Good morning, ladies and gentlemen. Welcome to Group 1 Automotive 2015 Fourth Quarter and Full-Year Financial Results Conference Call. Please be advised that this call is being recorded. I would now like to turn the call over to Mr. Peter DeLongchamps, Group 1's Vice President of Manufacturer Relations, Financial Services and Public Affairs. Please go ahead, Mr. DeLongchamps. Peter C. DeLongchamps - Vice President-Manufacturer Relations, Financial Services & Public Affairs: Well, good morning, and thank you, Keith. And welcome to today's call. The earnings release we issued this morning and a related slide presentation that include reconciliations related to the adjusted results we will refer to on this call for comparison purposes have been posted to the Group 1 website. Before we begin, I'd 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 call, statements made by management of Group 1 are forward-looking statements that are made 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 past 12 months, and 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 in 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. Joining me…

Thank you. We will now begin the question-and-answer session. And the first question comes from John Murphy with Bank of America.

Good morning. This is Liz Suzuki on for John. Just looking at your vehicle mix between cars and light trucks, what are you seeing in terms of gross profit per unit trends year-over-year in each segment? And is there more pressure on the car side or is it pretty even across the board? John C. Rickel - Chief Financial Officer & Senior Vice President: Liz, this is John Rickel. There's more pressure on the car side than truck and the other piece that I would point out is there is more pressure in the oil-impacted markets versus the non-oil-impacted markets. Those are the two key parameters.

Okay, thanks. That's helpful. And in terms of looking at domestic, luxury, midline, I would imagine more of your stores in those oil markets are domestic-based, but looking at luxury and midline, are the midline imports still seeing the same kind of pressure that the dealers have been talking about for the last year or so, or is that starting to ease at all? Earl J. Hesterberg - President, Chief Executive Officer & Director: I wouldn't say it's easing at all. I would say it's been consistently highly competitive throughout the year.

Okay. And is luxury experiencing now kind of an increase in pressure? Earl J. Hesterberg - President, Chief Executive Officer & Director: Yes. Yes, no doubt about that. We saw a noticeably increased level of margin pressure in the luxury brands throughout the country. And that's a function of some very powerful companies fighting for market share and also oversupply.

Okay. Thanks very much. And just one more quick one; is what do you think the biggest drivers are of the decline in used vehicle gross profit per unit? Is there a mixed shift towards more late-model vehicles that come in at lower grosses or are the dealers having to cut price due to weakening demand? Or what do you think is happening there on a year-over-year basis? Earl J. Hesterberg - President, Chief Executive Officer & Director: It's not a demand issue at all. It is an increased supply issue primarily. An increased supply issue and also I believe there is a mix issue of a greater supply of used cars and used trucks and SUVs. So the dynamic in the new vehicle land of trucks and SUVs being in greater demand than cars is same in the used vehicle market, and many new vehicle customers are trading in a car and moving to an SUV or a truck and then those trade-ins get pushed into the used retail market.

All right. Thanks very much.

Thank you. And the next question comes from David Lim with Wells Fargo.

Hi. Good morning, gentlemen and Sheila. Just wanted to sort of peel back the onion on premium luxury; can you sort of characterize, was it a – did demand tail off or incentives? And how did that all work with incentives? And was there like a pre-planned increase in inventory going into Q4 for Group 1, knowing that the luxury side normally does well in the December period? Earl J. Hesterberg - President, Chief Executive Officer & Director: No, David. This is Earl. There was no pre-planned inventory increase. There was increased pressure from manufacturers based on their supply. And I think particularly in the energy-related markets as demand dropped throughout the quarter, there was pressure on all the dealers to try to achieve various volume targets, which in many cases are related to incentives. So I think with supply and demand, with demand getting a little bit softer and supply being stronger than optimal.

Were you seeing, so were the premium luxury guys doing any kind of volume bonuses or retro bonus, or any kind of anomalies from their standard incentive structures that they normally provide to the dealerships? Earl J. Hesterberg - President, Chief Executive Officer & Director: Well I don't know how much was atypical to the standard, but yes, there are meaningful volume targets and dollars associated with it for a variety of luxury brands.

Got you. And then a follow-up question on M&A, I mean we're hearing through the grapevine that some dealers are beginning to maybe hunker down a little bit and I know that's a broad term, but are you seeing valuation multiples for a possible targets sort of going down? And would that be an opportunity for you guys to be a little bit more aggressive in 2016 with your buys here in the U.S.? Earl J. Hesterberg - President, Chief Executive Officer & Director: David, I can't really say I've seen the ask prices on dealerships for sale go down yet. My personal opinion is the pricing for acquisitions peaked in the U.S. over a year ago.

Yes. Earl J. Hesterberg - President, Chief Executive Officer & Director: That's one of the reasons we did not buy very much last year; I think we bought three different dealerships, and intentionally, all of them are outside of the oil patch and they were luxury brands, pretty valuable assets we think. So I think that will take some time for the pricing to get more realistic in the market. So I would think that with the margin pressure and a lot of the volatility in the stock market and such that all buyers would be a little more cautious this year, but I expect them to take a little more time for the pricing to adjust to a new psychology.

And... John C. Rickel - Chief Financial Officer & Senior Vice President: And the other thing, David...

Yes. John C. Rickel - Chief Financial Officer & Senior Vice President: The other thing, David, I would add to that is obviously with where the share prices fallen to.

Sure. John C. Rickel - Chief Financial Officer & Senior Vice President: The hurdle to have an acquisition is steeper than it would have been. Our shares are, obviously, a very attractive alternative for capital allocation at these prices.

True. And one follow-up question, I know that I'm sort of jumping around here a little bit, but can you comment on any kind of phenomena with the OEMs maybe pushing a little bit more on the preregistration front. Thank you. Earl J. Hesterberg - President, Chief Executive Officer & Director: Well, I don't want to comment on that.

Okay. Thanks. Earl J. Hesterberg - President, Chief Executive Officer & Director: There's a lot of aggressive companies that are out there fighting for market share.

Gotcha. I think that bodes pretty well for us. Thank you so much. Earl J. Hesterberg - President, Chief Executive Officer & Director: Thank you, David.

Thank you. And the next question comes from Brett Hoselton with KeyBanc.

Thank you, everyone. This is Irina Hodakovsky on for Brett. How are you doing? John C. Rickel - Chief Financial Officer & Senior Vice President: Good. Morning, Irina Earl J. Hesterberg - President, Chief Executive Officer & Director: Good morning, Irina.

Good morning. I wanted to ask you a little bit about Texas. You mentioned weakness there. How did you perform in Texas relative to the overall state results? And you mentioned in the past you had sensitivities in place to pick-up any sign of a pullback. They would trigger cost reduction should demand slow down. So wondering if you could also touch up on what those sensitivities are telling you right now about the outlook? Do we see continued deterioration? And is this triggering any sort of cost actions on your side? And what kind of cost actions are you able to pull? And how material their anticipated impact? Earl J. Hesterberg - President, Chief Executive Officer & Director: Well, that's a good long question. Our results in the fourth quarter, our Houston sales, which is our biggest market, we're actually up 1%. And although, the data lagged a little bit, our understanding is that outperformed the Houston market. And in the State of Texas, we were flat. And the State of Texas is a little harder to judge because markets like Dallas and Austin don't seem to be significantly impacted by energy. The rest of the State seems to have some impact. So we were flat in the State of Texas. And Oklahoma, we were down 3.5%, which we believe outperformed the market. But again, the data has a certain timeline to it on registrations. So we actually expect that in this type of environment we'll gain share. We've had cost reduction actions in place since probably the middle of the fourth quarter. The most obvious thing we need to do is get the inventories in line. And those vehicles are still coming in through the end of December. So we have some adjustments there. But mostly our staffing is, our people is 60% of our costs. So we have to lean these things down to the level of gross profit that we generate. And you size advertising also to your sales. And there's certain outside services that we can work on. But that's pretty much the standard nature. How that relates to a future dollar figure or percentage of gross profit figure, I really couldn't give you a forecast on that. But we clearly have work to do.

Thank you. And one last question. I missed what you said you're expecting in the U.S. market in terms of sales outlook for 2016. Earl J. Hesterberg - President, Chief Executive Officer & Director: I would say in the U.S. market slight growth, about 200,000 units, more towards 17.6 million units and 17.4 million units. Across the U.S. the conditions are still very good in the auto market with low interest rates and fairly high employment. So, and for example, in the fourth quarter our California business was up double-digits. So I mean there's still – and the East Coast, our East Coast business was, generally in most markets, up 5% or so.

Great. Thank you very much. Appreciate that.

Thank you. And the next question comes from Rick Nelson with Stephens.

Thanks. Can you tell us what was relative price spot for the quarter and the year, adding toward the key registration period here in March? And if you could comment on the momentum there and your expectation for 2016 in the U.K. Earl J. Hesterberg - President, Chief Executive Officer & Director: Yeah. Certainly, Rick. Yeah. I think overall we're still very positive on the U.K. There has been some oversupply in the U.K. market. Again, the pound has stayed relatively strong versus the euro. So there are some European manufacturers that like to pump additional supply into the U.K. So there are some challenges to deal with there. But we believe March is setting up for a very strong month, again, with our key brands that we have. So we think the U.K. is still pretty solid business.

And the energy markets, I'm curious as we move into early 2016, has the momentum seemed to be worsening? Or is it about the same? Or is it...? Earl J. Hesterberg - President, Chief Executive Officer & Director: Well, thus far, it seems to be about the same as it was in December. But it's clearly a notch-down from what it was a year ago or even from the third quarter. So some of the decisions we'll have to make is you know do we continue to push to gain share, because we're quite strong in all these markets? Or do we try to take a bit more margin? Because we really can't go much lower on the margins. So the other phenomenon that isn't yet consistent across the market, but in Oklahoma our used vehicle sales are up double-digit. And our overall used vehicles business in the U.S. is quite strong. In fact, we seem to be growing faster than most in used vehicles, and even much faster than the people who only do used vehicle retail for a living. So that will be a lever we'll try to pull pretty hard on is – there is a possibility that as new demand wanes some of that will shift to used.

Thanks a lot. And good luck. Earl J. Hesterberg - President, Chief Executive Officer & Director: Thanks.

Thank you. And the next question comes from Bill Armstrong with C.L. King & Associates. William R. Armstrong - C.L. King & Associates, Inc.: Good morning. In Brazil I understand the market obviously is very weak, but you guys actually did pretty-well all things considered. I was wondering what prompted the big goodwill write-down. And then maybe longer-term how much of a commitment do you still have down there in terms of your long-term commitment, and what might it take to either – maybe prompt the thought of possibly exiting Brazil? Earl J. Hesterberg - President, Chief Executive Officer & Director: Let me, well I'm not the accounting expert. But I can't tell you those impairments aren't optional. That's just the process we go through every year. And John's team and Ernst & Young test the intangible asset values and that was the result. So the rules are the rules and that's not optional. But the performance in Brazil, which is probably hard for people to grasp, in a market that was down 34% in the fourth quarter, to actually make a small profit is indicative that we've got some incredible people and some pretty good businesses down there. So, no, we're still all-in in Brazil. The population is still growing in Brazil; it's up to 207 million I think this year or next year, which is probably 7 million more than when we went down there. There's still no increase in public transportation. The political situation is probably as close to a nightmare as you can get. And so the economic situation follows right behind that. So I'm not sure it could be a lot worse. But this too will pass, and our timing wasn't the best to go into that market, but our task and our objective is…

Thank you. And the next question comes from Michael Montani with Evercore ISI.

Hey, guys. Good morning, and thanks... Earl J. Hesterberg - President, Chief Executive Officer & Director: Good morning.

...for taking the question. I just wanted to ask about what you'd mentioned in terms of production and perhaps there being a little bit too much of that. Could you characterize a little bit any discussions that you may have had with OEMs, you know to try to either cut back a bit or to tailor the production more to SUV and truck where there seems to be a higher natural demand level? Earl J. Hesterberg - President, Chief Executive Officer & Director: I think, firstly, all retailers such as ourselves have been communicating to the OEMs that we don't have enough trucks and SUVs. So I think that's been pretty clear. And we're at the point now where we're in discussions with most of our OEM partners that we just can't take any more inventory at the moment, at least in terms of a days supply. We need to work it down a little bit. And actually our total inventory only went up two days year-over-year. But what's within that is skewed too heavily to cars, which are not moving as well, so.

Okay. That's helpful. And I mean I guess just from prior experience and having lived through situations like this, I mean, what is your outlook about how long that sort of takes to get GPUs stable again? Is it just – we need to lapse some of these initial hits and then things stabilize? Or how do you guys think about planning the business and how long that might take? Earl J. Hesterberg - President, Chief Executive Officer & Director: Well, outside of the oil areas and the luxury brands, we actually got some margin stabilization last quarter. You just couldn't see it because of this new luxury brand factor in particular. So I would think that these luxury brand inventories can be right-sized in three months to six months.

Okay. That's helpful. And but I wanted to follow-up on was one for John. How quickly can you deploy some of these costs-out initiatives to manage down the cost base? Is that a three month thing or a six month thing? Can you give a little bit of incremental color there? And then also on Spire, you know it looks like an attractive acquisition. Can you provide any detail on either multiple or some of the synergy opportunities you guys may see? John C. Rickel - Chief Financial Officer & Senior Vice President: Sure. On the cost as Earl indicated, we started to pull some of the triggers kind of the middle of the fourth quarter. That's going to be an ongoing task that we are going to have to work at, especially in these oil impacted markets. So I think that's certainly through the first half of this year we're going to be working hard on trying to right-size the businesses and take out costs where we can. The challenges that we have is the volumes have really not fallen that significantly. So a lot of these things that you could have done in 2008, 2009 are not as easy to do because the volumes are still there. So you still need to be able to service the customers and process the paperwork in the back offices. So that piece is a bit more challenging, but it's around the pieces that Earl talked about where there are some controllables that we're working hard. On Spire, we were very, very excited about this acquisition, $575 million of annualized revenues. The stores sit kind of right within the same geography, so there ought to be a good opportunity to continue to leverage our scale. Things like our back office consolidation and the management team. So I think that it takes a little bit longer in the U.K. because of some of the social legislation around staff reductions, redundancies as they call them in the U.K. There's notice periods and such, so it will take probably a year to fully integrate. And basically we should think about kind of that revenue at average U.K. margins.

Okay. Great. And I guess if I could squeeze one more in. Just the share repurchase authorization went up. Is there any way to think about the timing that you might look to redeploy that, especially given as you've mentioned valuations? John C. Rickel - Chief Financial Officer & Senior Vice President: Well, I think the share price appears to us to be very attractive. We certainly have cash. And I think you'll see us be reasonably aggressive.

Okay. Great. Thank you, guys. And good luck. John C. Rickel - Chief Financial Officer & Senior Vice President: Thank you.

Thank you. And the next question comes from Steve McManus with Sidoti & Company. Steve J. McManus - Sidoti & Co. LLC: Hey, guys. Thanks for taking my questions. So the first question I have, looking at customer-pay growth, it's been under some pressure the last couple of quarters. Anything worth noting there? Earl J. Hesterberg - President, Chief Executive Officer & Director: No I don't think there's anything material. The recall flows have really been intense and also kind of up and down. So I think we continue to displace some customer-pay business in various brands, working on warranty and recall work. But I think overall, the service market is still – parts and service market is still very solid. And that's another lever we are going to have to pull harder on because it's there. That business is there, even in the energy impacted markets. Steve J. McManus - Sidoti & Co. LLC: Okay then. As to the U.K. acquisition, I mean looking at the margin profile for new vehicles in the U.K. versus the U.S. obviously much better. Has there been any margin erosion there? And if not, are you expecting any kind of movement into 2016 in respect to the U.K.? Earl J. Hesterberg - President, Chief Executive Officer & Director: Yeah. The new vehicle margins have been, relatively speaking, decent in the U.K. A lot of that margin money particularly that we get in the fourth quarter comes from hitting various targets, line targets and such. And as I mentioned with, there is some supply pressure in the U.K. as well. So we've got to work pretty hard, but we like – we've been very successful with our Audi and BMW businesses and this new acquisition gives us more power in both those brands. So we would think we can pretty-well hold year-over-year margins in the U.K. That's going to be our goal. I wouldn't see a lot of opportunity to increase them, but we think we can hold them. Steve J. McManus - Sidoti & Co. LLC: Okay. And the last one for me I guess, looking at the F&I GPUs kind of holding flat at about $1,346 per unit in the quarter. Should we expect any room for improvement there in the next couple of quarters? Or stay relatively stable? Peter C. DeLongchamps - Vice President-Manufacturer Relations, Financial Services & Public Affairs: This is Peter DeLongchamps, and I think relatively stable. We've still got some work to do clearly in Brazil. U.K. has been a bright spot for us, U.S. remained consistent. So we've always kind of modeled that area, consolidated in the $1500 range for U.S. Steve J. McManus - Sidoti & Co. LLC: Okay. Great. Thanks a lot, guys. I appreciate it. Earl J. Hesterberg - President, Chief Executive Officer & Director: Thank you.

Thank you. And the next question comes from David Whiston with Morningstar.

Good morning. Earl J. Hesterberg - President, Chief Executive Officer & Director: Good morning.

A question on the oil market weakness. I just want to get a bit more color on, is this impacting all segments? Is it just the dams? Is it just small business pickup customers, or just personal pickup customers? Earl J. Hesterberg - President, Chief Executive Officer & Director: Well, I think it's an overall demand issue, but I think it's going to be felt an awful lot more in the car segments. If there's still the overall strength of demand in the truck and SUV segments mitigated to a certain degree, and there's much lower supply on those vehicles. So although, it's an overall demand issue, I think it really manifests itself a lot more in cars.

Okay. And in Brazil I know you guys have done a great job there, this year especially. But are you at a point where you just can't take any more costs out without cutting into bone, so to speak. Or is there still more you can do there? Earl J. Hesterberg - President, Chief Executive Officer & Director: We are getting pretty close to the bone there. Now the best thing we can do is kind of manage our portfolio a little bit which we've done, and we are doing a little more work. So we're getting pretty close to the bone there.

Okay. And back to the U.S., now that Ford has made the lighter F-150 more readily available with higher production, just curious if there's any feedback, positive or negative you can share from your customers in places like Texas and Oklahoma on the new truck. Earl J. Hesterberg - President, Chief Executive Officer & Director: I think the feedback on the F-150 is overwhelmingly positive. Our F-150 sales for the fourth quarter were actually up 14%, which on any benchmark that's a pretty good number. So I think that's a positive story for us and for Ford.

Okay. Thanks very much. Earl J. Hesterberg - President, Chief Executive Officer & Director: Thank you.

Thank you. And the next question comes from Pat Archambault with Goldman Sachs. David Tamberrino - Goldman Sachs & Co.: Yeah. Hi, thanks. It's actually Dave Tamberrino on for Pat. Just a couple of questions for us here, but back to the premium luxury segment in the U.S., you mentioned needing to adjust your inventory levels and that should occur in the first half of 2016. But will the pressure in that segment really abate here, meaning are you seeing an overall behavior change from the luxury OEMs now following the weaker 4Q, or does the flattening overall market impact their actions and really intensify the fight for market share? Earl J. Hesterberg - President, Chief Executive Officer & Director: I don't' really think I can speak for the OEMs, and they know that we're going to have to adjust. And too much inventory in the long-term isn't' good for them or us. I think it may take them some time to adjust their car flows regionally. I expect they weren't thinking about this regional issue as much as we do. And so it may be relatively new issues for them. I chatted with some of those top executives probably early in the fourth quarter. I'm not sure it was on their radar screen until then. But it takes them a while to move their car flows around regionally. But it will cost everyone more money if those inventories stay too high for an extended period of time. And they're pretty smart business people. They know that. So I think we'll work together to adjust this. David Tamberrino - Goldman Sachs & Co.: Okay, that's helpful. And then just staying within premium luxury, has there been a difference in demand for passenger car versus SUVs, meaning is it more the inventory oversupply just in passenger cars and you can't get enough SUVs or is it similar for both segments? Earl J. Hesterberg - President, Chief Executive Officer & Director: No, you're correct that industry-wide trend applies to the luxury brands also. The SUVs have a greater level of demand than the cars in many cases. David Tamberrino - Goldman Sachs & Co.: Okay, that's helpful. And then just shifting gears on the F&I side have you seen any changes in lending standards more recently, particularly the willingness to loan to subprime borrowers or even an increase in rates there? Peter C. DeLongchamps - Vice President-Manufacturer Relations, Financial Services & Public Affairs: This is Pete DeLongchamps. I can tell you from our perspective and from our company, we have not seen a change. David Tamberrino - Goldman Sachs & Co.: And does that hold true for the Houston market as well? Peter C. DeLongchamps - Vice President-Manufacturer Relations, Financial Services & Public Affairs: Yes. David Tamberrino - Goldman Sachs & Co.: All right. Thanks for taking my questions.

Thank you. And the next question comes from Irina Hodakovsky from KeyBanc.

One more question for you guys. You have a lot of Toyota exposure. And there have been a couple of publications who discussed the Toyota disruption in Japan due to steel shortage. Can you give us any information on that? Are you hearing anything from Toyota? There are different reports in terms of the magnitude of this disruption. Earl J. Hesterberg - President, Chief Executive Officer & Director: Yeah. We saw that in the last few days also. And so we checked with our Toyota representatives. And they said the impact on our U.S. supply is not material, insignificant.

Great. Thank you very much.

Thank you. And we also have a follow-up question from David Lim from Wells Fargo.

Yeah the follow-up that I have is when you talk about inventory correction on the premium luxury, I mean is this – as you said, is this just a shifting of distribution of cars out of let's say South Central U.S. to other areas? Or are we talking about possible production cuts at the luxury OEMs? I just wanted to get a little bit more color on the commentary there, if you would, please? Earl J. Hesterberg - President, Chief Executive Officer & Director: Actually, David, I couldn't really speak for the OEMs. I don't know what their entire situation is. But my viewpoint on it was just that they would likely have to redistribute within the U.S. I don't know where they are at any one point in time. But I think they keep a pretty close eye on these things. So I don't really think they want the cars backing up either. So my guess would be they need to move them around within the U.S. But I would have to let them speak for themselves.

Gotcha. Thank you.

Thank you. And as there are no more questions at the present time. This does conclude our question-and-answer session. I would now like to turn the conference back over to management for any closing comments. Peter C. DeLongchamps - Vice President-Manufacturer Relations, Financial Services & Public Affairs: Okay. Thanks to everyone for joining us today. We look forward to updating you on our first quarter earnings call in April. Have a good day.

Thank you. This conference is now concluded. Thank you for attending today's presentation. You may now disconnect.