Edward Yruma (J.P. Morgan): What is the update on both Smart Choice and your shared services center?

Mike Maroone: Smart Choice continues to be a success, and we have rolled it into a number of other markets. We started in South Florida. We have now expanded it into North Florida into the Denver market and are beginning to do work in the Phoenix market as well.

Our next will be Memphis. So we are moving rapidly, and we are really pleased with both our associate acceptance of it and our customer’s acceptance of it.

Mike Short: And on the shared services center, we are continuing the ADP conversions, and have about 87% of our stores largely complete with that program by the end of the year and the core conversions into the SSC. The rest of the stores are right now at about 61%, and we have good momentum there as well.

Edward Yruma (J.P. Morgan): How much of the weakness is due to lower foot traffic due to the weakness on the new side of the business?

Mike Maroone: There are two things, lower traffic, especially in our two markets, and less trading from less volume. So our used business was better than our new business. Our used to new ratios continue to improve. But certainly the economic distress we found in our two key markets cascaded into the used business as well.

Matt Nemer (Thomas Weisel Partners): From a market-wide standpoint your D3 stores are becoming less profitable either on a per store basis or a per square foot basis. Is there something else that you can do with that space?

Michael Jackson: The domestic stores that we are enthusiastic about long-term fit the profile of being a great location with high throughput, and there the economies of scale still work and those stores are very competitive with import stores as far as the profitability.

What is on the bubble are the domestic stores that do not have economies of scale, and it is difficult for those stores to make sense in our business model. That is not to say they do not make sense for somebody else, but they make sense for us. We are able to sell those and get our money out of the real estate, working capital and some degree of blue sky.

Michael Maroone: We continue to look at all of our real estate and look to optimize it. There is no one solution such as a branded used car outlet. There are a number of solutions and it is really a store-by-store analysis.

We continue to look at those to invest prudently in those facilities, and there is a real shortage of properly zoned commercial real estate in the major metro markets, and we continue to look at our locations as being a strong asset.

Jonathan Steinmetz (Morgan Stanley): How did your gross profit per vehicle look if you were to break it out D3 mainline, import and luxury?

Michael Maroone: We did not see any major margin deterioration in any of the three buckets. They were relatively in line with the group. We looked at our aggregate gross profit per vehicle retailed as being up slightly. But we did not see any abrupt changes in any of the three buckets.

Certainly, on the luxury side, the S-Class launch of the Mercedes a year ago pushed that number up a little bit. But besides that, it was fairly constant.

Jonathan Steinmetz (Morgan Stanley): Did you get a lot from the preferred lender and the service contract unwind, or the benefits on the service contract as you did in the fourth quarter, or was this more warranty penetration and finance fee?

Michael Maroone: It was both preferred lender network. It was certainly the retro performance on our warranty portfolios with the OEM. In addition, we have put a greater emphasis on warranty and prepaid maintenance sales. Where we are not putting emphasis is on the rate side of it.

Jonathan Steinmetz (Morgan Stanley): Will you take on added financial leverage near-term to enact a buyback, or is this just used free cash flow?

Michael Short: Our expectation is to fund it out of free cash flow and coming out of the business. We are not anticipating levering up to do this.

Jonathan Steinmetz (Morgan Stanley): Would you rethink that if the stock price declined or you saw it as more attractive?

Michael Short: If we had an attractive acquisition, we would not hesitate.