Good day ladies and gentlemen, and welcome to the Snap-on Incorporated 2009 fourth quarter results conference call. At this time, all participants are in a listen-only mode. (Operator instructions). As a reminder, this call is being recorded. I would now like to introduce your host for today’s conference, Leslie Kratcoski, Vice President, Investor Relations. You may begin.

Thank you. Good morning everyone. Thank you for joining us today to review Snap-on’s fourth quarter 2009 results, which are detailed in our press release issued earlier this morning. Before we begin, I’d just like to take this opportunity to introduce myself. As Mark said, my name is Leslie Kratcoski and I joined Snap-on in December. I’ve already have the pleasure of speaking with several of you, and I do look forward to meeting and working with all of you. We have on the call today Nick Pinchuk, Snap-on’s Chief Executive Officer; and Marty Ellen, Snap-on’s Chief Financial Officer. Nick will kick off our call this morning with his perspective on our performance. Marty will then provide a more detailed review of our financial results. Afterwards, we’ll take your questions. As usual we have provided slides to supplement our discussion. You can find a copy of these slides on our Web site next to the audio icon for this call. These slides will be archived on our Web site 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. With that said, I will now turn the call over to Nick.

Thanks, Leslie. Good morning, everybody. Well, 2009 is in the book and we finished the year with another quarter of progress. The Tools Group and the Commercial & Industrial Group both ended with sequential improvements. So while we were challenged throughout the year, we were encouraged again by the fourth quarter results. We believe that it is fair to say that the Snap-on team extended its ongoing trend of operating improvement and of strategic progress. In the fourth quarter, our overall operating margin of 11.5% before financial services was our highest of the year and it was more than 200 basis points up from where we were at the end of the third quarter. And while the earnings are below the 2008 record fourth quarter levels, we did finish 2009 with a relatively strong performance and we are well positioned for the opportunities as they unfold going forward. Marty will take you through the financials in a minute, but first I’ll provide some perspective on the market environment, cover some of the operating highlights and discuss just how we are managing through the uncertain times. For the overall corporation, excluding currency which now has turned positive for us, fourth quarter sales were down 11.1% from 2008. There was an overall 5% sequential increase from the third quarter, but that’s about in line with normal seasonality. I think it’s fair to say that on balance we believe the markets have stabilized, but overall they are not yet clearly rebounding. In that however, there are some mild good news. We believe that distributor destocking is behind us, and we did see some modest strengths with stronger than seasonally normal sequential sales increases from our industrial division; however, Europe in general continues to lag, not showing any significant signs of recovery. The distributors…

Thanks, Nick. I will begin with our consolidated operating results which are shown on slide six. Sales in the fourth quarter of $618 million increased 6.2% sequentially from the third quarter. Without currency, sales were up sequentially 5%. As compared to last year, reported sales in the quarter were down 7.4%; and absent foreign currency effects, organic sales declined 11.1% year over year. As Nick said, we were encouraged by the sequential sales increase in the quarter in light of the continued headwinds particularly affecting certain markets in Europe. Consolidated gross profit margin of 46% in the quarter increased 110 basis points from last year. Because of lower production volumes, primarily in Europe, excess capacity costs continue to pose a challenge; however, we were more than able to offset those with material cost reductions, savings from our RCI initiatives, benefits of cash restructuring and other cost reductions. The net effect was a 200 basis point gross margin improvement in the quarter. Gross margin was further aided by better sales mix, particularly in the Diagnostics & Information segment, which improved consolidated gross margin by another 110 basis points. On the downside restructuring costs, included in gross profit, reduced the gross margin by 85 basis points and currency when measured on a year-over-year basis reduced gross margin by another 90 basis points. LIFO gains in the quarter from our continued inventory reduction efforts were offset by certain higher inventory provisions and the liquidation of slower moving items. Operating expenses in the quarter of $213 million were up $1.8 million from prior year. We achieved $19.2 million from cost reduction and cost containment actions. We also benefitted from $4.7 million of lower restructuring costs that are recorded in operating expenses. These improvements allowed us to more than offset higher pension expense, higher mark-to-market…

Thanks Marty. Well, that’s our take on the quarter. We are encouraged by the results, both financially and strategically. The challenges do continue but our Snap-on value creation processes are serving as well. Consider that OI percent for the year was 230 basis points higher than the last time our sales were below $2.5 billion, in 2006, not so long ago. That’s evidence of real improvement. We also believe we progressed and achieved strategically. Our franchisee network has been kept solid in the storm. We continue to make inroads in critical industries taking the Snap-on brand and product lines to new places. We are gaining share in the key segment of repair garage infrastructure and we get stronger in emerging markets every quarter. I know many of our franchisees and associates are listening around the world. So I will close simply by observing that none of this progress would have been possible without your support. I congratulate you for your achievement, and I thank you for your commitment and your contribution to our team. Now, I will turn the call over to the operator for questions. Operator?

Thank you. (Operator instructions) Our first question today will come from Jim Lucas, Janney Montgomery Scott.

Good morning all.

Good morning, Jim.

I wanted to start first with just a couple of housekeeping questions. The vitality index percentage of sales from new products, where did that stand in 2009?

The percentage of sales from new products, we don’t actually track that carefully in terms of our business. I am not a -- we track the general introduction of products but we don’t track it as a percent of sales because at the end it’s sort of when you get to the bottom of the order of new products, sometimes you have difficulty whether it is really a new product or just a new paint job or a new plastic covering. I will say though that we’ve had a pretty robust product and I can name a litany of our products from power tools to equipment to hand tools that have come out. I think a good barometer of this is when we have the franchisee conference in the late summer, there were 60 or 70 new products just introduced at that forum. So while we don’t track it we feel that it has been growing actually, our new product profile has been growing.

Okay, fair enough. Then just from a geographic standpoint, could you bring us up to date of you mix of North America and Europe and where the emerging market stands as a percentage of overall sales and wanted to transition from there. You alluded a little bit in your prepared remarks with regards to the progress you are making on the emerging markets side, but in addition on the new markets, I was just curious, are there any particular markets that you are doing better than others? You had mentioned on the last conference call that you had to go back and change some of the product offering to go after some of these new market opportunities and just wanted to get an update there as well.

Well, let me talk about emerging markets. The Asia-Pacific markets, you can tag it at about $100 million, that’s roughly what we are selling in that business. This year, we have some good news and bad news out of that market. The exports out of the market have obviously been a little bit down reflecting the developed markets (inaudible) downturn. The business in China and India to name two are up very strongly, but for us that’s a smaller base in terms of the total. The businesses in Southeast Asia are down reflecting the currency problems in Indonesia and the Philippines. Our European business – I think European business, you can say that our business outside the United States in total is about 40% plus, outside the US – 42% I think. And that’s been about steady over the last several quarters. That answer your question for geographic?

Yes, that does on a geography side.

And the other piece of the question, you are talking about the individual like critical industries, is that what you wanted?

Yes.

We continue to make some progress in, I would say natural resources, in terms of that business that seems to be selling fairly well around the world in places like Mexico and in places like – even in Europe. So we had some reasonably good wins in that area. Actually aerospace, we had some good wins in the past quarter with Gulf Stream and some other people. We saw some wins in the government. And education while down quarter to quarter because third quarter is always a big one in education, it was still pretty strong. Suffice it to say that the industrial business, which is driven by those mission-critical industries these days, is up quarter to quarter sequentially. So, we were pretty encouraged by that. I think what we’ve seen, Jim, is that the industrial business entered the recession late. It had a gangbusters quarter last year in the fourth quarter. The first part of the first quarter of ’09, it was still reasonably strong and then it dropped off some, and what we are seeing is them recover. I am mildly encouraged by what I saw in the results. I also met with several hundred of the salesmen; we had them in for their annual conference. And while we’ve talked about people from Louisiana in oil and gas or people from Washington selling to the government or people from the West Coast in aerospace, they seem optimistic. So we're looking for some mild optimism in that area.

Okay. Then with regards to any commentary you can give with regards to what you are seeing on the pricing front? And more specific with regards to material prices, are you beginning to see any inflationary pressures?

No. We don’t really have any significant pricing in our numbers this year. We had some good progress in terms of material cost reduction. When we look out in the future, we do see some movement, for example one of our big buy is steel; we buy about 70 million. I guess, it’s not a big buy compared to some people but – and it’s a mix view. Steel rod, for example, which is hand tools, went down then went up slightly in the summertime. Now it seems to be going down again. Steel plates, the equipment, which equipment uses, that's been flat and tool storage, which use coal rolls, coal rolls is creeping up. I don’t worry about this too much as long as the gains aren’t tremendously precipitous because we’ve had a history in Snap-on because we are premium product and being able to price. So generally if material costs eke up, we can get it back in price. So I am not too worried about that being an impact for us.

Okay, great. Thank you very much.

Okay.

Next we will hear from David Leiker with Robert W. Baird. Keith Schicker -- Robert W. Baird & Co.: Hi, good morning. It's Keith Schicker on the line for David.

Keith, how are you? Keith Schicker -- Robert W. Baird & Co.: I am doing well. Couple bigger picture earnings type questions here. I think in the past you’ve always commented directionally on how you felt earnings were going to go on the next quarter. I didn’t see that in the press release this morning and I was just wondering if you had anything to add about the next quarter.

I don’t think, I don't think there was any information in that omission actually. I think we feel about the same. I think our view of the future is that we feel we don’t have good visibility in terms of the sales, in terms of volume. As I said in my remarks, we have some mild optimism in this mixed result. We are watching Europe very closely, it hasn’t come back and that recovery had lagged. But, looking out in the future I am confident of our strategic investments and we did say in prior calls before the downturn hit that we expect to grow at mid single digits, 5% to 6% organically and I am pleased with the progress we made in the strategic areas, that is maintaining our network, penetrating critical industries which I just talked about. We are gaining share in garage infrastructure and the emerging markets. So I think as the markets rebound, whenever that is – I think it’s going to happen for us just like everybody else -- I think we are going to see that mid single-digit sales growth. On the other hand – on the other side of this is absence that growth we still feel pretty good as we did prior quarter in the fourth quarter -- in prior calls, about our Snap-on value creation processes and their ability to bring improvement out of the same levels of volume. So as we go forward given the same volume we believe we can improve. We have opportunity to do that. Keith Schicker -- Robert W. Baird & Co.: Okay. Thanks. And if I think about revenue in 2010 versus 2009, would I be right to conclude that in sort of a flat final demand situation, your sales might be up because we don’t need to do any inventory correction during 2010. Is that the right way to think about that?

Well, arithmetically, of course, if destocking ends, say, in Europe, SNA Europe is where mostly we sell through distributors. That's our big distributor play and there are other places, but that's just in terms of volume. Arithmetically, of course. If destocking ends and end markets stay at the same level we will see an uptick. The caveat I would give you there is there can be some minor destocking at end customers where you are selling to a factory and they have a tool crib and that factory has been at half capacity for a long time and they come back and so they have a little bit. That’s a minor effect, but it is an effect. And then the other effect for us is the mix among markets. We look at this carefully. We're seeing some unfreezing in Europe, in the UK, in Sweden, in Germany, but Spain is still very weak. So it’s possible for those markets to be going in different directions in terms of demand and I am not sure where the balance will be. But arithmetically you are correct. If distributors stop restocking and all things remain equal and the markets remain equal, then we'll see an uptick. Keith Schicker -- Robert W. Baird & Co.: Okay, that’s great. And then lastly, could you just comment on I guess the pace of business that you saw through the fourth quarter and we're a month into 2010, granted it's January, but how things have gone so far in the early part of the year.

Well, I think I said it in the – I think we believe the fourth quarter was up sequentially. There was some mild optimism in there and that played out December. Some of the areas in December were fairly positive for us. I think it’s best to say my crystal ball is not that good, because when I compare it to third quarter, I'm comparing to a damaged third quarter again, even though we're equal seasonality wise. Now, I will say, we were pleased with the industrial business. I just talked to the industrial guys and I must have talked to more than a hundred of them from all over the country, actually all over the world. And they all seemed optimistic. But I'm still from Missouri with regarding volume. So we'll see how it goes. I think we entered the year reasonably okay, but nothing to say, “Boy, it’s an indication of an upswing.” Keith Schicker -- Robert W. Baird & Co.: Okay, that’s great. Thank you very much.

Our next question comes from Gary Prestopino, Barrington Research.

Good morning, everyone.

Hi, Gary.

Marty, I think you may have done this directionally. You gave us some guidance on where you think the financial services operating income will be in prior quarters as we exit 2010, or am I incorrect in that assessment?

That’s correct.

Is it still where you said it was -- where you think it was going to be, I think it was somewhere $30 million to $40 million, is that right?

Well, I think what I said in the past was we -- looking at one or two quarters out, that first of all, in the fourth quarter we have a loss of $3 million to $5 million. We reported $3.8 million. So we are right within that range. I also had said that rolling forward another quarter into Q1, probably breakeven, we maybe $1 million or so under that number. But the trajectory from there that I’ve talked about in terms of – it’s actually taking the growth in the portfolio and looking at the interest yield on that, given more or less most of their expenses being fixed should give you the trajectory. So if you think about Q3 to Q4, and I would remind everybody that the earnings we had in Q3 included some gains in the first part of July, up until the termination, stripped those gains out you saw more or less about $5 million improvement sequentially. And if you do the math on the portfolio growth at roughly 15% to 16% yield you pretty much get there. But you have to remember, too, going forward, Gary, that that sort of $4 million to $5 million improvement can't -- it's not linear sort of indefinitely. There is going to be at some point here an increase at a little bit of a decreasing rate. There are some longer-term contracts beyond the term of the extended credit contracts that will take a longer time to roll from their portfolio, our portfolio. But at least for the next few quarters, I would tell you maybe it will be off $1 million or so in Q1 from break-even. Expect though that trajectory that I talked about for the next few quarters to hold.

Okay. That’s helpful. If I hear you right, overall US markets are somewhat more stable than they had been for the prior couple of quarters. Certain countries in Europe are still an issue overall. But you are seeing some stability in the US, is that correct?

Correct.

Okay. Now in terms of Europe, though, you cited a couple of countries, UK, Germany, I couldn't write down the last one

Sweden.

-- showing maybe some of the stability that the US is showing.

Right.

:

Gary, the big issue for us is Spain. We have, ballpark, 20% of our business is in Spain -- our European business is in Spain. So we are overrepresented there I think so that’s part of our difficulty.

Okay, so really it’s – Spain is mainly the key issue there?

Yes, we have business in Greece, in Italy, and places like that. So you can talk about that. But your ballpark, you're talking in that range. So we have – we watch that carefully and if Spain has a problem it affects us maybe more than you might expect in other places.

Okay, thank you.

(Operator instructions) Next we will hear from Holly Sankar [ph] with Wolf Baker Investments [ph].

Hi, good morning. I have a quick question on financial services. So when I look at the guidance you have on slide 11 for 2010, you are talking about $300 million of anticipated portfolio increase, so how should I think about that then given in the past you’ve grown your portfolio every quarter by somewhere between $120 million and $130 million, and it looks like it accelerated up to $132 million in the last quarter. Is this $300 million just what rolls off from CAB [ph], or how do you get to this number?

It’s, no. But it's the net portfolio increase, so remember, as we're building our portfolio, we are not only originating new contract we are beginning to collect payments on the prior contracts we’ve funded. So you are really looking at our additions if you will net of our collections. In essence what we are trying to help people with is, understanding the cash flow requirements that we need to fund over that time frame.

Got it. So how would that map to originations?

Well, we provided you with origination data for the quarter and if you historically we are in the $120 million to $130 million range globally. That’s a global number, not just a Snap-on Credit number. And actually that number was up a little bit. We are actually seeing some increased penetration in the Snap-on Credit business as a result really of our end customers having fewer financing choices and therefore actually benefits our business. But more or less that number hasn’t changed much, if you go back and look at their annual origination, not a lot of change, pretty flat. So that’s not going to change much but we begin to collect cash from customers whose loans were originated on our books.

Got it. Okay. And one last question on that subject which is on the yield. I know in the past you’ve talked about 15% to 17% yield. Are you seeing any changes in the yields, higher or lower from credit, or that yields on treasuries?

No.

Okay, thank you.

We currently have no questions in the queue. I’d now turn the conference back over to Nick Pinchuk for any closing or additional remarks.