Good morning and welcome to Sysco's First Quarter Fiscal 2018 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 Neil Russell, Vice President of Investor Relations and Communications. Please go ahead.

Thanks, Tiffany. Good morning, everyone, and welcome to Sysco's first quarter fiscal 2018 earnings call. Joining me in Houston today are Bill DeLaney, our Chief Executive Officer; Tom Bené, our President and Chief Operating Officer; and Joel Grade, 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 within the meaning of the Private Securities Litigation Reform Act and actual results could differ in a material manner. Additional information about factors that could cause the 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 July 1, 2017, subsequent SEC filings, and in the news release issued earlier this morning. A copy of these materials can be found in the Investors section at Sysco.com or via Sysco's IR app. Non-GAAP financial measures are included in our comments today and in our presentation slides. The reconciliation of these non-GAAP measures to the corresponding GAAP measures are included at the end of the presentation slides and can also be found in the Investors section of our website. Additionally, due to the Brakes Group acquisition that closed in July 2016, we've previously referenced financial performance results both including and excluding the acquisition for our fiscal 2017. Beginning this quarter and going forward, as we now have a full year's worth of financial results, we will be referencing financial results for Sysco in total. The one exception will be for operating income, as we still plan to give visibility on our original three-year plan target which did not include Brakes. Additionally, we have scheduled our Investor Day for December 7 in New York. We look forward to seeing you there. To ensure that we have sufficient time to answer all questions, we'd like to ask each participant to limit their time today to one question and one follow-up. At this time, I'd like to turn the call over to our Chief Executive Officer, Bill DeLaney.

Thank you, Neil, and good morning, everyone. I'm very pleased with our start to fiscal 2018 as reflected in the solid financial – as reflected in the solid first quarter results Sysco reported earlier this morning. For the quarter, sales increased 5% to $14.7 billion; adjusted operating income increased nearly 6% to $662 million; and adjusted earnings per share increased 10% to $0.74. These results were achieved in the midst of several devastating natural disasters during the latter part of the quarter which adversely impacted our business and that of our customers in several key markets. We estimate that our operating income for the quarter would have been approximately $10 million higher if not for the lost sales and reduced productivity caused by Hurricanes Harvey, Irma, and Maria. Tom and Joel will provide additional perspective on the financial impact of these unprecedented events later on in the call. Additionally, I'd like to take a moment to express our gratitude to all of the first responders, volunteers and charitable organizations who worked tirelessly to support those in need. I'd also like to thank our dedicated associates who sacrificed personally to ensure delivery of product to those customers with critical needs such as hospitals and shelters. Further, it has been incredibly gratifying for me to witness the tremendous outpouring of support amongst thousands of our associates for one another through Sysco's Disaster Relief Foundation. Moving now to the current economic and market environments in which we operate. We are hopeful that the recently reported and improved GDP trends in the United States could ultimately lead to demand lift for our domestic customer base. While it's difficult to totally isolate the impact of the extreme weather experience in Texas and Florida in September, it appears that current market conditions in the United States…

Thank you, Tom. Good morning, everyone. As Bill and Tom mentioned earlier, we are pleased with the results for the first quarter. Our earnings growth reflects continued momentum from our business, including strong local case growth and good gross profit dollar growth and cost management. This morning, I'll start with our quarterly results on a comparable 13-week basis. For the quarter, sales grew 4.9%; gross profit grew 3.8%; while adjusted operating expense grew 3.2%, which resulted in adjusted operating income growth of 5.6%, and adjusted earnings per share grew 10.4%, to $0.74. During the quarter, our results were impacted by both the impact of multiple hurricanes and a lower tax rate that, when factored together, would have resulted in operating income growth of more than 7% and earnings per share of $0.72, which is in line with our planned expectations. For the first quarter fiscal 2018, we saw inflation of 3.8% in our U.S. Broadline business. The pace of inflation has been rapid for a few categories, such as meat, poultry and dairy, ultimately driving overall inflation. During the quarter, we had gross profit growth of 3.8%, driven by local case growth and improved Sysco Brand penetration. Adjusted operating expenses grew 3.2% for the quarter, driven by increased transportation expenses and unusually lower bad debt expense in the prior year. In addition, our expenses include the impact of labor and related costs during the storms that we continued to pay, despite lower volumes in those affected areas. We continued to maintain a gap between gross profit dollar growth and adjusted operating expense growth. While the gap was not as strong as in prior quarters, we still feel good about the performance and the ultimate translation into adjusted operating income leverage and continued progress toward achieving our three-year plan objectives. Part…

Thanks, Joel. As you know, I will be stepping down as Sysco's CEO at the end of the calendar year, so this is my final earnings call. I'm the sixth CEO in Sysco's 47-year history as a public company, and serving in that capacity over the past nine years has been an honor. In addition, I have been truly privileged to work alongside hundreds of committed and highly-capable associates throughout my nearly 30-year career. Today, I would like to especially thank all of our associates who have supported me throughout my tenure as CEO. We faced many challenges together. Most importantly, we have together, as one Sysco, driven significant and much needed transformational change, expanded our international and domestic footprint, increased revenues by nearly $20 billion, and doubled Sysco's market capitalization. The great news is that there remains a lot of opportunity ahead and really good work to do. Tom Bené is the absolutely right person together with our leadership team to take Sysco to the next level, and I am confident you will be well-served by his leadership going forward. In closing, I just would like to note that I've been actively involved with Sysco's Investor Relations program during much of my career, including my early years in various Treasury functions and, of course, the past 11 years as CFO and now CEO. To those of you whom I've crossed paths with over the years, thank you for your interest in Sysco and for the respect you've provided me both in good and challenging times. I wish you all the very best. Operator we're now ready for Q&A.

Your first question comes from the line of John Heinbockel with Guggenheim Securities. Your line is open. John Heinbockel, your line is open.

Can you hear me?

Yeah.

Can you hear me, guys? (22:45)

So, I was going to say in light of the 4% inflation rate in the U.S., flat gross margin was actually a fairly decent outcome. So, maybe talk about where we sit with the evolution of revenue management. And kind of what you're doing at the margin here on price elasticity? Thomas L. Bené - Sysco Corp.: So, John, good morning. It's Tom. What I would say is that we talked a lot over the last couple years about all the tools that we've been building in the revenue management area and that we felt good that they were going to help us both in deflationary and inflationary times. And what I would just reiterate is that a lot of those tools – because what we are seeing in some of these categories is fairly heavy inflation in a couple of the ones that Joel highlighted: meat, poultry, dairy. And so what they really allow us to do is effectively pass on the pricing where we can, but do it in a balanced way such that our customers aren't feeling significant impacts over the short-term as well. So, it's really a matter of week-by-week providing our salespeople the right information, insight and guidance on how to basically price and be competitive in the marketplace.

Okay. And then maybe as a follow-up, the – when you look at what needs to be done at Brakes, right, and I know you've obviously made some management changes there. If you think about the two or three things that Sysco can bring to Brakes in terms of best practice sharing, what are they? And what is the margin opportunity at Brakes today when you look at the delta versus where you guys sit in the U.S.? Thomas L. Bené - Sysco Corp.: So, I assume – let's start with margin. When you talk about margin, you're probably talking about gross margin. And generally speaking, the margin – gross margin in Europe tends to be higher than what it is in the U.S. But their cost structures tend to be a little higher as well, which ultimately affects the operating margin. A lot of the activity that we've started to share, they have their own kind of category management approach and program, but we're starting to share more information between the European team and the U.S. team around how we might think about that process going forward. So, there could be some benefits regarding the product costs. But I'd say the bigger areas are probably around how we leverage some of the solutions we've built around the sales model here. We've talked over the last couple of years about the solutions that we've built out, whether it be things like business review or the revenue management capability, or even how we think about building out the branded portfolio in our Sysco Brand, and those all remain, I think, opportunities for us to help leverage some of that learnings out of the U.S. and share those best practices in Europe. And we've started that process already with that team.

And, Tom, if I could just add one other thing to that. It's Joel. I think the supply chain piece is probably the other part that I would just add to that. I think, obviously, some of the investments that we've talked about that we continue to make are around continuing to enhance their transformational work on the supply chain side as well as, again, to (26:00) around putting some of those best practices in place. So, I think, just to add one other thing to Tom's point. I think I would – the other part I would single out is an opportunity for us.

Okay. Thank you. And, Bill, congratulations on your retirement.

Thank you, John.

Your next question comes from the line of Edward Kelly with Wells Fargo. Your line is open.

Yeah, hi. Good morning, guys. And, Bill, good luck in the future as well.

Thank you.

So, I just wanted to start it – start on SG&A, particularly within the Foodservice side of the business. It was certainly higher than what we were expecting, up 3.2% on basically 30 basis points of case growth. Can you just provide more color on the impacts here? How much did the hurricane actually hurt that line item? The bad debt expense that you mentioned on the comparison side, what did that mean? And then can you talk about diesel costs and the impact that that had in the quarter as well?

Yes, sure, Ed. This is Joel. I'm going to start. I think a couple parts to that. Number one, there was some impact on our cost per case as it relates to, again, what I'll just call overall productivity. In other words, there's certainly as part of that, there are admin costs that we continue to pay where we're not shipping case volumes in those areas. And so, that would have a negative impact on that leverage. From a bad debt perspective, a lot of that's related to some actually positive bad debt results we had in the prior year that were, I would say, significant relative to what would be normal for us. So, when that comparison hits, it actually elevates what would be a growth in our admin costs for this year on that side of it. I think a couple of other pieces of that, again, certainly from a segment perspective, as what I've talked about mostly relates to the U.S. side. We certainly did have some higher levels of expense growth in our International businesses, so much we've talked about. There's some start-up cost with a new customer in Mexico and some investment costs that we've put into the UK Again, all of that now is actually factored into our cost structure, which would not have been something you had been used to seeing as much last year because we'd always talked about ex Brakes but, obviously, includes all that and – so, I would say those are really some of the primary callouts and, again, the hurricane, again, did have some productivity impact there, without a doubt. But I think it's a few – collection of a few things. We still feel good about our ability to manage costs still in this area going forward. Thomas L. Bené - Sysco Corp.: The only other thing...

Yes, got it. Thomas L. Bené - Sysco Corp.: Yeah. The only thing you mentioned...

I'm sorry, Tom. Thomas L. Bené - Sysco Corp.: ... was fuel. And so where's (28:48) about a penny detriment on fuel versus prior year. And the buildout, the cost comments that Joel made from an operating perspective, when you think about the way we run our business and the impacts of the – some of the storms, we still are basically paying all of our associates, drivers, warehouse, et cetera, without any case activity during those times. And so, that's what drove some of that incremental expense from an operating perspective as well.

Okay. Great. And then just one follow-up. Profit per case on U.S. Foodservice has been really strong the last months – been strong for a while, but the last couple of quarters seemed notably strong. Can you just talk about that acceleration and the momentum? And then how does that change over the next few quarters as you have some new business coming in? Thomas L. Bené - Sysco Corp.: So, Ed, I assume you're talking about gross profit per case.

Yeah. Thomas L. Bené - Sysco Corp.: Yeah. So, it's a really good question given the inflationary environment we're experiencing. So, we continue to see our gross profit per case improve, even though, obviously, we haven't seen margin expansion during this time of inflation. So, we continue to feel good about that and that's a combination of things. It's the category management effort we've had going. We talked earlier about the increase in Sysco Brand, another 82-basis-point improvement with our local customers, which is again, as you think about the challenges on inflation we're seeing, our ability to give customers options, including Sysco Brand, and help them maintain their cost, while also delivering improved margins for us, is a kind of a win-win in there. And so, as we see our case volume increase, we would actually expect to see us continue to be able to manage that accordingly. And so, we do feel like you're going to see some improvements there, predominantly in this multi-unit side, as we continue to go forward throughout the year.

Great. Thank you.

Your next question comes from the line of Kelly Bania with BMO Capital. Your line is open.

Good morning. Thanks for taking my questions. Just wanted to elaborate a little further on the international comments. I think you mentioned some further softness expected in 2Q, but an improvement in the second half? Did I hear that correctly, if – and can you elaborate on that?

Yes, Kelly. I think, again, as I talked about – I mean, some of this is really related to what I'll call some timing elements of the fact that the previous fiscal year with Brakes was on a calendar basis. And just essentially moving that now to where their fiscal year aligns with our fiscal year does cause some changing of the way some things are recognized. And so I think, from a timing perspective, again, that impact is going to most notably hit us in the second quarter, which again, used to be their – the final quarter of their calendar year. And again, – but certainly we'll expect some level of pickup in that, in the second half of our year.

Okay, and the other question I wanted to ask was just on the corporate multi-unit trends. Do you continue to expect those to improve, I think, starting next quarter? Can you quantify the magnitude of that there, and is this a positive or a negative for gross margin within the U.S. Foodservice? 32:10: So, I guess – let me take that at a high level, Kelly. It's, definitely, from an improvement – the trend's going to improve, okay? So, what's been going on as we've talked, we've been very thoughtful about the way we approach the multi-unit segment of our business. And we have had, obviously, some situations over the last year where we've not renewed some business, or lost some business there. And so, what we now are getting ready to do is lap some of that as we go into Q2, and we have picked up a couple of new customers as well. And so you – the combination of those things will in fact improve the multi-unit sales trends that we've been seeing for the last kind of three to four quarters. As far as gross margin, obviously, overall, that business is a lower margin than our local customers. As far as us sharing a specific number with you, it would be really difficult for us to do that. But you certainly will expect, as we get overall customer growth volume growing, that there will be some benefits to the gross profit dollar line. And it could have some impact on margin.

Thank you.

Your next question comes from the line of Vincent Sinisi with Morgan Stanley. Your line is open. Vincent J. Sinisi - Morgan Stanley & Co. LLC: Hey. Good morning, guys. Thanks very much for taking my question and, Bill, of course, best of luck to you in the next chapter here.

Thank you, Vinnie. Vincent J. Sinisi - Morgan Stanley & Co. LLC: Just – absolutely. Just wanted to – I guess, just first going back to inflation. Just to kind of get your sense versus what you guys were expecting heading into the quarter. Obviously, 3.8% was a bit above probably most of our estimates on the line here. Just wanted to see kind of versus your internal expectations, and if any changes have happened since. And maybe – I know you mentioned there's been some kind of changes where you can promote some of your private label. Has that been kind of a meaningful change with the higher inflation?

Here, let me take the first part of your question and then I'll let Tom chime in on the other. I think the – it's Joel. I think the – certainly, Vinnie, I would say that the level that we've seen here in Q1 – say, it's fair to say, is higher than we anticipated. And I guess I would say that the speed to which it actually happened in a few of the categories we called out was, I'd say, something that happened faster than we anticipated. But I think, at the end of the day, it certainly, as Tom pointed out, I think that some of the things that we've done, in particular, RevMan, CatMan, certainly provided us with the tools and resources, and certainly provided our sales team with the opportunities to manage this fairly well and, again, I certainly – somebody called out earlier, I mean, the fact that our U.S. Broadline – our U.S. Foodservice, excuse me, segment was relatively flat from a margin perspective, I think, is pretty strong relative to where (35:02) – despite, again, as you pointed out, things that happened probably faster than we anticipated. Do you want to add anything to that, Tom? Thomas L. Bené - Sysco Corp.: Yeah. I think the only thing I'd add, Vinnie, is that obviously, we continue to see some inflation through at least the balance of the calendar year. There are some things, like produce, that we think might be impacted more, given the recent fires in California. So, there are going be some continued areas we're going to have to deal with. And again, as w talked – from the first question – I think we feel good about the tools we've got in place to manage through this. But as Joel…

Thanks.

Your next question comes from the line of Karen Short with Barclays. Your line is open.

Hi. Good morning. It's Ryan Gilligan on for Karen. And thanks for taking the question. Did you say what operating profit was excluding Brakes? We're just trying to get to what the three-year incremental operating profit is now and by our rough math it seems like you're up to $460 million, so you would need to generate almost $200 million the rest of this year to get to the high end. Does that sound right?

Yeah. So, this is Joel. I mean, we actually – if you want to take the dollars ex Brakes, we added $52 million operating income dollars, again, ex Brakes and so that takes us to a total of $469 million for the – for, now, the nine quarters of the three-year plan.

Got it. And would the $50 million D&A (38:19) benefit contribute towards the plan as well?

Yes. Yes and, again, that's going be spread evenly across the four quarters of the year.

Got it. And on tax reform if it's passed and corporate rates are lowered, what are your views on whether or not incremental profit dollars will drop to the bottom line versus get computed (38:37) away?

Well, yes. First of all, it's – to you speculate on anything coming out of Washington right now is a little bit interesting. But I think the – yeah, look, we're a company that obviously has a large percentage of our profits in the United States and so, certainly, just based on that fact it certainly seems like a positive opportunity for us. I think the – in terms of passing some of that along, I – to be honest with you, I get asked this question a fair bit. I don't know that most of our customers spend a whole lot of time thinking about the correlation of prices and tax reform necessarily. So, I don't personally anticipate that being a significant issue either way, as it relates to this. But, certainly, again, overall, from our company's perspective, again, were that to happen, I think there's certainly some positive opportunities for us.

That's helpful. Thank you, and congratulations, Bill.

Thank you, Ryan.

Your next question comes from the line of Chris Mandeville with Jefferies. Your line is open.

Hey. Good morning. Just on the private label or brand penetration itself, if we think about it over the next three to five years within both Broadline and local, where do you think that ultimate penetration goal could go? And maybe in that context, when you guys are having your conversations with your suppliers, how are those discussions going these days? Do you feel like maybe you're able to receive some greater concessions out of them if they're not necessarily providing innovative or value-added product? Thomas L. Bené - Sysco Corp.: Chris, from a Sysco Brand perspective, as you know, we've continued to see this grow over the last couple of years and our total business is up 62 basis points and 82 basis points with our local customers. So, we continue to see opportunities there. And we get asked this often is how high is – could it go? And I don't think we really have a good view of that. And the reason I say that is what we continue to focus on is bringing very high quality products to the market at very competitive pricing. And I think as our customers continue to feel different impacts whether that's the cost of labor, wage rate increases or other challenges they might feel in their business, product costs' always going be there. And we bring them alternative solutions with Sysco Brand. So, the other thing we've done – we've talked about is we've been focused on bringing innovative solutions and products with Sysco Brand to the market. And I think the combination of those things continues to be well-received by our customers and that's why we see these increases. So, I know that didn't answer you directly, but what I'd say is we continue to invest here. We feel good about it. I talked about this brand revitalization effort. We've been doing a lot of work around refreshing the look and the feel of those brands and making sure that they're on trend whether that's with fresh and local products or that's with the ripe (41:37) types of products, whether that be organic or wholesome type products. So, we – we're doing a lot of work in that area and it's – appears to be resonating nicely with our customers.

All right. And the last one for me very quickly in terms of ROIC in the quarter as you calculate with and without Brakes, what was then numbers for those?

Yeah, the number, I think, in aggregate was 12.3%, as an overall enterprise. Actually, Chris, off the top of my head, I don't have that number without Brakes.

That's okay. We can follow up. Thanks, guys. (42:14)

Your next question comes from the line of Marisa Sullivan with Bank of America Merrill Lynch. Your line is open.

Morning. Thanks for taking my question. I wanted to touch on the U.S. Broadlines business. When you exclude inflation in case growth, it looks like there were some other negative pricing impact to U.S. Broadline sales growth. So, can you just give us a little bit more detail on this and was it related to an inability to pass through all the inflation or was it a decision by Sysco to get sharper on pricing or was it a more competitive environment? Just more color there would be great. Thomas L. Bené - Sysco Corp.: Hey, Marisa. I'm not sure exactly what you're referring to. I think we feel really good about the U.S. Broadline business and we talk about it in context here of our U.S. Foodservice Operations segment. And given we talked about some of the impacts of the storms on both volume and on gross profit dollars, and obviously the impacts on costs as well. So, I think when you think about everything that that business went through in this first quarter, we continue to feel very good about how we're managing it, including some pretty significant inflation in the quarter. So, I – the fact that we're basically flat on our gross margin given all those circumstances, we feel actually very good about that business.

Right. And then have you – are you at the point where you're getting any push back on the ability to pass inflation onto customers now that it's close to 4%? Thomas L. Bené - Sysco Corp.: Again, I'd say as we always talk, that's an average. So, category by category, sure, we run into some challenges from time to time and that's where we leverage things like Sysco Brand. And, candidly, we share a lot of information with our customers, so this isn't about just us moving our pricing. We share a lot of industry information with them, what's going on in the various categories and why the costs are going up from suppliers the way they are. So, it's – we're pretty transparent in that area and we try to spend a fair amount of time educating our own people so they can obviously educate our customers.

And the only thing I'd say, Marisa – I mean, again, we had a – despite all those things, we still had a very strong local case growth as well. So, I mean, when we combine that with some of the – again, holding a flat margin during this time, I can overall – certainly, on a customer-by-customer basis, could there be some pushback? Sure. But I think overall we've done a good – really good job there.

Got it. And then, just lastly, I'm wondering if you can give us a little bit more color on the sales performance of your non-restaurant customer and how you're thinking about sales and margin opportunities within that segment. Thomas L. Bené - Sysco Corp.: When you say non-restaurant customers, are you just talking about other segments within...

Like hospitals. Well, it'd be like hospitals, schools, kind of the – some of the institutional customers. Thomas L. Bené - Sysco Corp.: We feel good about them. I think that we continue – we're fortunate that we've got this broad segment that we operate in, our customer segments, and our mix is such that while restaurants certainly represent a big chunk of it, there are lots of other customer segments. As we've talked in the past, we see growth in areas like the foodservice management and also in the retail foodservice. So, I think the other segments continue to grow. Healthcare's always been a pretty good-sized segment for us and we are performing well there also. So, I think we feel great about the balance that exists across the segments. And I'd like to mention (45:47), other than making some decisions around certain multi-unit customers, we feel really good about where we are.

Thanks so much and best of luck, Bill.

Thank you.

Your next question comes from the line of Karen Holthouse with Goldman Sachs. Your line is open. Karen Holthouse - Goldman Sachs & Co. LLC: Hi. One quick housekeeping one. Could you give us an idea of what the blended interest rate on your debt was this quarter?

Yeah. Karen, we'll have to get back to you on that. Karen Holthouse - Goldman Sachs & Co. LLC: Okay. And then, looking at some of your commentary earlier about seeing strengths in brands that are familiar, convenient value, is that really a comment on maybe some strengths in fast food relative to casual dining as a category with what you're seeing in your customers? Thomas L. Bené - Sysco Corp.: I think it's commentary not necessarily on fast food but on independent restaurants and what we continue to believe is why they are positioned well to grow. And so, there are, obviously, more flexible menus, more ease of creating the right environment for consumers. And so, it has more to do with just acknowledging that there are lots of things still happening in that restaurant space and these newer concepts, whether they're independent or small multi-unit chains, they are continuing to see growth because they are bringing the kind of things that consumers are looking for to the market. Karen Holthouse - Goldman Sachs & Co. LLC: And then one other quick housekeeping. Are there any calendar shifts we should be thinking about into the next quarter with Christmas switching – moving off of the weekend? And then also, I think you lose New Year's Eve compared to last year?

Yeah, Karen, I would say that we don't anticipate anything significant there. Karen Holthouse - Goldman Sachs & Co. LLC: All right. Thank you.

Your next question comes from the line of Andrew Wolf with Loop Capital Markets. Your line is open.

Thanks. Good morning. First, Bill, congrats on your career.

Thanks, Andy.

And best of luck with everything. You're very welcome.

Thank you. I appreciate it.

So, I think, Tom, in your introductory comments, it sounded like ex hurricane, the U.S. business accelerated a little on the case side and was a little better on the gross margin side. So first, just to kind of check that, if you take the markets that were not impacted by the hurricanes, was case growth in fact – the local case growth, over 3%? Thomas L. Bené - Sysco Corp.: Yes. In many cases it was.

Okay. But in total – I mean, I'm just trying to get some – because, obviously, estimates are one thing and then there's other ways to sort of get... Thomas L. Bené - Sysco Corp.: Well. (48:38)

I guess, another way I want to ask it is – and it's sort of related so, is – how are these hurricane markets doing post hurricane? There's a lot of different theories, some is people are pent up and they want to go out to eat. Others is businesses are closed, people are moving. Are those markets normalizing? And are they running decently? Thomas L. Bené - Sysco Corp.: Yeah. I would say, ex a couple of key geographies, right? So whether it's here in the southeast where there are restaurants that are still closed or in parts of Florida like the Keys, where things are – many things are still closed. Much of the market is starting to get back to a normalized state. So, I would say yes, in general.

Okay. And related to that, the math, if you just take the math of what you said, it looked like the $10 million hurricane impact to the operating profits really came out of the case side and the gross profits. But it also sounded like, from what, Joel, some of your commentary, it might have also been in the OpEx side which I also would have expected. So, could you talk a little about that $10 million? Is it a, kind of, a hard estimate or how did you get to that?

Well, so look, it's a fairly – I get it. It's high level. It's ball park. It's directional. I – it's, I think, again reasonably, and accurate, I think it is – yeah, we looked at it mostly all along the lines of what you said, from a volume and gross profit impact. Certainly from a productivity impact, again, as we described it earlier, it's interesting, I mean (50:14) our costs to some extent didn't go up, if you want to call it that. Because we had – we're paying people, whether it's drivers, whether it's administrative people, we're paying them, irregardless of whether we're shipping cases or not. And so, I would say, in general, from a productivity standpoint on a per case basis, we actually had some impact there. But I – so again, it's – again, Andy, it's not an exact science but we certainly got what we thought was a pretty reasonable view of it. And what we quantified was mostly on the gross profit piece of that. And probably, maybe a little conservative on our part but we thought it was a reasonable view of what happened. Thomas L. Bené - Sysco Corp.: And, Andy, that was all based on case...

Got it. Thomas L. Bené - Sysco Corp.: All based on case volume, right. We didn't project any impact on a rate basis from gross profit per case. We just looked at purely at cases. And you asked about the 3%, we think that's a fairly conservative estimate, given what our run rates were in those markets.

Got it. Thank you. And just wanted to follow up on Brakes, and my last question is – just like, as you look – Joel, you mentioned you're reconciling or harmonizing the fiscal years, and that obviously has some tweaks to it. But is most of the slowing from just what's going on there with the cost inflation and consumer – fundamentals side, with what's going on in the UK? Or how would you portion it, between timing reconciliations and a little fundamental slowing, or some fundamental slowing?

Yeah, I'll start and Tom can chime in. I'd say, Andy, it's really some of both. Again, I think what I would say to you is that some of the timing issue is going to become more accelerated in the second quarter, which is why we're calling that out. Which again, will then rebound to some extent, in the second half of the year. But I would say for this particular quarter, it was some of both. Thomas L. Bené - Sysco Corp.: I don't have anything really incremental to add. I mentioned earlier some of the other impacts from – as you mentioned, from inflation and some of the macros in the UK.

Okay. Thank you.

Your next question comes from the line of Bill Kirk with RBC Capital Markets. Your line is open.

Thank you. Could you talk a little about the rationale for the recent deals off mainland U.S.? You gave some details on HFM, but how do you think about this deal and the completion of the Costa Rica stake versus opportunities that would be, kind of, more in and around your core or existing infrastructure? Thomas L. Bené - Sysco Corp.: Let me – I'll talk about those two, and then I'll let Joel embellish on kind of our broader strategy there. The – let's start with the Mayca in Costa Rica. So, as I mentioned, that was a business that we went into a joint venture with back in 2014. We feel great about the partnership we've had with the folks at Mayca. And as I shared, the results have been very positive over the last couple of years. So we exercised our option to basically acquire that business completely recently. And so, that's an example of where we started down a path with a partner and liked the way it progressed, them leveraging what they could from Sysco, and obviously them doing a great job in their marketplace. Separate that from HFM, which is just an outright acquisition and a market within the U.S. that's been white space for us. Other than some export business into Hawaii, we don't really have much of a footprint. We'd have no footprint there, and we didn't really do a lot of business there, so it's a white space opportunity that we're very excited about. They're a terrific distributor with businesses on a lot of the islands, and are really excited about what we can do together in Hawaii. As far as other types of acquisition, I'll let Joel talk a little bit about how we think about it and where you might see us focusing.

Yeah. I think the way I would characterize it, I mean, it's a little bit coincidental, I would say, in terms of timing, that we had two acquisitions we announced that were both on islands here. But I think in general, I would tell you that our overall strategy around M&A, it's – those are both very consistent with that. We're very – continue to be very focused on opportunities within our own domestic and core markets, or areas that might supplement our existing businesses, as well as geographic expansion. And so, I would just say, again, the timing probably a little coincidental on those two things, but our acquisition strategy has remained very consistent. And those two deals are very much a part of our overall strategy.

Thank you. That's it for me.

Thank you.

Your next question comes from the line of Shane Higgins with Deutsche Bank. Your line is open.

Yeah, good morning. Just a question and some clarification here, on how the local case volume trends were during the quarter in the markets that weren't impacted by the hurricanes? Did those accelerate throughout the quarter? Thomas L. Bené - Sysco Corp.: Shane, did they accelerate? So, I mean, when you think about this, we're – we break our U.S. out into six markets. And so, as you guys know, I mean, different things drive the business in different markets, not the least which is overall population growth, economic impact. So, what – as we said earlier, we saw good growth outside of those other markets, generally speaking, in the U.S. And so, we feel pretty comfortable with the numbers we've shared regarding the impacts due to the hurricane in primarily what we call in our South and Southeast markets.

Okay. Thanks for that. And how are case volumes trending 2Q to date? Thomas L. Bené - Sysco Corp.: We continue to feel very good about the growth that we've had in the – both local, and as I mentioned, change in multi-unit.

Okay. Great. Thanks. And just had a question on the – you guys called out some challenging inbound freight environment. Could you just give a little bit of color on kind of what changed there during the quarter, and what you guys are doing to mitigate these headwinds?

Yeah, I would just – I'll take that. It's Joel. And I would just say in general, the way to think about it is that there's been some level of shortage of drivers in inbound freight, and that's something that was happening somewhat prior to the hurricane, and then that got accelerated by the bad weather. So, lots more sheetrock being moved, and I would say carriers are taking the opportunity to move more expensive loads, and that doesn't always necessarily – that pinches supply on our side. And so, that was something – again, at the end of the day, our product costs is basically the cost of our products plus the costs of inbound freight. There's some increases there from an inbound freight perspective and, certainly, that's something, as we move forward, continue to find ways to mitigate that – it's continued somewhat here and as we moved into this quarter.

Okay. Great. And then congratulations, Bill. That's it for me. Thanks.

Thanks very much.

Your next question comes from the line of Ajay Jain with Pivotal Research Group. Your line is open.

Yeah. Hi. Good morning. Bill, I also wanted to say congratulations and wish you good luck in your retirement.

Thank you, Ajay.

Now that you've anniversaried Brakes, would it be possible to break out the actual currency impact, both in terms of revenues and operating profit? Maybe you already mentioned that earlier and I might have missed it, but it would be nice to get a sense of the actual operating performance in International after stripping out the currency impact, especially for the markets that Brakes operates in. So, if you can comment on case trends for International and also the overall currency impact, that would be great. I'm assuming that you can track those things a lot more easily now that you've cycled Brakes.

Yes, so Ajay, again, so the breaking out specifically – again, we're – we don't – we don't typically do that. What – here's what color I would give you, though. I mean, and actually general, the impact of foreign exchange overall for us has been relatively negligible for this quarter. So, there is – some of this stuff we've talked about that Tom referred to in terms of the weakness of the sterling really has played itself out in the selling margins. Because there's a fairly sizable percentage of products that the UK, or that are bought outside the UK, which has impacted the selling margins, but if you actually look at the overall impact of foreign exchange – again, the U.S. dollar's been somewhat weaker out there, the Canadian dollar, as well as the euro. Then there has been some impact where the sterling has continued to weaken. But – yet overall, on the top line and certainly on our operating income line, there's been a relatively minimal impact overall on foreign exchange. More on the top than overall, but again, not much on our operating income line when you aggregate everything.

Okay. So, going forward should we infer that you're not going be breaking out the currency impact based on the year-over-year comparisons?

Well, I guess, I would say in this particular case, it's – it was not significant and we didn't do it. If it's something really significant, we'll probably break it out.

Okay. And just one follow-up in terms of the U.S. local case growth, you've had a pretty impressive run now in terms of local case volume. So, over the past couple of years since the start of your three-year growth plan, has there been any noticeable shift in terms of where that volume is coming from at this point? Are you selling more cases to existing customers or is the local case growth coming more from new business? I'm sure you'll probably say it's a little of both, but if you can comment, that would be great. Thomas L. Bené - Sysco Corp.: Sure. And it is obviously both. We track both penetration which means more sales to existing customers as well as new lost business. And I would say in each of those areas, they've continued to grow. In Foodservice and generally, new business is very important because there are a fair amount of customers each year that cycle for various reasons. And so, I'd – it's a pretty good balance actually of both though. And I'd say the thing for us that we've really tried to focus on is penetration because we believe that the more products and service that we can provide a customer, obviously, that also provides more – what we call maybe stickiness or loyalty from those customers. You heard me talk in the past about loyalty and we continue to have a positive trend in our loyalty metrics, including about a 3-point improvement in the first quarter. So, we feel good about what we're hearing from our customers as far as what we're providing them.

Great. Thank you.

Your next question comes from the line of John Ivankoe with JPMorgan. Your line is open.

Hi. I think at this point my question is limited to some comments that Tom made in, I think, his prepared remarks around not just the move towards healthy, local, organic in terms of consumer preferences which is pretty easily understood. But also the comment around convenience, low cost, and familiarity. I interpreted that either in terms of traditional fast food which is obviously done very well over this cycle, but it could also mean things that aren't necessarily restaurants, like convenience stores or maybe other types of Foodservice operations that are more hybrid in terms of what their approach is. So, could you elaborate on that sub segment and how big of an opportunity that is relative to the business that you're currently serving? Thomas L. Bené - Sysco Corp.: Sure. First of all, I think you articulated it actually pretty well. And so, I think that that's – it was good to hear that what we said is – was translated, I guess, by you in the right way. I think, there's some of this is certainly the retail segment that we've talked about. We do see it continuing to grow. But the other segment that we all know is growing is this – kind of think about as prepared meals and this ability to get your – whatever your favorite restaurant is delivered to you now versus having to either go there to dine in or even to go pick it up. And we continue to see that movement happening. And there are lots of different folks getting into that space now in these prepared foods that are both retail, but also in many cases in foodservice outlets that are handling that. And so I think the more those folks continue to grow, that just provides more opportunities for our customers to grow and for consumers to get access to things that they like and enjoy. And so, that's really – is what we were trying to refer to there.

So, that sounds more independent restaurants and chains or maybe that also includes some smaller chains in that segment? And are you alluding to meal kits as well? Or is that a different segment than what you want to be doing? Thomas L. Bené - Sysco Corp.: Yes to your first part of your question and comment. And as far as meal kits, yeah, it's part of it. It's a fairly small segment and while I think it's still got some growth in it, as we've all seen, there's a lot of movement going on in that space right now. I think what we're seeing, though, is there are – think about it, instead of someone like a Blue Apron where you're having to get something shipped to you, there are local outlets that are accomplishing that same type of solution for customers or for consumers on a local level, whether that be an independent or a chain who are providing that same type of service.

Thank you.

Yes.

This concludes today's conference call. You may now disconnect.