Good morning. My name is Teresa, and I will be your conference operator today. At this time, I would like to welcome everyone to the Genuine Parts Third Quarter 2010 Earnings Release. 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. I would now like to turn the call over to Ms. Carol Yancey, Senior Vice President of Finance.

Thank you. Good morning. And thank you for joining us today for the Genuine Parts third quarter conference call to discuss our earnings results and the outlook for the remainder of the year. Before we begin, 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 and 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 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 with 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’ve concluded our remarks we will look forward to answering any questions that you may have. Earlier this morning we released our third quarter 2010 results and hopefully, you’ve had an opportunity to review them, but for those who may not have yet seen the numbers, a quick recap shows that sales for the quarter were $2,951 billion, which was up 13%. Net income was $131.8 million, which was up 22% and earnings per share were $0.83 this year, compared to $0.67 in the third quarter of 2009, and EPS increase was 24%. So from our perspective we had another solid performance in the quarter and that now puts us up 11% in revenue through the nine months plus 19% in net income and earnings per share are up 20%. We are proud of the job that has been done by the GPC team through the nine months and as a result, we feel that we are well positioned as we enter the final quarter of the year. In looking at the third quarter results by business segment, our two industrial related businesses continue to generate the biggest increases. Motion Industries, our Industrial distribution company was up 29% in the quarter and EIS, our Electrical distribution business was up 31%. In the case of Motion Industries, they were up 9% in the first quarter then plus 26% in Q2 and now up 29% in Q3, so the year’s got progressively stronger…

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 come back for a quick recap and guidance update, and then we’ll open the call up to your questions. (Inaudible) income statement shows the following, total sales were up 13% to $2.95 billion for the third quarter and as Tom mentioned, this follows a 12% increase for the second quarter. We’re encouraged to be able to continue our positive sales momentum this quarter particularly in our Industrial, Electrical and Automotive businesses. For the nine months ended in September our sales now stand at $8.4 billion up 11% from 2009. Gross profit in the third quarter decreased 45 basis points to 28.9% of sales, compared to 29.4% in the third quarter last year, although down, this decline reflects a sequential improvement in our year-over-year comparisons. For the year, gross margin $29.0 is now down approximately 56 basis points from $29.56 for the nine months through September last year. We’ve got work to do to improve our gross margins and our management teams are very aware of and focused on this challenge. Overall, we believe there is opportunity for growth -- for future gross margin expansion. But that said, we are up against a very strong gross margin achieved in the first -- fourth quarter of ‘09, so to clarify, we did not expect to realize gross margin expansion in this year’s fourth quarter relative to last year. We do however believe that we’ll show sequential gross margin improvement from the third quarter. For the year through September, our accounting pricing, which represents supplier increases to us was plus four-tenths of 1% in the Automotive,…

Thank you, Jerry. Well, that recaps our third quarter and nine month results and with the year-to-date sales up 11% and earnings up 20%, we feel that the GPC team has done a good job both on the operating side, as well as on the balance sheet side over the first three quarters of the year and we’re proud of their efforts. Now, as far as the final quarter of the year is concerned, we would expect fourth quarter revenues to be up in the 9% to 11% range and that would put us up 10% to 11% for the year, which is an increase from our prior guidance. At the same time, we need to raise our full year earnings guidance going from $2.70 to $2.80 that was given at the end of the second quarter to $2.90 to $2.95 and we think this is more appropriate now. At the $2.90 to $2.95 level this would put us up 16% to 18% for the year, which we think would represent a pretty good performance by the GPC team. At this point, we’d like to open up the call to your individual questions and we’ll turn it back over to Teresa.

(Operator Instructions) Our first question comes from Tony Cristello with BB&T Capital Markets. Tony Cristello – BB&T Capital Markets: Thank you. Good morning, gentlemen.

Good morning, Tony.

Good morning. Tony Cristello – BB&T Capital Markets: I wanted to start off and Tom maybe this is a little bit bigger picture question, but when you look at your businesses today, it’s clear the adjustments you’ve made in auto are working. The late cycle Industrial business that you have continues to be quite impressive from a growth standpoint and I guess, the lag remains sort of the office side of the business for obvious reasons. Are there any specific levers or initiatives that you can discuss in more detail that you may have underway that allow for an acceleration in growth in this segment, in spite of unemployment and some of the other macro factors we’re seeing today?

Tony, I would say that we do think as I mentioned in my comments that we’ll turn modestly positive over the final three months of the year and at this point, our expectation is for low to mid single-digit growth in Office Products next year. We don’t expect significant improvement from the employment picture at least until the latter part of next year anyway and it’s going to be driven the growth that we do get, is going to be driven by some of the initiatives that are underway. I’d prefer not to get into the detail of those for competitive reasons. But, we’re encouraged by the work that’s being done in a number of different areas by the Office Products team and actually feel like we put the worst behind us in that industry and while the recovery will be gradual, we are optimistic about a recovery in 2011. Tony Cristello – BB&T Capital Markets: Okay. And when you look then at your other businesses, do you -- would you say that the recovery and the progression you’ve seen to date now is pretty much in line with where you would have expected or would you maybe think you are a little bit ahead or perhaps a little behind in any of the segments?

I think in the case of the Industrial related businesses, we’re a little bit above where we would have thought, that -- both businesses, Industrial and Electrical have performed even above our expectations and we’re really proud of the job that those teams have done. With that said, we’re optimistic that they’ll continue to perform well for us over the remaining months of this year and on into next but our comps get a good bit more difficult as we get into the second quarter of next year, but we’re optimistic about continued strong performance from both of those right now. As far as Automotive, I think the team has done a really nice job of coming back from where we found ourselves about 18 months ago and our expectation is that they’re performing in line with where they thought they would be and will continue to perform about where we are right now, we think for the quarters ahead. Tony Cristello – BB&T Capital Markets: Okay. And maybe one last question and maybe for Jerry, when you look at -- you talked about the headcount and SG&A up only modestly even as we alluded to (inaudible) the Q&A on your prepared remarks about growth of the business. And at what point do you see you having to maybe add back a little bit more aggressively on the SG&A front or have some of the changes or costs that you’ve taken out, are they more permanent in nature?

Difficult question to answer, Tony, some of it is permanent in nature because the rationalization of facilities and so forth. I don’t see us aggressively adding back. We’re going to resist adding back and we’ll add back as we have to if we see that we have service levels and so forth. But I know our folks out running these businesses are very cognizant of that and expense great and we talk about that at each of our meetings. So I would not expect to see a big pick back up in our SG&A. I think that from a percent of sales basis, we will continue to show improvement, $75million last year that we took out, we thought that we might add maybe $20 to $25 of that back this year. But that we didn’t project the revenue growth being as strong in Industrial and Electrical as it is. So it may be a little north of that but at this point, I think we’ll continue to resist adding any of those expenses back and only put them back in when we have to. Tony Cristello – BB&T Capital Markets: Okay. Great. Thank you very much guys.

Thank you.

Our next question comes from Matthew Fassler with Goldman Sachs. Matthew Fassler – Goldman Sachs: Thanks a lot. Good morning and congratulations on your strong results.

Thanks. Matthew Fassler – Goldman Sachs: The first question I’d like to ask, just follow-up on the Industrial business and the volume rebate story, obviously, this was a deficit for you in 2009. Can you talk about the degree to which you’ve been able to reclaim some of these and to what degree that’s worked into your 2010 outlook, please?

Matt, it is built in, we’re assuring, we are projecting some increase because business is up but we’re continuing to decrease the inventory in the Industrial sector at the same time. I would say if you look at the improvement in the Industrial profits that probably a third of their improvements has come from the improved incentives, a third of them from just pure leverage and a third of them from those permanent cost reductions that we talked about. So we will have some lift in the incentives for the year, simply because of stronger revenue growth but I can’t quantify that for you at this time. I would say a third, a third, a third is probably a pretty good breakdown if you look at that profit improvement. Matthew Fassler – Goldman Sachs: And Jerry, I know that your inventory has been lean all year in all of your businesses and I guess it was flat year-to-year despite the sales increases, what did your inventory look like year-on-year in Industrial?

We could be down probably $40 to $50 million there in Industrial and in Office Products maybe flat to up a little bit, Automotive maybe flat to up or down a little bit. So in total, we’ll still have an inventory decrease for the year but the significant decrease will be in the Industrial sector. Matthew Fassler – Goldman Sachs: Got it. I guess the second question I have relates to Automotive, specifically you’re now starting to cycle some price cuts that commenced a year ago. Can you talk about how that’s flowed through your topline, how it’s flowed through your margin line and whether we’re now done essentially netting those into the numbers?

Well, as far as the known adjustments, Matt, I’d say we’re done but, you know, we found ourselves not being on the top of our game when we got into this a little over a year ago. So our folks are very, very vigilant right now, just watching what’s going on. I don’t know of anything currently that is in need of any adjustments. So I’d say that we’ve cycled the ones that we knew we had to do and what we’re seeing now is pretty much a comp performance year-over-year. Matthew Fassler – Goldman Sachs: Great. And then my final question relates to cash deployment. Your cash flow generation is stellar. Your cash balance is way above where we thought it would be, part of that is working capital, part of it also was the relatively small buyback in the third quarter. And you have been pretty astute buyers of your stock, pretty consistently. What is your thinking about buybacks versus other uses of capital, given the cash flow is strong and the tone of business seems strong?

Matt, we will still be acquiring our stock. We have a couple of acquisitions that we hope may come to fruition between now and the end of the year or the first part of 2011. Our position has always been that we try to buy on weakness and our stock has moved up here in the second -- in the third quarter. So we didn’t jump in and buy a lot of it. But if the stock stabilizes at a certain price and then it starts to back off. And our pattern has been that we’ll go back in and then buy off the weakness of that higher level. But we continued to view the stock as favorable and, frankly, if you look at the cash that we have and what we are earning on cash today with a dividend yield of about 3.5, 4%, then that’s a proper thing to do. But we’re being deliberate and trying to balance that against acquisitions. Matthew Fassler – Goldman Sachs: Got it. Thank you so very much.

Bye. Thanks.

Thank you, Matt.

Our next question comes from Scot Ciccarelli with RBC Capital Markets. Austin Paul – RBC Capital Markets: Good morning, guys. This is Austin on for Scot today.

Good morning.

Good morning. Austin Paul – RBC Capital Markets: In the Automotive business, you provided some figures on the retail versus the commercial side and also on fleet. I was wondering if there was any additional color you could provide on retail versus commercial trends and also trends on the fleet side?

Well, maybe we’ll take them in reverse order. In terms of the fleet, our fleet business really suffered last year as you may recall and we started to see a little bit of improvement in the first quarter. And then we saw sequentially further improvement in the second and on into the third quarter. We’re still only growing at mid single digits but certainly much better than what we experienced last year. We look at different indices but one of the things we track is truck tonnage and truck tonnage last year was down 8%. We saw it finish the year in the fourth quarter flat then it was up about 4.5% in the first quarter and then through mid year it was up about 9.1% in the second quarter. So we see that as a positive and what we hear anecdotally from our people is that that should continue at least to be in a modest growth pattern for us over the remainder of the year. Retail business in the second and third quarters was better than what it was in the first quarter. And we like some of the things we see with some of the initiatives that our merchandising team is doing right now. So we think that one will continue to perform at a reasonable level for us. The commercial business has actually gotten progressively stronger as the year has gone on and that’s especially true in our two primary commercial programs, NAPA AutoCare and major account. And we just couldn’t be any proud of the job that our people are doing on the commercial side of the business. We were up 9% in both the second and third quarter. And we think that’s pretty good growth on the base that we have in the commercial business. And we’re optimistic that we can stay in and around that number going forward. Austin Paul – RBC Capital Markets: Great. Thanks very much.

Thank you.

Thank you.

Our next question comes from John Murphy with Bank of America. Elizabeth Lane – Bank of America: Good morning, guys. This is Elizabeth Lane on for John.

Good morning. Elizabeth Lane – Bank of America: I just have a couple of quick questions for you. One is about margins, particularly for Auto and Industrial. And Auto margins have historically been as high as 8.5 to 11% even and in Industrial around nine. And I was wondering if you think we can get back to those levels any time in the next few years or if the competitive landscape seems to be such that it’s more unlikely to get back to that kind of range?

Elizabeth, it’s not in the cards for us to get Automotive margins back to 11 to 11.5%. Those were different times and it was different makeup of our Automotive sector. And also we had different competition at that time. I think we’ve shown improvement in the Automotive margins thus far this year. We’ll continue, I think to do that. Long range, our target for Automotive operating margins is to get them back to the 8 to 8.5% range. Elizabeth Lane – Bank of America: Okay. Great. And my other question is because you’ve often given some expectations on growth for each segment broken out. And I was wondering if you have an update for those expectations?

I can handle that, Elizabeth. Elizabeth Lane – Bank of America: Thank you.

For Automotive for the quarter, fourth quarter, we’re talking or thinking 6 to 8%. For the Industrial business, we’re thinking 18 to 22%. For the Office Products, flat to just up a bit, couple of points and then for the Electrical business, we’re thinking 25 to 30%. Elizabeth Lane – Bank of America: Great. Thanks very much.

Thank you.

Thank you.

Our next question comes from Gregory Melich with ISI Group. Gregory Melich – ISI Group: Hi. Thanks guys. Couple questions. Wonder if you could just get into the gross margin a bit on the rebate issue and the mix. I mean, that’s the continuing to run down. Obviously, there was the repricing actions last year in Auto. Basically, if it wasn’t for the Industrial mix, would gross margins have been up if you look at the category level and was that basically driven by rebates?

No, Greg, rebates play a factor into that but our gross margin is under pressure in all of our businesses, Office Products and the Automotive and it’s driven by a lot of things, customer mix and competitive situations. You know, at the second quarter call, someone asked the question about how strong we were in the fourth quarter operating margin last year and that was a one-time large LIFO adjustment within the Industrial sector. I think if you look forward, we made sequential improvement in our gross margin each quarter this year. We will not make that improvement in the fourth quarter. I think you can project out that we will be in 29.5 to 30% gross operating -- gross margin for the fourth quarter. Gregory Melich – ISI Group: Great.

But it is not all rebate-driven. It’s a lot of factors that play into that. Gregory Melich – ISI Group: Got you. And then the receivables were up 13%, was that basically Industrial or Auto? Where was -- what was driving that?

Actually, the receivables in total up, 12 on that 13% sales increase. But basically what happened is each one of them up a little bit in line with our revenue growth. You know, most of the time, receivables kind of play into whatever the last month’s sales growth was. And we had a strong sales month in September, so receivables are pretty much in line -- in each of the segments in line with the sales growth. Gregory Melich – ISI Group: Okay. And which brings me to the last question which is can you help us on the quarterly -- monthly progression within the quarter in terms of sales?

It was fairly consistent going through the quarter, Greg. Gregory Melich – ISI Group: And that would have been true across the business lines or was there anything in auto that would have moved around at all?

No. It was pretty consistent each month of the quarter. Gregory Melich – ISI Group: Okay. Great. Thanks.

All right. Thanks, Greg.

Thanks, Greg.

Our next question comes from Scott Stember with Sidoti & Company. Scott Stember – Sidoti & Company: Good morning.

Good morning. Scott Stember – Sidoti & Company: Could you talk about on the Automotive side, were there any regions in the country that showed particular weakness or strength?

No, not beyond the normal ranges that we see. You know, we have always got a couple that are a point or two above and a couple that are a point or two below the average. But no, it was a normal distribution for us. Scott Stember – Sidoti & Company: And specifically, could you talk about California?

Sure. California business is not bad. Scott Stember – Sidoti & Company: Okay. And could you talk about maybe on the Auto side, how things have progressed so far into October?

They are pretty much in line with what we saw through the third quarter on a monthly basis, so pretty consistent. Scott Stember – Sidoti & Company: But the growth rates obviously get a little tougher?

Well, the comparisons get tougher because we were up 6% in the fourth quarter last year and that was our best quarter of the year. That’s the quarter we started to make the turn. And as I said in my remarks, we went from -- we were up six in Q4, then six in Q1 and then seven in two and three of this year. The comparisons get a little tougher but as we also responded earlier in the Q&A, our expectation is to be up 6 to 8% in Automotive in the fourth quarter. Scott Stember – Sidoti & Company: All right. And Jerry, you gave some initial, I guess, stab at what the office supplies would look like on a sales basis for next year. Could you provide the same thing for the Industrial segment?

Yeah. I think Tom did that. But yeah, I think we got -- you’re talking about going into 2011? Scott Stember – Sidoti & Company: Yeah.

No. We don’t have any guidance to give out on 2011. We just now beginning our budgetary process and it will take some time to pull all that together. Frankly, we don’t see anything on the horizon right now that says it’s going to be any different other than the comparisons will be a little more difficult. Scott Stember – Sidoti & Company: Okay. And last question on the office supplies, could you comment on the level of benefit that you saw last year from H1N1? And what kind of a headwind it created in the third quarter and maybe for the fourth quarter as well?

I can’t give you the dollar amount but I can tell you that it clipped our, what we call our cleaning and breakroom supply category by 6 or 7% of growth that carried over last year into October and the early part of November. But the fourth quarter will be significantly less of a challenge than the second and third quarters were. Scott Stember – Sidoti & Company: Great. That’s all I have. Thank you.

All right. Thank you.

Our next question comes from Keith Hughes with SunTrust. Keith Hughes – SunTrust: My question’s been answered. Thank you.

Next, we have a question from Brian Sponheimer with Gabelli & Company. Brian Sponheimer – Gabelli & Company: Hi, good morning.

Good morning, Brian.

Hi. Brian Sponheimer – Gabelli & Company: Thank you again for the color regarding priority of cash deployment. I was curious as to what you’re seeing regarding behavior of targets from an acquisition standpoint, whether you’re seeing multiples potentially coming in or pricing becoming more attractive and that allowing you to become a little more aggressive in the coming quarters.

Brian, I’ll try to answer that. I think we see opportunities within the valuation ranges that we think are appropriate for the shareholders of Genuine Parts Company. But we don’t see significant moderation in expectations. We see enough that we have got a few discussions that are going on that hopefully will lead to something positive. On the other hand, we do see evidence of some private equity money coming back in. And we will have to wait a little bit to see what that does with valuations. But right now, we are optimistic about our ability to maybe get a couple of deals done over the next quarter or two. Keep in mind that the general range for our acquisitions would be 20, $25 million on up to $100 million. We’ll go above that but usually we’re in that lower range. Brian Sponheimer – Gabelli & Company: Right. Understood. So in the absence, let’s say private equity money starts to tick up some of the multiples and make acquisitions too pricy, you will go immediately to the dividend or the share repurchase at 14 times here?

That would be the normal thing, yeah. Brian Sponheimer – Gabelli & Company: Okay. And then just one last, you gave pricing year-to-date. How did pricing compare in the quarter, Q2 or Q3 versus Q2?

I can’t give it to you Q3 versus Q2 but I can give it to you for the year. Brian Sponheimer – Gabelli & Company: And that would be great.

What we have, Brian, we had four-tenth of a percent in Automotive with one-tenth percent of that coming in Q3. Okay. Then in the Industrial side, we had 2.1 for the ninth months and 1.2% of that coming in the third quarter. And then Office Products was flat and at three-tenth of 1% and then the Electrical Group had 3.6 for the nine months with 1.3% of that coming in the third quarter. Brian Sponheimer – Gabelli & Company: All right. That’s great. Thank you very much. Nice quarter.

Thank you very much.

Thank you.

Our final question comes from Bill Selesky with Argus Research. Bill Selesky – Argus Research: Well, thank you and congratulations on a strong quarter.

Thank you. Bill Selesky – Argus Research: I actually had two questions. The first being on vendor rebates during the quarter. I know vendor rebates normally affect you more in the Office Products and Industrial side of the business as opposed to Automotive. But can you just talk a bit about how things progressed during the quarter? And my second question was on pension obligations. I think you made a voluntary payment in Q3. Could you tell me what you have left in 2010, if any and what the situation would be in 2011?

I’ll take that in reverse order. The pension, we don’t -- do not need to and will not make another contribution in 2010. The size of the contribution that we’ll be required to make in 2011, if any, will be dependent upon an actuarial calculation. And it frankly will be dependent upon a return of assets, the pension plan earned in 2010 and be dependent upon the discount rates that nobody knows where that will be at year end. So that one is low too much up in the air to give you an answer. Bill Selesky – Argus Research: Okay.

So, we’ll make the required contributions whatever actuarially they come in and tell us that we need to make. And then your question about the incentives, just tell you how that works and what we do basically is we project out what we think the purchases of each of the business units are going to be for the full year. And then based upon the inventory turnover, how much of that would be required to be left into your -- in the value of the inventory. Then the difference there, we take that and we have to go through it and allocate out what we think will be an equal distribution for each of the four quarters. We do the best we can there. And our audit firm comes in and reviews that behind us. But at the end of the day, that’s still an estimate. And so our folks that negotiate these plans with our suppliers based on percentages of what their purchases are and that’s all determined by how good business is and how we manage our inventory levels. But I can’t really tell you each quarter how much that is or isn’t at this point. I hope that answered your question. Bill Selesky – Argus Research: Yeah. That’s fine. I appreciate that. That’s very helpful. Thanks very much.

All right. Thank you.

Thank you.

We appreciate all of you joining us on the call today. We appreciate your continued interest in and support of Genuine Parts Company. We look forward to talking to you when we have our year end and fourth quarter results. Have a good day.

This concludes today’s conference call. You may now disconnect.