This is Ernest Duplessis, Vice President of Investor Relations along with Bill Chapman, Director of Investor Relations. The purpose of this audio webcast is to provide you with additional perspective on Grainger’s results for the quarter ended September 30, 2009. For a complete view, be sure to reference our earnings release issued October 14, along with other information available on our Investor Relations website. Before we go any further, please remember that certain statements and projections of future results made in this press release and in this webcast constitute forward looking information. These statements are 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 that relate to forward looking statements. Our performance in the third quarter once again demonstrated the strength of Grainger’s business model and our ability to execute, despite a difficult economy. Sales were down 14% in the quarter, providing further evidence that we have yet to see an economic recovery. However, our sales performance, relative to the competition, provides further evidence that we are picking up market share. Strong cash flow generation of $275 million in the quarter was the result of solid execution and effective working capital management. There were a number of unusual items in the quarter. One of the purposes of this audio webcast is to further explain those items. The largest such item was the gain recognized after Grainger obtained 53% or a majority ownership in MonotaRO in Japan. We closed on this transaction in mid September and recorded the fair value of all acquired assets and assumed liabilities at the end of the 2009 third quarter, including $97 million in intangibles and goodwill, based on the market price of MonotaRO’s stock at the time of the…

Let’s move on to a quick review of our Product Expansion initiative. Sales from products added to our offering accounted for $251 million in sales during the quarter. This compares to a $196 million contribution in the 2008 third quarter. As a reminder, we have tripled the number of skus in the Grainger catalog since 2005. Product Line Expansion has helped us pick up market share by making Grainger more relevant to customers by offering a broader product line. It also enables customers to save money by consolidating their MRO spend with Grainger. Let’s now take a closer look at operating performance. Operating earnings for the company declined by 19% versus the 2008 third quarter. This decline was primarily the result of the 14% sales decrease coupled with operating expenses, which declined at about half the rate of the sales decline. This was partially offset by an increase in gross profit margins. Operating earnings for both segments were down year over year, while the operating performance for the Other Businesses improved. Let’s now take a look at operating performance by segment. Operating earnings in the United States decreased by 15% versus the 2008 third quarter. Operating margins declined by 20 basis points to 14.6%. This performance was primarily the result of the 14% sales decline and operating expenses, which declined 7% for the quarter. Partially offsetting this decline in operating earnings was a robust 190 basis point increase in gross profit margins due primarily to price increases exceeding COGS inflation and the reduction in the LIFO inventory reserve. The 7% reduction in operating expenses was driven by lower payroll and benefits costs, which were due to lower headcount, reduced commissions and no bonus accruals. Going forward, we expect that roughly a third of the decrease in operating expenses will be…