Welcome to the 2014 Third Quarter Investor Call. My name is Christine, and I will be operator for today's call. [Operator Instructions] Please note that this conference is being recorded. I will now turn the call over to Ms. Milton Draper. You may begin.

Thank you, operator, and welcome, everyone. I would now like to read the statements about the use of forward-looking statements and non-GAAP financial measures during this call. Statements made in the course of this call that state the company's or management's hopes, beliefs, expectations or predictions of the future are forward-looking statements. Actual results may differ materially from those projections. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained in our SEC filings, including our Form 10-K, our 10-Qs and our press releases. We undertake no obligation to update these forward-looking statements. We are holding this call to review our third quarter results and to answer any questions you might have. If you have additional follow-up questions after the call, please call me at (650) 589-9445. Joining me today is the Chief Executive Officer of Core-Mark, Thomas Perkins; and the Chief Financial Officer, Stacy Loretz-Congdon. Also in the room is Chris Miller, our Chief Accounting Official [ph]; and Greg Antholzner, our Vice President of Finance and Treasurer. Our lineup for the call today is as follows: Tom will discuss the state of our business and our strategy going forward, followed by Stacy, who will review the financial results for the third quarter. We will then open up the call for your questions. Now I would like to turn the call over to our CEO, Tom Perkins.

Good morning, everyone. I would like to begin with an update on our Rite Aid partnership, our new Ohio division and our CNG conversion program and then touch on our third quarter results. I will finish up by updating you on our core strategies. Our rollout of Rite Aid is essentially complete, and we are servicing over 4,200 stores today. I am extremely pleased that this organization could roll out such a large number of stores in such a short period of time. Between now and the end of the holiday season, we'll be focused on execution. Currently, we are delivering frozen, fresh and refrigerated products. These include such items as home meal replacements, deli meats, cheeses, yogurts, breads and fresh beverages. In addition, we are delivering an extensive list of bakery items. For the next couple of months, we will be focused on fine-tuning the current set of products. Then, when the holiday season is behind us, we and our partners at Rite Aid will explore which products are the best to roll out next and which stores to target for those product enhancements. These 4,200 Rite Aid stores offer a significant sales opportunity for our company. Today, we are not delivering all the products we could be delivering. This partnership is profitable today, but we have significant opportunity to expand our product offering, resulting in additional sales and profits in the future. We are committed to our long-term partnership with Rite Aid to help them maximize the efficiencies of their supply chain and to optimize the products they sell in their stores to meet the needs of their customers. Today, our new Ohio division is servicing approximately 800 of the Rite Aid stores. Our team got this division up and running very rapidly and was receiving product and…

Thanks, Tom, and good morning, everyone. I'd like to begin with a brief discussion of EPS and guidance before moving into the numbers for the quarter. Diluted earnings per share were $0.59 compared to $0.53 last year. Excluding LIFO expense, this translates to $0.76 for the third quarter compared to $0.59 last year. We are happy to see some return of commodity inflation with the long awaited candy inventory holding gain, representing approximately $0.14 per share of this quarter's earnings. We maximize these types of increases whenever possible. In addition, product inflation, which has been minimal in the last several years, helped offset inflation in our operating cost. We revised EPS guidance to reflect our current estimates for LIFO expense and a reduction in our expected tax rate. We have adjusted our LIFO estimate to approximately $18 million, up from $15 million, due primarily to an expected increase in the confection Producer Price Index. In addition, we reduced our expected tax rate to 37.5% for the year from 39% previously. The decrease resulted mostly from tax true-ups in the third quarter related to prior year returns that were finalized in September. The net effect is a $0.05 reduction to prior EPS guidance, driven primarily by higher LIFO expense. We now expect earnings between $1.68 and $1.76 per diluted share for the year. Excluding LIFO expense, this translates to a range of $2.17 to $2.25 per diluted share or an increase from prior guidance of approximately $0.05 a share. LIFO expense will be monitored for further adjustments, depending ultimately on the published U.S. Producer Price Index, which we use for book purposes. Our current LIFO projections reflect our best estimates, with cigarette and candy categories representing almost 60% of this year's expense. We have factored in modest inflation for cigarettes in…

[Operator Instructions] Our first question comes from Christopher McGinnis from Sidoti & Company. Christopher McGinnis - Sidoti & Company, Inc.: I guess just to start off, maybe on the Rite Aid, just with the current kind of offering that you have there in the 4,200 stores. Can you give us a sense of maybe the revenue benefit to you?

I would love to, Chris, but I can't. All I can tell you, it's good, but it's going to get much better as we progress down the road with them. Christopher McGinnis - Sidoti & Company, Inc.: Sure. I tried. I mean -- I guess just can you talk a little bit about the experience of bringing in -- going into 4,200 stores as quickly, maybe some of the positives and some of the negatives you've seen so far?

I think it's just been a tremendous win for this organization. I mean, not only -- just the fact of -- if you think -- you go from the beginning of just setting up 4,200 accounts to ensuring you're hiring up the right number of people, you're adding the right fixed assets, capital assets to handle the business. And then I look at it from Rite Aid's perspective as they had to communicate and train and organize over 4,200 store managers, right, for this transition. And I think it's just a testament to both organizations' -- great organizations and great people that work for us. And so it's -- when you sit back and we first looked at it and said, 4,200 stores, there's no way. And I think as Core-Mark does, there was a way and we got it done. And that's how we go to market and that's who we are as a company. Christopher McGinnis - Sidoti & Company, Inc.: Okay. One with -- just a quick question on the food portion of the business. The increase you're seeing on that, is that a combination of maybe new customers coming in but also -- what's driving that? Is it maybe moving up the value chain? I know there's a number of levels on your food offering.

Yes. Christopher McGinnis - Sidoti & Company, Inc.: Can you just maybe dig in that a little bit more?

Yes. I think, really, if you think about it, it's really our core strategies. It's really the Fresh and Foodservice and good-for-you products. And as we sort of discussed last call and we're still seeing is that, that center of the store is sort of -- it's growing at -- minimally, but really on the out periphery of a store, where you have the Foodservice offering then you have the Fresh products and you have the good-for-you products, that's really where we're seeing growth. And our core strategy is -- are the right strategies because that's what the consumers are looking for. So really our growth in our Fresh categories is really what's driving the overall growth in the food categories. Christopher McGinnis - Sidoti & Company, Inc.: And just 1 last question. Just through the Rite Aid win and the press around it. Have you seen any new customers come into the base that you typically wouldn't have seen that are asking about business?

I think that we've -- we always have discussions, ongoing discussions with a variety of different customers. Some were ongoing prior to Rite Aid, and I anticipate that we'll have more come to us after -- with the Rite Aid business now under our belt.

Our next question comes from Ben Brownlow from Raymond James. Benjamin Brownlow - Raymond James & Associates, Inc., Research Division: You touched on the CNG and, obviously, that's a really encouraging initiative. Is there any reason -- I think you said that you could or were planning to get up to a 40% conversion, fleet conversion, in the latter half of 2015. Could that conversion go north of that? And just, can you discuss some of the hurdles to achieving that?

Yes, I think, Ben, it can. And I think, definitely, with -- now that we have a great partner in U.S. Oil, I think that will assist us in getting more sources or infrastructure in place for CNG to fill our vehicles. The one thing is we are going about this the right way, which is ensuring that we are going to be driving the right number of miles to produce the savings, which really offset the incremental cost that we pay for those CNG tractors. And so really there -- so as always, we're very patient and we're very thorough in analyzing the return on the investment. And so absolutely, as we get more experience, as we see the tractors we have in place and we see the efficiencies increasing and the savings increasing that, at some point, we probably will increase or accelerate the conversion of the fleet. Benjamin Brownlow - Raymond James & Associates, Inc., Research Division: Great. And last question for me. The -- switching to the food/non-food, gross margins were much better than I had projected. Any reason to expect that to slow down, given the past 2 quarters and the Rite Aid deal kind of shifting that mix more towards higher-margin food items?

No, I don't see that. I think, really -- and at the end of the day, our core strategies, our focus is growing the higher-margin categories that we see with the Vendor Consolidation and Fresh categories. And so that is really what's driving that, that -- those results. And I have no doubt that the increases on our margins will continue because we're going to continue to see an expansion of those core strategies.

Our next question comes from Andrew Wolf from BB&T Capital Markets. Andrew P. Wolf - BB&T Capital Markets, Research Division: Well, I also wanted to ask on Rite Aid. And you mentioned the penetration opportunity going forward. Is that more in items that they currently do carry and Core-Mark could economically displace either a DSD vendor or another distributor or even self-distribution? Or is that more -- I'm not just asking more, I'm asking also for color, but also is that also around things they don't carry such as Fresh?

It's a combination of both. Definitely, there are opportunities. And again, it's all about vendor consolidation, right? So it's all about putting more on the trucks to provide 1 or 2 or 3 times a week delivery to the stores. But again, at the end of the day, the goal is to provide Fresh because they are looking to attract and offer the products that consumers are looking for, which are Fresh and good-for-you products. And so we definitely need traditional products to add to our trucks, but then also, it allows, it gives us the platform to deliver Fresh products to their stores, which they don't have today. And so really that is, I think, the long-term goal. That's where we're heading with them. And they see that also. They have the same vision as we do. Andrew P. Wolf - BB&T Capital Markets, Research Division: So it would be a mix of pretty much everything I mentioned essentially?

Sure, absolutely. Yes, absolutely. And I think wherever it makes -- to your point, wherever it makes economic sense and, again, what we know is that the more product we put on our truck, the better you leverage those costs. And so it's better for our customers. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. If you get to that point in a year, whenever it is, can you discuss where that -- like the drop size might index out to, obviously, not the cigarette side, but just the non-food -- the non-cigarette, excuse me, drop size might index out relative to like a typical convenience store?

I think that what we've seen, and this is from prior experience, we've been doing a certain number of stores, one for Rite Aid that we've been doing for a couple of years and also for some other drugstore chains. And we definitely see the drops in those categories are usually 3x to 4x larger than a convenience store drop. They just have more foot traffic. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. That's pretty exciting.

Yes. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. And then I just wanted to ask one other question around the bonus accrual, $2.3 million on the health care. It looks like, versus kind of incoming trend, the health care spend is about on and the bonus accrual looks a little lumpy. Is that the right way to think about the expenses, those 2 expenses?

Yes, I think so, too. I think if you think about it, so every year, we accrue bonuses and pay for performance. And in years where -- last year, we know we didn't hit our guidance numbers. And so the bonuses weren't as...

Robust.

Robust -- it's a good term -- than they are this year. So I think some of that is a better performance this year and not as good performance last year, coupled together to drive such a large increase.

We're matching it to the quarterly earnings as well.

Right. Andrew P. Wolf - BB&T Capital Markets, Research Division: And just on the health care. Can you give us a little color, is that incidence-driven or is it a change in some accrual that...

No, it's primarily just an increase in the number of employees plus the severity of certain claims. That's really all it is. Since we're self-insured largely, whenever we have large claims experience, that will pop that number up a little bit. And then that, coupled with the fact that we have more employees that are participating in our programs, is causing the cost to increase.

[Operator Instructions] Our next question comes from John Lawrence from Stevens.

Yes. Tom, would you -- not surprising, I want to touch on Rite Aid for a second, if that's okay. As you -- to make the point on -- we spent some time looking at a lot of stores in California. And obviously, that idea of that different planogram, I assume that -- can you tell us now -- I mean, I assume every store is really different or just different districts can -- of the stores you're in today, can you give us a sense of how many different planograms that could be?

I don't know that myself. I think that's one of the -- that is really part of that execution because I think if you were to ask Rite Aid, I think they probably didn't know that themselves when you have that number of stores. And so I think what we'll see over the next 3 to 6 months is really seeing a more of an insight into the different sizes of stores, the locations of the stores, and then really the customer foot traffic for those stores. And so I think, at the end of the day, we're going to have, probably, like you said, many different planograms to match where the store is located and who their consumers are.

Yes, it looked like there's -- obviously, you moved from Pasadena into Hispanic areas of L.A. and that set could be totally different.

Right. And then if you go to the East Coast, where -- you can see in some areas, those stores are much larger and newer, and a lot of the remodelings have been done in -- back in the East Coast. So I think that's -- so you definitely have a wide swing of different types of stores.

Great. And secondly, if you look at -- thanks for that clarity on the CNG. I guess 12% of the miles or I guess -- was that the number, Stacy, in the quarter? 12% of the miles were CNG?

Yes.

Correct.

If you flip that the other way, and to another way of looking at fuel savings, can you give us any sense of what percentage of the miles will be affected by the Ohio DC?

By Ohio?

You mean the number of miles we're going to be saving when we move to Ohio?

Yes. By just basically reallocating the routes.

Yes, I would say we've estimated about $2 million in savings. And it's probably, I would say, it's maybe 0.5 million to 0.75 million miles reduction. And don't -- that's just off the top of the...

Back of the envelope, right?

Exactly.

So as we look -- the right way to look at '15 is obviously that productivity number per box should improve, obviously, variances on what products are being carried. And then on the surface then we get this little bump from a CNG rollout on part of the chain. So all the arrows in the right direction?

Yes, I think so. And then I think that's where we're -- we know we're going to continue to add customers and so we got to do it as efficiently as possible. And we have to constantly be looking at ways to improve our efficiencies and reduce our cost. I think the second thing is, probably, is as critical, is just ensuring that we are addressing the driver shortage needs because what we do know is when we do experience driver shortages, it adds incremental cost to our system. And so our goal and our strategy is really focused around how do you mitigate those potential cost increases.

Last question. You mentioned a little bit in the commentary, but tell us what's going on in e-cig category?

E-cig is sort of flattening out. I think we saw some good bumps when -- with the Altria product and R.J. Reynolds product started to roll out. I think there's sort of a -- vape is definitely bigger and is growing at a faster pace, but it's hard to get a handle on those because a lot of those are on the unregulated businesses, the vape stores. If you're in California, you probably saw a lot of those in strip malls and stuff. And so I think there's still some wait-and-see. And in fact, you see -- read the press about the large companies trying to ensure that the FDA will definitely regulate the vape stores which will, in the end, help their business. But we still have a lot...

[Operator Instructions] We have no further questions at this time. I will now turn the call back to Ms. Milton Draper for closing comments.

Thank you for your participation in our conference call and for your interest in Core-Mark. We hope that you will be able to join us for our first Investor Day, which we will be hosting in Tampa, Florida, December 9, this year. We look forward to sharing in greater depth the reasons for our strong optimism about our organization. If you have any additional questions, please feel free to call me at (650) 589-9445. Thanks.