Bill Rhodes - CEO Bill Giles - CFO Brian Campbell – VP, IR

Matthew Fassler - Goldman Sachs Gary Balter – Credit Suisse Tony Cristello - BB&T Capital Markets Greg Melich - Morgan Stanley David Cumberland - Robert Baird Alan Rifkin - Lehman Brothers Danielle Fox - Merrill Lynch Maurice Stan - Janus Capital Cid Wilson - Kevin Dann Partners

Good morning. This is the conference call to discuss AutoZone’s third quarter financial results. Bill Rhodes, the Company’s President and CEO will be making a short presentation on the highlights of the quarter. The conference call will end promptly at 10 a.m. Central, 11 a.m. Eastern Time. I would also like to remind all parties today’s conference call will be recorded, and all parties will be able to listen only until we open up for questions and answers. Before Mr. Rhodes begins, the company has requested that you listen to the following statement regarding forward-looking statements.

Certain statements contained in this presentation are forward-looking statements. Forward-looking statements typically use words such as: believe, anticipate, should, intend, plan, will, expect, estimate, project, positioned, strategy, and similar expressions. These are based on assumptions and assessments made by our management team in light of experience and perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties including, without limitation: competition, product demand, the economy, the ability to hire and retain qualified employees, consumer debt levels, inflation, weather, raw material costs of our suppliers, gasoline prices, war and the process of war including terrorist activity, availability of consumer transportation, construction delays, access to available and feasible financing, and changes in laws or regulations. Forward-looking statements are not guarantees of future performance and actual results, developments and business decisions may differ from those contemplated by such forward-looking statements, and such events could materially and adversely affect our business. Forward-looking statements speak only as of the date made. Except as required by applicable law, we undertake no obligation to update publicly any forward-looking statements whether as a result of new information, future events, or otherwise. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section of AutoZone’s Form 10-K for fiscal year ended August 27th, 2005 for more information related to those risks. In addition the financial statements presented in accordance with Generally Accepted Accounting Principles, AutoZone has provided metrics in this presentation that are not calculated in accordance with GAAP. For a reconciliation of these metrics, please see AutoZone’s press release in the Investor Relations section at www.autozoneinc.com.

Thank you. Mr. Rhodes, you may now begin.

Good morning, and thank you for joining us today for AutoZone’s Fiscal 2006 Third Quarter Conference Call. With me today is Bill Giles, Executive Vice President and Chief Financial Officer; and Brian Campbell, Vice President of Investor Relations and Tax. I’d like to take a moment and personally welcome Bill Giles to the AutoZone team, and let everyone know how excited we are to have him as an AutoZoner. He is a terrific addition to our team. Bill, welcome to AutoZone. Now, regarding the third quarter, I hope you’ve had an opportunity to read our press release and learn about the quarter’s results. If not, the press release along with slides complementing our comments today are available on our website, www.autozoneinc.com. Please click on “Quarterly Earnings Conference Calls” to see them. Now, to begin, I’d like to start by thanking our entire organization for their efforts in continuing to live the AutoZone pledge. I am extremely proud of our AutoZoners and their efforts. The primary initiatives for this fiscal year have been focused on improving the customer shopping experience. A significant point of emphasis has been placed on AutoZoner training. We recently completed a survey across our organization that definitively stated that AutoZoners understand their objectives and they were on board with our efforts. As I visit our stores around the country, I continue to be very encouraged by the improvement in the look and feel of our stores as well as the engagement and high level of commitment of our AutoZoners. I firmly believe we are on the right track to continue to build this incredible company and deliver strong financial performance. Regarding the third quarter, for the 12 weeks ended we reported sales for $1.417 billion, an increase of 5.9 % from last year’s third quarter. Same-store sales, or sales for stores open greater than one year, were up 2.1 % for the quarter. Gross profit as a percentage of sales for the quarter was down 62 basis points, while operating expenses as a percentage of sales increased by 90 basis points. This resulted in operating margin of 17.9%, down 153 basis points from last year’s quarter. Operating profit decreased 2.4% versus the prior year. During this year’s quarter, we experienced additional expenses associated with the introduction of FASB 123-R Share-Based Payments at the start of this fiscal year. Excluding this item, operating profit decreased 0.8 %. Net Income for the quarter was $144 million, and diluted earnings per share increased 1.4% to $1.89 from $1.86 in the year ago quarter. Excluding this year’s expenses related to option expense recognition, net income was down 0.5 %, while earnings per share increased 3.3 % to $1.92 versus last year at $1.86. Our continued disciplined capital management approach resulted in return on invested capital for the trailing four quarters of 22.2 %. We have and will continue to make investments in our business that generate returns that significantly exceed our cost of capital. We have not and will not deviate from our efforts to optimize shareholder value over the long term. We continue to be fiscally prudent with our investments while optimizing our earnings per share. Now, I’d like to talk about DIY sales. Total domestic retail sales were up 6% for the quarter. During this quarter, we continued to focus on driving sales and profits over the long-term. Our customer research and sales results over the past three quarters continued to reaffirm what we have always known: our customers shop with us because we provide them with trustworthy advice. Our customers have told us to focus on the basics, which are incorporated within our AutoZone pledge to both our customers and fellow AutoZoners. Based on our pledge, at the beginning of this fiscal year, we introduced several customer service initiatives. I’d like to take a moment and share several examples of their successes during the third quarter. First, I’ve stressed that we were working to improve the customer shopping experience by optimizing the number of both off-shelf merchandise placements and sales for product placements. This included reducing the number of displays to improve customer flow and placing product on our shelves that are compelling and easily obtained based on the job the customer is planning to do. The results of this initiative have been extremely positive. While I mentioned a few moments ago how clearly our AutoZoners understand our mission going forward, our customer feedback continues to improve. They are telling us our stores are easier to shop and they’re enjoying their shopping experience to a much higher degree than they did just a year ago. A major point of focus is to give our AutoZoners the tools they need to effectively communicate our products’ features and benefits to our customers, ensuring the customer has all the information necessary to make an informed decision. In many cases, this leads our customers to purchase premium products because they offer the best value to the customer. Second, we have continued to focus on providing our customers with the broadest offering of parts and accessories to meet their needs. This includes improved in-stock levels in our stores. While we don’t provide statistics on this number, I am pleased to say we are saying yes to our customers more often today than ever before. We have significantly improved our ability to provide the right parts for our customers. During the fourth quarter, we will begin introducing our new proprietary parts look-up system Znet. This system will put more product and repair information into the hands of our AutoZoners and customers, continuing to enhance our offerings and giving our AutoZoners more tools to provide our customers with that trustworthy advice. Third, I had talked about adding clarity to our offerings by reducing the amount of non-automotive-related items in our stores. By and large, the goal of this initiative was to reaffirm to our core DIY customers that we are focused on providing the parts and products they need to maintain and accessorize their vehicles. While we carry non-automotive items, we have to make sure that we’re stocking the right inventory for our core automotive customer. We believe our store presentation today reaffirms to our customers our commitment to be their vehicle solutions provider. Fourth, I discussed a renewed emphasis on training, including a specific emphasis on our culture. During the quarter, we continued to hold what we called WITTDTJR meetings, “What It Takes To Do The Job Right”, for our AutoZoners. The meetings focus on our cultural practices to ensure customer satisfaction, focusing on things like Drop/Stop 30/30, greeting the customer within 30 feet or 30 seconds of entering the store; and WITTDTJR, providing our customers with the parts, products, tools and advice they need to do the job right. Improving the knowledge level and effectiveness of our team is an important element of delivering trustworthy advice. I cannot overstate how important I believe this effort is for our entire organization, and I believe our AutoZoner feedback states the same. Fifth, I mentioned we’re continuing to focus on our brands. We have significantly increased our mix of Duralast-branded merchandise, one of the top brands in the automotive aftermarket. This exclusive brand of high-quality parts and products provides us with a key point of differentiation. Along with our efforts on our import initiative, the successes of this program have only just begun. As I said last quarter, we’re continuing to listen to our customers and our 50,000-plus AutoZoners. We are focusing intensely on the basics. Simply put, excellent customer service and flawless execution. During the third quarter, gas prices rose considerably as the price of crude oil reached near record levels. We, like many retailers, are concerned by the sharp price increases at the pump. These higher expenditures are taking an ever-larger sharer of our customers’ wallets. While AutoZone cannot control gas prices, we believe we have initiatives in place to overcome much of these effects. Additionally, we view higher gas prices as an opportunity for us to help provide trustworthy advice on even simple little things that can improve fuel mileage and save money. Again, while we’re not excited about higher gas price, we certainly have initiatives in place to help offset their impact. During the third quarter, we estimate that weather had a modest favorable impact on our sales due to mild weather across much of the country. We believe the warmer winter weather caused a drop in certain failure-related hard parts categories that was more than offset by increased sales in preventative maintenance categories. Regarding miles driven, we saw slight monthly increases continuing into this quarter versus last year, continuing to reverse the trend we saw in the first quarter where miles driven decreased slightly. We believe this continues to correlate with the belief consumers become used to higher gas prices over time. Let me reiterate the two statistics we’ve always felt had the closest correlation to our market growth – miles driven and the number of seven-year-old and older vehicles on the road – both have continued to trend in the industry’s favor. Again, we don’t like to spend considerable time focusing on the impact of gas prices or weather because neither is controllable by us, and weather impacts will normalize over time. We do monitor these situations to ensure we are providing our customers with the advice and products they need to maximize their vehicle’s performance. We believe over the long term that as we execute our initiatives, we will overcome any effects of gas prices or weather. Regarding pricing across the industry, we have not seen any material change in the competitive landscape. While we have seen some cost increases driven by higher commodity prices, overall consumer price inflation in Q3 was in the low single-digit range. Finally, we’ve been updating all of you over the last several quarters on our inventory levels per store, and what we’re doing to ensure we’ve got the right parts available for our customers. We are determined to invest in one of the most important drivers to both attracting and retaining our customers – superior parts coverage. Optimizing inventory levels in this business is one of the keys to success. We continue to leverage our hub stores to ensure we have the parts and products our customers need while optimizing our returns. We will continue to focus on having the right merchandise available by individual store to satisfy our customers. Now, let me update you on some of our other efforts to drive sales. We continued our strategy of offering a good, better, best selection for many product categories. One example of this is the continued expansion of our own brands. We are absolutely committed to building these brands by offering high quality products at an attractive price to our customers. We began advertising the Duralast brand at the end of last summer, and we continue to be pleased with the traction this brand has gained with both our DIY and commercial customers. We believe we can continue to enhance the growth of the Duralast and Duralast Gold products as their reputation for quality and value is reinforced across the automotive aftermarket. Finally, for the fourth quarter of Fiscal 2006, we will begin launching a new selling tool in our stores. That tool is called Znet. Znet is a new and significantly improved version of our parts look-up system. It continues to leverage our unique and robust proprietary parts catalogue by allowing us to leverage some of the recent advances in technology. For the trailing four quarters, sales per square foot were $247. This statistic continues to set the pace for the rest of the industry. Our new stores are on track to achieve at least a 15% IRR and we continue to see an opportunity to open thousands of additional stores in the US. We opened 42 new stores in the quarter for a total of 3,699 domestic stores. This year, we’ve been able to open stores more evenly throughout our fiscal year. While our goal has been to open stores at a mid-single digit growth rate for 2006, this year, we’ve opened 116 new stores versus 88 new stores this time last year. Additionally, we were able to reopen two of the locations closed in the Louisiana and Mississippi markets due to hurricane damage, while eight remain closed. We also relocated four stores this past quarter, and we continue to see opportunities to expand this initiative in the future. Lastly, as you know, last fiscal year, we started opening stores in Puerto Rico. At the end of the quarter, we had ten opened stores, and we’ve been pleased with their results today. Now, let’s turn to commercial. For the quarter, total commercial sales were down slightly from last year’s quarter. We now have a commercial program of 2,123 stores supported by 126 hub stores. I want to spend some time this morning providing insights into the progress we are making in our commercial business. Our focus in the commercial business is on building a strong operating model for the long-term that delivers profitable growth. We have experienced periods of rapid sales growth in the past, but we didn’t deliver substantial incremental profitability. Our objective is to deliver both. For the last few quarters, we’ve been testing a wide variety of new concepts in select commercial stores. We have been very disciplined and methodical with these tests to determine the reasons for their successes. While our overall sales in commercial this past quarter were basically flat, the stores where our tests were running we’re not. These test stores generated substantial same-store sales gains, while gross profit dollars increased at comparable levels. What made our tests unique? Why were they successful? We believe that it boils down to two simple principles: making sure we had the appropriate coverage to say yes, and making sure we could get our customers the right parts and products at the right time. We continue to gain very valuable data on our customers and our customer service levels in this business through the hand-held PDA devices we rolled out last year. With this data, we have developed significantly improved reporting mechanisms to focus our AutoZoners on specific key performance indicators and to focus their attention on our priority customers. In these test markets, we gave our AutoZoners significant additional tools. In fact, initially, we overloaded them with resources. As we have determined the successful elements of these tests and have removed the inefficient resources, they have continued to deliver substantial improvements. These tests continue to focus on leverage our strengths: tremendous culture of customer service, strong availability of high quality products, and effectively leveraging technology. Relating to our focus on availability, our hub stores continue to provide us with fast replenishment of critical merchandise to support both our commercial and DIY businesses. We believe the extended, deeper availability of parts offered to stores supported by our hub network increases our commercial customer business. Therefore, we will continue to refine this model to determine where extended parts coverage can make a meaningful difference. We are continuing to refine and improve our model in these test stores. We are also expanding these tests into additional stores and markets to determine our effectiveness in various operating environments. Many may ask why not quickly roll this model out to the entire chain? Our answer is that we believe this to be a very promising improvement to our program, but we need to be disciplined in our approach to ensure we deliver sustainable growth both top line and bottom line, not compromising one for the other. Additionally, we want to ensure we have a plan in place to deliver the consistency in service and offering our customers want and deserve. We will develop and implement these enhancements in a fiscally prudent manner. Now, let’s turn for a moment to Mexico. Our Mexico stores continue to perform well. We opened four stores during the quarter, which now gives us 92 stores in Mexico compared with 3,699 in the US. Our ongoing commitment remains to prudently and profitably grow the Mexico business. This fall, we expect to open our 100th store in Mexico. This milestone opening will certainly be a terrific accomplishment for our team in Mexico. They are a great group of AutoZoners. Finally, I want you to know that I could not be more proud of what I’m hearing from our AutoZoners and customers. I am confident we’re on the right track to produce long-term shareholder value. Now, I’ll turn it over to Bill Giles to take us through the remainder of the income statement.

Thank you, Bill. Gross margin for the quarter was 49.7% of sales, down from 50.3% of sales in the previous year’s quarter. This 62 basis points of reduction in the quarter was not entirely unexpected. While we obviously were up against our toughest compare of last year in Q3, we also experienced a higher penetration of commodity and maintenance items versus last year, which typically have lower margins. This was somewhat attributable to a warmer spring selling season. We have continued to be successful in partnering with our vendors to offer the right products at the right prices to our customers. This effort includes supply chain initiatives, tailoring merchandise mix, the continued implementation of our good, better, best product lines – all allowing us to price our products appropriately and give our customers great value. Going forward, we believe there continues to be margin expansion opportunity. For the fourth quarter, we are well positioned to return to margins more in line with the prior year. We continue to work with our vendors to lower costs and provide the best selection of merchandise for our customers at the right prices. Our initiative to do more direct importing of merchandise from foreign suppliers has begun in earnest. Prior to the start of this fiscal year, we bought virtually all our goods from US vendors who may or may not have been buying from foreign sources. We are increasing our efforts to reduce our costs by going straight to the manufacturer where appropriate. We have begun to realize some of the benefits from this program, but it will continue to build over time. Moving on to SG&A, SG&A for the quarter was 31.8% of sales, up 90 basis points from last year. However, this year includes a non-comparable charge for the new expensing of stock options under FASB 123-R. On a comparable basis, SG&A went up 61 basis points. The increase is due primarily to the following: First, occupancy costs increased due to our continued investment in new stores and maintenance on our existing stores. Second, we continue to invest in our store level initiatives to improve the customer shopping experience. These initiatives continue to include expanded hours of operation, enhanced training programs, and ensuring clean, well merchandised stores. We continue to believe that they are necessary to ensure we provide an excellent experience for our customers to deepen the relationship with them. We invest in these initiatives because we believe they will help build profitable sales for the future. The majority of the spending in the quarter was variable, and we are controlling these expenditures. We will spend appropriately for the long run. As we said before, we expect these investments to gain traction over time, and we continue to adhere to that timeline. We are pleased with our progress to date, and we are well-positioned for the fourth quarter of this fiscal year. EBIT for the quarter was $253 million, down 2.4% over last year. Excluding this year’s adoption of FASB 123-R, EBIT for the quarter was basically flat versus last year. Interest expense for the quarter was $24.9 million, compared with $24.2 million a year ago. Debt outstanding at the end of the quarter was $1.825 billion or approximately $90 million less than last year. The increase in interest expense reflects both the ongoing effort to term out the Company’s debt on a long-term basis, as well as the year-over-year increase in short-term rates. Our debt levels were maintained in line with our guidance of 2.1 times our trailing 12-month EBITDAR. We have purposely managed our capital structure relative to our cash flow in order to maintain our credit ratings at investment grade while optimizing our cost of capital. For the quarter, our tax rate was 36.7%, below last year’s rate of 37.2%. Over the next several quarters, we expect to maintain an approximate 37% effective tax rate. Net income for the quarter of $144 million, was down 2.3% over the prior year. However, excluding stock option expense in this fiscal quarter, it was down 0.5%. Earnings per share for the quarter of $1.89 was up 1.4% on 76.6 million diluted shares. But again, excluding this year’s share-based option expense, earnings per share was $1.92, up 3.3% from last year’s $1.86 per share. Now, I’ll turn it over to Brian Campbell to take us through the cash flows and the balance sheet.

Thank you Bill, and good morning everyone. In the third quarter, we generated $237 million of operating cash flow, and we repurchased $228 million of AutoZone stock, as part of our ongoing stock repurchase program. We intend to continue to repurchase stock as long as it’s accretive to earnings and consistent with our 2.1 times adjusted debt to EBITDAR liquidity target, which we maintained again for the quarter. For the third quarter of this year, we reported yet another industry-leading ROIC of 22.2%. Looking at our inventory levels, inventory per store on the balance sheet plus the excluded pay on scan inventory, was $495,000 versus Q3 of last year of $497,000 and this was in line with last quarter’s $494,000 per store. Accounts payable as a percent of gross inventory finished the quarter at 82.3% compared to 87.2% last year. This decline was in part attributable to a change in the way we flow inventory receipts during the third quarter. Specifically, this year we purchased less inventory and had less vendor returns than last year. This reduced accounts payable as a percentage of inventory. The goal of this initiative is to improve inventory productivity and drive operational efficiencies for the future. The fourth quarter will represent more normalized comparison when we expect this ratio to be generally in line with last year. We continue to be committed to increased free cash flow through leveraging payables. This quarter we reported a total $123 million of inventory on pay on scan, which in accordance with GAAP is not reflected on our balance sheet. As we stated previously, pay on scan is about aligning the interest of vendors and AutoZone, and is one of the programs we use to achieve our financial goals. Total working capital was $175 million versus last year’s balance of $95 million. We will continue to focus on minimizing working capital as this reflects our ongoing focus on increasing cash flow. Net fixed assets were up 7.5% versus last year. Capital expenditures for the quarter total $66 million and reflect the additional expenditures required to open 46 new stores in this quarter, maintenance on our existing stores, and working on development of new stores for upcoming quarters. Depreciation totaled $32 million for the quarter. Additionally, during the quarter, we entered into a new a $300 million four-year credit agreement that replaced a similarly expiring agreement, and we amended and restated our $700 million agreement, in essence creating a $1 billion four-year facility. Additionally, the $150 million of senior notes with a 7.9% annual interest rate were retired. As of May 6, 2006, AutoZone continues to be one of the few players in our industry to have investment grade debt ratings. Our senior unsecured debt rating for Standard & Poor’s is BBB+, and we have a commercial paper rating of A2. Moody’s Investors Service has assigned us a senior unsecured debt credit rating of BAA2, and a commercial paper rating of P2. We continue to be comfortable with our long-term debt ratings and leverage ratios. Now, I’ll turn it back to Bill Rhodes.

Thank you, Brian. During the third quarter, we had much success in executing the initiatives we outlined at the beginning of the year, and more importantly, we believe we’re making good progress for the future. We were thrilled to have completed in our second quarter, the enormous and important task of resetting over 3,000 stores in just 12 weeks. I’m excited to say the feedback that we’ve received during the third quarter from both our AutoZoners and customers confirmed it was the right decision for our future. Our retail results continue to show improvement. Our commercial tests generated excitement across our organization. While we do not provide financial guidance, we are enthusiastic about our future. We continue to feel confident in our plan. Our story continues to be one of steady, profitable sales improvement. We knew we had to complete the task laid out before us during the first half of the fiscal year in order to be well-positioned for the important third and fourth quarters. We continue to execute on our game plan. This year continues to be about positioning us for the long run. While some of our initiatives have been completed, most will be ongoing. While we are always testing new initiatives, always pushing to see what new and creative strategies can be implemented, we are not talking with you today about any new strategies set to be launched during the fourth quarter. This fourth quarter of Fiscal 2006 will be about flawless execution of the game plan we established at the end of last year. Customer service will continue to be our key point of differentiation, and AutoZoners across the company are committed to providing that service to every customer. Our mission must be to continue to make AutoZone the best place to shop as well as a great place to work for our AutoZoners. We are energized by our AutoZoners renewed commitment to our culture exhibited throughout this year. We remain optimistic about the future as we will focus on continuing to educate our customers on doing the simple things that, while preventative, can mean great savings down the road. Also, as more and more of our kind of vehicles are on the road everyday, we continue to be bullish about our future. We believe our business is atypical. We are well positioned to grow profitably for the future. We have a terrific management team that is very committed to this business. We continue to demonstrate industry-leading financial metrics. Being a disciplined company, we have proven our ability to manage costs appropriately and invest in incremental initiatives that exceed our stated 15% after tax IRR hurdle rate. We are focused on operating this company to profitably grow sales, efficiently deploy capital, and optimize long-term shareholder value while maintaining the highest level of ethics. I thank you today for letting us share with you our company’s past accomplishments, and touch on our ongoing initiatives. I look forward to keeping you abreast of our results well into the future. Now, we’d like to open it up for questions.

(Operator Instructions) Matthew Fassler – Goldman Sachs. Matthew Fassler - Goldman Sachs: Good morning. A couple of questions – first of all, obviously, you did manage to scale back the expense growth a little bit as you had intimated that you would from Q2 to Q3. As you move into the fourth quarter, you start to cycle the period a year ago when you began to spend a little more aggressively on the business. At the same time, realizing the seasonally stronger quarter, you leveraged some of your fixed costs a bit more aggressively. How should we think about your spending goals and what it will take on the SG&A growth front to continue the initiatives that you’ve launched this year and that have gotten you some progress?

First, I’d like to start by saying we’re very pleased with the progress we’re making on those initiatives. They’re making a meaningful difference in our store presentation. They’re making a meaningful difference in our AutoZoners’ confidence level and morale. We’ve also seen, as I mentioned, significant improvements in customer service metrics, which we’ve been very pleased with. We did begin some incremental spending during the fourth quarter of last year, Matt, but the majority of it really was rolled out during the first quarter of last year. So, while we’ll see a little bit of improved comparability in the fourth quarter, the real benefit comes in Q1; and Q2, the full benefit. Matthew Fassler - Goldman Sachs: Understood. Second question, given all the accounts from many retailers of moderating sales in late April and early May across a number of durable goods sub sectors, I think we’d be remiss if we didn’t ask you whether, in fact, you have seen some of the same slowing in underlying trend that others have seen. I realize your compare was easier and you delivered your best comp in a couple of years on the heels of that. That’s obviously a great accomplishment; but the margin, it feels like something has changed in the marketplace. I’m curious what your view is on that.

We don’t get into specific week-to-week trends because quite frankly, they’re macro factors that come in and out over time. We watch our business over the long-term. We remain confident with the program that we’re continuing to deliver, and look forward to the future. Matthew Fassler - Goldman Sachs: Finally, last question, I know that you account for the impact of LIFO a little differently than some of your competitors. Did that move the needle in any way as you look at your gross margin this quarter?

I think the important thing about us and LIFO is we have a significant unreported LIFO benefit, and therefore there is no impact in our quarter on LIFO. Matthew Fassler - Goldman Sachs: That unreported benefit, did it stay level or did it move in a meaningful way this quarter?

It did move up again, Matt. We will report it in the third quarter 10-Q, $191 million as a balance versus the second quarter of $183 million. Matthew Fassler - Goldman Sachs: Thank you very much.

Thank you, Matt.

Gary Balter – Credit Suisse Gary Balter-Credit Suisse: Two questions. First of all, I want to welcome Bill Giles. Bill, I’ll start with you. Just a quick easy question, and then something a little bit more detailed. You had mentioned that the rating entities I think reconfirmed, or maybe Brian mentioned reconfirmed your ratings. In the press releases, you’ve always use six times that rent, and usually when we talk rating agencies, they use eight times. Are they comfortable with you using six, and can you explain why you do that?

We’re comfortable using six. We think it’s a better representation of what the outstanding debt is, and I think if you look, the agencies use different rates. Some use six, some use eight, and the long and the short of it is we think six is more appropriate given the complexion of our rent. Gary Balter-Credit Suisse: Okay, so there would be three at eight. So, we’re --

We’re consistent year over year in how we do it on a long-term basis. So, it’s apples to apples as you go out. Gary Balter-Credit Suisse: Okay, more back to business. The commercial sales were on the flattish side. Could you talk about some of the experiments that are going on now, and when you see some of that rolling out to help drive commercial?

Gary, this is Bill. As I mentioned on the call, we launched these initiatives back in the wintertime in a small number of stores, and we overloaded them with resources. Anything we could think of putting in there, we put in there to see how high was high. Once we began getting some traction, we went back and looked at the resources that were working and those that weren’t, and we reduced those and we continued to see significantly improved performance, albeit in a small group of stores. Therefore, what we want to do before we get into which initiatives are working and which aren’t, we want to go into more stores and different operating environments to make sure that we really know which ones are driving our improved performance. Gary Balter-Credit Suisse: So, we’re not going to do that roll out for a while.

I think we’re learning things about it everyday, and as we see improved results, we’re going to roll it further and as we need to refine things more, we’re going to slow it down. Gary Balter-Credit Suisse: Thank you.

Thank you, Gary.

Tony Cristello - BB&T Capital Markets Tony Cristello - BB&T Capital Markets: Good morning everyone. One question I wanted to just talk a little bit about is advertising and marketing and you talk about building brand awareness and the Duralast brand. Can you comment a little bit about levels of marketing or ad spend that you’re seeing now versus maybe last quarter or even last year in an effort to build out that brand?

Yes, Tony. I think quarter versus quarter our advertising spend changes because there’s more efficient ways for us to do it, and we have higher sales volume. So, traditionally, we advertise more in the third and fourth quarters than we do, for instance, in the second quarter. On a year-over-year basis, there’s not any significant difference in our advertising spending. However, we’re doing things in different ways. We talked about the Kenny Wallace sponsorship. That’s one way that we’re advertising. One of the things that we’ve done is we’ve shifted some from radio into TV, and specifically some of that TV spending is based upon the Duralast brand. We’re out marketing that brand to our customer, both DIY and commercial, and we’re very pleased with that program so far. We’ve done several spots. The first spot was on batteries. Since then, we’ve run spots on general parts as well as alternators and brakes. We’re excited about what we’re doing with that brand so far. We’re really excited about how it’s being received in the market. Tony Cristello - BB&T Capital Markets: One question relating to the commercial side of the business is you talked about more resources. Does that include more parts or more inventory availability at those locations versus what might be at other locations not involved in this sort of testing?

As I mentioned, we threw tremendous amounts of resources, and one of those resources we looked at was inventory. But our inventory coverage, it’s not that radically different. I think people expect that commercial has one inventory set, and retail has another. It’s amazing the overlap, and as we put incremental inventory in there typically we see that we sell more of it in retail than we do in commercial. So, we’re constantly refining our inventory positions on a store-by-store basis. That has been going on for many years and will continue. Tony Cristello - BB&T Capital Markets: Are the countermen, the parts desk, are they incented on sales? Are they incented on profitability? Can you just talk a little bit about measures you use in terms of retention to keep those people as they’re kind of key to the whole process in terms of driving commercial business?

Okay, we call them commercial specialists. They’re the ones that answer the phones for our commercial customers, and today, they’re paid on an hourly wage. We give them incentives on certain things just like everybody else, but they’re not incentive based. Obviously, we’re testing some different things and I don’t want to get into specifics on it at this time, but we’re looking at different ways to make sure we incent them. I did speak specifically on the call about how our PDA devices have given us the opportunity to reengineer our reporting and make sure that we have those people focused on the specific key performance indicators that drive our business and that’s been rolled out over the last few months, and we’re very excited about the emphasis that our commercial specialists are placing on it and their priority customers. Tony Cristello - BB&T Capital Markets: Thank you.

Thank you, Tony.

Cid Wilson – Kevin Dann Partners. Cid Wilson - Kevin Dann Partners: First congratulations on a nice same-store sales number. My first question is can you touch a little bit more on your goals in terms of your non-automotive reduction of inventory and what your goals are there? Maybe just a little further there.

I think for the most part, our non-automotive product reduction has been completed. That’s behind us. The presentation that you see in our stores today is the presentation that we’re currently comfortable with. As you know, we have a lot of things on our end caps and on displays that weren’t necessarily communicating our core offering to our core DIY customers. If you go into our stores today, you’ll go into the stores and you’ll see things in the windows that are relevant to everybody that comes to our stores. You’ll see things on our end caps like Meguiar’s Wash and Wax products; like tools. If you go in today and look, one of the first presentations you’ll see behind the Red Zone, you’ll see R134A, that’s speaking to that have DIYer and reconfirming to them that we are their vehicle solutions provider. Cid Wilson - Kevin Dann Partners: And, also you mentioned that you’ll be introducing Znet in the fourth quarter. Can you give us an idea on the cost of rolling it out, and any expectations in terms of the rollout?

Well, related to the capital investment is a part of our overall capital expenditure guidance being approximately the same as last year. It involves equipment and wiring for stores for broadband technology, but it’s just a continual ramp and rollout for our stores.

I think it’s important to note that quite a bit of that hardware has already been rolled to the stores. You go to our stores today, you will see in many of our stores, a vastly different presentation of the technology that’s there. Much of the infrastructure, not all of it, but much of it has already been put in place in preparation for Znet. We’re excited about Znet. We think it’s going to give our AutoZoners more tools to be able to convey more trustworthy advice to our customers. That goes from being able to provide specific vehicle repair information on the vehicle the customer’s working on, to being able to provide graphics of the parts that they’re looking for. Cid Wilson - Kevin Dann Partners: My final question is regarding comps looking in this fourth quarter. I know you don’t give guidance, but looking historically at the last two years, you’ve had down comps in the fourth quarter whereas you had a pretty easy comparison of just down five in the third quarter, but it was up in 2004. Is it reasonable to assume, or at least, is it reasonable to interpret that the fourth quarter is an easier comparison compared to the third quarter when looking at what you’re up against?

Sid, we generally always look to improve upon our results every quarter, but there’s still no guarantees. We have to continue to execute to improve on our initiatives, we certainly hope, but again, we don’t provide that kind of information.

I think it’s important too, Sid. We’re not focused on any one number over any one short period of time. If you think about the things that we have done over the last year, they’ve been very focused on improving our operating model for the longer term and making sure that we improve our relevance to our customers. Cid Wilson - Kevin Dann Partners: Okay, thank you very much.

Thank you, Sid.

Greg Melich - Morgan Stanley. Greg Melich - Morgan Stanley: Bill welcome again, as well. My question is really on inventory and where we see that shifting. It sounded like there was some one-off things this quarter that let the payables drop relative to inventories. Specifically, I was wonder pay on scan was down. Were there any vendors that switched back? Or was it a growth in direct sourcing that may have changed that?

Let me start with pay on scan, Greg. Pay on scan is one tool that we use with our vendors to achieve our goal of 100% accounts payable inventory coverage. It is not the tool. It’s not mandated. It is a tool to get us there. We have other tool that are out there like our Supplier Confirmed Receivable program. We work with our vendors to see which one of those programs or other programs are the most appropriate for them, and if one wants to move from pay on scan to Supplier Confirmed Receivable, and it improves our net position, then that’s what we’re going to do. So, there’s not a bias one way or the other. It’s a focus on how do we improve, how do we achieve our 100% inventory level.

I think if you look at the inventory overall, if you take a look at it on an inventory on a per store basis, you’ll see a lot of consistency this year relative to last year. I think some of the fluctuation that we experienced in the third quarter this year is really more comparative to the prior year rather than activity this year. We’ve done a better job of slowing inventory in a more ratable basis throughout this year. If you look at inventory on a per store basis, it’s fairly consistent throughout the year. Greg Melich - Morgan Stanley: So, just to make it clear – the pay on scan drop may have been a vendor choosing to go the other way, which was still better for you net/net?

It may have been, and it may have been better for them net/net as well. What we want to do is make sure that we optimize the total supply chain, not focus just on us, but focus on them as well and what’s the best way to optimize our two positions. Greg Melich - Morgan Stanley: If I could, just a second one on the SG&A, the extended hours. Could you just give us an update as to when you actually did that and how many stores it impacted?

We did it, and Greg, excuse me, I don’t know exactly when. My recollection is around June of last year. So, we’re about to anniversary that point in time. We did it in stores that we felt like it would work in. It’s a significant amount of our stores, more than half, but not all. Greg Melich - Morgan Stanley: Great thanks.

Thank you.

David Cumberland - Robert Baird. David Cumberland - Robert Baird: On the loyalty program, how has that performed versus expectations? Do you plan to extend that beyond May and if so, are any changes planned for the next phase?

We’re constantly looking at the loyalty program. We’ve been pleased with its performance to date, but we’re looking at ways to continue to optimize it. One of the reasons we introduced a loyalty program was we wanted to reintroduce some of the customers that we lost back to AutoZone, and we’ve been pleased with what that’s done. Over the long term we’re going to continue to look for ways to drive customer loyalty. It’s not just about a discount card. It’s also about gaining more information on our customers and their purchasing habits. There’s also other things that we can do that are non-monetary rewards we’re going to be testing. David Cumberland - Robert Baird: Thanks. On the commercial business, Bill, for a while you talked about focus on profitability. Has the profitability in commercial changed much over the past year or so?

We haven’t seen significant changes in profitability over the last year or so on a like versus like basis. David Cumberland - Robert Baird: Thank you.

Alan Rifkin - Lehman Brothers. Alan Rifkin - Lehman Brothers: Bill, with respect to your initiative to extend the hours of operation, once we get into the fiscal fourth quarter and you’ve anniversaried that initiative, can we assume that will, at that point in time, be accretive to the SG&A line? In other words are you seeing a 15% IRR on that initiative alone?

Allan, we will anniversary that in June as I mentioned, but that’s only one of the initiatives and it’s a small part of the overall initiatives that we’ve launched. So, it’s not the key driver of anything. As you saw, the biggest increase in SG&A that we had, we experienced in the first and second quarters. Alan Rifkin - Lehman Brothers: Bill, you also mentioned with the reset of the 3,000 stores that you’re happy with the results. Would you contemplate, if it could justify a 15% return, committing additional capital to the stores? Or, do you feel that at this point in time, no additional capital commitment of a significant nature is necessary?

I think they’re two separate questions, Allan. The first question is if we had a compelling test that showed that adding capital to our stores would drive a significant 15% after tax IRR improvement, we would absolutely do it. Your second part of your question, we’re very comfortable with the presentation that we’re making in our stores today. We’re really quite pleased with the progress we’ve made. We think it’s a very compelling presentation for our customers. Alan Rifkin - Lehman Brothers: Okay, great. One last question if I may, based on our channel checks and talking to other sources, we’ve heard that you’re actually reducing the commercial presence in some specific markets like Jacksonville and up in Michigan and parts of New England. Would you be able to comment on those specific markets relative to the commercial initiative?

Allan, you know that I’m not going to get into specific individual small markets, but I’d say, just look at our overall commercial programs. They’re up for the quarter. So, we’re continuing to look at ways to optimize each individual store and each individual market. Alan Rifkin - Lehman Brothers: Okay, thank you Bill.

Danielle Fox - Merrill Lynch. Danielle Fox - Merrill Lynch: First, just given the mix shift in favor of commodity and maintenance items, is it fair to say that it was primarily traffic rather than ticket that drove the comp?

No, Danielle. I think it was more ticket than it was traffic. Danielle Fox - Merrill Lynch: Okay, and the second question is just per store labor hours – are they up year over year, especially given the extended hours?

Specifically, we haven’t talked about what’s going on specifically with store labor hours, but we have talked about a significant amount of initiatives from both our training initiatives to expanded hours of operation. So, I think you can draw your conclusion from that. Danielle Fox - Merrill Lynch: Okay, thanks for taking my questions.

Thank you, Danielle.

Maurice Stan - Janus Capital. Maurice Stan - Janus Capital: Welcome Bill. I just wanted to follow-up on Danielle’s last question about the comp, and again, could you just comment on what kind of geographical disparity you may have seen between the regions given some of the different weather patterns that we saw earlier in the year? Again, just any comment on the trend through the quarter would be appreciated.

Sure, Maurice. This is Brian. In general, there’s going to be ebbs and flows with the weather and with different regional trends, but overtime it definitely evens itself out. So, we don’t go into great detail and deviation. Maurice Stan - Janus Capital: Any comments on the trend through the quarter?

No, not so much. In fact, consistently, the business just ebbs and flows; the weather was seasonably warm throughout the quarter so it was uneventful. Maurice Stan - Janus Capital: Thank you.

Thank you. That ends the question-and-answer portion for today’s conference.

Okay, before we conclude the call, I’d like to take a moment to reiterate that we know we still have much to accomplish. While all of us at AutoZone are proud of our efforts thus far, we are not satisfied with our results. We understand the huge opportunities that continue to exist within such fragmented businesses as US retail, commercial, and Mexico. Having such small market share across each of these priorities, we have only just begun our efforts to grow our business profitably. The AutoZone story can not be measured by any short burst. It has to be about setting a realistic pace for growth. It is about running a marathon. Right now, I like the pace we’ve set for the fourth quarter and beyond. Thank you very much for participating in today’s call.

Thank you. That concludes today’s conference. You may disconnect at this time.