Gary Balter (Credit Suisse): You have struck on the winning formula to grow the commercial business. You still only have programs in about 55 or 70 of your stores. Are you looking to accelerate that penetration?

William Giles: We hope over the long-term to increase that penetration. That is not a key component of what our strategy is today. We are looking every day to add a few programs, but it is not a big focus. Our big focus is making sure that we improve our value proposition to our customers and do it with the customers that we have today in the programs we have. But that is a component of our long-term strategy.

Gary Balter (Credit Suisse): Can you give any color on regional strength and weakness?

Bill Rhodes: We mentioned it in our prepared remarks but we saw some fluctuations on our regional basis. The biggest part of our fluctuation we believe comes from us and our execution in those individual markets. We saw nothing material worth highlighting.

Dan Wewer (Raymond James): When you are looking at increasing your yes percentage or your in-stock percentage for commercial and do-it-yourself, do you have a sense to how much that is adding to your same-store sales growth or your total revenue growth?

Bill Rhodes: We do specifically on specific categories. We can see it. We have not disclosed what that number is but it is a key component of our success in that business and its not only a key component for the sales that you get for that category, but whenever a customer calls you and you do not have it, then they are likely to move you down the call list over time if you do not say yes frequently enough.

Dan Wewer (Raymond James): How would you say the sales benefit from the extra $75 million added in fiscal year 2008 compares to the benefit of the $75 million in 2007?

Bill Rhodes: Last year’s benefit will be bigger than this year’s benefit because as we took the low-hanging fruit but we also learned a lot so we feel confident that the inventory that we are adding now is also going to be productive.

Dan Wewer (Raymond James): You were able to improve your gross margin rate despite the growing sales mix and commercial, it is always assumed that margin rates in commercial programs are lower than do-it-yourself. How much has that gap narrowed?

William Giles: It has narrowed. We continue to have opportunities on gross margin both on DIY side and the commercial side and so overall there are certain strategies that apply to both sides of the business and I think we have been successful in executing them so we feel good about the health of the gross margin overall and we are pleased that we were able to demonstrate an improvement this quarter.

Dan Wewer (Raymond James): Your initiatives to focus on commercial are working, are there any thoughts about putting together some new programs to stimulate you do-it-yourself penetration or is AutoZone’s do-it-yourself sales productivity so high that further gains would be difficult to achieve?

Bill Rhodes: No further gains would not be difficult to achieve, it is a more mature business for us but it is something that we are working on diligently every day. We are not satisfied with our performance in retail. There are a lot of influences that are going on today. We are not dissatisfied with it, but we are certainly not meeting our aspirational levels. We are doing a lot of things along with product assortment improvements, we are spending a lot of time on improving our training in the stores and making sure that our AutoZoners are motivated to give that great trustworthy advice.

Colin McGranahan (Sanford Bernstein): On the commercial programs, in the 1,200, the subset of programs where you have got the modified or different tools and processes, how would you envision the pace of expanding that to the base of the 2,233 programs now that you are starting to see some traction and what some of those different processes are?

William Giles: The biggest part of the differences in the programs is the sales resources that are provided to that program. Number one they have what we call the territory managers. There is an outside sales representative that also works with the AutoZoners in the box to make sure they are delivering great service. That resource would typically have about 10 stores that it supports and the stores that are not on that program do not have a territory manager associated with it. Also inside the store, the commercial specialist has incentive compensation. There are a few other elements but those are the main elements. As far as how fast are we going to grow, we have been prudent with how we have rolled it out over time and would expect us to remain prudent. We are confident that it is the right thing for those 1,200 stores but when we picked the 1,200 stores because we were putting new resources incremental cost in there we started them with a higher volume stores. As we get to the lower volume stores it gets more complicated to justify but as we improve our overall program and performance it gives us the opportunity to continue to expand it and we hope that will continue.

Colin McGranahan (Sanford Bernstein): Is part of that prudence managing the negative margin impact of the higher cost of these programs because the sales traction builds over time?

William Giles: We have a term we use around here, it is called pay as you go and that is what we have been doing with the rollout of that program. Roll it to the next set of people, make sure that it pays for itself, get traction in it, provide additional margins and then go roll it again.

Colin McGranahan (Sanford Bernstein): Can you talk about the impact of higher fuel on your distribution costs overall and how you are hedged at this point?

William Giles: We are not currently hedged. We have not been hedged this fiscal year at all. On hindsight that looks like that was a bad decision but one thing we have not spent a lot of time talking about our supply chain but they have done a phenomenal job over the last three years of continuing to drive incredible efficiencies out of that business and because of that we have not had to callout the impact of fuel. We have a big fuel component on both the outbound distribution processes also we manage most of the inbound freight in our DCs and we are getting fuel pressures there. Then we also have our commercial fleet where we are having fuel pressures. But we have a lot of pluses and minuses throughout our business and this is something that we can manage. Now if it goes to $6, $7 which nobody seems to be talking about, then it becomes a bigger component but we can manage it over time.

Matt Fassler (Goldman Sachs): Your SG&A line showed excellent expense control over the course of the quarter, year-to-year growth in SG&A dollars moderated on essentially the same store count. How proactively you manage the SG&A?

William Giles: The organization did an outstanding job of managing expenses throughout the quarter. I think we got out in front of it. We recognized some of the headwinds from a macro standpoint and we reacted appropriately. We have been careful about trying to make sure that we are not cutting expenses in areas that are customer-facing and so we have been able to find efficiencies just in how we operate the stores on a lot of fronts. There are a lot of places where we have been successful in reducing expenses and we will continue those as we move into the fourth quarter as well.

Matt Fassler (Goldman Sachs): You have been explicit about your leverage caps, from time to time you have come close to them and bought stock back. Is the current credit environment and discerning nature of just today has you sticking more rigidly to some of those targets than you might have in the past?