Good morning and welcome to Sysco's fourth quarter and 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 Neil Russell, Vice President of Investor Relations. Please go ahead, sir.

Thanks, Don. Good morning, everyone, and welcome to Sysco's fourth quarter and full-year fiscal 2015 earnings call. Joining me in Houston today are: Bill DeLaney, our President and Chief Executive Officer; Chris Kreidler, our Chief Financial Officer; and Joel Grade, our Chief Accounting Officer. Before we begin, please note that statements made during this presentation that state the company's or management's intentions, beliefs, expectations or predictions of the future are forward-looking statements and actual results could differ in a material manner. Additional information 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 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 applicable GAAP measures are included at the end of the presentation slides and can also be found in the Investor's section of our website. All comments about earnings per share refer to diluted earnings per share unless otherwise noted. In addition, all references to case volume include total Broadline and SYGMA combined, unless otherwise noted. 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. Finally, we will be hosting an Investor Day on September 15 in New York and look forward to seeing some of you there. At this time, I'd like to turn the call over to our President…

Thank you. And we'll go to our first question to Edward Kelly with Credit Suisse. Edward J. Kelly - Credit Suisse Securities (USA) LLC (Broker): Hi, good morning, guys. William J. DeLaney - President, Chief Executive Officer & Director: Hey, good morning, Ed. Edward J. Kelly - Credit Suisse Securities (USA) LLC (Broker): Could we start with the cost control side? Your operating expense growth is better this quarter than it's been in a while, actually and congratulations on your flat number per case. Can you provide a little bit more color here on, basically, I guess, what you're doing within the business? And then Bill, not maybe to steal too much thunder from the Analyst Day, but when you talk about significant potential to improve productivity and reduce costs, could you maybe give us a little bit more insight into what you mean there? William J. DeLaney - President, Chief Executive Officer & Director: We won't steal too much thunder from Investor Day, so don't worry about that, Ed. I think on the cost side, the way I look at our numbers is, those of you who follow us know, I look at them in terms of what are the key things we look at here? Volume growth, in particular, relative to the market, and within that volume growth it's very important that we see good local case growth, and we've seen that here over the last several quarters. We need the contract business as well, but we need that local business to grow as well to drive profitability. And then I look at operating income growth, operating income is always going to be not just mathematically, but just from a business perspective, it's going to be a by-product of the environment that we're in. And at times, sometimes…

We'll go next to Karen Short with Deutsche Bank.

Hi, good morning. It's actually Ryan Gilligan on for Karen. How would you guys characterize the competitive environment now that the deal is behind us and inflation is moderating? William J. DeLaney - President, Chief Executive Officer & Director: I don't think the competitive environment has changed that much at all. I mean, there's still plenty of competitors out there of all types as we've talked about in great detail here over the last year or two. So, I would tell you, I think competition is very, very acute. In the short-term, the way I would look at inflation, we have for years said and truly believe that the optimal range of inflation for our customers, and for us, is probably in the 2% to maybe 3% range. That's a level that typically our customers can pass on and do pass on, and generally that's a level that the consumer will accept. So, when we're in those levels we're able to have the best of both worlds, if you will, in terms of a little bit of a tailwind on inflation at the same time. It doesn't hurt demand to any large extent. We very seldom find ourselves in that zone, and right now, we find ourselves in a zone where there's little to no inflation. As we said, there's some modest inflation and some modest deflation in the categories. So, I think the way I would look at that is, it's a little bit of a better environment right now in terms of our customer being able to manage their business, and when our costs aren't going up that much, obviously we don't have to raise our prices as much. So from that standpoint, it probably does help in terms of case growth, but in terms of the competitive environment, I don't really think it changes that at all.

That's helpful. Thanks. And then maybe, could you just talk about your labor cost outlook and if you think maybe there'll be a battle for talent going forward as U.S. Foods rebuilds its sales force? William J. DeLaney - President, Chief Executive Officer & Director: Yeah. We'll talk more about labor cost, I think on Investor Day. But generally, we've got 50,000 people out there and they generally get raises every year. And our whole goal as I was speaking to in Ed's question is, the closer we can get to improving our productivity every year in sync with the labor increase, the better chance we have of keeping that cost per case in that zone that I discussed earlier. I don't know that I would – look, good people are always in demand in this industry, and we have a lot of good ones. And so, our people are always going to have opportunities. I would tell you our retention has improved here in recent months as we've kind of matured in a lot of our transformation work, and I don't expect that to be a big issue for us in terms of retention. But, we work hard every day to provide our people with good careers, and we work hard every day to make sure that we're retaining our best people.

We'll go now to Andrew Wolf with BB&T Capital Markets. Mr. Wolf, your line is open. Please check your mute function. Hearing no response, we'll go to our next caller, Vincent Sinisi with Morgan Stanley. Vincent J. Sinisi - Morgan Stanley & Co. LLC: Hi. Good morning. Thanks very much for taking my question, and Chris, best of luck to you. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: Thanks. Vincent J. Sinisi - Morgan Stanley & Co. LLC: Wanted to ask, you mentioned about some of the technology investments that were made in preparing for when the merger was a possibility. Can you just give a little bit more color in terms of how that does play in with some of your former initiatives that you've been continuing to execute on and kind of what we can expect going forward? William J. DeLaney - President, Chief Executive Officer & Director: I think, Vinny, the biggest that you can expect, and we will talk more about this at Investor Day as well, is while there's been tremendous emphasis, and appropriately so, on implementing SAP and where we are in that, we've kind of turned the corner there. So, on the one hand we've stabilized that system. We've improved the processes and we're moving more toward a modular rollout approach as opposed to an OpCo multi-modular rollout. And we're starting to see some good success there. And the most recent example would be in our inventory replenishment system, which internally we refer to as DPR. So, in terms of the base core business, I think we're in a more steady state and mature place there. We're running the business. We're running it well. We'll continue to improve that. But I think where you're going to see us go…

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

Hi, thank you. I wanted to ask about the SYGMA decline in the quarter. It was down 8% on sales. If you could, maybe talk about how that impacted the gross margins because the mix there has changed and obviously SYGMA is one of your lower margin businesses. How much did it help the gross margin? William J. DeLaney - President, Chief Executive Officer & Director: How much did SYGMA help the gross margin?

No, the fact that that's down, so the mix is lower there for SYGMA. William J. DeLaney - President, Chief Executive Officer & Director: Okay, I'd say for the quarter a very, very modest impact, but probably some. I think to your broader question, SYGMA is in somewhat of a turnaround situation right now. We've got new leadership there at the top, Greg Keller, who knows that business very, very well. And this is a year where we went through some changes with customers. There was some business that we lost that we didn't want to lose. There was some business that we transitioned because it was the right thing for us and the customer. And then there was some business where we had to adjust our pricing, which hurt our margins somewhat. So there's a little bit of everything going on there. We also had some expense challenges there that we're working through. So this was not a great year for SYGMA, and I expect it to improve here as we go forward in the new year and in the following years. I would say overall, we're trying to optimize that customer base in a way that obviously needs to work for the customer as well as us. And I think you'll see some more of that next year, but I also think you'll start to see improvement next year – excuse me, in the current year.

Were there notable losses that we need to carry forward as we model out Sysco in future quarters? William J. DeLaney - President, Chief Executive Officer & Director: I'm not getting into specifics, but I would look more at the fourth quarter than the first three quarters probably.

Okay, thank you. William J. DeLaney - President, Chief Executive Officer & Director: Sure.

We'll take our next question from Meredith Adler with Barclays.

Thank you for taking my question. Can you hear me? William J. DeLaney - President, Chief Executive Officer & Director: Yes.

A quick question just first. You used to talk about street business, and now you're talking about locally managed. Do you think you could just tell us what the definition is? Is locally managed the same as street business? William J. DeLaney - President, Chief Executive Officer & Director: So, Meredith, that's a great question. It's one of those questions we get from time to time. So no, it's not the same, but it's very close. What we did – this is about three years ago, Meredith. We changed our terminology internally to, frankly, bring a little bit more clarity and accountability to the ultimate responsibility for these customers. So locally managed business is business where the customer generally – and there are exceptions to every rule in Sysco – but generally the customer, the decision-maker of that customer is proximate; i.e., within the selling radius of that local operating company. So there's a high percentage of street business, but there's also a fair amount of what we call local contract business. And these would be chains. And they could be of different sizes. They could be local chains. They could be somewhat regional. They could even be across regions, and that's why I say there are exceptions. But, in our world, it's street business plus what we call local contract. And then corporate-managed business is your very large regional chains and your national and international customers, for that matter, where the relationships are largely managed from corporate here and generally with the customer. And then obviously, our operating companies are responsible for handling those relationships locally with the units and servicing those accounts. So that's as clear as I can make it, and there is some fuzziness there in the local contract. But the key is really how we look at the business and it's how we sign primary accountability for these customer relationships.

That makes sense. I just wonder when you talk about growth in the locally managed business, you could be talking about either small chains or business where it's contracted or business when you actually call on the customer. So the growth you talked about, is that coming from both kinds of locally managed business, or is there more growth in the independents? William J. DeLaney - President, Chief Executive Officer & Director: I'd say it's coming from both kinds. This happened to be a year where we actually lost a couple of very large local contract customers that were spread across multiple OpCos, so that's in that fuzzy category, which we call them local contract because the history of those relationships is local, but they cross over multiple OpCos. But I would say generally and even currently that growth is coming from both.

Okay, and then I just had one other quick question. I did notice that D&A was much lower this quarter than the recent run rate or lower than last year. Obviously, fourth quarter is a true-up period. Is there anything to comment on? And when you talk about cost per case, do you include D&A in cost per case, or is that just simply a corporate item? William J. DeLaney - President, Chief Executive Officer & Director: D&A, are you saying depreciation and amortization, Meredith?

Yes. William J. DeLaney - President, Chief Executive Officer & Director: Go ahead, Chris. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: So depreciation and amortization to the extent that it applies to business technology, we would capture that at the corporate level. To the extent it applies to something that's at the local level, it's captured within cost per case because it's applied at the local level. Generally, I don't think there's anything especially to call out this quarter about the change in that number. As you pointed out, there are some true-ups that occur at the end of every year. We've had probably more than last year than we had this year, so that's going to help your growth rate a little bit. But in general operating costs were much better managed this fourth quarter than last fourth quarter. The number we cited up $36 million happens to be the amount of the increase and incentives for the quarter as well. So, to the extent it went up, it went up for the right reasons. We were selling a lot more cases and rewarding people accordingly.

And so the lower growth in case cost in this quarter wasn't particularly due to D&A? Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: It was a part of that mix, but there was no significant amount attributable to that, no. William J. DeLaney - President, Chief Executive Officer & Director: To Chris's point, there wouldn't be a lot of amortization in that cost, but there's certainly a lot of depreciation in that number. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: There is, to the extent that at the field level, that's exactly right. William J. DeLaney - President, Chief Executive Officer & Director: Right.

Okay, thank you very much. William J. DeLaney - President, Chief Executive Officer & Director: Sure. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: Thank you.

We'll take our next question from Kelly Bania with BMO Capital.

Hi, good morning. Thanks for answering my question. Just wanted to talk a little bit more about gross margin. You called out some of your initiatives, a little better growth with some of the local accounts. But, if you just step back, how helpful was the flat food cost inflation, and where do you think gross margin has really stabilized at? William J. DeLaney - President, Chief Executive Officer & Director: I'm not sure I can answer the second one, but let me start with the first one, Kelly. So, look, I think it depends on whether you're talking about gross profit or gross margin. I don't want to be too anal on this thing, but that's the reality of it. We pay our bills with dollars, so gross profit dollar growth is very important here, and we had 3% gross profit dollar growth, which was less than what you saw earlier in the year, but at a time when there's no inflation, that was pretty good and we were able to manage our expenses pretty well. That's why I was saying earlier, those numbers are going to move around from time to time. Obviously, what we need to get back to more consistently is where that gross profit is growing faster than the expenses. I think on gross margin, when you're in an environment where your costs are not going up, there's not as much pressure to obviously raise your prices. And that allows you to manage your margin percent a little bit better. So, there's no doubt that that helped on the percentage part of it; but, again, we need to manage both. And after three years of talking about how important gross profit dollar growth is, I'm not going to sit here today and take a victory…

Thank you very much.

Thank you. Our next question from John Heinbockel with Guggenheim Securities.

Bill, one of the things we've heard is that post the U.S. Foods thing not happening, the promotional environment's got a little bit more intense. Is that fair? Is that what you're seeing? And then how might that tie-in with this disinflation? And does this – so, we've gone from plus four to zero in a very quick period of time. Does that breed more aggressive competition, right? Because everybody's COGS is going down and they can be aggressive without giving up a lot of margin? William J. DeLaney - President, Chief Executive Officer & Director: John, it's been a long time since I practiced accounting. I'm not sure that COGS are going down in the promotion. I think their sales are going down and maybe their marketing expenses are going up depending on how they account for it. So, I don't think that's a COGS issue. Obviously, cat management helped us there. As far as the question on promotion, I see there's been some chatter out there. Yeah, I mean, look, you've got a transition that's going on here. I think in certain markets we are seeing some of that type of activity. I've even read pieces where people are saying that we've stepped up our activity. And the reality is we haven't. I think we're always out there selectively doing what we need to do to retain good quality customers and business and selectively going after potential new business. So, it's not that we don't promote; but I would tell you, I don't think our promotion activities picked up in any meaningful way from a year or two ago. So, it's out there, I think we're going through this transition period, so it may be somewhat accelerated, but I think that's a little overblown right now. Robert Chris…

Okay, thanks. William J. DeLaney - President, Chief Executive Officer & Director: Sure.

We'll take our next question from Andrew Wolf with BB&T Capital Markets. Andrew Paul Wolf - BB&T Capital Markets: Thanks. Can you hear me this time? Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: We can. William J. DeLaney - President, Chief Executive Officer & Director: We can. Andrew Paul Wolf - BB&T Capital Markets: All right. I don't know what happened there. In the interim, most of my questions were asked, but maybe I could tie it together. I thought the gross profit growth with this inflation was pretty good. So, and you're saying even from U.S. Foods you haven't seen an uptick, if I can be so impolite, your old dance partner there. Have you seen an uptick from them specifically? Or I guess maybe you're saying if so, it's not enough to really change the nature of the market. So, when you sound a little cautious on the first half of the fiscal year, is it more on the expense side? Because if the market environment's not changing, you have some internal initiatives to get the gross profit dollars at least going above sales, is it more of an expense issue? It's just you can't – it's just hard to keep the expenses flattish or to get the leverage that you got this quarter? William J. DeLaney - President, Chief Executive Officer & Director: If I came across as cautious, I guess it's just my nature, Andy. But I'm trying to be balanced here and... Andrew Paul Wolf - BB&T Capital Markets: Yeah. No, I appreciate just being straight, so I'm just talking to you. William J. DeLaney - President, Chief Executive Officer & Director: But I think this is an important exchange here right now. So, I think, I'm really pleased with this…

We'll go next to Ajay Jain with Pivotal Research Group.

Hi, good morning. Thanks for the question. Bill, in your prepared comments, I think you cited improved expense management and also higher payroll costs, higher incentive compensation. And so with respect to your expense outlook for this year, overall would you say comparisons are starting to ease? And then can you give any additional breakdown on where you're expecting comparisons to improve and where you see continued pressure on earnings? Excluding the merger expenses and interest expense, I'm just still trying or struggling to get a big picture perspective on whether comparisons should improve this year or at least be a little bit more normalized in fiscal 2016. William J. DeLaney - President, Chief Executive Officer & Director: Ajay, look, our plan is to grow our gross profit faster than our expenses. And as I said a couple times now, that may look differently in some quarters than others and there will be a little more pressure in the first quarter or two. Our expenses this year were high, as Chris took you through, were higher than we planned. And we can't have 8%, 9%, 10% case growth on a currency-adjusted basis. So we had a good number here in the fourth quarter. I expect this to continue to improve on the expense side in the field. There are going to be some ups and downs there, but I'm confident that we're on the right track there. So I don't know that you can sustain flat every quarter, but certainly low single-digit case increases – cost case increases would be what we're shooting for here. On the corporate side, it depends on the quarter. We talked about some true-ups. I mentioned bad debt. So in any given quarter, there could be some things on the corporate side. I would just…

We'll take our next question from John Ivankoe from JPMorgan.

Hi, great. Thank you. First just a housekeeping question. The Analyst Day is going to be on September 15, I had something else written down, so I just want to make sure I have that right. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: We changed it to, I think the original day was September 24. We changed it to September 15, that's correct, in the afternoon.

Okay, thank you. And then secondly, the comments in the press release, we will also continue to evaluate opportunities to optimize our capital structure. That's obviously a very interesting comment, and one's imagination can run wild just seeing a sentence like that, within a press release especially. So as you've talked and had more time to think about this with the board and perhaps even solicited investor feedback, what do you think that optimal capital structure is in terms of rating? And whatever that is, I guess at this point, what are you waiting for to implement that optimized capital structure? William J. DeLaney - President, Chief Executive Officer & Director: Actually, John, that's pretty much the same thing we said when we announced the share repurchase. So our view on that is pretty straightforward I think at this point. We kept our powder dry here for quite some time because we've been looking at a lot of different opportunities on the acquisition front, some larger than others, and we ended up pulling the trigger on the U.S. Foods deal, and that required a lot of capital, and as we all know, that ultimately didn't play out. So where we're at today is we just felt it was appropriate to return some capital in the form of share repurchase back to our shareholders here over the next year or two. But we still think we need to keep some powder dry here. We continue to look for acquisitions, as I said in my comments, both within the core and potentially beyond the core, whether it be adjacency or continue to build our international platform here. So I would just say to you, we're going to do what we're saying here, which is from time to time we'll continue to look at our capital structure relative to what our other options are. And for the most part, it starts with investing in the business. I think we've got a pretty good cadence there. We've got pretty good – Chris has done a nice job coming in here and helping us get a little more structure and discipline around our CapEx spending. We've improved modestly, but we've begun to improve in our working capital management, so there are some good things going on there. But I would always like to have the opportunity to do some strategic acquisitions if and when they present themselves. It's just at this point we don't need to keep quite as much capital available to do that.

Understood, thank you. William J. DeLaney - President, Chief Executive Officer & Director: You're welcome. Robert Chris Kreidler - Chief Financial Officer & Executive Vice President: Thank you.

That concludes today's question-and-answer session and also brings us to the end of today's conference. Thank you for your participation, and have a good day.