For the year, operating expenses increased by 329 basis points to 27.5% of sales. Excluding the business rationalization charge, operating expenses increased by 200 basis points to 26.2% of sales.

Net interest and other expense was $297 million in the fourth quarter, an increase of $105 million. For the year, net interest and other expense was $769 million, an increase of $147 million from last year. Both the quarter and year reflect a $163 million charge due to a 50% write-down of our investment in HD Supply.

Now moving to our operational metrics, during the fourth quarter we opened six net new stores, including one relocation for an ending store count of 2,274. At the end of the fourth quarter, selling square footage was $238 million, a 1.3% increase from last year. Reflecting the sales environment and excluding last year’s extra week, total sales per square foot for fiscal 2008 were $298, down roughly 9%.

Now turning to the balance sheet, our team has done an excellent job of controlling inventory in this sales environment and the quality of our inventory has never been better. At the end of the quarter, retail inventory was $10.7 billion, down 9% from last year. On a per-store basis, inventory was down 10.6% to last year. Inventory turns were four times, compared to 4.2 times last year.

We ended the quarter with $41 billion in assets, including $525 million in cash and short-term investments. This is an increase of approximately $68 million in cash and short-term investments from the end of fiscal 2007, reflecting cash generated by the business of approximately $5.3 billion, offset by $1.8 billion of capital expenditures, $2 billion used to repay outstanding commercial paper and other debt obligations, and $1.5 billion of dividends.

As a reminder, we have a $3.25 billion A2/P2 commercial paper program that is 100% back-stopped by a committed long-term bank line of credit. As of the end of the year, we had no outstanding commercial paper.

Computed on the average of beginning and ending long-term debt and equity for the trailing four quarters, and excluding the business rationalization charge, return on invested capital was approximately 11.4%. As Frank mentioned, we expect 2009 to be challenging. Our guidance reflects our best thinking at this point. We have detailed our guidance in our press release, so let me just hit the high points.

First, let me remind you that we guide off of GAAP. We have based our working estimate on a number of external factors, including GDP, where our view is that nominal GDP will fall by 2.5% in the first half, and fall by 1.1% in the second half. Now our view on GDP does not include any potential lift from the economic stimulus package, which could be positive, or any impact if there were to be a significant increase in the personal savings rate, which could be negative.

As of today, we expect fiscal 2009 sales to decline by 9%, with negative comps in the high-single-digit area. We expect the first half to be softer than the back half of the year.

For fiscal 2009, we expect earnings per share from continuing operations to decline by 7%. On an adjusted basis, we expect earnings per share to decline approximately 26%. Included in our earnings per share guidance is our view that gross margin expansion will be flat to slightly positive for the year and expenses as a percent of sales should be flat year over year, but clearly this is distorted by the business rationalization charge. On an adjusted basis, we expect to deleverage expenses by about 13 basis points per point of negative comp, and this reflects the benefit of our support staff reductions, a lower cost of private label credit, and the exit of the EXPO businesses.

Now moving to capital allocations, our capital spending plan for 2009 is $1 billion, reflecting $175 million for new stores, $577 million for our existing U.S. stores and supply chain, $200 million for core IT and other corporate initiatives, and $72 million for our non-U.S. businesses.

We expect to open 12 stores this year, with about half of those openings in Canada and Mexico.

We have approximately $11.4 million of long-term debt, of which $1.8 billion comes due in the latter part of 2009. At this point, it is our intent to repay the debt maturities as they come due using cash generated by the business.

Finally, I want to give you our latest thinking on our recapitalization plan. In 2007, we completed almost 50% of our $22.5 billion recapitalization plan. Shortly after, we put the recap on pause given market conditions and it will stay on pause until we see stabilization in our business and the credit markets.

So thank you for your participation in today’s call and Augusta, we’re now ready for questions.

Question-and-Answer Session

Operator

Thank you. The question-and-answer session will be conducted electronically. To ask a question you may do so by pressing the “*” key followed by the digit “1” on your telephone. Please keep in mind if you are using a speakerphone to depress your mute function to allow your signal to reach our equipment. Again that’s “*1” to ask a question. We’ll pause for just a moment to assemble the queue. Our first question will come from Deborah Weinswig with Citigroup.

Deborah Weinswig – Citigroup

Good morning. Throughout the call today we heard about the newly improved assortment management tools. How much more opportunity is there to improve the processes?