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

Gregory Melich - ISI Group Inc. Eric Bosshard - Cleveland Research Company Matthew Fassler - Goldman Sachs Group Inc. Deborah Weinswig - Citigroup Inc Dennis McGill - Zelman & Associates Colin McGranahan - Sanford C. Bernstein & Co., Inc.

Good morning, everyone, and welcome to Lowe's Companies Fourth Quarter 2010 Earnings Fiscal Year Earnings Conference Call. [Operator Instructions] 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 reconciliation to 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. We delivered solid results for the quarter, including earnings that exceeded our guidance, and I would like to thank our more than 234,000 employees for their hard work and dedication. Sales for the quarter increased 3.1%, and comparable store sales increased 1.1%. Our domestic comparable store sales increase was 1.3%. Our fourth quarter sales benefited from a strong start to the holiday season resulting in great sell-through of seasonal products. However, difficult winter weather negatively impacted performance in the month of January. Comp average ticket was up 1.9% in the fourth quarter, but comp traffic was down slightly. New store cannibalization reduced comps by approximately 35 basis points in the quarter. We continue to be pleased with our merchandising strategies and seasonal sell-through, which helped us deliver 60 basis points of gross margin expansion in the quarter. We also leveraged expenses and delivered earnings per share of $0.21, an increase of 50%, which exceeded our guidance for the quarter. We used third-party data to gauge our retail market penetration. From a rolling four-quarter basis, we maintained our total unit market share with gains in 10 of our 19 product categories, including strong gains in hardware and tools. I'm pleased with our inventory position at the end of the fourth quarter, which was up less than 1% year-over-year. Since the end of the first quarter, we have carefully managed our purchases, driven exceptional seasonal sell-through and rationalized our assortments. Most importantly, we were able to accomplish this without sacrificing in-stock levels. Overall, while growth in household spending picked up late in the year, it remained constrained by high unemployment, modest income growth, lower housing wealth and tight credit. And, while consumer confidence rose in February to its highest level since February 2008, it remained close to the lows of the prior recession and near historical lows. According to our fourth quarter consumer survey, fewer homeowners feel the economy will get worse before it gets better. But the number of homeowners who feel the recession is not over remains high, and approximately 45% of those homeowners tell us that they do not anticipate changing their spending plans as they move into 2011, evidence that consumers at large remain cautious. Now let me address some of the management changes from the past few months. We were proud to have one of the deepest and most experienced leadership teams in retail. But with the long-tenured team, there will be retirements and rotations from time to time. In mid-November, Nick Canter, Executive Vice President of Merchandising announced his retirement after 37 years with the company. At the end of January, Larry Stone, President and Chief Operating Officer, announced his retirement after 42 years of service. Both have enjoyed long and successful careers at Lowe's making many important and lasting contributions. Though we knew this day would come and our thorough succession planning process had us prepared for the changes, we do not plan to fill the President and Chief Operating Officer position after Larry's retirement. So Larry and I will work together over the coming months to ensure a smooth transition and reporting structure for his direct reports. Bob Gfeller, an 11-year veteran of Lowe's, has assumed the role of Executive Vice President of Merchandising. Mike Brown, a 26-year veteran of Lowe's, has been appointed Executive Vice President and Chief Information Officer. And Rick Damron, a 30-year veteran of Lowe's has assumed the role of the Executive Vice President, Store Operations. We're fortunate to have a skilled and talented leadership team to make these rotations effective and seamless. At our analyst conference in November, we shared our belief that we can grow by focusing on the opportunity we have with existing customers by growing a greater share of wallet. We also reviewed the steps we've taken to begin the transformation from a home improvement retailer to a home improvement company. Our commitment is to deliver better customer experiences by pulling together the best combination of possibilities, support and value for customers. But to deliver on this commitment, we must remain focused on cost effective and efficient operations. At the end of January, to further align payroll hours with customer demand, we restructured our store management roles and implemented weekend teams. Larry will provide more details about these changes in a few minutes. Let me share a few milestones from the fourth quarter that give us confidence that we can deliver better experiences. First, to increase our share position in major appliances, we launched repair services at the end of September. The phase rollout was complete in mid-November enhancing our Appliance Advantage program to provide after sales service for customers. We now own the repair experience, taking the phone calls, troubleshooting the problem and assisting with the resolution. This program will drive incremental repeat customer visits with purchases across the store. Additional benefits include repair parts sales, additional Extended Protection Plan sales and a reduction in Appliance return rate. We're also able to accumulate data about manufacturer to help identify defects and work with our merchants to resolve quality issues. We will roll out this concept to outdoor power equipment in mid-2011. Second, our e-commerce team generated a significant amount of interest with our social media campaigns during the quarter. On two separate occasions, we were recognized as the second and third fastest growing site on Facebook, and we recently surpassed 500,000 fans. We also donated $1 million leveraging Facebook fans to publicize the event and allocate the funds to competing charities. We’re reaching a key customer segment through online media, which allows us to better monitor and influence sentiment from this highly influential and viral group of customers. With social media and the improvements we've made to our lowes.com platform such as improved search capabilities, new navigation and expanded marketing reach, we experienced a 32% increase in online conversion rates in the fourth quarter. Lastly, we launched our mobile site in December building a foundation that will allow customers to continue their shopping experience regardless of their location. We have 1 million visits to our mobile site within the first month of the launch, and while we're very pleased with customer adoption of the site, we're looking forward to significantly more expansion as we make incremental improvements to the site and as our marketing efforts ramp throughout 2011. We're also excited to launch our first Mobile App ! in early 2011, as well as the foundational release of My Lowe's, our customer focused portal with capabilities that will allow customers to more efficiently manage projects and improve their homes. As we look to 2011, it appears that unemployment is stabilizing. And while certain housing market indicators appear to be heading in the right direction, home price are still a hurdle. Economists are expecting another 5% to 8% drop in median home prices by the fourth quarter of 2011 due to an increase in the sales of distressed housing. The result is a housing market that is recovering more slowly than the overall economy. In addition, consumers are increasingly concerned about inflation over the next 12 months as the price of raw materials and oil surge and manufacturing wages in China continue to increase. So while uncertainty in the market remains, the economic recovery is continuing. And as I've said before, we are prepared to operate effectively in a slow-growth environment. Thanks again for your interest, and I'll now turn it over to Larry Stone to provide more details from the quarter and the year. Larry?

Thanks, Robert, and good morning. This morning, I will review our fourth quarter performance and then provide an update on our operational measures of success I covered during the analyst and investor conference in November. As Robert mentioned, we finished the quarter with positive comps of 1.1%. Performance exceeded the company average in the non-coastal regions of the U.S. particularly the upper Midwest, South Central and desert Southwest. Comparable stores average ticket increased 1.9%, continuing to the stabilizing trend we experienced in the first three quarters of 2010. It is worth noting that this average ticket growth occurred despite appliances’ comping just above the company average. Comp transactions decreased 0.8% year-over-year declining in January after increasing in November and in December. The largest wins from December to January occurred within the lower Midwest and Southern regions affected by January snowstorms. While we are confident that the destruction from the snowstorms reduced our totally quarterly comp sales, we did sell a tremendous amount of snow blowers, shovels and ice melt. We were able to meet this demand through the use of our predictive weather analytics combined with our advanced logistics systems, which helped us have product in stock where customers needed it most. Looking forward to the first quarter, we expect sales to benefit from post-storm repair of roofing, guttering, landscaping and other exterior products. In addition, we continue to look for ways to drive more transactions in our stores. As we enter spring, we are amplifying the message in and around our low price guarantee and remixing our media spend, and we're also putting more customer facing hours in our stores during the weekends. From a product category perspective, our strongest comp growth for the quarter was in seasonal living, tools, lawn and landscape, rough electrical and millwork. Seasonal living performance is driven by our holiday assortments and seasonal heating products. We bought holiday decoration items with wide appeal placed them in their storage early and drove great sell-through requiring fewer markdowns through inventory at the end of the season. Seasonal heat and light snow removal products benefited from the harsh winter. Strong tool sales reflected exciting innovation from our vendors and a clear targeted gift under strategy, which drove higher unit growth especially for hand tools. Snow shovels and ice melt drove our lawn and landscape comp growth, while rough electric growth was mostly due to copper inflation. Strength in millwork was primarily in windows and exterior doors. Our Project Specialist Exteriors or PSEs combined with focused SOS promotions helped customers take advantage of tax credits for energy efficient improvements that expired at year end. As with Cash for Appliances, we've seized an opportunity to drive additional sales by quickly executing programs that helped customers benefit from government incentives. Additionally, the Project Specialist Exteriors program helped us increase our 2010 installed comp sales by over 10% with the greatest growth occurring in millwork, lumber and building materials. In fact, fourth quarter comparable store sales on tickets less than $50 decreased roughly 0.5%, while those over $500 increased roughly 1%. The better comp performance in tickets over $500 was mostly due to strong sales of products handled through our PSE program. We expect to obtain further comp benefit from this program as we anniversaried last year's ramp up. Our lower comp in product categories include the cabinets and countertops, fashion plumbing, outdoor power equipment, home organization and flooring. Within outdoor power equipment, snow blower sales after this year's snowstorms only partially offset lower comps and generators due to last year's severe December ice storm along the East Coast. Home organization sales garage and kitchen organization products have struggled, though we expect to improve our sales in these categories in 2011. Finally, in our floor department, lament and wood products have not performed to our expectations, though we do have plans in place to improve the performance of this category in 2011. On the other hand, positive comps in carpet continued as customers responded enthusiastically to our free installation of most recognizable brand of stain-resistant carpet, STAINMASTER. Fourth quarter gross margin improved 60 basis points with margin rate increasing in 12 of our 19 product categories. Gains in many of these categories are attributable to our patch area expansion and base price optimization, which are two elements for our go-local merchandising strategy. We have better aligned our price with our stores' competitive circumstances, and we are successfully implemented the base price optimization tool to find the best balance of unit volume and margin rate to optimize margin dollars. For seasonal living products, we entered the holiday season early and carefully managed sell-through in order to minimize markdowns. There has been concern in the market about potentially negative margin impact from inflation. In 2010, we experienced cost inflation in rough electrical, rough plumbing, lumber and millwork, and we have been able to pass most of these costs through our retail pricing. However, we are also aware of inflationary pressures on imported products. These pressures are caused by growing wage inflation in overseas markets and increasing cost for fuel and raw materials such as steel. In fact, we have received request for price increases from some of our vendors. We believe that we can work with our vendors to minimize these increases and pass along the majority of these costs in our retail pricing. We leveraged operating expenses in the fourth quarter. Bob will walk you through the details, but one significant source of leverage was payroll. Fourth quarter payroll leverage resulted in our decision to freeze hiring in advance of our event restructuring of our store organization. Despite this leverage, we're gratified to see ongoing strength in our fourth quarter customer focus scores. Looking forward, I like to cover a couple of recent store organization changes that will strengthen our ability to serve customers and operate our stores more efficiently. First, as we slowed our pace of store openings, we knew it was time to change our store management structure and to continue to put more hours on sales floor in order to better serve customers. Therefore, we have reorganized our store staffing structure by consolidating the zone, operations, sales and administrative management team into a single-level assistant store manager structure. This structure fully implements the managers to drive the business and allows them to manage all team members in their area of responsibility. On average, this change resulted in the reduction of one management position per store. Second, we're implementing a weekend team in each store. In addition to our seasonal hiring, we will hire part-time employees dedicated to Friday, Saturday and Sunday to increase our ability to serve customers on these peak days. Customers will see more employees on the floor, and we believe the structure will yield increased sales and improved customer service. Although the primary purpose of these changes to make our store management structure more effective and to deploy more hours to serve customers when they are in our stores, net savings from these changes will largely offset the cost of our 2011 wage increases. We have continued to balance our inventory. At the end of the first quarter, inventory was 9.8% above last year, which was due [indiscernible] purchases in appliance and flooring. Over the last three quarters, we have carefully managed our purchases in these categories, and we drove exceptional sell-through in the fourth quarter in our seasonal and tool categories. We ended the fourth quarter 0.9% above last year, despite a 2% higher store count and fourth quarter comp sales growth. Even so, we have maintained our service-level, and as of this call, we're ready for spring across the country with the right items such as outdoor patio furniture, grills and lawn and garden products to meet customers' demand. Before I finish, I'd like to our update on how we plan to make progress in 2011 on the measures of success I've discussed during our analyst and investor conference, and Bob will take you through the guidance in more detail. First, we will grow sales 1% to 2% faster than the market. Our 2011 market share growth will be driven by better alignment of our teams and resources to meet customers' evolving needs. And as already shared with you, we expect sales to benefit from implement of weekend teams full implementation of our PSE program, adjusting our media mix and more aggressively messaging our low price guarantee. We also expect to drive additional transactions to revamp selling skills and better training for our associates. Further, as Robert discussed, we continue to make great progress in improving our online presence, which should lead to more purchases online and in the store. This growth in market share, in addition to opening highly productive stores with a greater presence in densely populated urban markets should help us make progress towards our second measure of success, growing sales per square foot to $304 in 2015. Third, we expect to grow EBIT 20 basis points for each 100 basis points above a 1% comp. In 2011, we will obtain most of this growth through expense leverage. SG&A will benefit from the store structure changes we've already announced and through continued efforts of our cost reductions committee, a cross-functional team that searches for opportunities across our company to get more value from every dollar we spend. Finally, we set a goal to improve inventory turns by 25% over the next five years. We made solid progress on rightsizing our inventories at the end of 2010, and we expect to continue that progress in 2011 as we review the depth and breadth of our assortments and roll out integrated planning and execution or IP&E. And hedge focus on the role each category plays in our mix, gives our merchants' and logistic team's better context for making inventory decisions. At the end of 2011, we look forward to updating you again on our progress towards our five-year operational goals. Thanks for your interest in Lowe's, and I will now turn the call over to Bob Hull to review our fourth quarter financial results. Bob?

Thanks, Larry, and good morning, everyone. Sales for the fourth quarter were $10.5 billion, which represents a 3.1% increase over last year's fourth quarter. In Q4, total average ticket increased by 2.3% to $61.34, and total customer count increased 0.8%. Comp sales were 1.1% for the quarter which was within our guidance of flat to 2%. Looking at monthly trends, comps were positive 2% in November, positive 2.8% in December and negative 2.5% in January. Our monthly comps in the quarter were impacted by both the holiday shift and weather. This year, New Year's holiday fell on Saturday, which was the first day of our fiscal January, where last year it fell on Friday, which is the last day in fiscal December. This shift aided December and hurt January comps. Adjusting for this shift, comps would have been positive 1.7% for December and negative 0.8% in January. As you heard from Larry, the sales of storm-related products in January were not sufficient to offset the negative impact to our normal customer traffic patterns. For the quarter, comp average ticket increased 1.9%, while comp transactions decreased 0.8%. With regard to product categories, the categories that performed above average in the fourth quarter included millwork, tools, rough electrical, seasonal living, lawn and landscape and appliances. Rough plumbing performed at approximately the overall corporate average. For the year, comp sales were 1.3% and total sales increased 3.4% to $48.8 billion. 2010 was our first positive comp year since 2005. For 2010, comp transactions increased 0.9% and comp average ticket increased 0.5%. For the year, the categories that performed above-average included tools, lumber, rough electrical, seasonal living, household power equipment, lawn and landscape and appliances. Millwork and paint performed, at approximate, the overall corporate average. Gross margin for the fourth quarter was 35.55% of sales, an increase of 60 basis points from last year's fourth quarter. The primary driver of gross margin expansion in the quarter was base price optimization and patch area expansion, and we estimate the favorable impact was approximately 25 basis points. In addition, product inflation, better seasonal sell-through, a higher proportion of private label products, less reset activity and lower inventory shrink all aided gross margin in the quarter. For the year, gross margin of 35.14% of sales represents an increase of 28 basis points over fiscal 2009. SG&A for Q4 was 26.64% of sales, which leveraged 65 basis points. The primary driver of SG&A leverage in the quarter was bonus expense. We were cycling against large bonus accruals in last year's fourth quarter versus more normal trends in this year's Q4. As a result, bonus expense leveraged 56 basis points in this year's fourth quarter. Also in the quarter, we experienced leverage in store payroll, impairment in discontinued projects and advertising. Store payroll leverage in Q4 despite the $15 million pretax severance impact associated with the store management structuring changes Larry described. Lastly, we experienced deleverage in the quarter associated with private label credit, profit taxes, bankcard expense and other income. The deleverage in other income relates to our share of the bank card anti-trust sentiment received in Q4 2009. For the year, SG&A was 24.6% of sales and leveraged 25 basis points to 2009. Depreciation at 3.74% of sales totaled $392 million and leveraged 21 basis points compared to last year's fourth quarter. Earnings before interest and taxes increased 146 basis points to 5.17% of sales. For the year, up 7.29% represents an increase of 70 basis points over 2009. Interest expense at $86 million for the quarter deleveraged 27 basis points as a percentage of sales. The increase in interest is attributable to the $1.5 billion increase in net debt at year end relative to last year. For the quarter, total expenses were 31.2% of sales and leveraged 59 basis points. Pretax earnings for the quarter were 4.35% of sales. The effective tax rate for the quarter was 37.5% versus 36.3% for Q4 last year. For the year, the effective tax rate was 37.7% compared with 36.9% for 2009. Q4 net earnings of $285 million increased 39% versus last year. Earnings per share of $0.21 for the quarter exceeded our guidance of $0.16 to $0.19 and increased 50% versus last year's $0.14. For fiscal 2010, earnings per share of $1.42 were up 17.4% versus 2009 and came in at the high-end of our original 2010 guidance of $1.30 to $1.42 provided last February. Now to a few items on the balance sheet starting with assets. Cash and cash equivalents at the end of the quarter was $652 million. Our fourth quarter inventory balance of $8.3 billion increased $72 million or 0.9% versus Q4 last year. The increase was due to square footage growth of 2% and distribution inventory offset by a comp store inventory reduction of 4.4%. Inventory turnover calculated by taking a trailing four quarter cost of sales divided by average inventory for the last five quarters was 3.63%, a decrease of two basis points from Q4 2009. At the end of the fourth quarter, we owned 89% of our stores. Return on assets determined using a trailing four quarters’ earnings divided by average assets for the last five quarters increased 52 basis points to 5.81%. Moving on to the liability section of the balance sheet, we finished the year with no short-term borrowings. We ended the quarter with accounts payable of $4.4 billion, which was a 1.5% increase over Q4 last year. In the fourth quarter, we issued $1 billion of unsecured bonds in two tranches, $475 million of five and a half year notes with 2 1/8% interest rate and $525 million, 10 and a half year issue with 3.75% interest rate. As a result, our total debt balance at the end of the quarter was $6.6 billion. Our debt-to-equity ratio was 36.3% compared to 26.6% to the end of 2009. At the end of the fourth quarter, lease adjusted debt to EBITDAR was 1.7x. Return on invested capital measured using a trailing four quarters earnings plus tax adjusted interest, divided by average debt and equity over the last five quarters increased 84 basis points for the quarter to 9%. Now looking at the statement of cash flows. For the year, cash flow from operations was almost $3.9 billion and cash used and profit acquired was just over $1.3 billion resulting in free cash flow of $2.5 billion, which was 12% higher than 2010. During the quarter, we repurchased 41.4 million shares at an average price of $24.15 for a total repurchase amount of $1 billion. For the year, we repurchased almost 112 million shares or 7.7% of our beginning share count. In total, we repurchased $2.6 billion in 2010 and had $2.4 billion remaining under our share repurchase authorization. Looking ahead, I'd like to address several of the items detailed in Lowe's business outlook. We expect the first quarter total sales increase of approximately 2%, which assumes comp sales to be essentially flat and square footage growth of approximately 2%. In Q1, we faced difficult comparisons associated with last year's Cash for Appliances program, which we estimate aided first quarter 2009 comps by 65 basis points. Gross margin is expected to be up slightly in Q1 2010 as a percentage of sales. For SG&A, we anticipate deleverage of 40 to 50 basis points. This deleverage is driven by a number of factors including insurance, proprietary credit and expenses associated with investments we are making with customer experiences. We are cycling against leverage in our casualty insurance program and last year's first quarter due to a decrease in actuarial projected losses during the period. Depreciation for Q1 is expected to be approximately $360 million and leveraged roughly 30 basis points. As a result, earnings before interest and taxes for the quarter are expected to decrease by 10 to 20 basis points to last year as a percentage of sales. For the quarter, interest expense is expected to be approximately $90 million. The income tax rate is forecasted to be 37.7% for the quarter and for the year. We expect earnings per share of $0.34 to $0.38, which is flat to last year's $0.34 at the low-end and an increase of 12% on the upper-end. Prior to getting into our outlook for the year, I wanted to highlight that our fiscal 2011 will include an extra week in the fourth quarter for a total of 14 weeks and 53 weeks for the year. Lowe's fiscal year ends on the Friday closest to the end of January. This means we have a 53rd week every five or six years. Our last 53-week year was fiscal 2005. For the year, we estimate that the 53rd week will increase total sales by approximately 1.6% and earnings per share by approximately $0.02. In 2011, we expect to open 25 to 30 stores resulting in an increase in square footage of approximately 1.5%. We're estimating 2011 comp sales to be positive 1% to 2%, and with the impact of the 53rd week, we expect total sales increase of approximately 5%. For the fiscal year, we're anticipating an EBIT increase of approximately 30 basis points. For 2011, we expect depreciation expense of about $1.5 billion and interest expense of approximately $350 million. The sum of these inputs should yield earnings per share of $1.60 to $1.72, which represents an increase of 13% to 21% over 2010. And looking at our guidance relative to the first call, the mean estimate for the year falls within the middle of our guided range. However, first quarter appears to be heavy, and Q4 appears to be light by about $0.02 each relative to our expectations. For the year, we are forecasting cash flows from operations to be approximately $4.6 billion. Our capital plan for 2011 is approximately $1.8 billion with roughly $100 million funded by operating leases resulting in cash capital expenditures of approximately $1.7 billion. Our guidance assumes approximately $2.4 billion in share repurchases for 2011 spread evenly across four quarters. Regina, we are now ready for questions.

[Operator Instructions] Our first question comes from the line of Colin McGranahan of Bernstein. Colin McGranahan - Sanford C. Bernstein & Co., Inc.: I just wanted to focus first just on the comp and market share. Can you comment on market share? And it looks like the NAICS 4441, so excluding the garden supply stores was up, and we don’t have January yet, but was up November, December about 5%, so how are you thinking about as it played out in the quarter? Any thoughts on why the NAICS numbers look a little bit better than your sales and do you want to comment on the comps spread relative to Home Depot, which I think widened out to about 3.7%?

I'll start with general comments, Colin, and then I'll let Greg talk specifically about the NAICS 4441. Obviously, November and December we had much better performance, as you said, the January NAICS isn't out yet. So certainly, I think when you look that part of it will be part of the impact, and I think we would focus on the NAICS 4441. Although we do know we have some work to do certainly. As we look at the comps versus our overall performance for the quarter, we're pleased with, obviously we met our numbers. We look at some of the items in the quarter, and what was discussed yesterday on the competition's call, if we look at Black Friday, we had great performance on Black Friday probably one of our best days ever that entire weekend, great receptivity to lowes.com in some of the things we're doing there. We weren't aggressive as others were with respect to appliances and the promotions that took on appliances around our Black Friday. So I think that certainly impacted our numbers as you see. We were just slightly above average comps on appliances for the quarter. The other thing is that Winter products, we had a great quarter in Winter products we had double-digit comps on top of what was a record year in 2009. But quite frankly, by the time we got to January, we were out of products for all intents and purposes other than ice melts, a few remaining snow throwers and shovels that were around. So we know that we missed some opportunity there because obviously the winter was much harder than we expected even though that we did have great performance. I think Larry talked in his comments a little bit about store staffing and the fact -- part of what we're reacting to with the weekend teams; is that we know we haven't had enough hours on the floor on the store on weekends, which is when we were short from customer facing time. As Larry mentioned, we had a hiring freeze in place because we were restructuring because we had to get reset for the change that took place. And we were probably a little light in some areas in the quarter as we were setting up to do that. But is set us up in great shape for spring. We’ve got the plans in place, the hiring has already started, and we think we're going to be in great shape to capitalize on spring sales. If you're going to make a change like that, obviously, the fourth quarter is the best time of the year to do it because that's our lowest volume part of the year. And then I guess finally, on kitchen cabinets was an area that we probably were not as promotional as some of the others during the quarter. And then I think there was also some comments about HVAC insulation. We're really not in the business so the tax credits stuff, we would have had similar results from the ENERGY STAR tax credit stuff but not in HVAC. So a little bit of thoughts there just kind of overall from market, market share. We maintained our market share grew it in several categories, so we're pleased with that, and we think we're in a great shape with the changes we've made, where we’re at from an inventory position, how clean our inventory is, and what we're doing from a staffing standpoint as we head into spring. So Greg I'd ask you to talk about the next numbers?

Collin, when we break down the subcategories of 4441, it looks like convenience factors played a pretty strong role in the fourth quarter. When you look at paint and wallpaper stores, their performance in November and December strongly exceeded the total category of 4441, 13.4%, 6.8% in November and December, and hardware stores performed at 11.7% growth and 4.5% growth in November and December, which does actually jive with our feeling about the factors of convenience playing a strong hand in store of choice in the fourth quarter.

Our next question comes from the line of Dennis McGill with Zelman & Associates. Dennis McGill - Zelman & Associates: Just was hoping you could maybe talk to the market share targets that you've said at 1% to 2% and compare that to the comp guidance for this year. It seemed like the overall markets probably got some growth behind it certainly with consumer confidence improving, I'm just wondering how you compare the market share gains versus the comp guidance in '11.

Dennis, this is Bob, I'll start. So one of the things that we've gone through the past couple of years when planning the upcoming fiscal year is the economists’ forecast are for a soft first half and improving second half, and we've been fooled a couple of times there. So we are actually planning for much more conservative market growth, specifically, in the back half of the year. The economist tend to -- their forecast are referred to as the mean, so everything kind of improves. We expect to be able to take market share when it comes, but we're planning very cautiously at this point in time. Dennis McGill - Zelman & Associates: On the volume market share, just wondering if you could also tie that to the price patches that you've talked about on the optimizations gross margin obviously benefiting, but to what extent is that playing into the factors if it all on the volume in the quarter?

The base price optimization, the patched area, as Larry described is very local in nature so the evaluation takes into account our pricing relative to the competition in the market. It does balance the desire to grow unit volume in some categories and gross margin. In other categories, it's a mixed approach, and is really based on that specific market. I would guess that the local economy and house price impact has a greater impact, a far greater impact than what we've done for the base price standpoint, market-by-market.

Your next question comes from the line of Greg Melich with ISI. Gregory Melich - ISI Group Inc.: My question is really about input cost and inflation. You mentioned how it actually helped gross margin a little bit. Could you, Bob, just tell us what it actually did to the comp in the fourth quarter? And what you're using for commodity cost and your comp expectations for this year and also gross margin?

So if we take a look at the inflation categories. Principally, lumber, build materials and copper, those were certainly up. In total, we experienced about 20 basis points of favorable impact on the comp for the fourth quarter. And thinking about 2011, we do recognize that there will be increasing request for price increases from the vendor community. As we think about rising prices of gasoline, clothing, food, et cetera, we are concerned with impact on the consumer confidence and spending as a result of kind of a mixed bag of potential increase in prices versus potential decrease in purchase trends. We will assume no impact on comps or gross margin as it relates to inflation for 2011. Gregory Melich - ISI Group Inc.: And then second, just a follow-up on the SG&A that you talked about in the deleverage in the first quarter. It sounds like most of those things are very first quarter specific specially the cycling insurance. On the credit side, could you give us the update on the where credit penetration is? And if that is still sort of a one quarter issue? Or you think that's a new run rate on credit?

I think that's a one-quarter thing. We have some favorability last year as it relates to losses that we're cycling against. Insurance is largely related to Q1 so yes, we do expect some deleverage in SG&A in Q1. The credit as a percent of sales in fourth quarter was about 17.5%, 17.4% specifically. That compares about [indiscernible] Q4 last year, and we have seen some stabilization of late in our credit penetration. For the year, we do expect some nominal SG&A leverage. So yes, the items I called out in my comments are specific to Q1, we do expect to leverage SG&A for the year slightly?

Your next question comes from the line of Deborah Weinswig with Citigroup. Deborah Weinswig - Citigroup Inc: Flexing the size of your stores based on market opportunities, how should we think about the size of the stores you'll be opening in the future? And in light of that, at the Analyst Meeting, you stated that CapEx should be in the range of $1.6 billion between 2011 and 2015. And how that fluctuate over time between the IT, new stores, maintenance CapEx and other? And should we think about their being less than on new stores over time with maybe more new stores and a smaller prototype?

I’ll start on the prototypes and let Bob address the capital question there. Standard prototype we're building today is 103,000 square feet, and that's down from 117,000 square foot store that we built for many years. We also had our smaller market store, which is 94,000 square-foot store that we use in certain smaller markets and also in some urban areas where that’s what we can fit into that particular area. So in terms of square footage, we’ve dropped it overall about 10% to 15%. And we still have our outdoor garden center in all of our stores and that really varies depending on the piece of property we can buy and what we can put on the site. 103K I’d say in the last two years that’s predominantly what we built as a company. It's our prototype going forward as we go back in re-merchandise our stores. There’s a lot of things that we gain sufficiency with 103 that have us go back into our other families of stores and improve the shopping experience for the customers just a couple of things on our seasonal side. We’re able to better merchandise our patio furniture, our outdoor power equipment, our walk-behind mowers and things like that, that really create a much improved shopping experience by some of the learnings we got from 103 because we did have that reduced square footage, we had to figure out how to make the store work better. So I'm very pleased with this prototype and 94K, we launched that many years ago and that's still been a great small-market store for us. In the 94K still has 94,000 square feet of interior selling space. So I'm very pleased with those two prototypes, and I'm sure we look at different things in the future depending on how the markets shake out, but for now, that's how we’ll build the majority of our stores in those two sizes.

This is Bob. On the CapEx trends, yes we do expect it to average roughly about $1.6 billion for the five-year period. We did expect a slight uptick in 2011 relative to the other year specifically to some investments we're making in technology both in the store and as it relates to CRM tools as we strive to build better customer experiences. Also as we think about our existing stores, the team has done a good job over the past couple of years, continued to refine our ongoing maintenance, which has allowed us to extend the useful life of some of our trucks, forklifts, to both stores and DCs . Based on the extension of a life we've been able to largely postpone purchases of that equipment over the past couple of years. We're at the point now where we need to repurchase new equipment, so that's causing a bit of an uptick in existing store CapEx relative to last year. So in total, I think we're going to have a higher mix of IT spend in 2011 going forward just based on the way the forward serving a lower mix of new store as a proportion of total CapEx.

I'd like to comment also. If you look at that spend Bob was talking about there is kind of a recognition that we're looking at spend to strengthen all the available channels with our customer in not just stores, and you see that if you listen to the AIC strategy going forward, and you understand the composition of the CapEx spend. And I think from the urban markets in the U.S., domestically, I still think we are lightly penetrated, and you see a lot of flexibility in terms of footprint moving forward as we attempt to rightsize the store for the metro opportunity. Deborah Weinswig - Citigroup Inc: With Michael Brown stepping into to the CIO role, can you update us on your current technology initiatives for the near term and the long term? And have those changed at all?

It stays on. The components are there. Full services platform or repair services, which we launched last year. Installed sales are much improved at point where installed sales order management flexible, those are the big things about the services platform, and really that's what helped us to cater to this better customer experience inside the box and across all the local channels where customers would like to shop with us going forward. Dot com [ph], we continue to invest in dot com, and certainly Robert mentioned some numbers on dot com, we're very pleased with dot com. It's still a small part of our business but overall it’s a growing part of our business. And certainly, we think the way customer will shop in the future is where we’ll really tie in to how we start thinking out beyond the four walls of our stores.

This is Robert Niblock. Part of putting Mike in that really to more than half speed the market from a technology standpoint, but second is really to enhance the focus of the technology that's delivered and looking at it from an operations perspective because, as you know, certainly, with rollout technology of the store it really has to sink up well with what makes sense and what works for to the operators that are out there day-to-day on the floor of the store. I think Mike brings a very valuable perspective to that, and he's surrounded himself with the technology expertise he needs on his team to ensure that from a technology standpoint it works, but then his perspective that he adds is bringing to market technology that really will resonate well with the field organization when it hits the floor of the stores. So that's what we're trying to accomplish and we're very excited about some of the early things that he's already focused on we'll be rolling out over the next couple of years.

Your next question comes from the line of Matthew Fassler with Goldman Sachs. Matthew Fassler - Goldman Sachs Group Inc.: Two questions and they both relate to the cost side. When you talked about the SG&A outlook for the first quarter, you spoke about investments in customer experience. I'm not sure if you explicitly cited what were those as part of your broader strategic discussion or if there's things you're doing in Q1, that are specific to Q1?

Matt, as it relates to Deb's question, we talked about the increase in CapEx as it relates to some of our initiatives there’s also an expense side of that. That's roughly 10 basis points of deleverage in the first quarter. But that's also about 10 basis points for the year as well. Matthew Fassler - Goldman Sachs Group Inc.: My second question relates to the weekend teams that you're building up the change in management structure in essence. If you think about your broader full-time, part-time payroll mix, if you could give us a sense as to sort of where you began or where you were last year and where do you think that mix ends up moving and whether where you see yourselves here at the end of 2011 is likely to be end game in that process?

Matt, this is Larry Stone. We've always strive to be around 70-30, it was kind of the mix number of part time versus full time, and we think that the weekend team certainly that full-time mix will move down some probably mix out somewhere between 60% and 65% going forward over mix. The problem is that and Robert alluded to do in the first question, where I think we were not doing the job we need to do in the fourth quarter. We just didn't have enough staff in the stores on the weekends and certainly, we've got part timers you got to give weekends off and so forth, so felt like this was a much better way to approach it because there are a lot of people a lot are very qualified people, they are looking for weekend shifts Friday, Saturday and Sunday, so we've been able to attract some very talented people. We feel like this will really give us that fourth power we need inside the store with the customer facing during those three peak days. I Think this is a great trade-off and the management decision inside our stores, I've noted in my comments it was the equivalent of one full-time person per store, so to add 10,000 people I think is a much better move for the company. Matthew Fassler - Goldman Sachs Group Inc.: And are you finding lot to this hire people within the current staff just people looking to change their timing or are you finding new faces from outside the business.?

I think if you think about finding some of both and certainly if you think about a lot of people have had work weeks cut to four days a week, and things like then and people need additional second income, so we've been able to line up some real quality people to help us with our weekend teams.

Your final questions come from the line from Eric Bosshard with Cleveland Research. Eric Bosshard - Cleveland Research Company: The appliance category, I guess I'm interested strategically how you're thinking about this and also a little more data. I know that you're aggressive and effective with the Cash for Appliance stimulus in the first half of '10 and then second half of '10 a little bit less aggressive. So I'm wondering how you're thinking strategically about driving share and promoting in this category? And then secondly, how you're thinking about comparing against the lack of stimulus in the first half of '11?

Eric, this is Robert. I mean I think overall, we still look to gain share in appliance we still think there's great opportunity out there. We'll be focused on that throughout 2011 as well. Obviously, we know that there's a hurdle coming up against with stimulus programs in 2011. We've got some other promotional things that we think will help offset part of that. We may not offset 100% of it, but we also recognize quite frankly that last year's high in the first quarter, even though we had great weather in the month of April and we've garnered some great sales. We knew there were some other areas that we probably didn't execute as well as we thought we could have. So even though we got a hurdle with appliances, to go up against in the first quarter, actually first half of 2011, we also recognize that there's some opportunity out there with other categories that we can execute better in, and that's really what the team is focused on we're saying, "Okay, given the environment, given what we're going up against, how do we execute as well as we can with some great promotions that we have out there and some great new ideas in the appliance category but then really focus on, where we didn't get our share of the business last year and go harder after that." So that's kind of our game plan. But on longer term our goal we got great relationships with key vendors in the appliance area. We're quickly becoming one of the biggest competitors with the dynamics that have changed overall in the industry. We feel good about our relationship, and we expect to continue to grow and I think it is, particularly, as you think about the environment slowly starting to improve. Customers, as we go forward, are starting to ease more maybe into some home improvement related areas. I think that bodes well for being strong in that category as well, so it continues to be a key focus for us. Eric Bosshard - Cleveland Research Company: Was there a thinking or strategic thinking about sitting out the promotional activity in November versus in the past? It seems like you've kind of gone along or participated in that?

We still had an aggressive promotion around Black Friday but just not as aggressive as others in the marketplace. So compared on year-over-year basis and everything, we still have good performance those types of things. We just weren't as aggressive as others in the marketplace, and maybe we didn't respond as quickly as we should have to that, and maybe gave up a little bit of share. We've taken all that into account. But no we're purposely sitting out. We just try to balance it across our promotions across some of the other categories of merchandise that we had in the store, and we probably gave up some on appliances because of that. Eric Bosshard - Cleveland Research Company: Just one last follow-up on the market share you commented about putting a little more labor into the store related to perhaps aiding market share improvement or continued market share progress. I'm curious on the price optimization. If you think that is having any influence on the relative market share performance and if there's any difference thinking about how aggressive you want to be with price optimization?

On price optimization, Eric, I would say that all of our market, shops everything we do still shows that we are appropriately priced in the marketplace. I think what it does help us with is stuff like the better sell-through that you see. So we make sure we're priced right and that by doing a better sell-through on the products. Obviously, that helps from a margin standpoint because you don't have those heavy markdowns at the end of the seasonal period, no everything we've seen from price optimization leads us to believe that we're headed in the right direction, and we don't think it is negatively impacting our price image out there in the marketplace.

Thanks again for your continued interest in Lowe's. We look forward to speaking with you again as we report our first quarter results on May 16. Thanks, and have a great day.

This concludes today's conference. Thank you all for participating, and you may now disconnect.