Good morning, and welcome to Sysco's First Quarter Fiscal 2013 Conference Call. As a reminder, today's call is being recorded. We will begin today's call with opening remarks and introductions. I would like to turn the call over to Mr. Neil Russell, Vice President of Investor Relations. Please go ahead, sir.

Thank you, operator, and good morning, everyone. Thank you for joining us for Sysco's First Quarter 2013 Conference Call. On today's call, you will hear from Bill DeLaney, our President and Chief Executive Officer; and Chris Kreidler, our Chief Financial Officer. Before we begin, please note that statements made in the course of this presentation that state the company's or management's intentions, beliefs, expectations or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ in a material manner. Additional information concerning factors that could cause actual results to differ in a material manner from those in the forward-looking statements is contained in the company's SEC filings including, but not limited to, risk factors contained in the company's annual report on Form 10-K for the year ended June 30, 2012 and in the company's press release issued earlier this morning. Non-GAAP financial measures are included in our comments today and in the presentation slides. The reconciliation of these non-GAAP measures to the applicable GAAP measures are included at the end of the presentation and can also be found in the Investors section of our website. All comments about earnings per share refer to diluted earnings per share unless otherwise noted. In addition, all references to case volume growth include total Broadline and SYGMA combined. At this time, I'd like to turn the call over to our President and Chief Executive Officer, Bill DeLaney.

Thank you, Neil, and good morning, everyone. This morning, Sysco reported record sales of $11.1 billion for the first quarter and net earnings of $287 million. Earnings per share was $0.49 and adjusted earnings per share, representing our underlying business performance, was $0.58 or a 3.6% increase year-over-year. Sales grew 4.7% for the quarter, driven mainly by case volume growth of 2.9%, which contributed to the highest quarterly sales level in our history. While we believe restaurant spending trends may have softened somewhat as the quarter progressed, we are pleased with our overall volume growth during the quarter. Acquisitions contributed 0.5% to sales growth during the first quarter, and we have completed or announced, thus far this fiscal year, the acquisition of companies with annual revenues totaling approximately $560 million, several of which expand our presence in geographic markets that we currently serve outside the United States. The acquisition environment is currently favorable, and we have a number of potential opportunities in the pipeline. Product cost inflation moderated to 2.2% for the quarter, which is beneficial for both Sysco and our customers. While our growth in adjusted operating income was modest, we are encouraged by our expense management performance in most areas of the business. Specifically, we experienced lower cost per case in our selling and administrative areas as a result of enhanced business practices and effective leveraging of this quarter's volume growth. Conversely, higher fuel prices, labor shortages in some markets that we operate in and execution issues on our part led to higher year-over-year delivery cost per case. We are fully committed to both servicing our customers at a high level and improving productivity in all parts of our business as we move forward. Turning to our business transformation efforts. We continue to make progress on deploying our…

Thanks, Bill, and good morning, everyone. For the first quarter, sales were $11.1 billion or an increase of 4.7% compared to the prior year, driven by case volume growth of 2.9% and food cost inflation of 2.2%. In addition, acquisitions within the last 12 months increased sales by 0.5%, and changes in foreign exchange rates decreased sales by 0.3%. Gross profit in the first quarter increased 2.9%. While gross margin in the first quarter declined 33 basis points to 18.1%, it's important to note that this performance significantly improved as the quarter progressed. Operating expenses increased $87 million or 6% in the first quarter of fiscal 2013 compared to the prior-year period, driven mainly by a $41 million increase in business transformation expenses and a $30 million increase in salaries and related costs. As a result, operating income decreased $31 million or 6%. Net earnings for the first quarter were $287 million, a decrease of $16 million or 5.3% compared to the prior year. Diluted EPS was $0.49, a 3.9% decrease compared to the prior year. As we have discussed on previous calls, we believe it's important to focus on the performance of our underlying business, which not only excludes $6 million in certain items such as severance but also excludes business transformation expenses. To summarize the performance of our underlying business, adjusted operating expenses increased 3.2%, adjusted operating income increased 2%, adjusted net earnings grew 3.2%; and adjusted EPS grew 3.6% to $0.58 per share. As Bill mentioned, the acquisition environment is currently quite favorable, and we have been very active in this area. To date in fiscal 2013, we have completed or announced 6 acquisitions of annual revenues totaling approximately $560 million, including 2 transactions which occurred subsequent to the end of the first quarter. As a result,…

[Operator Instructions] And we'll take our first question from Karen Short, BMO Capital Markets.

This is actually Ryan Gilligan on for Karen. We wanted to ask you about the inventory opportunity in terms of reducing SKU counts in your categories and the progress you've made so far, specifically in the categories that you've approached already. What has been the response from customers and what has been the impact on cost of goods?

This is Bill. I'd say on the SKU opportunities, we have kind of a 2-pronged approach right now. We, from an operational standpoint, have a lot of activity going on in our operating companies where, basically, it's what I would characterize as good old-fashioned inventory management where we see opportunities to reduce SKUs that are not critical to customers and which are slow-moving, then we do have -- brought a lot of focus to that particular an issue. So we've actually made good progress on that side of things. And generally, that's being handled well with customers. And any time you have a situation where you're reducing a SKU that -- or taking away a SKU that sells, often there will be some type of discussion with the salesperson or the customer. But we're working through those and I feel pretty good about that. As part of our lower costing products initiative, we've talked about exploring category management. And that will bring a much more integrated and smoother approach to how do we optimize our assortments throughout the enterprise and manage SKUs more effectively at the same time. So that work has not yet begun in terms of being live, but we're doing a lot of development work on that front as well.

Great. And can you talk about the cadence of sales trends throughout the quarter and into the second?

I would characterize sales trends pretty much what I said in my prepared comments. We certainly read a lot from you folks in terms of softening in the restaurant industry, and we think we've seen some of that as the quarter's gone along, and that's continued here somewhat in the early part of the second quarter. So the good news for us, and this is just something we always try to remind everybody, restaurants are obviously a big part of that $225 billion market, but we have a lot of other business beyond the restaurant business with colleges, universities, health care, hotels, basically any establishment where food is prepared and eaten away from home. So we’ve made some good strides with some of those customers, and that's serving us well right now.

Great. And, sorry, last question, just to go back to the opportunity with reducing cost of goods. The estimate that you outlined at the Analyst Day, could that possibly be conservative, or how are you guys thinking about that right now?

It's not conservative until we beat it, so I think at this point, that's our best guidance for you.

We'll take our next question from John Heinbockel of Guggenheim Securities.

So Bill, a couple of things. One of the reasons gross margin had declined over the last 1, 1.5 years, had been some proactive price investments you guys had made. Where do you stand on that? And assuming that, that's moderating, is there a possibility here that gross margin turns positive some time in '13?

I certainly hope so, John. We're pleased that the trends have improved, but obviously, they're still below last year. And I think in this type of market where the inflation has moderated, as we called out, we would expect to continue to see improvement in those trends. So we're highly focused on that is about all I can tell you. We've done a lot of work internally, John, outside of the big initiatives in terms of providing what we call more market-relevant costing to our operating companies through our purchasing organization here. And I think as we continue to provide better and more market-oriented, market-relevant transfer costing, and that gives the OpCos a better cost base to price off of. So there's a lot of different things going on there. So I'm going to answer it similar to your earlier question. We need to improve, continue to improve in that area. And as we get closer to year-over-year being flat, then I'll be more optimistic about improving year-over-year.

You also talked about the acquisition environment being very favorable. Now is that -- I guess it's a combination of these 2 things, but in terms of quality of companies available versus the price that you're having to pay, is 1 of those 2 much more favorable than the other?

That's an interesting question. I'll start and let our acquisition guy here probably clean it up here a little bit. I would say there's a couple of things going on right now. I think the environment is good. There's a little bit, I think, of a year-end phenomenon going on, with concerns about tax code and that kind of thing, so I think that has helped at least in this country. But I would also tell you that this interest rate phenomena, I think, works both ways. So for us, it helps the deals look more attractive, obviously, since our borrowing costs will be a lot less. But the sellers know that as well. So I think for good value in terms of quality companies, you're going to pay an appropriate multiple today, and we're willing to do that because we can see the benefits financially and otherwise. So hopefully, that's a response. So I think that's a better environment, but we're not stealing any companies right now. We're talking about good companies and pay reasonable value.

I don't really have anything to add, Bill. Bill kind of couched it. The only thing I'll amplify is we have seen substantial increase in inbound phone calls because of the potential for tax rate increases in the beginning of next year. So you’ve got a little bit of that rush to get it done phenomena. But we're fortunate; we're seeing a lot of good companies that haven't been interested in talking before coming forward and wanting to have discussions, and some of those will result in transactions soon and some may result in transactions later. But we're happy to talk to everybody.

All right. Then last on ERP. So Chris, you said none of the financial objectives have changed. I assume the costs and benefits you'd outlined for '13, none of those have changed?

That is correct.

Okay. And then accelerating it in '14. How many of OpCos do you think you have done by the end of fiscal '13? And then what's the capacity, if you look at it per week, per month, however you want to look at it, the capacity the organization has to do those? And if you do accelerate it, what do you do to enable you to accelerate it?

Well, John, first, I mean, our guidance for the year was 5 to 15 companies, and we're certainly comfortable with that guidance. If I were going to shade it, I mean on the pace that we're at, as long as things continue to go well, I think we'll be towards the higher end of that guidance. But we're very comfortable with that. As Bill said, and I repeated, we are looking at now what it would take to accelerate that based upon us starting to feel better about our deployment capabilities. I think it's premature to give you more guidance as to how fast we could go or how many we could do at a time until we finish that work.

And up next is Edward Kelly of Credit Suisse. Edward J. Kelly - Crédit Suisse AG, Research Division: Could we maybe go back to ERP? And I was hoping you could maybe give us a little bit more color around the decision that you're potentially making, I guess, to accelerate the rollout. So what are you seeing today in the most recent rollouts versus what you've seen over the first couple that gives you a little bit more confidence? And then the second part of this question is if you did accelerate it, and I know, obviously, there's a lot of variability around the details, but what would that mean to the 2015 guidance that you gave at the Analyst Day?

I'll tell you what, I'm going to try to do a better job than Chris, and then I'll let him go back and do this all over again. We -- I think the biggest thing we're seeing is confidence, I mean, to be somewhat qualitative. We -- I mean I think our people are -- we've done a few of these now, right? So we've done 5 now. And each time we do it, both the teams on the deployment side, as well as the local operating teams, the SBS teams, everyone, it's familiar, and it's things we’ve -- we get better each time and so I think confidence coming from improved performance in terms of the deployment aspect of it. In terms of what we need to see, we need to ramp up some resources to be prepared to move at a more accelerated rate. And we need to see really good transition into the operationalizing of the ERP platform as well. So those are all things, as I said and that Chris has alluded to, that we're assessing for over the next several weeks following these last 2 deployments.

Yes, I want to go back. I mean, at Investor Day, we actually talked about the potential to accelerate once we proved a few things and built up our own confidence. We just said we'd be looking for that opportunity. And I think all we’re really pointing out right now is we are now starting to look more seriously at the opportunity to accelerate based upon some early confidence. The impact of that, I obviously can't quote you numbers, but conceptually, the impact of that is we will accelerate expense, obviously, inside of the range that we had previously disclosed, and that would also ultimately accelerate some of the benefits that were post-2015. So if you recall when we talked about the benefits from business transformation, we said there would be additional benefits beyond the 3-year guidance that we were putting up on the slide and on the screen during Investor Day. So this would allow some of that to come into that 3-year period, but we'd also accelerate the expense to get it done. Edward J. Kelly - Crédit Suisse AG, Research Division: Okay, that makes sense. And then you did mention the $10 million to $20 million increase in the fuel charges. Is that a gross or net basis because you do have surcharges, I think down on a lot...

Yes, that's the fuel expense, not the surcharge. I don't really anticipate the surcharge increasing very dramatically, so that's the fuel expense. But ultimately, if the surcharge isn't going to grow, that's going to end up being a net expense as well. Edward J. Kelly - Crédit Suisse AG, Research Division: Okay, great. And another question is on inventory. Inventory was up about 11% this quarter. Inflation's lower; you're doing some SKU actualization although I don't know how much of that's in the numbers. But could you maybe just help us understand why inventories is up that much?

Yes, first -- I mean, we are moving more cases or still a significant amount of new cases. We were up 2.9%. Secondly, those acquisitions that we bring online also bring on additional inventory as well. You still have a little bit of inflation in there; it's not nearly as much as before. But every quarter, we – well, actually every month, we will analyze how much of our increase in inventory was due to sales versus DSOs. And I will tell you, we're still not hitting on all cylinders on the DSOs. We have opportunities for improvement there. But most of our inventory increase was driven by sales growth. Edward J. Kelly - Crédit Suisse AG, Research Division: Okay. And then my last question for you is a little bit more bigger picture related to CapEx. Your CapEx guidance for this year is certainly down relative to last year because there's less spending, I guess, on business transformation. But if you look back over time, you've had years where you were $400 million to $500 million in CapEx. You're still, I think, in the range, if I remember, $600 million, $650 million. Could you maybe just help us understand what the difference is even where you are now versus what that used to be? And is there an opportunity to get CapEx lower in the not-too-distant future?

Yes, it's a topic we've spent quite a bit of time talking about around here. I think the answer is yes, we can bring CapEx down lower. We've taken the first step of that, which is to look historically at some metrics for capital versus sales, for example. We talked about that at Investor Day and what's the right percentage, and I think we outlined 1% to 1.2% of sales. It's not perfect, but it's a good guideline. Step one is to get us back comfortably into that range, and then we'll see where we can go from there. But the answer to the first part of your question is we're a bigger company than we were 4 or 5 years ago. We've got more facilities. We had to -- during the crisis, we didn't spend a lot of capital, so we did some make-up spending afterwards because, frankly, we had built up some pent-up demand, and we needed additional space. So there was some catch-up there. Now we've got those facilities to maintain, we've got additional fleet from all of the case growth that we've realized over the last 4 or 5 years. So we're going to spend more capital to maintain that fixed asset base. But all of us believe that we've got more opportunities for efficiency.

Yes, the only thing I would add is Chris has done a really good job over the last few months of helping us make cash flow and asset optimization, asset management optimization in one of our key areas of strategic focus. We had 3 big facilities that came on board this past year. We have one big facility that's going to come on board in the current year in Southern California. Fleet replacement, those trucks and power units cost more today; significantly more than they did 2 or 3 and even certainly 5 years ago. So there's a fair amount of inflation on the construction side and on the fleet side if you go back and compare what we're doing today versus just a few years ago. Edward J. Kelly - Crédit Suisse AG, Research Division: Okay. And just one quick follow-up, and I'm done here. The cost savings that you guided to for the year, I think, was in this like $150 million range. How much of that did you get in this quarter?

So your guidance is approximately correct. We said total run rate benefit at the end of 3 years $550 million to $650 million, and we'd realize about 25% of that in the first year so your math certainly holds up. We believe we're on track for that. We're not really going to give quarterly guidance as to what we received. We certainly have internal forecast by category of initiative, and we're tracking those very carefully. We're ahead in some areas; we're behind in some areas; we're on track in other areas. But all in, we're feeling pretty good about the number for this year, and that's why we've not changed our forecast for that.

And we'll take our next question from Greg Badishkanian of Citi.

This is Alvin Concepcion in for Greg. I just wanted to ask a little bit more about the slowdown in the restaurant industry trends throughout the quarter and early part of the second quarter. Is there a major difference you're seeing out there between casual dining chain customers and independents? And also, is there any color that you're hearing from your customers on the sales environment? Are they increasingly more concerned and are they making some adjustments to pricing as a result?

Let me take the first one and if I forget get the second one, let's come back to that. I'll tell you what; can you just give me the first one again? I want to make sure I answer it right.

Sure. Are you seeing any major differences out there between casual dining chain customers and the independents?

Well, first of all, I guess the way we look at it, there's a lot of independents that are casual dining restaurants. Relative to chains, I'd say actually the data we're seeing right now is that there's been some growth with independents, modest. It's comparable to the chain growth right now after a couple of years of where independents have been flat to down and chains have been flat to up. So from that standpoint, that might be a promising sign. We're seeing the same data you all see. Sometimes, we're reading your data. I think overall, there is still very, very modest growth there, but the trends have softened, and it's not what it was a few months ago. Most of the growth seems to be on the quick-serve side and the casuals are holding their own. Upscale is up a little bit, but I still think that might be off of a relatively easy comparison. The only other color is I think traffic has softened some, but the price of the check, so to speak, is -- continues to grow modestly. So we still think there's some very modest growth there; it's not just at the rate of what we saw here just a few months ago. And again, we're splitting hairs here. It's not like it was robust growth a few months ago. So I just want to reiterate our point. We feel like we're doing a good job being responsive and proactive in those areas. We cover all segments of the restaurant industry. But again, we also have a strong presence in the nonrestaurant side of the foodservice industry, and we're doing a really nice job there as well.

That's great color. And I apologize if I missed this, but in regards to the sequential improvement in the gross margin, I'm assuming moderating inflation was a contributor to that. Did you also see improvements in the competitive pressures in the quarter relative to last quarter?

I think, clearly, the moderating of inflation was a big part of that. And we saw a little bit of that in the fourth quarter. I think inflation came down into the 3s, and then this quarter in the 2s. So there's -- as I've explained before, I don't want to sound too esoteric or too passive here. There's certain amount of math in the relationship between inflation and gross margin. So yes, we've benefited from that. But our margins were still down 0.3 of a point, and so a little bit of that, I think, was customer mix, where our contract customers have grown a little faster than our street customers right now. We did see our brand grow, which is encouraging; that's a good thing on margins. So, yes, the competitive pricing environment remains very acute. But at this point, this is really on us to find ways to continue to strike the right balance between growing our business with our customers and still driving out the right type of gross profit dollar growth.

And did you see any changes in the environment into October?

Yes, I would say it softened further in October.

With competitive pressures, I'm talking about.

That's almost impossible to gauge on a monthly basis.

And our next question comes from Mark Wiltamuth of Morgan Stanley.

Bill, if you can give us what your buyers are saying about inflation right now and how are you feeling about the center-of-the plate proteins in particular given the drought we had this year?

I think it's mixed. I believe we saw a fair amount of inflation in poultry this quarter, and meat's a big category for us, Mark, so I think that was 5% or 6%. So it's hard to get a great handle on where that goes from here, but I would expect that to stay up. Seafood, not as much. Dairy, on the other hand, we saw a meaningful deflation there in dairy and dairy, and a little bit in produce as well deflation. So actually, dairy and produce are probably 2 of your most volatile categories, and so they'll go back and forth. So right now, I would say it hasn't changed a lot from what we're showing here for the quarter. And I wouldn't expect it to change dramatically in the next few weeks or month or 2. But also, we're watching it really close because, obviously, there's other fundamentals out there in terms of the drought that we experienced throughout summer and what that may mean second half of the year in terms of both products and livestock and all that type of thing. So bottom line is it's in a good place for us and our customers right now. I do think there are some pressures building that over the second part of the year we could see a pickup again.

Just to follow up a little bit on your last comments there on the gross margins getting a little better here as the quarter progressed. Is that because your efforts to manage inflation were a little better, or that you backed off of some of your planned discounting? Where do you think the improvement came from?

Well, I think we managed it somewhat better, but we're still not managing as well as we need to. I'm just being straight with you there. But I also think, like I said, just the math of inflation, when your costs are only going up 2%, it's not as difficult to manage the pricing off of that than when they're going up 7% or 8% in some categories.

And up next is John Ivankoe of JPMorgan. John W. Ivankoe - JP Morgan Chase & Co, Research Division: Just a couple of quick ones, I think. You mentioned, Bill, in your prepared remarks something that Sysco was doing that was driving up the cost of delivery in the quarter, maybe -- I don't know if it was a mistake that you made, or maybe there were some initiatives. I mean -- I guess what were those? And are those now solved for the current quarter?

Well, let me balance this a little bit, John. What I said is I felt we did a really good job on the SG&A side. And unfortunately -- and we lowered our cost per case there, which is a key metric for us. And to just have flat cost per case in this business is pretty hard to do, so we were pleased with what we did there. We gave a lot of it back on the delivery side. Some of that was fuel; some of it was some labor shortages in markets that are particularly robust right now, and where some of the oil is being drilled and energy and that type of thing. So I'm sure we saw the benefit of that on the sales and gross profit line. And there's just some things we didn't execute as well as could have in several markets, and I’ll leave that in-house, if you're okay with that. And look, we're running a business here, and I wish on a given day or a given quarter, we could execute with perfection, and we did a lot of things well here, I would say, to characterize this quarter. I would've liked to see us perform a little better on the gross profit line and manage our delivery expenses a little more consistently across the company, and we're working on both of those. John W. Ivankoe - JP Morgan Chase & Co, Research Division: Okay, understood. And then secondly, I mean, obviously, you're outperforming the broad foodservice distribution industry as would be evidenced by restaurant sales that -- and especially in casual dining is actually seeing shrinking traffic. So -- I mean, what is your sense that -- where is your share coming from at this point? I mean, is it coming from some of the larger competitors, or is it the very fragmented industry that you see out there that may finally see some forced consolidation as traffic remains weak and fuel costs goes up for operators that already have extremely low margins?

Great question; hard to answer since we don't see the other guys' numbers. But my best judgment is that more of it is coming from the smaller, more fragmented part of the competitive landscape and that the larger players are probably holding their own or maybe picking up a little share. John W. Ivankoe - JP Morgan Chase & Co, Research Division: I mean, obviously, we've been talking a lot about acquisitions, but I mean are you beginning to see at the local level some consolidation of the smaller operators? Is there kind of some supply that's quietly coming out that we wouldn’t necessarily see here?

Yes, I think we are, and that's what we alluded to in comments on the acquisition environment being somewhat better. The challenge for you guys it's there's thousands of them, so it's hard for you to see it in terms of how our numbers roll up or the industry numbers. But the acquisition pipeline we're talking about is more in that middle to lower end of the competitive food chain, so to speak.

And our next question comes from Ajay Jain of Cantor Fitzgerald. Ajay Jain - Cantor Fitzgerald & Co., Research Division: My main questions were already asked earlier, but I wanted to just get some clarification on whether the severance costs this latest quarter are related to the cost reduction activities that were already contemplated for the year so even to the extent that your anticipated cost savings are at least somewhat headcount-driven, I'm just wondering if the severance represents some upfront investment in terms of the cost reduction goals or if it's totally outside the scope of the planned cost reduction activities that you talked about at your Analyst Day?

Ajay, this is Chris, and you nailed it. It is related to the initiatives, primarily related to the IT initiative that I talked about so there was a fairly large chunk of it this quarter. We'll probably have some more of it in Q2. But it's an upfront investment to get to the run rate savings.

Up next is Andrew Wolf of BB&T Capital Markets. Andrew P. Wolf - BB&T Capital Markets, Research Division: Looking at the segment numbers sales, could you talk about just SYGMA, why it slowed? Was that what's going on with those customers or did you anniversary some business?

We anniversaried some business, I've never used that term before, but I like that one, Andy. So we've had pretty good growth in the segment the last couple of years, and the key there generally is picking up a new customer and, obviously, not losing any big ones. So we haven't picked up a large new customer here over the last year. And we've lost a little business; some of that we wanted lose and some of it, not so much. Bottom line is SYGMA is going to be a little more volatile compared to the Broadline in terms of ups and downs. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. And with -- we don't see the inflation number by segment. But when I look at SYGMA going down and much more than sequentially in terms of sales growth in Broadline. Does -- what can we -- can you tell us if Broadline case movement was actually -- I'm sure it was better than the combined number, but was it a lot better; was it flattish sequentially or versus down the way it was for the combined 2 segments?

I want to be careful here, Andy, because you know a lot of our people listen to these calls, and we're working hard at kind of this One Sysco mentality here. But when you look at our numbers, as the Broadline goes is how the company goes. So there's never going to be much of a difference between the Broadline numbers and the overall numbers, and there wasn't in this case either. Andrew P. Wolf - BB&T Capital Markets, Research Division: Fair enough. Okay. And my last question is on business transformation. Kind of simply put, what are the things you're seeing that are -- have the executive -- your folks contemplating accelerating it; what's working?

Well, we had a similar question earlier. I'll give you my best shot at that and let Chris jump in here.

Maybe I can help.

Yes, Chris can help me this time. Seriously, look, we've obviously had some bumps along the way here, but we've done 5 of these now. We've continued to bring in folks to strengthen our team at all levels, and we're getting better at all parts of it, the prep work, the programming, the change management work, the training. And as a result, each rollout on these conversion weekends has been a little bit better. East Texas went very well. We've had good results business-wise since then. And so as you see that, people gain confidence, we gain confidence, and so that's the first step, is to make sure that you can handle the conversion right, get the deployment right and begin to hand it off to the business in a way that they run with it. And -- but you can't wait until you're year end to it to kind of have these thoughts. So where we're at right now is evaluating the opportunity to accelerate as we get more comfortable that we're executing at a level that's appropriate, and that we can mobilize the resources that it’s going to take to do that. Chris?

Yes, I think about this in 2 different components. There's the confidence level on being able to roll it out, so the actual implementation and then there's how does it work after the fact. And while those are tied together in our minds, they are kind of distinct parts of the equation. We're definitely focused in this particular answer to this question on the first part of this, which is, are we gaining more confidence in being able to roll it out? So I spent the weekend in North Texas during their rollout last weekend. And when you're actually sitting there watching the large number of people roll this thing out and implement it and it goes incredibly smooth, and yes, there are issues that come up right and left, but the team have gotten so adept at handling the issues. And frankly, they're smaller issues than we were seeing in the other ones, that just gives you more confidence that we know how to roll this thing out. And at the same time, we were doing it in another operating company at the same time. First time we've tried that. That gives you more confidence that we're going to be able to roll this thing out a little bit faster. Now we still have to get through a couple other hurdles to make sure that we're going to be ready to do that, and that's the work that we're beginning now. But I'd say that's more color on the whole confidence notion, and that's what's causing us to, at least, look at what it would take to go faster. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay. And on the second -- that's sort of where I was -- that answer was very clarifying. So the second way you look at it, the benefits, is there any -- is there enough data for you internally to also feel that more confidence about that, or is it really just more about the first part, the execution of the rollout?

Well, if you remember some of our previous conversations around the benefits, we were only looking at the hard dollar benefits, which primarily are driven by reduction in staff and headcount out in the field as we roll these things out. So as we go back and we look at what was our pre-rollout headcount, what did we anticipate getting to after the rollout by a certain amount of time? We're getting close to our targets there. And the first 3 being pilots and the second 2 -- or the first 2 being pilots; and then East Texas and the second 2 just having gone, it's a little early to get a complete read on that, but we are getting the headcount reduction benefits that we had anticipated getting in almost all areas. And the exceptions, frankly, are areas where as we went through the process, we decided that we might have been a little aggressive and -- in our initial estimations and we've pushed back a little bit since that time. So it's too early to read everything. We're not going to quote a bunch of numbers, but we're feeling pretty good about at least the hard dollar savings that we talked about publicly.

Yes, Andy, I'd just take a moment here to remind everyone that a lot of what we talked about in May and what we've shared since then is because we have had some delays here, we are finding other ways to accelerate these benefits. We're not waiting to deploy this thing in 70 U.S. companies and then Canada to get the benefits as we originally designed them in the business case. So when we talk about improvement in SG&A and when you look at that roadmap to 2015 that we put out there in SG&A and operations, some of those benefits were part of the original case, and we're going to drive those out now, and muscle through them where we need to. And then to Chris' point, there'll certainly be some additional benefits as we deploy and we're able to become more efficient post-deployment. But there's 2 paths right now: One is the deployment path, and the other is muscling through these cost savings even without the system.

[Operator Instructions] And we turn next to Meredith Adler of Barclays.

I wanted to talk a little bit, go back to the subject of inflation. And maybe just talk a little bit about what you're working on. I think you talked about some systems that would help pass along and were priced better, and I'm sure that relates to inflation. So maybe talk about where you feel you haven't done as good a job and how you see that improving and how quickly can it improve.

Okay, I'm not sure what we've talked about in terms of pricing and in inflation, but what I try to share with you, Meredith, is as we've said very consistently for as long as I can remember, if we could keep inflation in this 2% to 3% zone that we've had the last couple of quarters, and if it was relatively comparable across all categories, that's just a much better environment for our customers and, therefore, it's a much better environment for us. People can handle modest increases. Maybe not as easily as I could 3 or 5 years ago before some of the challenges in the economy and the marketplace, but certainly better than they can a 5%, 6% to 7% increase. We have pretty good systems today. I want to be really clear. We have good systems today on how to manage inflation. And from that standpoint, I think we do a decent job with it. I think the art to this thing right now is to, again, strike the right balance as we manage the business at that district level, at the OpCo level and then even here on how we interact with large customers and suppliers. How do we strike the right balance between profitable growth and pricing? And so along the way, we have certainly explored some different systems and scientific pricing modules, and we continue to assess those. And I think we will get better in that arena over time. And we certainly can see analytically that there's probably an opportunity to have less variability in our pricing. And we'll continue to work on those opportunities. But I would say to you, for now, it's kind of good old-fashioned management on our part and attention to detail and striking that proper balance between growth and profitability.

So I guess when you have said, you did say it on this call about could've done a better job in terms -- you're talking about finding a good balance between profitable growth and pricing when you say could've done a better job?

Yes, I'm just saying we, as a management team throughout Sysco, I think could've done a better job. We did better than we did last quarter, and we certainly did better than we did a year ago from a trend standpoint. But what I'm really trying to say is we see opportunity out there where we could perform even better, and that's what we're working on internally.

And we have time for one final question today, and we'll go to Erin Lash of Morningstar.

You commented that the acquisition environment was very favorable. I wonder -- I was wondering if you could touch on whether there were any differences that you're seeing between the acquisition environment in the U.S. versus internationally?

Well, to the extent that in the U.S. we mentioned the kind of tax rush, if you will, to get some of these transactions done by the end of the year, that does not necessarily apply to foreign acquisitions unless that their ownership may be U.S.-based. So we're not seeing, I'll say, quite as many. The markets are -- just talking about Ireland, there aren't as many players in Ireland. We tend to know who they are, and I think these were very targeted, strategic transactions for us to broaden our appeal to the customer base there and also broaden our network. So we've kind of picked what we wanted there, I guess, if we could say, and done it strategically. Canada, we spoke a lot about or at least I talked about our strategic desires in and around Québec, Montréal. And so again, I think the team was very thoughtful up there about which acquisitions we wanted to go after. But in terms of the pipeline, we've got stuff coming to us, I'd say, in all 3 markets, and we look at it, we evaluate it, we first decide whether it makes strategic sense and we start looking at whether the valuations are going to make sense to both us and the sellers and see if we can get a deal done.

That's very helpful. And then just finally, I was wondering if you could provide just a little bit more detail. You alluded to the execution issues that you're facing. I was wondering if those were in markets where you've already rolled out business transformation, or in markets that haven't been touched by those efforts yet.

Erin, it’s Bill. No, they were just -- I'm just trying to give you all some color. When you look over our business and you're talking about roughly 70 operating companies in the U.S. and another 10 or 12 large companies in Canada plus Ireland, the beauty of this business is there's always things that we're doing well and we can do even better. And then there's always going to be situations where we're not doing and performing quite as well as we would like. So the point is, is I can tell you without, from where I sit and where our management team sits, that there are several markets where we probably could have managed the operations side of the business a little bit better, and we will. And we're very focused on that. And so I share that with you basically to be candid, but also to illustrate the nature of the business, that it's one of continuous improvement. With that said, we did a nice job on the SG&A side. And so from the standpoint of looking at it overall, that's why you saw in my prepared comments from an overall expense management standpoint, the expenses in the core business grew about 3%. That's pretty good. We think we can do as well as that or better going forward.

And this concludes today's question-and-answer session. I'll turn it back to the management team for any final comments.

Thank you, everyone, for joining us. Have a good day.

And this concludes today's presentation. Thanks for joining and have a nice day.