(Operator Instructions) Good morning, my name is Elizabeth and I will be your conference operator today. At this time I would like to welcome everyone to the third quarter earnings release conference call. (Operator Instructions) I will now turn the conference call over to Mr. Tom McFall, Chief Financial Officer. Sir, you may now begin your conference.

Thank you, Elizabeth. Good morning everyone and welcome to the O’Reilly conference call. Before I introduce Greg Henslee, our CEO, I’d like to read a brief statement. The company claims the protection of the Safe Harbor for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by looking forward-looking words such as expect, believe, anticipate, should, plan, intend, estimate, project, will, or similar words. In addition, statements contained within this press release that are not historical facts are forward-looking statements such as statements discussing among other things expected growth, store development and expansion strategy, business strategies, future revenues, and future performance. These forward-looking statements are based on estimates, projections, beliefs, and assumptions that are not guarantees of future events and results. Such statements are subject to risks, uncertainties, and assumptions including, but not limited to competition, product demand, the market throttle parts, the economy in general, inflation, consumer debt levels, governmental approvals, our ability to hire and retain qualified employees, risks associated with the integration of acquired businesses, war, the threat of war, and weather. Actual results may materially differ from anticipated results described and applied in these forward-looking statements. Please refer to the risk factors sections of the company’s form 10-K for the year ended December 31, 2007 for more details. At this time, I’d like to introduce Greg Henslee.

Thanks Tom, good morning everyone and welcome to our third quarter 2008 conference call. Participating on the call with me this morning of course is Tom McFall, our Chief Financial Officer, and Ted Wise our Chief Operating Officer. David O’Reilly, our Executive Chairman, is also present. First off, I’d like to thank our management team, as well as every member of Team O’Reilly for all their hard work and focus on our continued success during the quarter. We’ve obviously taken on a substantial challenge with the acquisition of CSK Auto. I’m extremely proud of the progress we’ve made so far, and I know every member of Team O’Reilly is excited about the long-term prospects that the fully integrated chain and the execution of our dual market strategy in the CSK markets. We’re progressing nicely with the integration planning and execution and I’m very confident we’ll start seeing positive results as we improve the inventory positions, pricing strategies, and distribution model in these markets. I’d also like to thank our storm teams that so clearly exhibited the O’Reilly culture as we cleaned up and were first to open in most markets following the severe damage left by Hurricanes Gustav and Ike last month. Several of our team members volunteered for the extremely challenging jobs of getting our stores reopened following the floods and wind damage from these storms. I’m extremely proud to say that we were the first auto parts store to reopen in most of the affected markets and our customers were obviously impressed with the efforts we made to make emergency supplies like generators, gas cans, and batteries available for them to purchase. Many of our stores operated without power and in damaged structures, in many cases, all in the spirit of making sure we did all we could…

Thanks Greg and good morning everyone. As announced, we finished the third quarter with 3,277 stores and opened 37 new stores. That included 36 O’Reilly Stores and one Schuck Auto Parts Store. After deducting two store consolidations, which included one O’Reilly Store and one Schuck Store, we had a net 35 new O’Reilly Stores. This brings our new store growth at the end of the third quarter at the 131 stores. We have an 19 additional store openings planned for the fourth quarter, which will put us at our new store growth rate, 150 new stores. We also relocated nine O’Reilly Stores to new prototype buildings this quarter, which brings us to 23 relocations for the year. There was also five store renovations completed, for a total of 65 store renovations for the year. Once again, our new stores were divided out in the market areas reaching into 14 different states. The southeast received the most stores with 7 new stores in Georgia and 4 new stores in North Carolina. For the year, Texas continues to lead the new store count with 23 stores year-to-date, followed by Georgia at 16 stores and Ohio with 14 stores. As I pointed out before, with our capacity and number of distribution centers, we can more evenly spread out our new store expansions throughout our market areas, which is a positive for the real estate department and store operations team in selecting and opening up new stores. Our new Lubbock, Texas Distribution Center will begin operations next week, giving us the ability to continue to expand into west Texas and New Mexico and most importantly, handling the upcoming Checker Store conversions. The Lubbock DC will also relieve both our Houston and Dallas Distribution Centers of some hard to service stores in west Texas and…

Thanks, Ted. Now we'll review the financial results for the quarter. Sales were up 68% to 1.1 billion for the quarter. The increase was driven by a 7.7% increase in core O'Reilly stores and sales of $399 million at the acquired CSK stores. For the quarter, comparable store sales for stores open greater than 12 months increased 1.5% in the core O'Reilly stores, and decreased 4.3% at the acquired CSK stores. On a consolidated basis, comparable store sales for the quarter decreased 0.8%. For the quarter, core O'Reilly stores sales to independent jobbers, team members and equipment sales, which are not included in our comparable sales calculations, were $18.9 million, which was an increase of $0.6 million above the same period last year. Year-to-date, these non-comp, non-store sales were $54 million, which was a decrease of $1 million from the prior year. Year-to-date sales increased 28% to 2.5 billion. This increase was driven by a 7.6% increase in the core O'Reilly stores and sales of $399 million at the CSK stores. Year-to-date comparable store sales for stores open greater than 12 months increased 1.5% for core O'Reilly stores, and decreased 4.3% at the acquired CSK stores since July 12, 2008. On a consolidated basis, comparable store sales year-to-date increases 0.5%. Gross profit was 45.6% of sales for the quarter, versus 44.4% in the prior year. For the year gross profit was 45.2% of sales versus 44.3% in the prior year. the improvement was driven by the incremental improvement of the O'Reilly stores, realization of a small (inaudible 00:35:48) buying synergies, an influx of the higher margin CSK sales, which are driven by a higher mix of DIY sales and market-specific conditions. (Inaudible 00:36:00) was 37.3% of sales, versus 31.9% in the prior year. For the year, SG&A was 34.8% of…

(Operator Instructions) Matthew Fassler, Goldman Sachs. Robert Higginbotham – Goldman Sachs: Thanks, it's actually Robert Higginbotham in for Matt. First question, it seems as though the adjustments to inventory and pricing strategy in the CSK stores could have a pretty significant, very quick kind of impact. Is that in any way reflected in your guidance for that part of the business?

The period of time that the inventory and pricing would have the most affect, we really haven't given guidance for. We will see incremental improvements as we start to roll out inventory, more inventory in the fourth quarter. But it's going to take time to convert those whole inventories. So probably the bigger impact of the inventory rollouts would be next year and not so much reflected in fourth quarter. And our fourth-quarter guidance is just based on current trends, maybe easier comparisons to some degree and just kind of what we expect to happen as a result of some of the improvements we're making. But again, most of the improvements won't be made until next year. Robert Higginbotham – Goldman Sachs: Got you. And how should we think about any potential disruption from the conversions as you change the stores over and maybe you could talk about what you've seen through the very beginning of that process?

Well, the stores that we're converting here in the Central US and the stores that we'll convert in west Texas, I would compare to having maybe a tooth pulled at the dentist's office. It hurts a lot for a real short period of time. And we're going to do those quick. In one week, we will basically go in and lift the inventory, reset the store to our layout and put in a new inventory. So for those stores, I would say the pain level is pretty high, but it's very quick.The other stores and the bigger piece of the business, which would be the Western stores and the stores that are supplied out of – or some of the stores that are supplied out of the Detroit distribution center, we'll do those one product line at a time. And we really kind of govern how much the stores and distribution centers can do at any given time, so we make it non-disruptive. Because it's so important that because it's spread out over some period of time, that our customer service levels continue to improve because we feel we have a big opportunity in those markets to give higher levels of service, so we govern that. And that's one of the reasons that we won't complete those by-product-line changeovers until mid 2010. Robert Higginbotham – Goldman Sachs: Great. Thank you very much.

Tony Cristello, BB&T Capital Markets. Anthony Cristello – BB&T Capital Markets: Good morning, guys. How are you? A couple questions and I apologize, I got on the call a little bit late. But can you discuss maybe a little bit the labor component of the integration in terms of staffing, in terms of key personnel at CSK that you're targeting, you're keeping and how many are staying? And then as you evaluate the stores going out west and how those stores are staffed and in terms of what you may need in terms of labor?

Tony, this is Ted. Well, operationally out in the field, we have kept basically everyone. We've moved a person from the O'Reilly side out to help in the integration as a vice president of CSK integration, and then there too, VPs had been around a long time are really experienced long-term CSK management, and they have rolled out to divisional VP roles. And so their regional managers are the same. We've added a couple of regional managers to get better coverage. From a sales standpoint, they had an outstanding couple of people out in the field to be regional sales directors. So we feel in real good shape from just the leadership in the field. Same way in the distribution center. They had an outstanding individual that will continue to be our vice president of West Coast distribution. So overall, I'd say – it's looking real good. We're spending a lot of time out there with them and obviously passing on the culture. And helping them in the evaluations of market opportunities is somewhat new to them because they're looking at things with a little different perspective, but it's going well. Anthony Cristello – BB&T Capital Markets: And when you look, and I guess maybe this is more a question for Tom, at the CSK and the guidance in terms of the comp, you're negative 4%, 3%, and you're sort of going back to your original sort of range, are you looking at benefits that you're starting to receive on the CSK side of things and that's perhaps why you see improvement sequentially from Q3 into Q4? And you are not saying hey, things may still be at that minus 4 level but we're going to take it back down to the 1% to 3%?

Well the two items that I guess I would comment on here is we've seen their comp trend improve. And then, another odd item with the date of the acquisition, if we included the same period of time that our comps include from July 1st through September 30th, their comps would have been I would say quite a bit better. That first 11 days excluding it because we didn't own them negatively impacted their comps for the quarter. So when we look at a full quarter and given the current run rate, we're comfortable with the guidance that we have given. Anthony Cristello – BB&T Capital Markets: Okay, okay. And at what point, when you look out into next year and obviously – how should we think about the contribution from – outlook you sort of quantified some of the contribution from vendors and the benefit there, but how does that roll out as you do conversions? Is that a situation where, as you get that store up and running and converted over, that's when you start to see that benefit of that new inventory is replenished? How should we think about that from a standpoint of getting that full benefit of the $75 million or so that you indicated?

Well, the full benefit of the $75 million requires us to align all the product offerings across the chain unless in specific instances we decide to carry different products based on markets. But that's really determined on this line-by-line changeover across the chain, so we'll see that over the next year to year and a half as we review every category and match up the product offerings. Anthony Cristello – BB&T Capital Markets: Okay. Perfect. Thanks, guys. I appreciate it.

Peter Benedict, Wachovia. Peter Benedict – Wachovia Securities: Benedict. Could you talk about the competitive response you are seeing if any to the initial price adjustments that you're making out in those Western stores?

We've really – the situation is that due to maybe lack of attention and a little bit of strategy I guess relative to CSK's promotional initiatives, in many cases, CSK just wasn't competitive on the hard parts sort of the business side of the business, which to us is obviously the most important. And also, on some of the commodity items that are items that consumers can easily compare prices. There's not been a market response because our position is that we want to be competitive. We're not going out and trying to lower prices in the marketplace. We're just trying to be competitive with the competitors that exist in the market, so we have not seen a material response at this point. Peter Benedict – Wachovia Securities: Got you. Makes sense. Thanks. And then just on the gross margin, if we try to look just at the O'Reilly stores or the legacy O'Reilly stores, first half of year, gross margins were up anywhere from 35 to 70 basis points. With the new buying of synergies, can we assume in the third quarter that the gross margins were up at least that 70 level or was it even better than that?

Well, there's no question that the O'Reilly gross margin has improved and will continue to improve. We're going to stop short of trying to quantify the O'Reilly gross margin and the CSK gross margin stand alone because they cross over so much now due to the buying synergy and some of the things that have happened as part of the acquisition. And then from an SG&A perspective, obviously, we don't have – it's hard to divide the company into two pieces.So your assumption would be close. We're improving our acquisition costs incrementally as we start to roll out our product lines and that improvement is reflected in the O'Reilly gross margin performance as well as the CSK. Peter Benedict – Wachovia Securities: Thanks, and just one more. It sounded like there's a bit of a CSK hub store concept taking form, I guess the stores that are getting the $200,000 of additional inventory. Approximately how many stores can each of those hub stores service?

Well, it varies a lot by market. Some of the bigger markets, Phoenix and southern California, each one can service several stores and in many cases it's just the density of a store because in southern California you can't draw the circle very big because of traffic and so forth. But typically a hub store would service anywhere from 10 to 20 stores, something like that, in some cases more.

Yes, we in some of the smaller markets where we may have eight or nine stores, it could service as small as six, seven, eight stores, although that inventory would be adjusted down for that number of stores from a coverage standpoint.So now all of the inventory rollouts we're doing right now at CSK are not necessarily hub stores. Some of them are just big, good markets with a lot of installer base. So that evaluation is ongoing right now as we spend more time in the markets. Peter Benedict – Wachovia Securities: Okay, thanks very much.

Jon Braatz, Kansas City Capital. Jon Braatz – Kansas City Capital Associates: I don't know if you can touch on this or not, but as you look into 2009, what type of opportunities in terms of free cash flow is there, and your ability to maybe pay back a little bit of debt? Any thoughts on that whole cash flow process?

Jon Braatz – Kansas City Capital Associates: Okay. And are the DCs going to be purchased or leased? Or is that up for grabs still?

It depends on the specific economics of the sites. Because of the costs involved in opening a DC, the material handling equipment and the leasehold improvements, they are a long-term commitment for us and would tend to make us want to own those facilities because we would plan to be there for a long period of time. But given the right economics, we wouldn't be averse to leasing them. Jon Braatz – Kansas City Capital Associates: Okay. Than last, secondly, I think you – I think Greg mentioned that you identified 119 stores, CSK stores with a good installer market with space available. Is that suggesting that there will be CSK stores that probably will not have sort of an installer base opportunity or potential? Or is that just the initial opportunity you see?

Jon, this is Ted. That's just the initial opportunity. There's – I'd guesstimate right now that probably 90% plus of CSK stores will have an installer opportunity. In our world, O'Reilly world, it's even higher than that. But as you spend time out in California, there's some real dense retail areas where we have stores that overlap pretty close that may not make sense to have installer business run out of every store. But again, it will be in the high 90% or mid 90%, I bet. Jon Braatz – Kansas City Capital Associates: How long does it take to train the personnel that maybe weren't there and bring somebody in or train that person to be able to effectively work that market?

Well, it's just depending on where they are at in the learning curve, how long they been in the business. Realizing we don't have enough staff to grow the installer business, we'll obviously go out and recruit and hopefully bring on some experienced parts specialist in the marketplaces that have relationships, existing relationships with the installer base to start with. That's the best approach, along with training and promoting within. We'll go both ways. Jon Braatz – Kansas City Capital: Thank you very much.

(Operator Instructions). Adam Sindler, Deutsche Bank. Adam Sindler – Deutsche Bank : Quick question. Maybe if you could comment a little bit on the situation with new car dealers, we've seen accelerated closings given the macro environment. And wondering if you stand to gain some share from those closings or if they really transfer over to other branded dealerships?

Well, I think that some of our professional and commercial customers would gain some share on some of the maintenance items that might have been done at dealerships out of convenience. Many times the work that someone has done on their car, especially the ongoing periodic maintenance, is done in some place that is convenient to their home or their work. And where there were dealerships that run oil change specials and periodic maintenance specials, they might have been desired locations for that maintenance and that work would then go to our commercial customers in many cases. So we would see some benefit from that.But I would say that wouldn't be significant. Much of the work that the dealers do is warranty work, so the customer is going to chase down a dealer that's going to take care of their car under warranty with the majority of the repair work going to the aftermarket already. Adam Sindler – Deutsche Bank : Exactly, okay, great. That was the question, you guys. Thank you.

Vincent Sinisi, Merrill Lynch. At this time there is no response from the line of Mr. Sinisi. Your next question comes from the line of Sharon Zackfia with William Blair. Sharon Zackfia – William Blair & Company : I want to talk a little bit about when we get all of the synergies from CSK realized, 2010, 2011, as you look at the combined company, what ultimately do you think the margin potential is? Is this a combined company where operating margins could exceed what you had with the core O'Reilly business, given all of the synergies by the time we get to 2011, 2012?

Well, it's hard to project that for sure without gaining some experience with where we can get these stores to from a pure revenue perspective because the key to this as everyone knows is our ability to grow revenue in these stores to the point that we can leverage the fixed costs that they have, which are higher than some of the fixed costs that we experienced in core O'Reilly markets.We strongly believe we can do that with the stores on average generating over $1.3 million a year now and combined commercial and retail business without really doing what we would consider to be a great job in those markets and not really being in the commercial business to the extent that we would consider it.So I guess our hope would be that we can get these stores up in the $1.8 million to $2 million average and that by doing that, that gets our combined operating margin back to what we are as O'Reilly stand alone. And our aspiration obviously is to exceed that over time as we buy better and leverage technology to operate more efficiently and just continue to penetrate markets and further leverage our fixed costs at core O'Reilly and CSK. Sharon Zackfia – William Blair & Company : Secondarily, given some of the expenditures you're going to be incurring at CSK to remodel stores and build distribution centers, could you review for us your debt facilities and whether or not you need to go to any kind of additional lending facilities to maintain the pace of conversions and infrastructure that you've outlined to us?

Sharon, this is Tom. As relates to that, our current facility we have plenty of liquidity to execute the plan. And probably excess, not probably – we have excess capacity which we're quite happy we went out and got given the current credit markets.Back on your question on the operating margin, we would expect to get to an operating margin that is enhanced from where we've been in the past. That will take time. The two items that are a current headwind to that are CSK's occupancy costs is more. They own less of their property, which creates a structural difference in the finance. And what we need to do is those operating costs and those leases on occupancy is higher because of the number of people in those markets and also the retail prices that are charged. So that is why we're comfortable that we're going to get them to a volume that is substantially higher than what they are now with our dual market strategy and more in line with where they've been historically and more in line with the average sales volume for an O'Reilly store in a similar demographic.

Vincent Sinisi, Merrill Lynch. Cid Wilson, Kevin Dann Partners. Cid Wilson – Kevin Dann & Partners : Forgive me if you had talked about this because I jumped on the call a little late, but can you give us any guidance on average ticket versus actual store traffic in your core O'Reilly versus your core CSK stores?

At core O'Reilly, traffic was down slightly and ticket average was up. At CSK, we really don't have – I don't have the data. Do you have that, Tom?

We're digging up the comparative data from the previous year (multiple speakers).

Yes. We still have a lot of systems integration stuff that we've not completed and combining the companies to report financially is obviously a challenge to do in less than one quarter. So anyway, core O'Reilly it was – traffic was down a little bit and ticket average was up. Cid Wilson – Kevin Dann & Partners : Okay. And also, given the economic environment, did you notice any change in terms of the percentage of your sales that were credit card transactions versus cash transactions?

We continue to experience higher credit card transactions over the last two or three years.

We've been on a trend for some time now, Cid, with kind of a conversion of cash business from check and cash to credit card. And that rate has continued to ramp up at a steady pace over the last couple of years. I don't think we noticed anything in the third quarter that caused the rate to increase greater than what it has been. Cid Wilson – Kevin Dann & Partners : In other words you didn't experience anything that would indicate that the customers are being more credit likely given the economic scenario?

Nothing that we hadn't already seen as a trend prior to the third quarter. Cid Wilson – Kevin Dann & Partners : Okay. Thank you very much.

David Cumberland, Robert Baird. David Cumberland – Robert W. Baird & Company: Thank you. The acquisition-related charges in 2008, $0.11, that's higher than you originally guided. Why is that increasing?

Why did it increase? I'm sorry. David Cumberland – Robert W. Baird & Company: Yes.

The primary item that we hadn't included in our second-quarter call were the tax consequences as it relates to the transaction. David Cumberland – Robert W. Baird & Company: Great. And then on the $0.15 of dilution expected in 2008, is that roughly evenly split between Q3 and Q4?

Yes, it would be a little bit more in Q3 than in Q4. As we get our synergies online, that's a savings that helps offset that. David Cumberland – Robert W. Baird & Company: Thank you.

Mark Johnson, Principal Global. [Mark Johnson – Principal Global]: You talked about your business maybe picking up a little bit in the back part of September. Could you talk about what you have been seeing in October?

Business has been better in October than it was in the – than what we wrapped up the whole third quarter. We were trending up and our experience with one-third of the quarter behind us is what gave us comfort in getting guidance for core O'Reilly stores of 2% to 4% and the CSK stores of negative 1% to 3% and then 0% to 2% for the combined Company.Last year, if you look back at our history, at the end of the third quarter, we were expecting to have a pretty solid fourth quarter because of the trend we were on, and we are surprised by the downturn at the holiday season. So that's a little bit of an unknown for us this year given the current economic environment, although we have easy comparisons during the holiday season. So the current trend and those things are what gives us confidence in giving the 2% to 4% comparable store sales guidance for O'Reilly and the negative 1% to 3% for CSK. [Mark Johnson – Principal Global]: Okay, thanks. And then just one follow-up. I thought I heard you right in your prepared comments that you said you were going to have 185 CSK stores done by April. Is that correct?

By the end of April, yes. [Mark Johnson – Principal Global]: And did I also hear you say that you were going to start to provide some results on that group of stores at that time?

That's right. As we complete these conversions and have that material number of them completed and some time under our belt so that we can report the progress of those stores, we will start reporting the sales progress of those stores independently, so analysts and investors can evaluate the effect on sales penetration that we've had with the changes that we've made. [Mark Johnson – Principal Global]: Okay thank you very much. I appreciate it.

William Keller, FTN Midwest. William Keller – FTN Midwest Research: Just I think a quick one. Do you have any sort of preliminary CapEx guidance for next year given the number of new DCs you're looking at? And for the record, if this helps operator, we could hear the other gentlemen who was trying to ask a question earlier. Thanks.

We're not prepared to give CapEx guidance for next year yet. A lot of it will be driven on the discussions Ted talked about in our progress of adding distribution locations, as each one has a big CapEx tag on it.

And just to add to that a little bit, Tom. As Tom mentioned earlier, ideally since these are long-term commitments, we would like to own these facilities if it makes sense to do so. Although if we came across the right lease opportunity, we would do that and that's going to significantly affect our capital usage next year. So rather than give preliminary estimates on that, we are right in the middle of that right now and hope to have more clarity on that in the next month or so and we'll be giving CapEx guidance for next year on our next conference call. William Keller – FTN Midwest Research: Understood. Thank you.

Vincent Sinisi, Merrill Lynch. [Vincent Sinisi – Merrill Lynch]: Congratulations on a great quarter, guys. This is Vincent Sinisi in for Alan Rifkin of course at Merrill. Just a question in regard to the distribution center plans being completed by the end of 2010. How does that compare – when you started out with the integration, how does that timeframe compare to your original expectations? And then from there, if there are any implications, whether it's faster or slower, any implications on the $100 million in synergies?

Well it's about what we had planned. We've – we go back and forth with a partner that we have that helps us with the material handling equipment in the distribution centers. And we spent a lot of time with them over the last few weeks identifying how we can simultaneously build out these distribution centers along with our Greensboro, North Carolina distribution center and arrived at the end of 2010, providing we're able to procure real estate on our plan, which right now we're on plan to do that. We're real close to having something wrapped up in southern California. So it's equal to the plan that we originally set out to wrap up the distribution infrastructure by the end of 2010. [Vincent Sinisi – Merrill Lynch]: And just one quick follow-up. For the southern California as well as the Seattle locations that you had mentioned, do you think that is going to be completed by the end of this coming quarter? Do have any timeframe for that?

Southern California, the real estate deal will be completed. We'll have a lot of work to do – [Vincent Sinisi – Merrill Lynch]: Right, right, right, picking the locations, I meant, yes.

Seattle may or may not be. We don't have as much clarity on the Seattle distribution center right now as we do southern California, but there's a good possibility we would have it wrapped up by the end of the fourth quarter. [Vincent Sinisi – Merrill Lynch]: Okay, great. Thank you very much.

At this time, we have reached the allotted time for questions. I will now turn the conference call back over to Mr. Henslee.

Well, I would just like to thank everyone for their time this morning. As I mentioned earlier, our team is extremely excited about the prospects of the combined company, CSK and O'Reilly, and we are working hard to instill the O'Reilly culture in the CSK operations and get to a point that we can execute our dual market strategies out of those stores and are looking forward to reporting our fourth-quarter results at the end of the year. Thank you very much.

Thank you. This concludes today's O'Reilly third-quarter 2008 earnings release conference call. You may now disconnect.