short-term cash. Because of the banking shift at the end of the third quarter, we had more cash on hand and less paid down than we would normally have. Our normal run rate is about $30 million of cash in the cash cash account and then the rest of we would use as we did at the end of the fourth quarter to pay down the floor plan line. So I think, that the differential between third and fourth, is that we had less floor plan paid down that we normally would. We moved that back up as we went into the fourth. Brad Hathaway - J. Goldman & Company : Okay. I’m sorry for harping on this, but it looks like the floor plan increased roughly $100 million and the inventory also increased about$100 million. Is there something that I’m missing here about why the floor plan gains would really account for this?

We had four acquisitions in December. And they were all luxury stores. So I would say that it is primarily acquisition driven. Brad Hathaway - J. Goldman & Company : Okay. It just doesn’t seem to explain the decline from $79 to $34 million.

The $79 to $34 million that was the cash and it was basically that we used it to pay down some of the floor plan. Brad Hathaway - J. Goldman & Company : I will follow up with you afterwards.

Okay.

There are no further questions at this time. I would like to turn the conference over to Earl Hesterberg, President and CEO for any closing remarks.

Thank you for joining us today. We’re looking forward to updating you on our progress on our first quarter earnings call in April. Thanks and have a nice day. opyright policy:: THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS. If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!