I would now like to turn the meeting over to Mr. Bill Rhodes. Sir, you may begin.
William C. Rhodes - Chairman, President & Chief Executive Officer: Good morning and thank you for joining us today for AutoZone's 2015 third quarter conference call. With me today are Bill Giles, Executive Vice President and Chief Financial Officer IT and ALLDATA and Brian Campbell, Vice President-Treasurer (sic) [Vice President-Treasury], Investor Relations and Tax. Regarding the third 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. To begin this morning, I want to thank all AutoZoners for delivering another solid quarter. Our primary focus this quarter was to continue and expand our different delivery models, open two additional mega hub stores and closely monitor the performance of these ongoing tests. We've made good progress on these tests and now have just over 900 stores receiving increased deliveries intra-week or 18% of our domestic store base and we now have four mega hubs in operation. In recent years, we've diversified our portfolio somewhat with an emphasis on building additional legs of growth for the future. Our retail domestic business, which generates approximately 70% of our revenues, performed well in Q3 and while our growth slowed modestly from last quarter, we continue to see opportunities for future growth in both store count and same store sales. Secondly, our commercial domestic business, which has been growing sales by double-digits since 2010, continued its growth in Q3 and continues to represent a significant opportunity for us. Regarding our international operations, we've been doing business in Mexico since late 1998 and our model has proven to work quite well. In Brazil, we opened two additional locations and our sales continued to grow nicely. As with other international companies, the strengthening dollar has negatively impacted our U.S. dollar earnings from these operations recently. Even with this volatility, we're comfortable continuing to open stores at our current pace. Our Internet businesses AutoZone.com and AutoAnything continue to grow well, generally consistent with our expectations. ALLDATA, which is the leading diagnostic and repair information business in the United States, continues to perform well. However, that business is more mature and coupled with increased competition has experienced more nominal growth. And finally, IMC, an imports parts specialist that we acquired last fall, continued with its integration process where we're working to expand their footprint of branches and where we're working to leverage their inventory assortment across the AutoZone domestic store base. This past quarter, our U.S. retail business expanded with the opening of 27 net new stores. We also opened 72 net new commercial programs. We've a commercial program in 79% of our domestic stores having opened approximately 750 new programs in just the past two years. Additionally, we opened seven stores in Mexico during the quarter. In Brazil, we opened two additional stores and operated seven stores at the end of the quarter. We expect to open a couple of additional stores over the next few months. We currently have 8% of our total stores outside of the United States. We believe we have growth opportunities on a variety of fronts in the U.S. and outside the U.S. for many years to come. The cadence of sales this quarter showed much weaker performance at the beginning of the quarter, offset by stronger performance during the last two reporting periods. These results were not unexpected to us. If you recall, during our conference call last quarter, we discussed how income tax refunds were issued earlier this year, following in the last two weeks of the second quarter. We believe approximately 100 basis points of same store sales were pulled forward, which benefited our 3.6% reported comp last quarter. After the tax refund cadence normalized, our sales results improved as expected. Regarding merchandise categories, our failure categories continued to do well, outpacing both maintenance and discretionary categories. This was opposite of last quarter and a little unique considering we were hoping the lower gas prices at the pump, coupled with the spring season, would lead to accelerating growth. Our belief is that the late winter storms in the first few weeks of the quarter coupled with accelerated tax refunds led to a later start to the spring maintenance season. Regarding regional performance, the west and the east did a little better than the central part of the country. Much of this can be attributed to the precipitation we experienced in these areas. We felt we finished the quarter in good shape to start our summer selling season with our stores looking great and our inventory assortment better than it's ever been. I should say one last thing regarding the income tax refund discussion I mentioned earlier. From a report issued by the Treasury Department, the amount of refund dollars were just about identical with last year's totals. However, it was the pronounced shift to initiating refunds two weeks earlier this year that was new. We believe this was the large reason for the start of our quarter being a little weaker and we believe our last quarter sales represented more normalized levels. Overall, we were pleased with our sales performance in Q3 and we're optimistic about the sales environment heading into our fourth quarter. Inventory levels increased over last year's Q3, approximately 6% on a per-location basis. This was in line with our expectations, as we have implemented several tactics over the past year to improve our hard parts coverage and to place inventory closer to our customers. We anticipate that inventory levels will remain relatively flat in Q4. Additionally, the IMC acquisition has increased our inventory per store across the chain by about $13,000. IMC branches carry approximately 10 times the inventory per location that an average AutoZone store carries, but their sales volumes on a per-location basis are materially higher as well. As we discussed on the last several quarterly calls, we have several initiatives to improve our inventory coverage and our ability to say yes to our customers both retail and commercial more frequently. We're continuing to expand our initiative around replenishing stores on a more frequent basis from our distribution centers. Traditionally, the vast majority of our stores were replenished once per week. At the end of the quarter, we had more than 500 stores that were being replenished between three times and five times a week, the majority of which began in Q3. Based on our results to-date and to provide us with additional data to determine our long-term strategy, we added more than 350 additional stores to this program in just the last few weeks. This brings our total store count of stores receiving additional deliveries per week to well over 900 stores. We are seeing a lift in sales. However, we have yet to definitively determine the ultimate benefit, nor we determine the optimal frequency. So consistent with past test and given the magnitude of change, we will methodically test and carefully measure our results. In order to replenish our stores on a more frequent basis, it will require increased operating expenses and capital expenditures, primarily for two to three additional distribution centers. Our modeling to-date based on current results indicates that while it is dilutive to gross and operating margins, it is sufficiently additive to operating profit dollars over the long-term. We've been pleased with our learnings to-date and are encouraged to continue to expand more stores under the program to better evaluate our results. Additionally, I want to update you on our mega hub stores. As a reminder, our stores are supported by approximately 173 hub stores with an expanded assortment. While our traditional hub store carries between 35,000 SKUs and 50,000 SKUs, our mega hubs typically more than double the hub stores' SKU assortment. With these substantially expanded product assortments, our mega hubs leverage those increased product assortments across other hub networks, providing stores across a very large geography access to this broad assortment. Along with the two older locations, we opened two additional mega hubs this past quarter. We're planning on opening one additional mega hub location in the fourth quarter. Based on our results to-date, we've begun to identify the next set of mega hub locations and are in various stages of developing these stores. Assuming our findings are confirmed by the more recent mega hub openings, we will develop a long-term strategy to roll out these mega hubs to provide service to the majority of our domestic stores. All of our inventory availability initiatives are designed to significantly increase our ability to meet our customers' needs. As our commercial business has grown and as our aspirations for this business are quite high and our DIY customers' needs increase, our need for expanded assortments of quality products at the right price continues. This has been important and difficult work and I want to stress we are still learning. While we are encouraged by these initiatives, before moving more aggressively, we need to have solid evidence of the long-term ramifications to our business and we need to ensure these initiatives are the appropriate course of action. At this point, we are encouraged with our findings, but there are examples of inconsistent performance between markets and initiatives and we need more time and more test results to determine our ultimate strategy. Lastly, around our inventory initiatives, we're in the early stages of expanding our direct import capabilities. Although we currently have an active program, we believe that it can be significantly expanded by developing more internal capabilities. We've completed significant research and have now developed a new global sourcing strategy and that strategy which includes opening our first offshore sourcing office is in the implementation phase. Now, I'll take a moment to discuss our recently completed acquisition of Interamerican Motor Corporation doing business in the marketplace as IMC. IMC is the second largest distributor of OE quality import replacement parts in the United States. They specialize in parts coverage for European and Asian cars. While considerably smaller than the number one participant in the industry, IMC now with 18 branches offers an impressive growth opportunity for us, not just because of the parts coverage, but also because of the strong management team. While it's still early in the process, I will mention our plans include opening more IMC branches and incorporating their parts catalog into our AutoZone Z-net parts catalog. We will continue to go to market as IMC and we expect to open several new IMC locations over the next 12 months. We acquired IMC in September and the rate of integration and expansion has been encouraging to-date. Thus far, we've made the IMC catalog available to over 500 AutoZone locations. While many of these 500 locations recently added the ordering capabilities from IMC, we've seen a sales lift in these stores' commercial sales programs that encourages us that our assumptions on the sales lift to AutoZone from cross-selling were correct, if not even conservative. Additionally, IMC added one new branch and several others are in the development pipeline. Finally, we relocated the IMC East Coast distribution center, which allows greater access to more sizeable markets. Let me stress, the IMC brand is very important to us. We will grow the brand and its presence in the future in many more markets than it is in today. IMC has been in a growth mode recently and has built an infrastructure to support a substantially larger footprint. It currently doesn't enjoy the operating margins that we experienced. So it lowers our overall EBIT margins by approximately 40 basis points on an annual basis. We're very excited to have the great IMC team as part of our organization and we're very optimistic about our future together. We continue to see synergies moving forward. Now, let's turn to our third quarter overall results. Our sales increased 6.5% and our domestic same store sales were up 2.3%. Both retail and commercial experienced positive same store sales growth. While our same store sales were negative the first few weeks of the quarter, due in our belief mainly to a shift in the income tax refunds, the remaining weeks improved. That consistency was across all regions of the country. We believe we continue to benefit from macro tailwinds, our work on inventory availability initiatives and solid execution. Regarding traffic versus ticket in the DIY business, traffic was negative, while ticket was positive. In line with weekly sales performance, our traffic accelerated at the end of the quarter versus the beginning. Our average ticket grew generally consistent with the first and second quarters when it returned to more normalized levels after about a year of subdued growth. The hard parts additions we've added to our stores have helped ticket growth. While improvements in product quality have pressured traffic over the last couple of decades, the technology advancements have significantly increased the price of the products we sell. We've been managing through this phenomenon as mentioned for over two decades, and expect to continue to do so. We opened 72 new commercial programs in the quarter versus 137 programs in the comparable period last year. We now have the commercial program in 79% of our domestic store base. Our commercial sales excluding IMC were up 11.4% this quarter. While our productivity per program was nicely positive, it did not increase as much as last quarter. Much like our retail business, our commercial business did slow in the first few weeks of the quarter, but finished more in line with our expectations. We've intensified our focus on mature program growth, and specifically, mature customer growth, and it was encouraging to see the improvements that began in Q1 and Q2 continue into Q3, although those improvements were muted in the first few weeks of the quarter as well. Finally, our older programs, those greater than five years old, continued to grow in the mid single-digit range. Regarding Mexico, we opened seven stores this quarter and we added two stores in Brazil. Sales in our other businesses for the quarter were up 6.5% over last year's third quarter. As a reminder, ALLDATA and e-commerce, which include AutoZone.com and AutoAnything, make up this segment of sales. Regarding online sales, there continued to be great opportunities for growth on both a business-to-business basis and to individual customers or B-to-C. While these businesses are small for us at just 4% of our total sales mix on the quarter, we're seeing these businesses grow at a faster rate than our brick-and-mortar businesses. With the continued aging of the car population and with gas prices on average down materially year-over-year for the third quarter, miles driven increased 3.9% year-to-date through February. Declining prices at the pump have benefited our customers, especially those most financially stressed (17:57). The lower end customer benefits the most from lower gas prices relative to income. This trend is encouraging, but we understand this is just one of many factors that impact our business. While gas prices have increased more recently, prices are still around $1 a gallon below last year. Our operating theme for 2015 is Wow! Every Customer Everywhere, and our key priorities for the year are great people providing great service, profitably growing our commercial business, leveraging the Internet, leveraging technology to improve the customer experience while optimizing efficiencies, and finally, improving inventory availability. On the retail front last quarter, under the great people providing great service theme, we continued with our intense focus on improving execution. Along with improvements to our product assortment, we're incorporating more product content and information to help our store AutoZoners provide trustworthy advice. Delivering product quality, features and benefits content through training and in Z-net continues to be a major effort for us at the store level. Behind the scenes, we continue to increase our technology investments and challenge ourselves to make sure our offerings are relevant across all shopping platforms. We realize as customers have become much more tech and mobile savvy, we have to have a sales proposition that supports all the ways they desire to connect with us. It is imperative we continue to invest in both current and future technologies in order to drive sales growth across all of our businesses. Over time, we will update you on the rollout of these technologies and how they help us interact with our customers and their vehicles more effectively. As our competition continues to innovate, we understand our ability to both maintain and gain market share will require us to have great-looking stores, higher in-stock levels, and most importantly, more knowledgeable AutoZoners to help customers than even what is available today. While we are gaining share, we need to be even better. The biggest link to all of this is our people. As you have to have the right merchandise at the right price in great looking convenience stores, real differentiation comes from our AutoZoners meeting and exceeding our customers' wants, needs and desires. Our AutoZoners are the most valuable asset we have in differentiating us in the eyes of our customers. In regards to commercial, we opened 72 programs during the quarter and 162 programs year-to-date. As we expect to open approximately 300 programs this year versus 424 programs last year, we will have a busy fourth quarter. We're on track thus far. As we continue to improve our product assortments and availability and as we make other refinements to our offerings, we expect that our sales growth potential will continue to increase. Our results continue to provide us with confidence to be aggressive in adding additional resources and new programs to this important growth initiative. We should also highlight another strong performance and return on invested capital. As we were able to finish Q3 at 31.1%, we're very pleased with this metric, as it is one of the best, if not the best, in all of hardlines retailing. However, our primary focus has been and continues to be that we ensure every incremental dollar of capital that we deploy in this business provides an acceptable return well in excess of our cost of capital. It is important to reinforce that we will always maintain our diligence regarding capital stewardship, as the capital we invest is our investors' capital. Before I pass the discussion over to Bill Giles to talk about our financial results, I'd like to recognize and thank every AutoZoner for this past quarter's effort to provide Wow! customer service to all of our customers. Now, here's Bill.
William T. Giles - Chief Financial Officer and Executive Vice President–Finance, Information Technology and ALLDATA: Thanks, Bill. Good morning, everyone. To start this morning, let me take a few moments to talk more specifically about our retail, commercial and international results. For the quarter, total auto parts sales, which includes our domestic retail and commercial businesses, IMC, our Mexico stores and our seven stores in Brazil, increased 6.5%. And regarding macro trends during the quarter, nationally, unleaded gas prices started out at $2.27 a gallon and ended the quarter at $2.69 a gallon, a $0.42 increase. And last year, gas prices increased $0.29 per gallon during the quarter, starting at $3.38 and ending at $3.67 a gallon. We continue to believe gas prices have a real impact on our customers' ability to maintain their vehicles, and as cost reductions help all Americans, we hope to benefit from some increase in disposable income. We also recognized that the impact of miles driven on cars over 10 years old, the current average is much different than on newer cars in terms of wear and tear. Miles driven increased 4.9% in January and 2.8% in February. We don't have March or April data yet. The other statistic we highlight is the number of seven-year and older vehicles on the road, which continues to trend in our industry's favor. For the trailing four quarters, total sales per AutoZone store were $1,761,000. This statistic continued to set the pace for the rest of the industry. For the quarter, total commercial sales increased 11.4%. Commercial represented 18% of our total sales compared to 17% last year and grew $46 million over last year's Q3, an almost identical dollar growth to last quarter's $47 million improvement. We opened 72 new programs during the quarter versus 137 programs opened in our third quarter of last fiscal year; we now have our commercial program in 4,007 stores supported by 173 hub stores. Approximately 1,100 of our programs are three years old or younger. As Bill had mentioned earlier, both our total commercial sales and sales per program accelerated from the previous quarter's results. While productivity per program is lower than several of our peers, we have a much younger program base. Being able to increase sales approximately $50 million for the quarter year-over-year is allowing us to close that sales gap. Our focus is on growing market share and improving our service levels by having more programs closer to our customers, and we are consistently making progress. Looking specifically at mature programs, those at least five years old, they grew in the mid single-digit range this past quarter, slightly slower than last quarter. However, the first few weeks of the quarter for commercial were muting our productivity growth. Additionally, we still have significant opportunities to open additional programs over the next several years. In summary, we remain committed to our long-term growth strategy. We believe the improvements we have made and upcoming additional improvements from our inventory availability initiatives enhanced our prospects, and we believe the addition of IMC will provide us with more avenues to service our commercial customers very effectively. We believe we are well-positioned to grow this business and capture increased market share. Our Mexico stores continue to perform well. We opened seven new stores during the third quarter. We currently have 418 stores in Mexico. As the U.S. dollar strengthened this past quarter, we did have an FX conversion headwind. However, we still delivered a solid U.S. dollar equivalent EBIT result and felt good about being able to handle the currency weakening in regard to the overall impact of the company's results. We expect to open a similar number of stores in Mexico this fiscal year that we opened last year, about 40 stores. Our returns and profit growth continue to be in line with our expectations. Regarding Brazil, we opened two new stores and now have seven total locations. We are committed to our prudent pace of development, customers are embracing our offering, and sales results continue to climb. While still not profitable, we're beginning to close the gap. While it is easy to envision several hundred stores in Brazil over time, currently, our strategy is to open a few more stores over the next several months and then refine our offerings and prove that our concept works for our customers and is financially viable. Once we refine our offerings and operations and evaluate the performance, we will provide you with an update on our long-term growth plans. Recapping this past quarter's performance for the company, in total, our sales were $2.493 billion, an increase of 6.5%. Domestic same store sales or sales for stores opened more than one year were up 2.3% for the quarter. Gross margin for the quarter was 52.3% of sales, up 29 basis points. The improvement in gross margin was attributable to higher merchandise margins, partially offset by the impact from Interamerican Motor Corporation, which was acquired during September of 2014. Looking forward, we continue to believe there remains opportunity for merchandise gross margin expansion within both the retail and commercial businesses. The pressure we will experience from the IMC business along with the rollout of further stores and more frequent deliveries from our distribution centers will continue to cause headwinds to overall gross margin rate. Our primary focus remains growing absolute gross profit dollars in our total auto parts segment. SG&A for the quarter was 31.64% of sales, 12 basis points higher than last year's third quarter. The increase in operating expenses as a percentage of sales was primarily due to the impact from the IMC acquisition. While we have invested in several key initiatives that are customer service related, like training and systems upgrades, we believe we are well-positioned to manage our cost structure in response to our sales environment. EBIT for the quarter was $514 million, up 7.3% over last year's third quarter. Our EBIT margin was up 16 basis points at 20.6%. Interest expense for the quarter was $31.8 million compared with $36.2 million in Q3 a year ago. Debt outstanding at the end of the quarter was $4.533 billion or approximately $160 million more than last year's balance of $4.378 billion. Our adjusted debt level metric finished the quarter at 2.5 times EBITDAR. While in any given quarter we may increase or decrease our leverage metric based on management's opinion regarding debt and equity market conditions, we remain committed to both our investment-grade rating and our capital allocation strategy; and share repurchases are an important element of that strategy. For the quarter, our tax rate was approximately 35.9% above last year's third quarter. We expect our annual rate to be closer to 36.5% on an ongoing basis. Net income for the quarter was $309 million, up 8.4%. Our diluted share count of 32.3 million was down 4.2% from last year's third quarter. The combination of these factors drove earnings per share for the quarter to $9.57, up 13.1% over the prior year's third quarter. Relating to the cash flow statement, for the third fiscal quarter, our operating cash flow was $523 million. Net fixed assets were up 7.3% versus last year. Capital expenditures for the quarter totaled $107 million and reflected the additional expenditures required to open 37 new stores this quarter, capital expenditures on existing stores, hub store remodels, work on development of new stores for upcoming quarters and information technology investments. With the new stores opened, we finished this past quarter with 5,069 stores in 49 states, District of Columbia and Puerto Rico, 418 stores in Mexico, 18 IMC branches and seven stores in Brazil for a total location count of 5,512. Depreciation totaled $62.3 million for the quarter versus last year's third quarter expense of $58 million. This is in line with recent quarter growth rates. With our excess cash flow, we repurchased $515 million of AutoZone stock in the third quarter. At the end of the quarter, we have $778 million remaining under our share buyback authorization and our leverage metric was 2.5 times. Again, I want to stress, we managed appropriate credit ratings and not any one metric; the metric we report is meant as a guide only as each rating firm has its own criteria. We continue to view our share repurchase program as an attractive capital deployment strategy. Accounts payable as a percent of gross inventory finished the quarter at 110.9%. The inclusion of IMC reduced the AP ratio by about 174 basis points. Next, I'd like to update you on our inventory levels in total and on a per store basis. We reported an inventory balance of $3.5 billion, up 10.7% versus Q3 ending balance last year. Increased inventory reflects the recent IMC acquisition, new store growth and additional investments and coverage. Inventory per store was up 6% at $629,000 per location, reflecting our continued investments in hard parts coverage and the IMC acquisition. The increase in inventory per store this quarter due to the IMC acquisition was $12,700 per store. Finally, as Bill previously mentioned, our continued disciplined capital management approach resulted in return on invested capital for the trailing four quarters of 31.1%. We have and will continue to make investments that we believe will generate returns that significantly exceed our cost of capital. Now, I'll turn it back to Bill Rhodes.
William C. Rhodes - Chairman, President & Chief Executive Officer: Thank you, Bill. We are pleased this morning to report our 35th consecutive quarter of double-digit EPS growth, growing this quarter at a rate of 13.1%. Our company has continued to be successful over the long run. That success is attributable to our approach to leveraging our unique and powerful culture and focusing on the needs of our customers. At the end of the day, our customers have choices, and we must innovate to ensure they turn to us for their vehicle needs. We will continue to invest in our businesses and monitor the results from our ongoing inventory initiatives. As we have tested multiple delivery frequency models, financial results have been inconclusive as to which format makes the most sense. There are incremental costs to more frequent deliveries, and we have to make sure we develop the appropriate long-term solutions, because many of these additional costs will virtually become fixed costs. We are moving forward with our mega hub store concept. As you can see, we've got lots of exciting things going on. Along with our inventory assortment, our initiatives around commercial growth, Mexico, ALLDATA, e-commerce, Brazil and now IMC are all just getting started. Our long-term model is to grow new store square footage at a low single-digit growth rate, and we expect to continue growing our commercial business at an accelerated rate. Therefore, we look to routinely grow EBIT dollars in the mid single-digit range or better in times of strength. And we leverage our very strong and predictable cash flow to repurchase shares, enhancing our earnings per share growth into double-digits. We feel the track we're on will allow us to continue winning for the long-term. We believe our steady, consistent strategy is correct. It's the attention to details and consistent execution that will matter. Our belief this solid consistent strategy combined with superior execution is a formula for success. Our charge remains to optimize our performance regardless of market conditions and continue to ensure we're investing in the key initiatives that will drive our long-term performance. In the end, delivering strong EPS growth and ROIC each and every quarter is how we measure ourselves. We're pleased with our results this past quarter, but we must remain committed to delivering on our strategic and financial objectives. Now, we'd like to open up the call for questions.
