Laura Brown – SVP, Communications and IR Bill Chapman – Senior Director, IR

Hello, this is Laura Brown, Senior Vice President of Communications and Investor Relations. With me is Bill Chapman, Senior Director of Investor Relations. We are pleased to share with you some information regarding Grainger’s first quarter 2012 results via this audio webcast. Please also reference our 2012 first quarter earnings release issued today, April 17, in addition to other information available on our Investor Relations website to supplement this webcast. Before we begin, please remember that certain statements and projections of future results made in the 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. Strong sales growth and consistent execution was the story for the quarter. This performance was largely driven by continued enhancements to the foundation of our business and aggressive investment in our growth programs. As a result of the strong start to 2012, we have increased and narrowed the ranges for our sales and EPS guidance as referenced in today’s earnings release. We now expect sales to grow 12% to 14% and are forecasting EPS of $10.40 to $10.80 for the full year 2012. At the end of this recording, we’ll talk more about our revised guidance and our assumptions. We’ll start with total company results, and then take a closer look at our segments. Company sales increased 16% versus the 2011 first quarter. We had 64 selling days in both quarters. Operating earnings increased 16%, while net earnings increased 19%. As highlighted in our release, earnings per share of $2.57 for the quarter is an all-time company record and represents an 18% increase versus 2011. In a few moments we’ll take a…

Thanks, Laura. Since we’ve already covered company operating performance, let’s jump right into performance by segment. Operating earnings in the United States increased 17% versus the 2011 first quarter, and operating margin increased 90 basis points to 17.6%. This performance was driven by 11% sales growth, higher gross margins, and positive expense leverage. Gross profit margins for the quarter increased 10 basis points driven by price increases exceeding cost inflation, partially offset by higher freight costs and unfavorable mix, as lower sales of seasonal products slowed the sales growth of private label products. Expense leverage in the United States was positive despite higher growth-related spending on new sales representatives, eCommerce, and advertising. Let’s move on to our business in Canada. Operating earnings increased 24% versus the prior year, 26% in local currency. Strong sales growth coupled with higher gross margins and effective cost management contributed to operating margins increasing 100 basis points to 10.9%. Gross margins increased 60 basis points, primarily driven by improved customer mix and higher prices. Operating performance for our Other Businesses improved versus a year ago, the result of our focus on improving growth and operating results. This group posted operating earnings of $11 million for the quarter versus $6 million a year ago. Strong operating performance in Japan and Mexico, coupled with $1 million in operating earnings from Fabory, drove the improved results for this group. Below the operating line, interest expense, net of interest income, was $2.5 million in the 2012 first quarter versus $1.4 million in the 2011 first quarter. The increase was primarily attributable to interest on the debt of €120 million used to finance a portion of the Fabory acquisition. As mentioned at our November Analyst Meeting and in the 2011 Form 10-K, we were originally forecasting an effective tax rate…