Hello. This is Laura Brown, Vice President of Investor Relations; and I am here with Bill Chapman, Director of Investor Relations. Welcome to Grainger's quarterly audio webcast covering results for the first quarter ending March 31st, 2008. This recording is intended to provide you with information on our recent performance. We invite you to use this information in conjunction with the earnings release and other financial information posted on our Investor Relations website. Before we begin, I'd like to reinforce the fact that certain statements and projections of future results made in the press release and this webcast constitute forward-looking information. This information is based on current market conditions and competitive and regulatory expectations, and involve risk and uncertainty. Please see our Form 10-K for a discussion of factors as they relate to forward-looking statements. First quarter, 2008 sales were up 7% versus last year's first quarter. Both quarters contained 64 selling days. Net earnings increased 12% and earnings per share grew by 22% to $1.43. Sales, earnings, and earnings per share were all quarterly records. Operating margins increased 70 basis points in the quarter to 11.2%. This operating margin expansion was due to positive operating expense leverage and a modest increase in gross profit margins. As noted at our analyst meeting in November, we expect operating margin expansion going forward to come from a combination of gross margin improvement and operating expense leverage. Operating expenses as a percent of sales moved down from 30.4% in the first quarter of 2007 to 29.7% in the 2008 first quarter, led by the Grainger branch-based segment. And pretax return on invested capital or ROIC increased 60 basis points to 29.4% from 28.8% a year ago. Earnings contributions from the company's growth programs combined with efforts to improve productivity led to this performance.…

Thanks Laura. Let's move on to review of our key growth initiatives in the United States. During the quarter market expansion and product line expansion continued to deliver incremental sales growth and market share gains. Beginning with market expansion, the company completed 10 branch projects during the quarter including three new branches, two expansions, three relocations, one showroom upgrade and one closure. The sales contribution from each of the market expansion phases is included in the press release. Phases I and III continued to be the strongest, with sales up 11% in both. Phase V was up 7% with Phoenix particularly strong in the quarter. Phase II, which includes Southern California was up 6%, due impart to some large orders in Los Angeles. Similarly, Phase VI was up 6% with South Florida dragging down the rest of the cities in that phase. Finally, Phase VI was up 5%, and the Bay area was the slowest performer in that phase. While sales results in the top 25 markets were affected by the timing of the Easter holiday in March, these markets delivered sales growth that exceeded the rest of the network. Moving on to the product line expansion program, we added approximately 44,000 new products in the most recently issued catalog, bringing the total numbers of items to 183,000. The new products included fleet maintenance, power transmission and additional line extensions. We remain pleased by this program's ability to drive growth, and plan to continue to add new products for several more years. First quarter operating earnings for the company increased by 14% versus the 2007 first quarter. The majority of the improvement came from the Grainger branch-based segment, and Acklands-Grainger. This 14% increase for the company was the result of positive operating leverage, attained through the 7% sales growth in…

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THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.