Danielle Fox (Merrill Lynch): Could you address the issue of incentives at the associate level?

Bruce H. Besanko: It’s fair to say that we have competitive salaries for entry-level associates and we pay all of our supervisors and above a bonus in addition to their base salary based upon performance.

Chris Horvers (Bear Stearns): Can you talk about the ability to drive cash? How much of the deferred tax asset is an NOL? Earlier in the year, you talked about net-owned inventory being down 125 year over year. Any comment on that now?

Bruce H. Besanko: From a cash perspective, we’re actively managing the balance sheet and our cash position for strength. Nearly all of our stores are cash-flow positive and we’re in a great position to continue to maintain a strong balance sheet as a consequence of the great cash that the stores produce. The change year over year was principally driven and our cash position was principally driven by investments in PP&E and then the repurchase of stock late last year and the early part of this year, so that’s what happened in terms of the sequential improvement, was in short was working capital efficiencies.

As it relates to the tax issue, we talked about impairing our deferred tax assets in the third quarter. We were required to do that based on FAS-109. The result was a tax expense on top of the pre-tax loss. The three important elements of the tax impairment issue are first, this is a non-cash issue; second, we’ll be able to use the NOLs in the future and then finally, it doesn’t affect the income tax receivable that’s on the balance sheet.

The consolidated inventories at quarter end were relatively flat with last year despite the fact that the firm opened 28 new superstores. the net owned inventory was flat but I feel confident that we can achieve the goals of the $100 million to $150 million of net-owned inventory take out atthe end of the year.

Mike Baker (Deutsche Bank): Could you discuss a little bit the promotional environment in particular over Black Friday? You were a little bit more promotional but now you’ve become less promotional again. Is that a fair characterization and can you describe your philosophy on driving sales versus maintaining some gross margin trend?

John Kelley: The promotional activity over Black Friday was a little bit less than I’ve seen in the past years and we were able to capitalize on that with strong promotions in our TV and PC world. We also saw an increase in margin over that period of time also.

Philip J. Schoonover: It depends on the competitive set. In one way, our more traditional competitors were less promotional. The web was more promotional than ever and there is certainly more commerce flowing through the web these days and our new competitors, not the least of which are the warehouse clubs, are extraordinarily price and promotionally driven. We saw a balance of some opportunity in the insert promotions to improve profitability but we do not feel that the competitive climate in general in the consumer electronics industry is any less competitive than it was a year ago.

Andy Hargreaves (Pacific Crest Securities): You talked about linear improvement through fiscal Q3 in both attach rate and the close rate. Can you give any commentary on whether that continued into the first part of December?

George D. Clark: We had began to settle down on our operating model and our same ticket attach and our basket bottomed out at the beginning of Q3 and we’ve seen initial progress since then in terms of Circuit City advantage, Firedog, and accessory same ticket attach. We’re very focused on rebuilding our selling culture. We’re trying to settle down our operating model and focus in those particular areas, getting ready for our customers and helping our customers shop, find, enjoy. We have seen some initial progress but we have more work to do.

Bill Cimino: We are not going to discuss December trends on the call. We are going to focus on the third quarter.

Andy Hargreaves (Pacific Crest Securities): What is it exactly that you are doing with the store level associates to help improve the selling culture? What do you think that they are missing right now that your competitors are doing better?

George D. Clark: We have a lot on their plate and changing their operating model can be very complicated. We put seven new SOPs in place over the course of the summer. What we’ve done is we’ve narrowed the focus and we’ve gotten very focused on our selling culture -- what our experience is like with our customer, building the capabilities with our associates, and helping our managers focus on important Firedog services, Circuit City advantage and accessory attachment in our categories. Narrowing the focus has helped us see some initial progress.

Scott Ciccarelli (RBC Capital Markets): How would you characterize your vendor relationships at this point, because obviously the trends in the business are relatively soft?

Bruce H. Besanko: We maintain an ongoing dialog with our vendors. We have an excellent relationship certainly with our top vendors and they clearly understand where we are at in our turnaround plan. Our vendors are comfortable with our liquidity in large part because of the strength of our balance sheet and the $1.3 billion amended credit facility, which extends us out for another five years has given them additional comfort.

Jonathan Cramer (Cowen & Company): Can you go over what the status is of all your initiatives and then your thoughts about where you plan to take those going forward?

Philip J. Schoonover: Let’s start with the two transformation initiatives. We said retail transformation and then the SG&A takeout would be the two major structural transformations for the year. Retail transformation, the seven SOPs have been installed. We’ve made changes to our organizational structure at the RVP level, district level, store director level, and store management level. We’ve gone to the multiple zone model in the stores, so materially all the SOP work and structural work is behind us and we finished that work in early October.

The SG&A takeout, we’re right on track with the $150 million that we identified at the beginning of the year. We think there is an opportunity to better align our investments next year with the strategic outcomes and narrow the focus given our current performance. In addition to the SG&A takeout, we’ve doubled down our efforts in execution, so we are going to continue to fix expenses, make sure we capture the balance of the work that we started this year and continue to focus on next year. We’re going to fix close rates and attachment by returning to a selling culture at Circuit City, specifically in the big ticket departments of TV, PC, imaging, and MP3. We’re going to fix our margins through the work we are doing in assortment optimization, strategic sourcing, advertising and promotional effectiveness, and finally pricing, price elasticity and the way we manage our end of product lifecycle markdowns.

Jonathan Cramer (Cowen & Company): What expenses can you take out of the system and can you give us where you are with your point-of-sale system and what you need to do in terms of cost to get it in and timeframe?