Welcome to the Advance Auto Parts Fourth Quarter 2014 Conference Call. [Operator Instructions] This conference is being recorded. If you have any objections, you may disconnect at this time. Before we begin, Zaheed Mawani, Vice President of 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 would 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, forecasts, outlook or estimate, and are subject to risks, uncertainties and assumptions that may cause our results to differ materially. Our comments today will also include certain non-GAAP measures, including certain financial measures reported on a comparable basis to include impacts of cost that were incurred in fiscal 2014, in connection with the integration of General Parts International and B.W.P. Distributors. Please refer to our earnings press release and accompanying financial statements issued today for important information and additional detail regarding these forward-looking statements and the reconciliation of the non-GAAP measures referenced in today's call. 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. For planning purposes, our first quarter 2015 earnings release is scheduled for May 21, 2015, before market open, and our quarterly conference call is scheduled for the morning of Thursday, May 21, 2015. To be notified of the dates of future earnings reports, you can sign up through the Investor Relations section of our website. Finally, a replay of this call will be available on our website for one year. Now let me turn the call over to Darren Jackson, our Chief Executive Officer. Darren?

Thank you, Zaheed. Good morning, everyone. Thank you for joining us on our Fourth Quarter Conference Call. I'd like to start off by thanking all of our team members for their hard work and commitment to better serve our customers and grow our business. Joining me on the call today is our President, George Sherman, who will update you on our business operations; and Mike Norona, our Chief Financial Officer, who will update you on our financial performance. I will begin my prepared remarks today updating you on our fourth quarter performance, followed by an outline of our organization objectives for 2015. Our fourth quarter objectives were the same as they've been all year. We continue to focus on methodically improving methodically improving our base business while successfully integrating General Parts. Overall, we were satisfied with our progress in the quarter, which capped off a very good year. Our total sales, excluding the 53rd week, grew 48.1% in the quarter compared to the third quarter of 2013, primarily as a result of the acquisition of General Parts, sales from new stores and our comparable store sales increase of 1.1% in the quarter. Our fourth quarter comparable cash earnings per share of $1.37 increased 46% versus our fourth quarter last year, driven again by the acquisition of General Parts as well as our good base business performance. Our overall sales trends for the quarter mirrored the prior 3 quarter trends. The commercial business led the way during the quarter, once again delivering strong comparable store sales gains. This business showed consistent and steady strength throughout the quarter, with notable increases in both traffic and ticket, led by the strong sales increase in ride control and particular strength in our brakes category. Geographically, there was consistent strength throughout our North American operations,…

Thanks, Darren. First, I, too, would like to thank all of our team members for their contributions to customer service in the quarter and doing all the right things that show our customers that we put them first. At the heart of executional excellence is customer service, and our team members drove our success this quarter through their commitment to the customer. With my prepared remarks this morning, I'll provide a view on our fourth quarter business performance to get a little perspectives on the year ahead. Looking at sales, despite higher ambitions we have to the business, we were satisfied with our performance in the fourth quarter as the team delivered a comp sales outcome of 1.1%. Our positive sales performance was once again led by solid performance in our commercial business and good execution by our field, merchant and supply chain teams as we navigated milder seasonal weather. Our solid comp sales acceleration in our commercial business was led by our Northeast market, followed by our Midsouth and Great Lakes markets and benefiting overall from both transaction and ticket growth in the quarter. Our B2B business continues to perform very well, with double-digit growth once again in the fourth quarter versus the previous year. We continue to be pleased with our national account growth and the partnerships we are both establishing and growing. We, once again, delivered good growth in the fourth quarter and solid double-digit growth with our national accounts for the full year. As Darren referenced, we continue to make good progress with the integration of our commercial service programs between Advance and CARQUEST by adding CARQUEST Technical Institute and TechNet customers for the Advance payer proposition and we're adding Motoshop customers for the CARQUEST tool belt. The total number of TechNet customers at the end…

Thanks, George, 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 in 2014 and helping our company deliver strong financial performance in our fourth quarter and for the full year 2014. I plan to cover the following topics with you this morning: one, provide some financial highlights from our fourth quarter of 2014; two, put our fourth quarter and full year results into context with our expectations and key financial priorities that we use to measure our performance; and three, share with you our financial outlook for 2015. As a reminder and unless otherwise specified, Advance will present its financials and supporting commentary on a consolidated enterprise basis and will also discuss results on a comparable basis, which excludes the impacts of onetime integration expenses related to the acquisition of both General Parts and B.W.P., along with any amounts related to the amortization of intangible assets resulting from the acquisition of General Parts. Fiscal 2014 also includes an additional 53rd week of business. The financial results have been reported on a comparable basis to exclude the 53rd week. Please refer to the reconciliation of the financial results reported on a GAAP basis to comparable results in the accompanying financial statements in our press release. Also, as mentioned on our previous earnings calls this year, we had a conformity reclassification of supply chain cost from SG&A to gross profit and would like to reiterate this reclass continues to apply to these fourth quarter results. For the fourth quarter, this reclassification was approximately 101 basis points. And for full fiscal 2014, this reclassification impact has been 89 basis points. To summarize, for fiscal 2014, we previously communicated our full year comparable cash EPS guidance of $7.50…

[Operator Instructions] The first question today is from Dan Wewer with Raymond James. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Mike, there appeared to be some confusion earlier this morning, if the results were including or excluding the extra week. So just to confirm, the $1.37 that was on your release excluded the benefit, the $0.17 benefit from the 13th week in the quarter?

Yes, Dan. The number we released on the top of our headline, we did it on a 52-week cash EPS basis because that's consistent with how we gave the outlook for the year. So if you remember, we gave the outlook for the year at $7.50 to $7.60, that was on a 52-week basis. And we came in at the high end of that range at $7.59. And yes, you're correct. We actually -- we delivered $1.37 for the quarter on a comparable EPS basis in the quarter. And then if you add the $0.17 for that, the number is $1.54, including the 50 -- including the 53rd week. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Okay. Darren, you made a comment that the base business was good, not great. How should we reconcile that with the company's goals of improving 250 basis points of operating margin rate for the base business that you had outlined at the investor meeting back in Indiana a few years ago?

Yes, Dan. Here's what I would say in terms of that comment. When I look at our sales this year in terms of our comparable store sales performance, we absolutely were spot on where we said we would be. I think where we were a little light this year was in our gross margin rate, honestly, and part of that is just going through the balancing act, as I said in my comments, of the base business driving that, making the price changes as we go through the integration efforts as a business and we came up a little short on our gross margin rate. We exceeded expectation in terms of our SG&A management. So by the time you get to the bottom line, it was a good year. And I would say, it's typical for us to have higher expectations every year. You would expect us internally to have higher expectations than some of the external ones. That's just how we've gone to business every year. And so what was reflected internally is that we didn't achieve our high internal expectations, but that does not take us off pace to achieve our longer-term objective of 12%. George, would you add anything to that?

All I'd add Darren is since that comment, the baseline has been reset with the acquisition of GPI. Daniel R. Wewer - Raymond James & Associates, Inc., Research Division: Okay. Then just the last question I have with regards to this year's work on the vendor and product consolidation. If you're able to achieve that without any disruptions, can you give us some type of a payback that we might see in the way of inventory per store? Does that decline or increase in 2015? And then also in terms of margin benefit, how would that make up that $40 million to $55 million of synergies that you're looking for this year?

Yes, I would frame it this way, and then I'll have the team jump in. See 2015, Dan, you should have taken away from our comments, I mean, that we were purposeful, intense, complex, Herculean, and those could be a little bit -- they're not exaggerated in terms of the work effort. In 2015, we'll actually have somewhat of a bubble as we put in new vendors as we're taking out old vendors. But that does not take away from the longer-term benefit over the next couple of years as we get into 2016 in terms of those inventory levels coming down. But we're going to have this challenge this year as we put in new vendors, Monroe, take out the old the old vendor as we work down some of that inventory. And of course, some of it's going back to our vendor partners. But there will be timing challenges this year in terms of that transition. But over the long term, we see one of the bigger value creators in terms of cash flow is rationalizing down the overall amount of inventory per store. And that will be principally driven, again, also, by our daily replenishment efforts longer term, and it will be driven also by -- when we get the teams all consolidated in Raleigh in terms of our merchant teams, the more effective and efficient running of that business as well. Charles, what would you add to that?

Yes. I think, Dan, we've got a very formalized program on how we're tracking through the inventories that move through the year. From what we see today, we are on track around our expectations of what that -- the level that Darren's talked about and the speed at which we're going to move through that. In certain markets, we'll see improvement as we expand our 5x capability across multiple DCs, building on the 5x capability that we built this year. So I think we have the right plan and we have the right visibility to make sure that when managing our way through to improve inventory productivity into 2016 and 2017, being driven by both consolidation and the positive impact that we're going to see from the expansion of our daily delivery through the Advance network.

The next question is from Scot Ciccarelli with RBC Capital Markets.

So you talked about both gross margin and SG&A improvements that are expected for 2015. But if you look at your 2014 adjusted earnings and, call it, $50 million or so in cost synergies you get to roughly $8 in earnings for '15. So the implication is basically there's very, very little margin expansion for the balance of the business. So I guess, the question, guys, is, is there something else acting as a drag on the profit and margin guide for '15? Or is this simply a function of gross margins not coming in where you would have expected them and expecting that trend to continue?

Yes. So Scot, let me start and then I'm going to turn it over to George. First of all, we're pleased with our outlook because we're delivering synergies and as we said, over a 3-year period, we're going to deliver $160 million and outlook next year is $45 million to $55 million. So we're right on pace for that. And as you say, that is going to drive operating income growth and EPS growth. The base business is also growing. So let me just help you a little bit with math. If you look at the outlook range that we gave, $7.35 to $7.55 and if you back out the midpoint of the range, let's say, $50 million in synergies. If you back that out, both -- and you look at the range -- sorry, $8.35 to $8.55, and you back out the $50 million in synergies, we see the base business growing at roughly 5% to 7% if you use that same range. Now where are we seeing that? Well, continuing margin improvements through our merchandising, our global sourcing, SG&A improvements through our labor productivity and taking out costs in our support centers and having a more cost-effective model. The other thing embedded in our numbers is we're accelerating the growth of WORLDPAC. That costs us SG&A dollars. We think that's good for the long-term growth of the business. We're accelerating our supply chain initiatives like daily replenishment. So when you put those things in, those are all embedded in those numbers, so we're really pleased with the growth that we're driving and we're positioning the business for growth. George, I don't know if you'd add anything to that.

Yes, I think those are the key points, Mike. I think the base business will grow next year independent of the synergies, a sizable investment and supply chain, a sizable investment at WORLDPAC branches, you might think of that in terms of $0.20. So there is a good investment into those 2 areas, the daily delivery and then adding 12 more WORLDPAC branches.

Yes. I actually think that's where the confusion is Scot, is that we don't make it a habit to break out in an EPS type of way where we're investing next year. In the Advance DC network, we will double, nearly double the amount of stores being serviced by daily replenishment. It's going to cost us up to $0.15, and in WORLDPAC, we're going to double -- I think they're up 50%, they'll go from 8 locations to 12, right, in terms of new stores. It's going to cost us about $0.05. And so that's embedded in the base business. We think those are absolutely the right things to do in terms of growing our availability and accelerating our import business, and that's part of what the confusion may be. But it's absolutely the right investment in terms of what we need to do for the base business. It will help our integration efforts, too, because as we grow WORLDPAC, it allows us to support more Advance and CARQUEST locations. As we're doing daily replenishment, it also helps those markets that we are targeting conversion for.

So $0.05 on WORLDPAC going at far more aggressively 15 on supply chain, the 5x deliveries worth of inventory benefit's going to really come from what Dan talked about earlier so we need to do that, we need to accelerate that.

Got you. That's all very helpful, guys. And then, can you give us a better idea just in terms of how many stores at this point have the daily inventory replenishment or kind of where we're going, I guess, during the course of '15? And then, what kind of benefit could that end up generating? I'm assuming those stores are more productive than those that are getting inventory once or twice a week.

Yes, generally, all of the CARQUEST stores have daily replenishment already. 650 Advance Auto Parts stores are on daily replenishment, and you can think in terms of our doubling the Advance count during the course of the year.

The next question is from Greg Melich with Evercore ISI.

My first question was to dig a little deeper on the synergies, the $45 million to $55 million. Why is this year's net number less than last year's? And how much do you expect that to play out through the year, either quarter or by half?

Let me start off and say that it's going to be increasingly difficult to make a distinction between run-the-business benefits and synergy benefits related to the acquisition. We are now knee-deep in the integration work, so we've done, I think, a really good job for the first 12 months of trying to very separately manage, run the business work streams and integration work streams. It's fair to say that the integration is in the field now. So it is now something that the rubber hits the road obviously with our stores and our customers, that's where the integration is now. So it will get tougher to pin down what is an integration synergy versus what is just a good run-the-business discipline.

Yes. And Greg, I would add that we had a 3-year plan and we shared today it would probably be fairly equal across those 3 years with -- and we talked about the buckets and we thought more of the purchasing ones would come at the beginning and the fact of the matter is, we over-delivered a little bit more in year 1 in terms of purchasing and some of internal sourcing, and we didn't change our second year numbers. So we actually think it's a positive that we over-delivered that first year and didn't change what we were kind of forecasting. And again, these are estimates that we're doing and obviously, we always try to beat the estimates. But we're pleased with the progress we're making and we're on track to deliver that $160 million in net synergies.

And maybe a different question but somehow linked. I can't remember on whose prepared comments it was, you discussed how the comps are harder on the first half than the second half. If we look at last year, once we take out everything, what do we think the real organic sales growth number of the business was? If you had a 2% comp and you have some footage growth and then you had whatever the core business was doing, let's say it was organic, whatever number, 4% or 5%. How would you look at this year when you did your guidance? Do you think this year ultimately, organically would be the same, a little better, a little worse given the comparisons?

There's maybe 3 questions in there, Greg. Let me see if I can -- maybe I can try to parse through question #1. In part one, we said it would be a little tougher. All we're recognizing is that on the front end of this year, we had a weather benefit last year. We saw nearly a 500 basis points swing from November to December in our DIY business, and it was cold weather. We just sold fewer batteries. Some of that will linger into the front end of this year. We feel good about our sales trend right now, so I don't want you to overreact to that. So that was what we will face. We're facing a little bit of a weather benefit, it evens out. Two, organically, maybe a way to think about it is that the 2% comp we reported this year was just an Advance typical comp. Organically, if we had the CARQUEST numbers in, last year, it would've gone up a little bit because the commercial business was stronger. We're early into this year and you could say, "Gee, the comp guidance feels light." And that'll be reasonable comment. What we're recognizing is that we should expect the comp, just by virtue of adding in the CARQUEST commercial this year, gets better for sure. You have to offset that against probably 2 things that we're seeing is that when you go to do the lift and replace and you do the rebox, relabel systems work, there tends to just be the reality of the teams stopped focusing for a period of time on the sales process. They got to get the work done. And the other thing that we've gone through is that we reorganized our field organization and the teams are working through that process. There just tends to the reality of little bit of disruption and the teams have to get back in rhythm of their business. So we were trying to manage both the expectations in terms of working through the integration efforts, rebalancing that back with what the base business opportunity is this year and organically, by virtue of adding CARQUEST into the mix and the WORLDPAC locations into the mix, it's better, offset by the complexity of the work we're seeing. Anything else you'd add, George?

Yes. I would add that we're off to a very good start. So if you look at the integration of our field organization, first of all, culturally the teams have got along very, very well. The 2 organizations have overlaid quite well, and I think the team's demonstrated capacity to stay focused on sales while working through all of the heavy lifting of the integration.

The next question is from Seth Basham with Wedbush Securities.

First, a clarification on some of your cost synergies guidance. In the release today, you talked about net run rate cost synergies related to the acquisition to be under $60 million, previously you had been talking about total run rate. Can you just clarify the difference?

Yes. So Seth, let me give you a couple of examples. In some cases, gross and net are exactly the same. So when we go in and negotiate a contract, for instance, a fleet services or one of our contracts and we get a savings on that because of our new size and scale, those numbers are exactly the same. So if we get a $1 million in savings, the net and gross are the same. Purchasing ones are a little bit more complex. So our merchandising team now will go and negotiate a better rate. But when that flows through to the end consumer, obviously sometimes we give our commercial customers or our best customers get better pricing, if there's competitive pressures in the market. So we look to estimate what is the net amount of that benefit that we negotiated. So what we're trying to do is give you both sides of the entry, but that's how we think about gross and net.

Yes. Mike, let me add. Part -- Seth, part of that, too, when we say there's price harmonization, in order to get all the product on the same product platforms, same SKU, same brand, coming into the acquisition, we knew that in parts of the CARQUEST acquisition, the price was high. You can see that through your own customer survey data. So we're going through a process, too, where we're harmonizing the prices. So when we have to take the price down, you don't get the immediate benefit the next day. So what happens is you end up pushing out in that 3-year window the velocity of the unit sales. And in the immediate term, to Mike's point, we have more price harmonization this year than last year. We'll see some of that headwind this year. The benefit tends to show up in year 3 and year 4 and even somewhat later this year as you get more unit sales on that product. Does that make sense?

Yes, that's really helpful. Just in terms on the buckets of where your cost synergies are coming from, product synergies being a big one, can you maybe elaborate on where you think you are relative to your initial plan on some of the buckets? Are you ahead or behind and how do you look at it going forward?

Yes. Seth, this is Charles. So the merchant teams have worked through most of the vendor negotiations around the new programs. And now we're moving into the phase of actually changing overall the products to end up with that unified program both from a private label perspective and a national brand perspective. And we're on track. We had a forecast and we're delivering against that forecast. As George talked about though, as we move into the year 3 and year 4, what becomes synergy and run the business, the teams continue to do the vendor negotiations, we continue to drive our private label development. We've got good capability there, and we're going to be investing in the CARQUEST brand, and we'll continue to see those benefits come through as we grow our scale. And so I'm very comfortable that the teams are delivering against the overall expectations that we expect.

Yes, Seth, and I'll remind you, we kind of talked about the synergies falling in 3 buckets: Purchasing, scale and leverage, and supply chain. And Charles just talked about some of the merchandising ones. And then I would also add in merchandising, it's in the internal sourcing, that shows up in our margin and then some of SG&A buckets. Obviously, we're redoing a lot of our contracts. We've got some supply optimization work in there. So there's a number of things within our SG&A opportunities now, particularly in the G&A lines, as we now put these business together, as we look at doing our office consolidation, that has some benefits. A lot of our discretionary expenses. So those are some of the bigger buckets.

Got it. So they all appear to be on track with initial expectations, but there's not a lot of variability between where they're running relative to your expectation?

Yes, I think we're very pleased, they're all on track. And in particular, we've over-delivered on our purchasing synergies.

Okay. And my last question, a follow-up on, really, a topic. Just at product changeovers. Can you give us an update on how far you are through the rollout of those and when you expect that process to be complete?

Yes, we think that the -- that's what we're calling the lift and replace. So the key brand that we're adding into the portfolio, we're about 20% of the way through. We'll complete that by the early part of 2016. The other part of the work is where we relabel. So we have to get to a common part type. And we'll be completed with that work by the end of Q2. So we're on track in terms of the time lines that we set for ourselves, in terms of the conversion both by DC and then the conversions that we're doing we're with dropping in new front room products into the CARQUEST stores, so that we can get sales benefit in DIY. And that's good opportunity for us, and we've started those plans around conversions in the fourth quarter, and we'll run that all the way through the end of 2015 and be complete with that process by the end of 2015.

The next question is from Michael Lasser with UBS.

I know you're -- the synergies are becoming blended with the base business. But is there a relationship between the complexity of the phase of the integration? The potential amount of savings that can be realized from that phase? Basically what my questions is getting at is it sounds like you've baked into your outlook for this year that you are getting into more of the heavy lifting of the integration. So maybe you've baked in some more conservatism. So could there be some upside if it goes pretty well?

Yes. Michael, here's the way I would explain it. The easiest synergies that we can get are the ones that we can execute through the central office. Negotiate it and work for vendors, even some of the office consolidation work, those are pretty straightforward. Negotiating a truck lease contract is a straightforward synergy. You are right that the harder ones are the ones that are going to be in our field. So for example, when we do consolidations and conversions and the like, part of it is the customer's going to decide. And we have many more team members that are going to decide what the benefit's going to be in terms of retention rate of sales. Overall, the velocity of sales after we convert and consolidate a store. And I'll use the example of pricing, too, and price harmonization. Mike highlighted it. So when harmonize the prices across the entire CARQUEST Advance portfolio, we are going to have a little bit of a window in there in terms of we've taken the price change and the unit sales. The customer has to believe that's the new price, and we have to sell against this new price and the units follow it. So there tends to be a little more volatility as we're working through that change. Same with product. So as we replace some of the vendors that were core CARQUEST vendors over time and they're being replaced by another vendor, it's going to take time for the customers to say, I'm willing to take it. Now we've seen in some markets, we started in Canada, with a key vendors of ours. I mean, the uptake was immediate. We've had other places where the uptake has been okay. And so the synergies number that's out there in terms of the volatility, yes, we're going to have more volatility this year than last year. But overall, what you should take away is that we're on pace and we have every confidence that, that $160 million number, net of some of those volatility, is still fine.

That's very helpful. And I guess, this is kind of a follow-up to that. As of now, you have the largest scale in the industry and when all is said and done with the integration, you're going to have amongst the most competitive capabilities. So how long do you think it's going to take to close the comp performance gap with some of the peers in the industry?

No, Michael, I think if you look at last year to this year, there's 350 basis points of growth. So we went from a streak of some negative quarters to 5 in a row positive quarters. It's progress. It gives us a foundation to build upon for this year. We'd expect to see continued accelerations, certainly off of what we did in 2014 going into 2015, and that's reflected in the outlook. So I think competitively -- and again, I think Mike mentioned it in his comments, beginning in period 2, our comps are reflective of our entire organization, which is a largely commercial organization now. That's been our best business, that's been our best trend. So on balance, if you look at 2014 to 2015, we restored comp sales growth but we accelerated within the commercial space in particular. So I feel -- we're very optimistic in terms of our ability to drive comps going forward especially in the Commercial Business.

And George, what I would add is we don't see any gap in the industry and our commercial comps. We would -- we would say our commercial comps are every bit as good and in some areas, better than the industry. The challenge, just to be blunt, has been our DIY business. And I said in my comments, having that unevenness is unacceptable. We have made investments this year in terms of our Speed Perks program and what we're doing at the store level to keep growing that business. We've gotten better the last 2 years. We've got to turn the corner on more consistency in our DIY business. And that will close that gap besides the mix benefits that George has highlighted.

And we're doing it while managing an integration and we're doing it on 2 separate sets of systems, and that's a reality that we're going to live with for several years as we work the integration. So not only do I believe that we're able to close that gap and that we're delivering that from a commercial standpoint right now, but I think we're doing it with a level of resiliency among our team that's going to strengthen us going forward.

Okay. That's extremely helpful. If I could just have one last one on the cash flow outlook. Mike, maybe you could provide a little bit more detail on what's pushing up the CapEx this year and where do you expect the AP, the inventory ratio to end the year at?

Yes, I'll do the second win first. So our AP ratio, if you remember, when we combined our businesses together, we were a little over 80%, GPI was in the 50s. When you combined them together it was probably closer to 70% when we started this journey. We finished at the end of this year at 78.6%. We're very pleased with the progress. And we expect that to continue to climb next year. We didn't give an exact number but we expect that to continue to climb. And it's going to climb on 2 fronts: One is our merchant teams are doing a great job on continuing to improve our terms, and we're going to do a better job on managing our inventory. So both of those things impact our AP ratio. In terms of the free cash flow cash expenditures, the 3 biggest buckets are ones you've heard us say before. We're going to continue to open more stores, and that's 100 to 120 new branches next year, inclusive of WORLDPAC. We also have supply chain initiatives as we accelerate. We're very pleased, we're over 53% -- or 53% of our stores are on daily replenishment. We're going to continue to accelerate that, and that's where we'll be by the end of the year. And then our IT systems. There's considerable work in terms of systems work on integrating our -- whether it's POS systems, backend systems, but those are the 3 largest buckets. And there was a little bit of timing this year. Some of the capital -- we came in a little bit light in the capital on 2014. Part of that was just timing as some of it moves in the 2015.

And you can think of that IT work as supporting the first two. The consolidations, conversions, relocations, new store openings as well as the supply chain work in particular. So as we talk about building connectivity between CARQUEST and Advance Auto Parts DC, a fair portion of that is IT-related work so it goes right back to supporting the supply chain strategy.

The next question is from Aram Rubinson with Wolfe Research.

So it sounds like we've diagnosed the issue as DIY and I guess, I'm just hoping we can dive into a little bit more in terms of the treatment of it. I know, George, you mentioned there was kind of proof points of progress, maybe somebody else said something about labor scheduling. Just wondering if we can kind of dig in to that DIY and see if and when it can turn this year. I know the lifting is a little heavy going in, but what are we doing to get that business right? I understand you're saying it's a source of disappointment but what's the fix?

Yes, thanks. I heard a couple of things that I think will have an effect in our DIY business. So I'll start off with our Speed Perks loyalty program. It's something that we feel our field team needed. It was a gap that we had and we now feel like we have the best in the industry. So it is now rolled out in the majority of our stores. We're seeing some very nice growth, and it is clearly going to help us in terms of a bounce back effect of customers coming back to our stores as well as our ability to one-to-one marketing our customers. Training was clearly a focus for us as well. That began last year, it continues into this year. We have to convert at the counter and we have to convert with our car guy, our primary heavy-duty DIY customer. And then we have some natural benefits coming out of the CCR work. If you think about the consolidations, conversions, relocations, there is a DIY opportunity within some of these CARQUEST stores and businesses that we're pulling forward.

Aram, the other thing is, I think, we have been off television now, Charles, for a couple of years. You probably saw us right before the Super Bowl and then two, we have significantly upped even our television spend in the [indiscernible] And we have been light in both of those channels at reaching customers in a couple of years.

Okay. And then the follow-up is just wondering about the earnings cadence, is there anything kind of abnormal that they would kind of make any 1 or 2 quarters grow faster or slower than the house? And then I think you referenced 4 times how pleased you are to the start of 2015. Is that because of fuel? Is that because of something else? And how pleased is pleased?

I'll let George take this.

I don't think it's fuel. I mean, I think if you think about our industry, the fuel benefit's not because of an increase in discretionary income, it's because of an increase in miles driven on the road. So I think we're a little early in the game in terms of seeing that mileage effect on vehicles.

And we're also pleased with our commercial growth and the capabilities. And so I think there's some optimism. The consumer sentiment, obviously, is positive with fuel prices. And then in terms of the cadence of the year, no, there's not a lot, I think Darren hit that earlier. I think we're going to build throughout the year. There's a little bit of things going with some of the field work that we've done. George said that we're off to a good start with that team. We're really proud of the work that, that team has done, and we couldn't be more pleased with how the teams are coming together from a cultural standpoint. But we expect to it to build throughout the year. It's going to be driven by commercial. And as George said earlier, we look to improve the choppiness in our DIY business.

Our final question today comes from Matthew Fassler with Goldman Sachs.

Two this morning. The first if you try to x out, obviously, the noise with the extra week and such, it looks like the pace of expense growth moderated in the fourth quarter from the prior quarters. I don't think synergies were a big part of that and I suspect that some of the store consolidations you have were a part of it. But since we don't have kind of clean footage numbers, anything you could talk to was about in terms of drivers of the more moderate expense growth relative to sales?

Yes. Thanks, Matt. Over the -- I think we've built some nice muscles in 2012 and 2013 in terms of our cost. And we've got to do a lot more work on our cost. But we were really proud of the teams. I think the discretionary, as Darren said, business slowed a little bit. We didn't get -- especially after Thanksgiving, and the teams did a nice job pulling back on the larger discretionary expenses. We had less travel, we had less -- just a lot of the discretionary bucket. The other thing that also impacts that number, and we'll be anniversary-ing it obviously next year and we mentioned, is the incentive compensation. From a field perspective, we paid out nice bonuses this year, and we're always proud of that. And that's our ultimate goal. Obviously, some of us at our corporate level have annual bonuses. We always set higher expectations for us as a team, and we had a little bit of incentive cost turn back that impacted the numbering and positively impacted our SG&A. And we would expect next year, the incentive comps to more normalize. That will be a little bit of a headwind in Q4 of next year. But it was a -- it did help in SG&A in our fourth quarter.

That's terrific color. My follow-up question relates to store consolidations. You gave us guidance to your net openings for Advance and for WORLDPAC. Can you tell us whether there are any additional closings that we need to contemplate within the CARQUEST, the GPI organization more broadly for 2015? And then also to what degree is some of the benefit to comps from recapturing some of those sales factored into the outlook?

Yes, Matt. Here's a way to think about it, is that are we going to do more consolidations next year? Yes. But during the first quarter of the year, we've actually slowed those efforts to allow the teams to better work together in the field as we talked about our field organization. We thought that's really important for our team members and our customers in terms of maintaining that consistency and building those rhythms that we talked about. George, he can probably talk about -- we probably won't get started until Q2, Q3 in the overall consolidation process and conversion process again for next year. And I think the run rate that we've talked about when we get into the back half of the year is roughly 115 stores a quarter, Matt. And so I would say as we get to further conference calls to give you more color, but we've made a decision that the most important thing in this first quarter of the year is to come out of this first quarter with a focus and consistency of how our teams are running their businesses after the reorganization and how they're focused on customer retention and growth and that consolidation effort will pick up more -- with more intensity as we get to the second quarter and back half of the year.

Yes. Matt, maybe a little bit more color. I think you'll see a change in how we go about consolidations beginning this year. The first 100 stores that we did just happened to be low-volume CARQUEST stores. They were opportunistic, they were a learning opportunity for us. They weren't the best businesses that we're going to consolidate. Those are actually ahead of us still. Going into 2015, to Darren's point, we'll ramp up during the course of the year, and we'll establish a pretty good cadence of consolidation. It will be by market. So we'll go in and we'll, for instance, do the Dallas market, the Houston market and complete them one major market at a time more in more of a wave approach as opposed to a fairly random one in 2014 that was really based upon the lower volume nature of the stores.

Thank you. I will now turn the call back to Zaheed Mawani for any final comments.

Thank you, Wendy, and thanks to our audience for participating in our fourth quarter conference call. If you have additional questions, please call me at (952) 715-5097. Reporters, please contact Shelly Whitaker at (540) 561-8452. That concludes our call.

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