AutoNation Earnings Call Nuggets: Capital Outlook Allocation and Acquisitions Update
Capital Outlook Allocation
Richard Nelson – Stephens: Capital outlook allocation priorities seem to have really shifted from buybacks toward acquisitions. Wondering if you can provide some color on that. Is it a case for the valuations are now coming into the (wheelhouse) on the acquisition side?
Mike Jackson – Chairman and CEO: Actually, the process or the priorities have not changed one iota. We are doing every month, several times in month exactly what we’ve been doing for the last 13 years. We sit there and discuss where our capital can be applied best, it’s definitely done on an opportunistic basis that has to do with where the price of stock is, where we think the market is going, and what kind of acquisition opportunities are presented in the marketplace, do they fit and can we come to a meeting of the minds on price. Obviously, if you look at the past six months, we have done over $800 million of revenue run rate on acquisitions, meaning that it’s been a very good period of alignment on acquisitions. We have further discussions going on right now, but as I said in the past, you never know if you get to the finish line on these transaction. So I can’t commit in the future. So it’s done on an opportunistic basis, and that’s the way we’ve always done it, and right now, if we look at what is being presented to us in the marketplace and what we’re discussing, it’s the best return for our capital.
Richard Nelson – Stephens: Also, you mentioned the improvement that we are in an inflection point now with units and operation and positive for the several business. I’m interested in the used car business, how that improving supply, you see that evolving, the comps look good this quarter and we did see sequential improvement in margin and it’s supply driven improvement.
Michael E. Maroone – President and COO: Rick, it’s Mike Maroone. I don’t think the supply has yet changed, although, we are anticipating that it will get better especially for the certified pre-owned units, they’re still very tight and the supply is very limited so we are having to pay a lot of money to get those vehicles and that’s a growing part of the segment. The other factor is, the used vehicles out there coming in with very high mileage and we’re really working hard to retail those. So it’s keeping – putting enough pressure on the margins. But I think as it loosens up going forward and there is more supply, I think there is more opportunity on the margin side, but we are pleased that sequentially, our margins are up and looking for more…