Diane Dayhoff - Senior Vice President, Investor Relations Frank Blake - Chairman, Chief Executive Officer Craig Menear - Senior Vice President, Merchandising Carol B. Tome - Chief Financial Officer, Executive Vice President Corporate Services Mark Holifield - Senior Vice President, Supply Chain Marvin Ellison – Executive Vice President, U.S. Stores Matt Carey - Executive Vice President, Chief Information Officer

Scott Cicarelli – RBC Capital Markets Michael Lasser - Barclays Capital Dan Binder – Jefferies Christopher Horvers - J.P. Morgan Budd Bugatch - Raymond James David Strasser – Janney Montgomery Scott Stephen Chick – FBR Capital Markets Deborah Weinswig - Citigroup Wayne Hood - BMO Capital Markets Colin McGranahan - Sanford C. Bernstein Matthew Fassler - Goldman Sachs Laura Champine – Cowen and Co.

Welcome to today’s Home Depot first quarter earnings conference call. Today’s conference is being recorded. (Operator Instructions) For opening remarks and introductions I will turn the conference over to Ms. Diane Dayhoff, Vice President of Investor Relations. Please go ahead.

Thank you and good morning to everyone. Welcome to the Home Depot first quarter earnings conference call. Joining us on our call today are Frank Blake, Chairman and CEO of The Home Depot; Craig Menear, Executive Vice President, Merchandising and Carol Tome, Chief Financial Officer and Executive Vice President, Corporate Services. Following our prepared remarks, the call will be open for analysts’ questions. Questions will be limited to analysts and investors and as a reminder we would appreciate if the participants would really limit themselves to one question with one follow-up, please. This conference call is being broadcast real-time on the Internet at homedepot.com with links on both our homepage and the Investor Relations section. The replay will also be available on our site. If we are unable to get to your question during the call, please call our investor relations department at 770-384-2387. Before I turn the call over to Frank, let me remind you that today’s press release and the presentations made by our executives include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, those factors identified in the release and in our filings with the Securities and Exchange Commission. Now let me turn the call over to Frank Blake.

Thank you, Diane. Good morning, everyone. Sales for the first quarter were $16.2 billion, down 9.7% from last year. Comp sales were negative 10.2%. Excluding the charges related to the Expo business closings diluted earnings per share from continuing operations were $0.35. : The external environment remains difficult. Private, fixed residential investment as a percent of GDP is now at 2.7%. This is down 40 basis points from the fourth quarter and is well below the 60-year average of 4.8% and also below the previous 60-year low of 3.2%. We have referenced this number previously as an indicator of the health of our market and we have seen a substantial contraction from a few years ago when the percentage reached as high as 6.25%. We believe that most of the correction on this index is now behind us but there remain mixed signals elsewhere within the market. On the positive side, year-over-year 21 markets out of our top 40 markets are showing a lower rate of decline. We positively comped in our Gulf region, principally because of storm recovery, and major markets within the Ohio valley region returned to positive comps. We have also seen significant improvement in comp transactions. As Carol will detail, we had a very soft February in the U.S. with particular weakness in our western division but saw improvement through the remainder of the quarter. We are concerned about accelerating rates of foreclosures, particularly in the western part of the country where there is already a high density of houses in foreclosure. In the fourth quarter of 2008 we saw foreclosures decelerate in areas of California and along with that an improvement in our comps. Those trends reversed this past quarter which provides a cautionary note on signaling a recovery prematurely. One out of every 54 households in California is in foreclosure. That is the highest it has ever been and before we see real improvement we believe we need to see sustainable deceleration in foreclosures. Overall it is important to emphasize that most of our markets that are improving versus last year are only showing a slower rate of decline, not positive comps. Getting to less bad is not the same as getting to recovery. Whatever the longer term significance of these different signals, we continue to focus on improving our business. We have a lot of opportunity there and I think we have made some significant progress. In the first quarter we gained share in 7 of 13 departments, reduced inventory by over $1 billion and maintained a strong in-stock position in our stores. We also drove footsteps into our stores through our portfolio strategy and our new lower price program. Our comp transactions were down only 2.6% year-over-year which is the best performance on transactions we have had in seven quarters. Our customer service continues to improve. Our store operations team has rolled out new, customer first training to all our store associates and support staff and has brought simplification and focus across the business. We are seeing the benefit of this in improved customer service ratings. Our net promoter score, which is calculated by taking the percentage of our customers who rate their experience as a 9 or a 10 and subtracting from that the percent who rate their experience as a 6 or worse, has improved 790 basis points year-over-year and is now at 61.5%. That is a meaningful improvement. About a month ago we opened our sixth RDC in Valdosta, Georgia. This is an important milestone because it is the first of our RDC’s that is mechanized and the planned future state of our RDC’s is as mechanized facilities. We are very pleased with the performance of our RDC network and RDC’s now service approximately 600 of our stores and the roll out will continue. We are also making significant progress on our merchandising tools in the U.S. and that is reflected in the performance in the first quarter. These tools are helping us better control inventory in general as well as clearance and mark down management. Our core retail efforts in Canada, however, have experienced some difficulties. A software implementation of this scale often entails some set backs. What we are seeing is that the effort itself diverts attention from the core business. It also takes time for merchants and operators to effectively utilize unfamiliar tools and some of the tools themselves require tuning. Some of Canada’s under-performance over the last few months is attributable to these factors. These issues will get resolved and we are fortunate to have a very dedicated Canadian team to take on the twin challenges of a major system implementation and market correction at the same time. Also on the international front, our Mexican business again posted positive comps while our business in China posted low single digit negative comps reflecting the decelerating environment. Next month the Home Depot will celebrate its 30th anniversary. It is as true today as it was 30 years ago that our associates and culture set us apart. Based on this quarter’s results, 85% of our stores would qualify for success sharing, our program for rewarding our hourly associates. We are proud of this level of participation and proud of the work our associates do day in and day out. Now let me turn the call over to Craig.

Thanks Frank. Good morning everyone. Our sales reflected the ongoing weakness in the home improvement market. For the quarter every merchandising department experienced negative comp sales growth compared to the first quarter of 2008. In the first quarter departments that out-performed the company’s average comp were seasonal, building materials, paint, plumbing and flooring. Electrical, millwork, lumber, kitchens and hardware under-performed the company’s average comp for the quarter. While we saw weakness across the stores in the U.S. we identified four trends of relative strength across product categories. First, seasonal categories related to outdoor projects like landscaping, live goods, fertilizer and seed showed flat or positive growth in the quarter. We saw strength in vegetable and herb sales as more customers are opting to grow their own vegetable gardens. Second, as we shared with you in past quarters, basic repair and maintenance categories remain resilient across the country. Categories like caulk and water heaters and air circulation, fasteners, plumbing repair and roofing all performed better than the company average. Third, we saw simple remodel and décor categories gain some strength in the quarter. These are categories that help customers update their home in a cost-effective way such as interior paint, special order carpet, in-stock carpet, vinyl flooring, ceramic tile and window coverings. Finally, there was an increase in safety and security products. We believe the tougher economic times have made customers focus on safety. Categories like door locks and exterior security lighting performed better than the company average. For average tickets of $50 and below, roughly 20% of our business in the U.S., sales were basically flat year-over-year. Average tickets of $900 and above, representing approximately 20% of our U.S. business, sales were down around 15%. In total, average ticket for the first quarter was down 8.2% to $52.67. Adjusted for currency, average ticket was down 6.2%. The pressure on ticket comes from the softness in construction and discretionary categories. Products like dimensional lumber, gypsum, concrete and wire performed poorly in the quarter. Additionally we continue to see weakness in discretionary spend categories such as lighting, appliances, replacement windows and closet system remodels. We believe customers remain cautious about spending in this environment. In general, commodity pricing has been more stable in the quarter. Wire is experiencing significant deflation from the same period last year with copper costs down more than 50% from a year ago. Lumber continues to be at historic lows but we see offsets to these through inflation in areas like roofing and fertilizer. Despite soft sales our focus on improving merchandising processes and implementing improvements with our merchandising tools allowed us to better manage the business. As a result, this quarter we delivered share gains, inventory improvement and solid gross margin in the U.S. We have now experienced our sixth consecutive quarter of U.S. gross margin expansion at the same time we introduced new lower price. For the total company, inventory was down over $1 billion and inventory turns were flat year-over-year. We did this while maintaining a high in-stock level. While there are several economic factors affecting our results that we cannot control, we have continued to focus on those areas that we can control. Our portfolio strategy and expanded use of our merchandising tools combined with excellent collaboration and execution across operations and supply chain helped provide market share gains. Seven of our 13 departments experienced share gains during the quarter and we saw sequential share gain in our overall business each month of the quarter. The continued focus on providing great value for our customers helped drive traffic into our stores. Our merchants did an outstanding job heading into the spring selling season supplementing our everyday great values with special buys which helped our suppliers move product while creating excitement in our stores. With the use of our forecasting and assortment tools we had great sell through on these products. Additionally, and most importantly, this effort combined with great in-store execution and selling the project has resulted in good attachment on those special buys, boosting both sales and gross margin dollars. The result of this can be seen in our comp transactions which were negative 2.6% in the first quarter compared to the fourth quarter of 2008 where comp transaction were negative 5.8%. We feel good about our execution as we head into the heart of our spring selling season. We utilized our assortment management tools to refine our seasonal assortments and strengthened the value segment in the opening and middle price points. We feel confident we will aggressively drive value for our customers while maintaining our disciplined control over the business in this challenging environment. Finally, I am pleased to announce that Bill [Lenny] has rejoined the team as Senior Vice President of International Merchandising and we couldn’t be more happy to have him back. Now I would like to turn the call over to Carol.

Thank Craig and hello everyone. In the first quarter sales were $16.2 billion, a 9.7% decrease from last year. Comps for same store sales were negative 10.2% for the quarter with negative comps of 12.2% in February, negative 9.2% in March and negative 9.7% in April. Roughly 9% of our sales are from outside of the U.S. Versus last year, we saw significant strengthening of the U.S. dollar against all currencies. Fluctuating exchange rates negative impacted our total company comp by approximately 190 basis points. This was offset by a 30 basis point benefit arising from comp sales growth outside of the U.S. Comps for U.S. stores were negative 8.6% for the quarter with negative U.S. comps of 11% in February, negative 7.2% in March and negative 8% in April. Our financial results include the impact of several strategic actions in both the first quarter of 2008 and the first quarter of 2009. We detailed the financial impact of those actions on an exhibit to our press release which sets forth reported and adjusted results for both quarters. For the first quarter of 2009 our financial results were impacted by the closing of the Expo businesses. Sales from liquidated inventory were $221 million. Gross profit on those sales was $29 million and the operating expense of the stores including their closing costs was $146 million for a net reduction in operating profit of $117 million. Earnings per share for the first quarter of fiscal 2009 were $0.30, up 43% from last year. Excluding the Expo impact adjusted earnings per share were $0.35 compared to last year’s adjusted earnings per share of $0.41. In the first quarter our gross margin was 33.7%, a decrease of 22 basis points from last year. Our U.S. stores reported 29 basis points of margin expansion in the quarter driven by margin improvements in certain commodity classes, some shift in sales penetration and improved shrink performance. Through our focused [pay] portfolio approach, our U.S. merchants continue to introduce new lower prices while growing overall gross margins. The U.S. gross margin expansion was offset by two key factors. First, and as expected, the margin rate on Expo merchandise was considerably lower than last year as we liquidated the Expo business. Mark down’s taken as part of our Expo closings negatively impacted gross margin by 24 basis points. Second, we realized 27 basis points of margin contraction arising from our non-U.S. businesses, principally Canada, as we continue to work through inventory and other adjustments related to our score or SAP conversion. On a reported basis, we leveraged expenses as a percent of sales by 220 basis points but the numbers are distorted because of the strategic charges in both quarters. On an adjusted basis operating expense as a percent of sales increased by 23 basis points to 27.1%. For the year, we expect to de-leverage expenses by about 13 basis points for every point of negative comp. Based on this you would have expected us to de-lever expenses by about 133 basis points in the quarter. We were 110 basis points better than that due to a couple of reasons. First, we were $80 million under our expense plan in the quarter and that explains about 40 basis points of the difference. Some of this was timing, such as advertising, and some of this was just better expense control such as utilities. As anticipated, the remaining 70 basis points is explained by our private label credit card. The year-over-year expense reduction due to our contract re-negotiation will be more pronounced in the first half of the year than it will be in the back half of the year. We still believe that our general rule of thumb of approximately 13 basis points of expense de-leverage for every point of negative comp holds true for the year. Moving to our operational metrics, during the quarter we opened five new stores and closed 41 Expo businesses for an ending store count of 2,238. At the end of the first quarter selling square footage was 235 million. Reflecting the sales environment, total sales per square foot for the first quarter were $273, down roughly 10.5%. Now turning to the balance sheet, inventory remains a good news story. As you heard from Craig, at the end of the quarter retail inventory was $11.4 billion, down 9.6% from last year. On a per-store basis, inventory was down 8.8% to last year. Inventory turns were 3.9 times, flat to last year. We ended the quarter with $43.8 billion in assets including $2.2 billion in cash and short-term investments. This is an increase of approximately $1.7 billion in cash and short-term investments from the end of fiscal 2008 reflecting cash generated by the business of approximately $2.3 billion offset by $172 million of capital expenditures and $381 million of dividends paid. As a reminder, we have a $3.25 billion A2P2 commercial paper program that is 100% back stopped by a committed, long-term bank line of credit. As of the end of the first quarter we had no outstanding commercial paper. We have approximately $11.4 billion of outstanding debt of which $1.8 billion comes due in the latter part of 2009. At this point it is our intent to repay the debt maturities as they come due using cash generated by the business. Computed on the average of beginning and ending long-term debt and equity for the trailing four quarters, adjusted return on invested capital was approximately 11%. We are controlling what we can control. Our results in the first quarter were better than our plan but as Craig mentioned the external signals are mixed. We are comfortable with the guidance we gave at the beginning of the year. We are calling for fiscal 2009 sales down 9% with negative comps in the high single digit area, earnings per share from continuing operations down 7% and adjusted earnings per share from continuing operations down 26%. We continue to expect the first half to be softer than the back half of the year. We are holding our Investor conference on June 10 and look forward to covering our business in more detail with you at that time. We thank you for your participation in today’s call. Operator, we are now ready for questions. :

(Operator Instructions) The first question comes from the line of Scott Cicarelli – RBC Capital Markets. Scott Cicarelli – RBC Capital Markets: Can you talk a little bit about some of the issues you ran into in Canada with the systems you mentioned and what that may mean for the U.S. system conversions and process conversions?

Matt Carey is here and he will address that as well. I would say there are a couple of important learning’s for us in the effort. The first is when you think about it, we really started this back in 2007 in the second half of 2007. For now almost two years that is what our Canadian team has been focused on. They have been focused on getting this basic system in place. At the same time, on the U.S. side Craig and his team with the IT team has been adding merchandising tools over that period of time. So when you look at the relative degree of control and sophistication on the tools what you actually see is all that effort focused on the foundational work you kind of lose some ground. Second, as I said, these are big efforts. They dominate the mind share within the business. Again, it is something to be expected and a good learning for us that the business tends to focus on that implementation rather than some of the other issues coming at it. Again, we think we can work through it but it is cautionary as we think about the prospect of doing something like that more broadly in the company and certainly in the U.S. Matt do you want to make some comments?

I would say two things. One is as you mentioned when you change the tool set out from underneath the business like we did with SAP you have a significant change management process you have to go through and a lot of folks to train. That is really one of the challenges that we are having right now. The second is when you implement a system this large at this scale you always have tuning and stability issues that you have to deal with. That is really what we are dealing with right now. The third thing I would say is we are going to continue to monitor the results of the SAP implementation in Canada but at the same time we are going to continue to enhance our tool set in the U.S. such that we can get benefits immediately for our business.

The next question comes from Michael Lasser - Barclays Capital. Michael Lasser - Barclays Capital: The spread between your U.S. comp and Lowe’s comp widened a bit in the first quarter compared to where it was in the fourth quarter last year. That is despite an improvement in some of your customer satisfaction scores. Given that late last year you had some positive PR from the pricing changes you made and some advertising expenses from this quarter were pushed out do you think your share voice, your marketing message needs to be stronger in order to communicate to consumers they should come back into the stores? What is the philosophy there?

A couple of comments on that. First, it is a fair comment on the advertising weight and the share of voice. We did some re-profiling in the quarter and pushed it out later and maybe that is some of the reflection in terms of our February results. So that is a possibility. The other thing I would comment on is we look at our business in its entirety. We have lots of different competitors. We have gained share overall in our market and as I said gained share in a number of our departments as Craig referenced. I think while our target is always to beat every competitor the other thing I would point out is sequentially quarter-over-quarter it is a better performance for us. Michael Lasser - Barclays Capital: One quick follow-up question to the comment you made Frank about seeing some experience in the west, particularly California, slip a little bit and the thought that it is tied to foreclosures, are you seeing anything specifically that would lead you to believe that the moratorium on foreclosures late last year led to some better results there? It would almost suggest that as long as people are staying in their house and not fearful of losing it they are spending a little bit on the property.

I don’t know on the moratorium. What I can say and it was kind of the reason for the cautionary flag in the comments was California is a hugely important market to us. It is a hugely important market within the country. What we saw, when we had this call in the fourth quarter we were kind of saying hey we think California is on an improving trend. That reversed for us in the first quarter of 2009 and one of the things we see and it is not unique to California, it is in other states, is where you see this accelerating rate of foreclosures you see pressure on comp performance. If you look at California for awhile it was getting better as they were working through the problem and now it has regressed. As I say, we just take that as a cautionary note.

The next question comes from Dan Binder – Jefferies. Dan Binder – Jefferies: Two part question. First, if you could quantify the April/March Easter shift impact on comps. The second part of the question was as it pertains to the type of expense leverage we can expect on credit in Q2 and how much of the expenses shifted out of Q1 into Q2?

Let me give you the Easter answer first. Looking at U.S. comps, our reported comp was a negative 7.2% in March, negative 8% in April. Adjusting for Easter we were negative 8.7% in March and negative 7% in April. Then to answer your question about the benefit of our private label credit card, I think we have told you before we expect the year-over-year expense reduction to be about $250 million. We realized about $120 million of that in the first quarter so hopefully that helps with your model. I can just pick out for you the kind of expense de-leverage we experienced last year by quarter so that you can see that it is progressively easier. We de-levered expenses in the first quarter last year by 96 basis points because of credit. The second quarter 73 basis points. In the third quarter 70 basis points and then in the fourth quarter 28 basis points.

The next question comes from Christopher Horvers - J.P. Morgan. Christopher Horvers - J.P. Morgan: A follow-up on the expense question. First on the $250 million and the $120 million realized, that wasn’t the advertising portion you referred to. I am curious how much of that is swinging out of 1Q and is it showing up in 2Q? Maybe you could help us on the math with the 13 basis point rule of thumb. You saw about 2 basis points per point in the first quarter. You have the 70 basis points in the second and third quarter on the credit side. Would this suggest that by the time you get to the fourth quarter you would be de-leveraging at more than 30 basis points per negative point of comp to arrive at 13 basis points for the year?

Let me answer your first question first if I may. The private label card benefit of $250 million for the year, $120 million recognized in the first quarter, that is the private label credit card. We were $80 million under our expense plan. Some of that was timing and some of that was just better expense control candidly. I called out advertising as a timing matter. We will spend that. We were $10 million under our advertising plan in the first quarter. We will spend that in the second quarter. Hopefully that is helpful to you. Looking at the second part of your question about how the quarter’s progressed, our rule of thumb of 13 basis points is for the year. It gets increasingly worse as the quarters go on. Yes, in the fourth quarter we will have more expense de-leverage than the rule of thumb but for the year we think the rule of thumb holds true. Christopher Horvers - J.P. Morgan: One follow-up, if there is about 40 basis or $80 million under advertising and utilities, so what portion of that is utilities and how much of that do you think is sustainable?

I called out two of the unders. We have a lot of unders. Utilities, to give you the exact dollar amount was $15 million under plan. A lot of that was usage actually. We got smarter about how to run utilities inside of our stores. So that is probably a permanent reduction.

The next question comes from Budd Bugatch - Raymond James. Budd Bugatch - Raymond James: I was heartened to hear about the improvement in the logistics and RDC and the mechanized RDC. Can you talk about the time table? You have 600 stores operating, what is the time table? Is there any change in that?

No there is no change in the timetable. We are planning to continue the roll out and expect to have it basically done by the end of next year. Mark Holifield is here, our head of supply chain. Mark if you want to give some more color around that?

We are pleased with the performance of the overall supply chain and that includes our RDC’s as many of them go through their first spring peak. The network is performing well. We feel good about our in-stock. Our inventory turns are logistics cost and most importantly the RDC’s are serving the stores with timeliness, quality and accuracy of shipments. In terms of the mechanization, while we are pleased with our performance in the non-mechanized facilities the mechanization is really just the next natural progression as we are in our accelerated supply chain evolution here. What we have implemented in Valdosta is industry standard technology. We have got some higher speed conveyer there. Some automated scanning and some automated labeling technology. The intent of this is to improve the accuracy and productivity even further. Based on what we have seen we are pleased with the initial results. So we will open a couple of more non-mechanized facilities while we learn about mechanization a bit more before we open the next mechanized facility. It is in our plan and it is just the next natural step of our supply chain evolution. Budd Bugatch - Raymond James: The net promoter score growth was also pretty heartening. Is there any color you can add to that Frank in terms of regionality or measurement stats you are using or percentage that you are measuring?

I guess the additional background I would give on that is we are very heartened by that and that is one number we think it is always hard on these customer survey data to exactly pin down your improvement. But that is a pretty good metric for improvement and I think it just has a lot to do with what Marvin and the store operations team are doing in terms of simplifying our focus and really focusing on the customer. Marvin is here. Marvin why don’t you comment on that because I do think this customer first training that I referenced we have trained the entire company on is very important. We did that in the first quarter and it was a very important thing for us.

We did a couple of things. We took an aggressive step to train every associate in the company including Mexico and China to support areas on customer service expectation by position. In the past we have made a general statement about the importance of service. This time we took it one step further with a learning team under HR and the operations team partnering together and by position we outlined specific priorities for each associate to serve customers. So the net promoter score increased as a direct result of this better engagement. Another data point I would give you is as you know we get over 100,000 voice or customer data points each and every week so we have a good data set. As a result of that, every division around the country, even some of these very, very densely populated, urban metro areas we are seeing engagement ratings over 9 in these locations and we have never seen that before. So we are going to continue to execute well. We are going to continue to staff around traffic levels. We are pleased with our progress thus far. So we are going to keep moving forward and keep enhancing what we are doing.

The next question comes from David Strasser – Janney Montgomery Scott. David Strasser – Janney Montgomery Scott: When you talked about the trends of the $900 and the trends of the $50, is that something that has changed a lot recently or has that sort of been the case as we have kind of seen this negative comp trend for the last eleven quarters or so?

When you look at the transactions below $50 that actually has been an improving trend over the past few quarters. When you look at transactions in big ticket greater than $900 it is not improving. As a matter of fact it was slightly worse than it was in the fourth quarter. David Strasser – Janney Montgomery Scott: Is that the way you are kind of modeling going forward? The continued trend that you just said?

I think right now that is how we are viewing it. As the continued pressure is on big ticket and discretionary spend. David Strasser – Janney Montgomery Scott: One quasi, not really a follow-up, but when you were doing all the shedding of assets and so on with Expo and Yard Birds and all that, where does China come into that thought process? Is that something you remain committed to or is that something you still kind of feel you can continue to focus even more on?

I think as you look at China first it is our core business. These are stores we just had Annette Verschuren, our President in Asia over there with Bill [Lenny] who as Craig said is here now as our International SVP of Merchandising. These look like a Home Depot store. It is in our core business. I would also say we have had these stores for two years. We are still working on finding the right model that is a profitable model that we can then roll out across the country. We are not there for the sake of having 12 stores. We are there because we think there is a model to find and then roll out. That is really our focus. It is a little bit different from some of the other businesses.

The next question comes from Stephen Chick – FBR Capital Markets. Stephen Chick – FBR Capital Markets: Two questions. The first one is maybe kind of two parts. Relative to sales, Carol or Frank can you just confirm the $221 million in liquidation Expo sales is actually excluded from the comp? Secondly related to sales, as we look into the second quarter I was wondering if you could speak to we cycle I think some tax rebate stimulus of a year ago and I know you are not giving quarterly guidance but should we think about the comp steadily and sequentially showing improvements from what you reported in the first quarter? Then I have a follow-up question on your California comments.

I will confirm that the $221 million is excluded from the comp. As we look at the second quarter yes we do expect improvement and I will tell you that May is trending better than April. Stephen Chick – FBR Capital Markets: Is that trending better than April on an Easter adjusted basis I guess? So in the U.S. I think you had said; I’m sorry, remind me what you said about April. April is down 7?

On an Easter adjusted basis that is correct. Our trend is in line with our Easter adjusted and better than our reported. Stephen Chick – FBR Capital Markets: Secondly, Frank your comments about California reversing trend or course there, by my calculation I think California the sales were down I think in the fourth quarter something like 9% and you had indicated in some of your comments back then you were seeing stabilization. They had comped better than the company average back then. Are they kind of in line with the company average is my first question? Second, with foreclosures can you talk about the dilemma of that being bad for the comp? Maybe the economy and housing but I don’t want to say good but stimulating if you will with the renovation and the pent up activity that I would otherwise think might flow through a home improvement retailer if that makes any sense?

The first part of your question right. California for the first quarter was worse than the company average. As I said, it was a reversal. We saw from an improving trend to a worsening trend and now it is worse than the company average. I will just give you the way we are thinking on the foreclosure side. The data that tracks foreclosures and whether they are accelerating or decelerating, when a house is actually sold out of foreclosure it gets out of that data set. On a positive side for our business obviously you see an up tick in transactions in some of these areas as houses get sold out of foreclosure but you have got sort of an overwhelming negative as more houses get put in as basically the data is saying. So you have a little bit of an up tick because you have some turnover increase and then some significant pressure as the acceleration of foreclosures go.

If I can just jump in, there are 13 states in our country that have high density of foreclosures, seven of which we see the foreclosure rates accelerating and in those seven states our comp sales are worse.

The next question comes from Deborah Weinswig – Citigroup. Deborah Weinswig - Citigroup: With regard to the merchandising tools can you please provide us the percent in terms of the adoption rate by the buyers and also how should we think about gross margin benefit thus far and what additional opportunities are there in the future?

On the tools, I would say the adoption rate is very good by the merchants. Our merchandising operations team and IT team actually have been working hand in hand with the merchants to develop these tools based on what they need. So it is almost a pull versus a push environment. We see that these tools are a piece of what is helping us drive the productivity at the same time that we are becoming more competitive in the market, lowering prices and it will be a key component for us in continuing to deliver the margin as we have projected for the year being slightly up year-over-year. Deborah Weinswig - Citigroup: Frank [inaudible] for almost a year now. Can you please provide some color in the changes of your advertising is marketing since you joined? Are you doing anything differently in terms of reaching out to your credit card customers?

First on the marketing side, a couple of changes I would say organizationally just to highlight one thing we have now marketing reporting into merchandising. So Frank reports to Craig which has I think improved significantly the coordination on our marketing side with our merchandising team. That is both due to an organizational change but also just the way Frank works. The second thing is you have seen a change in our tag line. I hope the spirit of the company I think is going to be better reflected and the culture of the company is going to be better reflected in our marketing and our advertising efforts going forward. Craig I don’t know if you want to comment on that as well?

Part of our job as a merchandising team is to be the advocates for the customer and we are really focused on driving value and Frank and his team in marketing are really focused on doing a better job of communicating the value proposition of Home Depot. That is a big change. Deborah Weinswig - Citigroup: In terms of doing anything different with your credit card customers?

We enjoy a robust CRM as a result of our credit card population. We do targeted mailings to them to invite them back into the store. Interestingly, we are seeing a shift in our private label credit card sales. We are down about 300 basis points from a penetration perspective year-over-year. I guess that is not surprising. I think most retailers are seeing a shift in credit. If you look at cash, check or debit card, anything that is cash equivalent, as the penetration of sales has increased from 36% last year to 39% this year. The year-over-year change is all in our private label credit card.

The next question comes from Wayne Hood - BMO Capital Markets. Wayne Hood - BMO Capital Markets: Do you expect the 27 basis points of gross margin erosion quantified in the non-U.S. business to improve or worsen as the year progresses? What predictability do you have in that non-U.S. rate given the implementation of SAP and a longer term follow-up question for Frank and Craig.

We saw margin improvement in Canada in the month of April and the good news about the SAP implementation is we get to see margin every day. So now we are in to May and we continue to see improvement. The year-over-year noise that we have been experiencing both in the first quarter of this year and the fourth quarter of last year is going to abate. The guidance we have given for gross margin for the total company of flat to slightly positive for the year holds true. Wayne Hood - BMO Capital Markets: Frank or Craig or both of you, I guess as I look back at the industry over the last 10-15 years we have put on a lot of square footage, bigger stores, more vignettes to kind of go after the bigger ticket business as it kind of grew. I was just wondering have you given any thought to maybe secular changes that are afoot here with respect to big ticket purchases and any recovery we have may be longer and more prolonged and if it is longer and more prolonged are we sitting there with a store base that is so big it needs to be recalibrated for slower rates in big ticket to kind of improve returns over the long-term? If so, how do you recalibrate it?

Certainly we have recalibrated to the extent of saying new store growth is not our principle activity and our principle use of capital. Your comment is reflected at the broadest strategic level in the company in terms of how we are allocating capital. Within the store, you see some shifts in terms of how we allocate bays but that is more incremental and evolutionary. Is that helpful? Wayne Hood - BMO Capital Markets: I think we all understood the new store and why you backed it down but I’m just thinking the existing square footage that is still out there with expanded vignettes that if that business doesn’t come back beyond the payroll how do you reallocate that square footage to make it more productive, to get returns moving again in the right direction?

Again, I don’t think on that side and I will let Craig comment as well, that we see a need to dramatically remodel our stores in any way. We feel pretty comfortable with the space that we have allocated to each part of our business. There will be, as you suggest and we have actually done that on the store operations team under Marvin’s leadership, there is adjustment on labor hours in the store as an example. So you shift some hours away from some of the specialty, higher ticket activity to some of the more every day repair activity. At least right now for us it has much more of a labor impact and how we apply our associates than it does on any big changes in store structure.

The next question comes from Colin McGranahan - Sanford C. Bernstein. Colin McGranahan - Sanford C. Bernstein: I was wondering why the focus on gross margin? First in the U.S. the 29 basis points is a pretty good performance here. Carol can you break that down just in terms of the benefit from the things you mentioned; shrink, mix and commodity benefit? Then also just comment more broadly on any positive or negative around the promotional environment and mark downs? That is part-one focusing on the U.S. margin. Part two of the gross margin question, I still don’t in all fairness have really any understanding of what exactly happened to cause the gross margin pressure in Canada. Did the system buy too much inventory? Did you have mark downs? Was there out of stock? What exactly went wrong there that caused the gross margin pressure in Canada?

Let’s start with the first part of your question. In the U.S. up 29 basis points, shrink added 9 basis points or contributed 9 basis points of that 29 basis points. The remainder was driven primarily by a shift in mix. We had a lower penetration of lumber. Lumber is one of our lowest margin categories so that helped. We had a lower penetration of appliances and appliances is one of our lower margin categories so that helped. We had a higher penetration of paint and paint is one of our higher margin categories so that helped. Most of that 20 basis points is due to a mix in penetration.

On Canada what I would say is again is let me put this in two comments. My first comment, take an overall comment that you have a team that is very focused on implementing a very big process change with all the cultural change that Matt described. That is the one bucket. In the other bucket you have an economy that is starting to reflect the same pain as in the U.S. and on top of that a currency issue where the Canadian currency is devaluing. So that is the big backdrop. Underneath that you then look at okay what is your cost and price change process, what are your forecasting tools, what is the visibility you have through the system into those and what you get is maybe in part a reaction time that is slower than it might have otherwise been and in part reaction that is not fully addressing the issue that you have got. So I would say it is a combination of your focus gets taken off a little bit and then the tools are unfamiliar tools and you are not exactly sure how to work through with these new tools to get the desired result. As Carol said, we feel a lot better on where that is going. I think we all acknowledge these are big activities to take on. This isn’t a kind of wheels off issue. It was a couple of things didn’t go just as perfectly as we would like to see them go. Is that helpful? Colin McGranahan - Sanford C. Bernstein: Yes. I will follow-up afterwards.

The next question comes from Matthew Fassler - Goldman Sachs. Matthew Fassler - Goldman Sachs: First of all, can you talk about how the big ticket trend versus the small ticket trend if you will relates to the strength in any given market? In other words, in those markets which are recovering or are stronger for you in absolute terms are you seeing big ticket act better in relation to the broader mix than you are in markets that are weaker?

If you look at areas of the country where housing overall has been more stable from the very beginning, less speculative if you will, big ticket has done slightly better in those markets. If you look at areas like California where it has been difficult, the big ticket construction and discretionary categories are still running significant double digit negatives. Matthew Fassler - Goldman Sachs: Have those turned the corner at all? I guess there could be two kinds of sales improvement. There could be sort of traffic driven whether it is driven by seasonal outdoor or a revival of smaller ticket, less project oriented purchases or there could be what could be a slower but more significant turn which would be the big ticket business getting less bad as well. Are you seeing that happening?

At this point in time the big ticket and for example on the west coast we are not seeing a significant change in terms of improvement. As a matter of fact, it actually got a little more difficult from the fourth quarter as Frank had mentioned earlier. Matthew Fassler - Goldman Sachs: Just a follow-up question on appliances. You haven’t addressed it that explicitly but it sort of came up in an answer to a couple of questions ago that somewhat lower appliance mix I believe you said contributed to the gross margin improvement. I also know that had been a [footholed] category in the fourth quarter. Promotionally just any update on what you are seeing there? Also related to that whether you see any kind of strategic vendor opportunities during this downturn in that space?

Appliances overall I think have remained relatively promotional. It is a product category that historically is driven off promotion. We see that continue for sure. As far as supplier, I really don’t see anything significant.

The next question comes from Laura Champine – Cowen and Co. Laura Champine – Cowen and Co.: I was hoping you could drill down a little more into share gains. I think you mentioned 7 out of 13 categories. What generally is driving share gains and what is your outlook for that going forward?

From a share standpoint overall the things that are driving are aligned structure improvements so overall assortment improvements, utilizing our merchandising tools to get below market level and sorting more at a store level. We have used our portfolio strategy to focus in key areas in driving the right value proposition for our customer as well. Quite frankly these are things that we continue to focus on as we continue to learn and educate our merchants on the use of the tools and we expect that to continue in terms of the improvement in share.

I want to thank everyone for joining us today. We look forward to talking to you next quarter.

Ladies and gentlemen that does conclude today’s conference call. We thank you for your participation.