Welcome to the Sonic Automotive third quarter earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks there will be a question-and-answer period. (Operator Instructions) As a reminder ladies and gentlemen this call is being recorded today Tuesday, October 28th, 2008. Presentation materials which management will be reviewing on the conference call can be accessed on the company’s website at www.SonicAutomotive.com by clicking on the For Investors tab and choosing webcast and presentations on the left side of the monitor. At this time I would like to refer to the Safe Harbor statement under the Private Securities Litigation Reform Act of 1995. During this conference call management may discuss financial projections, information or expectations about the Company's products or market, or otherwise make statements about the future. Such statements are forward-looking and subject to a number of risks and uncertainties that could cause actual results to differ materially from the statements made. These risks and uncertainties are detailed in the Company's filings with the Securities & Exchange Commission. I would now like to introduce Mr. Scott Smith, President and Chief Strategic Officer of Sonic Automotive.

I’m Scott Smith, Co-Founder, President and Chief Strategic Officer of Sonic Automotive. Welcome to Sonic Automotive’s third quarter 2008 conference call. Joining me on the call today are the company’s Vice Chairman and Chief Financial Officer, Mr. Dave Cosper; our Executive Vice President of Operations, Jeff Dyke; Rachel Richards, our Vice President of Retail Strategy; and Greg Young, our Vice President of Finance. If you’ll please turn to our first slide, Sonic Automotive Q3 2008, Conference Call Topics, today we’ll be discussing an overview of the quarter, our vision and strategy and investments principles along with some color on the quarter then I’ll turn the call over to Jeff Dyke for an operating review and the priorities and specific strategies that he’s working on. Then Dave Cosper will follow Jeff with a financial review of the quarter and dive a little deeper into the numbers and then I’ll wrap up with a summary. If you’ll please turn to the slide, Building for the Long-Term, the Quarter in Review, during the last three months Sonic Automotive faced the toughest operating conditions in our ten year history. We faced a hurricane, gas shortages in the Southeast, historically low consumer confidence levels, last but not least, a credit crisis. I’m not sure if anybody paid attention to the Safe Harbor statement but there’s a lot of uncertainties that are out there obviously in the market these days. The combination of these forces resulted in the lowest SAR since the early ‘90s. Today we’re reporting an EPS loss of $0.57 for the third quarter. Included in the loss is $0.76 of non-cash impairment charges. EPS from continuing operations excluding Hurricane Ike impact and the impairment charges was $0.33 or $0.04 ahead of consensus. The majority of our impairment charge which Dave Cosper will discuss…

Thanks to all of the Sonic associates that continue to lead the way in creating the best automotive company in the industry to work for. Today I’m going to provide an overview of a few operational focus areas so our investors understand what we’re doing to take advantage of today’s marketplace. As Scott indicated there’s always opportunity to grow and prosper even in more challenged times so let’s take a look. Please turn to the page titled Operating Priorities, Used Vehicle Strategy. This is a slide that you’ve seen before which summarizes our used vehicle process. Phase I focuses on changing the culture in our stores to become more retail focused and less wholesale focused. Phase II focuses on optimizing inventory, putting the right car at the right location for the right price. Phase III envisions a national used vehicle virtual store. This virtual lot will have its own unique branding, consumer controlled shopping and transactional elements. Phase I is being completed in all of our Sonic dealerships, however, we need to add some focus to our West Coast stores to guarantee execution of this process. This started in September of 2008. We’re in the process of finalizing Phase II in our Alabama/Tennessee/Georgia region and the results are very encouraging. We are finding that vehicles processed through the Sonic Trade Desk on average turn 10 days faster and are averaging $800 more in gross. At the end of the fourth quarter we expect to have the Trade Desk implemented in our Texas region and by the end of the first quarter 2009 we’ll begin to implement Phase II in our dealerships in North Carolina, South Carolina, Virginia, Maryland and Florida. Phase III of our Sonic Virtual Store that will be named at a later date will be a unique offering…

EPS for the quarter for continuing operations was a loss of $0.24 down from a profit of $0.68 last year. Included in the results are the impact of Hurricane Ike that hit our Houston stores and non-cash impairment charges. The Hurricane disrupted operations for about 10 days in September and reduced diluted EPS by $0.08. Impairment charges for the quarter totaled $0.49 for continuing operations and $0.27 for discontinued operations and these largely reflect franchise and fixed asset impairments and lease exit costs. Given the dramatic changes in the business environment in general and in our business and the market value in particular we undertook evaluation analysis of goodwill recorded on our books. We concluded there is not an impairment of goodwill. As part of this analysis however we also reviewed franchise assets and fixed assets at the store level and we concluded there were some impairments concentrated heavily in our domestic stores. Excluding these charges we earned $0.25 a share in the third quarter and $0.33 a share excluding the Hurricane impacts. I want to note that our reported EPS numbers may move slightly when we file our 10-Q as we nail down the impact of our 2002 converts in the EPS calculation. This does not impact the $0.25 and $0.33 a share numbers I just discussed. I kind of view the quarter in three parts, first in July and August we were profitable with an operating margin of 3% essentially a continuation of what we saw in the second quarter. Second in September it was a tough month given the hurricanes and frankly a further drop in sales volumes but operationally we made a small profit. Third the impairment charges taken in the quarter which essentially are non-cash valuation adjustments reflecting the awful business environment. Business in October…

Many of you have been trying to understand what our industry and more specifically what Sonic Automotive looks like if the SAR stays around $12 million to $13 million for several years. We’ve been dealing with these same questions internally as we model out our company for the long term. Although we think the operating environment will begin to rebound as we head into 2010 we’re prepared to operate as if it won’t. If this downturn continues for an extended period of time we believe that several things will happen. First the number of dealerships in the industry will shrink as smaller dealerships begin to close so the sales per dealership will remain steady or go down slightly maintaining throughput. The brand mix will continue to migrate towards the import and luxury segments of the business as domestic manufacturers continue to reduce capacity and we believe that this benefits Sonic Automotive given our mix of dealerships. Parts and service business will begin to stabilize as customers can run but they can’t hide from repairs and needed maintenance. In the short term but eventually these vehicles will need the maintenance. We’ve already learned in the current environment that our parts and service business is not nearly as volatile as the new vehicle sales and our expense structure will continue to decline as we discussed in the beginning of the call. We’ve run several scenarios assuming the SAR stays around $12 million and have come to the conclusion that at these levels we’ll be able to sustain a net profit of $25 million to $50 million per year. As Dave discussed we have plenty of room on our EBITDA base debt covenants and I’m confident that we’re making much better decisions for the long term and have adopted sound investment principals. We’ve emerged from the quarter with a stronger and more secure future and before we take your questions as always I want to give my sincerest thanks to our Sonic associates. Their continued hard work and dedication are carrying through this challenging time. Thank you team. It’s an honor and a privilege to lead our company. Lastly the Directors of the company review the dividend quarterly and will act accordingly in the best interest of the company and shareholders. The dividend will remain unchanged for the quarter at $0.12 per share payable on January 15th, 2009 for shareholders of record as of December 15th, 2008. At this time if you promise not to ask questions about our telephones we’ll open the call.

(Operator Instructions) We will pause for just a moment to compile the Q&A roster. Your first question comes from Rick Nelson – Stephens Inc. Rick Nelson – Stephens Inc.: You referred to improvement in October, looking more like July and August. What is contributing to that? Is it Houston bouncing back or is it other factors?

It’s certainly improving a little bit for September, Rick, and I think that was the nature of my comments. It’s close but maybe a little soft in what we saw in July, but more like a July, August run rate. Houston is picking up, our service is very strong there. Jeff, you may want to comment on new sales there.

Rick, the Houston market is certainly making a difference both from a new perspective and used cars. We’ve got pent up demand in the Texas market and that’s starting to play out a little bit. We expect that to continue to play out as we go across the fourth quarter. Rick Nelson – Stephens Inc.: Dave, in terms of market [inaudible], are your covenants going to prevent you from doing much more in terms of buying out some of the leases?

Not the covenants per se, there is an overall basket capped at $200 million in the credit facility that we negotiated with the syndicate. We’re at $115 million, $120 million, something like that so there’s a fair bit of headway to go so I don’t see that being an issue. Rick Nelson – Stephens Inc.: The cost cuts of $12 million, that’s an annualized run rate I take it. How much of that would show up here in the fourth quarter?

About 25% or 30% of that.

Actually the regional structure.

The regional structure is done and that would be probably, it’s still 25% or 30% because we did it in the middle of the year. We’ll pick half of the regional structure redo for the last six months of the year.

But all for the fourth quarter.

Yes. Rick Nelson – Stephens Inc.: The asset impairments, can you identify the dealers that those are associated with? Are they primarily domestic stores?

They are in fact, yes, across the board. Rick Nelson – Stephens Inc.: In terms of service and parts, are you seeing any evidence that the consumer is trading down to shopping less expensive alternatives to the dealer?

We are. What we’re seeing is they’re spending less and less money on big ticket items and more and more money on quick lube items, oil changes and things like that and it’s our ability and the processes that we’re putting together to up-sell off of that. As we expand on our fixed operations processes over the next few months hopefully we can take advantage of those customers coming into our shops. Rick Nelson – Stephens Inc.: Finally, in terms of finance, we’re reading about the fine among the big institutions. Is that beginning to show up in terms of auto loans and your credit providers?

It is somewhat. I think it’s more consumer confidence than it is anything else. As consumer confidence comes back I think we’ll see that we’re able to get financing. It’s more in the subprime markets on pre-owned where we’re experiencing that affect and that business has dried up for us. We’ve had stores, especially in the Oklahoma area that have focused a lot on subprime financing. We’re going in and changing processes there to get them to focus in other areas of our business. We are experiencing some of that but it’s more subprime than it is anything else.

Rick, I would add to that, that for our luxury brands and import brands the captains have done yeoman’s job in supporting us and their share is up sharply. Some of the banks have cut back.

Your next question comes from Scott Stember – Sidoti & Company, LLC. Scott Stember – Sidoti & Company, LLC: Do you ever talk about your floor plan syndicate and maybe just give us a quick overview of where you stand? It sounds like you guys are in pretty good shape, particularly with the cap.

We’ve got a syndicate in place with 11 or 12 banks. Bank of America is the lead on that. It’s a $750 million facility. It also has $150 million used capacity in it. It’s operating fine, there’s no issues. Maturity date is 2010, February I think. We’ll probably start talking with the bank the middle of next year on that. We’ve not experienced any issues with that whatsoever. Scott Stember – Sidoti & Company, LLC: Do you have any open lines right now with any of the big three [inaudible]?

Yes, Scott. We do have some. We have a few silos with Ford Credit and GMAC. We also have some silos with BMW Finance and Mercedes Finance.

And Honda.

And again, as Dave said, those seem to be moving along. We’ve seen a little bit of rate increase from some of the domestics but nothing overly substantial. I think as we get further out and start to talk to our syndicated facility we’ll plan for the long term as to what we want to do with those silos. Scott Stember – Sidoti & Company, LLC: I think I missed part of the call but did you say that you paid down $30 million worth of the convert that’s coming due in May?

$25 million to date, Scott. $5 million in the third quarter and $20 million earlier this month. The balance now is $105 million. Scott Stember – Sidoti & Company, LLC: The plan would be to pay down as much as you can before you have to make a decision on how to finance that?

Yes, we’ve had some restrictions on how much we could pay but yes, the plan would be to retire more of that as we can, as we’re able. Because we’re doing it at a discount, a slight discount. Scott Stember – Sidoti & Company, LLC: The way things stand right now you have enough asset you can take that on in your revolver if you had to?

That’s correct. That was the one slide I had in there showing how we’ve pumped up our availability with the actions we’ve taken. Scott Stember – Sidoti & Company, LLC: Last question, Scott, I think at the end of your prepared remarks you made a comment about the $12 million SAR I guess for a prolonged period of time. Did you say $25 million to $50 million of net income?

Yes.

Your next question comes from Matthew Fassler – Goldman Sachs. Matthew Fassler – Goldman Sachs: Couple questions here, first of all can you just talk about what kind of exposure you think you have on fixed margins to the extent that you see ongoing declines in parts and service business? Do you feel like you bore the brunt of it in Q3 or could there be some more exposure just because of the fixed cost nature of that business?

From what I see, our margins are down versus last year but they’ve been flat for three quarters in a row and I see it stabilizing. If I go in and look at the numbers, customer pay was actually down two-tenths of a point, 20 basis points. That’s a big driver of our business. I don’t see huge risk in our fixed ops market. Matthew Fassler – Goldman Sachs: What about S&I PVR? One of the things we’re obviously seeing and hearing about is tougher LTV requirements from financing sources and consequently perhaps some of the dollars that might have been around to fund some of the marginal S&I expenditures might not be there these days? Are you seeing any impact from that?

Not really. Year-to-year we’re up. We’ve seen some sequential decline and some of our interest rate profit, it’s the captives that picked up shares. It’s hurt us a little bit sequentially but I see that kind of leveling off.

We also are focusing on our products that we’re able to sell in F&I and those products are increasing our products per car penetration is rising up. So we expect our PUR to stay somewhere in that $1,000 area that we talked about in our slides. Matthew Fassler – Goldman Sachs: Just looking at the covenants on the credit facility, I believe you’ve got a fixed charge coverage ratio and the senior secured leverage ratio. Can you tell us where you stood on each of those at the end of the third quarter please?

That’s actually in the slide deck. We had some issues with the call so you may have missed that part. But the fixed charge coverage was 1.65 and it needs to be greater than 1.2. The debt to EBITDA was .82 and it needs to be less than 2.25. There was a lot of room in that.

Your next question comes from John Murphy – Merrill Lynch. John Murphy – Merrill Lynch: Just first on debt, Dave, you mentioned something that there was the slug coming due or the convert that’s coming due in May of ’09 but there was also another piece coming due in 2010. Was that just the floor plan facility that you’re talking about?

There’s a convertible due at the back end of 2010, November, the 4.25% convert, it’s $160 million. John Murphy – Merrill Lynch: On this floor plan facility, what we’ve seen in the past is that the captives have often liked to have the floor plan facility in house and given favorable allocations based on that particular, GMAC and Ford Motor Credit. Are you seeing a day and age where there this is changing and that this outside conduit floor plan facility of these other banks is the way you’re going to go and you’re not going to be floor planning with any of the, at least the domestic captives?

No, I don’t see that. I think we’ll always have a great relationship with the captives. In fact, some are, depending on the captive, moving more of the floor plan back to the captive. It varies by manufacturer, of course, domestic versus import. But there’s always going to be a strong relationship there. John Murphy – Merrill Lynch: Do you see that being more selective than has been in the past? We’ve seen some large Chevy dealers lose their lines. Is that something they’re going to be more selective on these days?

I assume you’re talking about the GMAC pulling the line with the Heard Group. John Murphy – Merrill Lynch: This was Bill Heard.

I don’t know what drove that, but it’s a highly unusual event in my view. John Murphy – Merrill Lynch: On the cost cutting that you have in place right now, I was just wondering if that was it or if there might be any more coming in the future? As you’re thinking about setting up that program or potentially future programs, what kind of market are you thinking that we’ll be in next year? What’s your SAR run rate maybe not even next year but even in the fourth quarter? What is your SAR run rate operating base case that you’re using?

We’re planning on more of the same, basically flat at $12 million kind of run rate. Jeff may want to talk about this, but as we’re going through the budgets for next year, we’re looking at structural opportunities that we seen in the non-variable arena. Our business is highly variable the way we’ve got it cost structured so a lot of it comes out naturally without tremendous work, but we’re going after structural savings as well.

One of the great things about our company is from an SG&A perspective it’s an ongoing focus item. So while there’s certainly opportunities there, we’ve built all of our budgets using a baseline SAR of $12 million for next year and we’re structuring our cost initiatives around that. Maybe there’s a little more there, but quite honesty I think we’ve been doing a pretty good job from a cost perspective. We had a little out in the third quarter, maybe there’s a little more in the fourth quarter. But as we see it, we’re pretty steady as we move into next year. John Murphy – Merrill Lynch: When you stress test those levels, what do you think on the downside, as more out of curiosity? It’s a very tough thing to call these days but when you think about stress testing it to the downside and what you may have to do, what are the levels you guys are looking at?

In terms of the SAR? John Murphy – Merrill Lynch: Yes.

We’re just grabbing at straws here, John. Your guess is as good as mine. Maybe it’s a $10 million or $11 million SAR but we don’t see anything below that. John Murphy – Merrill Lynch: You’re going through the mechanics of that as you’re going through these cost cutting programs though, correct?

Absolutely. John Murphy – Merrill Lynch: Lastly, on your cap ex next year if we do go into this sort of draconian scenario of really rough SAR below $12 million, what is your ability to pull back on cap ex and if we had to go to pure maintenance cap and no expansion cap ex at all, what level would we be at?

We’re close to that level now operationally. I think we’ve worked extremely hard at seeing what projects we can push and the nice thing about this business is you can stop if you have to. I think maybe $12 million, $15 million would be a normal expense level. It may be a little less than, but the full year if you had to really pull in your horns. John Murphy – Merrill Lynch: And that’s blacktop and signage basically, right?

Yes and maintenance items, safety items, things like that.

What we are looking at, we’ve got a couple major projects that we’d like to proceed with. We’re looking to having basically construction loans put in place so you’re not out the cash, you draw as you go versus waiting to the end when the [inaudible] is up and complete and putting a mortgage on that. So we’re looking at everything that we can do to ensure we have liquidity.

And we’re holding our manufacturers equally accountable on these facility projects. If they’re applying significant pressure to us to increase capacity or what have you, we’re applying the same pressure for them to finance it at a very reasonable rate. If they won’t invest in their own facilities, why would we? John Murphy – Merrill Lynch: You’re finding those kinds of discussions are a little bit more free form and open than they have been in the past? They’ve been more receptive to that kind of pressure on the push back?

Significantly more receptive.

Your next question comes from Richard Kwas – Wachovia Capital Markets, LLC. Richard Kwas – Wachovia Capital Markets, LLC: When we’re looking at the $0.10 to $0.20 for the fourth quarter, Scott you talked about $25 million to $50 million in net for the year in a $12 million environment, $0.10 to $0.20 gets you to $0.40 to $0.80 on a run rate basis. Is the major difference between the $25 million to $50 million net and your run rate in the fourth quarter is that you haven’t achieved all the expense savings in that $12 million pool that you’ve identified?

There’s some of that and there’s probably a little dose of conservatism in those numbers frankly given the environment we’re facing and the uncertainty. Richard Kwas – Wachovia Capital Markets, LLC: For the quarter?

Yes, having moved guidance a couple of times, it’s a little tough to set guidance again.

Rich, consumer confidence is so low it’s just very difficult to predict.

Rich, if you go back to Q3 it’s like $0.32 to $0.33 if you make adjustments, pull out impairments, pull out the Hurricane. So the $0.10 to $0.20 looks a little light, doesn’t it versus that? Richard Kwas – Wachovia Capital Markets, LLC: When you look at the franchise impairments, what’s the risk that there’s further impairments on the domestic dealerships? What would cause you to have to take an impairment charge to any of your import or luxury dealerships?

We took a pretty good look at all our stores. We did it store-by-store for franchise and the fixed assets. Greg, do you want to?

Rich, I would just add you have to remember the way the accounting rules have changed not all of our domestic dealerships have franchise values associated with them, it’s basically every acquisition we made post-July, 2001. So most of those acquisitions have been more luxury and import oriented. I think we did a pretty good job of scrubbing it this quarter looking at our domestic stores that have been losing some money in recent years and writing those assets off. But the vast majority of our domestic stores don’t have franchise value associated with them. Richard Kwas – Wachovia Capital Markets, LLC: So there’s fairly limited risk going forward?

I would tend to think so because the luxury stores are still profitable, they’re still cash flowing. We’ll look at a few of our Cadillac stores over the longer term, but the ones that still have franchise values associated with them have been profitable, even in the current environment. Richard Kwas – Wachovia Capital Markets, LLC: Dave, remind me, I think after the year ends, you can pay down another $25 million of the convert, once we get into 2009. Is that correct?

That is correct. Richard Kwas – Wachovia Capital Markets, LLC: So you could reduce that to approximately $80 million when we get into May of next year?

Yes, I think it’s very prudent to prefund at a discount, it makes a lot of sense. Richard Kwas – Wachovia Capital Markets, LLC: Finally, on the current ratio if you indeed do use the credit facility how does that affect the current ratio come second quarter of next year? You’re going to have reduced availability on the line of credit and that’s not going to be an add back, so how do we think about that?

That is true and we’re looking at a number of ways to approach that and raise funds, but we’re confident that we can navigate through that. Richard Kwas – Wachovia Capital Markets, LLC: So potentially you could have asset sales, divestitures to offset and mitigate the use of the credit facility to fund this maturity?

Yes.

We do have some. As Dave said we do have some stores in disc ops, Rich and we’re also sitting on some pieces of non-dealership land and things like that that we can sell going forward. Richard Kwas – Wachovia Capital Markets, LLC: So the expectation is that you wouldn’t necessarily have to use all of that facility to fund this maturity?

Correct.

Your next question comes from Colin Langan – UBS. Colin Langan – UBS: Looking at your liquidity right now, it looks like you have $160 million when you combine what’s [inaudible] on the revolver and your cash. If you have $105 million due, that leaves you with about $55 million in available cash. How much cash do you actually need to operate your business?

About $30 million to $40 million, Colin. That’s probably high but I like some flexibility. I don’t want to get too tight. Colin Langan – UBS: Did you generate positive, operating cash this quarter?

We did, we paid down debt, I think $8 million, something like that on top of everything else. Colin Langan – UBS: Any sense of how much, do you have an operating cash flow number?

Not in front of me, no. Colin Langan – UBS: Do you expect with lower SAR expectations in the fourth quarter cash flow would be positive as well?

Yes, we took a look at what ’09 might be if we stayed flat, what our free cash flow could be and after cap ex at $25 million we think we can generate free cash flow of $40 million to $45 million. Colin Langan – UBS: That’s next year with low SAR?

Yes. Colin Langan – UBS: Have you seen any issues with manufacturers’ assistance with the financing? Have they been trying to cut it back?

On floor plan financing? Colin Langan – UBS: Yes.

Floor plan, no, some lighter rate adjustments, a few little tweaks here and there but nothing substantial. Colin Langan – UBS: Is that a risk going forward? How does that work? It has to be renegotiated or is it an ongoing negotiation?

With the manufacturers it’s sort of the program they offer, we don’t really negotiate with them. They offer the same plan to everyone. Colin Langan – UBS: You mentioned your fixed operating strategy, how much cash costs will there be next year and where should we see the benefit? Is that more a revenue benefit or will there actually be some margin improvements as a result?

There’s no cash costs and it’s both revenue and margin improvement. Colin Langan – UBS: Then we’ll start seeing those the first quarter of next year?

Actually you should start feeling some of the benefit of a few of the things that we’ve done in terms of expense and margin related items in the fourth quarter of this year. Colin Langan – UBS: Are there any covenant restrictions that would prevent you from selling dealerships to raise cash? Is there any rules around that? I know you have some discontinued.

No. Colin Langan – UBS: What is the status of the ones that you have in discontinued ops that you’ve sold? How many and how many are left to go?

There’s 12 stores there, we’re selling hopefully one today as we speak or tomorrow, this week that will generate $8 million or $9 million of cash. There’s another one closing later, probably in November. I see four fingers coming up. We’ve got three done and a couple others beyond the ones I just mentioned. Colin Langan – UBS: So you have 12 available now and you started the year with how many that you’re trying to sell?

We’ve probably sold.

We’ve sold three or four I think. Colin Langan – UBS: When is your target to sell the rest? Is that going to be delayed by the weak market?

It’s a little bit more but it’s within 12 months.

Your next question comes from Chris Gassen – Faircourt Valuation. Chris Gassen – Faircourt Valuation: I’m just going to mention two words and maybe you could just tell me whatever pops into your head. Share buy back.

Number one, tempting. I immediately reach for my wallet. Chris Gassen – Faircourt Valuation: Is there anything that you guys could spend money on in terms of capital expenditures, buying dealerships, whatever that would give us a better return than buying back our own stock at $2 and such?

No. Chris Gassen – Faircourt Valuation: Are we going to maybe do something? I’m hearing about all these things.

The company doesn’t have. Chris Gassen – Faircourt Valuation: Buy the land under our dealerships and all that stuff, I’m wondering why we want to buy the land under a dealership instead of just buying back some of our own stock.

Buying back the land under the dealership is really a non-cash event because we come in and put mortgages on top of it. We’re looking at the balance sheet. As we said it’s very tempting to want to buy back the stock right now and that obviously would be the best return to shareholders at this point in time in our view. But we have a broad number of people that we have status by, one of which is we want to maintain our liquidity to take out these notes in 2009. That’s really the main thing.

And the ability to take those out. If I personally had the dry powder, I’d go and I’d load the boat.

Your next question comes from Marshall Picher – Edge Asset. Marshall Picher – Edge Asset: I apologize, I came on the call a little late, if this has already been addressed, Dave looking at your debt covenants, I believe if memory serves, you got a waiver back I think in May, the definition of fixed charges I think included that convertible maturity and if you hadn’t gotten the waiver, you would have been in violation. Is that correct?

No, there wasn’t a waiver, Marshall. That was just an amendment to our facility I believe is what you’re referring to and it just clarified for calculation purposes when those notes go into the calculation. Marshall Picher – Edge Asset: So it has been amended, there’s no need for November for that issue to be re-addressed?

Right, that was done early in the year just as a kind of a cleanup to the documentation. Marshall Picher – Edge Asset: The timing then for the retirement would be May of ’09?

That’s correct.

Your next question comes from Paul Carey – Fountain Capital. Paul Carey – Fountain Capital: I was wondering, Scott, if maybe you could expand a little bit on comments you made earlier discussing the status of the industry as we look at the potential for some of the manufacturers to be merging potentially. I realize that, and that’s primarily a domestic brand issue, but could you talk about how Sonic and more specifically the publicly traded dealers would fare in that environment if we were to see a merger of some brands?

Are you speaking about Chrysler and GM? Paul Carey – Fountain Capital: Yes.

I think it’s a possibility that from what I hear that it may happen. We have very low exposure to Chrysler. I think the world of the GM management, I think they’ve had a lot of legacy issues that they’ve had to try to overcome and I believe that the only reason why they would do a merger is because they believe that it’s in the best interests of the company.

One other thing is that if something like that were to occur there’d be fewer stores in the marketplace which would bolster our ability to perform better. That would be a positive coming out of that. Paul Carey – Fountain Capital: And maybe coming from exactly the opposite direction if say for example one of your brand manufacturers were to go bankrupt, given franchise laws what is your expectation as to how that process might proceed?

That would be highly speculative but if one of them were to go into bankruptcy, I would imagine that it the company would remain operational. Obviously there would still be dealers to sell them and service their vehicles. Whatever transpired in that restructuring work its way out. Paul Carey – Fountain Capital: One last question and that is with some of the impairment charges that you’re taking, there’s been some discussion and I’m not sure if it’s correct or not, that if impairment charges were to continue and I realize you said that there are probably more, if there are any they’re slight if anything but they could have an impact on your covenant calculations. Is that true?

They don’t actually hit our covenant calculations.

They’re all add backs for the EBITDA as it’s defined in our debt calculations.

You have a follow up question from Richard Kwas – Wachovia Capital Markets, LLC. Richard Kwas – Wachovia Capital Markets, LLC: Just quickly, what’s your restricted payments basket, Dave, at the end of the quarter?

Under our indenture, Rich? Is that the one you’re talking about? Richard Kwas – Wachovia Capital Markets, LLC: Yes, whatever you could, if you wanted to repurchase shares what?

Yes, I think under the indenture I think we’re still at well over $100 million the last time we looked, Rich.

That’s exactly right and we’ve got $40 some odd million authorized.

There are no further questions at this time.

Thank you ladies and gentlemen.

This completes today’s conference call. You may now disconnect.