Welcome to the Advance Auto Parts Fourth Quarter 2012 Conference Call. [Operator Instructions] And today's call is being recorded. Before we begin, Joshua Moore, Vice President, Finance and Investor Relations, will make a brief statement concerning forward-looking statements that will be made on this call.

Good morning, and thank you for joining us on today's call. I'd like to remind you that our comments today contain forward-looking statements. We intend to be covered by and we claim the protection under the Safe Harbor Provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Forward-looking statements address future events, developments or results and typically use words such as believe, anticipate, expect, intend, will, plan, forecast, outlook or estimate, and are subject to risks, uncertainties and assumptions that may cause the results to differ materially, including competitive pressures, demand for the company's products, the economy in general, consumer debt levels, dependence on suppliers, the weather, business interruptions and other factors disclosed in the company's 10-K for the fiscal year ended December 31, 2011, on file with the Securities and Exchange Commission. The company intends these forward-looking statements to speak only as of the time of this conference call and does not undertake to update or revise them as more information becomes available. The reconciliation of any non-GAAP financial measures mentioned on the call with the corresponding GAAP measures are described in our earnings release and our SEC filings, which can be found on our website at advanceautoparts.com. For planning purposes, our first quarter 2013 release is scheduled for May 23 before market open, and our quarterly conference call is scheduled for the morning of Thursday, May 23, 2013. To be notified of the date of future earnings reports, you can sign up through our Investor Relations section of our website. Finally, a replay of this call will be available on our website for 1 year. Now let me turn the call over to Darren Jackson, our President and Chief Executive Officer. Darren?

Thanks, Joshua. Good morning, everyone. Thank you for joining us and welcome to our fourth quarter conference call. The fourth quarter brought to a close a very challenging year, yet we reached several important strategic and operational milestones. Our achievements during 2012 are a direct result of the hard work and dedication of nearly 54,000 team members. I want to say thank you to our Advance team for their continued diligence and commitment. Our bottom line results in the fourth quarter were better than expected. That being said, we are never satisfied when comparable store sales and EPS decline. Our fourth quarter results reflected sequential improvement from last quarter in sales, gross margin rate, SG&A expense control and operating profits. As we had forecasted during the third quarter call, we anticipated that the market would be challenging, and demand would continue to be weak for the fourth quarter. Our focus was to build on the third quarter sales trajectory, while materially improving our operating results in the face of near-term decelerating trends of our industry. As a result of our efforts, our market share gains were greatest in the fourth quarter, while achieving a record high operating profitability. I'm encouraged that our comparable store sales sequentially gained 30 basis points in the quarter when adjusted for the holiday shift. Our improvement was driven by both commercial and our DIY business. Quarter-over-quarter improvement in market share was driven by commercial, with consistent comp-store sales growth in each period during our quarter when adjusted for the holiday shift in December for our Advance stores. Our Commercial Business had positive trends in both transactions and average ticket size. Our DIY comps sequentially improved from Q3 to Q4, driven by an increase in the average ticket size. The increase was driven by mix of…

Thanks, Darren, and good morning, and thanks to all of our team members. Even though 2012 was a challenging year, their efforts and milestones reached have made 2012 a pivotal year in our profitable growth journey. As I begin my prepared remarks, I'd like to go into a little more detail on these accomplishments and provide an update on our progress on the key priorities that support our superior availability strategy and new store growth. As I've mentioned on our previous calls, our focus with respect to superior availability is on providing our customers with the best-in-market availability and consistency of service, both in order accuracy and delivery speed. The areas of priority continue to be the expansion of our hub network, the continual upgrade of our parts inventory at our non-hub stores, the opening of our new DC and the implementation of our daily replenishment capability, the growth in new stores and the continued growth and rollout of our B2C and B2B e-commerce platforms, commercial diagnostic tool and our electronics part catalog. In our fourth quarter, we continued to expand our hub network through new store expansion and the upgrade of existing stores, which have the space and are strategically positioned to operate as a hub. As a result of this work, we added 11 additional hub stores, bringing our hub store count to 339 versus 294 at the end of 2011. We also upgraded the inventory at 211 non-hub stores during the quarter. Including our hub store conversions, we've upgraded the inventory to over 1/4 of our total store base. This was no small effort by our inventory and store teams, and this work positions us to provide the products our customers need when they need them. Our fourth quarter also marked our first full quarter where our…

Thanks, Kevin, and good morning, everyone. I'd like to start by thanking all of our talented and dedicated team members for their commitment to serving our customers as we navigated through a challenging fiscal 2012. I would also like to welcome our new BWP team members. I plan to cover the following topics with you this morning: One, provide some financial highlights from our fourth quarter of 2012; two, put our fourth quarter and year-to-date results into context with our expectations and key financial dimensions we use to measure our performance; and three, share with you our financial outlook for 2013. 2012 was a challenging year for our business in the markets in which we operate. Our fourth quarter performance and full year results were primarily driven by the ongoing softness in our colder-weather markets. In addition, our results were impacted by fluctuating gas prices, high unemployment and a tough economic environment with more uncertainty, which decreased consumer demand for auto parts. As Darren mentioned, our focus all year has been to influence the things that are in our direct control. And we continue to be focused on achieving our longer-term growth and profitability goals by maintaining our strategic focus, executing on the fundamentals and simplifying our operations. While we are disappointed we did not achieve our growth and profitability expectations, we are encouraged by our improved sales performance trends versus the market and generating positive operating income growth in our fourth quarter. This improvement translated into a fourth quarter sales increase of 0.1% to $1.3 billion, despite a comp store sales decrease of 1.9%. Adjusting for the impact of the calendar shift in Q4 where we lost a couple of selling days as Christmas fell on a Tuesday this year versus a Sunday last year, our comp store sales…

[Operator Instructions] Our first question today is from Gary Balter with Crédit Suisse. Gary Balter - Crédit Suisse AG, Research Division: One question and one follow-up. You talked about Remington and what it's doing for you. Could you -- I don't know if you could quantify in the 195 stores where you said you've already rolled it out, the type of impact you're seeing from that. And then past Remington, could you talk about the rollout of further distribution centers into this year and following years?

Gary, I'll frame it and Kevin will give some of the details. Maybe I'll start with the back half of that question. So as we look at the daily replenishment opportunity long term, right now as we've said before, we're going to start with Remington and understand the lift. And we're delighted with the first set of stores that we've seen, and Kevin will give you a few more details on that. We've committed to a second center in the Northeast, in part because of the expansion in the Northeast and also in part because of our initial optimism that we had been -- that we had seen in some of our tests in terms of daily replenishment as well. I think longer term, what we're trying to balance is that these are not cheap facilities. We have found a number of ways through the process now to get the costs down. So after we get done with Connecticut, there are a few other places in the country we'd look to go to next. But I -- what I found is that if you get too far ahead of yourself in terms of kind of the disclosing where those are, for competitive reasons, that's not good, and making sure that the theory that we see on paper turns out in reality. And right now in Remington, at least the initial stores that we're seeing the lift numbers from the stores that are receiving daily replenishment, we're pleased with. Kevin, what would you add to that?

Sure, Gary. So as I said in my remarks, there were 2 reasons why we opened Remington. One was it's the first DC we've opened in many, many years, first DC I've opened in the 5 years that I've been here. And just based on store growth and comp store gains over the years, it was needed just to keep up with the demand. Second is obviously, it's a different facility with a different role. In the lifts that we're seeing, we essentially built a pro forma that was based on 2 things: It's less costly for us to run that facility because of automation and then it lifts because of better in-stocks in our stores. And essentially, the lifts that we're receiving today are ahead of that pro forma. And we're still in the early phases of kind of the shakedown cruise of the new DC. As Darren said, we -- and that would be -- essentially became our ninth DC. We've secured a 10th DC in Connecticut, and work is underway to replicate that work up there. One of the things that's highly sensitive here is how far can we deliver the product based on the sales lift and the humble assumptions we began with suggested 150 miles. At this point, essentially the question that we have is based on the sales lift, can that get pushed to 200 miles. And we'll have a better sense of that over the next few quarters. Assuming that in fact, that becomes the case, most all of our stores are within 200 miles of the 10 DCs we would then have. And what we have is a new capability that can be deployed into those DCs. So I think the future of this is to play out over the next several quarters. But it has a lot more to do with just leveraging what we've already done more so than a significant change of the facilities that we previously owned. Gary Balter - Crédit Suisse AG, Research Division: So just following up on that. The -- ignoring, let's say, like the DCs that are on the outskirts like in Kansas. But in the other ones, could you reformat them to take a lot of what you have in Remington? Or do you have to build new facilities?

The existing plan today is inordinately weighted to leveraging the 8 legacy DCs that we have. Gary Balter - Crédit Suisse AG, Research Division: Okay, great. And just following up, we've written about the polar vortex and the impact of the weather on sales. And we're getting a big storm right in your market this weekend, which I'm happy about, but other people may not be. When do you think we'll see -- assuming that it was weather, and clearly, your results point to that given the difference between the weather impact of markets or not. When do we start seeing the benefits of the snow and the cold that we're getting this winter?

Yes, Gary, our best estimate, as Mike highlighted in his comments is, as we look at our business, Q1 is our longest quarter with 16 weeks. We would be looking in terms of the wear and tear is going to continue to occur through the first quarter. As we begin the second quarter and the balance of the year, that's where we see the uptick. As we said in our comments, we're cautiously optimistic. One of the pieces in the caution is that our Northeast business early on in the year last year was still pretty strong. It really felt the effects of the winter as we got into, say, that later in that March, April and beyond time period. So when I step back, we have such a large footprint in that Northeast and Great Lakes region. Great Lakes was equally a good business, and we're looking for both of those regions to see that bounce back as we head into Q2 and the balance of the year.

Our next question is from Michael Lasser with UBS.

You alluded to share gains that you experienced in the quarter, can you talk about those in a little bit more depth? And is there a way that you could tie the share gains to some of the actions that you may have taken earlier in the year?

Yes, Michael. When we refer to that, what we're doing is looking at the NPD data in aggregate. And what we can see is our fourth quarter was by far our best quarter in terms of commercial share gains. We continue to give up some DIY share in the quarter. Just to be clear, just to highlight one thing, over the last several years, we made a deliberate decision to slow down new store growth in favor of focusing on our commercial capabilities. When we did that, we've been running at a rate of about half of some of our competitors in terms of new stores. And principally, the way you grow DIY share these days is through new store growth. And so we expect that share gap, particularly as we go into 2013, to close. And what you should take away from that too, the new stores that we are adding, we have been over last 2 years focusing on how do we position those to better serve the commercial customers, while delivering a DIY experience that certainly we'd be proud of. The New York class that we have now, this is the best class that we've had in nearly a decade. So we're upbeat about -- we're staying on strategy in terms of commercial -- in terms of commercial growth, while being able to reposition the DIY business for share gains in the future again.

And then given the performance of those new stores, the most recent class, do you get, you mean just a modest lift to your comp as those fall into the comp base?

Oh, absolutely. Yes, absolutely. Our estimates over the last several years, and I've talked about this before, is that versus some of our known competitors, it's probably about a 300 basis point gap that we've been experiencing. Certainly, you can see it in the totals, but the way these store models work, you experience significant comp store benefits in year 2, 3 and 4. Usually, it's about 4 years before you ramp to a maturity level in the stores.

That's super helpful. One last question, maybe for Mike. On the 3% to 5% growth in SG&A per store, how does that going to break down? Or is there any way you could just provide a little more detail on the nature of those -- to quantify the nature of those investments that you're going to be making in the upcoming year?

Yes. There's a couple that are the big drivers of that. So one of the drivers that's in that 3% to 5% SG&A per store increase is we acquired BWP. That's over 1/2 of that increase. And that -- their SG&A isn't growing. We just put their SG&A now on top of our SG&A. So that's 1/2 of it. And then the other big driver -- 2 big drivers are our new stores. So we've accelerated our new stores. And we again look 170 to 180 and more normalized incentive compensation. So those are the 2 drivers. And then the offset to that is improved labor productivity, improved marketing effectiveness. And then obviously we're going to continue our cost work around pulling out costs furthest away from the customer.

Our next question is from Matthew Fassler with Goldman Sachs.

My first question is about the buyback. And to your point you had abstained from buying back stock last year. How do you think about value? You talked about being opportunistic. What criteria do you use? And in that vein, you talked about your buyback through 2012. Have you bought back any stock year-to-date?

Yes, so Matt, maybe I'll do your last one first. We don't comment on our buyback before we do it. So I won't comment on that. We did say that we did kind of pull back on our buyback program last year as we preserved capital to look at sales growth opportunities including buying BWP. And what I will tell you is our philosophy on buyback hasn't changed. So you ask, what do we do? We look at value. And the first use that we think about when we're deploying our capital is we prioritize growth, so investing in the business. And then we look at buyback as also another way to pay back the shareholder and create long-term value and we take a long-term disciplined approach. We do use a DCF model that we shared before. And the good news is, that can sometimes frustrate shorter-term shareholders that hold us for shorter periods of time, but longer term shareholders have benefited because we bought back 41% of the company at an average price of just under $42. So our philosophy hasn't changed. What did change a little bit last year is we were looking at those sales growth opportunities, and what we did say in our remarks, is we do plan to resume our historical practice of buying back shares in a disciplined manner as we've done in the past. And also as a reminder, in our annual outlook, we have not included any share repurchases.

Understood. And then second question if I could. So you've spoken about some high level enhancements that you expect to make over time to your fulfillment capabilities. You also spoke separately about your desire to increase your traction with some national accounts. And I guess my question is, if you think strategically about where you stand competitively in terms of your ability to provide optimal service to all sorts of commercial accounts, is there a class of business or a class of customer where you feel you've been underpenetrated from a market share perspective relative to peers? Or you think your ability to compete and maybe for first call is going to grow as a result of some of these logistics efforts?

Yes, Matt. So let me put all 3 of those together because being about Advance Auto Parts 5 years ago, our Commercial business was $1 billion. Today, it's $2.3 billion. By and large, the growth has all come organically. So it's not about us simply adding programs to DIY stores. That was done a decade ago. And as we have taken that journey from a DIY exclusively focused retailer 15 years ago, our first step is that, I'll call it, the small mom-and-pop garages were just easier for us to deal with. In many ways, they looked like our DIY customers that we were comfortable serving. And I would say today, over the last 5 years we have grown significantly whether it's our relationship with Monroe, our relationship with Sears, our relationship with Goodyear and our relationship with Brakes Plus. All of those customers in some ways are helping us understand better what we need to do to be effective with them long term. Our push in availability specifically and import parts to bolster availability to the customer, daily replenishment is all reflective of the reality that serving these larger customers starts with availability. But it also includes, as Mike highlighted, our need to get into the commercial credit business. Our experience on that with our partner just was not what our larger accounts expected was one. And then two, we talked about our B2B platform. Two years ago our penetration on that was close to 0. We surpassed 10% this year, on our way to 20%. And the majority of those, as you would expect, are the larger bay garages in terms of reflecting those capabilities. I feel like we're in great shape today in terms of our sales force and how we're focusing them in terms of our platinum, diamond customers and their growth expectations. I feel terrific about what the teams have done in-store. We talked about our shrink results this year. Shrink is helpful because we see that in the P&L, but what's really helpful is the in-stock levels at the local store level. So organizationally, as I said, this has been a journey of 5 years to get to a set capabilities that those larger bay customers are an opportunity for us principally versus the traditional WDs for sure. I will tell you one of the benefits of BWP, when we look at their business, is that nearly 2/3 of the business that they're doing are with customers that we weren't doing business with. And they tend to be larger bay customers. Neil Stockel, who is in the Stockel family, have been just fantastic. And we see them as real resource to help us understand how to penetrate and grow even deeper relationships with those larger bay customers.

Our next question is from Colin McGranahan with Bernstein. Colin McGranahan - Sanford C. Bernstein & Co., LLC., Research Division: First, just on the BWP, focusing on that for a second. Can you give us a little detail on the integration and what those costs will be in 2013? Just looking at the EPS guidance, it looks like it translates to maybe $18 million to $24 million of actual integration expenses, which seems a little high at 10% to 14% of the sales of BWP. So maybe you can just give us a little more specificity on what those integration costs are, and how that integration is going to go?

Yes. So, Colin, this is Mike. I will start that and Darren, you can add any comments. But first of all, we're not going to go into a lot of details on our integration costs from a competitive standpoint. But let me give you a little bit of a frame. We said that these are onetime costs whenever you buy a company. One of the things that was a little bit unique about the BWP business is they had the company-owned stores and then they had the independents. We don't have the independents. So part of the costs are kind of separating the DCs and moving the DCs to the GPI -- the DC and the GPIs. So there's going to be some costs associated with that. And then there's just integration costs. As you transition, as you make changes, as you move things around and convert things. So those are where the costs are. And I want to be clear, those are onetime costs, $0.15 to $0.20. Obviously, those are estimates right now, and our goal will always be to beat those numbers. But that's our best view right now. I think the more important part about that business is, and I think Darren said it, we're extremely excited about it as it gives us some access to some new capabilities, some very talented people, including the Stockel family and all our team members. And so far, we're off to a fabulous start in that business. And then we also said that if you net out and take away the integration costs of that business, the sales of $170 million to $180 million is actually accretive to our business. It's in the commercial space, so we're really excited about that.

Yes, I don't have much to add, Colin, except just imagine you have 3 DCs. Products co-mingle. There's going to be a fair amount of work on the front end just to realign all the products to support the company-owned stores, to support the stores that GPI will be taking as a part of this. And then there's repositioning in our own markets. There's going to be real estate related costs that drive a fair amount of that onetime costs. And then there's just the natural retention in people type of costs too. So our goal is to actually get those behind us, and always to try to achieve a lower level of integration costs than what it takes. But we thought it was just helpful to frame that for the outside world. Colin McGranahan - Sanford C. Bernstein & Co., LLC., Research Division: Great. That's very helpful. Just a second very quick follow-up on new store expansion. 2013 and even beyond, obviously you're starting to accelerate the expansion a little bit here. Can you geographically talk about where the emphasis and focus will be, contrasting existing markets, new markets? It sounds like New York City and then New England area might be a bit more of an emphasis? And then further west as well.

Sure. Kevin?

Yes, Colin, this is Kevin. So essentially, there's 2 elements. The easy question -- or easy answer to your question is, what's our plan in 2013? And we have markets that were materially underpenetrated. And as we had in our prepared remarks, we entered New York City. New York City is just on the commercial side, over $1 billion in volume and it's a market we just entered last year. We, through the BWP acquisition, making a big bet in the Northeast. But the majority of our stores that we opened in 2012 were in the Northeast, and that will remain true as we go through 2013. So it's essentially storing out markets that we're underpenetrated in. We're also making a material push into Chicago, and that's another underpenetrated market. As you move forward to 2014 and beyond, you look at a map of Advance and it's an East Coast-based company. And we've commented on that and the impact of the weather. And the entire West Coast of the United States is essentially what we would be moving to over the next several years.

Our final question today is from Dan Wewer with Raymond James. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Darren, you noted a number of initiatives that further grow your commercial market share. But on do-it-yourself I believe the only catalyst is accelerating the number of new stores. But beyond that, is there anything in the works to improve the do-it-yourself productivity? And also I may have missed it, did you provide the do-it-yourself commercial sales mix in your prepared comments?

Yes, Josh, will...what?

38.2% is our commercial mix for the year.

Yes. And we would see that grow into over 40% next year with BWP and our other commercial efforts. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Joshua, what was it for the quarter?

38.2%. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: That was for the year or the quarter?

Quarter.

Quarter. Okay. And then, Dan, on DIY, it was blended into the comments, but it's a great question. So within DIY, Kurt Schumacher, who has been in the industry 39 years, with us for 12 years, took over our store organization midyear, our field organization. I tell you, Kurt is just passionate about the simple fundamentals of the DIY business, including when you look how DIY trends work these days, Friday, Saturday, Sunday are the days for the business. He's put a lot of effort into simple things and the fundamentals, which include the weekend staffing is one. We've talked before about down to the team member, we can see that average basket each team member is moving in a store these days. We've put in a lot of effort in growing the average ticket. We've said for years, and others may disagree with us, the DIY business is a 0 to 1 grower in total. The focus we've all been challenged by ticket growth and their -- our transaction growth for years. What we realize as we benchmark, some of our average ticket in store were low. And so our efforts this year have a lot to do -- and as you travel our stores, as I know you do, is focusing on our add-on sales efforts. We talked about later in the year we're going to be rolling out our internal languages, find it fast, get it fast, our new EPC. So today, our EPC doesn't necessarily make it easy for someone without deep auto industry knowledge to be able to put together a complete solution for the customer. Others have that ability on the EPC to kind of put together a complete bundle. What we see as the opportunity as we roll out our EPC, what we're…

Yes. Hey, Dan, before I hit that question -- and I know you always like to get to precision with your numbers, so let me give you -- so the Q4 mix of commercial was 37.9% and the annual mix of commercial was 38.1%. And then the drivers -- and then in terms of the drivers, there's a few of them. First of all, we're going to be anniversarying -- so we've got more -- if you remember, I think we took out about 221 basis points of costs last year of leverage, so we're anniversarying that. Two, is our new stores, so we're adding new stores. And last year, our new store mix was more at the back half of the year. This one is going to be spread out through -- evenly throughout the year. And then we have -- the third one component is the annualization of those stores. So typically, we opened 67 stores up in the back half of the year. As you know, the heavier costs are at the beginning of that, so that will be the third component. And then the last component is the incentive compensation. So as we know -- it's not increased incentive. It's just normalizing incentive comp, just given our lower performance last year just resulted in lower incentive comp. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Are you still thinking same-store sales are slightly negative in 1Q before flipping positive?

Yes, we don't give out quarterly guidance around that, but you can read into Darren's comments. I think Darren gave a good frame of how we think about the quarter.

Thank you. I would now like to turn the conference over to Joshua Moore for closing comments.

Thank you, Wendy, and thanks for our audience for participating in our fourth quarter earnings conference call. If you have any additional questions, please call me at (952) 715-5076. Reporters, please contact Shelly Whitaker at (540) 561-8452. Thanks again and that concludes our call.

Thank you. This does conclude today's conference. Thank you very much for joining. You may disconnect at this time.