Good morning and welcome to the AutoZone conference call. (Operator Instructions) This conference call will discuss AutoZone's fourth quarter financial results. Mr. William 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. 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, project, 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 and feasible 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.

Mr. Rhodes, you may now begin.

Good morning and thank you for joining us today for AutoZone’s fiscal 2009 fourth quarter conference call. With me today are Bill Giles, Executive Vice President, Chief Financial Officer, Store Development and IT, and Brian Campbell, Vice President, Treasurer, Investor Relations, and Tax. Regarding the fourth, I hope you’ve had an opportunity to read our press release and learn about the quarter’s results. If not, the press release along with slides complimenting our comments today, is available on our website www.autozoneinc.com. Please click on Quarterly Earnings Conference Calls to see them. We are very pleased to announce for the quarter a same store sales increase of 5.4% and an EPS increase of 14.2% in comparison to last year’s fourth quarter. Adjusting for the extra week in last year’s results, our earnings per share increased 22%. This past quarter we continued our relentless focus on executing the basics extremely well as we believe this translates to a superior customer experience. I’d like to sincerely thank and congratulate our 57,000 plus AutoZoners across North America for their tremendous dedication and commitment to excellence that led to us achieving our 12th consecutive quarter of double-digit EPS growth. Additionally I would like to recognize them for delivering a very strong fiscal year, highlighted by a same store sales increase of 4.4%, and an EPS growth adjusted for the extra week of 19.7%, all while providing superior trustworthy advice, and great customer service. And as evidenced, that we are focused on managing capital prudently, we increased our return on invested capital to 24.4% on a trailing four quarter basis. As we begin fiscal 2010, we feel we’re well positioned to take advantage of continuing growth opportunities that exist in each of our businesses; US retail, commercial, Mexico, and ALLDATA. We worked very hard this past…

Thanks William, before I begin let me remind you that last year the fourth quarter consisted of 17 weeks as fiscal year 2008 was a 53 week year. As I discuss our financial results for the quarter, I will compare the 16 week period this year to the comparable 16 week period last year. Regarding the fourth quarter for the 16 weeks ended August 29, we reported sales of $2.232 billion, an increase on a comparable 16 week basis of 7.1% from last year’s fourth quarter. Same store sales were sales for stores open more than one year were up 5.4% for the quarter. We experienced similar sales growth from both our retail and commercial customers. Additionally our sales trends throughout the quarter remained generally consistent. Over the quarter there were no material regional sales differences other then the weather impacts previously mentioned. Net income for the quarter was $236 million, an increase of 3.6% on a comparable basis versus last year’s fourth quarter and diluted earnings per share increased 22% to $4.43 from $3.63 on a comparable basis in the year ago quarter. Our continued disciplined capital management approach resulted in return on invested capital for the trailing four quarters of 24.4%. We’re 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. And we want to assure all investors 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 will generate an appropriate return. Gross…

Thank you Bill, before we conclude I want to take the opportunity to reflect on fiscal 2009. In my opinion our organization performed extremely well for the year, both operationally and financially. I’m very proud of what our organization accomplished along with the support of our vendors and I would like to recap a few of those key accomplishments in recognition of the terrific job our AutoZoners continue to do. We completed the year with our highest same store sales since 2002 at 4.4%. We continued to enhance our team, processes and commitment to the commercial business building good growth momentum. We grew market share in each of our four businesses. We opened a total of 180 new stores with 40 of those locations in Mexico. On a comparable basis we grew EBIT at 7.2% and grew EPS at 19.7%. Our return on invested capital ended the year at 24.4%, close to an all time high. Our core execution levels across the organization have continued to improve significantly. We completed the previously announced change to our capital structure and ended the year at 2.5x adjusted debt to EBITDAR, and successfully completed in these very challenging credit markets a $500 million bond offering and renewed our revolving credit facility. And just as importantly, our organization is very healthy. I would characterize the organization as motivated, team oriented, talented, and highly committed to excellence. Our approach has been very consistent, disciplined and methodical, with a focus on continuous improvement. Fiscal 2010 will have the same approach. We have very clear goals heading into 2010. Our operating plan theme reinforces this approach by leveraging one of our cultural cornerstones, going the extra mile. Our commitment to our customers, each other, and each of you, is that we will continue to go the extra…

(Operator Instructions) Your first question comes from the line of John Lawrence - Morgan, Keegan

On the sales side, first of all would you talk a little bit about that discretionary customer less then 20%, I know its hard with the expanded hard parts coverage over the last few quarters, but what is the normal rate or how high did that discretionary mix get at I guess when that customer was spending freely.

It wasn’t terribly higher then it was. We’ve experienced pressure in that business pretty much over the last year and its down, but its not changing that mix significantly.

So just the opportunity there when that product mix comes back.

Yes, there’ll be continued opportunities there and we look forward to taking advantage of that but I’m very encouraged by what’s going on with the maintenance items in our business. Obviously there appears to be a mindset change in our customers’ behavior on how long they’re going to keep their vehicle and that they need to continue to maintain it. And our hope is that that will continue even as the economy improves.

And secondly, if you look at SG&A, I know you, thanks for that breakdown of sort of where you spent that money, can you give us any step of clarification there or just help, that $50 million increase there of SG&A when you ex out the extra week, what buckets would you put those on as far as people versus the hubs and then investment. Can you give us any kind of sense of the magnitude of that investment.

Its difficult to break it out specifically, I think we had given some guidance before on some of the hubs but a lot of this is people related. We think we’re improving our customer service levels. We’re certainly supporting our sales growth overall by increasing our payroll levels. Some of the hub investments do require a headcount a little bit from increasing deliveries to the satellite stores so if I had to put it to a number, I would say more then half of that is more people related then asset related.

Your next question comes from the line of Dan Wewer - Raymond James

You had noted that the change in merchandise mix precluded AutoZone from improving gross margin rate, do you think this change in mix is prevalent throughout the industry or is it company specific to AutoZone.

I think we have seen, obviously we see market share information through NPD, and what we see from that is there has been some overall shift in the industry to those maintenance related categories but believe we’re seeing maybe increased penetration versus the overall market, but the overall market is increasing.

And you noted that gross margin rate could improve in 2010 in part due to lower commodity costs, but is there a risk that that lower inflation rate might adversely impact same store sales growth.

That’s a good question, I don’t see that. We haven’t experienced that before. We’ve had similar circumstances near as past, so I think overall though I think we see some opportunities in lower commodity costs increasing our import activity and so we believe there’s the ample opportunity to lower acquisition costs from merchandise perspective, but we don’t necessarily see that as a top line risk.

You sound relatively optimistic on same store sales in 2010 despite the more difficult year over year comparisons, I’m not expecting you to provide any guidance on comp sales growth, but is there some kind of range that you’re thinking about for the new year.

Obviously internally we’re thinking about ranges, but as you know we don’t share guidance going forward. What I do know is that we’re able to act and react very quickly at AutoZone to whatever the business dynamics are. We don’t have to have a three or six month timeframe to be able to react. So we’re certainly optimistic that there’s been a change in consumer behavior. We’re also optimistic that we’ve introduced ourselves to new customers who are doing new jobs and we think we’ve done a good job of that and we’re optimistic about the future. What does that look like? We’ll see as we, as the year unfolds.

Your next question comes from the line of Tony Cristello - BB&T Capital Markets Tony Cristello - BB&T Capital Markets : One of the questions I had, you talked about the sort of accelerated investment spend for this quarter, how should we look at from an investment spend for your current quarter or then going out. Have you pretty much caught up to where you wanted to be from a spend initiative standpoint.

I think that when we mentioned some of the acceleration, some of the maintenance programs, I think we feel as though we’ve caught up. We think our stores are looking good. That’s certainly something we’re very focused on. There’s still opportunity for us to continue to expand some of the enhancements that we’re making to the hub stores and as we mentioned in the call, we’re seeing sales momentum from those changes and so that momentum breathes momentum and we will continue to invest there as we continue to get those results. And at the same time our commercial business continues to build strong momentum and we’re making investments in there as William mentioned before, particularly in the sales force area. And so we’ve seen good results from the investments that we’ve made. So I expect it to be at a diminished rate but I also expect us to continue to do what we believe is necessary to continue to capture market share. Tony Cristello - BB&T Capital Markets : So if you were to put up another 5% or 6% type comp number in this upcoming quarter, we shouldn’t expect maybe the same $50 million or some area or magnitude of that, maybe a little bit less then that, but you would take advantage of sort of a perhaps a more aggressive initiative on the spending front.

I think that’s exactly right and as William mentioned before, we’re going to make game day decisions as we approach it and as we see our sales trends, but at the moment we’ve got good sales momentum this past quarter and so we did spend into that because again, we’re spending money for what we believe on a longer-term basis we’ll continue to capture market share. Tony Cristello - BB&T Capital Markets : Are there incremental costs that are flowing in from a hub related standpoint that are hitting the cost of goods line, rather then the SG&A line.

Less so, I would say its more SG&A related then cost of goods sold related. Tony Cristello - BB&T Capital Markets : And when you look at sort of unemployment and you look at the SAR, how do should we think about the impact on the DIY business, I know we talk about the average number of cars on the road that are six, seven, eight years and we talk about the miles driven and what that’s doing. But if you make the assumption if for the next six to 12 months whether unemployment is at 9% or 10% or SAR is only at 11 or 12, down from 16 million, what impact to you think that has on your business versus a SAR being at 14, 15, or 16 million.

Its challenging to decide exactly what the impact is going to be, but clearly the age of vehicles are continuing to grow even despite cash for clunkers. We think that’s good for our industry both in the short-term and in the long-term. Secondly on unemployment, we have seen strong correlations with our sales as unemployment increases and substantially increases. Interestingly we haven’t seen correlations on historical basis that it drops back off after that happens and I think there’s some of that that is driven by mindset shift in consumer behavior that we’re not going to go back to the go go days just because unemployment drops down by a point. So that’s part of where our thoughts are on what the future looks like and part of the reason why we’re generally optimistic about what our future holds. Tony Cristello - BB&T Capital Markets : And these initiatives that you put in place, does that give you a little bit of ability to lever at some point at an even lower same store sales comp then maybe you would have 12 months ago.

I think we’ve, I would characterize it differently in that 12 months ago we were levering on very low sales levels. We’ve elected to make some decisions over the last 12 months as we’ve seen market conditions be opportunistic and therefore we’ve ramped up our expenditures. I think we’ll be able to very effectively manage costs on a long-term basis. But we see a unique opportunity at this point in time with some initiatives that we have a high level of confidence in and that’s one thing that I want to make sure and reiterate. We, certainly the trends in the market have gone in our industry’s favor over the last nine months, but we’ve gained market share. And we’re very encouraged that the initiatives that we’ve done have led to that gaining of market share and we look to continuing to do that going forward.

Your next question comes from the line of Gary Balter - Credit Suisse

Just following up on Tony’s questions, what SG&A, what comp do you need to leverage SG&A next year, how should we be thinking about that.

I think that historically that we have said that its around 3% all things being equal. So what I think is that’s probably not a bad way to continue to think about it over a short-term basis. But take into account that there may be opportunities for us where we see momentum in sales from certain initiatives that we may accelerate certain initiatives, but at the moment, that’s probably the easiest way to think about it.

Okay because this quarter obviously we didn’t see that because of the [inaudible] your invested.

That’s right and we did that consciously. We kind of went through this process. We saw what a terrific opportunity for us to be able to enhance some things that have really worked for us and also to get ahead a little bit on some of the maintenance things, to make sure our physical plants, our physical property is looking good for the long-term.

And you may have said this on the call, but could you talk about the LIFO and FIFO impacts.

Not much of an impact at all really. There really wasn’t a significant impact on LIFO this quarter.

As you know we don’t record LIFO reserves so, [no] impact on our SG&A, excuse me [inaudible] profit.

As we look forward, the question we get as someone who has a buy on your stock is after next quarter when the comparison gets more challenging if they can only comp at historical levels on a two year basis that would be zero to two, and then they’re not going to get leverage, how do you respond. I’m sure you get asked the same question.

The first way I’d respond is we’ve gone through several cycles in the economy over the last 12 quarters. And we’ve grown EPS double-digits in each of the last 12 quarters in very different economic cycles. So we have changed our approach a little bit over the last nine months and we’ve been more aggressive on the initiatives. And I believe that aggression has led to us increasing our market share. If the sales environment changed, we stand ready to make sure we make the necessary adjustments in this business to continue to provide very strong performance and I’m highly confident we’ll do just that.

Your next question comes from the line of Alan Rifkin – Banc of America Alan Rifkin – Banc of America: The decision to increase your ownership of a store base in the current quarter, is that more so a reflection of the weak real estate environment today or do you think that going forward over the longer-term a greater concentration of owned stores could be possible.

I think that its probably a little bit of the former. Its always been our posture that we would prefer to own then lease where appropriate and so we did see more opportunities over the last 12 months and I suspect that that will continue for the next 12 months or so. So where we have opportunities we would prefer to own versus lease. That’s always been our viewpoint and I think the marketplace is allowing us to increase that. Alan Rifkin – Banc of America: Just as a follow-up there, how do you balance a decision to own versus rent versus—

If you lease, its debt anyway because you’re signing a 10, 20 year lease and we’re baking that into our overall capital structure so we capitalize an operating lease and then look at is as debt then make your analysis that way. At the end of the day is it more opportunistic for us to own versus lease. Alan Rifkin – Banc of America: What was the impact on earnings from the weaker dollar, if any.

We didn’t quantify that necessarily. It did have an impact. Its not material enough to break out at the moment but it certainly had a negative impact to our earnings results. Alan Rifkin – Banc of America: The decision to accelerate the store growth in Mexico, can you maybe just shed a little bit more color there on whether or not this could be a sign of a continued acceleration on there.

That’s a great question, we’ve continued to accelerate our growth in Mexico on a per store basis. We haven’t necessarily grown it significantly as a percentage of the underlying store base. But I would expect us to continue to grow it generally consistent on a percentage basis which means as we added 40 stores, we’ll grow it more next year. We may accelerate a little bit more aggressively then that, we’re clearly pleased with the operating performance of that team down there. They’re doing a great job. They’ve got some challenges right now with the weakening peso and the weakened macro environment in Mexico but they’ve done a great job of building and managing that business.

Your next question comes from the line of Kate McShane – Citigroup Kate McShane – Citigroup : Do you have any better sense of how the closures of dealerships are going to impact your business going forward.

Yes I think clearly its going to be impactful to the commercial market more so then the DIY market. From what we’re seeing so far its more concentrated generally speaking in the rural areas and its going to make it more difficult for people that live in rural areas to have a convenient dealership location to have their cars repaired at. So I think that that will be beneficial to the commercial market. We’re not spending a tremendous amount of time on it because as I mentioned in our prepared remarks, we only have 1.5% market share so we control our destiny in that market more so then a few thousand dealerships closing. But I think it will be beneficial overall to the commercial market. Kate McShane – Citigroup : I’m not sure if this was mentioned in your prepared comments, but with the interest expense up sequentially from the draw down of the credit agreement, should we expect interest expense to come down in the next few quarters or remain at this level going forward.

I think it will remain at this level going forward. We’re probably at about 80% or better on a fixed basis at the moment so I would probably think of it as this is kind of a similar run rate.

Your next question comes from the line of Matt Fassler - Goldman Sachs

On the commercial side, you spoke about sort of the up and down the street customers driving high single-digit same store growth, is the difference between that and the reported numbers still the cycling of some national accounts that you’re rolling off.

Yes, we had one significant national account that is impacting that number and if you want to break it out it was roughly 5% so without that account it would have been up another 5%.

And at what point do we finish cycling that.

Its not a particular specific point because it was a multi location arrangement, [many] multi location arrangement and so we’re starting to cycle some of it but we’ll really finish it around Q3.

Q3 of next year, so its with you for a little while longer.

It does get smaller from this point going forward.

And then you’re talking about seeing some lower cost of goods, we’ve sort of seen most of the commodity price declines transpire over the past number of months, if anything commodity prices have firmed up a bit, so does this reflect when the inventory is actually running through the P&L or is there some other explanation for the lag in the commodity price declines and the change to your cost of goods today.

Yes I think its probably a bit of a lag relative to how it turns through the inventory, so I would agree with you that we’ve seen the majority of the commodity price declines, but we still see some coming down the road.

And then on the margin front, you talked about mix issues, have you seen anything on the competitive front as it relates to different kinds of pricing or different levels of private label penetration in the DIY business particularly where you have transition going on at one or two of your competitors.

Yes, I would say for the most part that we haven’t seen any changes in pricing. When you look at the high velocity items, we’re not really seeing any kind of change in pricing. Certainly in some of the conversion areas that are going on in the country we see some pressure in pricing but obviously we have a view that we’re not going to be undersold as we approach the market and we’ve operated that way all the time and we’ve been competing with these competitors for a long time.

Your next question comes from the line of Chris Horvers – JPMorgan Chris Horvers – JPMorgan : A couple of questions on sales, can you talk about the rebate check compares, I know you mentioned that sales were relatively consistent. It seemed like other retailers had underestimated that boost so when you say relatively consistent, was July your weakest month of the quarter.

Clearly, first of all we said in opening comments that it was generally consistent but if you characterize it more specifically it was a little bit softer in the middle of the quarter then it was on either end. And we correlate that to the fact that there was a stimulus check that came out last year and in last year’s call we called out that we thought the stimulus checks had added about 1% to our comps last year. Chris Horvers – JPMorgan : And nothing in retrospect would make a change to that estimate.

No. Chris Horvers – JPMorgan : And do you think that on the kind of the sequential slowdown in comps and slightly on the two year, not too much to report there, but do you think that some of the deferred maintenance that was pent up let’s say in 2007, 2008 is playing itself out and that’s why you’re seeing a little bit of a slowdown.

To me I don’t characterize it as that, I think there’s really been more of a mindset shift on maintenance versus there was a big pent up amount of deferred maintenance. My reaction would be that the difference is primarily related to what we just talked about, the stimulus checks being in last year’s quarter and not being in this year’s quarter. Chris Horvers – JPMorgan : And then finally because I think we could try, is there any comment on September trends, you’ve mentioned it sounds like its continued, are we still talking like a 5% and as you think about your optimism for this upcoming year, how should we think about them, is that optimism against a tough compare or is that optimism in terms of being able to put up positive comps.

Let me start with the first part of that, and that is, I don’t ever want to get into a discussing a two and a half, three week, period of time because I think its not relevant to what the long-term success of us is going to be so I don’t want to get into what’s happened so far in September. But we do remain confident for the year that we will be able to continue to perform well and a lot of that confidence comes from what we’ve looked at on a long-term basis as economic cycles have changed and then also the fact that we’re growing market share and we have spent a significant amount of money on new initiatives in the last six months. And we see where those initiatives are paying off and so we remain optimistic that we ought to be able to continue to grow.

There are no additional questions at this time; I would like to turn it back over to management for any additional or closing comments.

Before we conclude the call I’d just like to reiterate that we are excited about our growth prospects for the upcoming year. We cannot take anything for granted as we understand we have to earn our customers’ business every day. Our culture remains the key point of differentiation from us and 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 manage our capital appropriately, we are confident AutoZone will continue to be incredibly successful. Thank you very much for participating in today’s call. Have a great day.