Good day, everyone, and welcome to the Sysco Announces Fourth Quarter and Fiscal Year 2011 Results Conference Call. As a reminder, today's call is being recorded. At this time, for opening remarks and introductions, I'd like to turn the call over to Mr. Neil Russell. Please go ahead, sir.

Thank you, James, and good morning, everyone. Thank you for joining us for Sysco's Fourth Quarter and Fiscal Year 2011 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 July 3, 2010, and in the company's press release issued earlier this morning. As disclosed in our earnings release this morning, our operating results last year included an extra week of operations due to the timing of the last day of our fiscal year. As a result, the fourth quarter of fiscal 2011 included 13 weeks of operations compared to the fourth quarter last year, which included 14 weeks, and fiscal year 2011 included 52 weeks of operations compared to the prior year, which included 53 weeks. On the call today, we will discuss year-over-year comparisons that include the impact of the extra week of operations. However, to provide financial results that are more comparable on a year-over-year basis, certain metrics will be provided which remove the estimated impact of the extra week. These adjusted metrics are non-GAAP financial measures. You can find the reconciliation of these non-GAAP measures to the applicable GAAP measures on the Investors section of our website at sysco.com. Also, all comments about earnings per share refer to diluted earnings per share unless otherwise noted. Lastly, we ask that you reserve December 9 on your calendars for our Investor Day in New York. Additional information will be provided in the next couple of weeks. With that out of the way, I'll 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 for both our fourth quarter and fiscal year of $10.4 billion and $39.3 billion, respectively. EPS for the quarter was $0.57, which was flat on a GAAP basis compared to the prior year. However, excluding the impact of the prior year's extra week of operations, adjusted EPS grew by 7.5% for the quarter. For the year, EPS was $1.96 compared to $1.99 last year. Similar to the quarter, adjusted EPS grew by 4.2% for the year after excluding the impact of the prior year extra week, the current year's $36 million multiemployer pension plan charge and the year-over-year effect of certain net tax benefits. Focusing on the fourth quarter for a moment, volume growth was positive but remains at modest levels. At the same time, food cost inflation in our product mix remained high and, in fact, was higher than each of the previous 3 quarters this year and the prior year. Thus, due in large parts to these 2 factors, we grew our gross profit dollars but once again experienced a decline in gross profit as a percentage of sales. Turning to the fiscal year, we grew our case volume and generated nearly $40 billion of sales in a market that most industry observers believe is currently flat, resulting in about half a point of share gain. We generated $1.9 billion of operating income, produced cash flow from operations of $1.1 billion and distributed nearly $600 million in dividends to our shareholders. In addition, we invested significant capital in our ongoing business, improved our customer retention performance and improved productivity in our operations. We're also pleased with our progress to date in better integrating our specialty Meat and Broadline operations in a manner that more cohesively…

Thank you, Bill. Good morning, everyone. What I'd like to do first this morning is provide a brief summary of the formal GAAP results. As Neil just mentioned, fiscal 2010 was a 53-week year compared to our typical 52-week year. GAAP results include the impact of that extra week of operations last year, which means the results that I will discuss compare 13 weeks of operations in the fourth quarter of 2011 to 14 weeks in the fourth quarter of 2010 and similarly, 52 weeks of operations in fiscal 2011 to 53 weeks in fiscal 2010. On a GAAP basis, for the fourth quarter, sales were $10.4 billion, an increase of 0.7% compared to the prior year. Gross profit declined 2.3% to $1.9 billion, and operating expenses declined 1.5% to $1.4 billion. As a result, operating income was $561 million, a decrease of 4% compared to the prior year. Net earnings were $336 million, a decrease of 0.4%, and earnings per share were $0.57, which were flat compared to the prior year. For the full year, on a GAAP basis, sales were $39.3 billion, an increase of 5.6% compared to the prior year. Gross profit increased 3% to $7.3 billion, and operating expenses increased 5% to $5.4 billion. As a result, operating income was $1.9 billion, a decrease of 2.2% compared to the prior year. Net earnings were $1.2 billion, a decrease of 2.4%, and earnings per share were $1.96 compared to $1.99 in the prior year or a decrease of 1.5%. As I mentioned, these year-over-year comparisons on a GAAP basis are not comparable because that extra week of operation in last year's fourth quarter impacts all the year-over-year comparisons, so what I'd like to do next is discuss our results for the quarter and the year excluding the…

[Operator Instructions] And we'll take our first question today from Meredith Adler with Barclays Capital.

I'd like to just ask a couple of -- maybe these are sort of housekeeping questions. Sales got a benefit from fuel surcharges. How much of a benefit was that?

Meredith, for whatever reason, you were breaking up. This is Bill. Could you just repeat that?

Sure. I'm just wondering how much benefit to sales came from the fuel surcharges as a percentage of growth?

I wouldn't say it was overly significant to the sales line. I think as Chris pointed out, it helped to defray our fuel expense in terms of the delta there, but I wouldn't say it was a big part of the sales percentage.

And can you talk a little bit more about the performance issues you're seeing at the Business Transformation Process?

Sure. Essentially, I would say to you that we, like I said in my prepared comments, we got into the pilot site in Arkansas in April. As Chris pointed out, we did do some additional testing, so we're probably 3 months delayed getting into that. And as we got into the conversion weekend, as you can appreciate, there's always a lot of things that go on in those weekends, but we got through it. We delivered groceries. We've ordered product, and we're taking care of our customers. As time went on, it became clear that we were still having issues with the ease of taking orders, the ease of processing orders, both on the buy and the sell side. We have some speed issues from a performance standpoint in terms of how long it takes for the customer or for the salesperson to put an order in. We've also had some issues with reports, that type of thing. So obviously, as we went into this initiative, Meredith, we've cautioned ourselves and everyone that we talk to to be prepared for the unexpected. And so while we were generally prepared for some challenges, these were things that we couldn't really anticipate until we got into the pilot. So those are examples, kind of high-level examples of some things we're running into. And where we are right now is we're very focused on a combination, really, of a couple of things. One is, pardon the expression, we're fixing those things, and so to the extent that they were designed and that they are working close to how they're supposed to work, we're attempting to make them work better and more efficiently for our customers and for our sales people and for all of our associates. To the extent that we've tripped into some design issues or flaws, we're going back, and relooking at that. And then to the side, there were several, what we call, enhancements or additional features that were never targeted to go into Arkansas being a pilot, and we're also working on those. And we would hope to have all that worked into the Arkansas company here as we get into November and early December.

I mean, obviously, you had some issues, and you need to fix them. But would it be fair to say that the environment has turned out to be much more challenging than you thought it would be at this point in time and that it just is prudent to slow down this project because the expenses are very high? I mean, if you kept ahead, the gross margin being this weak, aren't you -- weren't you running the risk of pretty weak earnings overall?

Well, I don't think it's gotten to that point. What I would say to you is basically what I said in my prepared comments, which is we need this system to work better before we roll it out to additional companies. And that's really what our focus is, which is to get it working as well as it needs to work. That's why you do a pilot, and that's where we're at. I don't think -- what you see Chris trying to do here in his comments is we're going to do as diligent an effort as we can as we go forward to separate for you how the core business is running and then what the project is costing us at any point in time. So clearly, we have to be aware of the project cost and sensitive to that. But at this point, I wouldn't say we're at a point where the expenses of the project are that big of a concern. We just want to roll it out in a way that our operating companies will embrace it and engage appropriately and that it serves our customers the way it's designed to.

Meredith, I'll jump in also. I mean, just taking on your question. I mean, it's a classic issue of "do you slow down a long-term strategic project because the short-term expense implications are too high?" And clearly, the answer we're going to give you is no. It is a very important strategic project to us. We're tripping over some of the steps that, frankly, we expected would be there eventually. You just don't know where they're going to come from, but you know they're going to come out of the woodwork once you turn the thing on. And we'll work through those, and we'll work through the expense related to any delays. But we're nowhere near a point where we would say, "we should slow this thing down because it's costing us in the short term in a difficult operating environment".

Great. That's a good way of thinking of it in my view. And then just finally, are there any benefits at this point in time to the Business Transformation Process?

Yes. Look, the way we measure benefits, which you've got to find some science to measure benefits, and so the team established some science behind it, the way we measure benefits. Yes, there are benefits, what we call the hard dollar benefits. And to do that, you basically start with a point in time and you measure your headcount in the affected areas, those areas where you're going to be making some fairly dramatic changes, and then you track the headcount reductions over time, and that's how you measure benefits. Well, we have some of those benefits. But the struggle is some of those benefits come from attrition, as well as other means, and you may get some attrition before you're expecting it, and you just choose not to replace those people. So you're getting some of that benefit early. That doesn't necessarily mean it's going to stick because the system is only in Arkansas right now. So anything we have right now is one, small and two, it's going to fluctuate because of the way we're measuring it. The real proof will be, frankly, as we start to roll this thing out and we start to look at the overall expense reduction out in the field and the affected areas, that's where we're going to have the hard dollar benefits as we continue to talk about those. And that's going to be a little while.

And benefits in terms of revenues?

Nothing that we could even begin to measure, no.

Again, Meredith, to take you back to the business case, we've been really clear on this. There's a hard dollar business case here that's driven mostly by headcount reduction, I mean, the administrative side of the business and by leveraging our headcount more effectively as we grow the business and sales. So Arkansas is a pilot, and at this point, we have our hands full in Arkansas and in the shared business center essentially getting through this transition. So we're not really -- we never were really looking for significant benefits at this stage of the project in Arkansas. That's why we call it a pilot. The benefits Chris was alluding to are some more structural things that we've done to prepare in terms of overall headcount, management-wise, and organizationally heading into this transition.

Next, we'll hear from Neil Currie with Dahlman Rose.

I just wanted to, first of all, talk about the inflation trend. Obviously, inflation was a little higher than it was in the third quarter, but you have more of a struggle passing it through than you have in the third quarter. So I was wondering what changed so meaningfully to put that much pressure on your gross margin compared to the third quarter, which looked as if it was very much an improving trend?

I'll take a shot at that, Neil. Essentially, you're right. I mean, what we've seen is increasing levels of inflation in our cost of goods as the year's gone along, and it was at least a point higher, I think, in the fourth quarter versus the third. In terms of the reasons for that, a lot of the same categories that have been high all year, the Meat, the Dairy, the Seafood, they've remained high, and some other categories that represent a significant amount of our purchases, Canned & Dry, comes to mind, have also begun to absorb higher increases in our purchasing costs over the last quarter or 2. So that's pretty much been the consistent trend. In terms of why we struggled more in the fourth quarter versus the third, that's a difficult thing to answer in terms of specifics. I would tell you that as inflation goes up, it is harder and harder to pass that along as you can appreciate. And I would also tell you that we see all the data out there that comes with the economy and some of the restaurant surveys and that type of thing, but we felt, we certainly felt, our people felt that after Mother's Day, the business slowed down a little bit, flattened out some in May, maybe picked up in June, hard to tell depending on who you're talking to and what sources you read. But I would say the market environment itself got a little tougher here as the quarter went along.

Okay. And without a crystal ball, it must be hard, but do you have a view on when inflation may peak?

Well, we've got a crystal ball. It actually just doesn't work. And it's hard to tell. What I would tell you is it doesn't appear to be leveling out. As we sit here today, everything you read and feel is that it's probably going to be with us here for the foreseeable future. We'll have to communicate that with each quarter, that type of thing. But looking out the next couple of quarters, I certainly expect it to stay relatively high.

Okay. And looking at your 2-year real -- your real sales growth trends, it actually looked a pretty good quarter. You saw some continued improvement in the 2-year number. Did you say earlier that through the quarter, that sales moderated and then improved towards the end of the quarter? July was better than June, is that right? Did I hear you say that?

No, we actually didn't say that. Yes, I think what you're referring to is the 2-year year-over-year-over-year is actually fairly good on a real basis, and I don't think we actually looked at that number in the last couple of days, but you're probably right. Despite the fact that, as Bill said, the industry is very stagnant right now, the calculations that we've done using external sources says we actually grew our share in here during the course of the year, we grew our share by another half point, which we manage to do consistently. So we continue to find growth, even though the market is not helping us.

Yes, I think -- I went back and looked at some of that as well. If you looked at the 4 quarters for the year, our best quarter for the real growth was the first quarter. I don't know. I think things may have felt a little bit better at that point in time, but there's some math in that number, too. We were comparing off of a very weak time from the year before. So when you look at this thing over the last 4 or 5 quarters, it really is hard to draw a conclusion from one quarter to the next in terms of the divine growth.

But intra-quarter, did you see -- what was the sales trend in the fourth quarter? How did that progress?

It's a tough quarter as you saw in terms of our numbers. All I can tell you is what -- and this is anecdotal. And then what we all read is that we felt like we started to flatten out a little bit here in May compared to April. And others are saying, there's some surveys out there that talk about the restaurant business numbers improving somewhat in June. I don't know that we experienced that in June. So I would say it's soft in beginning of May and stayed that way, at least from our perspective, through the end of the quarter.

Our next question comes from Andrew Wolf with BB&T Capital Markets. Andrew Wolf - BB&T Capital Markets: I wanted to circle back and kind of follow up on Meredith's question on the business transformation costs. I just want to make sure I understand, number one, if the gross cost was $0.11 and the net was $0.02, that's a $0.09 per share differential. But I'm pretty sure it wasn't what you guys would call benefits from the project, so could you kind of just tell us what is in most of that $0.09? Is it really the kind of the accounting that's been -- you talked about in the Q that is allowing you to capitalize more of the costs and things like that?

No. And actually, I'm glad you asked the question because you're tripping over, frankly, the reason we're changing the method in which we report this. I got to take you back in history. We reported this from the beginning as incremental cost to the company net-of-benefits. So let me take first the incremental. That meant only the additional costs to the company, so all these people internally, and we have a large number of people that are dedicated to this project that were Sysco employees that we transferred into the project, we did not count as an additional expense. So when we added up the expenses, it wasn't $100 million in that particular way of accounting for it, and then we've netted benefits against that, and you're right, the benefits were not $0.09 a share. So that's where we got to our estimate, most recent estimate of $0.02 to $0.04 on an incremental-net-of-benefits basis. The problem with that is it doesn't give you full visibility to the actual cost of the project. So we just pushed that away. We said, "Look, we're just going to disclose everything". So it’s all categories, all functions that are directly related to our Business Transformation Project, that's the $102 million that you're seeing today. I'm not netting the benefit to get that. As I said to Meredith earlier, they're not very large at this point in time. Andrew Wolf - BB&T Capital Markets: Okay, all right. So I need to look -- what was the fiscal '10 gross spend, so we can look at the net number there?

Fiscal '10 gross spend on a per share basis... Andrew Wolf - BB&T Capital Markets: Well, that's the $0.09?

Yes, that's the $0.09. You got to go back to $0.09. Yes, $0.09. And again, Andy, what we're trying to do in that is take you backwards so that you got the same basis that we're reporting now. You've got it for 2009. You got it for 2010.

That's the gross expense, not the gross spend per se.

That's right. That's the gross expense. It doesn't really apply to cash. Andrew Wolf - BB&T Capital Markets: Got it, yes. And Bill, as you're talking about slowing things down on functionality, I mean, it's kind of normal for IT to have that. But as you talk about just things like order entry, for example, is it -- the issue is more around the employees needing to get familiar with what they're doing and a new way of doing things and being trained, or is it more kind of substantive that you feel that maybe the pages they're looking at on the computer or whatever actually need to be redesigned? Or are you still -- or is it somewhere in between? I'm trying to figure out if the actual heart of the programming is something that is not performing, or is it more around sort of normal things in IT?

I get it. That's a good question, Andy. So I would say, look, there's always opportunities, I think, to improve how we train and prepare people for these changes and conversions and our change in [indiscernible] process. We felt we did a pretty good job there, and I think if that was the only issue we had, we probably wouldn't be having a delay right now. So there's always issues like that. Some of it's screens. I think to give you an illustration of an example, I guess, of what it would be is we built this thing. And obviously, keep in mind that what we -- the whole mantra for this thing is we're trying to build a platform here that will help us be more productive in the selling exercise and help our customers be more productive as well and have the experience be more positive experience. So as we went down that road and built in some of these enhancements, what's turned out to happen is in certain instances, those have worked or most of them have worked, but there's been residual effects, say, on processing time or on the ability for the MA or the account exec to see the orders as well as they'd like or maybe to modify the order, those types of things. So it's kind of a cause-and-effect thing. We did this to enhance it, but there is a side effect that we could have anticipated, so we got into the pilot, and so we're working through that. But there's enough of that that we need to slow down here and address it. Andrew Wolf - BB&T Capital Markets: That flavor is helpful. And just lastly, as it -- you've been talking previously about acquisition pipeline getting a little better. And does this delay in the ERP and business transformation, would that affect that, or do you think that's something you could kind of carve out and do some acquisitions, either minor or major regardless?

No. The way we think about acquisitions, there's the kind of the small step we do every chance we get and that anything going on with our ERP project wouldn't affect that at all. We continue to do those. I think we grew sales last year. The amount of deals we closed last year represented a little over 1% of sales. We're reporting about 0.9% impact in the fourth quarter. So we're going to continue to do those without regard to the timing and sequencing and all that from the business transformation. When you start to talk about larger transactions that would affect our Broadline company, we are cautious about that. We've talked about that before. This is a very important strategic objective for us, this business transformation. We're not going to take risks and screw it up, and so we're being very careful that anything we do would not get in the way of that rollout, and that will continue to be the case as long as necessary.

I think just to amplify that, Andy, we've been real clear on this. We would not take on a major acquisition that we felt going into it would significantly impact our core business in the near term as we're going through this 2012. So I guess to put my color on it, to the extent that we've got a delay here, that will extend that period for a little bit. Andrew Wolf - BB&T Capital Markets: Great. I really appreciate the added insight and clarity into the business.

Our next question comes from John Heinbockel with Guggenheim Securities.

A couple of things. When is the first wave now scheduled that you guys think to be completed with the SAP rollout?

We don't have a point estimate for that, John, at this point. Where we're at right now in order is we're very focused on Arkansas and the shared business center and getting that up to, as I said earlier, to where it's working the way we designed it to work or at least very, very close to how we designed it to work, and secondly, to get our enhancements in as well as the fixes that we've tripped over here going through this pilot. So those are the 2 priorities, getting Arkansas and SBS working and getting the fixes and the enhancements in. We hope to be in a position to have accomplished a good part of that by the end of November, early December. And then right now, our plan would be to go to one site. You could almost call it a second pilot, John, at some point after the first of the year. And the whole goal of that site would be strictly to see that this system can support multiple, or in this case 2 operating companies. And if all goes well there, then we'll come up with a revised schedule for the remainder of wave 1.

And John, just a little more color. To the extent we can when we get together in December, we'll give you additional color. To the extent we have at that point in time, we'll give you everything we know.

Because you do think you will get to a point where all of the kinks are worked out, so you can go fairly quickly at the subsequent waves that there will not have to be learnings, new learnings with each wave, or do you think there will be?

Look, it's the good news/bad news of having 85 Broadline operating companies that eventually, we're going convert. While they're all a little bit different, what they do out there is generally the same. And so I'm not going to say that what happens in Arkansas is exactly the same thing is what happens in Dallas is what happens in L.A. But the underlying business processes are generally the same. And so going to one and working out the majority of the kinks makes it much more probable that number 2 and number 3 will work just fine. The reason that, as Bill said and I've amplified also, that we've decided we're going to one more operating company next is we actually want to nail the fact that we can do this, that it's up and running and works just properly at multiple operating companies. That's why we're going to take that added step in there. We know it's going to cost us a little more time, but that's why we're going to do it. But there's nothing that we've seen that tells us that this thing is not going to work. These are problems. They can be fixed. They all have solutions. It's just a matter of getting the solutions implemented and tested and rolled. And I'm just going to keep coming back to the same statement. We don't want to roll this thing before it's ready because a problem in Arkansas, while it's a real problem for Arkansas, does not disrupt our business. What we can't afford to have is a problem when we've rolled it out before the operating companies, and we're just not going to take that risk.

As a follow-up to that, if you think about, and maybe it's too early to get your arms around this, but when you think about the ultimate benefit, has that changed at all? And then when you think about -- you guys have sort of laid out how this would roll through the P&L, and there was a point at which, I think it was 2013, but a point at which where the benefits would begin to ramp. Is that all basically in place just later? So I guess 2 related questions. But can you get your arms around that yet, or it's too early?

Well, let me tell you what we know. Again, we're trying to be as full disclosure as we can. One, do we still believe in the benefits of the project? Absolutely, we do. Two, is it fair to say that those benefits are probably delayed to the extent that the project is delayed? Yes. And the third point is do we have a time frame for those yet? And we don't. That was my comment. We're reevaluating based upon everything we're learning in Arkansas. We're reevaluating the long-term costs and the benefits and the timing of that. And again, to the extent we can, we'll give you more insight into that in December.

But the magnitude of the benefits, whatever you thought would exist in whenever, 2015 or '16, is it too early to tell whether that magnitude has changed?

Yes, we don't sit -- as we sit here today, we don't feel there's a significant difference in the magnitude of the benefits. Now the timing of the benefits, of course, will change. But there's nothing that causes us to believe that we can't get the benefits that we set out to achieve.

And John, I would just add to that. When we went into this thing, we were talking about a business case, which I took you through earlier. But we're also talking about a transformational case here, which we've chosen not to quantify because, frankly, it's impossible to quantify because you have to compare it to something that you didn't know what it's going to be. So if anything, look, this is a little frustrating for everybody, but we knew these things are going to happen at some point in the project. But in terms of where we are and in terms of our commitment to it, the only thing I wish, I just wish we had started this a year or 2 earlier because the marketplace we're in today requires us to be much more nimble and requires us to be even more customer-focused and engaged than what we've been historically. And that is the transformational case of this work. So we're very, very committed to it.

And then one final thing on inflation. How do you get your arms around elasticities and knowing whether taking pricing will -- it would seem to me like you could take more pricing than you have. Is there a way to get more comfortable with that and get a better sense of elasticity on the volume side, so you can take pricing more quickly?

Well, to be honest with you, and I think you know this, John, we don't talk a lot about elasticity. We're sitting on a table and certainly, our opcos don't talk a lot about elasticity. Where we're at today, we're in a market right now that isn't growing. We're taking share, but we've got to make an investment to take share. So I would tell you my view on this thing is that for the foreseeable future, it's about gross profit dollar growth and it's about cost per case. And if we continue to grow the gross profit dollars, we need to do somewhat better than what we did here this past quarter, then we'll be fine. We've got to manage the cost per case, and it's very difficult right now to determine how much of that gross profit dollar growth is going to come from inflation, come from case growth, come from margin mitigation, whatever you want to call it. And that's the charge that we put out on our operating company presidents and their management teams and probably their people, their sales managers and their marketing associates, as well as the account execs. We're all in this together here, and we're just trying to make good decisions on a day-in-and-day-out basis at the customer level to strike the right balance between case growth, pricing and margin. And so again, where I come out of this thing is we're very locked in right now on our gross profit dollar growth and managing our cost per case.

But you seem as if you don't really want cases to go negative, meaning if you took more -- if you got more price pass-through, say gross was down 15, 20 basis points, but case growth went negative, that would be, in your mind, a worse outcome, even if it had the same gross profit dollar performance, a worst outcome than where we are today. Is that fair?

Well, it's a little bit of a loaded question. I think what I'm saying to you is, first of all, we've been very focused this past year and will continue to be on improving our customer retention performance. It's good. It needs to be great. And so that ties in your cases, that type of thing. So I would say yes. I mean, look, it's a very competitive world out there today, and we've rolled up our sleeves, and we're grinding out there with everybody else, but not if the cost of doing things that we think are shortsighted or unintelligent. So I wouldn't say -- it just depends on the situation in terms of that trade off. But certainly, long term, our DNA and our whole mode of operating is to grow the business. But we think we're making intelligent decisions out there. It's just from quarter-to-quarter, you are going to see some volatility.

Next, we'll hear from Mark Wiltamuth with Morgan Stanley.

I wanted to ask a little more about the nature of the inflation. You had hinted like the last quarter that there might be a broadening of inflation into some other areas beyond really the Meat and Dairy and Seafood. Can you talk about that a little bit? And as we are getting into the first and second quarter where you lapped the big gross margin declines last year, is it that you have really already taken those body blows in Meats and now we shouldn't see as big margin declines?

On the first part of your question, Mark, we are seeing broader inflation, and by that, I mean across more categories. It's difficult the way we define the impact from inflation. We basically look at which categories saw the most significant increase in terms of our product mix and our basket of goods, and we define those as the high-inflation categories. And when we talked about how much of our gross margin decline is attributable to inflation, we point at those categories, and all the rest kind of balance out, some are up, some are down. This quarter was not the case. We looked at the high-inflation categories, and then you looked at all the rest, and they were still up. And so we've got inflation across a broader spectrum, not nearly as high as the ones we're calling out but across a broader spectrum. So that's the first answer to your question. Second, looking ahead is very, very difficult for us to do. On the one hand, you'd like to say, "It's very rare for us to go year-over-year with a decline in gross margins". At the same time, we're looking at inflation, and as Bill said earlier, "We don't have -- well, our crystal ball apparently is not working very well". We can't tell you what's going to happen to the inflation rate. All we know is what we're seeing right now is it's not going back down. And so that's going to play into the next quarter, quarter 1, 2 and 3.

Okay. And maybe just talk a little more of what you're seeing anecdotally out there. The Knapp-Track data, I guess, turned negative in late July, and are you getting any feedback from the operators out there, what they're hearing after the stock market correction? Has there been any change in restaurant demand?

Well, it's only been a couple of weeks, and I would say it's probably too early to make that call. Obviously, we're concerned about it, but the other thing I would say is "I think, to some extent, this market is reacting to things that our customers and the consumer and our people have already experienced over the last year, which is this choppiness of the recovery. And again, I'm not an economist or politician or anything, but I think what you're seeing in the market is just a lot of uncertainty from day to day. There's not going to be any great solutions coming in the short term, and I think the market is kind of focused on that, as well as some things beyond the U.S. So we're concerned about what's going on in the market, but I think we need to take a few weeks and just see how this plays out because I don't know that in terms of the world we work in that all that much has changed.

You have a question from Greg Badishkanian with Citi.

So I guess over the last 2 weeks or so, it really doesn't sound like it's changed all that too much for you, even with the stock market volatility?

Well, we don't typically comment, Greg, on interim quarter results. I'm trying to paint you a picture here where, so far, I think it's just too early to make that call.

Right, right. Okay, that's helpful. And just in terms of gross margins sort of the impacts like this quarter, what was the biggest impact? Was it the high-inflation certain categories, certain customer, product mix, changes or just discounting by either you or your competitors? Was there one thing that was the biggest factor?

I think it just goes on. It's more and more difficult to attribute it to any one factor. What we're trying to articulate today is -- Chris talked about the strategic price initiatives. There were still some of that, the fuel surcharge offset, most of that if not all of it. I think my message to you today is it's 2 things. One is the environment where the continuing and now the acceleration of inflation does make it difficult, as well as the market environment, where essentially, you're flat to no-growth type of low growth environment. It just makes it tougher, and everyone is out there competing from our customer to the suppliers to ourselves and our competition. So I think part of it is the environment that is continuing to really not improve a whole lot. It's better than it was 2 years ago, but it's not an easy environment to operate in. And then second, there's areas where we just need to execute better, and I touched on those earlier. We need to do a little better job growing our gross profit dollars relative to our expectations, and we need to manage our cost per case better. And those are the things we're very focused on here as we start the new year.

Our final question will come from John Ivankoe with JPMorgan. Amod Gautam - JP Morgan Chase & Co: It's Amod Gautam on for John. The past couple of quarters, you guys provided a breakout in terms of the gross margin impact between strategic pricing and commodity inflation. I was wondering if you could do that for the latest quarter?

We really didn't break it out for the quarter. And I'll be honest. The reason we didn't is because the inflation broadened so much that the way we were coming up with the numbers, we didn't have as much confidence in. As we've said in the script, inflation was a significant impact of it, and then the strategic pricing initiatives were still there, but they were offset by the fuel surcharge. So that's the best breakdown we can give you. For the year, we're basically -- I think the numbers add up to about 2/3 of it is what we would call kind of inflation and the related issues around that, and about 1/3 of it would've been strategic pricing initiatives for the year, which is, I believe, 46, 47 basis points. Amod Gautam - JP Morgan Chase & Co: Okay, that's helpful. And just in terms of building off of that, I mean, the strategic pricing initiatives, if you could just give some qualitative color about how those have played out relative to what your expectations were when you implemented them? And then second to that is how much longer you expect the pricing initiatives to continue to impact year-on-year margins.

Yes, I think we've said in prior quarters we continue to get the benefit that we sought from strategic pricing initiatives, which is we're growing cases in the specific categories that we targeted there. We also acknowledged that if anything, it's going to take longer to get the case growth that we originally had set out to achieve. Whatever estimate we did originally, it's just going to take us longer to get that, so you're going to still see the impact in our numbers. At some point, there will be a lapping effect to that. I'm not going to try to predict that for you here, but it's still in our numbers. There will be a lapping impact that will make it less of an issue, and we certainly aren't sitting here today designing any new strategic pricing initiatives that we put in place quickly. So hopefully, we'll continue to get the benefit as we go forward.

Thank you. That will conclude today's conference call. Thank you for your participation, and have a nice day.