Katharine W. Kenny - Vice President-Investor Relations Thomas J. Folliard - President, Chief Executive Officer & Director Thomas W. Reedy - Chief Financial Officer & Executive Vice President

Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker) Scot Ciccarelli - RBC Capital Markets LLC Brian W. Nagel - Oppenheimer & Co., Inc. (Broker) Sharon M. Zackfia - William Blair & Co. LLC Matt R. Nemer - Wells Fargo Securities LLC Matthew J. Fassler - Goldman Sachs & Co. Michael David Montani - Evercore ISI Elizabeth Lane Suzuki - Bank of America Merrill Lynch Chris J. Bottiglieri - Wolfe Research LLC Irina Hodakovsky - KeyBanc Capital Markets, Inc. William R. Armstrong - C.L. King & Associates, Inc. Mike L. Levin - Deutsche Bank Securities, Inc. N. Richard Nelson - Stephens, Inc. Seth M. Basham - Wedbush Securities, Inc. David Whiston - Morningstar Research Paresh B. Jain - Morgan Stanley & Co. LLC James J. Albertine - Stifel, Nicolaus & Co., Inc.

Good morning. My name is Junisha, and I will be your conference operator today. At this time, I would like to welcome everyone to the Q1 FY 2016 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 session. Thank you. Ms. Katharine Kenny, you may begin your call. Katharine W. Kenny - Vice President-Investor Relations: Thank you and good morning. On the call with me today are Tom Folliard, our President and Chief Executive Officer; and Tom Reedy, our Executive Vice President and CFO. Before we begin, let me remind you that our statements today regarding the company's future business plans, prospects and financial performance are forward-looking statements that we make pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current knowledge and assumptions about future events that involve risks and uncertainties that could cause actual events or results to differ materially from our expectations. In providing projections and other forward-looking statements, the company disclaims any intent or obligation to update them. For additional information on important factors that could affect these expectations, please see the company's Annual Report on Form 10-K for the fiscal year ended February 28, 2015 filed with the SEC. And as always, I hope you will all remember to ask only one question and a follow-up before getting back in the queue. Tom? Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you, Katharine. Good morning, everyone. Thanks for joining the call today. We had a great first quarter, driven by strong performance in all our key businesses areas and with the continuation of our store opening plan. I'll give you some of the highlights for the quarter. Used unit comps increased by 4.9% and total used units grew by 9.3%. Gross profit per unit relatively flat at $2,200 compared to $2,220 in the first quarter of last year. Total wholesale units grew by 4.7% and gross profit per wholesale unit of $1,032 was similar to $1,046 in the first quarter of last year. Other sales and revenues increased 14% year-over-year and CAF income grew 15% to approximately $109 million. I'll now turn over to Tom to talk about finance, Tom? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: Thanks, Tom. Good morning, all. Tom mentioned CAF income grew by 15% compared to first quarter of fiscal 2015 and average managed receivables grew by 17% to $8.7 billion. As mentioned in the release results for this quarter, we're again positively impacted by favorable loss experience at CAF. The weighted average contract rate, that rate we charge to the customers, was 7.4%, up slightly from last year's first quarter at 7.2%. Our allowance for loan losses grew to about $84 million or 0.94% of managed receivables. CAF net penetration was 42.2%. Half a point of that came from the loans originated under our subprime test, and that compares with 41.3% in last year's first quarter. Net loan dollars originated in the quarter rose 10% to $1.4 billion due to the combination of CarMax unit sales growth and CAF's modestly higher penetration. And during the quarter, we repurchased 1.8 million shares for about $120 million. That's down from the pace in recent quarters, reflecting the increase in stock price. Tom? Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you. SG&A for the quarter increased approximately 11.6% to $350 million. Contributing to this growth was the addition of 16 stores since the beginning of the first quarter of last year and a $7.9 million increase in share-based compensation expense. On a per unit basis, SG&A increased $51 to $2,098 compared to $2,047 in the first quarter of fiscal 2015, $39 of which was related to the stock-based compensation expense. During the first quarter we opened three stores, two in new markets for CarMax, Minneapolis and Gainesville, Florida. We also opened our third store in the Philadelphia market. After the first quarter ended, we opened our third and fourth stores in the Denver market. That was actually yesterday, and added a second store in the Providence market. We plan to open one more store in the second quarter in Tallahassee, Florida, which will be a new market for us. Our comp unit sales were driven by improved conversion and continued growth in customer traffic. Our web traffic was up almost 10% compared to the same period last year. Monthly web visits grew to nearly 16 million. And now over 60% of our visits are coming from something other than a laptop and a desktop, so either a mobile device through our app or on a tablet. And with that, we'd be happy to take your questions. Operator?

Your first question comes from the line of Craig Kennison of Baird. Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker): Good morning, thanks for taking my question. This is more of a long-term question, but we have this view that millennials might respond to your hassle-free business model better than prior generations. I'm curious what CarMax is doing to target this group any differently, whether it's from a marketing perspective or what your technology spend might look like going forward. Thomas J. Folliard - President, Chief Executive Officer & Director: That's a good question, Craig. We're in the middle of investing in continued capabilities on our website and mobile devices, and I don't think that's just for millennials. I think that's really for all consumers. If you look at consumer behavior over the last several years, it's clearly shifting towards wanting to do more and more of whatever shopping process they're involved in online. And we see that continuing to shift, and then within that, continuing to shift towards mobile. So we're working hard on our app and trying to have fantastic pictures on there. We've added zoom capability. We've added high-definition and zoom capability. We've given customers the ability to transfer a car from any store to any other store. We've given them the ability to pay for that online. If it's a paid transfer via credit card, they can fill out a big chunk of the paperwork online. And I think there's lots more to come there. It's just an ongoing process and trying to stay out in front of technology. But continued investments in the website and our mobile device I think will attract not only millennials, but other customers as well. Craig R. Kennison - Robert W. Baird & Co., Inc. (Broker): Thanks, I'll get back in the queue.

Your next question comes from the line of Scot Ciccarelli of RBC Capital Markets. Scot Ciccarelli - RBC Capital Markets LLC: Good morning, guys. Can you talk about subprime penetration? It still seems to be bouncing around a little bit and was down from 1Q last year. I guess what I'm wondering is how much of that drop is from business being picked up by Tier 2 lenders, and how much of that is maybe from some changes that the Tier 3 guys are making? Thanks. Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I think we talked about this a little bit last quarter. We've seen pretty stable performance from our Tier 3 lenders. If you look at what they're approving and the quality of their offers, it's been pretty consistent for the last several quarters. And as we've talked about, you've got to remember that their performance is a byproduct of both what they're doing on the credit front and what they're seeing coming through the pipeline. So I think it's fair to say that their behavior has been consistent and we're seeing a little bit more assertiveness in the Tier 2 space. Scot Ciccarelli - RBC Capital Markets LLC: All right, so no change in terms of thought process regarding the Tier 3 that they're probably just seeing less product because of the Tier 2 activity. Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I can't speak for them, but if you look at credit quality of applications this quarter, it's up about two points year over year. That moves the mix a little bit. And I think we've done a lot of work to build a good stable of Tier 2 lenders that each brings something different from the table from a credit perspective, and that adds incremental sales. So like I said, I think we're happy with the performance of our Tier 3 lenders. I think that we see consistent aggressiveness out of them in the last several quarters. I wouldn't attribute it to anything but some things moving around. Scot Ciccarelli - RBC Capital Markets LLC: So just to be clear, when the Tier 2 guys that needed taking up some share, we should assume that's a much more profitable transaction for you, correct? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: Yeah. As you know, we pay $1,000 per car in the Tier 3 space and we make $300 a car from the lender in the Tier 2 space. So every time we are shifting that volume, we're taking loan from $1,000 out-of-pocket to $300 in. So yeah, it's good. And you saw that reflected in the other margin this quarter. Our third-party finance net income, which is actually an expense, was actually flat year-over-year with 9% sales growth and that's a direct result of the mix of Tier 3 being a little bit lower. Scot Ciccarelli - RBC Capital Markets LLC: Got you, many thanks. Thomas J. Folliard - President, Chief Executive Officer & Director: And, Scot, as you know, one of our main goals at CarMax is to make sure that when customers show up at the store that they have access to credit and we always talk about global approval rating which is of applicants, how many get an approval from one of our lenders starting with CAF and then heading down through all of our other partners. And that number is over 90%. So we're pretty pleased with the credit offering that we have for our customers when they show up at the store, whether it's through CAF or one of our partners. Scot Ciccarelli - RBC Capital Markets LLC: Got you. All right, thanks a lot guys. Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you, Scot.

Your next question comes from the line of Brian Nagel of Oppenheimer. Brian W. Nagel - Oppenheimer & Co., Inc. (Broker): Morning. So I have a question, a follow-up that I'll kind of shove into one here. The question on the buyback and Tom, you discussed this a bit in your prepared comments, maybe an explanation why we saw a lower buyback never heard in Q1 versus the prior quarters. But can you give us a little more color there on how you're thinking about that buyback relative to the stock price? And maybe how should we consider the cadence of buybacks in coming quarters... Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I don't really want – we're not really going to be in a position to get into what we're going to do in future quarters, but I can tell you that our intentions are very much that it's a priority for us to return capital to shareholders, and as we've talked about the last couple of quarters, to move our capital structure towards where there's a little bit more leverage in it. And that is something we're committed to do over the medium to long term. In any given quarter, we might see some bouncing around, because rather than having a trading mentality, we're trying to take a programmatic approach to buying back stock. We've set up a program and we let it run for a period of time. That program's going to have guidelines in it that allows for more share repurchase at lower stock prices and dialing it back as the stock goes up. So – and we just kind of look at it from a longer-term perspective. We'll adjust those parameters as is appropriate going forward, but that's pretty much as much as I can say about it. We had a program in place that dials back at higher stock prices. We saw the stock price increase significantly over the last several months. And as time goes forward, we'll adjust it as appropriate, but keeping an eye on the fact that we do want to keep making progress towards more leverage in the capital structure. Brian W. Nagel - Oppenheimer & Co., Inc. (Broker): Got it, that's helpful. And then my follow-up question, unrelated. Just an update from a marketing perspective. Are you still list – is CarMax still listing cars on Autotrader.com and Cars.com? Is that still a marketing vehicle you utilize? Thomas J. Folliard - President, Chief Executive Officer & Director: At this time it's not, Brian. We have gone on and off testing with Cars.com and Autotrader.com, and we'll continue to test on whatever listing sites that add incremental sales and that are worth the investment. With the growth in carmax.com up to 16 million hits a month, we're a pretty prominent website, particularly in all the markets that we operate in, and we haven't found that there is incremental value there. So at this time, we're mostly just using our own website. We are continuing to test, but we don't have any cars on Cars.com or Autotrader.com at this time. Brian W. Nagel - Oppenheimer & Co., Inc. (Broker): Okay, thanks a lot. Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Sharon Zackfia of William Blair. Sharon M. Zackfia - William Blair & Co. LLC: Hi, I guess just two really quick questions. Tom, can you talk about why average selling price is down? I don't think I've ever seen that before at CarMax. And then secondarily, the stock comp, the $7.9 million, is there going to be accelerated stock comp all year, and how do we think about that and the G&A line? Thomas J. Folliard - President, Chief Executive Officer & Director: So the first part, I think we were down – well, I'm getting the number here – I think we were down a couple of hundred bucks. And I'm with you, Sharon, I don't generally expect ASPs to go down, so I don't have a great explanation for it. I think lower prices are better for our customers. I don't think it really is an indication of much of anything because the move was so modest. What was it last quarter? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: $100. Thomas J. Folliard - President, Chief Executive Officer & Director: We were roughly flat last quarter. I think we're up $100. So I haven't really read too much into it. It's such a small change in price. And then your second question, Sharon? Sharon M. Zackfia - William Blair & Co. LLC: The stock comp, I think you had $7.9 million of incremental stock compensation this quarter. I'm just kind of trying to figure out if there's accelerated stock compensation all year, how we should think about that and G&A? Thomas J. Folliard - President, Chief Executive Officer & Director: That's largely going to be driven by how the stock performs. And a big chunk of that is in our restricted stock units that go to the vast majority of the associates who are in the equity program largely in our stores. And that's a cash-settled expense for us, and it's subject to variable accounting. So this is going to be largely based on how the stock performs and a number of other factors. Sharon M. Zackfia - William Blair & Co. LLC: Okay, great. Thank you.

Your next question comes from the line of Matt Nemer of Wells Fargo. Matt R. Nemer - Wells Fargo Securities LLC: Good morning, everyone. I wanted to just piggyback on Craig's question around mobile and web capabilities. Just wondering if you can give us an update on the EasyShop program and what we can expect in terms of future web capabilities over the next year or two. Thomas J. Folliard - President, Chief Executive Officer & Director: Matt, so that was a – we originally called that out as a test. And EasyShop was a branded thing – excuse me, within the website. We're really not calling it that anymore. It's now really just expanded capabilities throughout the website, and we'll continue to test those capabilities. And when we find something that works, we'll roll it to the whole chain. And so the things I mentioned earlier, the ability to transfer a car, the ability to pay for a car, the ability to make an appointment, the ability to put a car on hold remotely, all those things are rolled throughout the company now, but we stopped branding it. We just realized it worked better as just part of the capability of our normal website. I really can't give you what I think the other things will be that – the capabilities that we'll add going forward, other than we're working really hard to try and make sure that customers can do whatever part of the transaction that they want to do from home, we want to make sure we give them that capability. So that's kind of where we're focusing. We want to improve their experience. We want to make sure we have the best search engine, we want to make sure we have the best touch screen experience, and we want to make sure we have the best mobile experience. And the other thing I would say is we need to hold ourselves to a standard of the experiences that people have in other parts of their lives and not just their experience that they have when they're shopping for a car. So the bar has definitely been raised as it relates to experiences online and experiences with mobile devices, but we're working real hard to stay out in front of it. Matt R. Nemer - Wells Fargo Securities LLC: And just a quick follow-up. I'm just wondering if you can give us a quick update on the small-store, small-market format. Thomas J. Folliard - President, Chief Executive Officer & Director: So I think we mentioned we were going to open five stores, read the results for some period of time, and then evaluate our plan going forward. On the last call, I mentioned that we feel very confident in the way we've performed so far. And if you look at our growth plans going forward, the 13 to 16 stores over the next few years, embedded in that will be small-format stores. So we've identified right now at least 80 markets that meet that criteria, and that will be part of our regular growth program going forward. Last month, the store that I mentioned in Gainesville, Florida is a little bit of a hybrid. It has a small-format front end, which means we operate it with the overhead structure that we've created for the small-format stores, but we have a full production shop in the back. So we're always going to be working on our formats and try to find out what's the most efficient way to want to run a store at various volumes. And we have incredible variation and incredible capabilities as a company to be able to go after just about any market now. We can open a market with selling as few as 75 cars a month, and we can run stores that sell as many as 1,000 cars a month. So I'm really proud of what we've accomplished in being able to address all kinds of different market sizes. Matt R. Nemer - Wells Fargo Securities LLC: It sounds like they're working. That's great news, thanks so much. Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Matthew Fassler of Goldman Sachs. Matthew J. Fassler - Goldman Sachs & Co.: Thanks a lot. My primary question relates to the wholesale business. Obviously, units will show volatility from time to time, and the profitability of the wholesale business was terrific. But the unit growth and the ratio of wholesale to used sold was a little bit lower than we had seen. So any insights as to what drove that this quarter and how you're thinking about the wholesale business generally this year? Thomas J. Folliard - President, Chief Executive Officer & Director: Matt, I've talked about this a number of times. I really don't worry about the wholesale business in any given quarter. We think about it over a very long period of time. If you look at it over a long period of time, it has essentially grown with unit sales. We're not worried at all that it's – it grew 5%. I'm glad that it grew 5%. It's a very, very big business for us. It's a very profitable business for us. It requires an incredible amount of effort in the stores. You think about every time we open up a new production store. And even in a new market, we've got to run another business within it. We have to have great customer service. We have to attract dealers to our auctions every day, and we have to give those dealers a great experience because they have other choices and they can go other places. So again, it's a big business. It grew 5% in the quarter, not quite what the retail growth was. But as you've been following us for a long time, you've seen that number dramatically in the other direction as well sometimes. So we're really thinking about that business over the long haul. And also, as you know, that business is not an independent business. It's attached to retail. Almost all the cars sold in wholesale are direct acquisitions from consumers, many of those who are buying cars from us, so we have to make sure that we're competitive. So I was very pleased with the quarter for wholesale. Matthew J. Fassler - Goldman Sachs & Co.: That's helpful. And, Katharine, hopefully you won't count this follow-up as an actual question. But just the stock comp, you have – you now disclose three or four sub-categories within SG&A. Does the stock comp number spread amongst the four of them, or is it focused in compensation? Thomas J. Folliard - President, Chief Executive Officer & Director: It's all in compensation. Matthew J. Fassler - Goldman Sachs & Co.: Great, thank you so much, guys. Thomas J. Folliard - President, Chief Executive Officer & Director: And, Matt, one more point on that. Almost all the variability in our stock-based compensation expense is non-executive comp, just to make that point. Matthew J. Fassler - Goldman Sachs & Co.: And it seems like, since you offered, it seems like on a per-vehicle basis, when you exclude stock comp, the delta was actually quite favorable, pretty well controlled year on year. Thomas J. Folliard - President, Chief Executive Officer & Director: Exactly. And remember, carrying – that's with 16 more stores in the base than were there last year, which as you know, in the early part of their life story is very SG&A inefficient until they grow to where we expect them to grow. And we've always said, we think we need mid to high single-digit comps to get some leverage there. I was really pleased with the way SG&A ran during the quarter. Matthew J. Fassler - Goldman Sachs & Co.: Thanks so much. Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Michael Montani of Evercore ISI. Michael David Montani - Evercore ISI: Hey, good morning. I just wanted to ask first off on vehicle demographics, if you could share the penetration of zero to four-year-old vehicles. I think it was 75% last quarter and growing pretty nicely. So could you just update us there on what you're seeing? Thomas J. Folliard - President, Chief Executive Officer & Director: For the quarter, it was 76%. And you mentioned 75% was in the fourth quarter, and that's on top of 73% the year prior. So I think pre-recession, that number was 85%, and then coming out of the recession it was 70%. So yes, we've seen some shifting back towards. We've been expecting this with the shifting in supply, with the change in the SAAR. But from quarter to quarter, it was relatively flat from the fourth quarter to this quarter. Michael David Montani - Evercore ISI: Thanks. And just to follow up on that, if I could, you mentioned that the buy rate was a little bit lower this quarter. Can you just share with us what's going on to drive that? Is there anything from a pricing dynamic that's impacting you in any way there, and also what the penetration is of retail used units that were from the appraisal lane this quarter? Thomas J. Folliard - President, Chief Executive Officer & Director: It was still a pretty good number. We're buying around 30%. That's pretty good for us. It's modest fluctuations in the buy rate. We called it out only because it was there, but it's not something that I really can add any color to because I don't think there was much to it. Michael David Montani - Evercore ISI: Okay, thank you.

Your next question comes from the line of John Murphy of Bank of America. Elizabeth Lane Suzuki - Bank of America Merrill Lynch: Good morning. This is actually Liz Suzuki on for John. With the loan charge-off rates running lower than expected, do you think half would be comfortable taking on a little more risk in expanding that sub-prime test even further? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I think the two are actually unrelated. We're looking at the subprime test almost as a different line of business with a different pool of credit. And as we've talked about before, we're constantly testing within our core CAF business different pockets of credit, both pricing and what we'll approve on an ongoing basis. And to the extent it makes sense and we keep the profile of the portfolio intact, then we'll roll those things out. As far as the current environment having an impact on that, these are anywhere from five to six-year loans. And I think the results in any one quarter or a couple of quarters aren't going to – aren't anything to go out and swing your credit policy for what you're going to be collecting in five years. Elizabeth Lane Suzuki - Bank of America Merrill Lynch: That makes sense. What do you attribute those lower loss rates to this quarter? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: The losses are really a combination of how many people are going bad and how many – how well we're doing recovering funds from those loans that have gone bad. And we've had some success in doing a little bit better on the recovery side, but the vast majority of what we're seeing in loss performance is that just fewer people are going bad. And I think that's not inconsistent with what's going on in the lending industry in general right now, at least, at the higher credit level. Elizabeth Lane Suzuki - Bank of America Merrill Lynch: Great, thanks very much.

Your next question comes from the line of Aram Rubinson of Wolfe Research. Chris J. Bottiglieri - Wolfe Research LLC: Hi, this is actually Chris Bottiglieri on for Aram. I had a quick question on the direct operating expenses within CAF. You've done a very nice job of managing it over time. But it seemed to slow a little bit in Q4, but now in Q1, came back down a percentage of AR. So I want to think about how you manage that over time as you continue to grow your book. And two, if the subprime test proves successful, like what does that mean for your direct expenses within CAF? Thank you. Thomas W. Reedy - Chief Financial Officer & Executive Vice President: We try to manage those expenses over time as efficiently as we can. Unfortunately, it's not only our activity that impact that. And so if you think about what's entailed in the finance business, there's a lot of activity contacting customers. If you're in an environment where people are less delinquent and there's fewer losses that – and fewer people not paying, which we are today, that means you're making less calls. It probably needs less resource to do that. If the world changes and you got to pay more attention and be making more calls, that will have an impact on your costs. But I think the team down at CAF has done a great job of getting more efficient in both those types of environments, and we'll try to continue to do so. And as far as Tier 3, as we roll that out, to the extent we roll that out, you would expect that it's a more high-touch business and it would have some impact on CAF's overhead costs. But we're not at a point where we can forecast that for you. Chris J. Bottiglieri - Wolfe Research LLC: Okay, cool. Thanks, guys. Thomas W. Reedy - Chief Financial Officer & Executive Vice President: Thanks. Thomas J. Folliard - President, Chief Executive Officer & Director: Thank you.

Your next question comes from the line of Brett Hoselton of KeyBanc. Irina Hodakovsky - KeyBanc Capital Markets, Inc.: Thank you, good morning. It's actually Irina Hodakovsky up for Brett Hoselton. A quick question for you, guys, on the used vehicle sourcing. We've been expecting an acceleration in off-lease supply to drive that supply of zero to four-year-old car inventory. And what I'm seeing is on the industry reports, on the certified vehicle sales, we're seeing double-digit increase through March, 11% up, and your increase is substantially below that. And I'm wondering if you are not getting those cars yet or if there is some sort of a bottleneck in inventory supply, or any commentary you can give us on what you're seeing in terms of zero to four-year-old vehicle supply coming in. Thomas J. Folliard - President, Chief Executive Officer & Director: You can't just look at CPO by itself. You have to look at total comps for the industry. If you look at the average of all the publicly traded new car dealers, used comps during the first quarter were at 5%, so about in line with where we were. Within that is where you see the growth in CPO, so there is a distinction there that you have to make. Lease percentage right now, I think, in the new car industry is somewhere around 30%. And when you see that supply coming back is really two years and three years later after you see a high lease percentage. So I'm not sure that we've seen much of it yet, but it's never been a problem for us to source cars. And when cars are at a high lease percentage, when you look out two years and three years later, generally, they're more organized at the auction, so it's a little easier for us actually to buy those cars when we see them come back to the marketplace. But we really haven't seen lease percentage change our ability to source cars over time, and we've been at this for over 20 years. So we actually think it's not a bad thing at all that there's a higher percentage of leases right now. And over the next two years or three years, that'll give us more access to those cars. Irina Hodakovsky - KeyBanc Capital Markets, Inc.: Great, thank you.

Your next question comes from the line of Bill Armstrong of C.L. King & Associates. William R. Armstrong - C.L. King & Associates, Inc.: Good morning, guys. Your weighted average contract rate for CAF was 7.4% versus 7.2% a year ago. Was there a mix going on there or are you seeing overall interest rates that you're getting from consumers starting to go up? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I wouldn't really read too much into that much of a lift. But as I've said, we've been in environments where rates are going down. We always want to make sure we're standing with the market; and in environments where we went to – rates going up, we want to be tested as well. So we have been doing some tests with increased rates in certain pockets, but like I said, I wouldn't read much into the difference in the – the weighted average contract is pretty consistent. Thomas J. Folliard - President, Chief Executive Officer & Director: And remember, we're very market-driven with a three-day guarantee for our customers to go get a better loan somewhere else and we unwind it free of cost. So that is a kind of a check and balance on how much rate we can actually get out of our consumers. But we think it's a huge competitive advantage that not only CarMax Auto Finance, but all of our other lenders as well, provide customers that opportunity to go get a better deal somewhere else, if they'd like, in the first three business days and get out of it at no cost whatsoever. So it's a good check and balance, but it's a great offering for the consumer. William R. Armstrong - C.L. King & Associates, Inc.: Right, understood, and then just a quick follow-up. Could you tell us what your originations were for the quarter for your CAF subprime test? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: It's about $15 million. As we talked about at the end of last year, we're comfortable continuing at that pace of about 5% of the Tier 3 originations. I think we're just under $90 million in total originations to-date now. William R. Armstrong - C.L. King & Associates, Inc.: Got it. Okay, thank you. Thomas W. Reedy - Chief Financial Officer & Executive Vice President: Sure.

Your next question comes from the line of Mike Levin of Deutsche Bank. Mike L. Levin - Deutsche Bank Securities, Inc.: Good morning, guys. Just to kind of follow up on CAF. We've been expecting to see the collateral spreads kind of tighten gradually over time, but the last three quarters would be kind of holding steady at about 6.3%. Does this kind of feel like a near-term equilibrium that you guys are seeing, or would you expect to see some contraction as we kind of move forward and the Fed moves rates? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: Well, I think you hit the nail on the head. We're going to – it's going to depend on what goes on with rates. As we've talked about before, our ability to manage that spread is very much market-driven. And to the extent we see cost of funds going up with – because benchmarks are moving up, we'll clearly test and see what we can manage that spread to, but it's going to be driven by what the market will bear and what our competitors are doing, and what makes sense for the customer. So it's very hard to speculate on it. We have seen spread compression if you look year over year. We just managed to outgrow that from an income perspective with growth in the portfolio overall, some larger originations in those prior years, and some favorable loss performance the recent quarters. Mike L. Levin - Deutsche Bank Securities, Inc.: Great, thanks very much.

Your next question comes from the line of Rick Nelson of Stephens. N. Richard Nelson - Stephens, Inc.: Thanks, good morning. The CFPB now oversees the large non-bank auto finance and provided CAF I assume is under their jurisdiction. Are there any changes required from an operating standpoint or a cost standpoint now that you've got this oversight? Thomas W. Reedy - Chief Financial Officer & Executive Vice President: I think the short answer is yes, we do expect there to be greater cost in administration. Now the flipside of that is the announcement last week didn't tell us anything new from what we've been planning for quite some time. As we've expected all along, capital will be subject to the bureau's supervisory authority as a larger participant. The definition of larger participant isn't really that large. It's about 10,000 loans a year in originations. So the vast majority of auto lenders are subject to it. But I think what it means for us is we're going to continue, as we have been, to refine our compliance program and meet the bureau's expectation. We're paying careful attention to industry developments and looking at our practices. Every time we see it, we learn more about what the bureau is interested in and making sure that we're doing our best to comply with what we think they want to see. But in answer to your question, there and going to be some administrative costs around that just, like we expect with the Dodd-Frank Reg AB II. With the extended reporting requirements, it will be a cost of doing business, and we'll let you know what it is if it's material when the time comes. N. Richard Nelson - Stephens, Inc.: Got you. Thanks, good luck.

Your next question comes from the line of Seth Basham of Wedbush. Seth M. Basham - Wedbush Securities, Inc.: Good morning. Thomas J. Folliard - President, Chief Executive Officer & Director: Hi, Seth. Seth M. Basham - Wedbush Securities, Inc.: My question is around conversion. Tom, you mentioned improved conversion helping comps. But how do those levels of improvement compared to recent quarters? Thomas J. Folliard - President, Chief Executive Officer & Director: That's another one that's been pretty volatile over time. And I still think of it as you have to look at it over a much longer period of time. And I've always felt that over time, we would get our comp sales improvement from a combination of traffic and conversion. So there have been quarters where conversion has outpaced traffic, and there have been quarters where traffic has outpaced conversion. In this particular quarter, we said it was divided between the two to deliver the 5% comp, but there's volatility in both of those things and I expect it to be volatile going forward, but I think over a long period of time I expect to get improvements out of both. So I'm not sure I really answered your question, but I can tell you we've had quarters where conversion improvement has been higher than this quarter, but we've had some quarters where we've been flat or behind as well. So really you have to look at it over a much longer period of time. I don't think one quarter is a good proxy for the long term, although in this quarter we had a little from both. Seth M. Basham - Wedbush Securities, Inc.: Got you. Just as a follow-up maybe, is there anything you can point to in terms of the trends in conversion rates in certain sectors of your customer population, whether it be credit tiers or otherwise and whether or not inventory levels are affecting conversion, those types of things? Thomas J. Folliard - President, Chief Executive Officer & Director: That's a really good question. We spend a lot of time trying to figure that out and we don't have a lot of success. So I'd say it comes from all kinds of different areas. There's an argument that people are more prepared when they show up at the store because they've spent more time on our website. There's an argument for more inventory for selection for the customer. You can clearly see impacts from movements in credit that impact conversion as well. We have extensive training programs going on in our stores in all areas of the company, which I think help conversion of course. We can buy cars a little bit better, have the right selection at individual stores even without having more cars. So we always say around here conversion is a very big word and it includes lots of things. So I really can't attribute specific points to any one of them. Seth M. Basham - Wedbush Securities, Inc.: All right, very good. Thank you.

Your next question comes from the line of David Whiston of Morningstar. David Whiston - Morningstar Research: Thanks, good morning, more of a strategic question for you. We're in a rather robust part of the economic cycle, and I'm sure you're always optimistic about all phases of the company. But in particular, given where we are in the cycle, what parts of your business you think you're most excited about over let's say the next 12 months? Thomas J. Folliard - President, Chief Executive Officer & Director: As you said, we're excited about all parts of our business. I think for me it's two things. It's the ability to continuously improve our existing store base, which has gotten quite large, and then our ability to enter new markets successfully, whether they're small markets or medium-sized markets or metro markets, and then to be able to deliver a consumer offer that has all kinds of advantages against the competition that allow us to continue to succeed. So I'm really excited about the core business. In the last several months, I visited lots of ours stores that have been around for 15 and 20 years, some are hitting all-time highs in sales. And then I've been to some of our new grand openings, and it always gets me excited to see how engaged people are to come and work for CarMax and deliver a great consumer offer. So again, for me it's continuing to grow the existing stores and then being able to go after new markets as well. David Whiston - Morningstar Research: That's helpful. And then just one other question. It's been tax refund time recently. I'm just curious, did you see a meaningful uptick in business with these other tax refund seasons or is it a little down or flat? Thomas J. Folliard - President, Chief Executive Officer & Director: We're really well past tax refund season now. For us, that's January, February, March timeframe. And over the last couple of years, we've seen some volatility around timing from just tax refunds, in general. But whatever you would've seen from tax refunds, you would've already seen in our business through the fourth quarter and then now that the first quarter is over. So it's always a big-time year for us particularly coming out of the winter and we had a big year this year as well. David Whiston - Morningstar Research: Okay, thank you. Thomas J. Folliard - President, Chief Executive Officer & Director: Thanks.

Your next question comes from the line of Paresh Jain of Morgan Stanley. Paresh B. Jain - Morgan Stanley & Co. LLC: Good morning, everyone. Just following up on the question on millennials and tech. CarMax has always led with technology and transparency in this business, but there is some serious money being spent by these peer-to-peer business models and they're gaining a lot of traction in millennials as well. And we've talked about this earlier and you said you're keeping a close eye on these models. And while you may not see them as direct competitors, is that an opportunity missed or is it something who can push you in the near future? And if so how quickly you can do that? Thomas J. Folliard - President, Chief Executive Officer & Director: That's a good question and I have the same answer as before. We're keeping a close eye on it and we'll decide if that's something we need to go after. As of this moment, we're not heading down the peer-to-peer path. But if you really think about the way CarMax works, the fact that we make a cash offer on every car is enabling a lot of peer-to-peer transactions and some of those are coming through us that would have otherwise gone peer-to-peer. So a customer who normally would have put their car online and be – or have put up in their yard and put a for-sale sign on it, now they're bringing a lot of those customers. They're bringing their cars directly to us and sell it to us. So it may not be exactly the way you're thinking of it, but I think we're getting plenty of customers who would have gone through the peer-to-peer channel and are deciding to sell their car directly to CarMax. Paresh B. Jain - Morgan Stanley & Co. LLC: Very well. And just a quick follow-up, would you rule out an acquisition of that kind in this space or would you do it organically? Thomas J. Folliard - President, Chief Executive Officer & Director: We're evaluating all different options and we're open to any way that makes our business better and delivers a better return for our shareholders. Paresh B. Jain - Morgan Stanley & Co. LLC: Thank you.

Your final question comes from the line of James Albertine of Stifel Nicolaus. James J. Albertine - Stifel, Nicolaus & Co., Inc.: Good. Good morning and thanks for taking the question. I was hoping and I apologize if I missed it in prepared remarks or another question, I dialed in a few minutes late. But hoping to get an update on the vehicle transfer activity, so the propensity for consumers to order a vehicle from outside their home market and have it shipped to their closest store. And then as a follow-up, any insight you could provide near term on sort of retail activity, particularly given some of the storms and flooding that we've been hearing in the Texas and sort of southern regions? Thanks. Thomas J. Folliard - President, Chief Executive Officer & Director: So on the first question, that number has been around 30% for quite a long time now. But that's a big number. We sold 600,000 cars last year, which means we transfer roughly 200,000 cars at the customer's request to the store near them and then sold the car. So we're transferring as many cars or more than anybody else at the customer's request when they see a great presentation of that car through our website. With 40 high-definition pictures and zoom capability, I think we'll continue to make progress there, but the number has been relatively flat. But again, it's a very, very big number. In terms of our regional differences, we never comment on regional differences. The only thing I'd tell you is I continue to be very proud of our CarMax team whenever we have a disaster in any area that involves large-scale loss of products. We're able to be there for the consumer when they are ready to buy something else. And we also are a place where people can get rid of their cars, whether they – if a car is flood-damaged or hail damaged, we still make an offer on the car. We turn around and wholesale that car. We won't retail one of those cars, but we still are there for the consumer when they need us in markets that have some trouble. But I can't really comment on any differences in performance. James J. Albertine - Stifel, Nicolaus & Co., Inc.: Great, thanks again.

I will now turn the call back over to the speakers for closing remarks. Thomas J. Folliard - President, Chief Executive Officer & Director: Okay, being there are no further questions, I want to thank everybody for your interest in CarMax and for joining us on the call today. And I especially want to thank our over 22,000 CarMax associates nationwide for all you do every day to make CarMax such a success. And we'll talk to you guys next quarter. Thank you.

This concludes today's call. You may now disconnect.