Good morning, and welcome to the AutoZone Conference Call. [Operator Instructions] Please be advised today's call is being recorded. If you have any objections, please disconnect at this time. This conference call will discuss AutoZone's fourth quarter financial results. Bill Rhodes, the company's Chairman, President and CEO, will be making a short presentation on the highlights of the quarter. The conference call will end promptly at 10 a.m. Central Time, 11 a.m. Eastern Time. Before Mr. Rhodes begins, the company has requested that you listen to the following statement regarding forward-looking statements.

Certain statements contained in this press release are forward-looking statements. Forward-looking statements typically use words such as believe, anticipate, should, intend, plan, will, expect, estimate, project, positioned, strategy and similar expressions. These are based on assumptions and assessments made by our management in light of experience, perception of historical trends, current conditions, expected future developments and other factors that we believe to be appropriate. These forward-looking statements are subject to a number of risks and uncertainties, including without limitation: credit market conditions, the impact of recessionary conditions, competition, product demand, the ability to hire and retain qualified employees, consumer debt levels, inflation, weather, raw material cost of our suppliers, energy prices, war and the prospect of war, including terrorist activity, availability of consumer transportation, construction delays, access to available and feasible financing and changes in laws or regulations. Certain of these risks are discussed in more detail in the Risk Factors section contained in Item 1A under Part 1 of our annual report on Form 10-K for the year ended August 28, 2010, and these risk factors should be read carefully.

Mr. Rhodes, you may now begin.

Good morning, and thank you for joining us today for AutoZone's Fiscal 2011 Fourth Quarter Conference Call. With me today are Bill Giles, Executive Vice President and Chief Financial Officer, Store Development and IT; and Brian Campbell, Vice President, Treasurer, Investor Relations and Tax. Regarding the fourth quarter, I hope you've had an opportunity to read our press release and learn about the quarter's results. If not, the press release, along with slides complementing our comments today, is available on our website, www.autozoneinc.com. Please click on Quarterly Earnings Conference Calls to see them. We are very pleased to announce another very strong quarter and fiscal year performance, both financially and operationally. Our EPS for the fourth quarter increased 26.9%, another strong financial quarter for us as our domestic same-store sales increased 4.5%. This marks the 11th consecutive quarter of EPS growth in excess of 20% and the 20th consecutive quarter of double-digit EPS growth. Although you've heard me say this many times before, it is important to again recognize and thank our AutoZoners who are operating as 1TEAM, delivering a consistent and superior shopping experience for all of our customers every day. The results that we have delivered this quarter and for the full year reflect the consistent execution and constant focus on improvement by our team as well as the ongoing investments we made in our business. As an organization, we routinely measure all activity to ensure that our investments are generating an adequate return. The consistency in our execution produces a superior shopping experience for our customers. The critical components of that experience are having the right AutoZoners delivering trustworthy advice and giving those AutoZoners the parts and products their customers need or desire. I'm pleased with the progress our company has made over the past several years,…

Thanks, Bill, and good morning, everyone. To start this morning, let me take a few moments to talk more specifically about our Retail, Commercial and Mexico results. For the quarter, Total Auto Parts sales increased 8% on top of last year's fourth quarter's growth of 9.6%. This segmentation includes our domestic Retail and Commercial businesses and our Mexico stores. This quarter, we completed category line reviews in 23 of our 40 major merchandise categories. Improving our parts coverage remains a key priority. Regarding macro trends, during the fourth quarter, unleaded gas prices started out at $3.97 a gallon and declined steadily, finishing the quarter at $3.63 a gallon. Last year, gas prices declined similarly during the fourth quarter, albeit from a substantially lower beginning point starting at $2.91 and ending at $2.68 a gallon. The difference, however, of a barrel of oil is not as material from last year to this year. On the last day of the quarter last year, a barrel of oil was $75. The last day of this year's quarter was $85 a barrel, which may imply prices at the pump could or hopefully should decline around $3 a gallon to be in line with last year. But the good news in the story is oil is down from $97 a barrel at the end of our third fiscal quarter in early May. While lower gas prices certainly should benefit our customers' ability to spend going forward, we're still cautious and the uptick in purchasing behavior did not materialize during the last couple of weeks of the quarter as gas did decline slightly. At the same time, with high gas prices, we have an opportunity for us to communicate with our customers on steps they can take to improve their gas mileage. Miles driven remains less…

Thank you, Bill. Before we conclude, I want to take the opportunity to reflect on fiscal 2011. Our organization built on the successes of the last few years and delivered even better results this past year. We are very pleased with these accomplishments, and I'd like to review a few of those accomplishments in recognition of the dedication, passion and commitment of our AutoZoners. We built on the last 2 years strong same-store sales results by growing 6.3% versus last year's 5.4% and fiscal 2009's 4.4%, our best 3-year comp performance since 2000 to 2002. We continue to build our Commercial business, growing sales by 22.3% and our program count by 235 or 10% over the ending count in 2010. And as previously mentioned, we surpassed $1 billion in Commercial sales for the year. We opened a total of 188 stores, including 41 stores in Mexico. We grew EBIT 13% and EPS by 30% on top of 28% last year. This year's EBIT margin of 18.5% represents an all-time high, exceeding last year's 17.9%. Our return on invested capital reached, as Bill said, a record 31.3% at the end of the year. We also generated approximately $1.3 billion in operating cash flow. We repurchased stock, representing over 10% of the current market capitalization for the third year in a row. And lastly, none of this could have been possible without our AutoZoners' continued dedication to providing the industry's best customer service. Their dedication defines who we are, and they are directly responsible for these record-breaking results. Our major objectives for 2012 will sound very familiar. They're great people providing great service, profitably growing our Commercial business, leveraging the Internet and continuing to refine our hub strategy. I should stress our industry has had favorable macro factors these past few years, and this positively contributed to our success. But what helped our performance specifically was our organization being well positioned and prepared to capitalize on these favorable trends. How long will these factors positively influence our performance? We don't know the answer but we do know that we can manage our business effectively and profitably regardless of the economic cycle as evidenced by our string of 20 consecutive double-digit EPS growth quarters. Unfortunately, our past successes are just that: in the past. We cannot rest on our laurels, and you have our commitment that we will not. Finally, before we move to Q&A, I want to again thank and congratulate our entire organization for their dedication to our customers, fellow AutoZoners, stockholders and the communities we serve. Our approach remains consistent. We are focused on succeeding in the first quarter of 2012, and we are optimistic and excited about our new fiscal year. Now we'd like to open up the call for questions.

[Operator Instructions] Our first question today is from Gary Balter with Crédit Suisse. Gary Balter - Crédit Suisse AG, Research Division: It's Gary and Simeon. Could you talk -- in Commercial, you keep on showing better and better numbers and you obviously have some strong momentum. When you look at the market share that you have, it's obviously quite small and it's still very fragmented, who do you think you're taking it from? Are you taking it from 2-step or 3-step? Are you taking it from some of the bigger players? Where's that share coming from?

Well, if you look at the -- let's start with the NPD information that we have. The whole market is growing on the NPD side and growing fairly robustly. We're just outpacing that market fairly significantly in our performance. I don't think we're "taking" share from them. What I see is the whole market’s growing. We’re just having outpaced growth. And then we don't have good visibility into the piece that's outside of NPD, but my suspicion is that's where we're probably having the most impact. Gary Balter - Crédit Suisse AG, Research Division: Or maybe said another way, where's the value add that you're providing that's creating that traffic that's leading to share gain or leading to just stronger results? How are you approaching the market differently than what's out there?

I think for us, we went back a couple of years ago, really about 3.5 years ago now, and really focused and defined a new strategy. And a big element of that new strategy was, number one, getting the foundational elements of our business right. What does that mean? That means making sure we've got the right parts coverage, making sure that we have the right people with the right set of training and tools capable to deliver excellent customer service. We also supplemented it with our hub stores, which have significantly improved our coverage especially on late-model coverage, and then we've rolled out and developed this really fantastic outside sales force that's continuing to mature. And so it wasn't any trick plays. It was just doing the basics of the business, which is what we've learned in Retail is what works and that's our strength. It's just doing it day in and day out. Core execution can be a point of differentiation. Simeon Gutman - Crédit Suisse AG, Research Division: It's Simeon. If I can just ask 2 follow-ups, one tied to that question. Can you separate out the number of new accounts you're picking up in Commercial versus increased penetration of existing? And then second, unrelated, on gross margin, I looked back at the press releases. It looks like second quarter this year you started calling it out as a benefit. So what's the opportunity left there? It looks like the comparisons will just get more difficult when you get to Q2 next year. Or are there more savings and a higher ramp to come?

I'll take the first part, and then Bill Giles will answer the second. When we look at our business as far as new customers, further penetration of retained customers and frankly, lost customers, we're seeing improvements in each one of those metrics and we're seeing them kind of quarter-over-quarter and year-over-year. So that's a good indication for us that we're continuing to improve on all fronts.

And, Simeon, on the gross margin, when you said that we called out in second quarter, I'm going to assume you meant shrink. And so we have had some good shrink results in Q2, 3 and 4, and we put some things in place in the field level, some initiatives in place that we really believe provide us a better ability to manage shrink going forward. And so there's no guarantee as to what shrink will be on a go-forward basis, but we believe that we have a process in place that is somewhat sustainable. And so although we may not achieve incremental improvements over what we have reported, our objective is to maintain where we are and make some incremental improvements along the way that might be a little bit smaller.

Our next question is from Alan Rifkin with Barclays.

The 104 programs on the Commercial side that were added in the fourth quarter mark some pretty significant acceleration over what you've done in prior quarters. Is that a run rate that we should think is achievable going forward?

That's a great question, Alan. And obviously, we've gained, over the course of the year, more and more confidence in our ability to open very productive new Commercial programs. But as you would expect from us, we're going to be methodical about it. We have plans to grow at a rate similar to the way we grew this year, but those plans aren't set in stone. We're going to look at the stores we opened in the fourth quarter, continue to work on them, make sure that they continue to improve and once they do, then we'll go to the next batch. And we're going to continue that all along the way. If for some reason they continue to accelerate, we might accelerate our plans. If for another reason they slow, we'll slow down and we'll go focus on the elements that are making them not be as successful as we want. So our plans in that regard are somewhat fluid, but we certainly see a tremendous opportunity for more programs over time.

Okay. So then, Bill, based on that commentary, can we infer from your remarks that you're actually seeing greater benefits than what you thought, which was a reason for you accelerating the program?

I think we opened about 3x the number of programs in 2011 than we had in the previous several years. I think -- and it doesn't take a rocket scientist to look at we were up 22.3% in our Commercial business. So we have a much higher level of comfort in our plans going forward than we did a couple of years ago.

Okay. A question for Bill Giles. Bill, I know you said that about 59% of your stores today had the Commercial program in them, what do you think that, that number can ultimately become? And if we do the calculation, your revenues per store on the Commercial side are still below that of some of your competitors. Is there any reason for us to believe that you cannot achieve revenues on the Commercial side per store that are on par with some of your competitors out there?

Yes, we certainly don't believe that there are any structural barriers that would prevent us from improving the productivity of our Commercial program significantly over what they have done already. In fact, we had very good performance in improving the productivity of the existing base stores in addition to the 9% openings that we've had just over the last year or so. And relative to what the percentage is, we haven't targeted a percentage exactly. I mean, one thing for sure is the trade areas of the Commercial programs are broader than the trade area of individual AutoZone stores. So we don't envision ourselves ever getting to 100%, but certainly we believe that we can increase to 59% significantly over the next few years.

Okay. And just one last question if I may. With you folks likely so focused on returns, what is the return period that you're seeing once you do add a Commercial program to the store? How long does it take you to earn your money back?

Well, it's relatively quick. I couldn't give you -- I don't -- I'm not going to give you a specific timeframe because again, the model continues to evolve and we're opening a lot of stores, as I said, recently. But think about it this way, it's that the incremental investment on a Commercial program is relatively small. We're utilizing the existing base assets of the store. We're adding a truck or 2 or 3, a few people to support that. There is a little bit of incremental inventory although obviously, on our AP and inventory ratio of over 100% [Technical Difficulty] So overall, the investment is relatively small and so we can -- that's actually what helps drive the ROIC. As we've mentioned before, I mean, the productivity of the overall box is up over 11% over the last couple of years, and a lot of that is the Commercial programs driving it, and we're really excited about what we see in front of us relative to our ability to open more programs, improve the productivity of our existing base programs. And it's a unique model in this industry to be able to have 2 businesses out of one box.

Our next question is from Kate McShane with Citi Investment Research.

With your investment in Commercial, you had mentioned the extension of some of the hub stores and that will be more CapEx than SG&A related and that SG&A dollar growth could be abating a little bit next year. So can you help us reconcile how we should think about SG&A going forward as you continue to focus on the investment in Commercial?

I think the investment in Commercial will really be able to support the new programs so some of the things that I was articulating in the last question relative to adding some payroll dollars from a Commercial perspective to support the Commercial business in the store, some trucks. There's some operating expenses there but they're not as significant. On the hub stores, what we'd always talked about in the last couple of years was that when we went to multiple deliveries, that increased some of the SG&A cost. And that's why you saw maybe close to 10 basis points of deleverage in SG&A we articulated over the last several quarters. We think that we'll begin the anniversary of that and then that won't be as much of a headwind going forward. You're right. The work that we're going to do on the hubs as far as expanding them and making them larger will be more from a CapEx perspective. So there’ll be CapEx dollars to expand the hubs, we don't see a significant SG&A investment in the hubs going forward relative to where we are today. But some of the investment will be in the Commercial programs expanding new programs, not necessarily the existing programs.

Okay, great. And with Commercial, leveraging your store base and increasing productivity, how do you view fulfillment of orders through E-Commerce as that becomes a bigger portion of your business?

The most important thing for us is being able to provide the customers the most convenient way for them to conduct business. And many customers prefer to be able to process their orders electronically. So on autozonepro.com, they have the ability to get on and process their orders, and there's no telephone call involved. And the stores get those orders immediately and fulfill them just as if they had answered them over the telephone. So they'll get an order that will print out in the stores and we’ll fulfill those orders out of the Commercial program and deliver them directly to the customer. So it's a seamless operation. And we're somewhat indifferent. We'd love to see the electronic orders continue to improve because we think it's more efficient for both us and our customers. But more importantly, we want to be able to provide the customers with however they want to conduct business the most efficient way possible.

Okay, great. And then if I can ask one final question. With the multiple deliveries and the way the Commercial business is structured, is there any way to mitigate the impact of higher fuel costs?

I think that would be a challenge. We haven't really identified a way. I mean, there's ways for us to improve some of the routes, et cetera, but that's more on line in the hubs. From a Commercial perspective not so much because it's not the hotshot business.

Your next question is from Aram Rubinson with Nomura.

Two things. One, could you remind us why we take margin on commodity prices when it’s inflationary out there to begin with? And then I had a follow-up.

Sure. Some of that is that you have some retail prices that you raise as you get increased cost. In certain instances, the retail price may come ahead of when the weighted average cost goes through the system. So you wind up with some improvement in margin.

And that normalizes over time, how philosophically does that balance, let's say, over the course of somewhat of an inflationary period?

Depending on the turn of the product. For example, on some of the commodity-based products, they turn a little bit faster, that timeframe would be fairly short.

And are you seeing the competitors out there? I know you mentioned there was – it’s always a difficult competitive environment. I guess, the motivation behind it and what you're seeing the competitors, and are you providing them a little bit of an umbrella by doing that?

Well, everybody is going to get priced somewhat to the same. I mean, it's very difficult to have a competitive advantage on pricing on a sustained basis so everybody will wind up pricing about the same.

Okay. And then my second question is just on payables. By our calculation, your AP days are a little north of 250 days. I assume there's a wide range around that. Do you have any of that touch 365? And if so, is there a geography on the balance sheet where those begin to appear? And then looking at the total vendor funding, does it -- do we capture it all looking at just the APs, which are short-term liability?

No, they’re short-term liability. We have some that are approaching but nobody's over, what you would consider long term.

Okay. So we don't need to look for other long-term liabilities or anything like that just yet?

That's correct.

Our next question is from John Lawrence with Morgan Keegan. John R. Lawrence - Morgan Keegan & Company, Inc., Research Division: Could you comment, Bill, just a little bit -- you made a comment on the cost side but following up on another question, can you -- if you look at those stores on a Commercial side that have been expanded now for several years, what would that range of success be over the last year from stores that are newly expanded or enhanced for those programs that have been out there for a period of time?

Yes, I would say that we're seeing significant improvements in the stores that have been open for 8 or 10 years or programs that have been open for 8 or 10 years. And we're also seeing improvement in the stores that we opened over the last 2 or 3 years, and we're also seeing improvements in the productivity of the stores that we opened this year. So on all fronts, we're seeing improvements. And I think it goes back to what we talked about earlier that we continue to make significant improvements in those foundational elements. And that work’s not finished. We'll continue to refine our offerings. But we've made some pretty significant progress on that front. And I think the customers have seen it, and that's benefited us across the board. John R. Lawrence - Morgan Keegan & Company, Inc., Research Division: And I apologize. I ask it all the time but I mean, when you look to the progress of some of those areas and those trade areas, I mean, there's a lot of factors that people are coming back to you and either using you for the first time or giving you a shot at that business. I mean, is there anything in particular you can point to that -- is it expanded coverage or the real -- I know there's not a silver bullet, but what really drives that decision as some of these decisions are coming back to you now that weren't, say, 2 or 3 years ago?

Yes, unfortunately, I can't point to one. I think it's a holistic approach. And it’s the rising tide lifts all boats. They have confidence in the quality of our products. They have confidence in our store AutoZoners being able to deliver. We have much improved coverage so our ability to say yes more frequently now is significantly higher than it was 4 years ago. And then we've got a great sales force that's out there telling our story and is in those shops, reminding them every day that we want to earn their business. And so I think it's a culmination of all those that's really driving our performance.

Our next question is from Matthew Fassler with Goldman Sachs.

A couple of follow-up questions, the first on the commodity price dynamic. What’ll happen as input prices start to level off or come down? Do you typically see the list price come down and consequently the margin follow? Or is there a period of even better margin performance where the inputs are down and the street price is a bit sticky?

I would say it's also dependent upon what happens in the marketplace as well because obviously, we don't operate in a silos so it depends on how everyone else reacts from a pricing perspective. But yes, overall, I would say is that there might be a little bit of a margin pressure if prices were to come down fairly significantly fairly quickly.

And have you seen peers before where commodity inflation has actually helped margin rate? Or is this fairly unique to this moment?

No, I'd say it's -- we've seen it before. I would say we've seen it before and it's not surprising necessarily when it happens.

Got it. And then my second follow-up just relates to your self-insurance number. If you could give us a little color on that, how often could that recur, might that recur? Is that just sort of an occasional item or sort of a truing up, if you will?

I would classify it as an occasional item. It's incident based. And so we probably had some favorability last year that wasn't overly significant. This year, we had a couple of unfavorable incidents during the quarter that drove up the expense for this quarter. So on a year-over-year compare, it was a little bit more significant.

So if everything were level and it was kind of business as usual next year, this wouldn't be part of the base, it would be an easier compare on the expense side?

Right.

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

This is Patrick Palfrey sitting in for Scot. I guess just first off, you mentioned that sales in the quarter were less variable in the prior quarter. Would it be safe to assume that consistent trend’s carried into September?

As we've done on every one of our calls, we don't really want to get into what's happening with the current quarter sales trajectory because we release our earnings and do this conference call so early in the quarter. We're only 3 weeks into our quarter and so I really don't want anybody to try to read anything into short -- very short-term sales trends.

Okay. Fair enough. But then I guess just digging a little more into the structural changes and the ticket transaction, I guess, how much do you think you can offset some of the structural transaction pressures from increasing the Commercial sales transaction count? And I guess just looking at tickets, how much is the increasing ticket coming from the structural improvements that you were talking about versus increasing Commercial sales?

Yes, let me refine that. When we were talking about transaction versus average ticket, we were talking about the DIY business on a standalone basis. So the challenge that we have there is over time, parts are lasting longer. So the number of cycles that you get on a starter or alternator or spark plugs or whatever the case may be is fewer than it used to be. But the cost of those products, because they're improved, they're significantly more expensive. And that's a trend -- we were actually looking at it again yesterday. That's a trend that's been going on since 1995. And we've been able to very effectively manage our way through it. So it's not anything that's alarming to us.

Our final question today is from Chris Horvers with JPMC. Christopher Horvers - JP Morgan Chase & Co, Research Division: I'm trying to understand, not necessarily asking about the current quarter, but that 150 basis points of variability. Was there any kind of better at the back end of the quarter versus the front end in the quarter? Or is it just kind of normal noise in monthly numbers?

Yes, I think it's absolutely normal noise in the monthly numbers. You also -- when you're looking at monthly numbers, it depends on what happened last year as well and there were some -- a lot of very warm days in this year and in the last year. And so if they weren't hitting at the same time, that -- so I wouldn't call anything in there significant. The only thing that we would say was significant is that gas prices were up quite a bit. And that was for the most part over the whole quarter. Christopher Horvers - JP Morgan Chase & Co, Research Division: But I think Bill mentioned that the discretionary -- it didn't sound like that really had an impact positive or negative to your business overall, the gas prices.

Weather or gas prices? Christopher Horvers - JP Morgan Chase & Co, Research Division: Gas prices.

No, I think gas prices absolutely hurt us during the quarter. Christopher Horvers - JP Morgan Chase & Co, Research Division: But you didn't necessarily see a rebound in the discretionary side at the end of the quarter?

No, but I don't think you're necessarily going to see gas prices only affect the discretionary side of the business. I think it's going to affect maintenance more so than anything else. Christopher Horvers - JP Morgan Chase & Co, Research Division: Okay. So then the leading question is, is that fair to think that the maintenance side improved as gas prices receded?

I think it's too early to tell. The gas price changes were very short at the end of the quarter, and we're not really watching it that close every day. We're just trying to make sure we're doing what's right for the long term of our business. Christopher Horvers - JP Morgan Chase & Co, Research Division: Got you. And then just on the inflation side, some people in your industry have talked about the not wanting to lead on price and some of the inflation hitting their cost but not passing it through or wanting to pass it through on a delayed basis -- what you're talking about today on the commodity pass-through, does that jive with what they're saying, meaning that yes, it's being finally passed through on the lag? Or is this just a whole another topic?

Well, the way I would address it is number one, we're not doing anything different than we've done for a very long period of time. When we look at our business and our trajectory and what's going on with our cost, we make pricing decisions that are based upon the facts that we have at hand and -- but we're also willing to go out and move our prices up even before the rest of the market moves. Now if they don't move, we're not going to be in a noncompetitive position on price. So we're willing to move first, but if others don't move, then we're going to make sure that our prices are competitive. All right. Well, before we conclude the call, I'd like to take a moment to reiterate that our business model remains very solid. We remain excited about our growth prospects for the upcoming year. We cannot take anything for granted as we understand our customers have alternatives. Our culture remains our key point of differentiation from our competition, and we must not lose sight of the importance of basic store execution in order to remain very successful. We have a solid plan for 2012 and as usual, our team cannot wait to get started. But I want to stress that this is a marathon and not a sprint as we will continue to focus on the basics and never take our eye off of optimizing long-term shareholder value. We are confident AutoZone will continue to be incredibly successful. We thank you for participating in today's call. Hope you all have a great day.

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