Good day ladies and gentlemen, and welcome to the Snap-on Incorporated 2009 third quarter results conference call. (Operator Instructions) As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference call, Mr. Marty Ellen, Chief Financial Officer. You may begin your conference.

Thank you [Mar]. Good morning everyone. Thank you for joining us today to review Snap-on’s third quarter 2009 results. By now you should have seen our press release issued this morning. Joining me today is Nick Pinchuk, Snap-on’s CEO. Nick will kick off our call this morning with his perspective on our performance. I will then provide a more detailed review of our financial results, and afterwards we’ll take your questions. Consistent with past practice we will use slides to help illustrate our discussion. You can find a copy of these slides on our website next to the audio icon for this call. These slides will be archived on our website along with a transcript of today’s call. Any statements made during this call relative to management’s expectations, estimates or beliefs or otherwise state management’s or the company’s outlook, plans or projections are forward-looking statements, and actual results may differ materially from those made in such statements. Additional information and the factors that could cause our results to differ materially from those in the forward-looking statements are contained in our SEC filings. This call is copyrighted material by Snap-on Incorporated. It is intended solely for the purpose of this audience. Therefore it cannot be recorded, transcribed or rebroadcast by any means without Snap-on’s express permission. With that said, I will now turn the call over to Nick. Nick?

Thanks Marty. Good morning everybody. Well, the economic headwinds continue to prove challenging and in this environment Snap-on seeks to limit the impact of the uncertainty. We seek to keep improving on execution and we’re going to continue investing in our prime strategic initiatives. In that context, I think it’s fair to say we’re encouraged by our overall results and in particular with the sequential progress of both the Commercial Industrial and the Snap-on’s Tools groups. Those improvements came in what is seasonally our slowest quarter, so it’s clear that the period’s actual performance confirms the continued strengthening of our company. The benefits of our Snap-on value creation processes were again evident over the last three months. Marty’s going to discuss as usual the financial results in detail, but I want to take a few minutes to highlight some of the elements of the quarter to provide you a bit of perspective on what we see in our markets and to discuss our approach in navigating what are proving to be some turbulent times. For the overall corporation, sales were down from last year by nearly 17%, 13.6% if you exclude the impact of currency. However, that year-over-year decline narrowed significantly from the second quarter. The third quarter’s normally slow for us but in 2009 the sequential decline was only about half of what we’ve seen in other years. In fact our Commercial Industrial segment or CNI actually saw sequential increase in organic sales. Now while that gain was slight, an uptick of any magnitude in the third quarter is very unusual in this segment. Remember, CNI has a substantial presence in Europe and they had to overcome the summer vacation slowdown, so we were quite encouraged by the results. Another positive was the sale of what we call big…

Thanks Nick. Our consolidated operating results are summarized on Slide 6. Reported sales in the third quarter of $582 million were down 16.6% from last year. Absent the effects of foreign currency, the year-over-year organic sales decline was 13.6%. As Nick said, the third quarter is seasonally low for us and sales did decline sequentially, but at a much lower seasonal rate of decline than historically experienced. Our consolidated gross profit margin of 44.8% in the quarter increased 10 basis points from last year. Major factors increasing gross margin were improved mix, particularly diagnostics and software based products, which added 90 basis points, and a 110 basis point improvement due to LIFO inventory reductions. We continued to carry manufacturing capacity costs due both to lower demand and to achieve targeted inventory reductions. Manufacturing capacity carrying costs, particularly in Europe, and net of cost improvements which include about $10 million of material cost reductions, caused a 50 basis point margin reduction. Additionally, higher restructuring costs reduced gross margin by 70 basis points and the negative currency effect on cross border product blows reduced gross margin by another 70 basis points. Operating expenses in the quarter declined $24.1 million from prior year levels, principally due to $18.7 million in savings from RCI, restructuring and other cost reduction initiatives. Lower sales volumes and currency further reduced operating expenses. Pension expense increased by about $3 million in the quarter as a result of last year’s decline in pension asset values. We expect a similar increase in pension expense in the fourth quarter. Again this quarter currency was a headwind compared to year ago exchange rates. First, currency translation reduced reported U.S. dollar sales in the quarter by $21 million, contributing a $1.9 million decline in operating income. As I mentioned, we have currency exposure…

Thanks Marty. Let me end as I began. The third quarter was another encouraging period for Snap-on. Sequential results were ahead of the usual seasonal trend. And while we do seem to be on a somewhat favorable trajectory, we are cautious regarding the prediction of the timing of an economic recovery. Historically the third quarter is an unreliable indicator of near term event. But what we can forecast with confidence, however, is that customer connection, innovation, RCI and Snap-on’s other value creation processes will continue to drive improvement. What I can assure you is that we will keep investing in decisive, strategic areas, strengthening our van network, penetrating garage infrastructure, expanding in critical industries and building in emerging markets. And what we can predict is that Snap-on’s position will continue to strengthen going forward despite the economic eventualities. In closing, I will recognize that there are many associates and franchisees listening to this call. I thank you all for your dedication to our team, for your support of our initiatives and for your extraordinary contributions to our progress. Now we’ll open the line to questions. Operator?

Thank you Mr. Pinchuk. (Operator Instructions) Your first question comes from James Lucas - Janney Montgomery Scott LLC.

Nick, I don’t necessarily want to belabor this but could we dig a little bit deeper into what you’re seeing in Europe since clearly that’s an important area and a lot of the indicators show that that is lagging some of the stabilization that we’re beginning to see in North America. And in particular, even if it’s anecdotal, color or evidence you can provide on what you’re seeing in terms of the inventory levels and de-stocking levels.

Sure Jim. You know I was just there about 10 days ago. What we saw was some moderation of de-stocking but it still continues. You might remember in the second quarter we said you know something like half our year-over-year reduction was due to de-stocking. And that’s moderated somewhat. And so we did get an improvement on a year-over-year basis, though modest. So we saw some narrowing of that. I think for the Hand Tools business the on-the-street positioning is still pretty weak. So the improvement we saw, and it was small, but the improvement we saw had to do with some ending of that de-stocking. We should see that continue, but you know I predicted I thought in the first quarter it would end quicker than it did. So we still see the shrinkage. I’m not sure when it’s going to end but logically it has to. If you look at the distributor base, one encouraging thing for us is we actually don’t see many of our direct customers going away. So that’s why we’re actually not doing much in the way of capacity reduction. We believe the market will come back once the economies become more robust. And most of my comments here have to do with SNA Europe, the Hand Tools business, the sort of on-the-street business. One small sign of good news we saw was that the equipment business, the infrastructure business around equipment and garage infrastructure, did show some improvement in this quarter. And so in places where you have strong technology argument, strong productivity demonstration, we saw in this quarter for the first time this year we were making inroads in selling. So that might also be a positive. But these are very weak indicators. Like I said in my remarks, I hate to make any judgments based on third quarters in Europe. So what we’re saying going forward is mild encouragement out of Europe.

If we look at the Tools business, can you speak to, you know in the past you’ve alluded to same-store sales but maybe talk a little bit about what you’re seeing in the dealer base in terms of how they’re managing their own working capital?

Yes, well we’re seeing some small de-stocking in the dealer base as well as on the franchisee base as well, our almost 3,500 franchisees in the United States. But that’s actually often at our urging. We like to see them do that. So I think I started saying back even in the fourth quarter of last year that we started out trying to urge them. So a small factor in our results is that de-stocking. What we did see was some mild positives. And we did see some big ticket items come back. One of the good things about the quarter was that I think how you interpret this is, if you have a productivity story to sell, like in equipment or diagnostics, we’re seeing people start to think they may want to invest. That’s how we’re interpreting the better news in equipment and diagnostics in the quarter. I think tellingly tool storage, which is as you know a little more discretionary, still stayed weak. We saw a burst of hope and you know first the good news in the second quarter where tool storage was up, but I think what we’re seeing is a little thawing in North America with that regard.

And then you know switching gears, talking a little bit of the growth opportunity, you’ve given us a lot of color in the past about I mean obviously innovation is key and you’ve given us a little bit of color, but could you give us an update on the emerging market as well as market expansion, how those activities are going?

Well emerging markets, what’s happening to us in emerging markets is we’re growing very well in India and China where the GDP’s are pretty strong. I think the GDP in China in the second quarter was 7.9 and India was 4.8. And we’re growing faster than that. We’re continuing to struggle at least in the first three quarters in places like Indonesia, Philippines, Southeast Asia. And I could go market-by-market and give you reasons why those economies are having some difficulty. And so that’s the sort of landscaping around there. We’re getting a little bit of boost out of China and India though, so we feel pretty positive about that. But as you know we’re still developing our product lines in those areas. We’re putting the physicals in place and we’re developing product lines. Still I remain pretty positive about that.

And you’ve talked you know some of the mobile tool crib for the oil and gas side, the wind opportunities.

Yes. What we saw there was, embedded in my remarks was you know we took a big down in industry pretty much across the board. You might remember. I’ll just give you some history is that all through last year and the fourth quarter I think we were up 14% year-over-year in that whole area, because we’re penetrating that business. And we really saw some drop-off in the first and second quarter. In fact, year-over-year’s in the second quarter for the Industrial business was down 30%. This time it was down roughly half of that. So we were encouraged by that. And we saw some sectors come back. Education, some government investment, and we saw some upticks in some of the other places. But you know places like wind, I think places like mobile tool cribs, places like aerospace, still a little weak for us. We remain confident, though. We remain confident that that’s going to come back. If you look at things like, and when I say weak you know let’s say natural resources, which would be mobile tool cribs and mining and oil and gas, that was down versus the second quarter only about 1%. So the sequential was a little bit better. So we see some thawing there but I hesitate to say anything because there could be big winds going, big winds as in you know the blowing of winds, in that area. What we see going forward in the Industrial business I think is further penetration of those segments like aerospace, natural resources, power generation, education, government, that will as the downturn moderates we will overcome that weak economy even in a down market.

Your next question comes from David Leiker - Robert W. Baird & Co., Inc. David Leiker - Robert W. Baird & Co., Inc.: On the emerging markets, just a couple of follow ups on there. Nick if you could frame that for us, you know it’s a fairly new area for Snap-on just a few years ago, but what’s your expectations for what that part of the business is going to be if you look out five years or ten years, you know looking at the other areas you’ve been involved in and what you think that opportunity eventually is?

Well my view is we have about right now this business will at least be in the next ten years as big as our European businesses, at least as big as our European businesses. That’s my expectation. What happens is in emerging markets, David, in my experiences, what you actually [audio impairment] a couple of cycles you build the infrastructure, you set up your distribution, you start winning customers, you put product lines in place, you start to understand this and you kind of create a hockey stick sort of toward the end. I hate to say a hockey stick but that’s the way it’s worked in all my experience in 11 years in Asia. Now when we look at the markets, they are pretty strong. There’s a lot of opportunity and we don’t see the competition being that tough. It’s very fragmented. You know if you just look at the automotive industry, the car part in the world, 70% of the world’s growth in car park will occur in the next five years in emerging markets. So it’s going to be very big for us. What you see us now is just building our physicals. We’re putting the plants in place. We’re engaging with customers. And actually developing a product line is not a small task in doing this. And so that’s what we’re doing. So I see the next ten years being as big as Europe. David Leiker - Robert W. Baird & Co., Inc.: So if you take those I guess four steps, you know infrastructure, distribution and product customer, it sounds like you’re really at the first steps there in most of these markets. Is that correct?

Right. Well, you’re always building infrastructure but we have a pretty good infrastructure in place now which we have the elements of an infrastructure in place now. Now what we need to do is start to engage a stronger and broader product line and develop our customer base. When I’m talking about this, I’m talking about China and Asia, you know Southeast Asia and China. We are not so far along in India. We have to be better in India and we are not so far along in Russia, so we have to build our infrastructure in those places as well. So if you’re talking about China, if you’re talking about Southeast Asia, if you’re talking about North Asia, our infrastructure’s pretty good. We’re building our product line and we have the rudiments of a distribution, we’re starting to build the product line and engage customers. If you’re talking about India and Russia, we’re still developing our infrastructure. David Leiker - Robert W. Baird & Co., Inc.: If we look at you know the seasonal pattern here where you’ve had an uptick I guess, is there a way you can characterize it across these three elements? How much of it is just you know this inventory cycle and you know end up de-stocking or replenishment if you will. Are the end markets doing better and market share? Is there any way you can characterize it?

What were the three again? Sorry, you broke up, David, please. David Leiker - Robert W. Baird & Co., Inc.: End markets, inventories and market share.

You know I would say number one, of course probably everybody on a call like this would say number one was market share. But I think that we have evidence to believe that in our CNI business you’re taking market share, if you look at our equipment businesses, if you look at our Industrial businesses, even SNA Europe can make a case for that. So I think that’s a fairly significant piece of it. I think the de-stocking, inventory correction shrinkage is the lowest piece. In terms of markets thawing, I would say that’s second, of course. So first share gain, second markets thawing a little bit because we do see some positives. For example, I’ll give you just a little bit of a thumbnail. In North America in the equipment business you know we’ve seen continued difficulty in the chains like Goodyear and those people. We’re not selling much to those people. But in terms of the independent garages, we’re starting to sell equipment where we weren’t in the second quarter and the first quarter. So that’s a little bit of a comeback for us. I don’t know if you say market share or, I don’t know where the breakdown is between market share and the thawing of the market. We’re confident we’re gaining market share and I suspect the market is thawing a little bit as well. David Leiker - Robert W. Baird & Co., Inc.: Just a clarification on that on your big ticket items on the equipment side, how much do you think you’re down from the peak?

Oh. David Leiker - Robert W. Baird & Co., Inc.: 60%, 70% maybe?

60% or 70%? David Leiker - Robert W. Baird & Co., Inc.: Yes.

No. But look I’ll say that we’re down let’s say from the peak probably about 25%. David Leiker - Robert W. Baird & Co., Inc.: On Financial Services, it looks like the loss that you reported here is certainly less than what we were expecting. I just wonder is there something we missed there or something in terms of there’s a cost allocation there and what our expectations should be going forward.

No, we did a little better as even we predicted, principally because of a lower level of certain payments we anticipated, making the CIT as support portfolio runs off. So our modeling was a little off there. We did tell all of you to think about a $3 to $5 million loss in the fourth quarter and I will remind you that while that doesn’t seem to be much of an improvement, you should not forget that included in the $5.3 million loss this quarter we still had gains on sales of contracts sold up through July 16 which were about $4 million. So had we not had those, the loss would have been closer to $9 million. So you see about a $5 million improvement, quarter over quarter, which should sort of reconcile back based on the numbers we’ve given you to about the ramp up in interest yield.

Your next question comes from [Siever Wong] – H.F.P. Capital. [Siever Wong] – H.F.P. Capital: I want to kind of go back to the emerging markets, in terms of progress for the segments is CNI ahead of SNA or the other, where in I guess Asia and China and I guess say Russia where you haven’t really built it out yet, can you give us an idea of progress for the segments? And then maybe profitability compared to the overall company?

Well profitability versus the overall company in emerging markets is lower because we’re in investment modes. So that is several hundred basis points lower than the average. You can just take that to the bank pretty much as you view it. That’s I think a given. And our growth in the emerging markets, all I’ll say is that in the quarter versus Quarter 2 we were up in emerging markets over Quarter 2. And we made some pretty strong double digit growth rate in that quarter. Now it’s a small base you know. Our Asia Pacific business is under 10% of our business. So it’s not a very big piece of our business. And I already said that China and India are off and we’re struggling a little bit in Southeast Asia. So that should give you some color around it. [Siever Wong] – H.F.P. Capital: But is CNI kind of more trust there or is it more you know independent technicians over there, too?

No. It’s a CNI trust. In other words the emerging markets are all within CNI, Asia Pacific is within CNI. [Siever Wong] – H.F.P. Capital: And then Marty, in the previous call you had also kind of given us an idea of what to expect for the first quarter of 2010, you said it was probably going to be breakeven. Is that kind of on schedule still?

That’s still on track.

Your next question comes from Steve Surrell - Conning Asset Management.

I’m just wondering as you think about this finance business, what kind of leverage you’re using internally for that business.

Yes, you see in our targeted leverage which is based upon our assessment of the loss experience in the portfolio, and in an effort to try to create a capital structure inside Financial Services that we think if it were sort of stand alone rated could support an A rating, would be 5 to 1 leverage. Now when you look at this morning’s press release and you look at the separate balance sheet for the global Financial Services business you’ll of course see lower leverage, about $92 million in debt and $172 million of equity. So what you’re really looking at there is a mixture. That is 5 to 1 leverage but only on the U.S. assets. The international assets are at least for the time being effectively un-levered, but we will probably change that going forward.

Can you provide for this quarter or going forward you know some delinquency or non-performer or write-off kind of?

We’ve given that in the slides this morning and you may not have seen those. Slide 11.

And Mr. Ellen we have no other questions in the queue at the moment. I’d like to turn the call back over to you for any additional or closing remarks.

We thank you all for joining us this morning and for your interest in Snap-on. Good day.

Ladies and gentlemen that does conclude today’s conference. Once again thank you for your participation.