Robert Niblock - Chairman, Chief Executive Officer and Chairman of Executive Committee Robert Hull - Chief Financial Officer and Executive Vice President Gregory Bridgeford - Executive Vice President of Business Development Larry Stone - President and Chief Operating Officer

Daniel Binder - Jefferies & Company, Inc. Peter Benedict - Robert W. Baird & Co. Incorporated Christopher Horvers - JP Morgan Chase & Co Matthew Fassler - Goldman Sachs Group Inc. David Schick - Stifel, Nicolaus & Co., Inc. Eric Bosshard - Cleveland Research Laura Champine - Cowen and Company, LLC Michael Lasser - Barclays Capital David Strasser - Janney Montgomery Scott LLC Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Good morning, everyone and welcome to Lowe’s Companies First Quarter 2010 Earnings Conference Call. Statements made during this call will include forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. Management’s expectations and opinions reflected in those statements are subject to risks and the company can give no assurance that they will prove to be correct. Those risks are described in the company's earnings release and in its filings with the Securities and Exchange Commission. Also during this call, management will be using certain non-GAAP financial measures. You can find a presentation of the most directly comparable GAAP financial measures and other information about them posted on Lowe's Investor Relations website under Corporate Information and Investor Documents. Hosting today's conference will be Mr. Robert Niblock, Chairman and CEO; Mr. Larry Stone, President and COO; and Mr. Bob Hull, Executive Vice President and CFO. I will now turn the program over to Mr. Niblock for opening remarks. Please go ahead, sir.

Good morning, and thanks for your interest in Lowe's. Following my remarks, Larry Stone will review our operational performance, and Bob Hull will review our financial results. Sales for the quarter increased 4.7%, and comparable store sales were positive 2.4%, our first positive comp in 15 quarters. First quarter sales were positively impacted by favorable weather in March and April, as well as government stimulus programs. However, I also feel our solid sales results suggest consumers are more willing to engage in discretionary home improvement. Even at the depths of the economic cycle, the home remained important to consumers, and they continue to spend on repair and maintenance products. But encouragingly, during the quarter, we saw signs that consumers were expanding their spending beyond repair and maintenance into more discretionary products and projects like riding mowers and gas drills. Consumers appear to be more positive about the economic outlook as many are beginning to see a path to recovery, supported by cautious signs that housing fundamentals are stabilizing. While employment remains a concern, on a relative basis, the economic climate is much better than a year ago, and consumers seem to feel better about the future. That's what we heard in our first quarter consumer survey. Our survey, along with other national measures, suggests consumer confidence remains low. But what we identified in this quarter survey was that consumers feel more comfortable, that nationally, the worst of the economic cycle is behind us. Caution remains, but a growing sense of comfort has more consumers planning and executing discretionary projects and purchases. In addition to signs consumers are re-engaging in discretionary projects, sales in the quarter were also aided by favorable weather. Despite record snowfall in February, which led to a slow start for the quarter, warm weather and a compressed selling season in March and April, gave consumers a reason to move outdoors and tackle traditional projects, as well as repair damage caused by the harsh winter. We saw strong performance across all of our outdoor product groups. Government stimulus also aided sales during the quarter. Consumers took advantage of the government-funded Cash for Appliances rebate program to invest in energy-efficient appliances, which grow double-digit positive appliance comps in the quarter. Detailed planning and great execution of our state-by-state marketing, merchandising and operations programs related to Cash for Appliances helped drive our solid results. Also, while difficult to measure, we feel the homebuyer tax credit helped sales. During the quarter, we continued our targeted outreach to new homebuyers, many of whom qualify for the tax credit, so Lowe's will be top-of-mind for their home improvement needs. We experienced solid sales across our footprint with 45 of the 50 U.S. states posting positive comps. Strong performance in Canada continued with a positive 14% comp in constant currency and over 38% comps in U.S. dollars. The solid performance by Canada added 20 basis points to the overall company comp. While our two stores in Monterrey, Mexico have only been opened since February, we're excited about the opportunity presented by this market. On the expansion front, we opened 11 stores in the quarter and vibrant markets in the U.S. and our first stores in Mexico. As we've slowed our expansion to minimize the pressure on our existing store base, our self-cannibalization has declined. For the quarter, it was only 65 basis points and it is expected to continue to decline as the year unfolds. While our sales performance was better than expected, our gross margin rate was lower than expected, driven by a change in product mix. For the quarter, strong sales of appliances and OPE, cost a higher-than-expected sales penetration of those categories and impacted our gross margin rate. Larry will provide additional detail on our margin trends in his comments. Although investments in our new sales and facility maintenance positions pressured expenses in the quarter, we delivered earnings per share of $0.34, which is significantly above our guidance for the quarter. We remain committed to balancing our efforts to manage expenses, while also ensuring our stores remained staffed with knowledgeable and engaged employees ready to serve customers. While our first quarter results were aided by weather and government stimulus, consumers are also showing signs of renewed engagement in home improvement, evidenced by their willingness to spend on more discretionary products. We're optimistic we'll continue to see solid sales through the balance of the year, with gradual improvement in quarter man [ph], but we still view 2010 as a year of transition for our industry, and it will likely be 2011 before we see significant growth. Within that context, we remain committed to providing great service and quality products to meet consumers ever evolving needs, which we're confident, will allow us to drive profitable market share. Thanks again for your interest, and now I'll turn it over to Larry Stone to provide more details on the quarter and the year. Larry?

Thanks, Robert, and good morning. Comps for the quarter were positive 2.4%, exceeding our expectations as we headed into the quarter. Comp traffic was positive 4.8% for the quarter, while comp average ticket was down 2.3%. While there were definitely some of the one-time drivers that possibly influenced our first quarter sales, we also saw signs consumers are increasingly willing to spend on big-ticket products. That’s evidenced by our positive comp of approximately 1% for tickets greater than $500. Additionally, consumers continue to make smaller transactional purchases. Comps for tickets less than $50 were positive 3% for the quarter. Looking at our results from a regional basis, 21 of our 23 U.S. regions have positive comps for the quarter. Two regions, one in the Northeast and another in the North-Central, posted double digit positive comps. Performance in these regions were driven by strong sales of seasonal products and major appliances. Also, the Western division, which includes some of the hardest hit housing markets, posted a positive comp in all four regions for the quarter. This is our best performance in this division since the fourth quarter of 2005. The two regions that had negative comps are in the Gulf coast and southern Texas, where we're still cycling last year's hurricane-related spending. As Robert mentioned, our Canadian stores had strong performance with 14% comps, measured in constant currency for the first quarter. Follow-through from projects stimulated by the home renovation tax credit, as well as consumers attempting to complete projects ahead of an upcoming tax increase in Ontario for installed services, probably grossed some sales in the quarter. But we've also been successful in differentiating ourselves in a Canadian marketplace. One recent example is our exclusive on Para Paints, a well-known Canadian brand renowned for its home color system featuring more than 2,100 colors. Turning to our product category performance, 13 of our 20 categories had positive comps for the quarter and three categories, Appliances, Outdoor Power Equipment and Seasonal Living posted double digit positive comps for the quarter. As the government-sponsored Cash for Appliances program occurred across the majority of the states, we saw consumers take advantage of this program to replace their appliances with new, more energy efficient models. During the quarter, we saw strong demand for refrigerators, ranges, dishwashers and laundry products. Our team executed our state-by-state marketing, merchandising, distribution and store operations plans, enabling us to capitalize on this opportunity. In addition to ensure we could continue to meet consumer demand, we made opportunistic inventory purchases in the quarter to make certain we had adequate appliance inventory on hand during this high demand period. We feel this purchase has paid off as many retailers struggle to replenish inventory as the state-by-state programs rolled out. Our knowledgeable employees, combined with our well-executed plans, great product selection right selection and unmatched in-stock levels, gave us a distinct advantage in satisfying the strong demand. As the weather warmed up, homeowners headed outside and took home projects to enhance their outdoor space. Throughout the economic cycle, we've seen consumers choose to repair outdoor power equipment rather than replace, which shows strong comps and repair parts. Our comps in parts remain strong, we saw a noticeable improvement in riders and walk-behind mowers, as we posted double-digit positive comps for the quarter. Additionally, we saw demand for pressure washers, grass drills and patio furniture. Combined, these trends in big-ticket OPE and seasonal living products are another encouraging sign consumers are more willing to spend on discretionary products. Installed sales posted double-digit comps for the quarter. A greater willingness to undertake some previously delayed discretionary projects, combined with consumer’s response to our easy-to-understand and value-based carpet installation offer, helped deliver strong comps in installed sales. In addition, during the quarter, we announced our channel-exclusive partnership with STAINMASTER Carpet, the brand most requested by consumers. STAINMASTER is known for its innovative stain resistant carpet options and we're excited about the opportunity to partner with them. Special Order Sales, which is also product-driven, had above-average comps for the quarter, driven in strong part by the demand for special order mill work. Finally, we had positive comps in our Commercial business for the quarter. Our district commercial account specialist’s have improved focus on the opportunities we have to grow sales within this Commercial segment. We remain committed to driving profitable share gains, and we use third-party data to gauge our retail market penetration. While this consumer survey data provides a good perspective of share movements, it is best to use reflect longer term trends across the industry. According to these measures, during the first calendar quarter of 2010, we gained unit market share in 11 categories and remained flat in one. Total store unit market share grew 10 basis points, which was greater than any other national retailer. We continue to work closely with the provider of market share data to determine how best use it to gauge market share trends. As a result of ongoing discussions with them, we feel transition to a rolling fourth quarter view, remove sampling anomalies and provides a better perspective of market share trends. On a rolling fourth quarter basis, we gained 70 basis points in total store unit market share, again more than any other national home improvement retailer across that time period. Gross margin rate for the quarter was below our expectations. A change in sales mix, driven by our outperformance in appliances and OPE, resulted in 36 basis points in negative mix impact on margin. While changes in mix accounted for essentially the entire decline, we also experienced some rate pressures as well. In a commodity category like lumber, with many competitors competing for market share, retail prices have been slow to move, despite the rising costs. This timing lag between cost increases and movement in retail prices pressured margin in the quarter. Additionally, we executed a reset in our Home Organizational category during the quarter, and we marked down and sold through existing inventories result, which pressured margin rate. Turning to expenses, as we described on our fourth quarter conference call, we expected some pressure from the new positions related to the roll out of our sales and service initiatives. Store payroll, our biggest expense, de-leveraged 40 basis points, driven primarily by the implementation of the Project specialist Exteriors and the Facility Service Associate positions. Also as the quarter unfolded and sales accelerated, we added incremental seasonal payroll to maintain customer service standards. At the district level, the new DCAS position, pressured expenses as those employees come up to full speed and begin to generate sales. In addition, advertising de-leveraged eight basis points, driven by three primary factors. First, during the quarter, we saw increased promotional activity in certain categories and we choice to match competitor offers. Also the Cash for Appliances opportunity lasted longer than anticipated and to ensure we catch their share of wallet, we extend our advertising spend accordingly. And finally, some big-ticket categories like Kitchen and Bath were planned with a low ad representation. As the quarter progressed, we saw stronger-than-expected consumer demand in those categories leading us to increase our ad exposure. We feel we have a solid advertising plan in place for the second quarter, but we will continue to review opportunities to drive sales. Inventory’s up 9.8% for the quarter. While this increase was greater than we planned, the gross was driven by new stores, as well as some opportunistic purchases we made that we think will allow us to drive sales and capture profitable share. As previously mentioned, we bought appliance inventories, we saw greater than expected response to the Cash for Appliances program, but we also made strategic inventory purchases in flooring, paint and lawn and landscape products to drive sales in these categories. It's important to note that with our strong seasonal sell-through in the first quarter, our inventory increase is not in Seasonal or Perishable categories. Overall, we feel we have the right inventory in place to serve customer demand, and we expect our inventory position to be in line with our plan by the end of the year. I would like to provide an update to new sales and service positions as described on last quarter's conference call. While we are in the early stages of implementing these positions, we are excited about the opportunity they create. Our PSE position’s helped drive sales and mill work and other build materials category during the first quarter positioned us to effectively compete in categories that lend themselves to an in home selling approach. Our DCAS position, as in 125 markets, has been instrumental in helping us build and strengthen the relationships with new and existing customers. During the quarter, we saw evidence of the sales benefit this new position can provide and we're evaluating adding additional markets. And finally, the FSA position will help us ensure we maintain inviting shopping environment and have better execution of minor store repairs, previously performed by third-party vendors. With the rollout of this position we have eliminated approximately 75% of our service contracts related to janitorial work and general maintenance. And as additional services contracts expire, we expect to realize additional savings. These new positions will pressure payroll leverage in the near term, but we continue to be encouraged by the opportunities they create to drive sales and improve efficiencies. We are encouraged by the widespread improvements in consumer demand across the geographic regions and the positive comp performance in the majority of our product categories for the quarter. While sales rated by weather and government stimulus, we're optimistic consumers are gaining confidence and a greater willingness to spend on discretionary projects around their homes. Our continued investments in our new sales driving positions, great merchandising and focus on service ensure we’re well-positioned to drive profitable sales and efficiencies. Thank you for your interest in Lowe's, and I will now turn the call over to Bob Hull to review our first quarter financial results. Bob?

Thanks, Larry, and good morning, everyone. Sales for the first quarter were $12.4 billion which represents a 4.7% increase from last year's first quarter. In Q1, total customer transactions increased 7.1%, while average ticket decreased 2.3% to $62.27. Comp sales were positive 2.4% for the quarter, which exceeded our guidance of negative 2% to flat. Looking at monthly trends, comps were negative 7.2% in February, positive 2.4% in March and positive 8.8% in April. For the quarter, comp transactions increased 4.8% and a comp average ticket decreased 2.3%. And looking at some specific impacts to comp sales in the quarter, cannibalization negatively impacted comp store sales by approximately 65 basis points. We experienced lumber inflation, which had approximately 30 basis points positive impact on first quarter comps, driven by plywood. We estimate that Cash for Appliances program aided total company comps by 65 basis points in Q1. With regard to product categories, the categories that performed above average in the first quarter include: rough electrical, nursery, seasonal living, outdoor power equipment, lawn and landscape products and appliances. Mill work and paint performed at approximately the overall corporate average. Gross margin for the first quarter was 35.2% of sales and decreased 28 basis points from last year's first quarter. The primary driver of the gross margin decline in the quarter was a mix of items sold, sales mix negatively impacted gross margin by 36 basis points, approximately half of the negative mix impact was driven by appliances. We continue to see positive results related to inventory shrink, which was 11 basis points lower than Q1 last year. SG&A for Q1 was 25% of sales, which leveraged one basis point. Here is some color on specific expense lines. Proprietary credit leveraged 35 basis points in the quarter, primarily related to lower losses and decreased money cost relative to Q1 2009. Utilities leveraged seven basis points in the quarter, as a result of reduced electricity usage and the increase in comp sales. Store opening cost leveraged six basis points to last year as a percentage of sales. In the first quarter, we opened 11 new stores. This compares to 21 new stores in Q1 last year. Almost entirely offsetting these items was de-leverage in the following areas: for the quarter, store payroll de-leveraged 40 basis points, driven primarily by additional hours associated with the PSE and FSA positions. During our fourth quarter earnings call, I noted that due to the unusually high winter storm activity, we were expecting incremental snow removal costs and expense de-leverage as a result. While we did incur higher than planned snow removal expense, cleaning and maintenance expense reductions associated with the FSA position almost entirely offset the higher snow removal costs in the quarter. Payroll taxes de-leveraged by 11 basis points in the quarter, as a result of higher payroll and state unemployment tax rate increases. Fleet expense de-leveraged seven basis points due to an increase in the number of deliveries as a result of strong appliance sales and a 33% increase in the average fuel cost for the quarter. Depreciation for the quarter was $397 million, which was 3.2% of sales and leveraged 19 basis points compared with the last year's first quarter, due to a slower square footage growth, access becoming fully depreciated and positive comp sales. Earnings before interest and taxes decreased eight basis points to 7% of sales. Interest expense at $82 million for the quarter, was flat to last year as a percent of sales. For the quarter, total expenses were 28.8% of sales and leveraged 20 basis points. Pretax earnings for the quarter were 6.3% of sales. The effective tax rate for the quarter was 37.8% versus 37.4% for Q1 last year. Earnings per share of $0.34 for the quarter exceeded our guidance of $0.27 to $0.29, and increased 6.3% versus last year's $0.32. Now to a few items on the balance sheet starting with assets. Cash and cash equivalents balance at the end of the quarter was $2.7 billion. Our first quarter inventory balance of $9.9 billion increased $886 million or 9.8% versus Q1 last year. Increases due to a 4.9% increase in comp store inventory, square footage growth of 2.9%, as well as a slight increase in distribution inventory. Inventory turnover calculated by taking a trailing four quarters cost of sales, divided by average inventory for the last five quarters was 3.56%, a decrease of 20 basis points from Q1 2009. Return on assets, determined using a trailing four quarters earnings divided by average assets for the last five quarters, decreased 106 basis points to 5.2%. Moving on to the liability section of the balance sheet. Accounts payable of $7.1 billion represents a 21% increase over Q1 last year. The growth in accounts payable is higher than our 9.8% increase in inventory, which is attributable to the timing of purchases in the quarter as well as ongoing efforts to improve vendor payment terms. In the first quarter, we issued $1 billion of senior unsecured bonds in two tranches, a $500 million worth of 10-year notes with 4.625% interest rate, a $500 million thirty-year tranche with a 5.8% interest rate. The proceeds of the notes will be used to repay the $500 million June 2010 debt maturity, general corporate purposes and to finance purchases of our common stock. As a result, our long-term debt balance at the end of the quarter was $5.5 billion. Our debt-to-equity ratio was 31.9% compared to 27.5% in Q1 last year. At the end of the first quarter, lease adjusted debt to EBITDA was 1.75x, which is higher than our target of 1.5x as a result of pre-funding the upcoming debt maturity. Return on invested capital, as you’re using a trailing four quarters earnings plus tax adjusted interest divided by the average debt and equity for the last five quarters, decreased 150 basis points for the quarter to 8.2%. Now looking at the statement of cash flows. Cash flow from operations was $2.7 billion, which was $391 million or 17% higher than Q1 2009. Cash used in property acquired was $283 million, a 51% decrease due to the reduction in our store expansion program. As a result, first quarter free cash flow of almost $2.5 billion was up 38% versus last year. During the quarter, we repurchased 18.6 million shares at an average price of $24.18 for a total repurchase amount of $450 million. We have $4.55 billion remaining share repurchase authorization. The remaining $15 million of the $465 million of repurchase of common stock shown on the statement of the cash flows relates to share purchased to facilitate stock based compensation transactions. Looking ahead, I'd like to address several of the items detailed on Lowe's business outlook. We expect the second quarter total sales increase of 5% to 7%, which incorporates a comp sales increase of 2% to 4% and the opening of approximately four new stores in the quarter. Depreciation for Q2 is expected to be approximately $400 million and leverage about 20 basis points to last year's second quarter. As a result, earnings before interest and taxes for the second quarter are expected to increase by approximately 40 basis points to last year as a percentage of sales. For the quarter, interest expense is expected to be approximately $85 million. The income tax rate is forecast to be 37.8% for the quarter. We expect earnings per share of $0.57 to $0.59, which represents an increase of 12% to 16% over last year's $0.51. For 2010, we expect to open 40 to 45 stores, resulting in an increase in square footage of approximately 2%. We’re estimating 2010 comp sales to be 2% to 4% and as a result total sales increase from 5% to 7%. For the fiscal year, we are anticipating EBIT to increase by approximately 60 basis points. Our EBIT outlook includes an estimated $50 million or $0.02 per share impact for the pending credit card legislation regarding fair and proportional fees. We expect the government's final ruling shortly, with the law becoming effective in August of this year. For 2010, interest expense is expected to be approximately $325 million, which is about $45 million higher than our prior outlook, as a result of the April bond issuance. For the year, we expect the effective tax rate to be 37.8%. The sum of these inputs should yield earnings per share of $1.37 to $1.47, which represents an increase of 13% to 21% from 2009. For the year, we are forecasting cash flows from operations to be approximately $4 billion. Our capital expenditures for 2010 are forecasted to be approximately $2.2 billion, with roughly $375 million funded by operating leases, resulting in cash capital expenditures of approximately $1.8 billion. As a result, we are forecasting free cash flow of $2.2 billion for the year. Our guidance for 2010 includes first quarter share repurchase activity, but does not assume any additional share repurchases. Regina, we are now ready for questions.

[Operator Instructions] Our first question comes from the line of Eric Bosshard with Cleveland Research. Eric Bosshard - Cleveland Research: You did a good job of highlighting the benefits from weather and appliances, both of which don't really continue into 2Q. Can you just talk about what else you're seeing in the business that gives you the confidence in this guidance for basically 2Q sales to improve from the rate of 1Q?

Eric, this Larry Stone. Certainly a lot of our categories, lumber, building materials and so forth, got off to a slow start in the quarter. As the quarter progressed, you could see momentum starting to gather on some of those products. Also I mentioned our PSE, our Project Specialist Exteriors, really made an impact on our Millwork sales, so there again, those sales should continue to grow as we head into the second quarter. And a lot of the interior projects, carpet, cabinets and so forth as the economy continues to get better and consumers gain more confidence, so we think those will continue as well. Our seasonal categories should continue strong in second quarter: Demand for outdoor power equipments and seasonal products, nursery products and all of our grills and patio and so forth should continue. So really, we feel very confident as we head into the second quarter. And one other thing, we haven’t had that extreme heat yet that we normally start to experience. So categories like air conditioners and fans should also start to pick up as the weather gets hotter. Eric Bosshard - Cleveland Research: The initial guidance coming into the year, I thought was a little bit of a softer first half and a better second half, and obviously the first half is turning out to be a bit better, but it appears with the full year guidance, that you're no longer assuming the second half improves from the first half. Can you just talk about the thinking within that in regards to the full year guidance?

Sure, Eric. I think from a sales perspective as we highlighted in Q1, we had some specific drivers that helped first quarter as you noted in your initial question won't continue. As Larry described, there’s probably other factors that help drive sales in Q2 and beyond, but we're still somewhat cautious regarding the state of the consumer and the economy as a whole. So we're somewhat cautious as we think about our outlook for the balance of the year.

Our next question comes from the line of Michael Lasser with Barclays Capital. Michael Lasser - Barclays Capital: Larry, I think in your prepared remarks, you discuss that one of the reasons for the advertising expense to leverage was due to increased promotional activity. Do you expect that this will intensify as the home improvement market continues to rebound? And will that lead to incremental pressure moving forward?

Michael, we don't think so. I think the thing that really happened in the first quarter is kind of an anomaly, as Robert mentioned in his comments. The first quarter got off to a very slow start as Bob referenced in his comments also about the comps. So February started off extremely slow for us. As the weather started to improved in March, we had our plans laid out, but there again, a lot of promotional activity was starting to be going on in a lot of our markets. So naturally, we had to respond. And we don't think that we'll continue in the second quarter. It seems like things have got more stable as we got through that initial two or three weeks of just tremendously good weather in a lot of sales. And then things kind of equaled that out as we got into the April time zone. So I don't think so. I mean we think things’ll be more rational as we head into the second quarter and hopefully for the balance of the year. But here again, I think it all depends on how this economy continues to improve and consumers still continue to gain confidence. I mean that's the way we kind of see the market playing out, but there again, things could change dramatically and if so, that's why I put in my comments that we stand ready to make changes if needed. Michael Lasser - Barclays Capital: As a follow-up on the appliance category, in those states that became the rebate program early, how have trends been following the expiration of the program? Are you seeing it just pull demand forward?

Certainly, in some states it did pull some demand forward, and in some of the states where we have relatively few stores we saw some fantastic comps, I mean numbers that are unheard of, but quite frankly was off a very low base. But if you look at some of our states where we have a lot of stores, been there a lot of years, we're still seeing good demand for appliances. It’s not like we brought everything into that quarter, and I think the thing that a big part of the appliance market that we've always done extremely well in is the replacement market. So somebody's refrigerator breaks unexpectedly or washer breaks or so forth; that business is still out there. So I think it brought forward some sales. We're not that naïve, but quite frankly, we think that business is still probably strong for us. It's been a category that we remain strong in throughout the downturn and certainly with the new products and new innovations and so forth that we expect to be one of the industry leaders. And we still have seven states that will launch this month: four in June and one in July. So there's 12 more states that will launch their programs during this quarter.

Our next question comes from the line of Colin McGranahan with Sanford Bernstein. Colin McGranahan - Sanford C. Bernstein & Co., Inc.: Just on average ticket with the strength of appliances, OPE and then extend [ph] it like in double-digit sales growth in installed sales, too, I was a little surprised that average was down I think 2.3%. Can you give us a little bit more color on what was driving the decrease in average ticket given the strength on some of the bigger-ticket categories?

Sure, Colin. Appliances certainly was strong for us in Q1. However, other bigger-ticket categories were off a little bit, specifically, cabinets. We talked about improving trends in fourth quarter, however, cabinets was down slightly, a slight negative comp in the first quarter. So that had a big contribution to the ticket decline as well as the lumber category. Lumber category was a lower mix of total sales to Q1, so that has an influence on ticket as well. Colin McGranahan - Sanford C. Bernstein & Co., Inc.: And then just on gross margin, thinking about the mix, obviously that should get a little bit better here going through as appliances lessen out. But on the rate side, the promo side and then the fact that inventory's up, should we expect gross margin to be up for the year? Or are you now thinking that it's going to be a down-gross-margin year?

We still expect gross margin to be up for the year. Certainly, the mix impact related to appliance was huge in Q1. We do expect that, that’s going to lessen as the year progresses. So we do expect margin to be up slightly for the year. Colin McGranahan - Sanford C. Bernstein & Co., Inc.: And the driver of that will just be better rate?

It’ll be a combination of better rate. It’ll be a combination of the things we've talked about in the past, which is global sourcing, marked on optimization. And we’ve also talked about in the past some expansion of patch areas that should help us with being competitive from a retail price perspective.

Tom, this is Robert. Also, as Larry mentioned in his comments, we're in real good shape on our seasonal sell-through, the way the season has started out, the way those inventory levels over, so that really takes a lot of pressure off markdowns on those seasonal categories as we move through the season and towards closing those out as we get through the second quarter on even the third. So we feel good about where we're at. We feel good about where those inventory dollars are invested. As I think Larry said in his comments, having gone through what the nation’s gone through in the past three years, a lot of capacity was taking out from a production standpoint. So where we saw opportunities, particularly in the appliance and some other areas, we did some advance buys because we thought we wanted to make sure we had the inventory to be able to garner our share of sales opportunities and stuff like these stimulus programs that are out there from the government. It's worked well so far, and as Larry said, we don't have as many of those in the second quarter but, certainly, some more states kicking off. And then we see extra 60 days to close on those homes that weren’t under contract by the end of April. And a lot of time when someone buys a home, that's obviously one of things they have to have is appliances with that. So we think we're in good shape. We think we have the inventory in the right place. We think we’ve minimized the markdowns, so all of that helps obviously with the gross margin trend heading in the second quarter and also the balance of the year.

Our next question comes from the line of David Schick with Stifel, Nicolaus. David Schick - Stifel, Nicolaus & Co., Inc.: You talked about opportunistic buys affecting the inventory a little bit in categories where you felt good. Can you talk about the cycle times on what you bought? Would you expect that to smooth out over the next quarter or two?

David, this is Larry Stone. Yes, we should. I mean appliances, one of the things that’s really helped us in appliance sales over all the time we carried appliances and having appliances in stock, as the Cash for Appliances started to unfold, quite frankly, the demand was outstripping our in-stock position. So we’ve worked with our vendors and did make these opportunistic buys of products that Roberts want are not going to go bad, these are products that we'll be selling as the year progresses, but we felt like to have the product in stock for the customers was worth an inventory investment. Also in categories like lawn and landscape and paint, once again, we felt like, based on the trends we were seeing in the business, that these were good solid investments for us. So the products that we purchased during the first quarter were products that the business is pretty stable throughout the whole year. So it's not a lot of seasonal products like we were going out buying a ton of grills and patio. I can understand concern, but quite frankly, products we bought were products that we know we can sell through without a lot of markdown or hopefully no markdown. David Schick - Stifel, Nicolaus & Co., Inc.: So the numbers should look more normal relative to comp maybe next quarter, is that right?

They should. That's correct. David Schick - Stifel, Nicolaus & Co., Inc.: The follow-up really would be the payables expansion, Bob, if you could talk about that?

Sure. As I mentioned in my comments, a lot of it really was just due to timing of purchases in the quarter. The increase in purchases, a lot of that came in April. So as we progress throughout the year, the AP leverage, AP as a divided inventory, will be up slightly for the year but not to the extent it was up in Q1.

David, this is Robert, just a follow-up, our margin’s always are obviously working on terms within it, but there's no significant change in terms across the board or anything like that, that we've executed with our vendors. So as Bob said, it's more driven just by the timing of purchases, where they occurred late in the quarter as demand ramps for things like appliances. David Schick - Stifel, Nicolaus & Co., Inc.: David, I think you're going to see inventory normalize as the year progresses. It still might be a little bit higher than one might expect relative to sales in Q2. But we expect it to be roughly on plan by year end or up approximately 3%.

Our next question comes from the line of Dan Binder with Jefferies. Daniel Binder - Jefferies & Company, Inc.: I was just curious if you could comment on new store productivity versus your expectations in the quarter. And then also, you mentioned hurricane activity. I was just curious if you could outline what the impact was this quarter, and what you expect it to look like next quarter. And then finally, aside from lumbar, you're seeing or it appears that there is inflation in other categories including carpet, flooring and other building products. I'm just curious what your outlook is on inflation, how that may impact your comps for this year?

I'll take the hurricane question, Dan. As you know, we did see elevated sales in Q1 last year as it relate to the 2008 storm activity. That negatively impacted first quarter comps by about 90 basis points. We think that's roughly cut in half in Q2, down about a 45-basis-point negative impact. And then in your first question, you referenced productivity. Could you expand on your question a little bit if you don't mind? Daniel Binder - Jefferies & Company, Inc.: Just how new stores opened up over the last 12 months, how they performed versus your expectations?

New store productivity in the first quarter was about 72%. So I would say that's a fair idea that we’d like to have be closer to 80%, but anything about 70% is decent performance.

Dan, on your issue with some inflation, yes, obviously lumber and some other commodities, we've seen some inflation in, some in rough electrical when you think about the copper wiring, those categories. I think compared to other cycles, as Larry mentioned in his comments, retails have moved up a little slower than what they have in the past, but they're starting to move up compared to what we've seen on the cost side, so that had a little bit of an impact as Larry mentioned on margin rate during the quarter. We are seeing those retails starting to move up. It's only for the fact that it's just been slightly slower than what we saw in prior cycles as we've seen our commodity prices move up. But we expect to see this continue to move up. As you get the economy starting to pick back up, there’s probably going to be pressure where our supply has been taken out of the market, so you’re probably going to see some inflation in those categories. Certainly in the second quarter, we expect that based on where lumber prices and where stuff like copper wire prices are at, are impacting rough electrical category so.

And also plywood, Dan, has had quite a run-up in plywood products. So there again, if you look at as we start in the second quarter and the third quarter, there's a lot of comments out there about weather and the storms and so forth. So there again, we’re keeping our eye on that as well. So we just feel like that things, hopefully, will start to level off and especially in lumber and plywood products as we head into the end of the second quarter and get back into the fall of the year. Daniel Binder - Jefferies & Company, Inc.: Comments on inflation, do you expect that there's a sort of a temporary gross margin pressure that continues into Q2, Q3? Or is it starting to flow through a little bit more quickly now?

I think Robert’s comments, and we’re starting to see people finally starting to move up on some of these products and let's say a lot of pressure in lumber, plywood, and really copper cable are three of the ones that gave us some margin pressures in the first quarter. So we're starting to see retailers move more pro-actively now versus for the middle part of the quarter people are kind of stuck on the price they bought it at versus replacement cost. And replacement cost jumped quite a bit as the quarter progressed. So we feel like that there's opportunity to move prices up to recapture some of those costs that are embedded into the product now with the replacement cost being much higher than they were at the start of the quarter.

Our next question comes from the line of Laura Champine with Cowen and Company. Laura Champine - Cowen and Company, LLC: Robert, you mentioned that 2011 might be the year where we really start to see improved growth, and I understand the caution this year. But why move it out a full year? And what should be the drivers you think to take 2011 growth even faster than 2010?

Well, I think if you look at some of the economic estimates that are out there, Laura, a lot of them, as we’ve gone through the recovery process, have started to push out when the timeline is for recovery. So for example, the thought was originally that home prices would bottom in the second half of 2010. That's now been pushed out to the first half of 2011, as we’ve got to get through this glut of foreclosures that potentially need to move through the marketplace. We continue to see pressure there. There's obviously still concern out there from an employment standpoint, even though I think the last numbers were 290,000 jobs were added, unemployment rate ticked up recently and is estimated to be at like about 9.6% consensus for the year and 2010. So as we think through that process, just looking at it from an overall estimates out there what the overall market growth is going to be, what the consensus is for our industry, this year versus next year, things have pushed out just a little bit. We've always said that 2011 would be the first year of recovery. We haven't really changed our outlook so much for 2010. We just had a better first quarter than we anticipated because of some of the incremental factors that impacted that quarter being the Cash for Appliances response for that, being greater than we anticipated. We didn't know at beginning of the quarter since the federal government rolled that out to the states and let them put in place the programs on an individual state-by-state basis, we didn't know exactly how those programs were going to be structured. And a lot of times it depends on how those programs are structured. Is it an instant rebate? Is it a mail-in? How does that work that drives the consumers' response to the category. So things like that had an incremental impact above what we’d anticipated in the first quarter because we didn't have the information as to exactly how those programs were going to be rolled out and so the impact that, that would have on consumers’ ability to take the states up on those offers. So Greg Bridgeford’s in the room. Greg, do you have anything else on the economic outlook?

No, I think Robert, you’re looking at consumer mindset as slowly starting to change favorable. But I think that, as Robert described, Laura, that we're still going to have to watch and see how home values do bottom out, which has been pushed out so that most of the economists that you talked to today would say that it's going to be a longer recovery with fewer curves in it. And then we'll begin to see meaningful change in consumer mindset towards the end of this year and into the first half of 2011.

Our next question comes from the line of Peter Benedict with Robert Baird. Peter Benedict - Robert W. Baird & Co. Incorporated: Could you give us some more color on the improved trends you're seeing in the Western regions? Specifically, how’s California performing, and how does that compare to the prior quarters?

Peter, it’s Larry Stone. As I stated in my comments, we have positive comps in the Western division for the first time since 2005. Certainly, all the parts of the West are doing much better than we were doing previously, and I’ve been out there a couple times in the past quarter, and you can just see it, the traffic in the stores and just anecdotally talking to customers and talking to our store teams and so forth, things seem to be getting better now. We know we're not out of the woods yet in those states, but certainly, the improving trends are much better. The balance in the steps so to speak of the customers and the employees are very encouraging. And there again, we've got all of our programs in place out there in terms of our Project Specialist Exteriors, our de-cash [ph] positions on their commercial account specialists. So we feel real good about the West Coast and how it's performing, but that's one great quarter. So we hope this trend will continue and certainly as we grow throughout the year and things continue to improve, those continue to get better on the West Coast. Peter Benedict - Robert W. Baird & Co. Incorporated: And then Bob, the $50 million credit expense that you alluded to in your prepared remarks, when do you expect that to hit the income statement? Is that going to be in 2Q or 3Q?

Pete, that starts in third quarter. I think the final regulations would become effective August 22. So we see that impact largely spread throughout third and fourth quarter. Peter Benedict - Robert W. Baird & Co. Incorporated: So $50 million over the second half of the year -- is that the way to think about it?

That's right.

Our next question comes from the line of Matthew Fassler with Goldman Sachs. Matthew Fassler - Goldman Sachs Group Inc.: My first question would be a follow-up to Dan's question on new-space productivity. I totally hear you on the productivity rate being very solid in absolute terms. I believe that for the quarter and for the year, you guided to the neighborhood of 100% for new-space productivity being based on the kinds of openings that you saw for this year. So some color on how you're tracking into that expectation would be helpful? And then my second question just relates to the appliance stimulus program. If you’re thinking about all of the various states and add up the potential, what proportion of the dollars do you think has been extended or claimed at this point? And how much do you think would be left for subsequent quarters?

Matt, it's Bob's I'll take the first part. So new-store productivity is assumed to be roughly 100% for the year. There's some nuances of the calculation. As we’ve talked about in the past, we've got a very healthy 2010 new opening schedule, added-sales-per-store roughly $33 million versus the $28 million average we saw per store in 2009. The other impact is when the stores open within each quarter, which has some nuance to the calculation, itself. So we do expect good new store productivity in 2010. I think it’s just some of the nuances of the calculation that gets us to a new-store productivity mathematically calculated to be about 100%.

Matt, it's Robert. In the estimates as to how much is already behind us, that one’s a little bit harder to estimate. Most of the largest states have come through with their programs. As Larry said, there's about 11 or 12 more that are kicking off. One of them out there that’s had a fairly big program was California, but the way they executed it initially was it only applied to very high-end appliances, very high-average tickets. So they didn't get a very big response. So one of the big unknowns is, do they come back with their remaining funds and execute it at a level that is more mainstream and drives more of a take-rate for the residents of the state there. So roughly, I'd say we're probably maybe 75% or so of the way through the programs out there, depending on what California does that could tick up a little bit more opportunity later in the year if they choose to do something there. Matthew Fassler - Goldman Sachs Group Inc.: So are you intimating that the first quarter probably saw the bulk of the benefit that you're going to see here or do you think that it could be immaterial [ph] for Q2 as well?

I think it'll still have an impact on Q2, but we think the impact on the first quarter is bigger than what the impact will be on the second quarter.

Our next question comes from the line of David Strasser with Janney Montgomery. David Strasser - Janney Montgomery Scott LLC: So you had talked about lumber prices kind of not being able to keep up with inflation or inflation cutting into marginal because prices haven’t been able to get up, go up as much. And in the past two or three years, part of the story here has been that you've seen a lot of competition, particularly some of the lumberyards go out of business. You alluded to it a little bit. I’m just trying to reconcile a little bit some of the comments. Are you seeing more competition come back in, which is kind of keeping some of that lumber pricing in check at the retail level?

Dave, this is Larry Stone. I’ll start on that one. Certainly, it’s not more competition. It's just the competitors that we still have left that seem to be trading dollars on product versus trying to get in line with replacement cost. That's been an age-old problem selling lumber. A lot of folks buy it at one price and sell it at one price and don't think about replacement cost. But the major retailers that we compete with on lumber products – it just seems like they've been holding their prices on some of the products that traditionally this time of year, there are certain products that go up in terms of retail, and this first quarter, they were just held down and quite frankly, we've got to match the competition in these areas. But as far as new competitors, we're not seeing a lot of competitors in the lumber build and drill [ph] business. It's more the same folks we compete with day in, day out. David Strasser - Janney Montgomery Scott LLC: As you sort of think about the back half of 2010, 2011, I remember over the course of the last few years, you talked about barriers to entry being been relatively low for some lumber yards to come back. How do you think about competition coming back if you're right on sort of the economy continuing to improve?

I think, Dave, we start talking about in the lumber and building materials area and those competitors start to come back in, and there’s a lot of consolidation that took place, high-end industries, they were trying to rationalize and based on the pullback on the sales rationalize their overhead, those type of things, you wouldn’t expect to see them really coming back. You really have new home construction heating up in a big way. And so when you think about still the overhang we have in existing home sales, the pressure’s going to be coming from the foreclosures that need to move through the pipeline like we talked about earlier. I think we're well into the recovery and new-home construction before you really start seeing an expansion in the kind of the traditional lumber and building material yards.

Our last question will come from the line of Chris Horvers with JPMorgan. Christopher Horvers - JP Morgan Chase & Co: Can you talk about big-ticket category trends outside of cabinets and non-seasonal categories? Curious, I think that'll be a really interesting read on how much we could maybe expect to continue into the back half of the year?

Chris, this is Larry Stone. A lot of the big-ticket items, and certainly if you look at our seasonal products, outdoor power equipment had a real strong quarter as I mentioned double-digit comps, and certainly that’s as a big ticket item. Our patio and grills, which are also considered big-ticket items that are real strong first quarter as well. So you would expect those to carry over into the second quarter as these products are really sold during the first and second quarter, our two best quarters for those particular products. So we think that will continue. Kitchen cabinets, as Bob mentioned, were down slightly for the quarter, but there again, as consumers gain more confidence, we expect kitchen cabinet sales to get better over time. Flooring was strong in the first quarter. There again, a large-ticket purchase, and millwork was extremely strong in the quarter with the average ticket in that being pretty high. So we think there's a lot of different big-ticket categories that are doing quite well for us and should continue as we head into the second quarter and, hopefully, the balance of the year. Christopher Horvers - JP Morgan Chase & Co: So then as you reflect back, and you get almost a nine-comp in April, so it seems like you have a lot of reasons to be optimistic as to what the second quarter holds, particularly with really easy weather compares in June and in July. So what's the foundation of your comp outlook here for 2Q?

Chris, this is Robert. Obviously, as we said one of the big drivers in the first quarter was the Cash for Appliances program. We think that'll continue into Q2 but not as heavily as in Q1. Also, Q1 had the impact of a lot of repair being done coming out of a harsh winter with the damage that was done to people's homes and landscaping and those type of things. So a lot of that activity would have took place as Larry spoke of as soon as the weather broke in the quarter. Some of that obviously will carry over into the second quarter, probably a little bit more of a favorable impact on that in the first quarter. You can actually think about taking the impact of some of that out. You're still looking for a nice improvement in comps going into the second quarter and just part of a gradual improvement that we've talked about. So we're still very optimistic. We're only into the beginning of the quarter. We're pleased with the way the quarter has started. But as we said, there's still -- this is kind of a year of transition. We're transitioning from prior three years when we had negative comps to a year where we're looking for positive comps, but there’s still not significant growth out there in the industry that's going to take place until we get employment really moving back in the right direction. We'll get home prices to bottom, which is probably more of a 2011 phenomenon, even though it gradually gets better. So there's still challenges out there in the economy. So we try and look at it as we're being cautiously optimistic. We're very pleased with the signs we saw and the results we got in the first quarter. We're sitting back and knowing that some of those were certainly aided by the stimulus program and the response to the harsh winter. We think that as the consumers gradually are feeling better and we're seeing them start to take on more discretionary-type projects, that carries over into the second quarter. But we're cautiously optimistic. But at this point in the quarter, we don't want to get ahead of ourselves.

Thanks as always, thanks for your continued interest in Lowe's. We look forward to speaking with you again when we report our second quarter results on August 16. Have a great day.

Ladies and gentlemen, this does conclude today's conference call. Thank you all for participating, and you may now disconnect.