Judd Nystrom – Vice President, Finance and Investor Relations Darren R. Jackson – Chief Executive Officer Jimmie L. Wade – President Kevin Freeland – Chief Operating Officer Michael A. Norona – Executive Vice President, Chief Financial Officer Charles Tyson – Senior Vice President Merchandising

Scot Ciccarelli - RBC Capital Markets Kate McShane - Citigroup Dan Wewer - Raymond James Alan Rifkin - Bank of America-Merrill Lynch Matthew Fassler - Goldman Sachs Brian Nagel - UBS

Welcome to the Advance Auto Parts fourth quarter 2008 conference call. Before we begin Judd Nystrom, Vice President, Finance and Investor Relations will make a brief statement concerning forward-looking statements that will be made on this call.

Good morning and thank you for joining us on today’s call. Certain statements made during this conference call will contain forward-looking statements and incorporate assumptions based on information currently available to the company. Any statements that are not related to historical fact are forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks, uncertainties and assumptions, including those listed from time to time in the company’s annual reports on Form 10-K and its other filings with the SEC. If any of these risks or uncertainties materialize, or if the underlying assumptions prove incorrect, the company’s actual results may differ materially from the anticipated results discussed in these forward-looking statements. The company intends these forward-looking statements to speak only as of the time of the conference call and does not undertake to update or revise them as more information becomes available. Our results can be found in our press release and 8-K filings which are available on our website at www.advanceautoparts.com. For planning purposes our first quarter earnings release is scheduled for Wednesday, May 20 after market close and our quarterly conference call is scheduled for the morning of Thursday, May 21, 2009. To be notified of the dates of future earnings reports you can sign up through the Investor Relations section on our website. Finally, a replay of this call will be available on our website for one year. Now let me turn the call over to Darren Jackson our CEO, who will be followed by Jim Wade our President; Kevin Freeland, Chief Operating Officer and Mike Norona, EVP and Chief Financial Officer. Darren. Darren R. Jackson: Thanks Judd. Good morning everyone. Welcome to our fourth quarter 2008 conference call. It’s an honor to share with you the terrific results that our 48,000 team members delivered in these extraordinarily challenging times. I want to thank our Advance family personally for an outstanding quarter and fiscal year. The first year or the first chapter of our transformation story is complete. There was considerable suspense and success as the chapter or year unfolded. I’m very pleased with our strategic and financial progress and the related accomplishments in fiscal 2008. I am energized with the revitalization of the values at Advance and our continued focus and commitment to our customers and team members. I am also very encouraged about our growth and earnings potential, yet I realize that our transformation is just starting to take hold, and it will take time to reach our full potential. Yet I am confident that we will get there. A year ago we embarked on a turnaround and transformation journey. We set out to define the state of the business and acknowledged that the turnaround of our business had to begin with a focus on the customer. I told you that we are going to embrace the turnaround mentality in terms of speed, simplicity and prioritization. We determined our strategy would be a simple focus on people; our customers and our team members. Specifically, our strategy would be guided by the DIY in commercial customer needs. Two-thousand-eight was the year focused on foundational change. We evaluated our portfolio of inventory, stores and initiatives. We retired our 2010 store format strategy. We introduced the commercial acceleration, DIY turnaround, availability excellence and superior experience strategies as the catalyst for our transformation. We are divesting of inventory and accessing stores that are not consistent with our future direction. The economic environment is a mixed blessing. On the one hand, we are deeply concerned for many of our fellow Americans, customers and family members on account of the crisis of unemployment. However, our industry and our role as a company have never been more important to meet the needs of our customers. We believe that the paradox of the economic environment is an opportunity for Advance. The rapid decline in consumer confidence, rapidly rising unemployment, the credit crisis, coupled with the single largest decline in annual miles driven of 3.7% presented significant headwinds throughout 2008. Now the tailwinds coming into 2009 include fewer new car sales and lower gas prices. Fewer new car sales result in customers keeping their vehicles longer, which increases the age of vehicles and the need to repair and maintain vehicles, while lower gas prices in late 2008 should begin to take some pressure off customers and enable them to spend some money on deferred maintenance. We believe that future stimulus will add to the tailwinds in 2009. The paradox of the retail environment played out in the fourth quarter of 2008. Specifically, retail industry comp for sales declined approximately 5% in December, representing the worst retail environment in 40 years. Despite the environment, our comparable store sales grew 3% which is our highest quarterly comp in 11 quarters and our EPS jumped 17% on a comparable operating basis. I am very encouraged that all three areas of our company posted positive comparable store sales gains in the quarter. That consistency of performance reflects the collective efforts of the field and support center executing at a high level for our customers. Clearly the actions we took in Q4 continued to improve our business model and yielded immediate benefits in the quarter which positioned us well for 2009 and beyond. Financially we are optimistic about our growth potential. Overall in 2008 we completed a successful Chapter 1 of our transformation story by accelerating top-line growth and achieving solid bottom line results. Two-thousand-nine is a new chapter in the same story. We are committed and focused on our four strategies to turnaround and transform our business. My goal as CEO is to accelerate our success in 2009 and beyond by building and empowering a great team. To do that, I must lead change and support the business and the team. To this end, we recently announced the promotions of Jim Wade to President and Kevin Freeland to Chief Operating Officer. These leadership changes will allow us to streamline our company’s structure; simplify and empower decision making closer to where the work is happening; increase focus on our four key strategies; and increase the speed of getting strategic initiatives to market. We also transitioned our store managers to the role of general managers; the changes being made to reflect the positions responsibilities, which are broader than simply managing a store. The general manager is responsible for supporting and growing both DIY and commercial sales in our integrated operating model. I have tremendous confidence in our leadership team and our general managers. Jim, Kevin and Mike will cover the strategic and financial results in more detail. In addition, Mike will cover our annual financial outlook for the upcoming year. We continue to take action to position the business for success in 2009 and beyond. The team’s ability to live our values and serve our customers better than anyone else will make the difference. I will close with an example of a team member who is a living example of what [good] looks like for growing our business. Dave Bearden was recently named District Manager of the Year for his region. Dave embraces the Advance values and strategic initiatives, and as a result has produced outstanding results. He demonstrates performance excellence in a consistent, meaningful and timely manner. Dave is a leader who inspires and motivates his team to reach out and achieve their full potential. He realizes the success of each store, his division and the company depends on his leadership in translating the company’s initiatives into operational excellence. He is a company leader with his customer satisfaction and team member engagement results, and today I am proud to have Dave leading one of our districts. Congratulations on a job well done, Dave. Now I’d like to turn the call over to Jim to provide a progress update on our commercial acceleration and DIY transformation strategy. Jimmie L. Wade: Thank you Darren and good morning. Let me start by saying I’m excited about the opportunity to lead our customer and sales driving functions, which include our DIY and commercial sales; marketing; customer insight and advertising; field and store operations; Autopart International and real estate. Now I’ll update you on our progress with our commercial acceleration and DIY transformation strategy. We’re pleased with the overall progress we made with our commercial acceleration strategy in the fourth quarter and for the year. We ended 2008 with our fourth consecutive quarter of double-digit comp growth with a 13.7% commercial comp for the fourth quarter, and 12.1% for the year. And we made good progress continuing to improve all of our team sales productivity methods. We also continued to gain market share in a business that is very fragmented and is still growing overall. I want to thank our store teams, our sales force and our support functions for the great job they did serving our customers and growing our commercial business in 2008. With our less than 3% commercial market share, we believe there is still much room for growth. We remain committed to aggressively growing the commercial business and despite the broader economic challenges, we believe we can continue to achieve double-digit comps in 2009. As we look into 2009 our primary focus will be to further accelerate our commercial business in the following three areas. We’ve developed a database to provide the full potential commercial sales for each store that is enabling us to aggressively invest in parts [credited] trucks and drivers in our stores and markets with the greatest potential, and with a proven track record of strong performance. We’ll continue to focus on building the basics of great customer service at each store. That means leveraging the increased parts availability in addition of key brands that Kevin and his team are driving. It also means focusing on timely, accurate and consistent deliveries to our garage customers; and knowledgeable team members who understand our commercial business. Not only will invest significantly in our commercial sales force; we’ll increase the number of commercial account managers as well as provide them more tools that will help us acquire new customers and increase our share of existing customers purchases. To give an example of what great customer service looks like, I’d like to share a story with you about one store’s success working with teams to serve their commercial customers. In our recent commercial customers satisfaction survey, we had a few stores that actually received 100% customer satisfaction scores. General manager Lynn Dudley, who’s been with Advance for nine years, leads one of those stores and has clearly taken full ownership of the commercial business. Our commercial account manager for that market, James [McNeed], works directly with the store team to build great relationships that cause customers to call the store for the parts they need. Commercial parts [inaudible] Robert [Burden] takes those calls and provides exceptional service every day. His previous background as a shop owner helps him better understand the needs of his customers. This store also has a great team of drivers who quickly get the right parts to the customers while expressing our appreciation for their business. The bottom line is that the entire team has earned the respect of their commercial customers. As a result, the customers reward them with their loyalty and that produces these excellent customer satisfaction scores. Thanks, team, for this outstanding example of teamwork and commercial acceleration. I’d also like to recognize the Autopart International team for another solid performance this quarter with a 6.4% comp sales increase for the quarter. AI continues to see strong success with its business model and we’re continuing to apply the AI teams knowledge to help us grow our overall commercial business. Turning now to our DIY transformation strategies, we made progress in the fourth quarter and in 2008 but we still have a lot of work to do. Our DIY comps were a negative 1.1% compared to a negative 3.1% in the fourth quarter last year. On a positive note, the DIY sales trend was a 300 basis point improvement from the third quarter 2008. Overall, nearly 50% of our stores did have positive DIY comps in the quarter and we believe our overall market share remains roughly the same. Although DIY sales trends improved for the quarter, we still were not consistent enough with our initiatives and executions to turn our comps positive in total. We are pleased to announce that Greg Johnson is joining our team as Senior Vice President DIY and Chief Marketing Officer. Greg has extensive background driving sales and focusing on customers and their needs with companies including Gillette, Best Buy and Eastman Kodak. We look forward to the contribution Greg will make to growing our DIY business, as well as being responsible for our overall marketing strategy and initiatives. In the first quarter we’ll continue to build on the tools to improve our execution on the DIY initiatives that we’ve described to you in previous calls including attachment rates, bilingual staff, staffing and weekend scheduling. We’ll also work harder to take advantage of the additional parts availability investment that we continue to make. We believe our 2009 advertising plan will drive more DIY traffic to our stores as it focuses more on promotional radio and less on branding primarily by TV. Lastly, we’re also looking forward to achieving more consistent customer service across our chain by learning from those stores that are getting great DIY results and from the new team member systems that we’ve launched. In addition to these specific initiatives, our entire team will make a stronger commitment that we can achieve positive DIY comps by focusing on serving each customer better. Our customer satisfaction scores by store are helping us gauge our progress. Pushing to new store development, we opened 26 stores during the fourth quarter. We also closed ten stores and relocated two. During 2008 we opened 127 stores including 18 by Autopart International. We closed 20 stores and relocated ten. Our total store count at the end of the year was 3,368. We previously said that we’re reviewing our store performance and our overall real estate portfolio. Mike will share more information on our store closing plans as well as our plans for continuing new store growth in 2009. In closing, we’re pleased with our commercial results and somewhat encouraged by the improvement in our DIY results during the fourth quarter. That said, we’re disappointed that our DIY comps remain negative and the bottom line is we have more work to do. Yet from the inside we see potential from things that are within our control. We’re encouraged by the progress a number of our markets are making and we thank them for showing us what good looks like. We’ll continue to share our progress in DIY as we further develop our go forward plans under Greg’s leadership. Now I’d like to turn the call over to Kevin to review our availability excellence and superior experience strategies.

Thanks Jim and good morning. I would also like to express my excitement about the opportunity to lead the company’s day-to-day operational functions including merchandising; inventory management; supply chain; store operations support; e-commerce; and information technology. I’d like to update you on the execution of our availability excellence and superior experience strategies. Availability excellence enables us to serve our customers better than anyone else by redefining the standards of breadth, depth and speed of delivery of parts. I want to congratulate the team for significantly increasing our parts availability in 2008. I would like to provide visibility to the key areas that will drive long term value. We will continue to invest in merchandising capabilities, invest in parts and reduce our net owned inventory. The transition toward our integrated operating model in merchandising is complete and our eight category teams are in place and engaged under this new model. We will continue to roll out our new category management process and are on track to improve the category’s performance in 2009. We recently launched the company’s global sourcing capability and private brand strategy. We have begun staffing teams in the states as well as overseas. In 2009 we plan to begin directly sourcing specific products to create competitive positions on the opening price point portion of our DIY assortment. We will also continue the rollout of our price optimization process which favorably impacted our Q4 growth margins. In 2008, we continued to upgrade inventory selections. For the year, we added over $100 million in hard parts including the addition of Lewis and Wagner and inventory upgrades in approximately 1,000 stores. We completed a new custom mix process that will produce higher sales and gross margins with no incremental inventory investment. Our custom mix system began it’s national rollout in the fourth quarter and we anticipate the full rollout will occur over the next 18 months. In Q4 we completed our review of inventory productivity. As part of that review, we decided to significantly change how we managed the end of life cycle of our inventory. In the past, we devoted our return privileges to parts for early model cars with greater than five years supply. In an effort to significantly improve inventory productivity, we have discontinued replenishment on all early model parts with two to four years of supply and have tightened our policy of obsolescence to greater than four years of supply. This policy change has led to a one-time, non-cash inventory adjustment of $37.5 million. More importantly, we will free up shelf space in our stores to insure the right parts are in stock. Mike Norona will share details about this in a few minutes. Moving on to supply chain, we continue to identify opportunities to drive efficiencies. We successfully piloted engineered standards in one of our distribution centers in Q4 and are migrating engineered standards to the balance of our distribution centers this year. This initiative enabled us to improve labor productivity in our main distribution centers and reduce distribution expenses over time. We recently announced the outsourcing of our private fleet to UPS Freight and Schneider. This change will allow us to focus more attention and resources on achieving advances for key strategies and meeting retail and commercial customers needs; a better ability to manage transportation as the company continues to grow; provide access to more resources and improve technology through national carriers; allow more scheduling flexibility, all of which will reduce our overall costs. These cost savings will fund our national expansion of our parts delivered quickly or PDQ network. We recently added a PDQ in Chicago and will add an additional PDQ each quarter for the foreseeable future. PDQ’s allow us to restock our stores with critical parts within two hours versus 24 hours in the past. Turning to information technology, we are continuing to leverage IT in support of our business strategies. As previously announced, we began a multi-year effort to replace our legacy merchandising systems with Oracle merchandising system. Work on this critical system will be brought online in stages beginning in the third quarter of this year. In addition, we’re developing our own independent e-commerce site. Our superior experience strategy enables us to serve our customers better than anyone else by consistently providing legendary customer service through a relentless focus on execution. Superior experience translates that goal into the specific activities that our team members must perform in order to unlock their full potential, drive significant customer satisfaction improvements, while ultimately accelerating sales growth. I would like to provide an overview of the accomplishments in Q4 as well as our objectives for Q1, 2009. In 2004 we better aligned our labor hours with customer needs. As sales accelerated above our initial expectations, we allocated additional hours where needed to fuel sales. For the entire quarter, we leveraged DIY labor compared to Q4 2007 while supporting the needs of our rapidly growing commercial business. In addition, we streamlined and eliminated several operational tasks to increase the portion of our labor hours devoted to customer service. To plan for the continued acceleration of our commercial business we tested a new integrated operating model in one market. The results of this test include a doubling of our on time commercial deliveries, significant leveraging of our driver hour expense, and acceleration of our commercial sales. This new stamping model will begin a phased rollout in Q1. In 2008 we made material improvements in strength; workers compensation; and general manager turnover. And finally, I’m encouraged about our future, particularly after recently spending time with our general managers and field leadership at our annual team meeting. Now let me turn the call over to Mike to review our financial results. Michael A. Norona: Thanks Kevin and good morning everyone. I’d like to start by personally thanking all of our talented and dedicated team members for the results we achieved this quarter. We’re in one of the most challenging and unprecedented economic environments ever, yet our team members found a way to take care of customers, accelerate our turnarounds, and deliver a strong financial quarter. I plan to cover the following topics with you this morning; one, provide some financial highlights for 2008 fourth quarter and annual results; two, put our 2008 annual results into perspective with our turnarounds, including sharing actions we took and are taking to position us for success in 2009 and beyond; and three, provide our annual financial outlook for 2009. Turning to our fourth quarter, our results include the impact of both the 53rd week and non-cash inventory adjustment resulting from a change in inventory management and related accounting policy change. I plan to share some insights on both of these items and then speak about our results on both a 12 week and 52 week comparable basis, as that provides a more transparent and relevant comparison to 2007. We have also included this in our press release. Our operating performance during the fourth quarter including the 53rd week but excluding the non-cash inventory adjustments was $0.51 diluted EPS versus the first call consensus estimates of $0.37 and $0.35 for last year. The 53rd week added approximately $0.10 to our fourth quarter results and came in higher than the $0.07 we had estimated. The favorability was driven by better than expected sales and a higher gross profit rate. As Kevin shared, we also made a non-cash inventory adjustment of $37.5 million which reduced EPS by $0.25 in the quarter. This adjustment resulted from a change in inventory management and related accounting policies. Removing this non-productive inventory from our portfolio, combined with our custom mix initiative, will allow us to improve the quality and productivity our brand [inaudible]. On a comparable 12 week basis, our EPS increased 17% or $0.41 in the fourth quarter compared to last year, driven by increased operating income, reduced interest expense and a lower share count. Some highlights for the quarter include a 3% comp sales increase, comprised of a 13.7% increase in commercial offset by a 1.1% decline in DIY; and 140 basis point increase in gross profit rates due to improved shrink, more effective pricing and a higher mix of sales from Autopart International. Also in the quarter, our SG&A increased 125 basis points driven by increased incentive compensation, strategic capability investments, and legal settlement costs. On a comparable 52 week basis, excluding the non-cash inventory adjustment, our EPS increased 16% to $2.65 compared to last year. Some highlights for the year include opening a net 107 new stores; a 1.5% comp sales increase comprised of a 12.1% increase in commercial offset by a 2.3% decline in DIY; and a seven basis point increase in gross profit rates due to improved shrink, more effective pricing, and a higher mix of sales from Autopart International. Additionally, our SG&A increased 66 basis points driven by strategic capability investments; increased incentive compensation; partially offset by lower medical expenses. Additionally free cash flow for the year increased 19% to $280 million over last year, primarily driven by the impact of the 53rd week and reduced capital expenditures. Capital expenditures were $185 million for the year compared to $210.6 million last year. The decrease in capital expenditures was primarily due to a reduction in new store development. To put our 2008 fourth quarter and annual financial results in perspective, we are pleased with our double-digit commercial comp sales growth; gross profit rate improvement; and earnings growth we delivered. We are also pleased with our free cash flow improvement and liquidity given the challenging and unprecedented economic environment. We are also realistic that we are early in our turnaround and need to balance short term earnings growth with making the required investments that will deliver long term value. Nowhere was this more evident than in 2008 and in our SG&A per store which increased to $609 thousand per store 2008 from $601 thousand in 2007. Clearly this is a reminder of the structural and operational investments we made and must continue to make to transform and differentiate our business to deliver sustainable and consistent growth. Now I would like to link our 2008 results with our turnaround. Two-thousand-and-eight was the first part of the journey which involves performing in-depth assessments of all parts of our business to unlock our full potential. This included determining our strategic direction; identifying fundamental capabilities for key strategies; making some required investments; and putting the foundational elements in place to get the work done. We also identified underperforming parts of our business that we need to [pay] back because they no longer fit with our strategic direction or deliver acceptable returns. We also identified four performance gauges that will be our financial compass for our turnaround. Our current performance in these gauges shows we are trailing the class of our competitors, with the key insight being we have a 13% sales productivity gap to the leader. That is, our sales per square foot, $208 is 13% below the industry leader despite the fact we spend roughly the same amount of SG&A per square foot. One of the key outcomes of our turnaround is to close this productivity gap. Two-thousand-and-nine will be about reconfiguring our business model around our customer; reducing expenses to partially fund continued strategic investments; and improving executions through peer group performance management. We will continue to focus on our four strategies and build on the assessments and investments we started in 2008. Our largest investments will be aimed at accelerating our commercial business and revitalizing our DIY business as Jim outlined. As Kevin shared, this also includes key investments in the enabling parts of our business such as availability excellence and superior experience to improve our operations. One of the keys to operations is consistent execution. Today we have a high degree of variability in our store performance. By way of example, we shared that our sales per square foot currently lags our competitors. Averages can sometimes be misleading because what you cannot see is that our top 10% of stores are delivering over $350 per foot while our bottom 10% are delivering $100 per square foot. Therefore the opportunity lies in narrowing the performance gap by improving our bottom poor performers. To accomplish this, we’re in the early stages of segmenting our stores into peer groups which have similar operating characteristics to drive performance. This approach will allow us to focus on our performance gaps within each peer group. Turning to fiscal 2009, and consistent with last year, we are providing annual financial assumptions to help you determine your 2009 estimates with different performance sensitivities. We believe this approach continues to be prudent given where we are in our turnaround and the prevailing uncertainty in the economic environment. Additionally, our roller coaster ride in 2008 proved that we are better operators than we are predictors of the future. In 2009 we expect a double-digit increase in commercial comp sales partially offset by low, single-digit negative DIY comp sales. We also anticipate a modest increase in our gross profit rate. Given 2009 will again be a year where we balance growth and investments, our SG&A rate is expected to increase and leverage at approximately a 3% increase in comp sales. While our destination is clearly focused on delivering long-term value to the shareholders, in the short term our SG&A will be constrained by continued strategic investments. One of the ways that we are mitigating this impact is to fund these investments by reducing existing expenses from less productive areas. Our 2009 store divestitures are an example of this. From our 2008, fiscal year 52-week EPS results of $2.55 we expect that each 1% increase in comparable store sales adds approximately $0.07 in EPS. In addition, a 10 basis point improvement in operating margins is expected to add approximately $0.03 of EPS. As a reminder, fiscal year 2009 includes 52 weeks versus 53 weeks in fiscal 2008. The additional fiscal week of business in 2008 contributed $88.8 million in revenue, $15.8 million in operating income and $0.10 of EPS. In terms of quarterly phasing, we expect EPS growth to be limited in the first half of 2009 driven by increased [achieved] capability in investments and more difficult comparisons to the first half of last year due to items such as savings, annualizations, and the economic stimulus check. Conversely, we expect EPS growth to be more robust in the second half of 2009 as we begin to realize the returns on the investments in 2008 and early 2009. In 2009 we are planning an incremental 40 to 55 Advance store divestitures on top of the annual 15 store closures we typically do. These divestitures were identified based on a thorough review of our real estate, store portfolio and are consistent with our approach to take action on all under-performing parts of our business that are not delivering acceptable returns or they’re not fit strategically. One of the key drivers of these underperforming stores is they’re un-competitive occupancy costs. We provide a range of store divestitures because they are a moving target based on rent renegotiations. We are committed to working with our landlord partners to lower occupancy costs to current market rates. In cases where we are unsuccessful we are prepared to make the tough choices. Going forward we will be performing a rigorous examination of our occupancy costs compared to market rates. Our 2009 annual financial outlook does not include these incremental 40 to 55 divestitures. Our best cost estimate for the store divestitures is approximately $500 thousand per store, primarily driven by the long remaining lease terms adjusted anticipated subleased income as well as the write-off of store assets. The payback on these incremental store divestitures is less than three years, driven by the elimination of current operating losses and inventory transfers to existing stores, along with the related tax benefits. Conversely, we see considerable opportunities to grow our store portfolio. In 2009 we expect to open approximately 105 new stores with 75 being Advance stores and 30 being Autopart International stores. This mix is reflective of the growth we see in our commercial business. As also can be seen, the number of total Advance stores will remain roughly flat in 2009, with the openings being mostly offset by the store divestitures. In closing, we are pleased with our fourth quarter results and happy with our strong start to 2009. We are committed to our four strategies including taking the appropriate actions and making the necessary investments required to reach our full potential. We are also balancing our optimism with the unprecedented economic conditions and we remain vigilant to have our four gauges measure our progress. Most importantly, we are investing in and betting on our talented team members to lead us to our turnaround. I am particularly proud how our team members responded from our third quarter performance to deliver the top and bottom line outcomes they did in our fourth quarter. Not only did this provide momentum as we enter 2009, but it helps to drive our free cash flow which in this challenging environment provides a solid foundation to build from. We are now ready for questions. Operator.

Thank you. (Operator Instructions) Your first question comes from Scot Ciccarelli - RBC Capital Markets. Scot Ciccarelli - RBC Capital Markets: Can you guys describe the impact of inflation in 2008 and what the expectations are in terms of product inflation for 2009? Number one. Number two, I’m not sure who this question should be centered towards but you know in terms of trying to customize inventory at a store level, kind of where are we? I know you guys used to do regions and then districts but there’s so much variability at the store level, if you can just give us an idea of kind of where you are in that process I think that would be helpful. Thanks.

In terms of inflation we roughly saw about a 3 to 5% inflation in our overall products last year which certainly pushed along the sales. We’re beginning to see some changes in categories and certainly the oil category would come first to mind as that has materially changed. And we’re beginning to see unit improvements as the price changes unfold. So I think that we’re going to monitor this very closely throughout the year; have not seen a material change in the trends but certainly we’ll stay very close to this. And what we don’t know is to what extent the change in the inflation rate will change the overall unit movement of the company to offset that. As it relates to the custom mix, we are complete with the system that we’ll need to customize down to the individual store. What we actually do is essentially re-assort one section at a time, and this is done to manage labor. About two-thirds of the sections change out each year. About a third of the sections change out every other year. So it’ll be about 18 months before we see the full effect of the impact on the business. But what we’ve done is gone through and completely re-assorted to markets to see what the overall impact was, and we’re extremely pleased as to what this does to drive overall business. Essentially they’re in stock on the things that customers want and pull out the products that weren’t selling in the past. Scot Ciccarelli - RBC Capital Markets: And that’s two markets out of how many? How many do you break it into?

Out of hundreds of divisions, so essentially it was a market test to see the impact of this. And then this will be a tailwind for us for about the next year-and-a-half.

Your next question comes from Kate McShane – Citigroup. Kate McShane – Citigroup: I was wondering if you could walk through and possibly quantify some of the puts and takes in your SG&A guidance for 2009. And has your guidance changed on what comps can leverage SG&A or has it always been 3%? Michael A. Norona: Yes. Hi Kate. It’s Mike Norona. We haven’t specifically given details around our SG&A but let me hum a few bars. So first of all I think our trajectory has changed. I think we came out of Q3 and I think we said we’d leverage at around 2.5. And 2009 is going to be another year where we balance investments and growth. And if you’ve been following the story the last year, we’re in a turnaround. And we’re looking at all the fundamental parts of our business, all structural parts of our business, to move ourselves to – move our assets to higher performing basis. And a couple of examples I would share is the inventory adjustment we made in Q4, where we’ve taken unproductive inventory out of the system to clear up shelf space and Kevin can hum a few bars on that – clear up shelf space for more productive inventory. Also the moves we’re making with our store divestitures. So we’ve taken a hard look at our store portfolio and we have stores that are under-producing, either from a profit standpoint or from the strategic standpoint. And what we believe is that by looking at all parts of our portfolio we can move our assets to more productive uses. So we believe next year we’re going to leverage our SG&A at roughly about a 3%. So maybe the last thing I would tell you is you know we’ve made some moves. I think we made some moves last year around things like less advertising, more trucks, more parts pros. So just an example of feeding our strategies with – and they come with some costs up front.

Three percent has about been our historical run rate. Last year it was a little lower due to some of the expense takeout. And Kate, just to be clear we – I mean, more trucks, more parts pros, more driver hours, less money being spent on television. More money being spent on commercial account managers next year. So philosophically what we’re staying committed to is how do we continue to build this integrated operating model through our focus on and our investments in the commercial space; through the investments in the right inventory, we did 1,000 upgrades last year. We’ll do another 1,000 upgrades this year to continue to build on this momentum in terms of re-architecting our model in the places that we think have the longer – are showing to have short term immediate benefits and longer term sustainable operating model benefits. Kate McShane – Citigroup: If I could follow-up with one other question on the do-it-yourself business, have you seen since one of your objectives and strategy is to increase attachment rates, have you seen any up-tick in attachment rates yet and do you think this is possible in 2009 when things are so difficult with the environment and unemployment? Jimmie L. Wade: Yes, Kate, this is Jim. We have seen some improvement on the attachment rate. I think we still have quite a bit of work to do as we continue to look at how do we best serve our customers from the standpoint of solution selling and make sure that they have everything they need to do a complete job. We are focusing a lot of attention on customer average, the average transaction that the customer has when they complete their visit to our store. We are seeing progress in that measure and I think in many ways it’s a broader look at the progress we’re making as opposed to just the attachment rate.

Your next question comes from Dan Wewer - Raymond James. Dan Wewer - Raymond James: Darren, your commercial sales obviously substantially stronger than that of NAPA. We saw that from O’Reilly last month as well. I know that in the past when you were asked a question of whether or not you had taken share from NAPA, you would say it’s probably coming from the jobbers. But given the extent of your improvement are you reconsidering who perhaps you are taking share from nowadays? Darren R. Jackson: Yes. I’ll have Jim and Donna talk to you about that, Dan, because they’re closer to it. Jimmie L. Wade: Dan, I think from an overall standpoint we would probably repeat pretty much what we’ve said for some time now that you know we’re in a commercial market that is still very fragmented. And we’ve got – there’s an awful lot of suppliers of auto parts in every market that are supplying the garage customers. And so as we are focusing on what we are focusing on, which is providing the best customer service that we can, I think we’re taking some share on an overall basis for sure. I suspect that a bigger portion of that is coming from the local market which is typically what happens. But we’re pleased with where we are. We’re pleased with the progress we’re making and we’re not so much focused on where it’s coming as opposed to just continuing to grow it and do what our customers are telling us is most important to them. Dan Wewer - Raymond James: As a follow-up there, in the beginning of your comments you noted that lower gasoline prices could change driving behavior in 2009. I thought it was remarkable your sales were as strong as they were given the miles driven dropped 5% in November. Do you ever ask yourself, you know, the credibility of the miles driven data from the DOT? And based on your sales results and your competitors, perhaps it’s not as bad as what they’re reporting. Darren R. Jackson: Dan, I ask myself a lot of questions. The way I think about it is there are many different factors driving consumer behavior right now. And if we reflected on it and I meant it that there is a lot of pain out there. And I think that there were a lot of consumers that frankly went to the dealer to get their car repaired and now the corner garage is just fine. And that corner garage used to just be fine for a number of people. And that change in the DIY behavior, I think, is reflective of people moving down. It’s probably not unlike what McDonald’s is experiencing. And that’s not to diminish what our team members are doing or the inventory upgrades or getting all those things right. But I think it is indicative of the environment and I think miles driven to your point is only one ingredient. I think our value proposition today, how we’re focused particularly in our commercial business and you know we have seen an up-tick in the DIY business, make no doubt about that. And I think it’s part of the holistic system, miles driven just being part of it. You can’t fight with the historical data in gas prices because the correlation is very strong, but I don’t know that the historical data even in recession periods tends to show this sector tends to do a little bit better. So we think we’re in a terrific spot in terms of the environment and we’re going to continue as Mike said to make sure that we’re putting the investments in terms of where customers are willing to pay us for it at this point of the journey. Dan Wewer - Raymond James: And then just real quickly can you just defend how you’re lowering shrink in this kind of an economy.

We essentially changed the way that we audit our stores. And essentially went from a cycle count process where you go one section at a time throughout a calendar of the year to doing whole audits of the stores using an outside third party. And essentially what we’re seeing is that this new process is giving us probably a year of positive results as we get to a new plane and anniversary the change between the two. We have also announced a four-point program to improve it systemically. And we’ll attempt to use this year to ingrain that process for probably a longer term benefit for the company. Darren R. Jackson: And the other thing I would say is Mike Marolt. So we were fortunate Mike led Best Buy’s efforts years ago when they were well north of one. I think even today they probably enjoy a shrink that’s less than a half a percent. And I think leadership is critical in a lot of spaces. And I think it’s not just – I mean he’s bringing a lot of practices that helped that organization. He’s bringing leadership and focus and building a team that I think we’re just starting to enjoy it in one part of our business. Shrink is one area. You know we’ve had tremendous improvement in places like workers comp this year. That used to be a difficult area for us. You know we see opportunities in the future with our partnership that we’re talking about with some of our vendors in the battery area. So I think it starts with leadership and then it can grow into other parts of the business as well.

Your next question comes from Alan Rifkin - Bank of America-Merrill Lynch. Alan Rifkin - Bank of America-Merrill Lynch: Darren, with respect to the rent negotiations other than the expenses associated with the possible 40 to 55 store closures, what do you think is the potential long-term occupancy savings on renegotiated rents for stores that will remain open? Michael A. Norona: Alan, you have another question as well? Alan Rifkin - Bank of America-Merrill Lynch: I do. I could ask you that as well. If I heard you correctly you said that you leveraged DIY labor. Is that correct? Michael A. Norona: Yes that’s correct. Alan Rifkin - Bank of America-Merrill Lynch: So you leveraged DIY labor with a negative 1.1 comp and certainly you folks have made a lot of strides on the DIY side of the business. Why then are you raising the threshold for comp necessary to leveraged labor since DIY is still 70% of revenues? And then secondly, given the strides that you’ve made, the positive strides, why is your outlook for DIY comps still to be negative in ’09? Michael A. Norona: So maybe Alan what I’ll do is I’ll hit the first one in terms of real estate and then I’ll turn it over to Jim. You know, this is a – the environment has changed significantly in terms of commercial real estate. And I think you’ve heard us say last year one of the areas that we are just un-competitive on is our occupancy costs. So there’s two dimensions. One is we’d look at our store portfolio and we’ve determined that we’re going to close an incremental 40 to 55 stores this year because of profitability – primarily profitability and strategic fit. One of the reasons we give a range is because the largest driver of being unprofitable is occupancy. So our real estate team is going to work with our landlord partners and where we can be successful will be in the lower end of that range. Where we aren’t successful we’ll be at the higher end of the range. So that’s how occupancy plays into the divestitures. Generally across our portfolio, though, the market has actually changed. And we are actually – over the next number of years we have 800 stores that their leases come up for renewals. And I think everywhere you read right now, there’s probably not a retailer out there that’s not doing the same thing. So we think there’s anywhere from a 5 to 25% opportunity. And I give you a big range because that’s what it is. And I think we are a good, strong credit tenant in a market wherer a lot of places are going dark. So we think there’s opportunities there. And I think that’s more a market position as well. Maybe I’ll turn it to Jim on the DIY. Jimmie L. Wade: Yes, Alan, this is Jim. Just as far as how we’re looking at DIY currently, I think as you heard us talk about it in our comments earlier, we’re certainly encouraged by what we’re seeing in DIY. We saw the fourth quarter certainly improve from the third quarter and we’re encouraged by what we’re seeing so far this year. But I think where we are in terms of our guidance is that if you look at the last couple years, we’ve had negative comps in DIY. And we’ve got to earn the right to – our team has to earn the right to be able to forecast something more than that. We’re going to be working really hard this year to change that trend. But that is where we are today in spite of the improvement we saw in the fourth quarter. I think your other question is somewhat related to that in that we’re balancing 2008 and as we go into 2009 a rapidly growing commercial business with DIY business that was negative. And so within the store we’re balancing that staffing matrix. And Kevin mentioned earlier we’re doing some things to test and pilot some different mixes of staffing to help us manage that total labor better as we grow the business, but certainly a positive DIY certainly changes the ramifications of how we run the stores. So we’re working very hard on increasing the DIY business but we’re forecasting based on what we’re seeing in 2008. Michael A. Norona: Alan, I just want to add one thing. Your comment on de-leveraging SG&A, one of the other reasons we’re de-leveraging SG&A is not just primarily labor. It’s the investments we’re making in other parts of our business, whether it’s our new merchandising systems; as Kevin said, PDQ’s; and some of the transformation things that we do typically has some upfront costs but they have great MVP’s and drive good long-term value. So that’s what causing some of that SG&A de-leverage. Alan Rifkin - Bank of America-Merrill Lynch: So in other words if you weren’t conscientious in making those additional investments beyond things really at the store level, what would then the threshold be for SG&A leverage? Would it be considerably lower than the 3%? Because it sounds like you guys have voluntarily [inaudible] ending on a number of things and that’s the only reason why the threshold is rising. Is that fair takeaway? Darren R. Jackson: Alan, I think it would be lower. But I wouldn’t take it to sub-two because keep in mind you have medical inflation. You know, every year we do give raises. We’ve been fortunate to have some good performance and just inflation in the system, whether it’s on occupancy and other areas. That’s why I said historically even in good times the breakeven was about 3%. I think to Mike’s point what you don’t see is we’re in there aggressively taking costs out, whether it’s through some of our – we just recently outsourced the trucks as Kevin said. We’ll have some severance this year that goes with that. But on the other hand going forward you know we’re going to have some nice savings with it. So this year there’ll probably be no leverage from that transaction but next year and the following year there will be. And so we’re going across the business where we can to make sure that we’re taking costs out where we can improve capabilities over the long term. There might be a little short term preying in SG&A. So then we can focus on the parts of the business we want to grow going forward.

Your next question comes from Matthew Fassler - Goldman Sachs. Matthew Fassler - Goldman Sachs: I’d like to ask a question about merchandising systems, the Oracle system that you’re putting in place. You’ve talked a lot about store level inventory, customization and the impact that that’s had where you’re implementing it on a small scale. How well the rollout of your – of the new system further impact or improve your ability to execute on that front? And if you can differentiate the advantages that you expect to recognize when this system is rolled out from the work you’ve already been able to do.

Matt, this is Kevin. I’d like to have Charles Tyson assist me on that. But essentially the program will roll out in three phases starting in third quarter of this year. And the first thing that we’ll see in terms of the tangible benefit on the company is our ability to price product more essentially effect to a closer local demand and what we see in terms of competitive reactions around the stores. And as we go into fourth quarter and first quarter of next year other advantages including our ability to tighten up what we’re doing in category management and inventory management, but I’ll turn it over to Charles.

Thank you Kevin. Good morning. So I think certainly the advantages of getting a lot more granular on the way that we’re going to be able to manage our inventory, specifically at the category level and our ability to get to custom mix in the front room is going to be very significant for our merchants. I think the second one as Kevin said is our ability to drive zone pricing to a much more granular level will drive benefit through the end of ’09 and into ‘010. So we see the investments having material effect on both our merchandising and replenishment team’s ability to drive improved performance. Matthew Fassler - Goldman Sachs: My second question is a follow-up on the inflation team and it relates to hard parts. You discussed trends that you had seen in some of the commodity areas like oil and some of the other chemicals and there’s been some elasticity I guess that’s helped defray whatever kind of fading inflation there is. To what degree has inflation been a factor in the hard parts area which is harder for us to see as we shop up your stores and what kind of trend would you anticipate in ’09? Jimmie L. Wade: Well, certainly in ’08 if you look to metal pricing, commodity pricing there was an impact driving inflation up. And you have visibility to what happened to commodity pricing over the last six months as being a worldwide industrial slowdown. So we are seeing some of the benefits in the reduction in commodity pricing flowing through to benefit us today. Matthew Fassler - Goldman Sachs: And I would imagine that given the lack of transparency of pricing to consumers, there’s probably less risk of prices coming down in those areas? That is sale prices? Jimmie L. Wade: I think that’s a good comment. Darren R. Jackson: One other comment, when Jim was talking one of the things that we’ve been working on is attachment selling and trying to drive the overall basket and as he mentioned we’re not as far along on that as we would hope but that the customer average or the average ticket is rising. And part of that is a second activity that we’re engaged in which is many of our key products have a good, better, best assortment to it and we’re seeing more progress quite frankly in stepping the customer into some of the premium products than we are in our ability to manage the overall attachment rate. Matthew Fassler - Goldman Sachs: And finally as it relates to the trajectory of earnings growth over the course of the year, you alluded to a slower growth in the first half and then perhaps bigger expectations presumably adjusted for the 53rd week in the second half. How should we think about that in the context of the shrink benefit that you captured in the fourth quarter which obviously seems quite legit but would also seem to create a tough bar for you to cycle on the gross margin side? Should we infer that the expense investment should be highest in the first half and then recede in the second half of the year? Or do you think that you can cycle the gross margin benefit that you saw with unfettered momentum? Jimmie L. Wade: Yes, a couple of things. In terms of the shrink and I think that Kevin and Darren alluded to it, because we’re starting from a - you know, we think we have a lot of opportunity in shrink. So we continue to see shrink as being a tailwind for us as we go forward. So we think there’s the opportunity. And I think, Matt, what we’re not going to do is – I think what we’re going to do this year and I think I said it in the script we’re better operators than we are predictors of the future. This is an unprecedented environment. What we shared with you in the script is really what we know. We know last year we had the stimulus, which will be a little bit of a headwind for us. We know we annualized some savings last year. And we know we’re making some investments. And we’ll be making investments throughout the year. I think what changes, though, is there’s an expectation that those investments start to give us a return. And we should see some of those start in the latter part of 2009.

Your next question comes from Brian Nagel – UBS. Brian Nagel – UBS: First, I also wanted to look at gross margins more closely. And as I look at my model Advance Auto Parts has shown a nice increase in gross margin for a few quarters now, but that rate of improvement clearly stepped up in Q4. So I guess the question I want to ask there is what were the factors that really helped to drive that rate of improvement higher? And as you think about in 2009 and you gave guidance for modest gross margin, how should we think about the sustainability then of those factors that drove the gross margin in Q4? Darren R. Jackson: Yes, so maybe I’ll tell you where we saw the big drivers and then I’ll have Kevin comment on 2009. I think the three drivers that we alluded to one was shrink and that was over 50% of the increase we saw in Q4; the second was more effective pricing; and the third is a higher mix of business from Autopart International which typically has a higher gross profit rate. Kevin.

Yes, Brian, we rolled out a new price optimization program in fourth quarter and it was only partially complete by the end of the year. That will have its full impact as we go into next year and we were expecting a significant improvement. One of the things that was commented also is that what we refer to as margin drainers, so shrink would be an example of a margin drainer. Darren mentioned in terms of battery returns. It’s a hit on the margins in that large category. All of those things should have a positive impact as we move into next year. We mentioned the global sourcing and our ability to essentially private label a larger portion of our assortment should begin to positively affect us at the tail end of this year. But at the same token, we’re beginning to get some momentum behind sales. We’re getting very focused on the competitiveness of the opening price point portion of our overall pricing strategy. And those things will be somewhat of headwinds as we go into the year for margin, but should be tailwinds as it relates to overall sales growth. Brian Nagel – UBS: The non-cash inventory adjustment you took in the fourth quarter, does that include a markdown of goods? And if so, will the flow of those goods be a positive for gross margins over the next few quarters?

Brian, no, essentially this was an operational change that we made that then led to an accounting change. But we historically had taken products that were essentially for older cars that had grown to a five year supply and focused our return privileges on those products. What we have moved to and it’s a part of the rollout of the new custom mix tool is essentially early model parts at two years of supply is the new standard. And we have created what we refer to as the neutral zone which is two to four years where essentially we will discontinue all replenishment, any sale in a store that occurs will just go out of stock on that slow moving merchandise. Any sales that occur in local stores, because our stores share inventory, we’ll transfer it to that store and again not replenish it. And we’ll focus the lion’s share of our vendor returns in that neutral zone. And so this intent is to take products that are four years of supply and greater and we’ll take this charge. And our intent would be to prevent the reoccurrence of this by this focus in what we refer to as the neutral zone. And those products that we had, $37 million were generating about $5 million of sales per year, which is about a two-tenths of a turn. The product that we would be replacing on the shelves because our stockrooms are full today as we get these products out of the shelves and replace them with more saleable products, the actual sales rate that we would see would be a tenfold increase. Michael A. Norona: And just to be clear, what we did with the adjustment wasn’t a markdown. It was actually taking that full amount as we now have a different definition of obsolete inventory that’s anything greater than four years. And it was the adjustment to take – to write off that inventory. And that’s a net adjustment of not only writing off the inventory but what we’ll get from the sale of that and moving the inventory and so on. It’s a net adjustment. Jimmie L. Wade: So when you connect both of those, Mike and Kevin, so Brian if you go back to the custom mix and what we’ve learned in the custom mix and what’s selling in those two markets what we learned is we’ve got to create shelf space. And so we might as well yank inventory off the shelf that’s turning at point two and look to put the tailored merchandise or the tailored mix into those stores that are turning closer to two. And we thought that this is – essentially, it’s a no brainer because we’re cleaning up part of the portfolio that’s part of the issue we have in terms of sales productivity and replacing it with things that work in those communities, not unlike the change we’re making in the store portfolio. Mike, I think you would say the stores that we’re divesting are probably doing $100 a foot. And so we’re willing to relocate and find better locations in order to solve the bigger opportunity which is getting sales per square foot moving again. This is part of a year long process to be honest where we said, “Where do we have to go in and clean up some of the legacy issues that we have so we can position the business to grow more effectively, support our team members and the stores with the products that they’re looking for, and get better positioned in the right markets?”

Wendy?

Yes?

I think at this stage we are past our 10:00 Central conference call so thank you everyone for joining us on today’s call. If you have additional questions please contact Joshua Moore at 952-715-5076. Reporters please contact Shelly Whitaker at 540-561-8452. That concludes our call. Thank you.

Thank you. That concludes our call today. You may now disconnect and thank you for joining us.