Good afternoon, ladies and gentlemen. And welcome to Tractor Supply Company’s Conference Call to discuss Fourth Quarter and Full Year 2009 Results. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session, and instructions will follow at that time. (Operator Instructions) Please be advised that reproduction of this call in whole or in part is not permitted without prior written authorization of Tractor Supply Company. And as a reminder, ladies and gentlemen, this conference is being recorded. I will now like to introduce your host for today’s conference, Ms. Erica Pettit of FD. Please go ahead, Erica.

Thank you, Maria. Good afternoon, everyone. And thank you for joining us. Before we begin, let me take a moment to reference the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. This conference call may contain forward-looking statements that are subject to significant risks and uncertainties. Including the future operating and financial performance of the company. Although the company believes that the expectations reflected in its forward-looking statements are reasonable, it can give no assurance that such expectations or any of its forward-looking statements will prove to be correct. Important risk factors that could cause actual results to differ materially from those reflected in the forward-looking statements are included in the company’s filings with the Securities and Exchange Commission. The information contained in this call is accurate only as of the date discussed. Investors should not assume that the statements will remain operative at a later time. Lastly, Tractor Supply Company undertakes no obligation to update any information discussed in this call. Now, I’m pleased to turn it over to Jim Wright, Chairman and Chief Executive Officer. Jim, please go ahead.

Thank you, Erica. Good afternoon, everyone. I’m here today with Tony Crudele, our CFO; Greg Sandfort, our President and Chief Merchandising Officer; and Stan Ruta, our Chief Operating Officer. At the on set of 2009 we knew that it would be a dynamic and challenging year to stay ahead of the game we assessed and responded to a much more cautious and needs-driven consumer, through our teams of steadfast execution we deliver strong results quarter-after-quarter while continuing to make strategic investments in our business. We’re delighted that we achieved record financial results for the year based on fourth quarter performance. We continue to experience solid sales performance in consumable, usable, and edible are cue categories, including animal and pet-related products, as well as, key winter products. Throughout 2009, we focused on two priorities, which were to continue differentiate our company in market and execute our retail strategy to ensure that we win the current environment and beyond. I’ll briefly review key accomplishments that drove top and bottom-line growth for this year. First differentiating our company in the marketplace. We’ve always served an attractive niche and continue to see relative strength in both the consumers and the markets we serve. While our consumers were not immune to the challenges of the economic environment, they are generally more fiscally conservative and they are less impacted by weak housing and credit markets. Our compelling merchandise assortment is wide yet targeted positions us as a one-stop destination for those who live the rural lifestyle. Throughout the year, the team continued to work closely to support our customer’s everyday basic needs at compelling prices. In doing so we expanded our cue item offering, which helped drive traffic into our stores. Animal and pet-related products grew and we built upon this strength with successful and seamless…

Thank you, Jim. Good afternoon, everyone. We are extremely pleased that both the top and bottom-line results were stronger than we expected for the quarter and full year. Additionally, we continue to manage our margin, increase customer traffic and reduce year-over-year inventory levels for the ninth consecutive quarter. We have to thank all of our team members for great achievement in a very difficult marketplace. For the fourth quarter ended December 26, 2009, net sales grew by 7.9% to $862.5 million and net income grew by 54.8% to $38.3 million or $1.04 per diluted share. Comp store sales increased 0.7%, compared to last years 1.3% increase and non-comp sales were $57.2 million or 6.6% of sales. New and existing customers are shopping for their rural lifestyle essentials that tend to be purchased in more frequent shopping trips with lower average tickets. These products in our consumable, usable, and edible or cue categories continue to be the key merchandise drivers of our sales. Animal and pet-related products performed well and we had benefit of additional lift from the rollout of Purina and Nutrina premium feed SKUs that we began selling in early October. Repair and replacement part categories continue to perform well as consumers remain committed to fixing existing equipment for as long as they can while postponing big-ticket and discretionary purchases. Although sales of insulted outerwear did not meet our overall expectations for the quarter. We did had brisk sales in the later part of the quarter once the cold weather became more pronounced and as we moved into 2010. We were very comfortable with our inventory levels as we exited the season. We estimate that we experienced 175 basis points of deflation on sales in the quarter and effectively managed this impact at the gross margin level. Deflation was…

Great. Thanks, Tony. We expect retail environment to remain dynamic and will need to maintain crisp execution to reach our desired goals. We have an experienced and energized leadership team in place with a roster of individuals who are focused on getting the job done. While we had management changes over the last few years even our newest executives are now entering their second and third years with the company. As such we are fully ramped up and very confident in our ability to build on our positive momentum throughout 2010. Together our actions we’ll remain focused on -- relentlessly focused on serving our customers and managing our business proactively. Let me go to more detail on both of these priorities for 2010. First we’ll maintain relentless focus on serving our customers with our unique mix of merchandise, elevating our customer shopping experience and refining our marketing program more specifically, our unique mix of merchandise is a driver of business. We remain in line with our customers’ needs, therefore emphasis on cue item will continue. We will continue to increase our direct sourcing to offer the best products to our customers from both quality and value perspective. We’re also strengthening our private brand, which provide great value for our customers and improved margins for us. With respect to discretionary purchases, we believe there’s a pent-up demand in big tickets but we believe it’s also too early to say whether we will see that demand come to fruition in 2010. As such, we’ll carefully manage our inventory levels for discretionary and big ticket merchandise to support customer demand. We’ve proven the ability to navigate well and adjust appropriately during both inflationary and deflationary periods. Although lifestyle is still growing. Let me reference a few high-level comment from December 2009 article in…

Thank you. (Operator Instructions) Our first question come from the line of Vincent Cinice of Banc of America/Merrill Lynch.

Good afternoon. And thanks very much for taking my question. Jim, if you could give any color or mainly on the gross margin and I know Tony, you mentioned, the few factors that are going into your outlook for the 2010 period. If you can give any further color just in term of how you kind of foresee that throughout the year on both the inventory management front as well as the freight opportunities or slight headwinds as you mentioned in 2010, that would be great?

Hey, Vincent, this is Greg Sandfort. Let me answer that question for you. In regard to margin, there’s a number of thing that we are doing. One is we are moving our model from I would say indirect sourcing to direct sourcing to factory and that is a big move for us that has substantial impact on gross margin. We won’t see much of that until the late part of 2010 but it is the works today. Pricing optimization is another piece. We talked about the focus on, the 2250 this past year and is actually moving up now to be a 3300 program, so we found more things to support. But you’ve got to understand that there’s high velocity SKUs, as well as, low velocity and what we’re going to be doing is looking at price optimization on as many of the high-velocity SKUs that we can, as well as, and taking a look at that bottom 3 to 4000 SKUs, the things just turn a little bit slower, there’s another opportunity. Another thing that we’ve done in margin protection and past margin growth is looking at multiple sources for our commodities. The dynamic of understanding that there are several places we can go to fulfill those needs and then having that dynamic of comparison of price is something that we have definitely stepped up this year and we’ll continue all the way through 2010. And then the last thing on the margin side is, and Jim mentioned this and so did Tony. The ability of us to move through on actually clearly on seasonal products. It will limit the backside markdowns and it really adds the gross margin equation. Now, talking about on the logistics and transportation side, the big wins here really are several things. One is we went through a dedicated fleet bid process over this last, well, 2009, and as was mentioned, we found some tremendous savings by reconstructing how we operate our trucks and how we actually run stem miles, so there are savings yet to be scene through 2010. Secondly there is a vendor compliance rollout program that is will be in the initial stages in March, probably gain some momentum mid-year towards end of year and this is all about saving efficiencies not only from a movement of product in transportation but once it enters the building and then is distributed, put away, taken down, picked, and pushed back out to stores. So those two things -- are two things to note that I think will definitely impact margin.

Okay. That’s very, very helpful. Thank you. And just one quick follow up if I may, a quick question on your Purina and Nutrina products. I’m assuming they’re certainly in the higher velocity category that you folks had mentioned. Just wondering if the 15 SKUs that are currently in stock, if or I guess more importantly, when would we see a greater number of SKUs coming from those two brand? Thank you.

As far as SKU expansion, we are in discussions with both the brand feed provider at this time. It will probably be the later part of this year. We have yet to really, in my opinion, maximize and understand the impact of those SKUs in our assortments, so you won’t see probably much SKU expansion to latter part of 2010, possibly into 2011.

Great. Thank you very much.

Thank you. Our next question comes from the line of David Magee with SunTrust Robinson Humphery.

Yeah. Hi. Good afternoon, guys. A couple of questions. One, can you talk little bit about your assumptions for 2010 with regards to composition of the comp and do you expect sort of a continuation from what we saw in the fourth quarter?

Yeah. Just briefly and if Greg wants to add. Generally we see that the cue items will be the drivers and obviously there’s the potential lift from the feed program and the hand SKU assortment. And additionally, the repair and maintenance piece as we move into spring we think will be very critical as well as people continue to maintain their equipment. So I think you’ll see a similar pattern, my only hesitation on the question as far as Q4 goes is that, Q4 is our strongest apparel quarter with the insulated. So if you draw the comparison for the full year relative to that quarter that would be erroneous but the general trend of the cue items driving the business to 2010 would be essential.

Okay, Tony. I guess, well, what I’m looking for is more of a traffic versus average transaction size relationship. Does that continue as it was in the fourth quarter, you think?

I believe directionally that would be correct.

Okay. The second question has to do with just the inflation impact on the margin. You mentioned, the impact on the margin itself this year. I’m curious, could you just give more color regarding maybe the fuller picture in terms of the, your ability to pass on inflation and maybe what the net impact would be to EBIT dollars?

Let me handle that one. David, this is Greg again. We have demonstrated throughout the year that with either inflation or deflation, we have a mechanism and a process in the company to not only track that, forecast that, but react to that. And using that mechanism, we can get a little bit out in front of what we see coming towards us in either category and we make the adjustments. What we found through the inflationary period is it’s easier because if prices move, it’s easy to kind of move pricing up and the customers in many cases will accept that. Deflation is always little bit more difficult and its really more of a stair step process as you start seeing prices coming down because of the move in average cost of your ownership inventory. But I’ll reiterate, we have a plan here, we have a process, it works and we manage through both of those cycles very, very well in 2009, and we see no reason that we won’t do the same in 2010.

Great. Thank you. Good luck.

Thank you. Our next question comes from the line of John Lawrence of Morgan Keegan.

Good afternoon, gentlemen. Just real quick, Greg, I don’t know if you want to follow on that as well. But when you talk about the Purina and Nutrina items, those step, those put the traffic that came in as part of those items. Did the basket look what you expected it to or did mostly just get feed or do they cross over to other parts of the store?

John, what we tracked thus far is it’s very similar to the purchasing that you would see as far as basket size in our own private brand. In traffic probably brought some new customers but in the same respect the basket, composition of the basket was very similar.

And secondly on private label, Jim’s comment for the year, you’ll continue to expand that. You think weather was the single sort of factor there related to C.E. Schmidt and would you look to expand that going into 10?

First of all, weather did play a little bit of a role in the fourth quarter with the insulated product. But ironically, our C.E. Schmidt products did perform very, very well. Secondly, yes, there will be an expansion in C.E. Schmidt and we are very pleased with what we saw in C.E. Schmidt for her. We plan to dial that assortment up into 2010 and actually probably add some other categories in C.E. Schmidt as we go into the second half of 2010.

Great. Thanks a lot.

Thank you. Our next question comes from the line of Jack Murphy of William Blair.

Yeah. Just a couple of quick questions. First, I wonder if you could -- if you had mentioned how you had started the year, how January is progressing. I know you mentioned one specific category but any overall comments on the total comp and how that’s looking?

I guess if you look at, again Q1 as you know, is kind of a breakeven quarter for us historically. Winter came early in Q1, early in January, so as a result, I guess, the only year-over-year difference would be that we were in a position to have further sale through of the remaining heating and cold weather outerwear early in the season at the first markdown as opposed to sometimes happen to us later in the season at the second and third markdown.

Okay. All right. So stepping back maybe a more longer-term question. Could you talk about how the new stores are performing and what point we may see greater real estate acceleration and are you seeing any real benefit from the kind of relative weakness of the real estate landlords at this point?

Yeah, Jack, Stan here. New stores are performing very well. We are very pleased with their performance and we’re going to continue to grow the stores at the pace Jim outlined a little bit earlier. We are seeing some, on the retrofit side, those costs are coming down. Our grant has come down now for the last three years in a row, combination resulting in the work we have done to value engineer our prototypes and frankly, the economy is bringing the price of real estate down. So we’re going to continue to open 70 to 80 stores a year, for the near-term and keep our eyes on the economy and trends and hopefully we’ll ratchet that up when we feel the time is right, we’ll keep you posted.

Okay. Thanks.

Thank you. Our next question comes from the line of Matt Nemer of Wells Fargo.

Good afternoon, everyone. Great quarter, great year.

Thank you.

Thank you.

My first question was, if -- I just wondering if you could drill down a little bit deeper on the animal and pet category, and maybe Greg you could chime in, sort of wondering what categories are strong, is it just consumables or you are starting to see some up tick in some of the hard goods items as well?

I’ll take that first. This is Greg. No question that the consumables are the majority of the drivers but we are seeing some nice add-on business with animal care. And other things like the minerals, part of the business and so on and so forth. So it’s not just feed. There are other thing that are selling. Now in the equine business it’s little different. There you know, we have seen a little bit of a slowdown on the hard goods side and continue to see the feed and care side driving that business. But in general, the basket is relatively healthy right now, it’s not just feed.

And anything we need to be aware of that’s changing competitively either pricing or resets at some of the competitors or new product introductions, et cetera?

As far as what we can see and acknowledge that we have, we’re probably the one that got the most change, adding Purina and Nutrina and repositioning our overall mix. There’s continued, you know, I’ll call it drop off of the independent feed stores out there. They have been, with the economy where it is and money being as tight as it is, the independents are struggling. But I don’t see anything on the horizon from maybe even in some of the big box or whatever and we feel very comfortable about the assortment.

Thanks. And then just switching gears to expenses, SG&A per store was up a little bit this quarter versus a little more flat last quarter. Is the difference mainly explained by the incentive accrual and tax reserves that you mentioned or is there anything else there that we should be aware of?

Matt, that’s -- those are the two big ones that were incurred in the quarter. And in particular on the incentive compensation, relative to quarter-over-quarter, it was a significant increase just due to last year, did not have a significant accrual.

And then lastly, just to follow up on Jack’s question. Are you still thinking longer term that if you like what you see, the store growth rate could come back up to low double digits and new store productive, we’re coming up with a number that suggests higher than it’s been in a very long time, does that mesh with you -- how you track it internally?

Yeah. As far as the new store productivity and we will continue to look at the environment and if we like what we see, then we would potentially ratchet up the store growth. The new stores, we like the 2009 stores. We generally see them as a little bit stronger group than the 2008. However, straight across the board over the last several years, we like the new store groups but there was a like up tick in 2009.

Great. Okay. Thanks so much. Good luck this year.

Thank you.

Thank you.

Next question comes from the line of Peter Benedict of Robert Baird.

Hey, guys. A couple of questions. First of all, would you be willing to quantify to the degree that you can the lift that you saw in the fourth quarter from Purina and Nutrina, I mean, certainly there was probably a traffic benefit there. Any metrics you can kind of give us to give a sense of maybe how impactful that was?

Peter honestly, I’d rather not comment on that, the only thing I will tell you is that we did saw increased foot traffic and new customers.

Okay. Fair enough.

Peter, this is Jim, also want to recognize that those SKUs from, I guess, 20 SKUs roughly for both companies represent premium feed and to the degree they impact our existing business is only in the premium section of livestock and equine feed, which is a minority of overall feed business. While it’s very, very important to us, we are delighted with the results, it is not like we have moved the entire category from -- to a branded option from a private brand only option.

Okay. Understood. When we think about 2010, in terms of the comp outlook, does it assume traffic continues mid single digits, I mean, that’s been one of the real strong points for you guys of 2009, do you think that can continue into 2010?

Yeah. We think that will moderate somewhat, so, and obviously look at our comp forecast. We see probably a little more stability and take it than we have had and a growth in traffic but somewhat diminished rate compared to what we experienced in 2009.

Okay. Good. Then on SG&A, it was up about 10% or 11% in dollar terms versus last year in the fourth quarter, in other words there were some incentive things there. But how should we think about SG&A growth in 2010, I mean, this 10% are good kind of starting point, I mean, I know the square footage is going to be up about 8%. Is that where we should be thinking in term of SG&A dollar growth for 2010?

It’s probably not quite that high. Because I think that there were some more significant adjustments relative to the incentive comp in some of the other year-end entry. But I think that you’re looking, again, some directionally, you’re in that upper single-digit range.

Okay. Thanks, Tony. And then just last on the use of cash, I mean, I know your outlook doesn’t assume any buybacks you do have a lot of cash. Can you give us some parameters around, what’s the right level of cash for you guys to operate at. Is it we kind of get a sense of when you might decide to do more buybacks?

Again, as much as, we have internally set some targets, We have not disclosed those yet. When it comes to the share buyback, it’s not necessarily driven by the quantity of cash. We really look more at the marketplace and the volatility in the stock and again, directionally where we feel the company is going and where the stock is trading. So that is more of a determinant than the cash balances. I think as we move forward in the year, we’ll give more direction as to what our sort of cash requirement is going to be. We currently want to take a look at the real estate and how the real estate market progresses and if there’s some opportunities there and again, we can further clarify as we move throughout the year.

Okay. And actually, one additional, if I can. On the inflation outlook for 2010, you guys are expecting about 1% net inflation. 1Q you said deflation, is that deflation hit going to be less than what you saw in the fourth quarter, so kind of a less deflation in 1Q versus 4Q?

Yeah. we anticipate it to be a little bit less than the Q4 impact and again, you know, it’s difficult to model but we feel that it would actually start to subside a bit as we move -- get through the end of the first quarter and that continue to moderate as it moves into the second quarter.

Okay. What’s expected to inflate in the second half of the year, to kind of get you, I mean, I appraise this rate, I guess, to get you plus for year?

Yeah. But not significant, I mean, if we plateau or get to flat in Q2, you’re generally looking at to balance out about 2% over the course of the second half.

That is going to be more of the feed items, you think, or?

It, again, difficult to project but we have seen -- we’ve seen that elevation in the feed items and again, it’s difficult because you’re really looking at year-over-year increases. And so we did have some deflation in those categories so there is potential as we cycle through against those items. But again, it’s driven by the core commodity items and the big three, clearly, the grain, the petroleum and the steel products, and so we really just need to monitor those categories.

Okay. Great. Thanks a lot.

Thank you. Our next question comes from the line of Christian Buss with Thomas Weisel.

Hi, there. Congratulations on a great quarter.

thank you.

Just wanted to ask where private labels shook out for the year as a percentage of revenues?

Generally we were actually up and cracked through the 20% mark. I want to say were approximately 21%, so we had a strong performance in 2009.

Okay. And then on related question. Can you talk about what percentage of revenues now coming from direct source product, I think, you had been saying you are at about 7% before?

Yeah. Again, we were up slightly in 2009 and closed out around the 8% number.

Okay. Is there any help you can give us on sort of what the margin lift your getting from the private label product is on a relative basis?

Yeah. Fairly consistent with prior years, we believe that it ranges between 500 and 1000 basis points, when it comes to the direct imports, it’s slightly lower, when it comes to the private label categories, dependent on whether it’s used as entry point product or not or if it’s higher up the later and of a premium category. It could stretch as high as 1000 basis points but overall, the private label will run a little bit less than the direct import.

That’s very helpful. Thanks a lot.

Thanks. Our next question come from the line of Robert Higginbotham with Goldman Sachs.

Good evening. And a couple of questions. To follow up on the brand introduction on the horse feed business. Could you give us any kind of color on any kind of impact you saw on regional brand exits there? You talked to gaining that incremental customer, I was wondering if there was any kind of offset and really looking to the future and wondering if, once that negative offset maybe dissipates when you’ll have a really powerful net incremental impact? That’s the first. I have a couple of follow-ups. Thanks.

Robert, this is Greg. What we saw was a relatively easy transition for many of our customers from some of the regional brand moving over to Nutrina or Purina, so we really did not see any real negative impact on the business. They were more than delighted to have either those brand in the stores.

Got it. Thanks. And on 2010, your sales outlook for this year, when you think about big ticket, you know, how do you expect big ticket trends to development through the year as part of that maybe you could talk to what kind of signs you’re looking for out there to, manage your approach to that business, pretty effectively narrowed your assortment in that business to really kind of optimize where the demand transfer really going or what signs are you looking for those trend to reverse?

Sure, Robert. Jim. There are two kind of really trend on big ticket, one, we expect continuing very tight credit market for consumers, as well as, consumer that will continue to be kind of adverse to taking on more short-term or credit card debt. So that would speak to continue compression of big ticket. The upside will come as consumers recognize that the cost and I guess, aggravation continue repair of what big ticket product will make replacement more attractive to them. We believe that is going to happen. Certainly when we look at riding lawn mowers, we believe there’s a tremendous pent-up demand. We done know if that’s coming to us this year or not. We’re planning for not to but we also have a quick response plan in place all the way back to manufacturers, so that we see anything, any easing in any thing, any of our big ticket products, our supply chain is poised to respond very, very quickly.

Got it. I’ll leave it at that. Thank you.

Thank you. Our next question comes from the line of Brent Rystrom with Feltl & Company.

Hi. Good afternoon. I just have three questions. On the apparel site, are the markdowns on the winter apparel, are they coming any later, it appears that last year when I shopped in stores at this time, I saw the markdowns were little bit heavier already?

This is, Brent, this is Greg. The difference is we didn’t have near the carryover that we had a year ago, to be honest. And we acted faster, we start taking some intermittent markdowns in the fourth quarter, which really reduced the carryover and of course, we had nice push in weather the early part of January, which really cleared us of a lot of carryover, so we’re in great shape.

And from that perspective, we did a survey back in December, mid, in December into early January and found that, close to like 90% sales through on a lot of the private label product. Is that pretty consistent what we saw that time and talking to C.E. Schmidt outerwear?

I would tell you the sale throughs on C.E. Schmidt were above what we had expected. We are very happy with the performance and again, very little carryover. I’m sure you have been in the stores recently, you will see that we relatively sell through.

The remark I’m getting consistently from store managers this last year on the remaining clothes that they had now you put that more in the middle of the store needed more visible as people came in this time and you are looking for that markdown, you haven’t done that this year. Is there a reason?

Well, part of the reason was we reengineered the [Sanford] store this year to feature toys and holiday decor and things. And we positioned the left-hand corner at the front of the store the heating and warmth shop, if you want to call it that. And that was really the positioning, what we found was the customer could find the product where destination put in place, so wasn’t an issue. And I will tell you that we’re very please with the sale throughs and as we pulled our stores, the majority of our stores liked except this year versus last year.

Okay. Any branding or pricing strategies planned for our equipment as far as the riding lawn mower season?

Well, we said we were going to narrow the assortment and we have. I would rather not get into the assortment exacts but what you’ll find is a very focused, pointed assortment that is right for the TSC customer, and that’s how we approached at this season, so we’re very happy with the positioning. And as Jim said earlier, if the season opened, if the pent-up demand starts to materialize, we are well position to take advantage of them.

Final question, just from the perspective of the snack bar, how would you characterize the relative success of that, again my store visit tell me that manager saying water, the fatty salty doing stuff like that, doing real well, the Powerade, for example, not doing so well. How do you evaluate what is in there and how to change, doesn’t seem have a lot of change fall to winter here?

Well, Snack Barn is a concept, it’s new for the second half of the year. There’s no question that we’ve done our own due diligence on what sell best and what did not and store managers, I’m for that a pretty good feel for that as well. It’s changing out in the first quarter again and what we’ve learned is that both the front wall and the fore placement products sell differently, so we have Greg going to apply now as we go into 2010, and we believe that the concept is not only viable but can add, substantial volume for us in profitability as we go into 2010.

Thank you. Congratulations.

Brent, thank you.

Thank you. Our next question comes from the line of Mitch Kaiser with Piper Jaffray.

Thanks, guys. Good afternoon. Tony, could you take us through kind of your assumptions on the average costing pools? I think I’m on the Q3 call you were talking that there might be some gross margin rate pressure? And then just maybe what your assumption is for diesel pricing, I know it’s up about 25% kind of year-over-year and recognize there’s a three to four month lag on that but if you could take us through kind of your assumptions I’m thinking and that will be helpful? Thanks.

Yeah. Generally, we don’t talk in too much detail on LIFO pools themselves. However, you know, we did receive an obvious benefit as we had deflation in the fourth quarter. Go forward, when we look at inflation in the coming year. One, obviously, we like it to be somewhat moderate because significant inflation can have more pronounced LIFO impact. But in, just, one thing I wanted to point out is that over last decade, outside of 2008, Mitch, it was been a very small number. It’s always been less than $10 million. So we don’t believe that either have a significant impact at these lower inflation rates and we do believe that it’s very, very manageable as we move into 2010. So relative and the second question Mitch was…

You kind of give assumption on diesel pricing and then I have just one quick follow-up?

Yeah. Generally, we expected to increase throughout the year. But we will look at the federal guidelines and we’ll utilize that as our projection. So we do anticipate to have some increase but it’s relatively moderate.

Okay. So maybe some of the initiatives that you’re taking on the transportation side will help alleviate that?

Yeah. That is our goal and we look at the initiatives and what the potential savings could be and we believe that it will offset it maybe not in its entirety but feel that we can have a significant offset from the initiatives that we have in place.

Okay. And then just to be clear, in the release you talked about $0.20 of LIFO provision or charge. Is that about $10 to $12 million in pre-tax, then?

Correct. We said that it was $12.2 million pre-tax is the guidance -- full guidance for LIFO in 2010.

Okay. Sound good, guys. Thanks. Good luck.

Thank you.

Thank you. We have reached the allotted time for questions. I will now turn the floor back over to management for any closing remarks.

Okay. Well, thank you very much. Glad you’re on the call with us, glad you’re on the trip with us. It’s been an exciting journey for the last 10 years, two years, and certainly last year was just terrific. I’m extremely proud of the team, delighted with store readiness. I visited 120 stores just last year and frankly, have never found us better, more prepared for business. We’re doing a great job from stores all the way back here to the store support center and I look forward to great anticipation to another good year in 2010. Thank you.

Ladies and gentlemen, that does conclude our conference call for today. You may all disconnect. And thank you for your participation.