Good morning, everyone, and welcome to Sysco's First Quarter Fiscal 2014 Conference Call. As a reminder, today's call is being recorded. For opening remarks and introductions, I will turn the call over to Mr. Neil Russell, Vice President of Investor Relations. Please go ahead, sir.

Good morning, everyone, and welcome to Sysco's First Quarter Fiscal 2014 Earnings Call. Today, you will hear remarks from Bill DeLaney, our President and Chief Executive Officer; and Chris Kreidler, our Chief Financial Officer. Before we begin, please note that statements made during this presentation that state the company's or management's intentions, beliefs, expectations or predictions of the future are forward-looking statements, and actual results could differ in a material manner. Additional information that could cause results to differ from those in the forward-looking statements is contained in the company's SEC filings. This includes, but is not limited to, risk factors contained in our annual report on Form 10-K for the year ended June 29, 2013, and in the news release issued earlier this morning, which is posted in the Investors section at sysco.com and can be found on the Sysco IR app, which can be downloaded from the iTunes App Store and Google Play. 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, which 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 volumes include total Broadline and SYGMA combined. [Operator Instructions] At this time, I'd like to turn the call over to our President and Chief Executive Officer, Bill DeLaney.

Thanks, Neil, and hello, everyone, and thank you for joining us today. This morning, Sysco reported record first quarter sales of $11.7 billion, net earnings of $286 million and EPS of $0.48. Adjusting for certain items, such as severance and facility consolidations, adjusted EPS was $0.49, which is flat compared to prior year. Market conditions remained very challenging for our customers throughout the quarter as consumers continue to spend their disposable income in an increasingly disciplined manner, and to some degree, shift their spending to more durable goods. While these trends are not favorable to the foodservice industry, we're hopeful that they will begin to abate as we approach the new calendar year and beyond. Notwithstanding the challenging market conditions, we grew our sales for the quarter by nearly 6% over the prior year, with approximately 2/3 of that growth coming in the form of case volume growth. Earnings were generally in line with our expectations as strong expense management helped to offset the impact of sluggish gross profit dollar gains. We continue to drive solid growth with our large national and regional customer base, while sales growth with our locally managed customers remains soft. We also made good progress in several of our enterprise-wide business transformation cost-reduction initiatives, which contributed to a significant reduction in cost per case in our Broadline operations compared to last year's first quarter. Turning to our technology transformation. During the quarter, we installed a major scheduled update to the system which favorably impacted all 5 of our SAP-enabled operating companies. Following the implementation of these performance and functional enhancements, we generally have experienced improved performance and stability in the technology. Encouraged by this progress, we remain scheduled to resume our deployment rollout next week at our Boise, Idaho, operating company. Assuming the results in…

Thanks, Bill, and good morning, everyone. For the first quarter, sales were $11.7 billion or an increase of 5.7% compared to the prior year, mainly due to acquisitions, which increased sales by 2.3% and food cost inflation, which was 2.1%. Case volume increased 4.1% for the quarter; and case volume, excluding acquisitions, increased 1.8%. Changes in foreign exchange rates decreased sales by 0.5%. Gross profit in the first quarter increased 1.8%, and gross margin declined 68 basis points to 17.63%, due mainly to continued weakness in locally managed sales, the difficult business environment and competitive pressure. In addition, sales to large regional and national customers are growing faster than local business, and this mix shift drove about 15% to 20% of the gross margin decline during the quarter. Operating expenses increased $36 million or 2.3% in the first quarter of fiscal 2014 compared to the prior year period. Excluding the impact of operating expenses from acquired companies, adjusted operating expenses were flat compared to the prior year. This was achieved as a result of benefits from our business transformation initiatives, as well as lower business transformation expenses. Business transformation expenses were lower in the first quarter by $11 million, due mainly to lower spending on third-party contractor expenses. As deployment begins to ramp back up in the second quarter and throughout the remainder of the fiscal year, expenses are expected to be similar to the prior year. As a result, we continue to expect total business transformation expenses for the year to be in the $300 million to $350 million range. Similar to last year, we continue to see business transformation benefits driving down operating expenses. As a result, payroll in our sales and IT departments are once again lower than the prior year, down more than $20 million combined,…

[Operator Instructions] We'll go first today to Karen Short with Deutsche Bank.

Just looking at case volume in general, it sounds like case volume in street accounts is very limited or low or potentially even negative. So I guess, maybe, can you talk a little bit about what you think that's a function of? Is it maybe a function of headcount reduction and MAs or just base-level attrition at the street level with your customers or maybe some response to your waves of SKU reductions? Any color there?

Karen, I think you answered most of your question right there. But yes, I'll take a shot at it. I think, clearly, this macro environment continues to be difficult for our customers, and we mentioned the casual dining segment, so that's a big part of our street business, more so than maybe on the big contract side. So I think there is a macro aspect to that. Certainly, we are driving a lot of change as we've referenced here for several quarters. And any time you drive change, you do have to drive it through your sales organization, and our folks have had to deal with a lot of that over the last 12 to 15 months. Now we're getting the benefit of it on the cost side, but it has somewhat probably hurt us a little bit on the top line. It's hard for me to tell -- really, the SKU thing, you get different pieces of feedback on that. I don't think it's as much the SKU issue as it is just the amount of change, and to some extent, as we've eliminated some territories, customers are dealing with different MAs and that type of thing. So from -- I think there's a little bit on the macro, somewhat on the inside, internal, if you will, I would say, largely to be expected. We just need to work through it as fast and as well as we can. And I would just tell you, the competitive environment, in particular on the street business, remains very acute. And we need to fight to keep the cases that we have and to grow those cases. And so there's a never-ending balance here across the different markets and the different operating companies and that trade-off between retaining and growing business and pricing. And we continue to try to do that as well as we can. Obviously, it's a challenge right now.

Okay. That's helpful. And just a question on categories in terms of wave 1 and 2. How many categories is it going to address? I know you gave dollar amounts, but how many categories and if you could give any color on what categories will be included?

Yes, I don't think we have any finite number of categories. We continue to look, for example, at the rollout calendar. It was pretty aggressive in the front end. We've made some modest adjustments. So that could ultimately end up with maybe a couple more waves, if you will, than what we initially intended. But I think to put it in perspective, we buy about a little over $30 billion worth of product. And the pilot, we said, was about $1 billion and wave 1 is $4 billion, but wave 2 would be less than that. So I think we're getting to where it's a significant piece. By the end of the year, it will be a significant piece of our overall purchasing.

We'll take our next question from Mark Wiltamuth with Jefferies.

I wanted to dig in a little bit more on the gross margin decline of 68 basis points. You talked a little bit about mix, but maybe you could give us some other factors that played into that decline because we've now had a couple of quarters here in the mid-60s or 60s or higher on a basis points decline.

Yes, Mark. So mix is a part of it, I think Chris mentioned it's about 25% of that reduction. The rest of it is pretty much what I was discussing there with Karen. We've got a very competitive environment out there, and we do a lot of business, it's a volume-driven business. We're the leader by far. And the most profitable business we have is the business that we're already transacting. So we're fighting very hard to hold on to those cases, and we're doing a reasonable job of that, as I said, in a challenging environment. With that said, there's things that we can do and execute better. There is some variability, as we've called out over the last 2 or 3 calls, between operating companies and how well we're executing, and we're trying to provide the right level of support to give more consistency in our performance there. So there's opportunities for us in the short to medium term to manage the margin better and still grow the business and take care of our customers, and that's what we intend to do.

What do you mean by locally managed business was under more pressure on margin? Was that -- does that mean more street account margin pressure than the rest of the business?

Yes, so let me address the terminologies. So over the years, it's still relative when we talk about contract and street. But as we evolve here and as our organization structure evolves, we're trying to be a little more clear on where the large amount of the accountability goes in terms of growth. And so our operating companies pretty much control 60% to 70% of the revenue stream on average. And the bulk of that is street business, but there's also contract business locally. So when I speak of locally managed business, it's what's largely managed at the operating company level, the majority being street, but there's a good percentage of local contract as well. The rest of it, we refer to as corporate managed, and that's our big national and large regional multiunit customers.

And it sounds like that segment is where you've been getting more of your wins lately, the corporate managed business. Is that right?

Yes. I mean, there's pressure in that segment as well, but we've done a nice job leveraging our scale there, and those customers see that as a big competitive advantage for them. So we've had some good success there actually over the last 2, 2.5 years.

And the locally managed pressure, is that just reaction to the difficult operating environment or is it kind of planned attacks to kind of gain share in some places?

I think it's a combination of all of that. I don't think there's a lot of growth right now on the street. We'll update that data here as we get into the end of the calendar year. And so I think that results in more of the same that we've seen in the last 2, 3 years. When there's not a lot of growth, that creates a lot of acute pressure on the street and that type of business, and there's a lot more people trying to do what we're trying to do, which is hold their business and grow it.

We'll go next to John Heinbockel with Guggenheim.

So a couple of things. Bill, you said in the 5 SAP-enabled companies, performance has significantly improved. So with respect to that, what has improved? And then, is it just operating performance or actually, is there a financial performance at those 5 companies that has meaningfully improved?

John, when I speak to the favorable results that we're seeing there and the improvement we're seeing, it's more about the platform itself. We see more stability where we're utilizing the hardware better. Some of the issues we've had with replenishment, service levels, those have begun to improve as well. It's not as consistent in terms of the trend lines as we'd like to see, but it's definitely better than where we were. So it's more on the operating side and on the hardware utilization itself. And it's encouraging.

Now is that -- should that directly translate to financial performance, or is there a fair bit of a lag between when that will happen?

There's still more of a lag than what we'd like to see, which is why we took this pause here to go in and basically dedicate all of our resources to enhancing the underlying system itself. So yes, it should to and obviously needs to. And we just need that dip to be less -- more shallow and last not as long. So we're not there yet, but we are feeling more confident in terms of the strides we've made, and that's why you hear us talking about beginning deployments again with our company in Idaho this month then hopefully more than that as we get into new year.

Now let me ask on gross margin, if you take mix out, maybe you're down 50 bps, give or take. How do you guys analytically look at the ROIC of that and the elasticity of that? And then, I guess, if you had spent less than the 50 bps, would case volume be significantly worse or it's a balance, but how do you analytically think about the balance whether you're getting a decent return for the 50?

Yes, I think, John, you've been very consistent on that question. Actually, I'm getting a little more perspective on the elasticity as we go through this over the last year, 1.5 years. But I would say, certainly, we're conscious of ROIC, but we tend to look at that more at the operating unit level and obviously the enterprise level. We look at the profitability of the accounts. We look at growth. I mean, ours is a business that's driven on growth. We invest in the business, we utilize our scale. We see that as a very big competitive advantage, both on the operations side and on the sales and marketing side, both with our big contract customers and locally. So our fundamental belief is that we need to grow this business. Now we need to grow it profitably. But our customers are all profitable. It's a matter of are they as profitable as they were a year ago, and we look at that. And I would tell you, 1 year, 1.5 years into trying to get better answers to your question on elasticity, I'd say it's -- I don't think I can tell you that we would have had more GP dollars if we had higher margins, let's say. And as you look at it by market or OpCo, it's a function of our leadership and our execution. It's a function of the support we're able to give them here from corporate with all the initiative work that we're doing. And it's a little bit of a function geographically on how healthy those markets are. For example, the Southwest in Texas, we're able to grow the business here a little better because the underlying market's somewhat better, middle part of the country more difficult.

And then, lastly, the acquisition pipeline, do you think based on what you see today that you'll be -- again, we're going to lap some of the acquisitions you did last year so -- but if you sort of think about what you might bring on online new over the next 9 to 12 months, you think that will likely be in the 1% to 2% range contribution to sales or do you think it's less than that?

John, this is Chris, with a bit of weak voice today, I apologize. What we said is we plan to grow at least 1% every year. We've got a lot of carryover from the deals we did last year, the annualization of what we did last year, which is going to give us 1% just on carryover. So if we do our normal 1%, of which we'll get about 0.5 point benefit this year, plus 1 point carryover, we'll be in that 1.5% range. That's kind of our target for this year. And then going forward, we still plan to do at least 1% a year. We've still got a very robust pipeline. The first quarter always seems to be a little bit weak, but we're pretty pleased with the progress we continue to make on the acquisition front.

We'll go next to Edward Kelly with Credit Suisse. Edward J. Kelly - Crédit Suisse AG, Research Division: Bill, just not to beat a dead horse here, but I want to start with a follow-up on the gross profit, and let's think about gross profit per case, I guess. How much of the pressure that you're seeing right now is from new business pricing or is it just -- or is it renewals of existing contracts?

Are you just asking about the contract business or are you asking about all customers? Edward J. Kelly - Crédit Suisse AG, Research Division: Your whole business. How much of it is pressure on existing customers versus going out and trying to win new customers?

I'd say it's more on the existing customers. They're all looking to find ways to save money and run their businesses better. And as we've alluded to here and spoken to, the environment for many of our customers, especially on the restaurant casual dining side, remains very challenging. So we're always in conversations, whether it's street business or larger-chain business, trying to find ways to share savings and to provide them more value. So given the math, it's definitely more on the existing business. We could be doing better on the new business, I'll tell you that. So I think that's in a left-handed way kind of a testimony to the fact that we're not just chasing business to get a top line. So I'd like to see our new business numbers be a little bit higher right now, and I expect that they will pick up here as things start to stabilize with the sales force. But I would have to say it's mostly on the existing business. Edward J. Kelly - Crédit Suisse AG, Research Division: Okay. And then just on gross profit per case, generally. Obviously, it's a little weak right now. It sounds like you expect it to get better as the year progresses. So first, I guess, is that true? And do you think you can get back to the point at some time this year where you have flat-ish to maybe modestly positive gross profit dollars per case?

Well, we tend to speak about gross profit more in terms of percentages, so I'm going to leave it there. I will say this, we need to improve, I think that's clear. I mean, if you look at the quarter, the way I would characterize the quarter is the top line number was good. We would've liked to seen a better number on the locally managed street business than what we saw, and that drives some of the margin as well. So we need to do better there. I don't know that we can get all the way back to flat by the end of the year, but certainly, we can -- I feel like we can make some improvements and we need to. The good news here is that the cost per case, we are seeing the benefits of a lot of the initiatives we've undertaken here over the last 12 to 15 months, and there's more to come there. And they do go together at some point, especially on your big contract business. Your -- as that business grows somewhat faster than your street, you need to see lower cost per case than your expenses because that's part of the economics on how you go after that business. So our target is to obviously improve the gross margin performance. I'm probably not prepared today to tell you we're going to get back to flat. Edward J. Kelly - Crédit Suisse AG, Research Division: All right. And then just last question for you. Category management, can you just maybe provide a little bit of color on what your clients actually are saying at this point, specific pushback, how you're adjusting to that? And then as you think about what you've rolled out so far, what's been the sales and the gross profit dollar impact so far on those categories?

I would say, generally, 2 things, one is that the customers have been incredibly supportive. They're looking at this with an open mind. Our sales force is -- they've got a lot coming at them. They've done a nice job in our sales management. We've done, I think, a very good job bulking up and strengthening our merchandising team throughout the company, but especially here at corporate. We put a lot of planning, a lot of thought into this. So we've learned a lot over the last few years from big initiatives that there's things we need to do in terms of bringing folks in and better preparation, better communication. With all of that said, we can still communicate better between here and our operating companies. There's probably some process improvements in terms of how we manage the conversions at the operating company level that we need to get better consistency on amongst the different companies, and that's an opportunity obviously for us to work better with them. The suppliers give us good feedback as we get into some of the individual categories and which ones will be more complicated than others, that type of thing. So right now, I would just say to you that from a process standpoint, we're about where we thought we would be. We're doing fine on the conversions. But the reality is, it somewhat depends on the category and it depends on the customer and it depends how good a job we did in terms of comping the specs on the individual items. And so it's a one-on-one conversation with each and every customer. And we're just trying to strike the right balance between moving forward and doing the right thing for the customer but also the right thing for our economics. And at times, we probably have moved a little too fast there and we just need to be a little bit more patient at times and give our people a little more support to do that. But all in all, I'm pleased with where we're at. That's a big initiative. And as I said in the prepared remarks, we still feel very good about it going forward.

We'll go next to Michael Kelter with Goldman Sachs.

This is Ivan Holman sitting in for Michael. I was hoping to dig into the guidance a little bit. You mentioned that you expected trends to improve and profitability to build as 2014 continues. And since there are a lot of moving pieces, I was wondering, is that predicated on an improvement in the macro? And excluding an improvement in the macro, do you still think that you can continue to build there through the initiatives that you're rolling out?

Well, yes, it's predicated on some improvement in the macro. If you recall, if you look at our year last year, on a relative basis, the first half of the year was much stronger than the second half of the year. And so there is some presumption there that the macro will gradually improve. But we're not waiting on that. So it's hard for me to kind of gauge how much improvement we'll make with or without the macro. But we certainly expect to grow the business. If the macro improves, we'll grow it a little bit more. We expect that we'll continue to make strides on margin and cost management. I think the components of the improvement on cost control will change over the course of the year, and Chris can take you through that a little bit. But we -- the bottom line is here we expect to improve, but certainly, an improving macro would give us more confidence.

Great. And just a quick follow-up. With regards to acquisitions, can you just help us understand from a process perspective, given the erosion in gross margins from the mix shift towards the locally managed business, can you help us understand when you're looking at acquisitions, if there are any constraints around that in terms of decisions to grow the top line but perhaps at the expense of gross margin, and how you view the evolution of the business as you look at acquisitions on a go-forward basis?

Well, let me say this. The way we look at acquisitions is we're looking for opportunities to bring businesses in this company that will help us grow. That may be geographic, it may be a product category, it may be -- it may not be necessarily a top line opportunity, could be a consolidation play. So it just depends on the specific opportunity we're looking at it. If you look at our acquisitions over the last 1.5 years or 2 years, we've done all of that. We bought a company up in Western Minnesota, which, believe it or not, gave us some green space up there even though we're in Minnesota, we're in North Dakota. We've bought some specialty product companies, European Imports comes to mind. And we've entered into some new geographies in Québec and the Bahamas and Ireland. So we look at everything there. And we're certainly -- as you look forward, it's certainly a meaningful part of how we expect to grow the top line. But in the end, it needs to be profitable as well. Chris, you want to add anything to that?

Yes, I'm not sure we fully understood the premise of your question, but I think Bill's explanation is good. We do all sorts of different types of acquisition. Generally, the margins that we see in the company before we acquire it are lower than our own margins. And so it might be a bit dilutive when we first merge it in with our existing business. But then that yields the opportunities that we have with these acquisitions to put them into our buying programs to enhance their performance, especially if it's a fold-in and get cost savings out of it. So we might see a bit of a dilution initially, but then we see synergies, if you will, as we operate it for a period of time and bring it into the fold. So we believe these -- especially the smaller acquisitions that we've been doing, and they're not all tiny, but small-, medium-size acquisitions are very beneficial to us both in growing the top line but also in continuing to enhance our profitability over time.

We'll go next to Meredith Adler with Barclays.

I'd like to kind of connect 2 things you've been talking about and we'll see if there is a connection. You were talking about category management and maybe you got some pushback from some customers. Do you think there's any relationship with pricing? You did say pricing to existing customers had come down. Is there any relationship between that and your category management efforts or is it separate?

Meredith, I think what I acknowledged is that we can do better on gross margins, and we're working hard on that. I would say, on CatMan in particular, the type of conversations we're having with customers would be generally expected when you're sitting there, talking to them about, in certain instances, changing out an item. I wouldn't call it so much as pushback as it's just people want to know why it's good for them and that type of thing. So I would say, overall, in terms of the profitability on the CatMan, it's been as good or better than we expect. So that really hasn't been the issue there. It's just we need to do it in the right way to sustain the growth that comes from that. And the way we're approaching category management, it's -- clearly, we need to realize the gross savings and invest in that in the right way and create the net savings we've spoken about. But our whole goal here is to do this in a way, and we're doing it in a very well thought-out way, to sustain growth over the next 2 or 3 years as well and hopefully accelerate growth. So it's more of a growth issue than it is a profitability issue, I would say.

Okay. And then I have a question about marketing associates. I think you mentioned that there had been some declines. And could you just spell out -- I know you had done some layoffs or allowed attrition to happen. Have you also had some defections? And would you say that whatever impact that has on sales is behind you or will there be some over -- future spillover effect?

Yes. If you go back, let's go back 15 months. And so as we started rolling out a lot of these initiatives, on the sales side, we had several key initiatives. We implemented a CRM tool across the company. We looked at creating more consistent pay plan across the company, different variables but more consistency in terms on how the commission grid works. We flattened the sales organization. Where it made sense, we tried to take layers out or at least make sure that our best and most talented sales associates and sales management are as close to the customer as possible, and we looked at nonprofitable territories. So yes, we're down in terms of territories year-over-year. That rate of decline has plateaued out to some extent. And I would say this, it's -- part of it was very conscious, part of it, we've lost a handful or 2 of people in management probably that we wouldn't wanted to have lost, and I'm sure we've lost some MAs that we wouldn't have wanted to lost. And when we didn't execute well in a few companies, we lost more people than I would've liked to seen us do. But all in all, for something of that magnitude, I think we've executed reasonably well. And to your last question, yes, things have begun to stabilize. The change that Sysco is going through today, becoming much more customer-centric and we're having to accept the fact that change is perpetual. So it's not like the sales force isn't going to have change going forward. It's not like the customers are not going to see some change. The degree of change, I think, has stabilized and I think we will see some improvement there as people get more confident in the new organization structure and what their roles are and that type of thing. So absolutely in a better place from that standpoint than we were a year ago.

And I'd just like to throw in one more question. This quarter, you did buy back stock and it looked like you were a net borrower to buy back stock. I was just wondering if this -- I kind of went back and looked and I think that the share count went down a bit more than it has recently. Is there anything in that? Is that a part of a plan or it just worked out that way?

Meredith, this is Chris. It's no change in our strategy, just to be candid and upfront about it. We typically -- periodically, every quarter, we look at what's the expected dilution from options, issuance options, exercises, et cetera. We try to look as far ahead as possible, and then we try to put in place a plan to offset that with stock repurchases. We got a bit ahead in the first quarter due to pricing and due to some modeling that we did. And so that's what you see is a pretty strong first quarter. Depending on where the stock goes and what happens with option exercises, we'll determine whether we continue to buy at a similar clip or a much less clip. But it is not a change in strategy.

We'll take our next question from Andrew Wolf with BB&T Capital Markets. Andrew P. Wolf - BB&T Capital Markets, Research Division: Chris, you mentioned -- I just want to make sure, you said the cost per case was $0.09 lower this quarter but you expect $0.05 for the year. And could you just kind of give me more information about that? It seems like a really strong number this quarter. And is that all having to do with hiring in the warehouse or in other parts of the company?

No. As we've talked about over the last couple of quarters, and I think we're starting to give a little more insight into the amounts and the magnitudes, it's really a continuation of the initiatives that we began last year. So we saw significant declines in our sales cost per case, offset by some increases on the warehouse and driver side. And so what we're really saying is as a first -- well, first, we put out guidance for the year that we expect to be down $0.05 a case. The first quarter, we're down pretty heavily but we're going to wrap that as we get into the latter half of the year because we started some of those initiatives in the latter half of last year. So as we wrap it, we won't see as much of a decline. We're very confident we'll see our $0.05 a case for the year, and I hope we'll do better than that and then we've got to continue with additional initiatives to continue to drive down that cost per case as much as we can. And first, to offset any increases that are somewhat natural year-to-year; and secondly, hopefully, actually drive down the absolute number. Andrew P. Wolf - BB&T Capital Markets, Research Division: And is any of the overhead cost reduction part of that, like the lower pension expense, or is it all sort of variable costs?

Yes, it is, Andy, and the reason I don't call it out is that it hits multiple line items when we talk about the retirement-related expenses. On a cost per case basis, they hit the sales line, they hit the operations line. They hit multiple lines because it's a labor expense. But yes, that is part of the decline in multiple areas. Andrew P. Wolf - BB&T Capital Markets, Research Division: Just wanted to understand it because the variance, it's big numbers. Second, on the table in the release that has the MA-served sales as a percent of Broadline, the year-ago figure is about almost 90 bps or so lower than what's in the press release a year ago. Is that a number that gets routinely adjusted, or is that in any way related to the re-class?

Yes, Andy, to be honest, I didn't look at it. I don't think it would be related to the re-class. We'll take a look at that and come back to you with an answer. I don't know the answer off the top of my head. Andrew P. Wolf - BB&T Capital Markets, Research Division: Okay, I appreciate it. The reason I asked that is if it is adjusted the way -- if I were to carry through the same 90 bps change, it would actually look like your MA-served business as a mix -- on a mix basis, actually, kind of improved from the fourth quarter. But that doesn't sound like what you're all saying around...

No, that should not be the implication [indiscernible]. So let us check.

[Operator Instructions] We'll go next to John Ivankoe with JPMorgan. John W. Ivankoe - JP Morgan Chase & Co, Research Division: It seems like with the gross margin decline, it almost feels like there's a war of attrition that's kind of out there in the overall marketplace, with everyone having to take gross margin down because the next person is and what have you. So I mean, could you kind of comment, I mean, if that's something that's happening, if you might be losing share to on the street account basis? And I know it's a very hard question to answer, but how long it could continue? How long can your competition continue to invest in price if they don't have the cash flow and the balance sheet and the margins that you have to start with?

Well, those are great questions, John. I'll take a shot at it. I would say it's -- I don't know if it's a war of attrition. It's just a very acute competitive environment. And I know I'm repeating myself at this point, where I don't believe that there actually is a lot of overall growth on the street right now. And if you're Sysco, first of all, let me be clear, we need to do better managing margin. And we've got some things we're working on and continue to work on in the short term. And over the medium term, there will be some other opportunities, I think, for us to mitigate some of this pressure. But from our standpoint, it does come back to scale, it does come back to looking at that in the context of expense improvements as well. And we're just not going to give up cases unless we're doing something really ridiculous. And in that case, we will transition the business. So it's not an environment where we want to give up cases. As far as what the other guys are doing, we've acknowledged over the last couple of years that the nature of the competition continues to evolve so we continue to have a lot of traditional competitors, large, medium and small. I think the nature of this business is, if you don't -- if you're not looking to grow and expand, you can generate cash and stay in business for a while. I think there's a fair amount of people leaving and you see that, I think, in our acquisition pipeline picking up somewhat. At the same time, the barriers to entry are relatively low, so there continues to be a lot of small players out there. And then we have the nontraditional…

We had a pretty good run with SYGMA for about 2 years, and we did pick up some business over the last few months. And I think you saw that on the top line this quarter. When you do pick up business, it can create some expense issues and transitions, so we had some earnings pressure there as well. So we've got a nice stable of customers in SYGMA, and we're working very hard to continue to do good by them and then to solidify those relationships and grow within those relationships. But certainly, we have some key prospects out there as well. And SYGMA, it's a $6 billion business. We make about 1%. But it represents a big part of the opportunity in our market, and it's just important that we balance the growth there. John W. Ivankoe - JP Morgan Chase & Co, Research Division: Okay. And the final question for me, it's a quick one. What's kind of the inflation/deflation outlook as you see it maybe over the next 6 to 12 months?

I would say, again, a very slight category. Certainly, your commodities are going to be up and down and that type of thing. But right now, the best information we have is probably more of the same. It's hung in there in the relatively low 2s. And as I sit here this morning, I don't really have anything to tell you that would cause that to go up appreciably over the next 6, 9 months.

Yes, the only thing that we get, which I'm sure you guys get the same report, is there are certain categories be, for example, where we continue to see some inflation. But Bill's right, overall food prices just don't seem to be going up and the forecast is not for them to go up. John W. Ivankoe - JP Morgan Chase & Co, Research Division: And that was actually kind of the point of the question is whether the rate of inflation could actually drop to the point where there'd be almost no inflation in the model.

We're not reading that in any of the expert reports. We see that it might be a tad lower than last year on a whole, but we're not seeing anybody writing about deflation.

Ladies and gentlemen, we thank you for your participation. This does conclude today's conference call. Have a great rest of your day.