Key questions and answers from the second quarter earnings call conducted by Autozone Inc. on February 26, 2008.

Matthew Fassler (Goldman Sachs): Any comments on your capital structure?

William Giles: On a year to date basis we repurchased $350 million worth of shares versus $220 million purchased last year. We accelerated some of our repurchases in the first quarter and we are committed to get back to our 2.1x and maintaining our investment grade credit rating.

Matthew Fassler (Goldman Sachs): Was the weather a factor in driving mix and consequently margin in either direction this quarter?

William Giles: We are going to get fluctuations on a weekly basis throughout a quarter but on a 12-week basis things seem to even out a little bit. Our merchandise organization has done a very good job between just optimizing our merchandise assortment.

John Lawrence (Morgan, Keegan): Comment on the two priorities in Commercial?

Bill Rhodes: We have focused really hard on making sure that we got the foundational elements of our business in good shape and that includes parts coverage that includes high levels of service. We did some things like bringing our credit processing back in house and so we got those foundational elements in place and then we began building some strong sales culture.

John Lawrence (Morgan, Keegan): Any feel for that inflation in some of those oil based products?

William Giles: Probably a little bit less but we continue to see pressure.

Michael Baker (Deutsche Bank North America): What are your plans on marketing going forward?

Bill Rhodes: Around Christmas time we went out and did four very hot promotions and we did it to try to see what we could do with increasing customer traffic. And we also supported that with some incremental radio.

We found that it is just very hard to break through during the holiday shopping experience; a tremendous amount of people out there. And we also found that because we can sell some promotional items at very aggressive prices that does not translate into being able to drive profitable sales across the balance of our stores.

Michael Baker (Deutsche Bank North America): Any comments on potential consolidation in the space and how that might impact you?

Bill Rhodes: We have tremendous competitors across the entire country. A lot of times people want to talk about Advance and O’Reilly’s and CSK and obviously those are very strong competitors. Any change in the competitive landscape we will certainly monitor it and react to it but we believe our success is determined by what we do and how we interact on a daily basis with our customers and our AutoZoners.

Cid Wilson (Kevin Dann and Partners): Is there any change in terms of the percentage of your total inventory that is private label?

Bill Rhodes: It is not materially changed. We continue to look for ways to enhance our Duralast and Duralast Gold offerings and in some cases they get a little bit more focus because they are in some of our core categories.

Cid Wilson (Kevin Dann and Partners): Any color on you’re utilization of your DCs and where they are and what your outlook is in terms of your DCs?

Bill Rhodes: At the point in time that we make changes to our distribution strategy we will communicate them. At this point in time we have seven distribution centers in the continental United States and they are capable of servicing all of our stores. We also have a DC in Mexico that services our Mexico stores.

David Cumberland (Robert W. Baird): For the commercial business have you been able to maintain margins in the first half of the year while you have been investing in the business?

Bill Rhodes: As far as gross margins have been, we have not seen any or had any significant shift one way or the other in our overall gross margins. As we make investments particularly in some specific areas we can see some minor contraction in the operating margin but nothing material.

Danielle Fox (Merrill Lynch): Is there a material difference in the pricing environment between retail and commercial?