Good morning. My name is Morris and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2009 earnings release conference call. All lines have been placed on mute to prevent any background noise. After the speaker’s remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. Ms. Carol Yancey, you may now begin your conference.

Thank you and good morning and thank you for joining us today for the Genuine Parts Company second quarter conference call to discuss our earnings results and our outlook for the remainder of the year. Before we begin this morning, please be advised that this call may involve forward-looking statements such as projections of revenue, earnings, capital structure and other financial items, statements on the plans and objectives of the company or its management, statements of future economic performance and assumptions underlying these statements regarding the company and its business. The company’s actual results could differ materially from any forward-looking statements made due to several important factors described in the company’s latest SEC filings. The company assumes no obligation to update any forward-looking statements made during this call. We will begin this morning with remarks from Tom Gallagher, our Chairman, President and CEO. Tom.

Thank you, Carol and I would like to add my welcome to each of you on the call today and to say that we appreciate you taking the time to be us this morning. As we customarily do, Jerry Nix, our Vice Chairman and Chief Financial Officer and I will split the duties on this call and once we have concluded our remarks, we will look forward to answering any questions that you may have. Now earlier this morning we released our second quarter 2009 results and hopefully you’ve had an opportunity to review them, but for those who may not have seen the numbers as yet, a quick recap shows sales for the quarter were $2,535,000,000 which was down 12%. Net income was $103.6 million, which was down 22% and earnings per share were $0.65 this year, compared to $0.81 in the second quarter of 2008 and the EPS decrease was 20%. In looking at the individual results by business segment, our automotive revenues were down 5%. This follows a 7% decrease in the first quarter, so while we still have a good bit of work to do within our automotive operations, we were encouraged to be able to show some improvement over the first quarter results. Additionally, unfavorable currency exchange accounted for 3% of the second quarter decrease as well as 3% of our year-to-date decrease. Interestingly, our automotive performance improved on a monthly basis as the quarter progressed, which we were pleased to see and we feel that this is a result of some of the initiatives implemented earlier in the quarter. Examples of actions that were taken in the quarter will be in the areas of pricing where adjustments were made to certain product categories where needed to meet market pricing, a heightened emphasis on the…

Thank you, Tom. Good morning. We appreciate you joining us on the call today. We’ll first review the income statement and segment information, then touch on a few key balance sheet and other financial items. Tom will comeback on for a brief recap and then we’ll open the call up to your questions. I’ll view of the income statement shows the following. Total sales for the second quarter in 2009 were down approximately 12% to $2.5 billion. This quarter sales reflect a slight sequential improvement for automotive and office products offset by further declines in industrial and electrical. Gross profit in the quarter was down approximately 30 basis points at 29.4% of sales, compared to 29.7% in the second quarter last year. Our gross margin year-to-date of 29.7% is down slightly from last year. These decreases are primarily driven by reduced volume incentives earned, which was caused by lower levels of purchases. Reduced incentives account for $20 million and $40 million in lost gross profit dollars for the quarter and the six months respectively. Offsetting the negative impact of incentives are the ongoing benefits of last year’s product inflation and results of some of the margin initiatives we put in place. For the year through June, our cumulative pricing which represents supplier increases to us were down 1.5% in automotive, plus 2.10% in industrial, plus 3.0% in office products, and plus 2.1% in the electrical segment. Now let’s look at SG&A. For the second quarter, SG&A expenses were $579 million, compared to $637 million last year a decrease of $58 million. For the six months in 2009, SG&A stands at $1.2 billion, down approximately $98 million from $1.3 billion in 2008. Improvements in SG&A expenses are driven by the initiatives we’ve been implementing to reduce our cost structure. These initiatives…

Thank you, Jerry. So that recaps our second quarter and first half results. We said back in our February conference call, that we expected the first half of the year to be challenging and with sales down 11% year-to-date and earnings per share down 22% that is certainly proven to be the case. As far as the remainder of the year is concerned, we anticipate that our automotive revenues will improve somewhat over the final two quarters of the year and we look for automotive to get back into positive territory in the second half. As mentioned earlier, we’re encouraged by the early results from some of the initiatives implemented in the second quarter and there are several more actions being taken in the third quarter that will help the automotive results. Additionally, as most of you probably know, we’ve just named Paul Donohue he was the new President of the Automotive Parts Group. Paul is an extremely talented Executive who has capably handled increasing responsibilities since joining GPC in 2003, and he will keep the focus clear and the energy level high within our automotive operations. We’re pleased to have him in his new position. Now, as far as office products is concerned, we feel that their results will remain about the same as they have been through mid-year for the next few quarters. However, our expectations for industrial and electrical are a bit more cautious. In our prior full year guidance of revenues, we said we would be down 5% to 8% and we had anticipated a bit of improvement in industrial and electrical as we approached the latter part of the year, but at this point, we think that it may take a little longer for these two businesses to start to rebound and with this in mind we feel that a full year revenue expectation of down 7% to down 10% would be more realistic at the time and as a result of this revenue revision, we would also want to narrow the range on the earnings side from prior guidance of $2.25 to $2.75, to $2.25 to $2.50, which is more in line with how we see things right now. So that concludes our comments and at this point we’d like to take your questions and we’ll turn the call back over to Morris. Morris?

(Operator Instructions) Your first question comes from John Murphy - Merrill Lynch.

The auto operating margins were obviously a lot better than we were expecting and pretty impressive in the quarter given that the weakness. I was just wondering if you could break out, I mean actually, I look back and they haven’t been this good since the second quarter of 2004. If you could sort of just breakout how much of this is cost cutting, how much of it is pricing and how much of it may be sort of a reemphasis your relationships with accounts and maybe product positioning. If you could just kind of bucket the magnitude between those three factors. I just really trying to understand if this is a sustainable level going forward.

John, this is Jerry. I’ll take that. The Automotive Group’s got started cutting their expenses earlier than the other businesses because their revenue was slowing prior to the slowdown in the industrial and the electrical side. So some of that is they had taken some severance and all that earlier than the others. Another part of that is we sold our rotating electrical business last year in the second half of the year and that was a lower margin business, benefits thus the reason for getting out of it and so it’s a combination of those factors, but we have always been in the automotive sector, been able to operate much more efficiently there and slowdown revenue and I think this is just a reflection of that.

When we think as the pricing adjustments that are being made in that segment, where is that? I remember in the last call, you were seeing some pricing pressure from competition in some larger items like rotors and stuff like that. Is that the still the case? The pricing adjustment that you've made, have you seen any type of competitive response there?

I’ll try to answer that one John. Rotors was one example, ride control is another where we made some adjustments. Chassis products is another, some chemical product as well as some temperature control and what we've seen in terms of the results is that our unit sales on these product categories are now starting to really pickup and to get up to some pretty impressive levels. We implemented ride control at the end of April and our June unit sales were up in the mid teens. We did chassis at the end of May and we saw impressive results in our June unit sales for chassis and the same can be said for the other two, the temp control and the chemical. We've got a few more to do. We've got a couple of other actions that are slated for the third quarter. So, we always see competitive prices in the marketplace, but when we started to look at this, we found that we were a little too far out of line and we needed to do something about it and I think we're on the right track.

Just lastly, maybe just staying on pricing throughout all segments, what is the pricing environment that you're seeing going forward? Are you seeing in the other segments more pricing competition and what are you seeing from sort of the supply side of the equation? Are you seeing prices ease as the environment remains tough and you're able to sort of take advantage of that spread? What's really going on with sort of your pricing versus your retail pricing?

Well, in the non-automotive businesses, I wouldn't suggest that the pricing pressures are any more intense than what they are in automotive. I think automotive is very, very intense, but I would also say that we see more pricing pressure in those businesses today than we might have seen at certain times in the past and I think that's reflective of declining marketplaces in those other businesses and everybody's trying to do what they can to capture some market share. As far as what we're seeing from our vendors, it varies by vendor. In some cases, we're able to work with vendors and find ways to lower the cost to handle the account and exchange that for some additional discounts. In other cases, we have to do it on our own until we can find a way to bring our purchase prices down, but it's pretty competitive in all four of the businesses.

This is actually the last question. When we look at the cost savings that you're putting in place right now, assuming that the environment improves going forward in 2010 and 2011. How much of these cost saves, do you think you'll be able to capture in the next year or two or will there be some rehiring going on as demand hopefully really across the board for all your products starts to pickup?

There will have to be some additions back to the headcount as volumes pickup for sure, but we think that will be lag somewhat the revenue improvement and then other things that we've done on the cost side or things like facility rationalizations, and transportation optimization and some other things along those lines that will in fact stay with us over the long term. So, we're mighty proud of the job that our folks have done, quite honestly. They reacted to this thing quite well and I think they've done in automobile job on the cost side with a few more things to come yet.

Your next question comes from Marc Andre - Goldman Sachs.

This is actually Marc Andre filling in for Matt. I just had a quick question. Is it possible for you to disaggregate the drivers of automotive, more specifically giving the detail behind the fleet pricing, Canada, Mexico, currency, selling versus sell-through in terms of contribution to the growth rate?

What are you looking for us? I didn't understand the question. Will you repeat that for us?

Yes, basically asking for the contribution to the automotive decline rate by segment, in terms of fleet, pricing, Canada…

We got it now.

I got it now we apologize for not clearly grasping the question, but we mentioned earlier that currency accounted for 3% of the difference. The fleet side is between 2% and 3% impact on the revenue. Pricing is a point to a point and-a-half, so they would be the major contributors.

What the underlying international growth was, do you have an idea in terms of Canada, Mexico, ex currency?

No, I don’t have that in front of me.

They’re doing a little bit better in Canada and about the same in Mexico in local currency, but we don’t have the opportunity to report that local currency.

Your next question comes from Scott Ciccarelli - RBC Capital Markets. Ivan – RBC Capital Markets: Hey, good morning guys. This is actually Ivan sitting in for Scott. I just kind of wanted to touch on NAPA first off, if you don’t mind. Could you tell us beyond the comments you’ve already made what change changes would we expect to see from the management changes you made there. Just we saw that you had, as you mentioned putted a new President. Are there any other details we should be aware of, just from that perspective on NAPA?

Well, the impact of Paul Donohue’s naming to the President’s position, we think will be very positive. As I mentioned, Paul is a highly energetic, highly focused individual and he will bring those same qualities to the team on the NAPA side. You may know that in the interim, I have actually been working more closely with the NAPA side of the business and there are some other things that I’ve got responsibility for as well, so I’ve not been able to give 100% of my attention to the NAPA side. With Paul on the job now, he will be focused 100% and that we’ll see the benefit of that as the next two quarters unfold. Ivan – RBC Capital Markets: Just a next question, if you don’t mind just a quick follow up. With regards to motion, have you seen any kind of stabilization in that particular business segment? Could you give a bit more color kind of on your outlook for the rest of the year?

Sure, what we said in our comments is that after dropping on a monthly basis for four consecutive months, we saw the May and June results come in somewhat similar to the April results and that’s the first time we’ve seen that stability in quite some time. Admittedly, these are at a very steep declines, we’ve seen low-20s for industrial and mid-30s for electrical, but our hope is that that’s indicative that we’re at or near the bottom and that we won’t drop significantly in the months ahead and we’ll look forward to hopefully having a chance as we get deeper into the year to maybe reduce the level of decrease. We don’t see any significant change in the end markets in either case. Demand seems to be a bit more stable, but we don’t see yet any pickup in demand in industrial or in the electrical side. Ivan – RBC Capital Markets: Understood, stabilization just kind of in summary stabilization perhaps at lower levels and somewhat slower growth going forward.

That’s our sense right now and we’ll just have to see how the third quarter plays out.

Keep in mind; they were down 16% in the first quarter and down 22% in the second and there’s still so much uncertainty out there right now, you have to do just as Tom said. We think maybe 22, hopefully is the bottom.

Your next question is from Keith Hughes - SunTrust.

A question on the acquisitions you referred to earlier like about $100 million you spent on those, could you just give a little more detail on the revenue and what kind of businesses they were?

Keith, this is Jerry. Looking at the cash flow, where it shows $100 million, in that number, we have a company that we’ve owned for quite some time, above as repackage, and the other Napa member on the portion of that so we had minority interest. If you look, we had a much larger minority interest on your balance sheet in the past. We purchased their minority interest in June and that’s about $60 million of that number and the remainder would be for the acquisitions.

Okay. What kind of businesses were they?

We have one of them in the both automotive, are groups of stores and in the industrial side, in the industrial supply side of the business, so two industrial, two automotive.

Okay and the minority interest you purchased for $60 million, it's a repackage or is that what you said?

Yes, it's a company. We've owned that company and over the years all the other NAPA members owned it as well and we bought it from each one as we bought them, but they are still and NAPA member out there that we don’t know and they had a minority ownership and Balkamp. They decided, they wanted to sell it and we purchased it. That's an accretive deal for us.

Final question, automotive you’re talking about business perhaps turning backup in the second half of the year. Would margins, I assume raise from this level that we've seen in the last six months with a little bit of increased volume. Is there anything there that would detract from that?

I don't see it detracting. One of the things that, I should have mentioned when the question came up from John Murphy earlier about the improvement in the automotive margin. We had a pickup of about $9 million in the second quarter from this pension curtailment and we pushed that back to the individual operations and about half of that goes back to automotive. So, that's one reason for the significant improvement. Certainly as revenue comes back, they will be able to expand their margins, but as Tom mentioned earlier, as revenue comes back we may have to start back adding some headcount, with part timers and so forth to service the customers and so I can't tell you that it's going to jump up. It's certainly not going to jump up because that's not the nature of the company, but we should see some improvement.

Your next question comes from Ryan Brinkman - JP Morgan.

This is Ryan Brinkman for Himanshu. Could you please talk a little bit about what your sense is with regard to automotive segment market share trending? This seems to be an area of strong management focus coming out of the last quarter. Also with regard to the naming of the new automotive division leader, should we take this as a sign of intensifying focus on automotive market share and if so, are there any specific strategies that you're ready to share that are being pursued or any kind of directional guidance you can give us in terms of how the think about your competitive position in the automotive business going forward?

If we look back over several quarters, we would acknowledge that we have probably lost a little bit of share over the last three or four quarters. Prior to that, we were performing as well as or maybe better than some of our peer group companies, but the last couple of quarters we would say that we did lose a little bit of share. I think that the second quarter results would indicate to us that we're moving in the right direction, but we still have a further way to go. We need to continue to push some of the initiatives that we put in place in the second quarter and to launch some of the ones that I referenced will come in the third quarter. As far as naming Paul Donohue to the President's position, yes it is recognition of the significance and importance of the automotive business to Genuine Parts Company, it's 53% of our total company revenue. Paul as I said, he’s one of our very best executives and fortunately he's had a chance to work around the automotive business for the last two years and we've taken the best we have and put him in charge of the automotive parts group in expectation that we will continue to make the progress that we think we started to make in the second quarter. As far as specific strategies, I don't think we would want to get into the detail of those on this call.

Just secondly, if you could talk just very briefly about the potential impact if any that you see of a government scrapping incentive program for new light vehicles on the automotive business going forward. Generally, we've tended to think that any impact would be seemingly negligible, given that the decrease in age of the vehicle parts would be potentially in [Inaudible] context of 250 million cars parked out there on the road. Are we directionally correct thinking about that? Is that how you guys are approaching this?

Absolutely, any study that we've seen shows that it will be very, very small in terms of impact, because of the size of the fleet, as you referenced, 251 million vehicles. It's also interesting to see that while it has had some impact in the short term in Europe. It has not had the effect longer term that the European governments were hoping for. So, this will be very, very minor in terms of impact in our opinion.

Your next question comes from Brian Sponheimer - Gabelli & Company. Brian Sponheimer - Gabelli & Company : Can you give us a breakdown of what you experienced regionally in automotive, Northeast, Southeast, West, Southwest.

Sure, the strongest areas for us would be the Northeast, the Midwest, the mountain states; the Northwest and the ones that continue to have the most difficult time would be the Southeastern area and out into California, Arizona, Nevada and those areas there. We see a little bit of slowdown in the Southwest, we think mostly driven by the decline in energy prices, but the biggest impact would be in the Southeast and California. Brian Sponheimer - Gabelli & Company : Are you seeing any pricing pressure from competitors there that would exacerbate any weakness?

No, none beyond what we see in most places. Brian Sponheimer - Gabelli & Company : Okay. Moving along just what opportunity exists on picking up parts distribution to dealers either becoming used car dealers or service shops, basically stranded dealers from GM or Chrysler. Have you seen any stranded dealers looking to Napa to source parts?

The opportunity we think is real and many of these dealers have decided that they’re going to stay in the used car business and that they’re going to run a full-fledged multi-brand service facility and yes, we have seen a number of these dealers have an interest in aligning themselves with Napa and we also see some of the existing vehicle dealers that have expressed an interest in owning some Napa stores, so we think this is a net positive for us. Brian Sponheimer - Gabelli & Company : Okay and one last question, on the office and industrial side are you getting any sense that inventory adjustments are complete with your customers and like auto production, there maybe a sequential pickup, however small just simply on right-sizing inventory?

We do think that the inventories are pretty lean as we go out the supply chain and we do think that with an increase in demand, there should be a very, very near term pickup in outbound sales for us.

This is all the time that we have questions for. We appreciate all of you joining us today. We will look forward to talking to you in the future and we appreciate your ongoing and continued support of Genuine Parts Company.

And this does conclude today’s conference call. You may now disconnect.