Kevin Freeland - Chief Operating Officer Darren Jackson - Chief Executive Officer and Director Joshua Moore - Michael Norona - Chief Financial Officer, Principal Accounting Officer, Executive Vice President and Assistant Secretary Jimmie Wade - President

Alan Rifkin - BofA Merrill Lynch Aram Rubinson Kate McShane - Citigroup Inc Anthony Cristello - BB&T Capital Markets Gary Balter - Crédit Suisse AG Matthew Fassler - Goldman Sachs Group Inc. Daniel Wewer - Raymond James & Associates Scot Ciccarelli - RBC Capital Markets, LLC

Welcome to the Advance Auto Parts Fourth Quarter 2010 Conference Call. Before we begin, Joshua Moore, Director of 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 company's products, the economy in general, consumer debt levels, dependence on foreign suppliers, the weather, business interruptions and other factors disclosed in the company's 10-K for fiscal year ended January 2, 2010, 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 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 earnings release is scheduled for Wednesday, May 18, 2011, after market close, and our quarterly conference call is scheduled for the morning of Thursday, May 19, 2011. To be notified of future dates of 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?

Thanks, Joshua. Good morning, everyone. Welcome to our fourth quarter conference call. First, I'd like to thank our 51,000 Team Members for their hard work and congratulate them on an outstanding performance in the fourth quarter and for the 2010 fiscal year. Our team reached many record milestones this year, both strategically and financially. A few of the milestones I'm most proud of include our tremendous growth in our Commercial programs, which have generated three consecutive years of double-digit comparable store sales growth. Our year-end customer traction and market share results set new records, and our Team Member calibration and engagement scores also reached all-time highs. Finally, our overall financial performance on sales and margins, profits and returns exceed expectations. Specific highlights for 2010 include our commitment to serve customers, which continued to fuel our growth and profitability, driving an 8% comp store sales gain and a total sales growth of 9.5% for the year. Our operating income rate rose to 9.9%, driven by our gross profit rate, which reached 50% of sales. Our earnings per share jumped 31.7%, with our return on invested capital climbing to 17.5%. Mike will provide more specific detail on the fourth quarter and full year results in a few minutes. Our organizational and strategic results were just as gratifying. The revitalizing of our core values, which are to inspire, serve and grow, coupled with the successful execution of our four strategies, stand out as our most important accomplishment that contributed to our 2010 performance. The key highlights include our ability to inspire as reflected in the quality of our Team Members and the number of ASE-certified Team Members, which now is nearly 7,000 and growing. Our commitment to serve our customers better than anyone else is reflected in our new highs and inventory availability and Team Member service factors according to NPD. Our growth results are reflected in the consistent and profitable execution of our four key strategies, starting with Commercial Acceleration, which generated double-digit comp growth in Commercial each and every quarter over the past three years, resulting in average Commercial programs growing from $414,000 to $593,000 annually for Advance stores. DIY Transformation resulted in the development of our "Service is our best part" brand promise, while supporting our industry-leading sales per store. Availability Excellence extended our gross profit rate 335 basis points over the past three years, while lowering our own inventory per store by 28%. Superior Experience has driven improvements in our overall customer satisfaction, while our customer-driven labor model and e-commerce site have enhanced our customer shopping experience. Looking to 2011, the vital signs of our industry continue to be very favorable. The average age of vehicle on the road is over 10 years, with nearly 2/3 of those vehicles greater than seven years old. Miles driven have continued to increase modestly and consumer preference still favors necessity as a result of the sluggish economy and job market. Yet, we do see potential headwinds, such as rising gas prices and rebounding U.S. auto market and the associated increase in seasonally adjusted sales. In addition, the challenging weather conditions in many of our core markets have led to a very tough start to the year. Q1 will be lower than our original plans and vision and as usual, we have adjusted our annual outlook to reflect our start to the year. History still shows us that weather tends to even out through the course of the year. 2010 was definitely an exception to that rule, as weather favorably impacted us all year. However, there is nothing to lead us to believe that 2011 will be another exception, and we are early enough in the quarter and the year to make adjustments to deliver another successful year. Turning to a longer-term view, our focus over the last several years was to catch up on mission-critical capabilities including commercial sales, e-commerce, merchandising and field leadership to name a few, while reigniting our focus and commitment to our customers and Team Members. We certainly have closed the gap from that vantage point as indicated in our record-level customer and Team Member satisfaction. Research concludes that the customers see very little difference between leading players in our industry. As a matter of fact, last month, I received a letter addressed to the Advance AutoZone Parts' CEO. I'm still not sure if I should open it. So when the customers had nothing else to remember their experience, they simply talk about price and location. Our greatest opportunity to differentiate Advance is by providing an experience that is more meaningful and memorable than price and location. Looking forward, we will focus on a single customer promise: "Service is our best part." "Service is our best part" was the theme of our 2011 Leaders Forum that was held earlier this quarter with 4,500 of our frontline leaders. I've never experienced so much enthusiasm and galvanizing focus from a team. As we shared with the team our strategies that enable "Service is our best part," enable converge from four to two, service leadership and superior availability will simplify our focus and allow us to strengthen our integrated service model for our DIY Commercial and AI customers around the shared commitment. Our superior availability commitment will be to get the right part to the right place at the right time every time. It compels us to maximize the storage capacity of our stores and warehouses as well as increase our delivery speed to our customers. This strategy will be a multi-year journey to revolutionize availability and lower our supply chain cost, resulting in increased profitability. Service leadership will leverage on superior availability. Our service leadership commitment is to lead with the right services and the right support at the right time and the right way. Jim and Kevin will provide additional insights regarding service leadership and superior availability in just a few moments. Collectively, "Service is our best part" will seek to separate Advance over the next five years from an industry dominated by a property, parts and price promise. I expect our service leadership and superior availability strategies will allow us to maintain our industry-leading sales per store while growing our operating margins to 12% and return on invested capital to 20%. While we believe our sales per store potential is nearly $2.5 million, our goal over the next several years is to achieve $2 million per store driven by our growth in Commercial as we move towards becoming a fully integrated service model. Ultimately, my confidence is driven by the quality, passion and track records of the Advance leaders. In January, at our leadership conference, we had the opportunity to recognize a member of our team that brings our value proposition and brand to life every day. That team member was Mike Byrd. Mike was recognized as our Regional Vice President of the year. Mike started working for Advance while he was in college and worked his way up through the company over the past 20 years, holding various leadership roles within our field operation. His region is the leader in all key metrics, and he truly has a passion for service leadership. Leaders like Mike who are driving our business demonstrate how we will win with the customer and differentiate ourselves in 2011 and beyond. Congratulations, Mike, and thanks for all you do. Now I'd like to turn the call over to Jim Wade, our President, to discuss our service leadership strategy.

Thank you, Darren, and good morning. As always, I want to start by thanking our hard-working and committed team for another record quarter and year. We appreciate our team's passion for providing great service to our DIY and Commercial customers, and earning their business one customer at a time and doing it through our core values. I want to spend my time this morning taking a look back at our results for the fourth quarter and then talking about how we're bringing service leadership to life in 2011. In the fourth quarter, our team continued to do a great job executing our initiatives as well as leveraging the strong industry fundamentals to produce strong results. Our total comp store sales grew by 8.9% in the fourth quarter compared to 2.4% during the same quarter in 2009. Consistent with the first three quarters of 2010, we are pleased with an increase in both the number of customer transactions as well as the average transaction size. Each of our major geographic areas produced positive comps in DIY and double-digit comps in Commercial, resulting in a very consistent performance across our company. We reached a few milestones in our Commercial business that we're very proud of. The fourth quarter marked our 12th consecutive quarter or three full years of double-digit Commercial comp in our Advance Auto Parts stores. In those three years, our total Commercial sales have grown by 57%, and now represent 34% of our total sales compared to 27% just three years ago. We now have over 40% more Commercial parts pros, truck drivers and sales force in place since three years ago when we committed the resources to accelerate our Commercial share. Those resources were invested in the customer. We're very excited that we finished the 2010 year with the highest customer satisfaction scores from our Commercial customers that we've ever achieved. We believe this is a true measure of our future potential in this business. Our DIY business again produced strong growth and achieved our seventh quarter of positive DIY comps in the last eight quarters, with solid positive comp each quarter in 2010. Our DIY customer satisfaction scores continue to increase as well. We continue to generate the highest sales per store in our industry, and we gained market share during the quarter and for the year. In our stores, we will focus on several key areas in 2011 that will enable us to serve our customers with dependable and fast service consistently in every store, every day by every Advance Team Member. We believe that to provide a great customer experience, we must achieve a new standard of operational service excellence, and that has to be brought to life for the customer by our team. In order to enable a high level of operational and service commitment, we'll focus on the following: We've increased the number of district leaders and reduced their average store count, so they'll have more time to spend in their stores coaching and developing the team. We'll increase the clarity of what's operationally critical for our district leaders and general managers to focus on to achieve consistent foundational excellence in every store, and we'll continue to measure our progress. We'll continue to build on our customer-driven staffing to ensure we have the right people at the right time to align with our customer traffic. We'll further accelerate our team member training and development in both parts knowledge and selling skills to better enable them to find solutions for their customers. We'll build stronger relationships with our highest potential Commercial customers through the partnership of our store teams and sales force to visit and support those customers. We'll measure and we'll improve our delivery times and order accuracy to our Commercial customers, which will enable them to be more successful in taking care of their customers. We'll spread our message through our advertising and marketing programs to drive new customers to consider us and to build our brand around our team. And we'll leverage to its fullest potential the increased parts availability that Kevin will describe, along with all the tools his team is providing, so we can find the right part and get it to the customer fast. As Darren mentioned, we held our Annual Leaders Forum in January where we had the opportunity to spend time with all our general managers, our field team and our sales force and to review our plans for 2011. We're very excited about our teams' commitment, and we know that it will be through their commitment and passion that will bring "Service is our best part" to life for every customer. Lastly, we continue to reach new customers and grow our sales through successful new store openings. During the fourth quarter, we opened 26 stores including three Autopart International stores and closed three stores. For the year, we opened 148 stores including 38 AI stores, and closed five. As of the end of our fourth quarter, our total store count was 3,563 including 194 Autopart International stores. In closing, thanks again to our team for another successful year and for remaining committed to leading inspired teams and delivering on our promise that service is our best part. Now I'd like to turn the call over to Kevin Freeland, our Chief Operating Officer, to discuss our superior availability strategy.

Thanks, Jim, and good morning. I would also like to congratulate the team for a strong fourth quarter and year. I'll take a moment to highlight a few of our accomplishments during the quarter, as well as update you on our initiatives to support our superior availability strategy. During the fourth quarter, our gross profit rate increased 147 basis points versus the fourth quarter of 2009. The fourth quarter improvement was driven by increases in both front room and back room categories resulting from the rollout of our custom mix and price optimization strategies, the strengthening of our merchandising capabilities and the impact of our rapidly growing global sourcing capabilities. We continue to be pleased with the strides that we've made in improving our gross profit rate, which has increased 335 basis points in the past three years. Through our custom mix rollouts, we completed 163 upgrades during the quarter. We continue to improve our category sales and margin rate performance in Hard Parts as a result of our increased availability and continued strength in our Commercial business. Our sales and margins in accessories also improved in the quarter and continued to benefit from our new global sourcing capability. During the fourth quarter, we continued to improve our parts availability through the addition of eight HUB stores. Our delivery HUB network is at 176, providing multiple daily deliveries to 2,300 stores, in addition to our 31 PDQs. In 2010, our DC productivity improved double-digits over 2009 due to the continued focus on labor standards and productivity initiatives. Our adjusted accounts payable to inventory ratio increased significantly from 61.2% to 71% at the end of fourth quarter. Our increase in AP ratio continues to be driven by more favorable payment terms, supply chain financing and the timing of inventory purchases, while our owned inventory decreased by $94 million versus 2009, while we continue to increase the amount of inventory throughout our system as inventory per store increased 10% over the fourth quarter of last year. The customer perception of product availability continues to increase and exceeded our internal expectations for the year. Our superior availability strategy is focused on driving industry-leading parts availability. We continue to be thrilled with the progress of our DIY e-commerce platform, with sequential increases in all key metrics: traffic, conversion rates and sales. We're excited about the completion of the rollout of our business-to-business e-commerce capabilities, with the ability to provide our customers with increased convenience and a better experience through our new online capability. Our B2B capability gives us confidence that we continue to drive strong Commercial sales growth by strengthening our competitive position and enabling us to do business with more customers and larger bay garage customers. In the fourth quarter, AI's revenue grew 33%, driven by the net addition of 38 stores over the past 12 months and a positive comp performance. Overall, our fourth quarter, as well as 2010, was very successful for our team, and I'm thrilled by the strategic and financial progress we've made as we focus on providing superior availability. Now let me turn the call over to our Chief Financial Officer, Mike Norona, to review our financial results.

Thanks, Kevin, and good morning, everyone. I'd like to start by thanking all of our talented and dedicated Team Members for their contributions to the financial progress we made in our fourth quarter and for fiscal 2010. I plan to cover the following topics with you this morning: one, provide some financial highlights from our 2010 fourth quarter; two, put our fourth quarter results into context with both our full year performance and the key financial dimensions of our transformation over the past three years; and three, provide you with our annual financial outlook for 2011. As a reminder, our fiscal 2009 results included the impact of store divestitures, which decreased diluted earnings per share by $0.03 during the fourth quarter last year and $0.17 for fiscal 2009. I will speak about our year-over-year results versus 2009 on a comparable operating basis, excluding the impact of 2009 store divestitures, to provide a more transparent and relevant comparison. We have provided both GAAP and comparable operating results in our earnings release. Looking at our fourth quarter, we were very pleased with our strong end to the year, with earnings per diluted share of $0.57 versus $0.39 last year, a 46% increase or a 58% increase on a GAAP basis. For the full year, our earnings per diluted share increased 32% on a comparable basis to $3.95, which was on top of a 14% increase in 2009. On a GAAP basis, our diluted earnings per share increased 40% over 2009. Our comparable store sales increased 8.9% during the fourth quarter, which was on top of a 2.4% comp increase during the fourth quarter 2009, representing an 11.3% two-year comp store sales increase. Our fourth quarter comps were driven by our 12th consecutive double-digit comp increase in Commercial, our seventh quarter out of the last eight quarters of positive DIY comps and strong online sales. For the year, our comp store sales increased 8%, with total sales increasing 9.5% to over $5.9 billion. As Kevin mentioned, our gross profit rate increased 147 basis points versus 2009 and continues to be driven by improved merchandising and pricing capabilities, improved parts availability and supply chain efficiencies. The 147 basis point increase was on top of a 78 basis point increase in gross profit last year in the fourth quarter 2009. For the full year, our gross profit rate increased 113 basis points and now stands at a record high of 50%. This is a significant achievement, given the strong growth of our Commercial business, which now represents 34% of our 2010 sales versus 32% in 2009. Our SG&A rate of 42.8% increased 20 basis points versus the fourth quarter of 2009, primarily due to higher incentive compensation resulting from our strong 2010 performance compared to our soft fourth quarter of 2009 combined with the deliberate decision to pull forward in 2011 expenses in Commercial and availability into our fourth quarter as we highlighted during our third quarter call. However, these increases were almost entirely offset by expense leverage in our fixed-cost structure as a result of our strong fourth quarter comp sales increase of 8.9%. For the full year, our SG&A rate increased to 40.1%, a 13 basis point increase versus fiscal 2009. Our operating income increased 38% versus the fourth quarter of 2009, and our operating income rate increased 127 basis points to 6.6%. Our full year operating income increased 22% versus fiscal 2009. Our operating income rate increased to 9.9% of sales for fiscal 2010, which represents 100 basis point increase versus 2009 on a comparable operating basis. Free cash flow through the year was a record $466.4 million, which represents a $56.5 million increase over last year. This increase was primarily due to our strong growth in net income and reduced owned inventory. Our accounts payable to inventory ratio increased to 71% from 61.2% in 2009 as part of our continued efforts to reduce our net owned inventory, which decreased $94 million versus 2009. Our consistent and sequential improvements in our operating and financial performance over the past three years, along with our disciplined approach to managing our capital investments, reinforce our commitment to accelerate growth, improve profitably and drive shareholder value. We will continue to measure our financial performance based on these three dimensions. Our commitment to growing our business is reflected by our 8% increase in comp sales in 2010 and industry-leading sales per store, which grew 6.4% to $1.7 million. Our sales per store have increased $170,000 over the past three years. Our ability to grow profitability is marked by consistent and continued gross profit expansion and an increased operating income rate, which grew 113 basis points and 100 basis points, respectively. Over the past three years, our gross profit rate and operating income rate have expanded by 335 basis points and 130 basis points, respectively. As we look at our ability to drive shareholder value, we are pleased with our 240 basis point increase in ROIC to 17.5% over 2009, a 44% increase in economic profit added over the past 12 months and our 2010 record free cash flow of $466 million. Over the past three years, our ROIC has grown 380 basis points, and our free cash flow has doubled. Our performance was also recognized externally in 2010, with our uprates by Moody's and S&P bringing us to full investment-grade status. During the fourth quarter, we repurchased 2.4 million shares for $157.8 million at an average price of $66.71. That brought our total share repurchases for 2010 to 13 million shares for $633.9 million at an average price of $48.67. Additionally, during the first quarter of 2011, we repurchased 1.9 million shares for $121.6 million at an average price of $62.72. These repurchases reflect our views of our low valuation and our internal confidence in our company's ability to grow profitability and to create long-term shareholder value. As we stated in our press release, the company's Board of Directors authorized a new share repurchase program. Overall, 2010 marked our third year of improved financial and operational performance. While our performance in 2010 was definitely buoyed by favorable weather patterns and strong industry dynamics, the strategic choices we have made through our investments and the superior execution of our team played a significant role and have allowed us to gain market share and position our company for long-term growth and success. Turning to fiscal 2011, we estimate our EPS will range from $4.60 to $4.80 per share and reflects the share repurchases up to the time of this release. Our outlook estimates an average share count of approximately $82 million of outstanding diluted shares. Now I'd like to provide you with the key financial assumptions implied in our annual financial outlook. In 2011, we will continue to expand our store base and anticipate new store openings for both Advance and Autopart International brands to be approximately 130 to 140 stores. Our focus on service leadership and superior availability will fuel continued growth in our industry-leading sales per store. We expect comp sales to grow in the low to mid-single-digits driven by strong Commercial growth and the resurgence of DIY. We expect our gross profit rate to continue to expand, however, at a much more moderate pace. We will continue to reap the benefits of our previous investments and merchandising capabilities, supply chain and availability, including areas such as global sourcing. However, we expect some headwinds to margin from supply chain investments to fuel superior availability as well as some potential inflationary headwinds in certain commodities that will constrain gross profit expansion. Turning to our cost structure. Differentiation will require continued investments in the areas of service leadership and superior availability. We have demonstrated over the past three years that investing in the right initiatives can deliver solid growth and returns as evidenced by our strong operational and financial performance, and we are committed to the same discipline as we embark on differentiation. That said, we expect SG&A dollar growth per store to continue to decelerate in 2011 from 2010, driven by cost savings in areas of labor management, operational efficiencies and variability in store performance. These savings will somewhat offset our 2011 investment spend and will result in our SG&A leveraging at a lower level of comp store sales. We also expect capital expenditures to increase in 2010 to a range of $275 million to $300 million, principally driven by supply chain investments as part of our superior availability. These investments include new technology such as a new warehouse management system that will take us to the next level of enhanced availability and supply chain productivity and capacity investments including a new distribution center in Remington, Indiana, required to meet our future growth needs. With our strong fourth quarter, where we accelerated our market share growth and customer scores, we expected our first quarter 2011 to build on that momentum. While we do not provide quarterly outlooks, we have gotten off to a significantly slower start than we anticipated. We know weather has impacted the start, and we continue to monitor other drivers. We now anticipate first quarter comp growth could be flat to low single-digits, which could constrain our first quarter earnings. It is early enough in the year where we can adjust our plans as we learn more. I would also like to remind you that our first and third quarters represent the most challenging comparisons on a two-year basis, and both were significantly benefited by favorable weather patterns in 2010. We continue to believe the long-term industry dynamics are still in place. We have factored all of this into our annual EPS outlook. In closing, Advance Auto Parts has been focused on becoming more competitive within our industry, and we are pleased with our progress. We are focused on becoming differentiated and a fully integrated service model. Ultimately, we will win with our customers through service leadership and superior availability. We expect to continue to build upon the momentum of the previous three years and we'll continue to be guided by meeting the needs of our customers and measure our financial progress through growth, profitability and value creation. Our talented team will continue to propel us forward and ultimately help us reach our full potential. Operator, we are now ready for questions.

[Operator Instructions] Our first question today is from Gary Balter with Credit Suisse. Gary Balter - Crédit Suisse AG: On the gross margin, you mentioned in the press release and on the call the gross margin moderation. Can you talk about the drivers that you still have? Because obviously, you still have the supply chain opportunities. You still have some of the price optimization. Where are you if you had to put yourself on 100%, kind of at a 100%? Are you at 50% level, 75% level on some of those?

Yes. Gary, this is Kevin. The gross margin calculation for us, there's over a dozen components that we take a look at. There is, as you mentioned, price optimization, the global sourcing, supply chain efficiency, category management shrink, the mix of front room and back room, DIY Commercial, so a fairly complex interaction. And any one moment over the last three years, some number of them were headwinds and others were tailwinds. As we look out into next year, we are continuing to have tailwinds in areas like price optimization that is moving to our Commercial business, the global sourcing that's expanding. But we're also beginning to make investments in areas like supply chain, which are long-term tailwinds, but short-term, opening up a new distribution center will impact the immediate numbers. So I think long term, we're bullish that we can continue to enhance margins, but we'll have a materially diminished rate in 2011. Gary Balter - Crédit Suisse AG: Can you talk a bit more about the investments you're making in supply chain and what you envision that will provide for you?

Sure. Two things: one, as Mike mentioned, we're opening a distribution center in Remington, Indiana, which will bring the fleet of full-sized DCs from nine, including AI, to 10, and we're putting into that facility a new warehouse management system, which is a material impact on our IT spend for the year. And essentially, we've not opened a new distribution center a number of years despite the increase in store count and the comp increases that we've had. That new facility will essentially allow us to keep up with the growth of the business.

Our next question is from Matthew Fassler with Goldman Sachs. Matthew Fassler - Goldman Sachs Group Inc.: I want to ask a question about your cost structure. Can you give us a sense, as you look at 2010 retrospectively, the amount of SG&A that you think was discretionary related to performance? You talked about incentive comp for the fourth quarter in general and how that influences your leverage point for 2011. And any color on where that leverage point might be would also be helpful.

Matt, it's Mike. So turning to 2010, I think what we said is really, 2010 kind of finished three years as we've built up capabilities, and we've been investing in the business and things like Commercial and our availability strategies. And what we said in 2010 is that our SG&A dollar growth and our SG&A per store would start to decelerate. The growth would decelerate. We actually saw that. So if you look at 2009, I think our SG&A per store was roughly 8.1%, and last year, it was 6.7%, if you see where we finished up the year. So we actually did exactly what we said we were going to do. And I would anticipate -- and SG&A in the fourth quarter came in pretty well exactly where we thought it would be. We were anniversary-ing, as I said in the Q3 call, incentive comps from 2009. And then with our strong comp in 2010, that was about an 80 basis points difference in incentive comp. So if you back that out, our SG&A came in roughly where we thought it would be in Q4 2010. Turning to 2011, we anticipate -- first of all, we're still going to have to invest in the business. We're still growing in Commercial. We still are building out availability in some of the areas that Kevin talked about. However, we see opportunities, savings opportunities in areas like goods not for resale, occupancy, improving the variability in our store performance, our being able to leverage some of our labors from some of the initiatives that Tammy has talked about before about our customer-driven labor model. And we anticipate our SG&A growth will again slow from 2010 and 2011. And I anticipate that our SG&A per store will grow in a range of roughly 2% to 4% versus where it grew last year at about 6.7%. Matthew Fassler - Goldman Sachs Group Inc.: And some of the variability between the 2% and the 4% depend on sales as it relates to incentive comp and paying out your Team Members?

Yes, that's exactly it. I mean, I'd love for it to be at the high end of that range because our sales came in better than we thought. So that picks up our variable. It picks our discretionary, and it picks up our investments. And we don't break that out, but we try not to predict. And I think that gives you a good enough range. But you'll see from that, that will allow us to leverage in a much lower comp level than we did this year. Matthew Fassler - Goldman Sachs Group Inc.: If you think about the cadence of expense growth, last year, was unusually high, I think, in Q1, as you made some investments and obviously, had a very good sales number and then again in Q4, given the incentive comp that you just cited. Should we think about the year-on-year growth in SG&A reflecting those comparisons? In other words, as you cycle very big spending, you might be able to have it up at the low end of that range as opposed to other quarters when it might be middle or high end of that range?

Yes, this is what I would tell you, Matt. I would expect that our growth, so I gave you kind of that range of 2% to 4%, I would expect a little bit more growth in the first half of the year and a little bit less growth in the second half of the year. Matthew Fassler - Goldman Sachs Group Inc.: More growth in the first half of the year?

More growth, higher growth in the first half of the year because you got the annualization of what we did in the back half and less growth in the back half of the year.

Our next question is from Scot Ciccarelli with RBC Capital Markets. Scot Ciccarelli - RBC Capital Markets, LLC: Intuitively, it makes a lot of sense that rising gas prices, the rising SARs on the headwinds for the company, and frankly, the whole industry. I also know you guys are incredibly analytical, so I was just wondering if you've been able to quantify the kind of impact you're expecting from either those variables, if you've been able to find any kind of correlations that you think you can kind of point to at sizing the impact?

Scot, this is Darren. The truth is we look in many different places. If you look out to NPD, they use many of those variables. And if you're just to use what they think the world will be in 2011, they think the market will grow another, and this is total market, another 6%. And so they factor in everything from where unemployment is to revolving credit, to SARs, projected SARs' growth to miles driven. And they all factor in there. But at the end of the day, what you recognize is – theirs too, is just a guess in terms of where it can be. I think if you actually looked across our industry, we all guessed wrong in 2010. It was actually much stronger. And weather did play a part in that, as we look to 2011, the way we're looking at it is the structural pieces of the industry they have not changed. I mean, the cars are getting older. You know what, we may see SARs go to 12.5 million this year. That is a small increase in terms of the overall cars out on the road today. We don't think scrappage rates are going to change a ton in terms of the marketplace. And gas, we do know it's probably -- from a DIY point of view, I think we're up $0.50 a gallon as we sit here today. We know from history, that will cut into pieces of our business today. But I think those are all different types of crosswinds that we have in any one year. The weather that we're experiencing right now is, on the one hand, it is cutting into our business. On the other hand, it is actually building the wear and tear on those cars that should show up in the shops, in our shops later in the year. Scot Ciccarelli - RBC Capital Markets, LLC: If you kind of look at the comp performance between yourselves and your major competitors, they've been virtual mirrors of one another over the last eight quarters. And when I kind of look at that and then I look at all the investments you guys have made into your own business, how do you evaluate the changes that you've made, I mean, outside the comp? Because obviously, everyone is doing pretty well right now or have been doing pretty well over the last two years.

So Scot, let me just say I appreciate that question. It's an excellent one. The things that I pay attention to, and I'll use one example so we can get other questions, is when you look at our focus on the Commercial business, naturally, the headlines get 12 quarters in a row of double-digit comp store growth, which is fantastic. The things we don't publish is that, that I pay attention to, is that our customer satisfaction scores. And if you imagine, the net promoter score over the last two years has risen a full 10 points, and to rise a full 10 points in Commercial customer satisfaction says to me that in a business that, quite frankly, that we were a little late to the party to in terms of having some of the national brands, a little late to the party to in terms of B2B capabilities, online capabilities, a party that we were a little late to in terms of a Commercial sales force investment, to move Commercial customer satisfaction a full 10 points. I don't think you can find other examples in the industry of moving the customer perception that fast in that short period of time. And it's not lost on us that in our SG&A line, if you said what's making up that difference, by and large, it's our investment in people because our hypothesis is over the long term, if we win the customer relationship part of the business and we see those metrics moving in the right place, that will continue to grow, when the market finds its way back to where it used to be in terms of growth trajectory.

Yes. And Scot, I would just build on Darren's point. Two things, when you pin in on just the SG&A line, that's correct. But when you look at SG&A, it's what you're spending today and the investments you'll get out over the long term. So in some cases, we've invested ahead, i.e., building a dot-com site. That's the gift that we're giving for a long time. And then the other one is others of our competitors have spent dollars, but they're spent it in different buckets. So I would just ask you to go back and look at where others spent capital dollars or acquisitions as well.

Our next question is from Tony Cristello with BB&T Capital. Anthony Cristello - BB&T Capital Markets: Darren, you talked and referred to getting to the 12% EBIT margins in after several years or a few years down the road, can you maybe bridge the gap between where we are today? And is that totally a function of productivity in getting that to the $2 million level? Or at some point, do you then get to see that SG&A as it decelerates become more of a leveragable or more of a contributor to sort of ultimately get to that EBIT number?

Yes, Tony, terrific question. Again, it's both, Tony, that the way that we see the story unfolding as we move towards $2 million a store is that there's so much fixed cost in this business that if you can drive that top line, as you begin to -- I don't know that I love the word optimize, but it is a optimize the operating model. So I think we just finished last quarter rolling out B2B in terms of the Commercial space to all of our stores. So less than 1% of our sales today in the B2B online space, and actually we're just finishing rolling out, is very low. I think if you look across some of the competitors that have been out there in the industry for many years with that online capability, it's probably closer to 20%. So there is a benefit that's ahead of us, both in terms of how we can grow the business and how that will help us leverage and optimize the business going forward. There are other examples in terms of -- we're now past the halfway point in terms of rolling out our Commercial wave program. And we're going back in now that we have two years of understanding in terms of those Commercial models to say, you know, is there a better way, both to increase the service levels to our Commercial customers and optimize the profit formula. Those things will take on the form of as we look at the different transportation models, store-to-store, that are still ahead of us, too. So it's not as if the whole story is about it's just about growing the top line. No, we're very passionate about it. Or it's not a story of just how do we go in and remediate an SG&A line. But if you think about it, what we're trying to balance is that achievement of a service level above anybody else's in terms of who we are and delivering growth through that in translating it into the operating margin growth that's ahead of us. Anthony Cristello - BB&T Capital Markets: I noticed that the number of new AI units that are going to be opened up this year is down from where you opened last year. Has AI reached sort of a breathing point? And is that less of a contributor to sort of where you see, directionally, the productivity going?

Yes, Tony, this is Kevin. Well, they had a significant expansion last year and expanded into the Florida market. We're going to have that team concentrate this year, integration of a number of back office functions with Advance. We see material profit enhancement from that. So they're, basically, going to go through much of what Advance went through over the last three years, highly concentrated into this year.

Our next question is from Alan Rifkin with Bank of America. Alan Rifkin - BofA Merrill Lynch: Darren, with incentive comp having such a profound effect in the fourth quarter, could you maybe tell us what the process will be for accruing incentive comp in 2011? And will it differ at all from 2010 so that there is a more, possibly, timely booking of this expense?

I'll take that question. So first of all, our practices in 2011 will be very consistent with 2010. We pay on growth. That's what we use. So if you remember, we changed our comp programs in 2009, and we started paying on growth. So when you're growing, and we love to pay out more dollars to our Team Members and share that when they're growing our business. What happened in Q4 is that we did an 8%, 9% comp, so we paid for growth. And we were anniversary-ing Q4 of 2009 where we didn't grow as much. Remember, we did a 2%, 4% comp. so we had that impact, so your anniversary-ing large comp with smaller comp, bigger bonus dollars. And the other impact that happened in Q4 of 2009 is we had annual programs. So what happens is you accrue those annual programs. And if you remember, we had a significant fall off in volume in the 2009 Q4, so that was another part that impacted us. So I would say that was more a onetime thing than thinking about how we're accruing going forward. Alan Rifkin - BofA Merrill Lynch: If I could just follow-up there if you don't mind. But while the comp of 8% and 9% was certainly above your annual number of 8%, the comp dollars in Q4, and please correct me if I'm wrong, are the lowest of any quarter? If that indeed is true, why is there such a disproportionate amount of the compensation booked in Q4?

Yes, these are annual programs as well. So we have annual programs and we have store programs that pay out monthly. Alan Rifkin - BofA Merrill Lynch: So SG&A dollar growth per store, you said it's certainly going to accelerate in 2011 versus 2010, But certainly the comp difference that you're forecasting of low to mid singles compared to 8% is a pretty significant difference. If you hit the midpoint of your comp guidance for 2011, can you maybe just shed a little bit more color on what you think the SG&A dollar growth per store may, in fact, come out to be?

Yes. Hey, Alan, can I correct you? What I said in my remarks and what I said earlier to one of the questions is last year, our SG&A per store grew at 6.7%. And this year, we expect that to decelerate the growth, decelerate in the 2% to 4% range. So actually, our dollar growth will actually decelerate in 2011. It won't increase. Alan Rifkin - BofA Merrill Lynch: Well, it will still increase but at a lower rate.

Yes, that's right. It will increase but at a lower rate. So 2% to 4% versus the 6.7% that we saw this year -- or 2010.

Our next question is from Dan Wewer with Raymond James. Daniel Wewer - Raymond James & Associates: Darren, I just wanted to talk a bit more about AI and how it fits in with the long-term Commercial strategy. As I recall, AI generates about $25,000 in sales per week per location, so a little bit more than twice your Commercial average in your Advance stores. But as I recall, the operating margin is pretty skinny, and perhaps that's what's leading to the consolidation in the back office. But can you talk about long term? Do you view AI just remaining essentially a separate brand? Or do you envision at some point beginning to integrate it into the capabilities of the Advance-branded commercial program?

Dan, maybe a little bit of context. So in 2010, we opened 40 AI stores, Kevin?

38.

Yes. Part of what we were testing in 2010, we actually went much further away than the whole market, Dan. And what we were testing is does the value proposition work? And some of the hardest work of doing business is to figure out, will the consumer actually buy. We know that business has been very successful in its home markets. And to be candid, we were very pleased in terms of how that business performed outside of its own market. So a lot of the work that we've done over the last couple of years is, do we test -- how do we test it in other type of markets. We tested the store within a store. I'm not confident that that's a winner because it just creates another level of complexity that's hard to run within a box. And as we look at the future, a way to think about it is we still see a world where AI is standing separate in terms of the customer-facing activities. But there are many back-office activities that candidly if we're going to grow it faster, it can grow faster on the rails. So think about supply chain, think about some of the merchandising synergies. Today, we even have separate finance, and by and large, we have been operating it really at arms length, and now we see the opportunity to save. If we were to integrate this -- and some of it is about cost savings for sure, but I would say the majority of it is it allows us to position that business to grow more rapidly in different markets in the future. Do you have anything to add, Kevin?

The only thing I would say is you made a comment, do we envision this as a separate brand or becoming a rebranded as Advance. There's numerous differences in the models. And we're running a model that we hope would be 50-50 DIY Commercial on Advance, and it's 100% Commercial on the AI side. We have a business that is largely branded for Advance, and it's almost entirely private label for AI. And the differences continue. As we look at AI as they went into the Florida market and other markets they've expanded into in the last several years, they're complementary to our business. It's not something that is cannibalistic. So I would concur with Darren, we have had pronounced margin expansion for Advance, and a pronounced margin expansion for AI would have a comparable positive impact. We've been able to significantly reduce owned inventory. A significant reduction in their owned inventory would be positive as well. So I think it's taking a good brand with a truly differentiated model and allowing it to benefit from some of the tail winds that we've been able to create for ourselves on the Advance side. Daniel Wewer - Raymond James & Associates: Other retailers that have a similar customer profile as yours have been highlighting the elimination of the tax refund, anticipation loans as a headwind in January sales. But as the IRS begins to cut those checks in February, the sales dollars should come back into consumer spending. Do you think that the elimination of those RALs has had any impact on your business thus far in the quarter, and as a result, this quarter might turn out to be back-loaded?

Here's what I would say, Dan. Jim and myself, we were traveling last couple of weeks to stores. I was Visiting with Commercial customers. And when you listen to the teams out in the field, I mean they're actually so much closer to what's going on, and they would say in January, one of the challenges that they're facing is just that they're just not seeing the level of tax money, both in the Commercial accounts and showing up in our stores. So weather is a big piece of it. If you said to me, tell me what the changes year-over-year, I can't tell you what the changes, anecdotally. That is something we're hearing in the marketplace. But like weather, it will come back. And so we tend to view it as a timing issue at this point versus something that's structurally different.

Our next question is from Kate McShane with Citi Investment Research. Kate McShane - Citigroup Inc: I was wondering if you could talk a little bit about the inflationary headwinds that you had mentioned in your prepared comments and what your view will be on raising prices and what prohibits you maybe from passing it all through?

Essentially, if you just look across all industries, the oil prices are rising, and well-documented price of steel is rising and well-documented. And obviously, we have a number of products that are based on those two commodities. The key question for us is to what extent will we be able to have those cost increases reflected in the marketplace. And that's unknown. Quite frankly, we're pretty early in the cycle. Some of the products that we have have relatively long lead times. And today, we see that as part of the deceleration of margin growth. But it's very difficult to predict at this point just what the nature of it is. And certainly to the extent at which those prices are reflected in the marketplace, it would be margin neutral and would actually enhance sales. And if you only have to look back a few years ago, that was the situation we were in as an industry, that certain amount of our top growth was actually being driven by inflation of the products. Kate McShane - Citigroup Inc: And if I could go back to a previous question that was asked about some of the external factors that are impacting your business. Do you have a figure for what U.S. SAR has to be in our order to start dragging down the average age of cars? And how do used car sales come into play with this in the calculation of the average age of cars?

I think the arithmetic is, I'll get this close, but not perfect, but I think we're scrapping about 14 million cars a year. So I think if we build 14,000,001, we're starting to change some of that age dynamic in the industry, Kate. And you just have to go back, what, four years ago and look at the new cars, I think it’s 2002 to 2006, we're traveling at about a 17 million car rate. We're traveling at a rate, still depending on whose estimates you believe this year, anywhere from 12.5 million to 13.5 million. So there's still a pretty precipitous decline in terms of the new cars coming online.

And our final question today comes from Aram Rubinson from Nomura.

One, I guess, on sales, and then, two, on the margin. At least kind of back of the envelope calculations would suggest that the spread between the DIY and the Commercial comp kind of widened out during the fourth quarter. Wondering if you can kind of verify that or put a little bit of a range around the Commercial of the DIY? And then curious into Q1, whether that spread is, in fact, also kind of moving more towards Commercial?

Yes, maybe I'll start that, it's Mike, and then I'll turn it over to Jim to give you some insights. But we don't break out our Commercial and DIY. What I will tell you is that we enjoyed our 12th consecutive Commercial comp, and we enjoyed strong DIY comps building on I think it's positive seven out of the last eight quarters. But we don't break out because, as we've shared before, we're looking to build an integrated model. And while we have specific initiatives for each of the different customer groups, we think about it as more integrated. Jimmie, do you want to give some color?

Yes. The only thing I would add is that in the fourth quarter and in the first quarter, we really haven't seen any change in the trend between the two businesses in either case. So I don't think what you're seeing there is really showing up in the numbers.

And then just to follow up on the gross margin. There are elements of the gross margins which are, of course, benefits the programs that you're instituting, and then on the other hand, there's always some investing that's inside that line item. As you move your accounts payable up, I'm wondering if that yields any pressure on the gross margins over time as your mix, of course, moves up? We've not seen any of those things affect pressure on the margins over time. But I guess I'm trying to get a sense of the balance of growth. How much is kind of new incremental programs that are benefiting and then whether you're kind of reinvesting that growth in some things that maybe either in price or in getting the payables in terms to where you want? Just trying to understand the balance between the investment and the, call it, the harvesting.

Again, we had a sizable increase in the AP ratio last year, the largest we've ever had, and quite friendly, the largest of any one in our industry. And margins went up over 100 basis points. So we've not seen a correlation between improvement in payment terms and margin. That's essentially not the way the program works. So I don't believe -- I do believe that, that AP ratio will continue to grow over time, and that's a goal of the company. And I don't believe that what we do, in fact, have margin headwinds that doesn't appear to be one of them.

Thank you. And that's all the time we have for questions. I would now like to turn the call back to management for any final comments.

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

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