The firm’s stores in Mexico continued to perform well.

The firm opened 13 new stores during the fourth quarter and for the year, it opened 23 new stores. The firm currently has 123 stores in Mexico. The management’s ongoing commitment remains to prudently and profitably grow the Mexico business.

Outlook

For 2008, the firm is focused on improving these important measurements even more. From continuing to challenge all of AutoZoners to become ASE certified and there are more today than ever before to improving the shopability of stores through continue refreshes. For instance, the firm painted over 800 stores this year, and resurfaced more parking lots in its stores than in many years. Finally, the continual refinement of the off-shelf merchandise placements to offer more of what customers are demanding. The firm also continues to utilize its loyalty program to learn more about its customers than ever before. Although still very early, this has begun to help the firm to dissect buying habits of its shoppers.

For 2008, the company will continue to utilize television and radio advertisements with radio still the dominant medium. The company will continue to focus its messaging on trustworthy advice provided by AutoZoners every day, and also on building both the AutoZone and Duralast brands.

A second major focus for this year continues to be around hard parts product assortment. This has been a major focus throughout the year, and will continue to be a major focus in 2008. Everyone across the company is excited about the hard parts additions, and the firm has begun to see successes in several key categories where it has placed specific emphasis.

Key questions and answers from the fourth quarter fiscal 2007 earnings call conducted by AutoZone Inc. on September 18, 2007.

John Lawrence (Morgan Keegan): On the commercial side, would you elaborate a little bit about some of the tests, the transitioning with more profitability and how is that coming about? Could you provide some examples of how the hard parts coverage is helping your business?

Bill Rhodes: We rolled out our test programs about a year ago, and we continue to roll them out, although at a very prudent place. We are functioning in a pay as we go model. We''re going to make sure the investments we''re making are proving themselves. That''s one of one of the beauties of having 4,000 locations and almost 2,200 commercial programs. We don''t having to full steam ahead at any point in time so we can prove the activities we''re doing are paying off.

We''ve been very encouraged, particularly on the commercial side, with the product assortment improvements we''ve made over the last nine months, and we''re now beginning to build a world-class sales culture, and that''s something that''s new to us. Historically we''ve been a retailer, and retailers don''t have direct sales operations. We''re continuing to learn in that area.

John Lawrence (Morgan Keegan): On the SG&A line going forward, will some of those other initiatives as far as training and advertising continue to add to the expense line?

Bill Giles: Overall we wouldn''t expect that level of deleverage on an ongoing basis. We''re very much committed to making sure we continue to invest in the initiatives to help drive and improve customer service on an ongoing basis, and we have our expenses appropriately managed.

Robert Higginbotham (Goldman Sachs): Can you comment on how sales progressed through the quarter and also give us some extra color on what the regional disparities were, particularly Florida and California?

Bill Giles: Historically we do not break out sales trends throughout the quarter or even regionally. I can''t say that we''ve necessarily seen anything that we would say that one particular region is carrying us or killing us. What we''re doing is focused on a lot of things across the organization. We have done a good job throughout the year of improving and expanding our product assortment particularly on the hard parts side of the business. We''ve done a good job of continuing to improve our customer service levels. We get good feedback from our customers that our overall service levels and satisfaction levels have improved on a year-over-year basis. It is a lot of things throughout the quarter that helped us improve the momentum we have gained.

Robert Higginbotham (Goldman Sachs): Could you comment on why you think that the DIY environment is still as tough as it is and when do you think that starts to turn around?

Bill Rhodes: We haven''t seen a radical material change in our DIY performance over the last 24 months, and certainly miles driven have flattened to slight declines over the last 18 months, but what we''re focusing on is what can we do to make our business more productive? We have so many opportunities to continue to become more and more relevant to our customers. We''re very pleased with the progress we''re making on our initiatives, but the bottom line is it hasn''t generated the sales growth we want, need or expect. We''re not significantly off from that, but we''re not meeting our aspirations, and that''s our commitment regardless of what''s going on in the macro environment, we need to go meet our expectations.

Dan Wewer (Raymond James): If we see a sales breakout in 2008, it sounds like it will more than likely originate on the commercial side of the business where you had the greatest opportunities. Is that accurate?

Bill Rhodes: We have the greatest opportunity on commercial. We have 13% market share on DIY, 1.3% on commercial. We have a tremendous long-term opportunity in commercial and a tremendous long-term opportunity in DIY, but we have a more mature model in DIY than we do in commercial.

Adam Timler (Deutsche Bank): Did you comment in your prepared remarks you will essentially able to offset the lost revenue from Midas with other initiatives in the quarter on the commercial side?

Bill Rhodes: That''s correct. Overall our sales performance was up 0.5%, which was the first time in three quarters or so it went positive, and that was despite the termination of the Midas agreement which formally terminated on July the 1st. But there was a transition that began around April 1st.