Good afternoon ladies and gentlemen. Welcome to the Penske Automotive Group Fourth Quarter 2013 Earnings Conference Call. Today's call is being recorded and will be available for replay approximately one hour after completion through February 20, 2014, on the company's website under the Investor Relations tab at www.penskeautomotive.com. I will now introduce Tony Pordon, the company's Executive Vice President of Investor Relations and Corporate Development. Sir, please go ahead.

Thank you, Laurie. Good afternoon, everyone. A press release detailing Penske Automotive Group's fourth quarter 2013 results was issued this morning and is posted on our website, along with the presentation designed to assist you in understanding our financial results. Joining me for today's call are Roger Penske, our Chairman; David Jones, our Chief Financial Officer; and J.D. Carlson, our Controller. On this call today, we will be discussing certain non-GAAP financial measures, such as adjusted income from continuing operations; and adjusted EBITDA and EBITDA. We have reconciled these items to the most recently, directly comparable GAAP measures in this morning's press release, which is available on our website. Also we may make forward-looking statements on this call. Our actual results may vary because of risks and uncertainties outlined in today's press release, which may cause the actual results to differ materially from expectations. Additional discussion and factors that could cause results to differ materially are contained in our public filings, including our Form 10-K. At this time I will now turn the call over to Roger Penske.

Thank you, Tony. Good afternoon, everyone and thank you for joining us today. I'm pleased to report that our business produced another outstanding quarter completing the most successful year in the history of our company. For the fourth quarter, income from continuing operations increased 19.3% to $61.7 million and related earnings per share increased 19.3% to $0.68. The fourth quarter record results are driven by an 11% increase in retail unit sales and 15% increase in total revenue to $3.9 billion including a 12.4% increase in same store revenue. Before discussing the details of the fourth quarter results I’d like to summarize the company’s full year performance. In 2013, PAG achieved new performance records for retail unit sales, revenue, SG&A to gross profit, income from continuing operations and earnings per share. A record breaking performance is largely attributable to the nearly 18,000 people that makeup the Penske Automotive Group team. Last year 6 of our U.S. dealerships were named to the automotive news, 100 best dealerships to work for, while our UK business was again named one of the best big companies to work for by UK’s Sunday Times. I’d like to thank each person on our team at these locations for their commitment to ensuring the long-term success of our organization. In 2013 we retailed 366,200 units, an increase of 12%. Our used to new ratio ended the year at 0.83 compared to 0.80 in 2012. Total retail unit sales increased 13% in the U.S., and 11% in our international markets. Revenue improved 12% to $14.7 billion. On a same store basis retail revenue improved 11% with each area of our business achieving solid growth throughout the year. We generated 110 basis points improvement an SG&A leverage to 78% compared to 79.1% in 2012. Our gross profit flow-through was…

(Operator Instructions). And our first question from the line of John Murphy with Bank of America Merrill Lynch. Please go ahead.

Good afternoon, Roger. How are you?

All right, John.

A first question on the average selling price for new, I mean you alluded to it being up a little bit 6%, I think it was 6.3%, but you also said that D3 grew faster, the three brands grew faster than in your luxury or buying import brands. I was just curious, are you seeing sort of a lift across the board in mix that everybody is buying in all different brands because looking at D3 growing faster, I would have assumed that there might have been a degradation in the average selling price from new vehicles?

Really our volume in and D3 is very small and I think that the transaction price overall was up 3.6% and the U.S., it was up 0.7 and really the international really drove that, was up 11.2%, so that would probably the difference that drove that price.

Okay. That's very helpful. Then just a second question as we look at the used vehicle business which is outperforming at least on a percentage basis, the new vehicle, what's driving that, is that really the retail first strategy or are there other bigger opportunities in the used vehicle market that you are taking advantage of?

Well I think, retail first we've talked about that before, I think we've got a metric we use to retail, wholesale to use retail, which we try to keep below 20% that’s I mean if you do 100 retail used, you don’t want do more than 20 used wholesale and that drives some, at least some attention to the used cars. I think the other area that’s been positive for us is our internet and our penskecars.com website has been keen. We had about 60% of the cars that came out of the rental car business that were sold this year were given -- went to our dealerships also was positive. But to me the key point is that we retailing cars which have higher mileage, we put a warrantee on those, maybe three to six months on the power train for the customer in most cases. And with that we’ve seen quite an increase. But the internet probably has really given us a real lift and the off-lease opportunity when you think about in our business because primarily we have a big lease portfolio that lease -- off-lease group of cars that comes to us has been very profitable for us also and gives us some more vehicles. And also when you’re looking at our loaner cars, we have a big focus on the loaner cars, trading those loaner cars probably not waiting for a year we move those in 6 to 9 months. Again I think that’s key.

Okay. And then let me just sort of my next question just as far as the strategy of penskecars.com, really how that’s working out and also sort of e-commerce in general, if you’re getting lead from a lot of other internet sites, just trying to understand how penskecars.com is impacting the business first? And then also sort of secondarily, how sort of third-party sites and lead generators are impacting your business more in general?

Well, I think let me just say first from a digital standpoint, we refreshed all of our websites now, larger vehicle displays, more pictures, quicker inventory access which has been key. We put in Collision Centers, now we have websites. We’re seeing a significant rise in website traffic probably up 20% from last year. And we’ve got a mobile app now which we rolled out for penskecars.com with iTunes and Google. And basically I can be sitting with you anywhere and we can bring up Penske cars and it shows our entire new and used car inventory. So to me that’s a real step forward and people are using that. To me we have cars under 15,000 on that site. So that’s some of the quick hits that we’ve had. We also from a reputational management standpoint social medium, we’ve really started to focus on that with the open Google and some of the other areas and our fan count is up about 93% from last year. And when you look at e-marketing and from e-commerce perspective, one thing that our folks did that we send out different communications to the customers when they are buying a car or they are in for service. What we have done now, all the communication now is called action. And to me rather than just to playing chain later with a logo on it. So I think so of that has created more action in the service side and also on the sales side. So, our CRM consolidation with dealer stock it in and some of the things that we are doing across our network we have one DMS as you know rentals and rentals we have had that for a number of years. So we’re tying in there many of their products. So I think Penske cars has been a plus. We’ve had that now for about three years and we continue to enhance that and it gives us the availability to put all the cars across our business. Also on the UK side we have sitting our net which gives the opportunity, we have auction site there actually that we can put our used cars on, and it’s a live auction going on all the time. So to me I think that’s key. On an IT perspective, we have enhanced our intelligent systems, we’ve got again mobile payments that have come forward now that we can actually pay our service bills on a mobile site. So, we’re trying to stay up, I guess the market gets faster and faster but to me we want to make it easier for the customer to do business.

It’s a fun site to browse. Maybe just one last question on parts and service, the 8.8% increase in same store sales. There was another sort of a big print that you guys put up. Are we seeing finally the increase in the UIOs as sort of the one the five year old; the one the six year old cars that are in the sweet sport for parking service really kicking in or is there any warranty working here that might not repeat going forward? Just don’t understand sort of the trajectory, I mean as far as expectation that we’ll see big increase in 2014, what is your view on that, and are we seeing it already?

Well, number one, we look at one to five year repair orders and 50% of are in customer pay. And when you look at warranty one to five, it’s about 70%. So to me, we are capturing that customer, and I think you have better customer loyalty when you look at Premium/Luxury the complexity of the cars and people are not comfortable taking to those to some of the outside shops, so that’s been a benefit to us. When you look at warranty, the royalty number was up on a same store basis double digit. And I think some of that is being driven by the full circle program that BMW has and also you got Toyota Care with the first two years of free maintenance. So those are things that are key. When we look at the business overall, it’s hard to predict just what is going to be recall as we saw, previous recall I think just lately, we had a seat recall at Toyota. So to me those are things that obviously generate more revenue for us. But overall, customer pay was up almost 8% for the year, we talked about double digit 12% on warrantee. Our PDI get ready was up almost 10 and our body shops were up 7. So overall we had great strength. I know there was some concern last quarter about our parts and service increase. And when we got into it, it was really a recall in the UK on solenoids, on the fuel system and Mercedes Benz, it was a big campaign. And when that went away that was part of our reason we had a major drop. So I think as I said earlier, we got to be watching one of these campaigns that will drive, will drive our parts and service margin. So that’s something we got to look out for.

Great. Thank you. That’s very helpful.

Thanks John.

And we’ll go to Rick Nelson with Stephens Incorporated. Please go ahead.

Good morning, Roger.

Hey Rick.

In car growth per unit looks like, we’re starting to see some stabilization there, some pressures I got some deadline import, category. But do you think we've raised bottom and we can maintain these kind of margins on a go forward basis?

Well, when you look at our margin, we went from 8% with an increase obviously in the MSRP, but I went back with Tony and we looked at where were we back at 2006 and we were at $3,200 and we are in 2011, we are at 32, and in 2013 we’re at 32 on new in the fourth quarter. So to me that shows that we've got some consistency. And there is a pressure down on some of the volume foreign. But to me that's one of the things that we’re managing I think pretty well, and when you look at it overall, our 0.2% decline, it could be a little bit of mix volume, because we have more volume foreign which would drive some of that down.

And your flow through, I mean incremental gross profit, I’m calculating 24% including rent in the fourth quarter, is that a level of that you are happy with and there is some opportunity there for better flow?

I would say that the flow through, I’m never happy, let’s put it this way, but I think 31 to 35 is where we try to focus on. We had some high cost, in the UK. Remember when you look at our SG&A the gross benefit we’re up 40 points better last year in the fourth quarter and 50 this year. And because we have such a strong third quarter in the UK where they have the registration months in our gross profit in the UK were 15 million more than the third quarter this year than it was last quarter. And that you still have the fixed cost so that has some reason to drive it down. Overall, we’re up 31% for the year and I think that’s in line with our targets.

Thank you for that. Also there is a lot of well publicized weather challenges and you’ve got a lot of exposure have to those markets, if you can comment on how you see the weather impacting your early 2014 sales?

Well we certainly know that these closures in fact today I got an order early this morning in Washington closure you know all the impact in Atlanta, all we have to East Coast and we had that also in January. So I would say that we’ve seen probably double-digit decreases in business in the East Coast so far this year, but just we’ve seen a strong increase double-digit in the West. So overall we’ll see how it balances out, hopefully we’ll get those people to come back in, but there is no question on the retail side that we’ve seen in our service departments a little later, obviously we get some body shop business out of this, but I think we got to stay tuned on that.

Thanks a lot and good luck.

Thanks Rick.

Our next question from James Albertine with Stifel, Nicolaus. Please go ahead.

Thank you and good afternoon gentlemen.

Hi, Jamie.

Hi, Jamie.

Touch on over the last four, five years you’ve shown some pretty significant SG&A to growth leverage. And in that time not much early you’ve shown a lot of growth via M&A. So why don’t you get an idea for how are you thinking about the M&A trajectory looking forward? And then sort of as a related question where are the biggest opportunities still internally where you maybe focusing some of your investments in terms of driving efficiency and growth? Thanks.

Well if you go back to 2009 we were at 83%, we are at 78% now so we’ve had 500 basis points of benefit. I think overall that’s developed and driven a margin for us from 2.3 to 3.0 which obviously we should see that continued benefit. I think our target and as we go into 2014 would be another 50 basis points, stretch would be a 100. We want to be careful we don’t get ahead of our skies on stuff like this. But from an M&A perspective we look at businesses based on profitability where we can get scale. And hopefully the consolidated offices that we have been able to do over the last 12 months has been a real benefit to us and we’ll continue to do that. Sometimes on new acquisition we can’t overnight consolidate offices. So it takes us time to do that so don’t get the benefit right away we think in the UK and the international markets that’s something that’s a priority for us in our business plans as we’ve talked about going through those at the end of the year. I think in the U.S. we have got significant opportunities in the pipeline and also overall, because there is only about 10% of the market is consolidated today either with public or some of the bigger private groups. So to me it gives us an opportunity. I think we remain opportunistic in the U.S. we also look at brands and where we have scale as we’ve been in Australia with there last week there was lots interest coming to us on the automotive I think we run the play with a commercial vehicle here for while before we jump in to retail auto but there is a lot of opportunity there. It…

I appreciate the details as always. Congratulations on a great quarter and very good luck in the first quarter.

Thank you.

We have a question from Brett Hoselton with KeyBanc. Please go ahead.

Hey, Brett.

Hey, Brett.

Hi. A couple of questions here as I think about -- first of all, can you just kind of outline and when we talked a little bit about this earlier. I think can you talk about some of your target expectations for revenue growth in the sense of what portion of that is same-store versus what portion of that might be acquisitions in your mind?

Well, I think that as we target next year we look for double-digit, so let’s say used 10%, I would say half of that would be organic and half would be on acquisition, would be a good target.

And then can you talk a little bit about, we’ve heard quite a bit about inventory levels, but I think most of these folks are on the domestic side. Can you talk about your inventory levels, just kind of broadly speaking where do you see your inventory levels at, are they potentially constraint, do you think the market is too high and how that might affect your business going forward?

Well, when we look at our business and our inventories at the end of the year, we felt 63 days was certainly not excessive and our mix is so much skewed to volume foreign and the Premium/Luxury don’t have the impact of 100 plus days with a number of our large domestic. So, when you look at Audi, we really have the softness in inventory in Q5, Q7, Porsche has been in real tight supply and when you look at Mercedes, new CLA and the new S Class and GL, I think that we’re in real tight position there. So overall, X5 is the -- I think someone said, we had 35 in stock around the whole country. So, to me we’re going to be at lower inventory. Sometimes this new models coming out, so you really roll down the old model, it takes time for them to get the pipeline filled with new models. But we’re going to manage at this level I think somewhere in the $2.3 billion to 2.5 billion maybe $2.6 billion is realistic as we roll into the summer months and obviously if we get into the March, we’ll see the UK inventory probably come down because we’ll have the registration months in March and also September. So, I think we’re in a pretty decent level. And I will tell you this; we’re not going to be afraid to say no to the manufacturer if we get too much.

And then just switching gears, used vehicle gross profit per unit, what’s your sense on where we go from here? Is there in your mind the potential to see it maybe continued to decline a little bit as you maybe try to push for a greater volume in that segment or do you think kind of where we’re at and maybe just flat in the outlook at this point?

Well, remember we’ve got a different dynamic which is taking place with our international business. In this country when we sell a demonstrator, it’s sold with the new car and we don’t have a lot of demos. But internationally, it’s part of the dealer contract you have to carry demonstrators. And I would say that a typical BMW star, Mercedes star in the UK would have 20 to 25 demos. When those are sold they’re sold as used cars and obviously there is slightly new so they would go in a much lower margin. And then has some reason as we’ve grown that volume of businesses over I think it had some impact on our used car gross number. But to me we’re trying to get to 1 to 1 and by doing that obviously we’re selling cars that maybe less margin, but what it does I think I said that earlier, it gives us the growth on the front-end it gives us the added F&I and then let’s not forget the PDI benefit we get from the internal gross profit. So to me, I think that’s key. And when you look at our business for the fourth quarter, we were up almost 7 million plus in gross so the unit volume not only was up, but it also increased more gross profit than more customers. So, I think the model is right. Whether it’s going to up from here, I can’t say that, I would say we’re going to try to drive it. And at the end of the year also I think when you look at the end of the year there are values do go down on used cars so in many cases from a wholesale standpoint it would have some impact on our overall gross.

Excellent, thank you very much, Roger.

Thanks.

We’ll go next to Brian Sponheimer with Gabelli & Company. Please go ahead.

Yes, hi Brian. Brian Sponheimer - Gabelli & Company: Hi guys. Hi Roger, hi Tony. Just wanted to spend just a minute here going back over just the margin compression on volume front and just whether we may see that becoming problematic as the year progresses given the rise in the yen relative to other currencies?

Well, when I look at margins and quite honestly just looking taken a snapshot of January, I see our Toyota business is flat year-over-year and I just picked one before the call just to take a look at it. So, I think we can manage that, so we haven’t seen a deterioration if we look at January ‘13 versus January ‘14 we are flat meaning we haven’t had any reduction actually. And volume point obviously when we looked at new for the year or for the quarter was down about 40 basis points or 50 basis points, so it had some deterioration, but I think we can manage that. Brian Sponheimer - Gabelli & Company: Okay. And just to go back over acquisitions, would you be able to disclose if you signed any NDAs that are -- or deals that maybe coming in the next three to six months?

Well, we know NDAs we sign would probably have a clause that we could really make it official until it’s done and also we have that condition posing us with the OEM also, so we wouldn’t disclose that at this point. But I would say that we have a pipeline both in the U.S. and also internationally. Brian Sponheimer - Gabelli & Company: What’s a difference in seller settlement maybe in the U.S. versus some of your international targets?

What we see internationally that people really have been beaten down I mean their business has been way down. There was no capital to grow in many cases, they are interested in really writing the facilities in Italy we have had some great opportunities there are minimal goodwill to pay, good businesses we come in with fresh capital and want to reduce some maybe investments and facilities and we are able to attract some good people. So, I would say the international business is at least in Western Europe are very good and the big thing there is getting the right people obviously and partnerships as we have been able to do. And over here obviously it’s very competitive because the volume foreign and what I would say Premium/Luxury are really attracting higher pricing right now. Brian Sponheimer - Gabelli & Company: All right, thank you very much, great quarter.

Thanks.

We have a question from Ravi Shanker with Morgan Stanley. Please go ahead.

Yes, good morning everyone. This is [Vijay] in for Ravi.

How are you, Vijay?

First a clarification on your fourth quarter used results, so your reduced revenue per unit was up quite a bit in the fourth quarter, but you’re gross per unit declined about 6%. So could you help us understand a bit better what was going on with that divergence?

I am going to have to get Tony to come back, I really can’t answer that right now, so why don’t we come back to you on that, okay.

Okay, sure. So maybe a broader question on F&I, but unrelated to the CFPB, so you’re continuing to see very healthy growth in that business. And I wanted to get a sense of how you think about that in a rising interest rate environment and if we can continue to expect the growth you’ve been seeing recently or there might be some pull back as interest rates go up?

Let’s position it overall, both domestically and internationally. 70% of our F&I income comes from the U.S. and 30% internationally. And when you look at that 60% is product and 40% is reserve, so you will see obviously some -- probably pressure as interest rates would go up. But today when you think about 40% or 70%, about 30% of it is really F&I reserve. And we've been operating in an environment with leases. And quite honestly, in leases margins and interest rates really don’t come in to play because you are really talking about our lease payment and that's 55% of our Premium/Luxury business would be leased.

Okay. Well that's all I had. Thanks so much.

Okay. Thanks.

And we have a question from Scott Stember with Sidoti & Company. Please go ahead. Scott Stember - Sidoti & Company: Good afternoon Roger and Tony.

Hey Scott. Scott Stember - Sidoti & Company: Could you maybe quantify some of the headwinds that you might have faced with fourth quarter of last year with a lot of replacement demand after the hurricane in the northeast and maybe talk about whether we should see some of that in first quarter as well?

Well, there is no question, we had the benefit of Sandy in the first quarter last year, so some of those costs will be difficult, as we go forward. I can’t tell you with the weather what we have now, it’s going to be interesting to see what's been held back on the East Coast as we go forward. But overall, when we look at our business, we had a good East Coast business from the standpoint overall. And in Connecticut probably we had a lower increase from the standpoint of new vehicle. But on a New Jersey standpoint, we look at North Jersey, we were up about 2% over last year. So, to me, you have to go to each individual markets, but used car business was up everywhere, and of course we had decent growth on new. Scott Stember - Sidoti & Company: Okay. And you alluded to the fact that obviously the -- at least sequentially in the UK that the parts and services was a lot better, now that you have that comparison in the third quarter that disappeared. Can you just talk about what the UK did as far as the comp basis and parts and service?

I don’t think we have that really here. Overall, we were up 8.8% from a same store basis, so to me I definitely have get that. Sorry, I don’t have that here. Scott Stember - Sidoti & Company: Okay. And just lastly on the equity and affiliates, it seems like nice 30% plus increase, was that all Penske truck leasing?

No, no that Penske truck leasing had an excellent quarter. Obviously they were up significantly. But our joint ventures in Germany with the Jacobs (inaudible) our business had ATC, we have a 27% interest in heavy duty truck operation in Phoenix, our (inaudible) Oklahoma City, Dallas and Fort Worth and they had a nice increase. So it was to me -- starts to show that the strength to some of these JVs we have an outside investments that will help us in overall. Scott Stember - Sidoti & Company: Okay. All right. That’s all I have. Thank you.

Thank you.

And we have a question from Matt Nemer with Wells Fargo Securities. Please go ahead.

Hi Matt.

Good afternoon. Congrats on a great quarter and a great year.

Thank you.

Couple of follow-ups, I guess the first thing I wanted to ask is in the new car business, were there any special programs on the luxury side that you think really added materially to the gross profit and might not repeat or is it sort of more of the same that we usually see in -- at the end of the year?

Well let me say that, I want to go to the UK; we didn’t see the money that usually, I think everyone kind of backed off in Europe about who was going to be the leader Audi, BMW or Mercedes. So we actually saw less incentive and less money at the end of the year that we have seen in the past. Now over here, there was a significant dollars available but what you saw was at Mercedes has a new leadership bonus and a performance bonus which they gave to dealers and you picked up some of that at the end in the quarter in the fourth quarter. So to me, I don’t think overall and I would have to go up back out to the field, but I don’t think overall -- there was this much push as there has been in the past. And quite honestly in the U.S., I don’t think there was much more than we had a year ago. So, it was pretty much consistent. The only thing we had was there were bonuses on that CSI both service and parts which you could take at the end of the year that probably helped us on the premium side and that was specifically Mercedes Benz.

Got it, okay. And then I just wanted to double check something that you said on customer pay. Did you say that that was up 8% in the quarter or for the full year because I’ve got the first nine months up between 2% and 4%. And that would be a pretty acceleration if that were for the full year.

That was the quarter.

That was the quarter. And then just can you give a little more detail on sort of what drove that change in trend up call it 3 or 4 to up 8?

Well I think number one, we’ve taken some aggressive pricing, if you look at our margin, on customer pay in the U.S., we were down from 49 to 48 because what we are doing has got menu pricing now on older vehicles, those are the customer pay. We want to be competitive not see those people go out the doors who maybe have some impact there. And we had the same -- the UK has been really not growing as fast on a service levels, so we have in the U.S. So they have done some discounting and customer paid too. And I think that is given us the ability to attract some business that we didn’t have in the past.

Okay, and then just lastly you gave some guidance on your corporate ID CapEx this year. And I am wondering if you have a sense for what the total number will come in at for the year with either rental car expense or IT and other?

It is going to be -- hard to give that today because we are looking at our rental plan at this point. And to me if we are in the $120 million to $130 million from the standpoint on the car side, we’ve got to look at if the rental car (inaudible) without rental car. And today we will be turning that fleet. So we’d have probably maybe $10 million, $15 million more in rental car after depreciation on new vehicles. So that is going to turn, we don’t double that up obviously each year. But there is an opportunity for us to go to another city, and if did that, that would probably add another $30 million or $40 million. But we look at that almost like forward plan. We get financing on those through our traditional finance sources. And we typically -- our amortization of that is 1.5% per month. And we figure values and those are good and we keep those vehicles anywhere from 12 months to 14 months.

All right, it’s kind of an extraneous CapEx number, okay. That is very helpful. Thanks so much.

Okay, great.

And we have a follow up question from Brian Sponheimer with Gabelli & Company. Please go ahead.

Yes, Brian.

Brain, we have your line open, please go ahead. Brian Sponheimer - Gabelli & Company: Okay, thanks. Sorry I was muted by myself. The last time Roger that you went through a winter that was this severe, did you get any business on part and service that picked up throughout the year, just given the stress on cars that you had sold in the winter say four or five years ago there were coming back based on failure, given the stress of the prior six month or so?

I think in these types of [stardom], the thing what you see most is body shop where people maybe get some transmission work. But we saw a much bigger pick up in Sandy where we had cars flooded and things like that, I think this is a time period that we’ll see some body shop, but I don’t see anything that will drive the business to something or it would be significant. Brian Sponheimer - Gabelli & Company: Okay. That was the follow-up. Thank you.

Thank you.

And our last question which from the line of David Whiston with Morningstar. Please go ahead.

Hey David.

Good afternoon guys. First question, do you happen to know how much was available for buyback at your-end?

About 70 million.

70, okay. And Roger given your expertise and focus in the Luxury industry with Mercedes moving down in segment that’s really desirable product, like the CLA and BMW going out right to, what's your opinion and what this means for the future for rents such as accurate view like in [Lincoln]?

Well, I think you’ve got to look at the whole market, they are coming down, CLA is 2099, the MSRP over the transaction price might 32 and 33, you’re really sitting right on top of Avalon and they’re even in Toyota and Honda. So I think the impact with the Germans coming down and you see BMW and you’ve got the phase 3 coming in from Audi, this is just going to be a very competitive segment. But I think it’s going to be image which will drive some of that and obviously the Toyota and Honda people have earned their business on quality. So, I think it’s going to be interesting, I don’t know how it’s going to impact Lincoln. I think Lincoln is trying to compete at a little higher level. So, it’s a very interesting question. I think there is just going to be with the Germans and we think about it was S Class and now it’s down to a GL or an ML and even smaller and you’ve got McCain coming in, Porsche entering at X3 market. So, it’s a crowded area. But the good news is that we’re sitting with 66% of our business being Premium/Luxury. So, I am clapping to see them move in those directions. And remember leasing is so strong. One of other things that probably will drive the competition to Lincoln or Acura is the residual values of some of these German makes when they compete in the market and you look at the payment differences will make a big difference unless the Acura or Lincoln decides to support residuals heavily, so that’s always a decision the OEM has to make when they see the market conditions in the competitive environment.

Okay. And with the commercial business in Australia, do you guys have any indication how much of that truck volume down there is tied to the Australian auto manufacturing industry?

I would say very little, I mean when you think about today you’ve got Ford pulling out of Australia, Holden has announced coming out and Toyota. It’s just the cost of labor there. So to me it’s the country is as big as the U.S. and there is really, you don’t have rail, you don’t have some of the other types of transportation. And I think we have to rely on mining, forestry and agriculture obviously in New Zealand. So to me those are the things that will drive that market there rather than automotive. I don’t think that’s been the big driver there at all. I think quite honestly with those manufacturers pulling out, and I know for a fact that the government has subsidized them is one of the reasons they’re taking those subsidies away and that’s really driving these guys offshore. They can actually import cars at less cost than building them in country.

Okay that’s helpful. And just last question, what is your position on NADA’s dealer reserve proposal?

From the standpoint of consumer finance, at this particular time, they haven’t -- today the CFPB has not approved the NADA plan. And we like the move that NAD is getting out in front of the dealers, obviously it’s going to be regulatory. we continue to review their plan but as I said earlier at this particular time it’s a small portion of our overall income as finance reserve is probably when you down as probably about 30% versus you might see other places due to the international versus domestic versus products as we said earlier. I just think we have to wait and see. Obviously I am not real enthused about having if we change a rate or something have to come up with four or five reasons on each transaction. That would encumber the transaction. One of the benefits that we have as dealers is the electronic e-contracting where the banks -- it’s quicker for the customer and it’s certainly more efficient for the banks and the dealers. So I think we’ve got -- I think we are in the first inning here advancing to see what guidance we get as we go forward.

Okay, thanks very much.

And I will turn it back to our speakers for closing remarks.

Okay, that ends up the call. Thanks. We will see you after the first quarter. Thanks for your support.