Good morning and welcome to the AutoZone conference call. (Operator Instructions) This conference call will discuss AutoZone's third quarter financial results. Mr. Bill Rhodes, the company's Chairman, President and CEO, will be making a short presentation on the highlights of the quarter. The conference call will end promptly at 10:00 a.m. Central Time, 11:00 a.m. Eastern Time. Before Mr. Rhodes begins, the company has requested that you listen to the following statement regarding forward-looking statements: Certain statements contained in this presentation are forward-looking statements. Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, reject, position, strategy, and similar expressions. These are based on assumptions and assessments made by our management in light of experience, perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including, without limitation, competition, product demand, the economy, credit markets, the ability to hire and retain qualified employees, consumer debt levels, inflation, weather, raw material costs of our suppliers, energy prices, war and the prospect of war including terrorist activity, availability of consumer transportation, construction delays, access to available financing, and changes in laws or regulations. Forward-looking statements are not guarantees of future performance, and actual results, developments, and business decisions may differ from those contemplated by such forward-looking statements, and such events could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Actual results may materially differ from anticipated results. Please refer to the Risk Factor section of AutoZone's Form 10-K for the fiscal year ended August 30, 2008, for more information related to those risks. In addition to financial statements presented in accordance with Generally Accepted Accounting Principles, AutoZone has provided metrics in this presentation that are not calculated in accordance with GAAP. For a reconciliation of these metrics, please see AutoZone's press release in the Investor Relations section at www.autozoneinc.com.

Good morning and thank you for jointing us today for AutoZone’s fiscal 2009 third quarter conference call. With me today are Bill Giles, Executive Vice President and Chief Financial Officer, Store Development, and IT, and Brian Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the third quarter, I hope you have had an opportunity to read our press release and learn about the quarter’s results. If not, the press release, along with slides complementing our comments today, is available on our website, www.autozoneinc.com. Please click on Quarterly Earnings Conference Calls to see them. To begin, I would like to thank and congratulate all our AutoZoners for their efforts that led to us achieving our 11th consecutive quarter of double-digit EPS growth. It is the dedication and commitment of our AutoZoners across the company that makes us successful. For the quarter, we experienced significant growth with domestic same store sales increasing 7.4%, following last quarter’s 6%, and EPS increasing 26%, our best performance since the second quarter of fiscal 2004. As we have stated on many occasions, we believe our business is not inherently cyclical in nature and given the ongoing macroenvironment challenges facing the global economy, we believe AutoZone is well positioned to help our customers effectively maintain their vehicles at a great value. We believe we can make a material difference in helping both our retail and commercial customers save money and time by doing the job right the first time. We believe both the headwinds and tailwinds facing our retail commercial customers have not changed over the last few months. While gas prices declining from the $3 range last October has had a positive economic impact on our customers, we have become mindful of the steady creep in pricing since early January. Expenditures related to gasoline can…

Regarding the third quarter, for the 12 weeks ended May 9, 2009, we reported sales of $1.658 billion, an increase of 9.3% from last year’s third quarter. Same store sales or sales for stores open more than one year were up 7.4% for the quarter. This same store sales result was a sequential improvement from last quarter’s 6% growth. We experienced sales growth from both our retail and commercial customers; however, retail performed at a higher level than commercial. In the third quarter, gross profit as a percentage of sales was consistent with last year’s quarter, while operating expenses as a percentage of sales decreased by 40 basis points. This resulted in an operating margin of 18.4%, up 41 basis points from last year’s quarter. Operating profit increased 11.8% versus the prior year. Net income for the quarter was $174.0 million, an increase of 9.5%, and diluted earnings per share increased 25.9% to $3.13 from $2.49 in the year-ago quarter. Our continued disciplined capital management approach resulted in return on invested capital for the trailing four quarters of 24.5%. We are proud to report that this metric continues to improve over last year’s already industry-leading rate. Return on invested capital is a key measure of our success. We have and will continue to make investments that we believe will generate returns that significantly exceed our cost of capital. We will not deviate from our efforts to optimize shareholder value over the long term. We continue to be fiscally prudent with our investments while optimizing our earnings per share. We want to assure all investors that we understand the capital we deploy in this business is your capital. Based on our historic and current ability to generate strong cash flow, we are able to strategically invest in those assets we believe…

In summary, we are very pleased with this past quarter’s performance. We also understand that we must remain focused on our main objectives in order to continue to grow both our retail and commercial sales. Our team is executing well, very well, and we feel we’re well positioned for success; however, there are no guarantees. We earn our customer’s business on a daily basis. Our competition remains focused, so we must continually improve our customer’s experience to improve our results. While the third quarter results continued the success we experienced in the second quarter, we understand and want to highlight again for each of you that our industry’s historical sales growth rates have been more conservative in the range of 4% for total sales growth. We expect to continue with our current game plan for the upcoming quarter. We remain committed to differentiating ourselves through continuing to develop our great people who provide great service. Four major objectives for 2009 continue to be a relentless focus on hiring, retaining, and training our AutoZoners to make sure we’re delivering trustworthy advice, and in this environment, we have a unique and incredible opportunity to retain our great AutoZoners and strengthen our team with very talented new additions. As we continue to say it’s always great to be an AutoZoner. Second, continued refinement of our product assortment, especially for late model products. Third, deploying inventory more effectively across our network with specific emphasis on utilizing our hub store network even more effectively, and finally commercial sales growth and appropriately paced profitable growth across our up and down the street, national account, and public sector customers. This will be accomplished through a combination of continual development of our sales team and refinement of our product assortment and service offerings. We enjoy industry-leading metrics today, but we have to continue to innovate and improve every facet of our business. We cannot and will not get complacent. Continual focus on customer service will remain our key point of differentiation, and AugoZoners are across the company are committed to providing that wow customer service our patrons have grown to expect. We continue to feel confident in our long range plans. We believe we have the opportunity to continue to grow sales across retail, commercial, Mexico, and AllData. I thank you today for letting us share with you our company’s results and touch on our ongoing initiatives. We look forward to keeping you abreast of our results well into the future. Now we would like to open up the call for questions.

(Operator Instructions) Your first question comes from Alan Rifkin – Banc of America. Alan Rifkin – Banc of America: Bill, I’d like to just touch on the continued rollout of the hub stores. If you can maybe just provide a little bit more color on what benefits you are seeing in the markets where you have in fact already rolled out the hub stores and when should we see this program actually finish, and what where the incremental costs in the quarter, if you could shed some color on that as well.

Let me start with strategically what’s going on with the super hubs. First of all, we’re still in the learning phase, Alan. We implemented five super hubs about 1-1/2 years ago and let them run for a year so we can refine their operations and understand the impact of those. As we entered this year, we planned to go to the next set of stores, and we did that. We basically completed that next set of stores at the beginning of the third quarter. As we continued to monitor the results of the larger base of stores, we were very encouraged with what we were seeing, not only in the hub stores, but also in the satellite stores. From the sales perspective, they are driving sales through two primary contributors. Number one, they’re adding incremental SKUs to what our normal hub stores hold into the local market place, and then secondly they are increasing the frequency of delivery. So in some stores, before you might have had one delivery from the hub store a day, today you’ll have three, and so they’re making easier access to those hub store parts. As far as when we’ll complete it, candidly we haven’t determined that yet because we are ahead of where we anticipated being. That’s why we’re going out and rolling our next set of stores this quarter. We are going to continue to monitor those and will look into next year to see how we can continue to accelerate it.

Alan, on the cost component, as we mentioned in the press release, we had about 50 basis points from higher incentive comp and investments in hub stores, so I’d split that, and so I’d say the hub stores are probably around 20 basis points or so of incremental investment. Alan Rifkin – Banc of America: Bill, is it fair to assume that since you’re accelerating the rate of implementation that you’re seeing desired effects thus far?

Yes, and I would even characterize it differently and stronger than that, Alan. We are accelerating because we saw even better performance out of those stores, and that’s not just due to the general lift in sales that we’ve seen. We’re looking at this versus control stores, and we’ve been quite encouraged with the results. It’s the age old story. Parts availability in this business is imperative, and this helps us strengthen our position in parts availability. Alan Rifkin – Banc of America: You appreciate the breakdown with respect to your revenues classifying them as either maintenance, discretionary, or failure. Would you care to just provide some color as to what proportion of your revenue base each of these constitute?

We’ll take a look at that. I would say that probably 30% or so of that is towards maintenance and you can split the rest of it between the other two categories.

That’s not something we can easily answer from the top of our heads because it’s not the way we track our business on a regular basis. We look at it by major categories. We put this distinction out because we are seeing some different trends, particularly with maintenance categories over the last several months.

Your next question comes from the line of Dan Wewer with Raymond James. Your line is open. Dan Wewer – Raymond James: Bill, the three leading companies in the sector are all achieving strong topline growth, but there seems to be uncoupling in the trend in gross margin rate Zone not showing that the same rate of improvement as the others. You had cited increased promotional activity I guess precluding any benefit for AutoZone in the quarter. I was wondering if you could elaborate on that. Is this in response to CSK rolling back their everyday pricing and your need to match that or is it simply your customer’s hitting your ad items more frequently than they have in the past?

I would first of all characterize the promotional activities as broader than just ad items. It certainly has ad items. We also have other things in there like our loyalty card, and what we’ve seen over a period of time is that we’ve seen our customers migrate more to those promotional offerings. We have not substantially changed our promotional offerings over the last two years, but as this economic cycle has become more difficult, we’ve seen more people migrate to that. I want to be very clear this was not any kind of response to CSK or their conversions. Obviously our pricing philosophies have remained the same for a long period of time, and as we’ve said quite a few times, elasticity in this business is very different than most other retail sectors, clearly on failure-related items. They are quite inelastic, so I don’t want anybody to misread our notion. What we have seen is just a gradual shift or an accelerated shift in the promotional offerings. Also understand that we’re articulating on a gross margin that was flat, so the magnitude of the numbers that we’re talking about is really quite small. Dan Wewer – Raymond James: On your fourth quarter sales guidance, you’re referring to perhaps returning to a normalized rate of 4%, but that was for the industry. Up until two quarters ago, AutoZone same-store sales have been approximately flat for about 4 years, so were you suggesting look at that 4-year run rate for AutoZone or think more in terms of the industry comp average of around 4%?

I actually specially said that the industry is growing on a 4% total level which is generally consistent with what we’ve experienced prior to the last two quarters. We had as you mentioned flat comps, and our square footage growth rate has been about 4%, so we have been growing basically inline with the industry. Now, the one thing that we didn’t highlight in this call is that and I mentioned that we’ve grown market share in commercial; we also seen healthy gains in market share in retail, so the notion that the industry may decline or may go back to more normalized levels at some point whether it’s this quarter or 12 months from now or whatever, we believe that we have opportunities to enhance the way we offer our services to our customers and improve our market share. Our objective is never to grow zero comps, although we did it for a while. Dan Wewer – Raymond James: Just make sure I understand. You are suggesting for the upcoming quarter and excluding for the fact that you have one last week that flat comp would be a more reasonable outlook?

No. First of all, we don’t give guidance, so we are specifically not trying to give guidance. That is our philosophy. What I’m trying to say is don’t straight line a 6 or 7.4% comp into the foreseeable future. That’s not consistent with historical trends.

Your next question comes from the line of Matthew Fassler with Goldman Sachs. Your line is open. Matthew Fassler – Goldman Sachs: As you think about modulating expenses, and you intimated that you can, I guess, gas it up and pull back essentially as you see fit, what kind of lead time do you need as you think about projects like your hub store investments and training, etc., in order to pull back on SG&A commitments?

Matt, historically we’ve demonstrated an ability, we’re relatively nimble on a lot of these expenses, and we have been able to do them in a quarter on many cases, and so we position ourselves and the organization positions itself, so that it can react to positive and negative sales trends on a fairly fluid basis, so I would say actually in a quarter in many cases. Matthew Fassler – Goldman Sachs: Just to under within commercial, of the sales growth that you are seeing, how much you think relates to your initiatives now, and how much relates to the market. I guess you have control stores where the resources that you’re allocating to the business are probably unchanged from a year ago more or less, and are you seeing those stores respond as strongly or would you say that the commercial customer is really moving forward as quickly as retail?

I would start with Matt that I don’t think what happens in the market has a big determinant on our success when we have just over 1% market share. I think it’s more about what are we doing in that business. We control our destiny completely. As far as the control stores, I want to be careful about that because they’re not technically control stores. They are still getting enhancements in technology and enhancement in product offerings. They just don’t have the outside sales representation and incentive compensation and a couple of other minor things, but I think the bottomline is we are going to determine how we do in commercial. Matthew Fassler – Goldman Sachs: Finally, can you just kindly remind us of the timing of the loss of that significant customer and whether that was all in a single quarter or whether that was a gradual dynamic?

It was a gradual dynamic. Actually the largest amount of business that we did against them was in the third quarter of last year, so we’d begun ramping down against that. We’re still doing business with that customer and still have some of those programs in place, so it will continue to run for roughly a year, but the biggest part of it, we just overlapped. Matthew Fassler – Goldman Sachs: Did ever quantify how big a contributor that was?

I don’t believe we did specifically.

Your next question comes from the line of John Lawrence with Morgan, Keegan & Company. Your line is open. John Lawrence – Morgan, Keegan & Company: Bill, would you comment on the last question regarding or Dan’s question about the promotional activity? Could you give us the next level, how does the Duralast brand impact that promotional schedule, and is there a trade down effect into the Duralast brand? I know it’s not at the low end, but can you give us some insides there, please?

To answer that specifically, I would say that Duralast brand doesn’t really play into that promotional activity per se, and we’re not seeing a trade down. I think what we were articulating is that first and foremost the promotional offerings are the same this quarter as they were last quarter as they were last year for the most part. We’ve seen some increased penetration and activity from consumer behavior standpoint, taking advantage of those opportunities to save money, and so that’s really what we’ve seen. Keep in mind again gross profit is flat with last year and for the year to date it is flat with last year, so we are not seeing any unusual fluctuations, simply just pointing out some activity to help give you a little bit of color on our gross margin rate overall. John Lawrence – Morgan, Keegan & Company: That assumes that some of this additional inventory into these super hubs, a lot that would be Duralast product?

It would be from the standpoint that we have a lot of hard parts, and that’s really the point of it. It is that we’re increasing and improving the coverage significantly in those hub stores and the related satellites, and that’s really our ability to be able to deploy inventory on a smarter basis, and we really believe that in the long-term these hub stores are going to allow us to be able to do that and that we’re going to be able to say yes on a more frequent basis to our customers.

Your next question comes from the line of Kate McShane – Citigroup.

You had mentioned in your comments that you thought it would be more productive for the government to give vouchers for repairs as everyone can’t get financing or can afford the new cars with the cash for clunkers legislation. Is this something that you’ve heard as being discussed as an option?

I don’t know that I’ve heard it discussed as an option coming to us. It’s certainly been discussed as an option coming from us and coming from our industry associations, both AAIA and CARE—the Coalition for Automotive Repair Equality. We’ve made that point very clear, but as I said in the comment, it’s been interesting to see this initiative more from something that was an environmental protection initiative into a sales stimulus initiative, and it’s hard to fight the sales stimulus if they’re trying to stimulate new car sales, but we believe if you really want to help a broader section of the motoring public, let’s give them vouchers so that they can take their car to a dealer, to an independent repair shop, to one of our national account, or give them a coupon so they can bring to AutoZone and do it themselves and save even more. Kate McShane – Citigroup: Even though it was the AAIA suggestion, does it seem to be gaining traction or do you have any support from anyone yet on the suggestion?

Not particularly at this point in time, but we continue to engage in the discussions and debate.

Your next question comes from the line of Scot Ciccarelli with RBC Capital Market. Your line is open. Scot Ciccarelli – RBC Capital Market: I guess we’ve seen over the years, long stretch of years, gas prices go up and down, we see miles driven increase and decrease, but it seems to me we really don’t have a good historical precedent for the massive drop that we have seen in new car sales. Can you guys provide your perspective on how you think this is going to basically impact your business over the longer term?

I think you make a great point first, Scot, and that is that we don’t have a great analog to draw back to, but the bottomline is as new car sales go down, I don’t anticipate the fleet size is going to change, so the fleet is going to age, and so more cars are going to be out of warranty, and we have a better opportunity to participate in the repairs of those vehicles as they come out of warranty, so we continue to believe an aging fleet as we have said for many years is positive, and we think it’s going to reach close to 10 years when the AAIA comes out in a couple of weeks or months. Scot Ciccarelli – RBC Capital Market: With all due respect, why wouldn’t that increase the historical growth rate of this industry?

I think it could. I think that’s yet to be seen Scot. Let me touch on that for one second if you don’t mind. We plan very conservatively. We always do. First of all, we don’t have to get out in front of our business to make sure we can provide our customers with great products if our sales accelerate, so what we don’t want to do is get our sales thinking that we are going to be in this kind of environment for an extended period of time. It’s not necessary for us to effectively manage this business.

Your next question comes from the line of Colin McGranahan with Bernstein. Your line is open. Colin McGranahan – Sanford Bernstein: I think last quarter you said that much of the increase in business had come from new customers that hadn’t been AutoZone customers in the past. I wondered if that continued to be the trend as sales accelerated even a little bit further, and if you learned anymore from some of the survey work that you have done on where these customers were coming from. Are they previously OEM dealer customers that are fixing the cars themselves or are they coming from the independent garage, the independent dealers, etc?

Well, it’s always very difficult for us to announce specially all of the customers. Clearly our loyalty program allows us to have better insight, and we continue to mine that information. I don’t know if we necessarily said that a majority of the customers were new customers last time. I think what we were alluding to is that given our transaction count and the heath of the industry overall that we believe that we have an increase in new customers coming into both the industry and specifically coming into AutoZone, and one of the things we were alluding to and highlighting, and I think Bill talked a little bit on the call was the importance our AutoZoners and the training, etc., in order for us to provide great trustworthy advice, particularly for new people coming in to the industry.

Your final question comes from the line of Greg Greg Melich – Morgan Stanley. Greg Melich – Morgan Stanley: I just wanted to follow up a bit more on the gross margin. I think in the introductory comments you guys talked about the promotional offerings and some of the pressure there continued but it was unchanged, but then you mentioned that the penetration had increased. Could you just explain what that is? Was that just more SKUs being prmoted?

Not necessarily more SKUs. What we were saying was that the consumers increasing the penetration of those offerings, so in essence the promotional calendar is relatively consistent with the prior years; however, the consumer’s activity was slightly more weighted towards that activity, and we spent a fair amount of time talking about it on the call, and so I don’t want it to get over played. Again, gross margin is relatively flat, and we were trying to give you some color on gross margin activity during the quarter, and so one of the things that we had seen is just a slight increase in consumer activity related to promotional offerings, but again, our offerings are relatively consistent year over year. Greg Melich – Morgan Stanley: There wasn’t anything else, and the promotions were basically the way they were last year. There was nothing incremental in terms of SKUs?

You’re exactly right. Think about it as some of the window signs, etc. That activity is the large vast majority of our promotional offerings, and that is relatively consistent quarter over quarter. Greg Melich – Morgan Stanley: A second followup on SG&A; you talked about the super hub rollout and how that could continue if keeps going well. Is there an element of the super hub rollout that is fixed up front? In other words, as you add another 5 or 10 or 15 super hubs, that the incremental costs is less or is pretty much one for one as you do a new hub?

I would say that there are some incremental costs, as we mentioned. There is some ongoing payroll and some ongoing delivery cost to operate a super hub, but there is a component of that 20 basis points that we highlighted before that will be one-time.

Before we conclude the call, I’d like to reiterate that we have a solid plan for the future, and we’re focused on growing all facets of our business. Our culture remains the key point of differentiation from our competition, and I want to stress that our efforts have a long-term focus. We view ourselves as in a marathon, and not a sprint. Our focus is on our critical success factors. As we continue to focus on the basics and management our capital appropriately, we are confident AutoZone will continue to be incredibly successful. Thank you very much for participating in today’s call.