Good morning everyone and welcome to the Sysco Reports First Quarter Fiscal 2015 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 conference over to Shannon Mutschler, Vice President of Investor Relations. Please go ahead, ma’am.

Good morning everyone and welcome to Sysco’s first quarter fiscal 2015 earnings call. Today you’ll hear prepared 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 within the meaning of the Private Securities Litigation Reform Act of 1995 and actual results could differ materially. Additional information about factors 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 28, 2014; 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 www.sysco.com or via the Sysco 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 applicable GAAP measures are included at the end of the presentation and can be also 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 broad line and sigma combined. To ensure that we have sufficient time to answer all questions today 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 President and Chief Executive Officer Bill DeLaney.

Thank you, Shannon. Hello everyone and thank you for joining us today. This morning, Sysco reported first quarter fiscal 2015 financial results. Sales grew more than 6% to $12.4 billion and adjusted net earnings increased 7.6% to $309 million. Adjusted EPS, excluding certain items, increased approximately 6% to $0.52 for the quarter, our strongest year-over-year growth in quite sometime. We are pleased with the solid operating performance we delivered in our first fiscal quarter in the midst of ongoing challenging market conditions. While we were challenged with expense management in certain aspects of our business, we generated more than 2% case volume growth and managed acute inflationary pressures very effectively, as evidenced by essentially flat year-over-year gross margin. Our improved performance during the quarter was due in part to the benefits we realized from our portfolio of business transformation initiatives, especially category management. In addition, case growth trends in our locally managed business were favorable for the second consecutive quarter. Recent restaurant data reflects ongoing stagnant traffic trends but somewhat improved industry sales trends as food-service establishments increase prices to offset high inflation in meat, dairy and seafood categories. However while we believe that industry trends have gradually improved, that improvement has been more pronounced in certain geographic regions. In addition, while consumer confidence and employment metrics have strengthened somewhat, overall consumer spending remains restrained. Lastly we’re hopeful that the recent marked declines in fuel prices will help to drive additional traffic to our customers. With that, we remained intently focused on enhancing every aspect of our business so that we were able to better support our customers, operate more efficiently and compete more effectively. As I mentioned, benefits from our category management initiatives continued to gain momentum. We expect that all remaining categories we’ll launch into the market by…

Thanks, Bill and good morning everyone. For the first quarter, sales were $12.4 billion or an increase of 6.2% compared to the prior year. Food cost inflation was 4.9% driven mainly by inflation in the meat, dairy and seafood categories. Sales from acquisitions increased sales by 0.6%. However this was largely offset by the impact of changes in foreign exchange rates which decreased sales by 0.5%. Case volume grew 2.3% during the quarter, including acquisitions and approximately 2.2%, excluding acquisition. Gross profit in the first quarter increased 6%, nearly at the same rate as sales growth. Gross margin declined 4 basis points to 17.59%, reflecting the positive impact from our category management initiative and improved margin trends over the last few quarters. Operating expenses increased $136 million or 8.6% in the first quarter of fiscal 2015 compared to the prior year period. Operating expenses increased mainly due to a $67 million increase in payroll expense and a $41 million increase in certain item expenses. The most significant drivers in the increase in payroll expense were higher sales and delivery costs as well as incentive accruals. Regarding the incentive accruals, during the last year's first quarter we reduced certain incentive accruals based on our performance at that time. In this year’s first quarter, our incentives are generally accrued to higher amounts, reflecting the impact of recent performance and causing a year-over-year variance. Certain items totaled $43 million during the quarter and mainly related to the merger and integration expenses. The substantial majority of these costs related to consulting fees. Excluding certain items, operating expenses increased 6%. As Bill mentioned, we believe we had opportunities to better manage our operating expenses over the balance of the year. However the cost increases in the first quarter will pressure our ability to meet our…

(Operator Instructions) And we will take our first question from Kelly Bania with BMO Capital.

Hi, good morning. Thanks for taking my question. Just first, on the payroll increase, I'm wondering if you could just go into a little bit more details in terms of the different buckets of the $67 million increase between the sales, the delivery expense, and the incentive accruals? And what sort of year-over-year increase in payroll was that overall for the first quarter? You mentioned it would be kind of difficult to achieve that flat cost per case for the year, so how should we think about payroll for the next couple of quarters?

I will start Kelly and let Chris kind of help me out here little bit. I would say just on the overall expenses – before I answer the question I guess is your expenses as adjusted are up about 6% and in payroll labor and related is usually 70 - generally 70%, 75% of our structure. So I don't have the exact number in terms of payroll. I don’t know that we disclosed that but I think that should be a pretty good proxy for you looking at there. It comes in different buckets as we took you through on the sales side. For example, and we have begun to grow our MA workforce again modestly, we’re more in certain markets. So we made some significant reductions in territories – unprofitable territories 18 to 24 months ago. So we’ve worked our way through that. We’ve grown our territories. We had a very nice quarter. We grew our gross profit quite a bit. We grew our locally managed business. The way our commission grids and our bonus grids work, that does translate to a more earnings for our salespeople and for our management team. So that’s probably what you see there. I think the other biggest bucket was in delivery -- especially in certain markets we’re struggling to attract people. It’s a great markets if you’re a driver these days and to retain drivers in certain markets as well. So I’d say most of the payroll impact was in those two areas.

I don't have a lot to add – just my comments about the incentive accruals are simply that the last year we lowered a longer-term incentive accrual based upon where we are versus those targets in that particular incentive and that this year we are at target. So you’ve got the year over lapping effect there. So that was a portion of it as well.

Great, that's very helpful. And then I was wondering if I could just follow-up with one kind of bigger picture question. Could you talk about just the trends you're seeing maybe with respect to categories and the types of foods that are seeing strongest growth? The reason I ask is I guess we heard from McDonald's, maybe a week or two ago, that they were thinking about possibly pursuing some organics. I'm just curious with what you're seeing in trends in natural and organics and if your customer base were to increase focus on those types of products, where do you think you and your suppliers stand in terms of being able to cater to that?

I think we have seen those trends for quite sometime whether it’s organic or local or sustainable, different people look at different ways. So local is probably the bigger trend that I think we tend to see given that we do have some of the locally managed customers who are cozing that type of thing. And so I would say it's the trend that’s growing. I wouldn't describe it as an overly large piece of our business today but I think it's an increasingly important for two reasons. One, it is growing and I think we want to be ahead of that, or at least step with that. And I think two, with the customers where those types of products are important -- even though it might be a relatively small piece of their buy, they feel very strongly about that. So whether it's organic or local or other similar types of items or categories, that being able to supply those types of products is key to continue to develop the relationship with those types of customers. And I think our suppliers are getting there. It’s – I think as we work through category management, especially the second round once we've been through these initial launches, I think this type of a discussion will be even more bigger part of the discussion as we go forward. So certainly suppliers are very proactive in this space and others we work with together to further our offerings as we go forward. So I think it's a trend that’s been there, it’s growing. The people that want local and organic are very very steadfast in those desires and it’s an important part of those customer relationships.

And we’ll take our next question from Andrew Wolf with BB&T Capital Markets. Andrew Wolf – BB&T Capital Markets: On the sequential improvement in the MA-served sales growth, could you help us think about where that's coming from? It sounds like, obviously, there's an inflation help and I guess there's more salespeople. Could you give us a little more color on how or what's driving that internally or externally, maybe it's the environment?

I think it is – I honestly don’t think the environment has changed that much. We went through kind of this weather cycle last year where it was really rough, December through February, and so that certainly impacted everyone. And then cabin effect in April and May where sales came back pretty strongly. We’ve lapped a lot of that now. So I think the market is kind of where it’s been. I think it's almost month-to-month, you see one report – one month where consumer confidence is up, or the restaurant operators’ confidence is up, the next month it’s down a little bit. So I don’t think there is any a distinct change in the pattern there. I think from our perspective we’re a year or two years now into these initiatives, both in terms of the category management but also some of the segmenting work we've been doing with our sales and marketing teams and we have a program called back to basics that we are out there with – and it allows us to both focus more in certain segments and at the same time use that as an opportunity to enhance training with our sales force. So we’ve seen some positive trends there. As I noted in my comments some of this is more geographic specific. And so I think at least from what we see certainly the South in particular where we are here in Southwest has been strong for a while now. And so in the West, it looks like we’re seeing some improved results there and I don’t know how much that as a macro. We had a foldout out in Southern California last year, we’re through that and we’re starting to see the rewards from that investment that we made at Riverside last year. And I would say the last thing I guess from my perspective is just the stability of where we are in our initiatives. We’ve been – we’re two plus years into all these initiatives, that first year, year and a half it was very significant impact on our sales force. As I said earlier we reduced a lot of unprofitable territories, that has an impact. It took us a while to kind of hit our stride in category management. So as we’ve matured in rolling out these initiatives I think it's become more business as usual and we’re just executing better. So I think little bit maybe on the macro, little uneven, little geographic there and I just think that a lot of this change that we’re driving out we’re getting better at it and more stability within the sales force. Andrew Wolf – BB&T Capital Markets: Can you just as a follow-up before I get back in queue, could you annualize what the growth in the MA looks like, even if it's not maybe contributing a lot like right now?

Andy, I don’t know if that’s something we've done before. I’d just tell you that we are growing in a number of MAs and it is modest. I think let me comment at this way. The way we are evolving, I think in terms of our thoughts on MAs and salespeople and territories in particular is to grow those territories at a level that we anticipate opportunities for sales growth and to try to stay ahead of that. So some markets might be mid-single digits, and other markets, might be flat to low single digits.

And we’ll take our next question from John Heinbockel with Guggenheim. John Heinbockel – Guggenheim Securities: So Bill, on gross margin, where do you guys sit now with price investments? Are we at a point, even when the category management benefit subsides, are we finally at a point where gross margin can be managed flat year-over-year and [indiscernible] the downward pressure that you've had in the past?

The honest short answer is I don't know, certainly that’s our goal and the way we have spoken to it is we expect because of -- the ongoing nature of the market that we’re in, it’s a large market that's the good news, it’s low barriers to entry, there’s a lot of people in it. And there is not a lot of growth there right now. So I think we’re continuing to see a lot of pressure on the street and what you hear us saying, what you hear d me saying in particular for example on the caveman is that those initiatives are beginning to bear fruit and helping us to offset some of the pricing pressures that you're alluding to. And I think when you look at our quarter obviously we had a lot of inflation in certain categories and I think we did a decent job of passing that along in an appropriate way. But I would say most of the margin positives in the quarter were from taking cost out of our cost of goods and in ensuring those savings with our customers. John Heinbockel – Guggenheim Securities: Do you think -- is that level of price competition, has that been exacerbated right by the whole merger situation in that people may see some business up for grabs while you guys are in limbo or no?

I think in certain markets I would say that that's probably had more of an impact on US Foods than it has on us. I think they are in a tougher situation there to deal with that. So yeah, there’s definitely, I am sure, some competitors trying to take advantage of that. But I think it's also -- I think early months or weeks that was a bigger deal, I think that’s levelled out to some extent. I don't think it’s been an impact in our people. We’ve kept our people very focused and it’s not to say there is not incidence of that, I am not saying that but in general on a base of whatever 12 billion in sales for the quarter I don't think that was the big part of it. At least not for us. John Heinbockel – Guggenheim Securities: And then just lastly, back on the growth in MAs, was a lot of that, did that pre-date or the plan for that pre-date US Foods and is most of that in non-overlapping markets or it's both?

It has nothing to do with US Foods. I mean it was basically in our profit plan for the year. Look, I have spoken to some previous calls, we took approximately thousand unprofitable territories out of our business over what we thought was going to be a 12 month period, it happened in 3 to 6 so that was pretty significant impact and most of our operating companies and markets did a nice job managing that. In certain instances, we didn't do so good job and we went too fast and that had some doubling down negative impact. So that's really us -- a management team whatever 6, 12 months ago saying okay, we’ve done that now, let’s get back to what we normally do which is growing territories in conjunction with what we think the opportunities are. So I wouldn’t try to connect that to US Foods at all.

And we will take our next question from Edward Kelly with Credit Suisse.

It's Lauren Wood on for Ed. Just another question on gross profit. So it looks like the spread between gross profit growth and volume growth improved again this quarter. Can you maybe talk about how much of that could be attributed to internal initiatives like category management, how much of that could be attributed to inflation, and how sustainable do you think this is going forward?

Well, okay, I think when you look at the growth in gross profit dollars, we've acknowledged that there is a lot of inflation in that and so that is part of the – that 6% growth we’re talking about in sales and GP dollars inflation, piece of that. However inflation also makes it more difficult to keep that spread relatively close. So that’s where I was saying I felt even though the market continues to be very competitive that we did a nice job there and that takes you to the initiatives of which we think category management in particular has now kicked in, in a meaningful way, allowing us to manage our cost of goods more effectively and also to invest in our customers along the way. So I think it's mostly the initiatives as well as the fact that we’ve got 7000 salespeople out there, 70 operating companies and senior management teams and they’re all very focused on executing as well as they can. So I think with at least us growing into a company that’s going to continue to embrace change and have initiatives, I think our people are coming to grips with that, we’re getting better at executing change in the business at the same time. But I think the initiatives themselves as I said earlier are contributing to that. And I think on the inflation front, we just did a nice job there of keeping that spread as close as we did.

Okay, and just as a follow-up, can you give us any more color on maybe what categories you've addressed more recently and how that process is going?

Well I tell you, we’re into waves 6, 7, 8 – we’re well into it now. So I don't have all the categories in front of me. I know I think we have done some poultry categories and I know bread and rolls were big one but we’re now into categories where there is double-digit subcategories f you will. So we’re into the core of the entire offering right now.

And we will take our next question from Karen Short with Deutsche Bank. Karen Short – Deutsche Bank: Hi. Just a couple of questions on the integration costs. So you're now kind of at $130 million cumulatively and I guess the first question is, are we now kind of at the point where this is about as far as you can go without actually merging? And then the second question was is this included in the original $700 million to $800 million in guidance that you gave on integration expenses or is that in addition to?

Hi Karen, let me start with the second part of the question. We certainly included in our original guidance 700 million, $800 million some assumption for pre-closing merger integrated expenses. I think it’s fair to say we had exceeded that assumption. We will come out with a new number of what we think the overall costs are going to be. We will share that as well, as what we’ve spent which we’ve been disclosing on a month by month basis. But obviously we’ve spent more than we originally planned. The first part of your question -- there is continual work that we can do. There's only a certain amount of information we can share between the two companies prior to actually closing the transaction. And so we do as much as we can kind of business stream by business stream and then we do some work in clean rooms but there is some work that we can’t even do outside our clean room or inside of clean room I should say until we actually close. So there’s more work to be done. I think it’s fair to say at this point we’ve done a lot of good work. Teams have put in a tremendous amount of effort. We’ve got a very clear idea about how we would merge the two companies together and the more time we have the more butt left would say our integration execution will be once we’re able to start that process. So there's still more work to be done perhaps not at the same level and same intensity as we’ve been doing it over the last 10 months. Karen Short – Deutsche Bank: Okay, that's helpful. And then I guess just to follow on that, I guess within the bucket of this $130 million, can you maybe give a sense of what the dollar amount that would be Sysco employees that have fully dedicated to the integration planning versus the actual just pure consulting fees?

Yes, the vast majority of it is consulting fees, Karen. Karen Short – Deutsche Bank: And then just last question was on the update of the business transformation to other OpCo's this coming year, any idea what the plans are?

Yeah, I'll start here, Bill may want to chime in. As we said in prior last couple of calls, we just did a major upgrade at the SAP software itself which went well and now we’re focused on doing what we will call some functional rollout of SAP. So Bill mentioned in his opening remarks accounts payable, accounts receivable, we will do some I think additional rollout of some HR functionality etc. and that has a double advantage. One, it helps our shared services. That secondly, it also helps us as we begin to do merger integration, once we’re allowed to do that, it helps us achieve synergies faster. So that’s the focus that we have for our SAP rollout now. Those types of things, once we do them actually make rollouts in the operating companies easier because we’re converting – we’re transitioning less at these operating companies when we actually go back to rolling out at operating companies. And as we go through this process we are obviously looking at the overall integration plan from a technology perspective of how we will roll out operating companies in the merged enterprise.

I think the only thing I would add there is – in the broader way of looking at business transformation we’ve talked about category management. This is going to be a good year to continue to launch the rest of the categories this year. We’re pretty much through the SG&A work and so you’re not seeing a lot of new benefits coming from that, that was the work that I alluded to earlier that we did the first year and year and a half. There is a lot of work still going on on the operations side, supply chain side of business in terms of optimizing our efficiencies, our processes or our pay plans in the warehouse and delivery and we’re really not seeing those benefits to the degree that we will down the road. So again in the broader way of looking at business transformation there’s still a lot going on, that our operating companies are dealing with right now.

And we’ll take our next question from Meredith Adler with Barclays. Meredith Adler – Barclays Capital: I wanted to talk a little bit more about category management. I think you've spoken in the past that it wasn't just a simple SKU rationalization process, but it's clearly having a very nice benefit on the gross margin. Can you talk a little bit about exactly what's happening and how that's leading to the gross margin improvement?

Sure. I think the key, Meredith from our perspective is we have a very robust process that we’ve developed. We have brought a lot of people into the organization at all different levels who have done category management for and other industries. And so we’ve learned from some of our other stumbles if you will, with initiatives that we needed to not just develop the folks we have of which we've done, but also bring in some other folks that have the experience. I think we’ve had really strong leadership with Tom Bene and Bill Day and Bill’s group. So I think it starts there and we feel good about that. The nature of the process is sitting down with these suppliers and trying to create some level of partnership as we go forward, obviously it’s not going to be the same with every supplier and the focus on the customer and focus on the opportunity for growth. And as you do that at least two things become quite apparent is by using some of the intelligence that our suppliers have, all the time developing more insights ourselves through our customer work and marketing, we’re able to see where most of our customers want to spend their money in terms of what items, what categories and we’re able to also focus -- necessarily focused on where we have a lot of redundancy in SKUs and items that don’t move a lot. And then as we work closer together with the suppliers and we start to see success which is the key, we’re able to see that working together here we can create savings for the customers and for our supplier and for ourselves and that creates this efficiencies that you’re starting to see on the cost of goods side. So it clearly starts with technology and this is a big change in our company, strengthening our team, it’s coming at this from a customer perspective and ultimately getting the right suppliers to partner up with us in a way that it’s a win-win, win, it’s got to work for the customer, it needs to work for us and obviously it’s got to work for supplier. Meredith Adler – Barclays Capital: And how do you deal with pushback from a customer who says, oh, I'm madly in love with my particular vendor, don't do anything? Do you just keep that item around or are there financial incentives for them to shift vendors?

Well I think we’ve gotten better at that, and I think it comes with understanding our customers and listening to them and getting them to actually have that conversation with us. And so from that standpoint I think we’ve made good strides. It’s all the above. I think for the most part you have the conversation, you understand what the x says, as best as you can, and you make it more about choices and/or timeline. So in certain cases depending on the customer and how key an item is, you may not convert them. But in most instances, there is an opportunity to convert them, certainly you will need to share some of the economics with them as well and you will need to – again I think it’s where we’ve gotten better -- you need to have a timeline that works for the customer. And again we’re not looking to – and we’d be nice to do all these and 90 to 180 days but if it takes six months to a year to do it the right way, that's what we’re doing. So again it just comes down to listening to that customer and getting them -- really trying to understand what -- why they have that angst and maybe what you say, maybe as simple as some type of economic play, but it very well could be they are happy to make the changes we just need to sell on it, and that takes some time to get them to understand the attributes of the alternative product. Meredith Adler – Barclays Capital: Okay. And then I have a question for Chris. You did mention that cost per case this year might not be down the way you'd hoped it would be or it might not be flat as you'd hoped it would be. Is it the things you talked about in the first quarter, specifically transportation, but MAs and incentive comp that are the reason you don't think you'll make the cost per case goal or is there something else that you're thinking about?

Yeah, it’s more than that but it’s something we didn’t talk about – I think Bill’s prepared comments I think he described that as pretty broad-based and so we had some increases almost across the board in different areas, some of which we expected, certain pension related costs and things like that, and some of which we didn’t, so delivery expenses continue to be upbeat and they were up pretty significantly last year. We talked about the sales compensation expense, things like that. So as we look here at the end of Q1 what we’re really calling out is our cost per case is up significantly. We had a flat goal for the year. We have a lot of areas to go after and we will go after those but we’re pointing out that there’s going to be some pressure on us achieving that goal. In no way are we going to give up on the goal but we are calling out the fact that it’s going to be harder because we are starting if you will on the trench, we’ve got to dig our way out it.

And we will take our next question from Mark Wiltamuth with Jefferies. Mark Wiltamuth – Jefferies: Hi, thank you. Could you talk a little more about -- you said that certain geographies were performing better than others. Is that a function of what's going on with the consumer health in those markets or is it more Sysco initiatives that are driving that?

Well I would say what we are extrapolating – at least what I'm extrapolating is when we see some deltas that are somewhat pronounced, you would have to -- one would conclude that some of that is coming from the relative health of the local or regional economy. so when I talk about the Southwest, I think the economy that has been strong dynamic for long time now, we’ve got some very large operating companies in southwest that have been performing very well for multiple years as well. So it's a combination but certainly when you look at the South and the West compared to what we see up in the North and the Northeast to some extent, there are differences. So we’ve got strong people throughout the country and leaders and associates and I think the initiatives are being developed and implemented pretty evenly throughout the country. So I think on the margin it’s more of the economy as well as the execution. The good news is we’re having success in all of our markets right now. I was just trying to bring some color to everything that you read and we tend to - questions we tend to get on these calls as – is it as competitive – is it more competitive and we think it's just as competitive as it’s been quite some time. We just happen to believe that there is two or three markets that are a little bit more favorable I guess in terms of underlying economics and consumer outlook. Mark Wiltamuth – Jefferies: Lastly, in talking about the US Foods merger and the FTC review, you did use the word solution, which implies you're working on addressing a concern. If there's any other color you can give us there or are you considering divestitures or was that always part of the plan?

Well I think you have to go back to where we were. So I would just say this – we are at a point now where we’re certainly talking to the right people. We’re having the right conversations and it's taking longer than what we originally projected. With that said we really had never been through anything like this before. So it's really hard to get to toward – too concerned about that aspect of it. I will go back to the comments I made when we announced the deal back in December 9. We think the strategic value of this opportunity is significant. We think it's very pro-competitive. We think it’s going to be very good for our customers over time. We certainly think there is complexity to it and we need to get a good return on it. And as we said on previous called since then we have shared a lot of information with the FTC, we've had a lot of meetings with the FTC and I think they are up to speed now in this industry, it’s taken some sometime, it's an industry where as you know there's not a lot of other public players, really other than us currently, so it’s just taking more time and we thought to I think give the information to the FTC, get it digested and begin to having these conversations. So bottom line, we’re looking for a successful outlook. We are looking for a solution .We just think at this point it’s going to take longer than we originally projected.

And we will take our next question from Ajay Jain with Cantor Fitzgerald. Ajay Jain – Cantor Fitzgerald: I had a variation of some of the questions asked earlier on how you're managing your gross margin so well with this level of inflation. I think if your cost of goods is going up and you're passing along the higher food costs, the gross margin percentage should still decrease, even with higher gross profit dollars, at least that's the way the math is supposed to work. So can you comment if you're getting any unusual support from the vendor community that's helping you out? Is there anything else that might be driving the gross margin trends, such as incremental vendor support, that's on top of the cost savings initiatives that you talked about earlier?

Yeah, Ajay, I think as we discussed on the last two or three calls I would agree with your first point that when you have significant inflation especially in the categories we called out here, you’re looking at double-digit inflation for at least the last couple quarters, meat, seafood and dairy. You generally cannot pass that along as fast as you’d like and frankly in many instances it's not even appropriate to do that. So I will go back to something we’ve been doing for years and we work with our customers, we work with them on their menus, we look at alternative products that would make their offerings in their item selection and their menus more attractive. And we do that through our product specialists or company chefs and obviously through our marketing associates and our counter executives. So we do all those things. So it is harder to pass it along and that's why I was referring to earlier I think it remains very competitive from a pricing standpoint on the street. There's nothing special going on with vendor support. What I was speaking to a couple other times, is when we say that we believe the category management is beginning to deliver the results that we projected for it, that does play out on the cost of goods side. When you are able to form some strategic partners with your suppliers and as you get deeper into the category launches and you begin to execute those throughout the enterprise, it takes months to really cycle through all that but that does translate into savings and that I think that's what you're seeing is where we are buying better but nothing other than the fact that the process for category management is beginning to mature. Ajay Jain – Cantor Fitzgerald: Okay, thank you. And I don't expect you to respond further to potential FTC issues, but I wanted to see if you can comment on one practical aspect of any divestitures you might need to make. So specifically, for some of the national accounts that are currently handled by Sysco or US Foods, if there is a change of control on some Broadline facilities that you might need to divest, how would you deal with the issue of those national accounts and who's going to supply them under a change of control for any regional Broadline facilities?

As you say we’re not going to comment on that. It’s all part of it. That discussion, Ajay, is all part of the process. Ajay Jain – Cantor Fitzgerald: Okay, thanks. If I could just ask one final question, you talked about higher corporate and payroll expenses, but can you comment on the level of integration and planning costs we should assume going forward? Does that spending moderate or could it potentially be higher over the balance of the year, based on how you're allocating those costs? –

Good question. What I said earlier was I don't know that we will be running at the same intensity that we we've done over the last 10 months. I'm not going to sit here and expect them to moderate or diminish significantly but I think we’re probably seeing a peak and we’re probably going to be flat to moderately down. I'm saying that without actually having a forecast in front of me but I don't anticipate any new significant expenditures in the way of merger integration expenses other than some of the ones we called out in terms of interest expense and things like that which will continue to account to the certain item until we close.

And we will take our next question from John Ivankoe with JPMorgan. John Ivankoe – JPMorgan: I have two questions please. First you mentioned in your prepared remarks turnover and shortages related to your delivery drivers I assume. Is that fixable with compensation, is there anything else to kind of understand why you are seeing a pickup in turnover there? In other words, is it something that you can reverse or has the market for these individuals gotten that much more competitive?

John, Bill, I think it's fixable in most markets. I think there’s things that as we brought in some of our talent acquisition to work in the more central locations it’s taken us some time as an organization to adjust just to see how that works between the OpCo and the shared services groups. So we've had some challenges out there and we have addressed those. I would expect from that standpoint things will get better. With that said, there's a handful of markets just because of the underlying economy and in particular drilling where it’s very difficult to compete for drivers – nationally there is a shortage of drivers. So I think it’s all manageable, it’s just harder to manage today than what it’s ben and I would expect that you'll see an improvement there over the 6 to 12 months. John Ivankoe – JPMorgan: And secondly, just a question on the restaurant industry. We did see – I am really talking about the casual dining data but I think this is true for QSR in general as well -- a pickup in August, September, even into October especially relative to July and July being I think the highest volume month in the quarter which was actually the lowest month in the quarter on a year-on-year basis. Is that kind of what you're seeing in the broader data as well like in other words July was the low point in the quarter and that’s since picked up or could you comment a little bit more in the industry?

I actually don't know that I've seen that. My sense at least from for example, some of the feedback we get in surveys from operators is that July and August were stronger and September they weren't as you said about what was going on in the business and maybe their outlook. It's still good. The metrics we're looking at, people are still reasonably optimistic of the operators going forward but my sense is actually it was stronger earlier in the summer than in September.

And we will take our next question from Vincent Sinisi with Morgan Stanley. Andrew Rubin – Morgan Stanley: Hi, this is Andrew Rubin on for Vinnie. You just touched upon it a bit, but I was wondering if you could talk about your sales cadence for the quarter, if there were any trends in that? In terms of, with the hiring increases, if that started to flow through on the sales side or generally, the timing until you see that start to flow through?

I am sorry, the part of the question? Andrew Rubin – Morgan Stanley: Just sales cadence through the quarter if there's anything to call out.

Sales gains? Andrew Rubin – Morgan Stanley: Cadence. If it was stronger in any one month or accelerating, decelerating?

I think you’re going back to John's question -- again I am trying to make distinctions here where at least the data we see is not that distinguishable. So, no, I would say the cadence obviously was good. It’s hard to pin down week to week but I think the biggest thing as we look at our numbers is just the inflation stayed strong in those categories throughout the quarter. But we saw growth throughout each month and as we said we’re seeing bulk on the locally managed and corporate management side of the business. So I wouldn’t say there's anything overly dramatic or material that would separate one part of the quarter from the quarter.

The second part of your question I think was around – was it a impact from the hiring of MA and I think it’s – Bill obviously will jump in here – it takes a while before newly hired MAs trainees as we call them begin to have an impact on your sales volume. So MAs that we hired 6, 9 months ago will start having an impact but those that we’ve hired in the last quarter or two really aren’t driving that sales volume yet.

I think that’s right. I think what is helping – what I also alluded to earlier is the fact that we’re 9 to 12 months past these territory reductions. So there’s just more stability in sales force right now, we’re getting better at implementing these initiatives. I think our sales force and sales management team are in a better place in terms of just the day to day aspect of the business. Andrew Rubin – Morgan Stanley: Okay, thank you. That's helpful. And then just to touch on the inflation side, with this coming in a little higher for the quarter, has your outlook changed in terms of what you're potentially seeing for when this may moderate or inflation outlook for the rest of the year?

I think it’s going to be with us for a while. Dairy is a category that – it’s not quite like – but dairy tends to go up and down a little faster than the others But from what we read here certainly in the meat side of the business, we expect to continue to see inflation there for the next several months probably. So right now I don’t tend to go out too far with my thinking here but I would think over the next six months, could migrate a little bit at some point but I think we’re going to still have a fair amount of inflation.

And we would like to thank everyone for their participation on today's conference. That does conclude our call. Please have a great day.