Good morning and welcome to the Sonic Automotive Fourth Quarter and Year-End Results 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, Wednesday, February 19, 2014. Presentation materials, which management will be reviewing on the conference call, can be accessed on the Company’s website at www.sonicautomotive.com by selecting Investor Relations under our company drop down box and then choosing Webcasts & Presentations on the right side of the page. At this time, I would like to refer to the Safe Harbor statements 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 and markets 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 and Exchange Commission. Thank you. Thank you. I would now like to introduce Mr. Scott Smith, President and Chief Strategic Officer of Sonic Automotive. Mr. Smith, you may begin your conference.

Great. Thank you. Good morning ladies and gentlemen. Welcome to Sonic Automotive’s fourth quarter 2013 earnings call. I’m Scott Smith, the Company’s President. Joining me today on the call are David Smith, our Vice Chairman; Heath Byrd, our CFO; and Jeff Dyke, our Executive Vice President. I’ll start today’s call with the brief overview of the quarter after which I’ll turn it over to Heath to review our financial results followed by Jeff with look at our operating results. We’ll then have closing comments and open the call for your questions. If you please turn to the slide Q4 results, adjusted income from continuing operations for the quarter was at an all-time record level for any quarter with the company earning [$36 million]. Revenue growth of 5.8%; new retail revenue up 3.1; volume up 0.7%; used resell volume up 12.7%; volume up 10.1%; F&I revenue up 6%; PUR up 11.43%, fixed ops revenue up 10.4%; gross profit growth up 7.8%; SG&A was 75.2% which includes our initiative expenses, including initiative are expense and ex-rent, SG&A would have been 70.1%. Adjusted income from continuing ops is up $6.8 million or 23.4%; adjusted diluted EPS from continuing ops was up 29%. With that I’ll go ahead and hand the up to Heath.

Thank you, Scott. Good morning, everyone. I’m going to be starting on slide 7 of the presentation. As Scott mentioned, revenue was up 5.8% over Q4 of last year, strong growth in pre-owned F&I and fixed. For the year, revenue was up 5.7% with new retail, used retail and fixed all up 6% and F&I up 8.8%. Gross profit was up 8% for the quarter and 5% for the year. Total gross margin for the quarter was at 14.6% and 14.7% for the year. Incremental flow through was at 21% for the quarter and at 42% excluding our pre-owned and customer experience initiatives. As Scott also mentioned, adjusted diluted EPS was at $0.67 for Q4, 29% increase and $2.03 for the full year which is an 18% increase from last year and at the top of our annual guidance. Next slide please? SG&A: SG&A as a percent of gross was at 75.2% for the quarter, 20 basis better than last year and 77.1% for the full year, our internal target was at 77%. The increase was due to expenses related to acceleration of our pre-owned and customer experience initiatives, offset slightly by reduction in [rent]. Next slide please? If you dig deeper into the SG&A for the quarter, it’s the core business [without future] investments, was at actually 73.4% gross, this is 200 basis points better than last year. However fourth quarter spend for initiatives includes $3.2 million from pre-owned initiative, $2.1 million from customer experience and $800,000 for stock remediation for a total of $6.1 million. Next slide? Full year SG&A, so the core business without our future investments 75.6% gross which is a 120 basis points better than last year. Full years spend for initiatives $7.6 million while pre-owned initiatives $6.7 million for customer experience and $4.3 million…

Thanks Heath and good morning everyone. I am very proud to present our fourth quarter 2013 operating results on behalf of our team here at Sonic Automotive. New car volume was up just under 1% for the quarter and new car revenue was up 3.1% with PUR increasing $154 per copy and that drove PUR overall to $2,415 with gross increasing 7.6% to $82.1 million. These numbers represent all time records for Sonic and new car volume for the quarter and the year. We also set an all time Q4 record for new car gross. I’m particularly pleased with this separate, because it coincides with further development of our True Price strategy and the execution of this strategy in our stores. It further demonstrates our ability to price and manage inventory on a centralized basis, which is one of the keys to the implementation of our One Sonic-One Experience strategy being rolled out later this year. Our Sonic inventory management system and pricing tool SIMS continues to improve each month and our ability to execute is really gaining momentum. It’s second time for our associates to get comfortable with our True Price strategy and it is starting to become part of our culture and we are excited about the results we are seeing. We ended the quarter with a 54 days’ supply and are comfortable with our inventory levels as we head into the March selling season. Next slide please? I’m very proud to present our pre-owned results for the quarter. Resell volume was up 10.1% for the quarter with revenue increasing 12.7% and PUR relatively flat at [1358] per unit. We averaged 86 units per store per month and that’s up from 80 prior year. This performance was an all time Q4 volume and gross record. We also sold…

Thank you, Jeff. Heath and Jeff covered almost everything that I had in my closing comment here. But I do want to say that 2013 was all time record for us and we sold more vehicles than we’ve ever sold before. We still believe there is a tremendous amount of upside in the existing story. 2013 was a transition year for us; I’m very pleased with the year. We’ve covered a tremendous amount of cash story. We’re looking very, very forward to 2014. Going forward, we’re committed to following great and operating strategies in both standalone pre-owned stores, our One Sonic-One Experience, which is our customer experience initiative. I believe that franchise acquisitions could be possible, while they are not the primary focus to actually blow them out. We want to continue owning our dealership properties. This past year we invested $75 million in our property. We had (inaudible) to our portfolio of properties inflation in the percentage. Owning the 31% we believe by the end of ‘17 we will own approximately 45% of our stores. And looking at these strategies, we returned the capital, returning capital to shareholders is also a priority. During 2013, we returned $3.1 million to shareholders through share repurchases approximately $5.3 million and declared dividend. At December 31, 2013 our common stock repurchased authorization is at $133 million. We believe that our stock is a new value and we will continue to opportunistically repurchase share. If you go to the next slide please, 2014 plan. We expect 2014 industry volume of (inaudible). Based on this, we expect 2013 diluted earnings per share from continuing ops to be in the range of $2.09 to $2.19 when we call franchise operation. This excludes the effect of our standalone pre-owned activity. As we have discussed in previous calls, we will continue to incur start up experiences related to our standalone unit operations in 2014 which will be slightly offset by revenue after our opening in the fourth quarter of 2013. The increase of our standalone pre-owned operations, we expect total diluted EPS from continuing ops to be between $1.95 and $2.05. Before we take your questions, I would like to just take a minute to thank all of our associates within (inaudible) who join together everyday accomplished one of the America’s greatest companies to work in a shop. It’s an honor and privilege (inaudible). Thank you. We’ll now open the call for your questions.

(Operator instructions) Your first question comes from Rick Nelson with Stephens.

Hey thank you and good morning.

Good morning.

I wanted to follow-up on the used car business. If you could kind of back it up there with CarMax where you see similarities, where you see differences and those accounts have a name at this point?

Rick, this is Jeff Dyke, yes the concept does have a name, we are not ready to reveal the name. And it’s going to be significantly different than what you would see from a traditional auto retailer or a CarMax which is really kind of in the same light. We’ve really built a different kind of facility. The experience is going to be different for the guest both electronically and at the physical plant. And it’s kind of very hard to keep most everything under wraps, we will have a really good launch and we do have a good launch planned to begin to wrap the Denver market sort of understand what’s coming their way. And so I would tell you that there is not a lot of similarity, it’s just going to be a different way to go to market and one that we are very excited about, one that we’ve been working on and we said this for last call for the last six or seven years the plant has been ahead we’re just not been in the position to pull it off and now we are, we’re very excited about it. There is just a lot of really neat things that are coming. We really feel like there is no barriers to entry for us for an inventory management, the pricing we feel like we are showing what we can do on the pre-owned side of the business with Sonic Automotive we’ve used a lot of those tools that will help us implement these things at the new comp at the new divisions. So we are very excited about it and we’ll share more as get closer to that launch date.

Okay. That’s good. Thank you for that. Also I would like to ask about the new car kind of outlook which is paying in terms of market share looks like to come flat some of the peers have reported also for the fourth quarter?

Yes, we're playing around with our margins, we're very pleased where the margin was in Q4 and we've got really good inventory. Our BMW business was good, our Harley business was okay. I mean you look across the brands, we really Rick are working to make sure that True Price is doing what it’s supposed to do and it's becoming a part of our culture. And so, some of the brands we get stuck a little bit from share, but they grew in margin. We did have a record breaking gross quarter in new. And as we move in the March, I might like some of that up a little bit and it's not that we can't turn the volume on. I feel like January and February were so far little bit tight, most of that's weather oriented and others -- the lag is not so much the industry as it is just ask playing around with our margin and our pricing systems and learning here over the last couple of quarters.

(Inaudible) the tax rate, the adjusted tax credit of 29% came in quite a bit below where we were placing was the driver there and what's your expectation for 2014?

Yes. So there would be -- related to the taking out the converts in terms of the third portal activity. But the majority of this is just a normal cadence we're going through our recurring provision and gaining the tax right, getting the taxes just filed and completed. Our models for going forward are at 38.5%.

Thank you. Also I would ask one more. So one time experience on Sarbox call, are those in that $0.14 numbers that you called out or is that exclusive to the used car bills?

I’m sorry, can you say it one more time. I didn’t get you.

$0.14 expense that you are anticipating for 2014 that is for the used car format, I’m curious if that also includes Sarbox remediation cost and the customer experience are caused….?

It does not. If you do the math, we’re looking at about $12 million to $13 million pre-tax expense which comes directly from pre-owned initiative, it does not include anything for Sox or customer experience. In 2014, the Sox remediation will completed that will then start moving into transitioning into centralization. And that expense we have budgeted for about $4.75 million compared to the $4.3 million we spent this year. Customer experience we expect the same kind of spend that we've had for last year 2013. It’s our models right now where $7 million or the customers experience that will be run through SG&A.

That's not part of the $0.14?

It is not. The only piece of the business that we are breaking out separate is just the standalone pre-owned initiative.

As the customer experience strategies have been pushed out a bit, the 18 months from July or is that what you were referring to 3 months ago?

No Rick, it’s Jeff Dyke, no it’s still right in line. We might get in the store in June, but I see our end tools are already in the store. We are testing it. And we keep testing and the other elements [Piper] just revealed them yesterday will start with some tweaks here and then we’ll start implementing one store in the July timeframe. And that’s why [quoted] right with our timeline as we projected early last year that we will be doing so there is going to be no change there.

And Rick this is Heath again. I want to give you some more color around the taxes. I just spoke a little bit (inaudible) if you can give us some details.

Yeah the accounting related 5% that really didn’t have anything to do the tax rate. The tax rate, it will fluctuate from period to period based on when we actually complete tax returns or when certain audits are completed by the states or by the IRF. So we just had more of that activity that occurred that affected the rate during this year, it didn’t have anything to do with 5% then.

Okay. (Inaudible) and thanks guys and good luck.

Thank you.

Thank you.

Your next question comes from Scott Stember with Sidoti & Company. Scott Stember - Sidoti & Company: Good morning.

Good morning.

Good morning. Scott Stember - Sidoti & Company: Could you talk about how your luxury sales did in the quarter versus volume imports and domestic? And just separately the gross margin expansion in the quarter, would you tie that into just the benefits of the new true pricing methodology?

Yes. I would tie that in 100%. There is no question. We moved our pricing, we’re doing a lot better job of not negotiating. We’re not there yet, we still have a lot of work to do. We also believe that our consumer is getting used to what it is we are doing in a (inaudible). There is not a lot of back-end quote negotiation. And so that certainly very helped out. And as far as our business mix, our luxury business was really huge during the quarter driven by BMW and Mercedes. Our domestic business is also solid driven by Ford. And our import business is okay. Honda was a little bit less than we would like to (inaudible) we can’t face with the brand in the quarter and we would like to see, we were a little more aggressive in this out of the brand during the quarter, but other than that, no, not surprises for us. Scott Stember - Sidoti & Company: Okay. And as far as True Price it goes, could you remind us if that process in 100% of your stores right now?

It has been 100% of our stores, yes it is. Scott Stember - Sidoti & Company: Okay, got it. That’s all I have for right now, thank you.

Great. Thank you Scott.

Your next question comes from Patrick Archambault of Goldman Sachs.

Yes, thank you very much good morning. Yes, I guess going back to just the I think one of the first questions which was that the volume kind of lagged peers a little bit or the industry a little bit. I just wanted to have -- like how much was that due to both kind of pricing aggressively and the impact of True Price which people are still getting used to or is that one more than the other?

No, it’s just our team getting use to executing our True Price strategy, we changed something this large in the stores. In order to take some offer about to get used to it and that’s it. One other thing that we have been very focused on is establishing our margins and staffing and negotiating in the stores the back and forth which our customers love and we are hearing from them that they love it. So no I can move some numbers around. We are doing that essentially here from the home office and ramp up volumes anytime we want. We are getting to a point where we can start to push some buttons and make things happen. We do that all the time on the pre-owned side. And we have very stable margins and really nice growth on that side. And we have demonstrated that for a lot of time now we’re just learning how to do it on the new car side. And so this is nothing unexpected. We are delighted with our margins. We are delighted with how we’ve been managing that, how the team is adjusting to true price. And we made a lot of progress from the beginning of the year to the end of the year. And we’re going to make a lot more progress this year with it. And it’s a key factor in One Sonic-One Experience. We have got to get the back and forth negotiations out which takes up a lot of time and it’s a painful end for what the customers cannot spend. And so we are going to, we’re fixing that. And it’s just one small piece of a big puzzle that we are putting together here with our technologies and processes and it doesn’t bother us at all. We are right where we thought we would be at this point in time and we’re very delighted with the margins. We are pushing buttons to make our margins to go up and that’s working nicely and the consumer loves it. So we don’t see it as a big issue.

Yes. No I mean and certainly the margin did sort of speak to that this quarter. I guess just maybe so I understand the objectives of True Price is it I don’t know maybe this is kind of maybe this is both again but in aggregate is True Price expected to be something that drives up margins overtime just because there is more discipline in the sales process or is it something where ultimately you actually expect to get volumes, because you're kind of picking a page from the CarMax model where people actually enjoy the [knowhow go] experience. Is it like what do you see the main objective?

So, if you look at the story this morning we're going to drive significantly higher market share. We're going to take share, once product line experience has put it place. We do expect margins to go up. Because the consumer enjoys the process and you’re a consumer as well. We all pay more for something that we enjoy. And the customer satisfaction score getting it all up, we are already seeing that, we had record high sales satisfaction score. So those are the three things that are going to happen. We're going to take the market share, we have developed the KPIs around that. And in some of our locations, we're already seeing it. It's a bit early yet, if we don't have our total process in place where the sales specific handles the entire transaction, but it's a very exciting time for us because sort of mainly through the headwinds of getting True Price put in place without really blowing everything up and that was a very difficult thing to do. So, we've accomplished that, we feel like it's stabilizing it's not that big story around Sonic anymore, it's in place. Whatever turnover we've had, because of it it's done and we're really moving forward and very excited about it. We are managing our inventories right. There is no question that the lead driver and all of this will be an increase in market share. And we have those defined. And as we get a little further into all of this, we'll be happy to share it with you.

Okay. That's helpful.

This is Heath. I just want to add to that, I think we are just adapting to the behavior of our customers and pricing expense. And to us that leads to market share. And Jeff mentioned our new car pricing analytics, those are just getting underway and that's just going to make pricing that more precise and we think that all that leads to market share.

Okay. That’s helpful. One other one if I may; you had a pretty large public dealership competitor kind of announce a series of kind of, I don’t know, economic impact or charges, however you want to describe them based on just the weather and that you see in the first quarter. I just kind of wanted get your characterization of the impact of that. I know obviously your geographies are different and your demographics are different in terms of what you sell through, wanted to get the impact of that. And then as a second, interestingly enough, they were talking about also parts and service being hit and some of that kind of not really coming back, right, just because your service base may not, when you lose somebody you may now be able to accommodate them later, something like that. So thoughts on that would be great as well.

So, we got a lot of East Coast that got impacted in January and February. And our net store level income is going to be hit, 1.5 million to 2 million for the first couple of months. That translates into two pennies, maybe three pennies somewhere in there, but March is coming and March is a really, really strong month for us. And there is no question that we have the ability to make up those numbers. So is there an impact on an EPS basis, I think Heath and I were talking about earlier, maybe 8% or something.

8%, two or three pennies.

But it not catastrophic and our teams, one of things that we’ve done is we’ve extended our operating hours, we’ve opened stores where we can later and earlier. And so we’re doing everything we can to take care of our guests and to make up the loss business. So, there are stores where it does a ton of fixed operation gross and we’ve got them, some in our Atlanta market and make that kind of gross up is going to be difficult but it’s not a game changer and maybe like I said maybe 2 pennies or something for the first few months that we can make that up in margin and we think certainly not an impact but it’s not catastrophic.

Okay, very helpful guys. Thanks a lot.

Yes.

Your next question comes from the line of Hoselton with KeyBanc.

Good morning gentlemen.

Hi Brett.

Hi Brett.

The customer experience expenses, the $7 million in ‘13 and ‘14, what are your expectations as you kind of move through 2015 and 2016, does that continue or do you see maybe a step function reduction in that as you kind of roll out the plan?

Yes. The expenses are going to change, but we’re actually utilizing them all. But we’ve got in our models when we get out to ‘15 we still got total spend of IT in development around $6 million and it starts to go down in ‘16 and ‘17 to four and then three and then three. So we see it’s the same level for ‘15 and starting to go down in ‘16, ‘17, ‘18 for development.

Okay. And then as we think about the roll out of the true price experience, the gaining on the market share, the gross profit going up and the customer satisfaction scores, it sounds like you’ve seen some of the customer satisfaction initially, the gross profit per unit, new vehicle obviously benefited there; market share kind of a mixed bag, maybe based on fourth quarter results. But I guess my question here is as we kind of look out for 2014 and 2015, is there a point in time that you hope to see a more meaningful acceleration or do you see just kind of a slow steady ramp up for improvement?

Here is that’s going to work, and we’re going to roll out some of the other store and put the processes in, but we’re going to brand the market once we have a total market rolled out. So we expect that once the entire package is in a particular market like the Charlotte market and our five stores here that we’ll start to see immediate impact in growth in those stores. We’ve got a two year roll out schedule here, it is going to take all of ‘14 to get this market rolled out, tested and making sure that everything is working right. If you remember, we rolled out SIMS, 3 years ago, it took us a long time to SIMS up and right the way we wanted it. And so we will spend all of ‘14 getting this one market right. And once we do, we’ll put together an aggressive roll out schedule that will cover most of ‘15 and probably the first half of ‘16. So, we will see market share gains, I think once our market is rolled out immediately. We are going to offer the consumer something that nobody else can’t offer. And that’s pretty special thing when you are in a marketplace which matures ours and we can walk in and do something that nobody else is doing and the work that our competition would have to do to get here, what we know we have been through the last couple of years, (inaudible) has been pretty spectacular. So we look to begin to grow share relatively quickly as the market gets rolled out. And that’s within our forecast and our plans.

Okay, thank you. And then as we think about parts and service, margins down a little bit year-over-year; warranty work obviously up quite significantly. Generally people perceive that the warranty work carries with it maybe little bit higher margins. So, I’m kind of wondering, how do we think about your parts and service margins on a year-over-year basis and how do we think about the outlook for your parts and service margins?

Some of that is just mix and the big story in our parts and service business is our customer pay growth, up nearly 7% for the quarter. That’s really a big story, you see that continuing especially with market share growth as we move forward. Not quite as worried about the margin here. We are still working on pricing and some quote unquote true pricings in fixed operations where we become more consistent there and we use our tools to help us price our thoughts and labor there and more effectively and efficiently. And then we’re creating a really neat relationship between our technicians and our customers. So we’ve got a lot going on here, the margins are going to move around a little bit but growth that we think is just going to continue to roll really especially in our highland stores, we’ve just got a lot of really neat things cooking. And I expect those percentages to stay pretty consistent as we move forward.

And our gross margins for customer pay and warranty are basically the same.

Thank you very much, gentlemen.

Your next question comes from John Murphy with Bank of America Merrill Lynch.

Good morning, guys.

Hi John.

Just a sort of follow up to what Bret and I think Rick was getting at when talking about sort of the guidance for ’14; it sounds like a lot of the costs for pre-owned store initiative and the customer experience are going to continue into ‘14 and probably into ‘15. But as we speak about this, obviously this is just not a cost equation there, there is going to be some benefits and some revenue and upside to these investments. And just trying to understand when you think will sort of hit the falcon point from these things being a bit of a wait and a drag to really being sort of additive and then sort of breaking away maybe two or three years out where the cost is being more than covered by sort of the benefits, I am just trying to understand as you are thinking about this -- is that a late ‘15, ‘16 or ‘17 event?

Well, I will start; this is Heath. My model is we’ve got our pre-owned initiatives; it starts cash flowing and still give operations as we open up another market but each market the models having cash flow in three years, profitability in four years. And of course on the customer experience side, as Jeff mentioned, once we get that two year roll out point, that market share does exactly what you’re saying, will create that additional gross and it actually starts paying off. So, that’s a three year process and each part on the standalone is again cash flow in three and profitability in four.

Yes, I mean that covers John, I think that gives you a really good idea of kind of where we see it. So ‘16, ‘17, we start seeing some really nice returns for One Sonic-One Experience, in particular market share growth. That’s the big KPI of all this is driving market share. But we’ll see it earlier on in markets that we will allow. And so, you’ll see little bits and pieces of it and we’ll share that with you. Once we get Charlotte up and running on these quarterly calls, we’ll come back and say here is our schedule for rolling up, and here is what Charlotte is doing. So much share we’ve taken, so much growth we’re seeing and that’s why that’s for rest of the company and you come up with some numbers, they are pretty spectacular.

And on top of that, we also will be providing reporting separately, so you understand this is how the core new car franchise business of Sonic is doing and this is how the standalone pre-owned business is doing. So, we’ll try to make that as transparent, so you can see how well we’re doing on those models.

And to make it clear, the Denver market is not going to open until the fourth quarter of this year. So, we’re going to do some things to begin the market and the market earlier than that. But we will not be open for operation until Q4 of this year.

Okay, that’s very helpful. Then just a second question on the location of the first store. Why did you guys pick Denver, is that because you have a big luxury and truck mix, and it will be sort of higher price points and more CPOs, or what was the rational for starting in that specific market?

Well, one, we know the market very well; two, the demographics fit what we are doing; three, it’s the 15th largest pre-owned market in the country. And throughput per store, if you really study the market, the volume throughputs per store on the new car franchise is really high. Our stores, [there is still ton] of pre-owned cars, CarMax is opened there and they are doing 300 plus cars in their stores, relatively quickly; their ramp up period has been short. So there is just a great pre-owned market there. And a lot of wear and tear on the cars, so quicker trade ins. And so all those things led to that market. And like we’ve got, and we’ve told you this one (inaudible) we’ve got 15 other markets identified but let’s get one open and then we’ll start backing some other ones.

Okay. That's very helpful. Then just a follow-up on the new vehicle, sales growth that just is lagging the market; I understand you have some levers that you can pull if you wanted to play the game on pricing or lowering gross as to choose volume. So I understand that, that might make sense in the short run. But as we think out over the next couple of years, and think about UIOs around your dealerships, this may have a multi-year impact on your parts and service business and how you’re thinking about that and balancing that in the equation?

Yes, it’s going to be significant. The biggest problem we’re going to have is the need for more bays. And we’re talking about that. And as we build new facilities, we’re building for that. For example, we’ve got a brand new out new Audi store in Houston that we just built and we built enough space to accommodate the growth and fix. We are building new BMW store there, we’re doing the same thing there. In other words, we’re overbuilding that space from what we would typically do, given the fact that we think, what we think our market shares is going to be in the markets that we do business in. So you’ll spot on, you’re thinking right. And it is -- that’s a dividend and it’s going to keep on plan for a long time, but it’s one of the key success factors of KPIs to this whole strategy.

So even with growth on the new unit volume kind of lagging the total market, you think you actually will have enough UII growth to really drive high parts and service same store sales growth?

Yes, absolutely. Keep in mind, there was only 2013 where we’ve bounced around a couple of quarters in terms of market share learning how to handle True Price. I mean it’s not -- this hasn’t been going on for long, and I need to get the team to learn that strategy, literally if we want it to. I think that would push a couple of buttons and assume our market share is skyrocketing right now. But that’s not what we want to do. We want to have nice steady growth and get our team focused on the guest experience and not just selling cars from a low price, and building value in the brand that we represent. And that’s really important in how all this comes together. So, it’s worth to cost instead of growing it 5% or 6%, or 5% to grow 3.5%; it’s worked that little bit there to get our team lined up to learn how to sell in this type of environment. The changes that we’re bringing to our stores are significant, they’re very significant. So, we’ve got to put these processes in and do them in a certain way and do them in a certain order; and that’s what we’ve done. We did the same thing in pre-owned 5, 6, 7 years ago and you just look at the pre-owned growth that we’ve had over that period of time and that’s our strategy and we’ve been very successful with it. And it’s just going to take some time. We’re going to bounce around a little bit, we’re telling you guys that ahead of time. We’ve told you guys at the beginning of the year, margins have really settled down and we’re going to have a deal on this environment and the consumer loves it. And that’s it the big story here is our guest love it and we don’t even have rolled out yet and they love the pricing strategy.

Okay. That’s helpful. And then just lastly, I mean obviously you’ve got a lot of issues going on right now, it seem like they ultimately will have some big pay-offs. But it is somewhat of a distraction versus making acquisitions and we are hearing from lot of other groups that there is some really right targets out there and that the pace of bidding is going to pick up. Could you see in 2014 nearly ramping up your acquisition activity or do you really feel like you have too much going on internally to execute on that because it seems like there is a big wave coming here and I just want to make sure you guys aren’t missing out on opportunities?

Hey this is Scott. The way that we think about acquisitions and position the company is really to transform into a large specialty retailer of pre-owned vehicles. And let’s not just say that we didn’t look at deals. I wanted to get it out there; but yes we are in the market and are looking deals all the time. But if you look at our acquisition last year with the Mercedes and BMW deals in Denver, there is a fairly strategic and it turned out to be great deals for us. As we look as how we allocate our cash, again we’re investing ourselves in our pre-owned initiative, we’re purchasing our real estate, we’re buying back stock again we feel that we’re very undervalued. We have $133 million of authorization to purchase stock. And so we will evaluate deals, but it’s not a top priority for acquisitions.

Okay. Thank you very much, guys.

Thanks (inaudible).

Your next question comes from Ravi Shanker with Morgan Stanley.

Hey Ravi.

This is Vijay in for Ravi. Like to talk about the used business for a second, on a same-store basis your used ASPs were up about 2%, while your front-end growth per unit was down 5%. Could you talk a bit about that diversions and what drove that?

Our used car PUR was up on a same store basis I don’t know, nothing of that nature. I am not -- I mean we are very pleased with our used car business in the fourth quarter. We thought our growth was right in line with sort of where we’ve been all year long. We continue to work on our pricing and our spends, but we are very pleased with the growth that we saw and where we are. Probably if you look at it at the end of the quarter we ended with a 26 day supplier product. Our team is looking at ramping that inventory level up. I think we are executing a really high level right now and can afford to have a little higher day supply. So we’re going to, we’re looking to meet that day supply up into the 28, 29, 30 day range as we move into the selling season here and maybe you see a little higher volume growth, but I think margins will continue to stay where they are.

Okay, got it. Maybe moving into the parts and service for a second, the same-store growth was up pretty nicely at 7% and that was driven primarily by the 18% growth in warranty although partially dry down a bit because customer paid through about three is that a dynamic that you expect to continue in 2014 where it’s really driven by warranty or is there a point in which you think that customer pay will start to inflect and warranty will start to normalize down a bit.

I mean warranties are sharp -- you can’t have a count on it. And our customer pay trends have been improving on a same-store basis. So, we think as we implement One Sonic-One Experience, our market share continues to grow that, that trends going to go up in particular in the high line business. So, it's more and more cars that are out there on the road. So, we're seeing that trend we've been assets by everybody and that trend is certainly coming through this year. And so, we're very pleased at where we are and we think that as we implement our One Sonic-One Experience strategy, that's going to continue to grow right. So, we have the same attraction for the service drivers as we do to our sales force.

Alright, that's all from me. Thanks very much.

Thank you very much.

Your next question is a follow up question from Scott Stember with Sidoti & Co. Scott Stember - Sidoti & Co.: Hey guys, just a follow-up on the One Sonic-One Experience. Just to clarify you said that would be rolled up by the end of 2014, correct?

No.

15. Scott Stember - Sidoti & Co.: And Scott let's clarify that. We're going to roll out the Charlotte market in 2014. Scott Stember - Sidoti & Co.: Okay.

And if all goes well there, then we'll begin the process of rolling out in 2015 and based on my experience I expect that to go into the first quarter or second quarter of 16. So, it's about something that’s going to roll out in one year. And we've got a lot of work to do between July and December to make that work. But based on past experience and what we've done I think that sound as… Scott Stember - Sidoti & Co.: So, basically Charlotte will be the first group to go in and I guess is there a timeline for that in ‘14 or we talking towards the end of the year or middle part of the year?

We're going to start in July. We've already put in our CRM tools. So, we're going to start in July and depending on how our store goes, the first store that we do we’ll rollout the other stores and hopefully by the end of the year we will have all that done. Scott Stember - Sidoti & Co.: Got you. That's all I have. Thanks a lot.

Thank you.

(Operator Instructions) Your next question comes from Bret Jordan with BB&T Capital Markets. David Kelley - BB&T Capital Markets: Good morning this is actually David Kelly for Bret. Just a couple of questions, and really a follow-up to the earlier warranty question. Significant growth on the fourth quarter up 21.5% or so, I was just wondering if you could provide some color or commentary on the impact of lease cars in the fourth quarter and maybe what you are saying year-to-date of our in 2014 as well?

Obviously, it helped. What’s this, Toyota, BMW and all having are giving us opportunities there. And to be honest with you we’re still seeing in January and February Toyota in particular. A lot of cars sales on many different lines and which is a bit of a surprise, but it is continuing on. But it’s nothing that we forecast or include any of our forecast, that's just not business that you can count on. And that's not the business we want to grow and we want to grow our internals through our pre-owned sales and we want to go, our customer pay. So those are the things that we’re focused on. And I want to grow that’s just a grade b for us. David Kelley - BB&T Capital Markets: Okay. Great thank you. And then with the just going to following up on that as well. The Toyota (inaudible) in particular the recalls getting a lot of press over the last couple of days or so. Any impact there as well as that a decent piece of the pie or is that just small drop of the bucket that we won’t, that won’t be quantifiable?

Yes. It’s the second comment, it’s just not, there is not enough volume out there and even the Toyota recalls are all very small, a lots of parts and labor there, real quick turnaround, so it’s certainly nothing that’s going to even register on the scale. David Kelley - BB&T Capital Markets: Okay, great thanks. And then just one final question more high level touching on the 2014 plan. Just looking at your Sar outlook ‘15, 7.5 to ‘16, 2.5. I know it’s a lower end in particular this seem to be somewhat below what maybe the market’s building in right now to 2014. Is this just a conservative outlook that we’re setting up for the earnings guide or is this reflective of something we are seeing in the regional market?

Well if you look at what went on and just the market did slowdown in December. December, from a volume perspective was not as robust I think as the industry thought it was going to be. January came along and it’s a little slow. And February came along and it’s okay. Those are probably driven by weather events, but I don’t know probably call it conservative it’s the same way we forecast to [sell] every year. We’re always little bit I guess a little bit conservative at our view point and we’ve had a lot of great growth year over the last few years. So I mean some of our competitors have gone up between 16, 15.5, I think so it’s not that big of a difference. And any comments…

Yes. Well I can tell you a lot of the economists complaining the weather, but there are indications in the economy that are a little concerning (inaudible) housing. And the report that just came out on housing down 16%. And there is a direct relation for housing and auto sales. Auto loans actually decreased in December, so I think of growing or slowing a bit. Still some growth there good there but assuming the confidence index was down. So there is some learning signs there that we just see that it may not be as high as some of the other estimates that came out and we feel comfortable with that range. David Kelley - BB&T Capital Markets: All right. Good, I appreciate the color, thank you.

At this time we have reached the allotted time for your questions. I would like to turn the call back over to management for closing remarks.

Right. So thank you, ladies and gentlemen. We appreciate your time and interest in our company. Have a wonderful day, thank you.