Michael E. Maroone: On the fixed operations, our customer pay was down 4%. Our warranty was down 7%. The customer pay traffic was actually off about 4% as well. So the dollars were off 4%, the traffic was off 4%.
Michael J. Short: On the cap ex, within the $55.7 million that I called out for the quarter there was a substantial portion that was lease buyouts that were just economically the right thing to do. So there was about $20 million of that in that number. So for next year, cap ex is going to be lower as we continue to manage our cash but I don’t think we do any projections for next year on that number yet.
N. Richard Nelson, Jr. (Stephens, Inc.): Can you talk about the regional performance, specifically California and Florida and how those trended versus the chain?
Michael E. Maroone: Northern California has shown some signs of stability. Southern California is still in distress. Florida is in a lot of distress I would say and is probably one of our most challenging markets today.
N. Richard Nelson, Jr. (Stephens, Inc.): How much of the weakness in the business overall do you think is store traffic and how much of it is the availability of credit and are you beginning to see any thawing at all in the credit availability?
Mike J. Jackson: Let’s take the industry sales performance in October which was about a 30% decline. While we’re in a cyclical downturn and have been for two years and that’s about a 10% decline in business or about 1/3 of the decline. Now you have the credit panic that hit in the middle of September and all of a sudden that 10% decline has expanded to a 30% decline.
Half of that additional decline is the breaking of consumer confidence and their deep concern as to where the economy is and where it’s going. That impacts big ticket items. The balance of the decline is indeed tighter credit standards. If you look at the disproportion of decline of the domestic versus import and premium luxury, clearly it’s in credit because the financing available from the domestics and their companies is under the most stress whereas the Japanese still have very strong finance arms as do the Europeans. But everybody has tightened.
I would say in the 30% decline in October, 1/3 of that then was financing, 1/3 of it is consumer confidence, and the last 1/3 is the cyclical downturn that we were in already. My view is then that since we’re deep into the cyclical downturn and we had this extraordinary event of a credit panic that we’re now in overcorrection. Sales are now dramatically below trends and we will get a benefit from that on the other side. Now, you’ve got to make it to the other side which we clearly will but both housing and automotive are in an overcorrection at this point.
N. Richard Nelson, Jr. (Stephens, Inc.): Are you seeing any thawing at all in the availability of credit or is it still very tight?
Michael E. Maroone: I think overall it’s very tight. I don’t think we’re seeing a thawing. Certainly you can look at specific lenders such as Toyota that are in much better shape than others. The Japanese and the European captives certainly are a little looser but they too have tightened up from prior times.
Joseph C. Amaturo (Buckingham Research): Of the $500 million could you break out how much of the reduction’s expected to come from floor plan debt reductions versus capital structure reductions and how long it would take you to basically reduce your debt burden by $500 million?
Michael J. Short: We don’t have a specific timeline for that but the floor plan reduction is about 10% and the balance will be coming on the non-vehicle debt side.
Joseph C. Amaturo (Buckingham Research): So basically over some period of time you’ll be able to generate about $450 million of free cash flow?
Michael J. Short: It’s a 10% reduction in the floor plan piece. That’s not 10% of the total. So that’s about $150 million of the $500 million and probably a little bit more than that.
Joseph C. Amaturo (Buckingham Research): Could you give us the composition of your floor plan debt providers? For example, what percentage of the floor plan is represented by GMAC, Ford Motor Credit, etc.?
Michael J. Short: It’s largely all the captives. About half of it would be in the domestics and half of it from everybody else.
Rod Lache (Deutsche Bank North America): I was hoping you could clarify how much of the $100 million cost cut you’ve completed? If you subtract the segment income from the EBIT that you reported excluding charges, it looks like you’ve got $26 million of corporate overhead in this quarter versus $27 million last year. Is that right and should we then conclude that the cost savings are largely outside of corporate overhead?
Michael J. Short: It’s corporate overhead and other, so there are other things in that number including some of the ancillary businesses that we have in our lines clearly one segment, collision centers and things like that that run in to that number as well. So, that’s not just corporate overhead and we don’t provide at this point any additional detail within that.
In terms of your other question on the $100 million in cost savings, we’ve taken $86 million of that out now on our run rate and expect to complete the $100 million that we had targeted before the end of the year and we think there are opportunities beyond that.
Rod Lache (Deutsche Bank North America): I believe your floor plan debt would be excluded from your covenant calculation, would that be correct?
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