Good morning and welcome to the AutoZone conference call. Your lines have been placed on listen-only until the question and answer session of the conference. Please be advised today's call is being recorded. If you have any objections, please disconnect at this time. This conference call will discuss AutoZone's third quarter financial results. Bill Rhodes, the company's Chairman, President and CEO will be making a short presentation on the highlights of the quarter. The conference call will end promptly at 10:00 am Central time, 11:00 am Eastern time. Before Mr. Rhodes begins, the company has requested that you listen to the following statement regarding forward-looking statements. Certain statements contained in this presentation are forward-looking statements. Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, project, position, strategy and similar expressions. These are based on assumptions and assessments made by our management in light of experience and 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 credit market conditions, the impact of recessionary conditions, competition, product demand, 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 and construction delays, access to available and feasible financing, and changes in laws or regulations. Certain of these risks are discussed in more detail in the Risk Factors section contained in Item 1A under Part 1 of our annual report on Form 10-K for the year ended August 31, 2013, and these risk factors should be read carefully. Mr. Rhodes, you may now begin.

Good morning and thank you for joining us today for AutoZone’s 2014 Third Quarter conference call. I hope everyone had a wonderful Memorial Day weekend. With me today are Bill Giles, Executive Vice President and Chief Financial Officer, IT and ALLDATA, and Brian Campbell, Vice President, Treasurer, Investor Relations and Tax. Regarding the third quarter, 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 complementing our comments today is available on our website, www.autozoneinc.com. Please click on Quarterly Earnings Conference Calls to see them. To begin this morning, I want to thank all AutoZoners across our organization for delivering another solid quarter operationally and financially. This morning, we reported our 31st consecutive quarter of double-digit earnings per share growth. While past success is no guarantee for future performance, this consistency in earnings is something we strive to attain each and every quarter. This morning, we’ll discuss our sales results and provide you some details on regional and product sales trends. We’ll also provide some detail on the cadence of sales throughout the quarter. Next, we will update you on our various initiatives. We’re very excited about all the initiatives being worked and believe our progress can benefit the company’s sales and earnings trajectory for years to come. For the quarter, we reported a total sales increase of 6.2% while same store sales were up 4%. In retail, we experienced same store growth in both traffic and ticket, although ticket growth continues to be subdued versus historical growth rates due to the lack of inflation. As expected, during the quarter the deferrable maintenance categories that were challenged during the harsh winter rebounded nicely, while the failure-related categories that were so strong during the winter continued…

Thanks Bill, and good morning everyone. To start this morning, let me take a few moments to talk more specifically about our retail, commercial and international results. For the quarter, total auto parts sales, which includes our domestic retail and commercial businesses, our Mexico stores and our four stores in Brazil, increased 6.1% over the 12 weeks. Regarding the macro trends during the quarter, nationally unleaded gas prices started out at $3.38 a gallon and finished the quarter at $3.67 a gallon. Last year, gas prices decreased $0.07 per gallon during the third quarter, starting at $3.61 and ending at $3.54 a gallon. We continue to believe gas prices have a real impact on our customers’ abilities to maintain their vehicles and we will continue to monitor prices closely in the future. We also recognize that the impact of miles driven on cars over 10 years old, the current average, is much different than on newer cars in terms of wear and tear. Miles driven data reported by the Department of Transportation are available only through February. January was down 1.3% while February was down 0.8%. The other statistic we highlight is the number of seven-year and older vehicles on the road, which continues to trend in our industry’s favor. Another key macro headwind last year was the payroll tax reinstitution. While we do not expect to benefit this year, we simply are anniversarying a negative event from last year. It is hard to gauge what benefit this has had or will have on our traffic, but it won’t be an additional pressure point like last year. For the trailing four quarters, total sales per auto parts store was $1,767,000. This statistic continues to set the pace for the rest of the industry. For the quarter, total domestic commercial sales…

Thanks Bill. We’re pleased to report our 31st consecutive quarter of double-digit EPS growth. Our company continues to be successful due to a long-term focus. We focus on delivering exceptional customer service and executing at a high level consistently which we believe is a competitive advantage. To execute at a high level, we have to adhere to living the pledge. Like our operating theme for this fiscal year states, we must focus on creating customers for life. We cannot and will not take our eye off of execution. Success will be achieved with strong attention to detail. The initiatives we are working on around inventory assortment, hub stores, commercial growth, Mexico, ALLDATA, ecommerce and Brazil are all very exciting to us. We feel these efforts will lead to increasing sales for many years to come. While our industry sales according to MPD data made available to us were higher than last year’s results, we must remain focused on enhancing every facet of our business. While it is exciting to see our industry doing well, we cannot become complacent. We are just starting to implement our initiatives, and while encouraged, we still have a tremendous amount of work in front of us to determine the optimal approach. Our long-term model is to grow new store square footage at a low single-digit growth rate, and we expect to continue growing our commercial business at an accelerated rate. As we continue to execute on our financial model, we look to routinely grow EBIT dollars in the mid-single digit range or better in times of strength, and we leverage our very strong and predictable cash flow to repurchase shares, enhancing our earnings per share into double digits. We believe our steady, consistent strategy is correct. It is the attention to details and consistent execution that will matter. Our belief is a very thoughtful operating strategy combined with superior execution is a formula for success. We are investing in the key initiatives that will drive our long-term performance. In the end, delivering strong EPS growth and ROIC each and every quarter is how we measure ourselves. We remain committed to delivering on our strategic and financial objectives. Now we’d like to open up the call for questions.

[Operator instructions] The first question is from Alan Rifkin with Barclays. Alan Rifkin – Barclays: Thank you very much. Question for Bill Rhodes – can you maybe just provide a little bit of color on performance of the hubs that have so far been expanded relative to the ones that remain to be expanded? What do the productivity differences look like between the two? And then I have a follow-up, if I may.

Yes, thanks Alan. They’re fairly significant. Now, what happens in many of the cases is the hubs as they were didn’t have the space necessary to have the entire parts assortment that we wanted to have in those hubs, and so when we relocate them we make sure—or expand them, we make sure that they have the physical space to hold all the inventory that we want. That inventory, we’ve already determined in the other locations is productive inventory, so it’s just a function of getting the space. So they performed fairly significantly better. Alan Rifkin – Barclays: Any quantification of significantly better? I mean, are the expanded ones doing 20% better than non-expanded, or is it higher or lower than that?

I don’t have the quantification in front of us. What I can share with you is like any other investment that we have, the expansions are generating a 15% after-tax IRR because that’s what we hold them to, so that’s not only the inventory load but also the expense that goes into the remodel or move as well as the additional square footage. Alan Rifkin – Barclays: Okay, and one follow-up if I may. With respect to trying to increase the frequency of delivery, if you look at your product assortment, what proportion of your products would you say need to be available for delivery same day versus one day versus maybe two days, and where are you relative to that today?

One of the interesting facts is 70% of the SKUs that are in our stores have one piece on the shelf, so what that means is if we sell it during the week, we’re out of it for up to eight days. So what we’re finding in the daily replenishment model is that the biggest benefit comes from the items that are stock one and stock two, and so the frequency of delivery allows us to be in-stock much quicker. Now one of the things we’re doing is we’re testing five day a week delivery. Now we’re going to go out and that’s why we’re saying, we don’t know what we’re going to do, we’re going to go out, we’re going to test other cycles – two times a week, three times a week to determine what the optimal approach is. Alan Rifkin – Barclays: Okay, thank you very much.

Thank you. The next question is from Gary Balter from Credit Suisse. Gary Balter – Credit Suisse: Thank you. Just following up on Alan’s question, is there a way to measure with your customers the fill rate that you’re getting in these expanded hubs?

Are you asking are we able to— Gary Balter – Credit Suisse: Well I know you measure it, but could you give us some quantification that way in terms of what percent of the orders are you satisfying from the customers versus what you were before you added the inventory?

I think one of the ways to think about it, Gary, from a hub perspective is what we look at is the lift that we get out of the satellite stores that are basically pulling merchandise and product from the hubs. In essence, that was product that they might not otherwise have been able to say yes to, so I won’t be able to quantify that for you right now but the fact is that, as Bill said before, we’ve got our return metrics that we are looking at to determine what kind of lift each satellite store gets as we expand the hub and add more inventory into the hub, and that’s kind of how we measure it going forward, so that ultimately is showing up in your comp store sales performance as well. Gary Balter – Credit Suisse: Thanks, and then just to follow up and I’ll get off – Bill, you talked about the seven-plus, like your type of vehicles has been growing and continuing growing, but there’s some concern about the five- to seven-year-olds as the 2009’s now start hitting the equation. What are your thoughts on that?

Yes, there’s a little bit of a dip in that five- to seven-year-olds, but the more important point is that the number of registered vehicles hasn’t really changed significantly, so we still have the same number of vehicles out on the road and so you do have a little bit of a dip, if you will, if you look at the timeline. But for us, the advantage is that we do continue to see vehicles age and that’s helpful for us, and so we’re finding that our cycles or our lifecycle of product is actually getting expanded out a little bit further. Gary Balter – Credit Suisse: Great, thank you very much.

Thank you. The next question is from Matthew Fassler with Goldman Sachs. Matthew Fassler – Goldman Sachs: Thanks a lot. Good morning. Thanks a lot for the color that you offered us on the composition or the mix of business as you made your way through the May quarter. As you think about the August quarter and you think about the weather that you’ve experienced year-to-date, particularly the after effects of the tough winter, and you think about failure and for maintenance product, how do you envision the mix evolving – I know it’s somewhat forward weather dependent – and if you could talk about the gross margin implications of that outlook.

Okay. The best analog that I think we have for what a harsh winter will or will not do for your business performance is two years ago, Matt, when we had a very mild winter. If you remember, we called out for some time that that mild winter really hurt us, and it particularly hurt us in the deferrable maintenance categories. Well, now we’re coming off of a very harsh winter. When we came into this quarter, we said we anticipated that the failure items would slow down a bit, which they did, and we anticipated that we would see an increase in the deferrable maintenance categories – think about brake systems, chassis and the like. That’s what we saw. Our expectation is that those trends will continue for some time and certainly through the summer months. As to the ramifications on our gross margin, it’s not material one way or the other. We typically – and I don’t think we have ever called out – that we’ve had a shift in product mix that has been a key driver of our gross margins. Matthew Fassler – Goldman Sachs: Great, and then a second question that I want to ask, a brief one – so obviously you disclosed commercial total revenues and it’s sort of to us to think about what the comparable store trajectory might be like, and to do that we need to think about the productivity of the new unit. Can you talk about as you’ve moved deeper into the base with the commercial rollout, how the sales per new commercial program has been evolving over the past couple or three years relative to recent trend?

Yes, I would say it’s remarkable that the new stores – and we track them out period out to 13 periods, how are they doing on both sales and EBIT – and it’s remarkable the consistency of those new store openings, although they are getting slightly better year-over-year-over-year, which is counterintuitive. You would think that they would be performing worse because hopefully we’ve opened the best programs earlier on in the life cycle, but I think as we get better in commercial and as we learn how to open programs better, they are getting marginally better even as we go to the less desirable programs, although they are very desirable. Matthew Fassler – Goldman Sachs: That’s very helpful. Thank you so much.

Thank you. The next question is from Greg Melich with ISI Group. Greg Melich – ISI Group: Hi, thanks. I have two questions, one on sales and a follow-up on inventory. You talk about sales through the quarter starting strong with tax refunds and weather and failure, and then getting more volatile towards the end. Could you help us with the magnitude of that? Was the early part of the quarter 2x what the end of the quarter was?

Yes, I would say probably. I wouldn’t say exactly 2x, but I think it certainly softened up a little bit towards the tail end of the quarter, and that’s always an odd time of the year anyways. We’re kind of past the tax season, before the summer season really gets started, so it’s not unexpected for us to have a bit of sales volatility during that last period of the third quarter, and we experienced it this year. I think part of it was that we just started out very strong.

I would also add, if you recall this quarter’s call last year, we talked about a strong April and the fact that we maybe we were getting out of the challenges that we had experienced., so April was a particularly tougher comparison versus last year. Greg Melich – ISI Group: Got it, and would it be fair to say that traffic was positive through the whole quarter, even though it maybe got a little more volatile towards the end?

Yes, I think that’s fair to say. Greg Melich – ISI Group: Okay, great. And then my follow up was, Bill, you mentioned your comments on inventory, that now were largely complete in terms of the additional items going in for commercial, and that we would now sort of flush out the slower turning SKUs in the ensuing near during normal negotiations. What does that do to gross margin and working capital as you go through that?

Yes, and just to clarify, in some of these product placements we’re largely done. We still have some more things to do from a hub perspective, et cetera, in terms of adding inventory, et cetera, so I still think we have some opportunities to improve our coverage overall. I think from a gross margin perspective, we wouldn’t anticipate that the inventory additions would have a significant impact on our gross margin rate by themselves necessarily. I mean, obviously we continue to believe there’s opportunity for us to improve gross margin rates, and I think from a working capital perspective we obviously reported AP to inventory of 114% this quarter versus 111% last year, and as we’ve said before, we don’t anticipate our AP to inventory percentage increasing significantly going forward. We do believe that there will be a little bit of pressure on AP to inventory or working capital as we move in the next six, 12, 18 months or so, but we believe that we can kind of maintain close to these levels. Greg Melich – ISI Group: That’s great. Thanks a lot.

Thank you. The next question is from Dan Wewer with Raymond James. Dan Wewer – Raymond James: Thanks. A question for Bill Rhodes regarding inventory productivity. You noted that inventory per store is up a little over 8.5%, yet if you look at gross profit dollars per store they were up slightly more than 4%. So I guess my question, when you look at the, let’s say the (indiscernible) ROI on these new SKUs, are you seeing diminishing returns from before you began the program?

Clearly. The inventory that we’re adding today is significantly less productive than the inventory that’s in our base assortment – no question about it. But when we run our models, we are very confident that even though it’s less productive, that it can be a productive investment for us and we’re pretty pleased with how they’re performing so far. Dan Wewer – Raymond James: Then as a follow up, I believe this is the first instance since the fourth quarter of 2009 that operating margin rate declined year-over-year. Interestingly, you achieved very good sales growth in 4Q ’09 as well, but it does raise questions that with your operating margins well above the industry average – obviously the highest in the industry – do you think we’re beginning to see a peak in operating margin rate?

In the spirit of full and fair disclosure, last quarter we had a declination in operating margin as well, so that’s— Dan Wewer – Raymond James: Okay, oh yes.

But you’re right, though – ’09 was the previous spot, Dan. At the end of the day, we’re focused on growing operating profit dollars at high returns, so that’s ultimately what we’re focused on. We want to grow sales, gain market share, and we want to deploy our capital, which includes inventory and expenses, in a manner which continues to generate high returns, so that is ultimately our objective. So we’re not 100% focused on just increasing our EBIT margin necessarily quarter-in and quarter-out, although we’ve done a very good job of that consistently over the years. So is this the peak? I don’t know the answer to that question. We’re not focused on the EBIT margin, per se. We’re focused on operating profit dollars and generating high returns.

If I may, I would add one thing – in 2005 when we created our reinvestment plan, our operating margins were at an all-time high of 17.5%. They went down to about 17% in 2006 and everybody was saying, okay, this is the beginning of the migration back to the mean in the industry. Clearly over time, we found ways to be more productive and increased our operating margin almost 250 BPs above that point in time, so I have a high degree of confidence that this team will continue to find ways to make this business more productive, but we’re not going to get focused particularly on a quarter-to-quarter basis if we have some deterioration in the operating margin, as long as we’ve got good returns. Dan Wewer – Raymond James: Great, thank you.

Thank you. The next question is from Kate McShane with Citi Research. Kate McShane – Citigroup: Thanks, good morning. I think when you started talking about testing changes that you’re making in commercial business about two quarters ago, you thought it would take about a year to assess and complete the tests. Is this still the timeline, and once you do decide to take a direction, how long will it take to implement? And then just in addition to that, how does private label come into play with the testing of your commercial strategies and the increases in inventory?

Okay. On the first one as far as the timeline, I think we’ve been fairly vague about the timeline because we don’t know what we don’t know, and I say that to say we had an initial test on daily deliveries. Now, we’re saying wait a minute – we need to go test different frequency of delivery, so that’s going to push out our timeline a little bit. But each initiative is not necessarily dependent upon the other, so we’ve already finished what we call the optimal hurdle, which is store SKU placements. We’ve now gone into a new prototype – we’ve made a decision on that and we’re moving forward, so every one of them is not necessarily going to be on the same timeline. But the bigger, broader ones, which by the way whatever decisions we make could have significant implications, we want to be careful and we want to make sure that we’ve got the right amount of information, and that we have a long enough testing period so it’s reliable. As far as how private label plays into this, number one, we don’t consider it private label. We think Duralast is the best and strongest brand in the automotive aftermarket, and I hope you’re enjoying our new marketing featuring Chuck Liddell. But I don’t see that any of this testing to date has proven to change any of our strategies. I’ll remind you that we have some very strong brands that are national brands in our stores, both on the sales floor and in hard parts, and where we find that there’s a good value proposition that the customer thinks is important, we will carry a brand, be it a Duralast brand or someone else’s brand. Kate McShane – Citigroup: Thank you.

Thank you. The next question is from Chris Horvers from JPMC. Chris Horvers – JP Morgan: Thanks, good morning. So two follow-up questions – first on the gross margin, can you talk about the outlook there? And you had some pressure in the supply chain from the inventory additions that you put into the stores. Does that continue, and is it related to that deleting process that you mentioned earlier in the script?

Not so much the deleting process as it is just the overall increase in inventory movement, if you will, and so I would expect us to continue to have a little bit of pressure on supply chain costs for the next few quarters. From a margin perspective, we continue to believe—we haven’t had a lot of inflation in the last probably year and a half, and sometimes inflation can be your friend from a gross margin perspective, so we’ve done better—you know, our merchandising organization has done some really good things in order to try to improve cost from sourcing and optimizing how we’re getting product into the country, so I think that there continues to be some opportunity for us to continue to grow our gross margin rate. Obviously the Duralast product continues to do well, and as we continue to increase its penetration that will also help improve gross margin rate overall. So although we have some pressures here and there, I think we feel pretty positive about our gross margin rate going forward. Chris Horvers – JP Morgan: And on the deleting side, does that create some sort of markdown risk at the store level that you need to clean out the SKUs that you don’t want?

Typically not. Many of the deletes, we’re able to push through the system and sometimes we’re able to push it back to the vendors as well, so historically deletes has not resulted in necessarily margin pressure. Chris Horvers – JP Morgan: And then the follow-up on the commercial sales per store, it was according to our calculation down a couple percentage points year-to-year, so just following up on that productivity question, was there anything else that would have driven it down on a year-to-year basis besides the comments provided previously?

Not too much, other than just the number of stores that we’re opening on a quarterly basis. I think we probably accelerated our commercial program growth rate on a quarterly basis higher this year than we did last year. Chris Horvers – JP Morgan: Okay, thanks very much.

Thank you. The next question is from Bret Jordan of BB&T Capital Markets. Bret Jordan – BB&T Capital Markets: Hey, good morning. A quick question, a follow-up I guess on two questions around brand and Duralast versus national brand. Do you have more national brand inventory in stock this quarter versus a year ago? Is there any change in the weighting?

I wouldn’t say it’s material. There’s pushes and pulls in various categories, but I wouldn’t say there’s any material change. Bret Jordan – BB&T Capital Markets: Okay, and then a follow-up – you commented on the new prototype store allowing more hard parts in the box. Could you describe that a little bit more, maybe how much incremental product can get into the store and what type of investment is involved in reformatting?

Well number one, we haven’t made any decisions to go quote-unquote reformat. These are for the new stores that we’re going to be opening, some of them in the fourth quarter. Certainly after the fourth quarter, they’ll all be opening with this new prototype. It has a little bit incremental capital and expense to open the new store, but not material, but it will carry more than 20% additional hard parts than the current prototype that we have today. Now over time, we’re going to see how it performs. We have some stores that do very high volumes, so some of these elements we might want to go back and put them in there, but we haven’t made any of those decisions at this point in time. Bret Jordan – BB&T Capital Markets: Okay, and then one last question. On your internet sales volumes, did Auto Anything or the online initiative grow at a faster rate than the category? I guess all other was up 7%. Did the online sales exceed that?

I’d say a little bit, yes. Bret Jordan – BB&T Capital Markets: Okay, great. Thank you.

Thank you. The next question is from Brian Nagel with Oppenheimer. Brian Nagel – Oppenheimer: Hi, good morning. I wanted to follow up on the inventory issue as well. I think a couple questions ago, someone asked about the productivity of the new inventory you’ve put into stores, but maybe I’ll ask the question – if you look at the incremental inventory you’ll be continuing to put in the stores for a longer period of time now, is there a way to think about what type of sales benefit should be derived from that? Maybe said another way, what type of sales are not occurring because the inventory is not there?

Yes, I think in essence, Brian, that’s what we’re trying to figure out at some level, so obviously we can quantify internally the productivity that we’re getting out of our adds to date, but the real question will be is when we’ll be more expansive on our rollout of inventory and execute some of these tests that we’re talking about as to what that will ultimately mean in sales. So I couldn’t give you a number today as to exactly what that would be, but obviously we’ll continue to monitor it internally. Brian Nagel – Oppenheimer: Got it. Then just as a follow up to that, you continue to—the AP leverage is quite remarkable. Will that change or will AP leverage kind of stay where it is, even as you put more inventory in?

I think as we put more inventory in, the question is going to be the productivity of the inventory as a group overall, and so as inventory turns slow a little bit, if they do, then that will put a little bit of pressure on your AP to inventory ratio slightly. Obviously our merchandising organization continues to work with our vendors in order to optimize turns so that we’ll continue to work hard at maintaining our AP to inventory ratio where it’s been historically. But I think looking forward, we don’t necessarily expect it to increase at the levels it has historically. Brian Nagel – Oppenheimer: Got it, thanks.

Thank you. The next question is from Aram Rubinson with Wolfe Research. Aram Rubinson – Wolfe Research: Hi, thanks. Good morning. Had a question around labor – I think you mentioned in the release you were adding labor to some stores. Can you help us think if that’s more DIY oriented, more commercial oriented, and then I had a follow-up for you. Thanks.

Yes. Number one, I would say it’s both, and we’ve really moved to managing our labor more on a holistic basis rather than just DIY or commercial over the last year or so as part of our one team strategy to make sure that we’re serving all of our customers exceptionally, regardless of how they interact with us. When you think about the labor increase this year, and it happened in the second quarter and it happened in the third quarter, the biggest reason for the labor increase is we really managed labor very tight last year, and in some respects we are annualizing that very aggressive management of labor because we had very tough sales trends. One thing I’m proud of this organization, we’ve performed very well regardless of industry headwinds or tailwinds, and last year we had to be very aggressive. So we’re just annualizing that – there’s no change in strategy really. Aram Rubinson – Wolfe Research: So there’s no change in where you’re, let’s say, sourcing your parts pros from? Is there a mix of internal versus external, and if that should change? And then the follow-up I had was also around just the general harsh winter that we had, as you were coming into this quarter, I’m just wondering whether or not you thought the harsh winter weather would have given you kind of even more benefit than you ended up getting, or how it compared to the expectations you might have had coming in.

Yes, I would say number one, we’re not sourcing our people from any different sources than we have on a historical basis. Secondly, I would say that our sales performed a little bit better in the third quarter than our expectations, particularly when the winter subsided and the tax refunds were flowing. We had some tremendous weeks in that period of time, so I would say it rebounded quicker. And then, we’ve been encouraged by the deferrable maintenance categories and how they’ve continued to perform throughout the quarter. Aram Rubinson – Wolfe Research: In thinking about how to compare against the year from now, if this was more favorable than you might have thought, and then I’ll hop off.

I’ll say the second quarter is going to be a daunting sales quarter. I mean, we just had a tremendous weather pattern, and our failure categories were off the charts in the second quarter. Now on the other side, our deferrable maintenance categories were down, so it will be what it will be. We’re up to the challenge, regardless of what we’re lapping next year. Aram Rubinson – Wolfe Research: All right, thank you. Best of luck.

Thank you. The next question is from Michael Lasser with UBS. Michael Lasser – UBS: Good morning. Thanks a lot for taking my questions. I’m curious about what performance metric you’re seeking to maximize with all the different initiatives you having going – the availability, inventory, payroll. Is it return, it is margin, it is sales? What are you seeking to maximize, and how do you think you’ll get there?

Well as we’ve said for a long time, our two performance metrics are EBIT dollar growth and return on invested capital. That’s been our incentive compensation program for 12 or 13 years now. It continues to be. So if you think about what we’ve decided are the most important metrics, those are it. Michael Lasser – UBS: Okay, and then my second question—sorry, go ahead?

Go ahead. Michael Lasser – UBS: My second question was on some of the comments you made around productivity of your commercial programs. The new ones continue to do better, so I guess inherently that means some of the more mature ones are degrading a little bit. Is there any—a, is that true, and b, are there any common characteristics about what’s driving the degradation in performance in some of the older commercial programs? Thank you.

I would not infer that the older commercial programs are degrading; in fact, they’re continuing to grow. What’s happening is we’ve opened, what, 1,400 new locations over the last four years, so our maturity of the commercial programs is fairly significantly different than it was four years ago. So I would not read anything into the average weekly sales being relatively constant – they’re all moving in the right direction. We just have a higher percentage of new programs.

Mr. Lasser, does that conclude your questions? We’ll move on to the next question. The next question is from John Lawrence with Stephens. John Lawrence – Stephens: Good morning guys. Bill, would you comment a little bit—not to beat a dead horse with this inventory issue, but can we just talk a little bit about when you talk about those maturity of programs, I guess the other factor is now that you’re at 76% hub sort of commercial program penetration, is what we’re talking about is finding that optimization point to whether you can go to 90% commercial programs, or I guess the other way to look at it is how variable are these programs across the country when you open them in terms of breadth of inventory, say, compared to three or four years ago with import parts, et cetera?

Yes, it’s a great question, John. Number one, I wouldn’t say across the country that there’s great variation. I would say it depends on the market and the demographics, so they perform differently in dense urban environments than they do in suburban environments versus the way they do in rural environments. They do different in heavy Hispanic or African-American or Caucasian environments. But what we’re finding as we go deeper and deeper is every—more and more stores have the potential than we thought, so we’re continuing to grow at a pretty rapid rate. We’re not closing a lot of programs – in fact, very, very few, and I think as we continue to improve our commercial business, then we find that we can operate in places we didn’t think we could before. So I don’t think we know—well, I will tell you, we do not know what the ultimate answer is. I think we suspect it’s higher than we ever thought it was before, and the better we get, hopefully those expectations will continue to go up. John Lawrence – Stephens: And the last question there is when you’re in a new market, is that incremental part that we’re talking about here that maybe stocked out today with this incremental inventory, can you move up on a call list when you have that incremental part? Does that help?

Absolutely. You know, when you first engage with a customer, you don’t start at number one, at least not on very many occasions. A lot of times, you’ll start as fourth or fifth call. Well, if nobody else in town has it, now you’ve got an opportunity to impress that customer, so they call you with something they didn’t think you would have and you have it, and then you give them prompt, great service, and guess what? Now you’ve got a chance to start moving up that list. John Lawrence – Stephens: And all those tests are just trying to optimize the capital required to get that there?

That’s correct. John Lawrence – Stephens: Thanks a lot.

And the expense structure as well. It’s a pretty heavy math problem, honestly. John Lawrence – Stephens: Great, thanks.

Thank you. I would now like to turn the call back over to Mr. Rhodes for closing comments.

Okay. Before we conclude the call, I’d just like to take a moment to reiterate what separates us from other players in our industry. It’s of course our culture, which is very special. Being part of the AutoZone family is very unique across the retail landscape. We are currently working on a variety of exciting new initiatives that we discuss and test and that we believe will enhance our performance over time. Ultimately, our AutoZoners have delivered year-in and year-out, and I’m highly confident with them leading the charge, our future is incredibly bright. Thanks for participating in today’s call. Have a great day.

Thank you. This does conclude today’s conference. Thank you for joining. You may disconnect at this time.