Delaware
|
74-1648137
|
(State or other jurisdiction of
|
(IRS employer
|
incorporation or organization)
|
identification number)
|
1390 Enclave Parkway
|
77077-2099
|
Houston, Texas
|
(Zip Code)
|
(Address of principal executive offices)
|
|
Large Accelerated Filer ☑
|
Accelerated Filer ☐
|
Non-accelerated Filer ☐ (Do not check if a smaller reporting company)
|
Smaller Reporting Company ☐
|
|
|
Page No.
|
|
PART I – FINANCIAL INFORMATION
|
|
|
|
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
|
|
Sep. 26, 2015
|
|
Jun. 27, 2015
|
|
Sep. 27, 2014
|
||||||
|
(unaudited)
|
|
|
|
|
(unaudited)
|
|||||
ASSETS
|
|||||||||||
Current assets
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents
|
$
|
388,256
|
|
|
$
|
5,130,044
|
|
|
$
|
384,898
|
|
Accounts and notes receivable, less allowances of
$46,470, $41,720, and $60,879 |
3,531,105
|
|
|
3,353,381
|
|
|
3,646,817
|
|
|||
Inventories
|
2,841,361
|
|
|
2,691,823
|
|
|
2,845,641
|
|
|||
Deferred income taxes
|
85,416
|
|
|
135,254
|
|
|
140,554
|
|
|||
Prepaid expenses and other current assets
|
93,015
|
|
|
93,039
|
|
|
90,493
|
|
|||
Prepaid income taxes
|
88,807
|
|
|
90,763
|
|
|
—
|
|
|||
Total current assets
|
7,027,960
|
|
|
11,494,304
|
|
|
7,108,403
|
|
|||
Plant and equipment at cost, less depreciation
|
3,961,299
|
|
|
3,982,143
|
|
|
3,968,713
|
|
|||
Other assets
|
|
|
|
|
|
|
|
|
|||
Goodwill
|
1,981,390
|
|
|
1,959,817
|
|
|
1,980,524
|
|
|||
Intangibles, less amortization
|
168,541
|
|
|
154,809
|
|
|
180,325
|
|
|||
Restricted cash
|
—
|
|
|
168,274
|
|
|
165,437
|
|
|||
Other assets
|
232,361
|
|
|
229,934
|
|
|
190,631
|
|
|||
Total other assets
|
2,382,292
|
|
|
2,512,834
|
|
|
2,516,917
|
|
|||
Total assets
|
$
|
13,371,551
|
|
|
$
|
17,989,281
|
|
|
$
|
13,594,033
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|||||||||||
Current liabilities
|
|
|
|
|
|
|
|
|
|||
Notes payable
|
$
|
51,806
|
|
|
$
|
70,751
|
|
|
$
|
78,635
|
|
Accounts payable
|
2,887,863
|
|
|
2,881,953
|
|
|
2,924,417
|
|
|||
Accrued expenses
|
999,337
|
|
|
1,467,610
|
|
|
1,132,069
|
|
|||
Accrued income taxes
|
—
|
|
|
—
|
|
|
94,437
|
|
|||
Current maturities of long-term debt
|
31,810
|
|
|
4,979,301
|
|
|
306,931
|
|
|||
Total current liabilities
|
3,970,816
|
|
|
9,399,615
|
|
|
4,536,489
|
|
|||
Other liabilities
|
|
|
|
|
|
|
|
|
|||
Long-term debt
|
3,004,618
|
|
|
2,271,825
|
|
|
2,626,610
|
|
|||
Deferred income taxes
|
160,688
|
|
|
81,591
|
|
|
115,500
|
|
|||
Other long-term liabilities
|
885,501
|
|
|
934,722
|
|
|
959,920
|
|
|||
Total other liabilities
|
4,050,807
|
|
|
3,288,138
|
|
|
3,702,030
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|||
Noncontrolling interest
|
44,243
|
|
|
41,304
|
|
|
34,098
|
|
|||
Shareholders' equity
|
|
|
|
|
|
|
|
|
|||
Preferred stock, par value $1 per share
Authorized 1,500,000 shares, issued none
|
—
|
|
|
—
|
|
|
—
|
|
|||
Common stock, par value $1 per share
Authorized 2,000,000,000 shares, issued
765,174,900 shares
|
765,175
|
|
|
765,175
|
|
|
765,175
|
|
|||
Paid-in capital
|
1,231,506
|
|
|
1,213,999
|
|
|
1,155,838
|
|
|||
Retained earnings
|
8,816,245
|
|
|
8,751,985
|
|
|
8,878,693
|
|
|||
Accumulated other comprehensive loss
|
(1,007,539
|
)
|
|
(923,197
|
)
|
|
(743,172
|
)
|
|||
Treasury stock at cost, 169,052,528,
170,857,231 and 177,897,055 shares |
(4,499,702
|
)
|
|
(4,547,738
|
)
|
|
(4,735,118
|
)
|
|||
Total shareholders' equity
|
5,305,685
|
|
|
5,260,224
|
|
|
5,321,416
|
|
|||
Total liabilities and shareholders' equity
|
$
|
13,371,551
|
|
|
$
|
17,989,281
|
|
|
$
|
13,594,033
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
Sales
|
$
|
12,562,611
|
|
|
$
|
12,445,081
|
|
Cost of sales
|
10,324,616
|
|
|
10,256,364
|
|
||
Gross profit
|
2,237,995
|
|
|
2,188,717
|
|
||
Operating expenses
|
1,744,521
|
|
|
1,723,104
|
|
||
Operating income
|
493,474
|
|
|
465,613
|
|
||
Interest expense
|
126,907
|
|
|
30,934
|
|
||
Other expense (income), net
|
(15,240
|
)
|
|
(2,188
|
)
|
||
Earnings before income taxes
|
381,807
|
|
|
436,867
|
|
||
Income taxes
|
137,387
|
|
|
158,054
|
|
||
Net earnings
|
$
|
244,420
|
|
|
$
|
278,813
|
|
|
|
|
|
||||
Net earnings:
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.41
|
|
|
$
|
0.47
|
|
Diluted earnings per share
|
0.41
|
|
|
0.47
|
|
||
|
|
|
|
||||
Average shares outstanding
|
596,698,935
|
|
|
588,277,056
|
|
||
Diluted shares outstanding
|
600,789,913
|
|
|
593,309,750
|
|
||
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.30
|
|
|
$
|
0.29
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
Net earnings
|
$
|
244,420
|
|
|
$
|
278,813
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
||
Foreign currency translation adjustment
|
(87,229
|
)
|
|
(71,254
|
)
|
||
Items presented net of tax:
|
|
|
|
|
|
||
Amortization of cash flow hedges
|
1,676
|
|
|
126
|
|
||
Change in fair value of cash flow hedges
|
(3,778
|
)
|
|
(34,111
|
)
|
||
Amortization of prior service cost
|
1,715
|
|
|
1,737
|
|
||
Amortization of actuarial loss (gain), net
|
3,275
|
|
|
2,993
|
|
||
Total other comprehensive (loss) income
|
(84,341
|
)
|
|
(100,509
|
)
|
||
Comprehensive income
|
$
|
160,079
|
|
|
$
|
178,304
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net earnings
|
$
|
244,420
|
|
|
$
|
278,813
|
|
Adjustments to reconcile net earnings to cash provided by operating
activities:
|
|
|
|
|
|
||
Share-based compensation expense
|
11,636
|
|
|
12,161
|
|
||
Depreciation and amortization
|
135,961
|
|
|
133,996
|
|
||
Amortization of debt issuance and other debt-related costs
|
6,161
|
|
|
3,803
|
|
||
Loss on extinguishment of debt
|
86,460
|
|
|
—
|
|
||
Deferred income taxes
|
124,631
|
|
|
9,940
|
|
||
Provision for losses on receivables
|
1,546
|
|
|
6,058
|
|
||
Other non-cash items
|
(4,511
|
)
|
|
(1,280
|
)
|
||
Additional changes in certain assets and liabilities, net of effect of
businesses acquired:
|
|
|
|
|
|
||
(Increase) in receivables
|
(211,035
|
)
|
|
(267,602
|
)
|
||
(Increase) in inventories
|
(162,867
|
)
|
|
(251,998
|
)
|
||
Decrease (increase) in prepaid expenses and other current assets
|
165
|
|
|
(7,019
|
)
|
||
Increase in accounts payable
|
23,580
|
|
|
99,744
|
|
||
Decrease in accrued expenses
|
(470,409
|
)
|
|
(28,725
|
)
|
||
Increase in accrued income taxes
|
5,833
|
|
|
137,506
|
|
||
Decrease (increase) in other assets
|
(10,354
|
)
|
|
2,327
|
|
||
Decrease in other long-term liabilities
|
(38,419
|
)
|
|
(64,417
|
)
|
||
Excess tax benefits from share-based compensation arrangements
|
(4,280
|
)
|
|
(689
|
)
|
||
Net cash (used in) provided by operating activities
|
(261,482
|
)
|
|
62,618
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Additions to plant and equipment
|
(121,243
|
)
|
|
(118,821
|
)
|
||
Proceeds from sales of plant and equipment
|
1,506
|
|
|
1,126
|
|
||
Acquisition of businesses, net of cash acquired
|
(83,598
|
)
|
|
(32,074
|
)
|
||
Decrease (increase) in restricted cash
|
168,274
|
|
|
(20,025
|
)
|
||
Net cash used for investing activities
|
(35,061
|
)
|
|
(169,794
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Bank and commercial paper borrowings (repayments), net
|
717,600
|
|
|
268,598
|
|
||
Other debt borrowings
|
4,148
|
|
|
13,901
|
|
||
Other debt repayments
|
(3,659
|
)
|
|
(4,207
|
)
|
||
Redemption of senior notes
|
(5,050,000
|
)
|
|
—
|
|
||
Debt issuance costs
|
—
|
|
|
(642
|
)
|
||
Cash paid for settlement of cash flow hedge
|
—
|
|
|
(58,935
|
)
|
||
Cash received from termination of interest rate swap agreements
|
14,496
|
|
|
—
|
|
||
Proceeds from stock option exercises
|
54,768
|
|
|
35,179
|
|
||
Dividends paid
|
(179,037
|
)
|
|
(170,049
|
)
|
||
Excess tax benefits from share-based compensation arrangements
|
4,280
|
|
|
689
|
|
||
Net cash (used for) provided by financing activities
|
(4,437,404
|
)
|
|
84,534
|
|
||
Effect of exchange rates on cash and cash equivalents
|
(7,841
|
)
|
|
(5,506
|
)
|
||
Net (decrease) in cash and cash equivalents
|
(4,741,788
|
)
|
|
(28,148
|
)
|
||
Cash and cash equivalents at beginning of period
|
5,130,044
|
|
|
413,046
|
|
||
Cash and cash equivalents at end of period
|
$
|
388,256
|
|
|
$
|
384,898
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
|
|
||
Cash paid during the period for:
|
|
|
|
|
|
||
Interest
|
$
|
93,976
|
|
|
$
|
49,921
|
|
Income taxes
|
13,298
|
|
|
15,827
|
|
•
|
Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;
|
•
|
Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and
|
•
|
Level 3 – Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.
|
•
|
Time deposits and commercial paper included in cash equivalents are valued at amortized cost, which approximates fair value. These are included within cash equivalents as a Level 2 measurement in the tables below.
|
•
|
Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. These are included within cash equivalents and restricted cash as Level 1 measurements in the tables below.
|
•
|
The interest rate swap agreements, discussed further in
Note 6
,
"Derivative Financial Instruments"
are valued using a swap valuation model that utilizes an income approach using observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. These are included within prepaid expenses and other current assets, other assets, accrued expenses and other long-term liabilities as Level 2 measurements in the tables below.
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 26, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
102,508
|
|
|
$
|
62,131
|
|
|
$
|
—
|
|
|
$
|
164,639
|
|
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreement
|
—
|
|
|
8,219
|
|
|
—
|
|
|
8,219
|
|
||||
Total assets at fair value
|
$
|
102,508
|
|
|
$
|
70,350
|
|
|
$
|
—
|
|
|
$
|
172,858
|
|
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Long-term debt
|
$
|
—
|
|
|
$
|
506,713
|
|
|
$
|
—
|
|
|
$
|
506,713
|
|
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
506,713
|
|
|
$
|
—
|
|
|
$
|
506,713
|
|
|
Assets and Liabilities Measured at Fair Value as of Jun. 27, 2015
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
4,677,735
|
|
|
$
|
63,689
|
|
|
$
|
—
|
|
|
$
|
4,741,424
|
|
Restricted cash
|
168,274
|
|
|
—
|
|
|
—
|
|
|
168,274
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreement
|
—
|
|
|
12,597
|
|
|
—
|
|
|
12,597
|
|
||||
Total assets at fair value
|
$
|
4,846,009
|
|
|
$
|
76,286
|
|
|
$
|
—
|
|
|
$
|
4,922,295
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Accrued expenses
|
|
|
|
|
|
|
|
|
|
|
|
||||
Current portion of long-term debt
|
$
|
—
|
|
|
$
|
1,257,127
|
|
|
$
|
—
|
|
|
$
|
1,257,127
|
|
Long-term debt
|
—
|
|
|
503,379
|
|
|
—
|
|
|
503,379
|
|
||||
Total liabilities at fair value
|
$
|
—
|
|
|
$
|
1,760,506
|
|
|
$
|
—
|
|
|
$
|
1,760,506
|
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 27, 2014
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cash equivalents
|
$
|
—
|
|
|
$
|
143,416
|
|
|
$
|
—
|
|
|
$
|
143,416
|
|
Restricted cash
|
165,437
|
|
|
—
|
|
|
—
|
|
|
165,437
|
|
||||
Other assets
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreement
|
—
|
|
|
264
|
|
|
—
|
|
|
264
|
|
||||
Total assets at fair value
|
$
|
165,437
|
|
|
$
|
143,680
|
|
|
$
|
—
|
|
|
$
|
309,117
|
|
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other long-term liabilities
|
|
|
|
|
|
|
|
||||||||
Interest rate swap agreement
|
$
|
—
|
|
|
$
|
3,496
|
|
|
$
|
—
|
|
|
$
|
3,496
|
|
Long-term debt
|
—
|
|
|
499,110
|
|
|
—
|
|
|
—
|
|
||||
Total Liabilities at fair value
|
$
|
—
|
|
|
$
|
502,606
|
|
|
$
|
—
|
|
|
$
|
3,496
|
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||||||
|
Balance Sheet Location
|
|
Fair Value
|
|
Balance Sheet Location
|
|
Fair Value
|
||||
|
(In thousands)
|
||||||||||
Interest rate swap agreements:
|
|
|
|
|
|
|
|
||||
Sep. 26, 2015
|
Other assets
|
|
$
|
8,219
|
|
|
Other liabilities
|
|
$
|
—
|
|
Sep. 27, 2014
|
Other assets
|
|
264
|
|
|
Other long-term liabilities
|
|
3,496
|
|
|
Location of (Gain) or Loss
Recognized
|
|
Amount of (Gain) or Loss
Recognized
|
||||||
|
|
|
13-Week Period Ended
|
||||||
|
|
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
|
|
|
(In thousands)
|
||||||
Fair Value Hedge Relationships:
|
|
|
|
|
|
||||
Interest rate swap agreements
|
Interest expense
|
|
$
|
(1,997
|
)
|
|
$
|
(3,269
|
)
|
|
|
|
|
|
|
||||
Cash Flow Hedge Relationships:
|
|
|
|
|
|
||||
Interest rate swap agreements
|
Other comprehensive income
|
|
6,134
|
|
|
55,374
|
|
||
Interest rate contracts
|
Interest expense
|
|
2,720
|
|
|
205
|
|
|
|
|
|
13-Week Period Ended Sep. 27, 2015
|
|||
|
|
|
|
|
(In thousands)
|
||
Redemption Payment
|
|
|
|
|
$
|
50,000
|
|
Debt issuance cost write-off
|
|
|
|
|
28,642
|
|
|
Bond discount write-off
|
|
|
|
|
17,869
|
|
|
Gain on swap termination
|
|
|
|
|
(10,051
|
)
|
|
Loss on extinguishment of debt
|
|
|
|
|
86,460
|
|
|
Interest expense on senior notes
|
|
|
|
|
8,375
|
|
|
Total
|
|
|
|
|
$
|
94,835
|
|
|
Pension Benefits
|
|
Other Postretirement Plans
|
||||||||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||||||
|
(In thousands)
|
||||||||||||||
Service cost
|
$
|
2,902
|
|
|
$
|
2,815
|
|
|
$
|
134
|
|
|
$
|
134
|
|
Interest cost
|
42,833
|
|
|
42,779
|
|
|
153
|
|
|
148
|
|
||||
Expected return on plan assets
|
(53,203
|
)
|
|
(57,156
|
)
|
|
—
|
|
|
—
|
|
||||
Amortization of prior service cost
|
2,743
|
|
|
2,777
|
|
|
41
|
|
|
42
|
|
||||
Amortization of actuarial loss (gain)
|
5,435
|
|
|
4,968
|
|
|
(118
|
)
|
|
(109
|
)
|
||||
Net periodic costs (benefits)
|
$
|
710
|
|
|
$
|
(3,817
|
)
|
|
$
|
210
|
|
|
$
|
215
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
|
(In thousands, except for share
and per share data)
|
||||||
Numerator:
|
|
|
|
||||
Net earnings
|
$
|
244,420
|
|
|
$
|
278,813
|
|
Denominator:
|
|
|
|
|
|
||
Weighted-average basic shares outstanding
|
596,698,935
|
|
|
588,277,056
|
|
||
Dilutive effect of share-based awards
|
4,090,978
|
|
|
5,032,694
|
|
||
Weighted-average diluted shares outstanding
|
600,789,913
|
|
|
593,309,750
|
|
||
Basic earnings per share
|
$
|
0.41
|
|
|
$
|
0.47
|
|
Diluted earnings per share
|
$
|
0.41
|
|
|
$
|
0.47
|
|
|
|
|
13-Week Period Ended Sep. 26, 2015
|
||||||||||
|
Location of Expense
(Income) Recognized
in Net Earnings
|
|
Before Tax
Amount
|
|
Tax
|
|
Net of Tax
Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|||
Reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service cost
|
Operating expenses
|
|
$
|
2,784
|
|
|
$
|
1,069
|
|
|
$
|
1,715
|
|
Amortization of actuarial loss (gain), net
|
Operating expenses
|
|
5,317
|
|
|
2,042
|
|
|
3,275
|
|
|||
Total reclassification adjustments
|
|
|
8,101
|
|
|
3,111
|
|
|
4,990
|
|
|||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before
reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
N/A
|
|
(87,229
|
)
|
|
—
|
|
|
(87,229
|
)
|
|||
Interest rate swaps:
|
|
|
|
|
|
|
|
||||||
Reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Amortization of cash flow hedges
|
Interest expense
|
|
2,720
|
|
|
1,044
|
|
|
1,676
|
|
|||
Change in fair value of cash flow hedge
|
N/A
|
|
(6,134
|
)
|
|
(2,356
|
)
|
|
(3,778
|
)
|
|||
Total other comprehensive (loss) income
|
|
|
$
|
(82,542
|
)
|
|
$
|
1,799
|
|
|
$
|
(84,341
|
)
|
|
|
|
13-Week Period Ended Sep. 27, 2014
|
||||||||||
|
Location of Expense
(Income) Recognized
in Net Earnings
|
|
Before Tax
Amount
|
|
Tax
|
|
Net of Tax
Amount
|
||||||
|
|
|
(In thousands)
|
||||||||||
Pension and other postretirement benefit plans:
|
|
|
|
|
|
|
|
|
|
|
|||
Reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|||
Amortization of prior service cost
|
Operating expenses
|
|
$
|
2,819
|
|
|
$
|
1,082
|
|
|
$
|
1,737
|
|
Amortization of actuarial loss (gain), net
|
Operating expenses
|
|
4,859
|
|
|
1,866
|
|
|
2,993
|
|
|||
Total reclassification adjustments
|
|
|
7,678
|
|
|
2,948
|
|
|
4,730
|
|
|||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||
Other comprehensive income before
reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
N/A
|
|
(71,254
|
)
|
|
—
|
|
|
(71,254
|
)
|
|||
Interest rate swaps:
|
|
|
|
|
|
|
|
||||||
Reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Amortization of cash flow hedges
|
Interest expense
|
|
205
|
|
|
79
|
|
|
126
|
|
|||
Other comprehensive income before
reclassification adjustments:
|
|
|
|
|
|
|
|
|
|
|
|||
Change in fair value of cash flow hedges
|
N/A
|
|
(55,374
|
)
|
|
(21,263
|
)
|
|
(34,111
|
)
|
|||
Total other comprehensive (loss) income
|
|
|
$
|
(118,745
|
)
|
|
$
|
(18,236
|
)
|
|
$
|
(100,509
|
)
|
|
13-Week Period Ended Sep. 26, 2015
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax
|
|
Foreign Currency Translation
|
|
Interest Rate Swaps,
net of tax
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jun. 27, 2015
|
$
|
(705,311
|
)
|
|
$
|
(97,733
|
)
|
|
$
|
(120,153
|
)
|
|
$
|
(923,197
|
)
|
Other comprehensive income before
reclassification adjustments
|
—
|
|
|
(87,229
|
)
|
|
—
|
|
|
(87,229
|
)
|
||||
Amortization of cash flow hedges
|
—
|
|
|
—
|
|
|
1,676
|
|
|
1,676
|
|
||||
Change in fair value of cash flow hedges
|
—
|
|
|
—
|
|
|
(3,778
|
)
|
|
(3,778
|
)
|
||||
Amortization of unrecognized prior service cost
|
1,715
|
|
|
—
|
|
|
—
|
|
|
1,715
|
|
||||
Amortization of unrecognized net actuarial losses
|
3,274
|
|
|
—
|
|
|
—
|
|
|
3,274
|
|
||||
Balance as of Sep. 26, 2015
|
$
|
(700,322
|
)
|
|
$
|
(184,962
|
)
|
|
$
|
(122,255
|
)
|
|
$
|
(1,007,539
|
)
|
|
13-Week Period Ended Sep. 27, 2014
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax
|
|
Foreign Currency Translation
|
|
Interest Rate Swaps,
net of tax
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jun. 28, 2014
|
$
|
(685,957
|
)
|
|
$
|
134,452
|
|
|
$
|
(91,158
|
)
|
|
$
|
(642,663
|
)
|
Other comprehensive income before
reclassification adjustments
|
—
|
|
|
(71,254
|
)
|
|
(34,111
|
)
|
|
(105,365
|
)
|
||||
Amounts reclassified from accumulated
other comprehensive loss
|
4,730
|
|
|
—
|
|
|
126
|
|
|
4,856
|
|
||||
Balance as of Sep. 27, 2014
|
$
|
(681,227
|
)
|
|
$
|
63,198
|
|
|
$
|
(125,143
|
)
|
|
$
|
(743,172
|
)
|
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
Sales:
|
(In thousands)
|
||||||
Broadline
|
$
|
10,028,096
|
|
|
$
|
9,971,375
|
|
SYGMA
|
1,445,904
|
|
|
1,541,612
|
|
||
Other
|
1,446,938
|
|
|
1,252,086
|
|
||
Intersegment sales
|
(358,327
|
)
|
|
(319,992
|
)
|
||
Total
|
$
|
12,562,611
|
|
|
$
|
12,445,081
|
|
|
|
|
|
||||
|
13-Week Period Ended
|
||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||
Operating income:
|
(In thousands)
|
||||||
Broadline
|
$
|
726,965
|
|
|
$
|
686,482
|
|
SYGMA
|
5,224
|
|
|
5,150
|
|
||
Other
|
26,508
|
|
|
37,729
|
|
||
Total segments
|
758,697
|
|
|
729,361
|
|
||
Corporate expenses
|
(265,223
|
)
|
|
(263,748
|
)
|
||
Total operating income
|
493,474
|
|
|
465,613
|
|
||
Interest expense
|
126,907
|
|
|
30,934
|
|
||
Other expense (income), net
|
(15,240
|
)
|
|
(2,188
|
)
|
||
Earnings before income taxes
|
$
|
381,807
|
|
|
$
|
436,867
|
|
|
Sep. 26, 2015
|
|
Jun. 27, 2015
|
|
Sep. 27, 2014
|
||||||
Assets:
|
(In thousands)
|
||||||||||
Broadline
|
$
|
7,989,108
|
|
|
$
|
7,730,239
|
|
|
$
|
8,861,929
|
|
SYGMA
|
508,403
|
|
|
512,044
|
|
|
519,554
|
|
|||
Other
|
1,515,458
|
|
|
1,415,038
|
|
|
1,643,808
|
|
|||
Total segments
|
10,012,969
|
|
|
9,657,321
|
|
|
11,025,291
|
|
|||
Corporate
|
3,358,582
|
|
|
8,331,960
|
|
|
2,568,742
|
|
|||
Total
|
$
|
13,371,551
|
|
|
$
|
17,989,281
|
|
|
$
|
13,594,033
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
Sep. 26, 2015
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
Totals
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
237,758
|
|
|
$
|
4,252,595
|
|
|
$
|
2,537,607
|
|
|
$
|
—
|
|
|
$
|
7,027,960
|
|
Investment in subsidiaries
|
9,473,425
|
|
|
—
|
|
|
—
|
|
|
(9,473,425
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
512,397
|
|
|
1,662,227
|
|
|
1,786,675
|
|
|
—
|
|
|
3,961,299
|
|
|||||
Other assets
|
203,535
|
|
|
525,372
|
|
|
1,653,385
|
|
|
—
|
|
|
2,382,292
|
|
|||||
Total assets
|
$
|
10,427,115
|
|
|
$
|
6,440,194
|
|
|
$
|
5,977,667
|
|
|
$
|
(9,473,425
|
)
|
|
$
|
13,371,551
|
|
Current liabilities
|
$
|
478,158
|
|
|
$
|
1,105,347
|
|
|
$
|
2,387,311
|
|
|
$
|
—
|
|
|
$
|
3,970,816
|
|
Intercompany payables (receivables)
|
1,041,230
|
|
|
(1,670,713
|
)
|
|
629,483
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
2,884,581
|
|
|
9,337
|
|
|
110,700
|
|
|
—
|
|
|
3,004,618
|
|
|||||
Other liabilities
|
715,169
|
|
|
271,194
|
|
|
59,826
|
|
|
—
|
|
|
1,046,189
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
44,243
|
|
|
—
|
|
|
44,243
|
|
|||||
Shareholders’ equity
|
5,307,977
|
|
|
6,725,029
|
|
|
2,746,104
|
|
|
(9,473,425
|
)
|
|
5,305,685
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
10,427,115
|
|
|
$
|
6,440,194
|
|
|
$
|
5,977,667
|
|
|
$
|
(9,473,425
|
)
|
|
$
|
13,371,551
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
Jun. 27, 2015
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
Totals
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
4,894,387
|
|
|
$
|
4,012,924
|
|
|
$
|
2,586,993
|
|
|
$
|
—
|
|
|
$
|
11,494,304
|
|
Investment in subsidiaries
|
9,088,455
|
|
|
—
|
|
|
—
|
|
|
(9,088,455
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
510,285
|
|
|
1,694,659
|
|
|
1,777,199
|
|
|
—
|
|
|
3,982,143
|
|
|||||
Other assets
|
371,802
|
|
|
522,566
|
|
|
1,618,466
|
|
|
—
|
|
|
2,512,834
|
|
|||||
Total assets
|
$
|
14,864,929
|
|
|
$
|
6,230,149
|
|
|
$
|
5,982,658
|
|
|
$
|
(9,088,455
|
)
|
|
$
|
17,989,281
|
|
Current liabilities
|
$
|
5,851,364
|
|
|
$
|
1,658,558
|
|
|
$
|
1,889,693
|
|
|
$
|
—
|
|
|
$
|
9,399,615
|
|
Intercompany payables (receivables)
|
973,497
|
|
|
(1,996,915
|
)
|
|
1,023,418
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
2,154,923
|
|
|
10,121
|
|
|
106,781
|
|
|
—
|
|
|
2,271,825
|
|
|||||
Other liabilities
|
624,795
|
|
|
278,458
|
|
|
113,060
|
|
|
—
|
|
|
1,016,313
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
41,304
|
|
|
—
|
|
|
41,304
|
|
|||||
Shareholders’ equity
|
5,260,350
|
|
|
6,279,927
|
|
|
2,808,402
|
|
|
(9,088,455
|
)
|
|
5,260,224
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
14,864,929
|
|
|
$
|
6,230,149
|
|
|
$
|
5,982,658
|
|
|
$
|
(9,088,455
|
)
|
|
$
|
17,989,281
|
|
|
Condensed Consolidating Balance Sheet
|
||||||||||||||||||
|
Sep. 27, 2014
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
Totals
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
233,010
|
|
|
$
|
4,345,475
|
|
|
$
|
2,529,918
|
|
|
$
|
—
|
|
|
$
|
7,108,403
|
|
Investment in subsidiaries
|
8,297,396
|
|
|
—
|
|
|
—
|
|
|
(8,297,396
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
488,618
|
|
|
1,758,530
|
|
|
1,721,565
|
|
|
—
|
|
|
3,968,713
|
|
|||||
Other assets
|
332,075
|
|
|
522,013
|
|
|
1,662,829
|
|
|
—
|
|
|
2,516,917
|
|
|||||
Total assets
|
$
|
9,351,099
|
|
|
$
|
6,626,018
|
|
|
$
|
5,914,312
|
|
|
$
|
(8,297,396
|
)
|
|
$
|
13,594,033
|
|
Current liabilities
|
$
|
831,556
|
|
|
$
|
953,078
|
|
|
$
|
2,751,855
|
|
|
$
|
—
|
|
|
$
|
4,536,489
|
|
Intercompany payables (receivables)
|
2,292
|
|
|
(111,694
|
)
|
|
109,402
|
|
|
—
|
|
|
—
|
|
|||||
Long-term debt
|
2,560,245
|
|
|
15,232
|
|
|
51,133
|
|
|
—
|
|
|
2,626,610
|
|
|||||
Other liabilities
|
635,590
|
|
|
318,736
|
|
|
121,094
|
|
|
—
|
|
|
1,075,420
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
34,098
|
|
|
—
|
|
|
34,098
|
|
|||||
Shareholders’ equity
|
5,321,416
|
|
|
5,450,666
|
|
|
2,846,730
|
|
|
(8,297,396
|
)
|
|
5,321,416
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
9,351,099
|
|
|
$
|
6,626,018
|
|
|
$
|
5,914,312
|
|
|
$
|
(8,297,396
|
)
|
|
$
|
13,594,033
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 26, 2015
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
Totals
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
8,524,550
|
|
|
$
|
4,426,998
|
|
|
$
|
(388,937
|
)
|
|
$
|
12,562,611
|
|
Cost of sales
|
—
|
|
|
6,912,169
|
|
|
3,801,384
|
|
|
(388,937
|
)
|
|
10,324,616
|
|
|||||
Gross profit
|
—
|
|
|
1,612,381
|
|
|
625,614
|
|
|
—
|
|
|
2,237,995
|
|
|||||
Operating expenses
|
199,375
|
|
|
956,915
|
|
|
588,231
|
|
|
—
|
|
|
1,744,521
|
|
|||||
Operating income (loss)
|
(199,375
|
)
|
|
655,466
|
|
|
37,383
|
|
|
—
|
|
|
493,474
|
|
|||||
Interest expense (income)
|
146,097
|
|
|
(39,983
|
)
|
|
20,793
|
|
|
—
|
|
|
126,907
|
|
|||||
Other expense (income), net
|
(5,077
|
)
|
|
(477
|
)
|
|
(9,686
|
)
|
|
—
|
|
|
(15,240
|
)
|
|||||
Earnings (losses) before income taxes
|
(340,395
|
)
|
|
695,926
|
|
|
26,276
|
|
|
—
|
|
|
381,807
|
|
|||||
Income tax (benefit) provision
|
(122,484
|
)
|
|
250,417
|
|
|
9,454
|
|
|
—
|
|
|
137,387
|
|
|||||
Equity in earnings of subsidiaries
|
462,331
|
|
|
—
|
|
|
—
|
|
|
(462,331
|
)
|
|
—
|
|
|||||
Net earnings
|
244,420
|
|
|
445,509
|
|
|
16,822
|
|
|
(462,331
|
)
|
|
244,420
|
|
|||||
Other comprehensive income (loss)
|
(84,341
|
)
|
|
—
|
|
|
(183,185
|
)
|
|
183,185
|
|
|
(84,341
|
)
|
|||||
Comprehensive income
|
$
|
160,079
|
|
|
$
|
445,509
|
|
|
$
|
(166,363
|
)
|
|
$
|
(279,146
|
)
|
|
$
|
160,079
|
|
|
Condensed Consolidating Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 27, 2014
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Eliminations
|
|
Consolidated
Totals
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
8,322,308
|
|
|
$
|
4,464,469
|
|
|
$
|
(341,696
|
)
|
|
$
|
12,445,081
|
|
Cost of sales
|
—
|
|
|
6,774,508
|
|
|
3,823,552
|
|
|
(341,696
|
)
|
|
10,256,364
|
|
|||||
Gross profit
|
—
|
|
|
1,547,800
|
|
|
640,917
|
|
|
—
|
|
|
2,188,717
|
|
|||||
Operating expenses
|
190,897
|
|
|
932,195
|
|
|
600,012
|
|
|
—
|
|
|
1,723,104
|
|
|||||
Operating income (loss)
|
(190,897
|
)
|
|
615,605
|
|
|
40,905
|
|
|
—
|
|
|
465,613
|
|
|||||
Interest expense (income)
|
50,166
|
|
|
(21,474
|
)
|
|
2,242
|
|
|
—
|
|
|
30,934
|
|
|||||
Other expense (income), net
|
(2,402
|
)
|
|
(399
|
)
|
|
613
|
|
|
—
|
|
|
(2,188
|
)
|
|||||
Earnings (losses) before income taxes
|
(238,661
|
)
|
|
637,478
|
|
|
38,050
|
|
|
—
|
|
|
436,867
|
|
|||||
Income tax (benefit) provision
|
(86,344
|
)
|
|
230,631
|
|
|
13,767
|
|
|
—
|
|
|
158,054
|
|
|||||
Equity in earnings of subsidiaries
|
431,130
|
|
|
—
|
|
|
—
|
|
|
(431,130
|
)
|
|
—
|
|
|||||
Net earnings
|
278,813
|
|
|
406,847
|
|
|
24,283
|
|
|
(431,130
|
)
|
|
278,813
|
|
|||||
Other comprehensive income (loss)
|
(100,509
|
)
|
|
—
|
|
|
(71,254
|
)
|
|
71,254
|
|
|
(100,509
|
)
|
|||||
Comprehensive income
|
$
|
178,304
|
|
|
$
|
406,847
|
|
|
$
|
(46,971
|
)
|
|
$
|
(359,876
|
)
|
|
$
|
178,304
|
|
|
Condensed Consolidating Cash Flows
|
||||||||||||||
|
For the 13-Week Period Ended Sep. 26, 2015
|
||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Consolidated
Totals
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
(525,626
|
)
|
|
$
|
(317,193
|
)
|
|
$
|
581,337
|
|
|
$
|
(261,482
|
)
|
Investing activities
|
138,186
|
|
|
(13,083
|
)
|
|
(160,164
|
)
|
|
(35,061
|
)
|
||||
Financing activities
|
(4,445,507
|
)
|
|
(800
|
)
|
|
8,903
|
|
|
(4,437,404
|
)
|
||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
(7,841
|
)
|
|
(7,841
|
)
|
||||
Intercompany activity
|
59,403
|
|
|
329,064
|
|
|
(388,467
|
)
|
|
—
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(4,773,544
|
)
|
|
(2,012
|
)
|
|
33,768
|
|
|
(4,741,788
|
)
|
||||
Cash and cash equivalents at the beginning of period
|
4,851,074
|
|
|
26,377
|
|
|
252,593
|
|
|
5,130,044
|
|
||||
Cash and cash equivalents at the end of period
|
$
|
77,530
|
|
|
$
|
24,365
|
|
|
$
|
286,361
|
|
|
$
|
388,256
|
|
|
Condensed Consolidating Cash Flows
|
||||||||||||||
|
For the 13-Week Period Ended Sep. 27, 2014
|
||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline
Subsidiaries
|
|
Other
Non-Guarantor
Subsidiaries
|
|
Consolidated
Totals
|
||||||||
|
(In thousands)
|
||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
||||||||
Operating activities
|
$
|
(93,666
|
)
|
|
$
|
(24,502
|
)
|
|
$
|
180,786
|
|
|
$
|
62,618
|
|
Investing activities
|
(33,867
|
)
|
|
(33,841
|
)
|
|
(102,086
|
)
|
|
(169,794
|
)
|
||||
Financing activities
|
46,544
|
|
|
605
|
|
|
37,385
|
|
|
84,534
|
|
||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
(5,506
|
)
|
|
(5,506
|
)
|
||||
Intercompany activity
|
58,326
|
|
|
55,264
|
|
|
(113,590
|
)
|
|
—
|
|
||||
Net increase (decrease) in cash and cash equivalents
|
(22,663
|
)
|
|
(2,474
|
)
|
|
(3,011
|
)
|
|
(28,148
|
)
|
||||
Cash and cash equivalents at the beginning of period
|
158,957
|
|
|
27,772
|
|
|
226,317
|
|
|
413,046
|
|
||||
Cash and cash equivalents at the end of period
|
$
|
136,294
|
|
|
$
|
25,298
|
|
|
$
|
223,306
|
|
|
$
|
384,898
|
|
Maturity Date
|
|
Par Value
(in millions)
|
|
Coupon Rate
|
|
Pricing
(percentage of par)
|
||||
October 1, 2020
|
|
$
|
750
|
|
|
2.60
|
%
|
|
99.809
|
%
|
October 1, 2025
|
|
750
|
|
|
3.75
|
%
|
|
100.00
|
%
|
|
October 1, 2045
|
|
500
|
|
|
4.85
|
%
|
|
99.921
|
%
|
•
|
Partnership - Profoundly enrich the experience of doing business with Sysco;
|
•
|
Productivity - Continuously improve productivity in all areas of our business;
|
•
|
Products - Enhance offerings through a customer-centric innovation program;
|
•
|
People - Implement enterprise-wide talent management process; and
|
•
|
Expansion - Explore, assess and pursue new businesses and markets.
|
|
13-Week Period Ended
|
||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
82.2
|
|
|
82.4
|
|
Gross profit
|
17.8
|
|
|
17.6
|
|
Operating expenses
|
13.9
|
|
|
13.9
|
|
Operating income
|
3.9
|
|
|
3.7
|
|
Interest expense
|
1.0
|
|
|
0.2
|
|
Other expense (income), net
|
(0.1
|
)
|
|
—
|
|
Earnings before income taxes
|
3.0
|
|
|
3.5
|
|
Income taxes
|
1.1
|
|
|
1.3
|
|
Net earnings
|
1.9
|
%
|
|
2.2
|
%
|
|
13-Week Period Ended
|
||
Sales
|
0.9
|
|
%
|
Cost of sales
|
0.7
|
|
|
Gross profit
|
2.3
|
|
|
Operating expenses
|
1.2
|
|
|
Operating income
|
6.0
|
|
|
Interest expense
|
310.3
|
|
|
Other expense (income), net
|
596.5
|
|
(1)
|
Earnings before income taxes
|
(12.6
|
)
|
|
Income taxes
|
(13.1
|
)
|
|
Net earnings
|
(12.3
|
)
|
|
Basic earnings per share
|
(12.8
|
)
|
%
|
Diluted earnings per share
|
(12.8
|
)
|
|
Average shares outstanding
|
1.4
|
|
|
Diluted shares outstanding
|
1.3
|
|
|
(1)
|
Other expense (income), net was income of $
15.2 million
in the first quarter of fiscal
2016
and income of $
2.2 million
in the first quarter of fiscal
2015
.
|
|
13-Week Period Ended Sep. 26, 2015
|
|
13-Week Period Ended Sep. 27, 2014
|
|
13-Week Period Ended Change in Dollars
|
|
13-Week Period
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Gross profit
|
$
|
2,237,995
|
|
|
$
|
2,188,717
|
|
|
$
|
49,278
|
|
|
2.3
|
%
|
Operating expenses
|
1,744,521
|
|
|
1,723,104
|
|
|
21,417
|
|
|
1.2
|
|
|||
Operating income
|
$
|
493,474
|
|
|
$
|
465,613
|
|
|
$
|
27,861
|
|
|
6.0
|
%
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
$
|
2,237,995
|
|
|
$
|
2,188,717
|
|
|
$
|
49,278
|
|
|
2.3
|
%
|
Adjusted operating expenses (Non-GAAP)
|
1,731,516
|
|
|
1,679,669
|
|
|
51,847
|
|
|
3.1
|
|
|||
Adjusted operating income (Non-GAAP)
|
$
|
506,479
|
|
|
$
|
509,048
|
|
|
$
|
(2,569
|
)
|
|
(0.5
|
)%
|
|
13-Week Period Ended Sep. 26, 2015
|
|
13-Week Period Ended Sep. 27, 2014
|
|
13-Week Period Change in Dollars
|
|
13-Week Period
% Change
|
|||||||
|
(In thousands, except for share and per share data)
|
|||||||||||||
Operating expenses (GAAP)
|
$
|
1,744,521
|
|
|
$
|
1,723,104
|
|
|
$
|
21,417
|
|
|
1.2
|
%
|
Impact of severance charges
|
(3,189
|
)
|
|
(1,804
|
)
|
|
(1,385
|
)
|
|
0.8
|
|
|||
Impact of US Foods merger and integration planning costs
|
(9,816
|
)
|
|
(40,481
|
)
|
|
30,665
|
|
|
(0.8
|
)
|
|||
Impact of facility closure charges
|
—
|
|
|
(1,150
|
)
|
|
1,150
|
|
|
NM
|
|
|||
Adjusted operating expenses (Non-GAAP)
|
$
|
1,731,516
|
|
|
$
|
1,679,669
|
|
|
$
|
51,847
|
|
|
3.1
|
%
|
Operating income (GAAP)
|
$
|
493,474
|
|
|
$
|
465,613
|
|
|
$
|
27,861
|
|
|
6.0
|
%
|
Impact of severance charge
|
3,189
|
|
|
1,804
|
|
|
1,385
|
|
|
0.8
|
|
|||
Impact of US Foods merger and integration planning costs
|
9,816
|
|
|
40,481
|
|
|
(30,665
|
)
|
|
(0.8
|
)
|
|||
Impact of facility closure charges
|
—
|
|
|
1,150
|
|
|
(1,150
|
)
|
|
NM
|
|
|||
Adjusted operating income (Non-GAAP)
|
$
|
506,479
|
|
|
$
|
509,048
|
|
|
$
|
(2,569
|
)
|
|
(0.5
|
)%
|
Interest expense (GAAP)
|
$
|
126,907
|
|
|
$
|
30,934
|
|
|
$
|
95,973
|
|
|
310.3
|
%
|
Impact of US Foods financing costs
|
(94,835
|
)
|
|
(3,703
|
)
|
|
(91,132
|
)
|
|
NM
|
|
|||
Adjusted interest expense (Non-GAAP)
|
$
|
32,072
|
|
|
$
|
27,231
|
|
|
$
|
4,841
|
|
|
17.8
|
%
|
Net earnings (GAAP)
(1)
|
$
|
244,420
|
|
|
$
|
278,813
|
|
|
$
|
(34,393
|
)
|
|
(12.3
|
)%
|
Impact of severance charge (net of tax)
|
1,991
|
|
|
1,151
|
|
|
840
|
|
|
0.7
|
|
|||
Impact of US Foods merger and integration planning costs (net of tax)
|
6,128
|
|
|
25,835
|
|
|
(19,707
|
)
|
|
(0.8
|
)
|
|||
Impact of facility closure charges (net of tax)
|
—
|
|
|
734
|
|
|
(734
|
)
|
|
NM
|
|
|||
Impact of US Foods Financing Costs (net of tax)
|
59,203
|
|
|
2,363
|
|
|
56,840
|
|
|
24.1
|
|
|||
Adjusted net earnings (Non-GAAP)
(1)
|
$
|
311,742
|
|
|
$
|
308,896
|
|
|
$
|
2,846
|
|
|
0.9
|
%
|
Diluted earnings per share (GAAP)
(1)
|
$
|
0.41
|
|
|
$
|
0.47
|
|
|
$
|
(0.06
|
)
|
|
(12.8
|
)%
|
Impact of US Foods merger and integration planning costs
|
0.01
|
|
|
0.04
|
|
|
(0.03
|
)
|
|
(75.0
|
)
|
|||
Impact of US Foods Financing Costs
|
0.10
|
|
|
—
|
|
|
0.10
|
|
|
NM
|
|
|||
Adjusted diluted earnings per share (Non-GAAP)
(1)
|
$
|
0.52
|
|
|
$
|
0.52
|
|
|
$
|
—
|
|
|
—
|
%
|
Diluted shares outstanding
|
600,789,913
|
|
|
593,309,750
|
|
|
|
|
|
|
|
|
Operating Income as a
Percentage of Sales
|
||||
|
13-Week Period Ended
|
||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||
Broadline
|
7.2
|
%
|
|
6.9
|
%
|
SYGMA
|
0.4
|
|
|
0.3
|
|
Other
|
2.6
|
|
|
4.0
|
|
|
Increase (Decrease)
|
||||
|
13-Week Period
|
||||
|
Sales
|
|
Operating
Income
|
||
Broadline
|
0.6
|
%
|
|
5.9
|
%
|
SYGMA
|
(6.2
|
)
|
|
1.4
|
|
Other
|
8.2
|
|
|
(29.7
|
)
|
|
Components of Segment Results
|
||||||||||
|
13-Week Period Ended
|
||||||||||
|
Sep. 26, 2015
|
|
Sep. 27, 2014
|
||||||||
|
Sales
|
|
Segment Operating
Income
|
|
Sales
|
|
Segment Operating
Income
|
||||
Broadline
|
79.8
|
%
|
|
95.8
|
%
|
|
80.1
|
%
|
|
94.1
|
%
|
SYGMA
|
11.5
|
|
|
0.7
|
|
|
12.4
|
|
|
0.7
|
|
Other
|
8.7
|
|
|
3.5
|
|
|
7.5
|
|
|
5.2
|
|
|
|
|
|
|
|
|
|
||||
Total
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
•
|
Cash flows from operations were a negative $
261.5 million
in 2016 compared to $
62.6 million
in 2015, and were negatively impacted by cash payments for Certain Items;
|
•
|
Capital expenditures totaled $
121.2 million
in 2016 compared to $
118.8 million
in 2015;
|
•
|
Free cash flow was a negative $
381.2 million
in 2016 compared to a negative $
55.1 million
in 2015, and were negatively impacted by cash payments for Certain Items (see Non-GAAP reconciliation below under the heading “Free Cash Flow”);
|
•
|
Cash used for acquisition of businesses was $
83.6 million
in 2016 compared to $
32.1 million
in 2015;
|
•
|
Net bank repayments were $
717.6 million
in 2016 compared to net bank borrowings of $
268.6 million
in 2015; and
|
•
|
Dividends paid were $
179.0 million
in 2016 compared to $
170.0 million
in 2015.
|
•
|
working capital requirements;
|
•
|
investments in facilities, systems, fleet, other equipment and technology;
|
•
|
return of capital to shareholders, including cash dividends and share repurchases;
|
•
|
acquisitions compatible with our overall growth strategy;
|
•
|
contributions to our various retirement plans; and
|
•
|
debt repayments.
|
•
|
our cash flows from operations;
|
•
|
the availability of additional capital under our existing commercial paper programs, supported by our revolving credit facility and bank line of credit;
|
•
|
our ability to access capital from financial markets, including issuances of debt securities, either privately or under our shelf registration statement filed with the Securities and Exchange Commission (SEC); and
|
|
13-Week
Period Ended
Sep. 26, 2015
|
|
13-Week
Period Ended
Sep. 27, 2014
|
|
13-Week Period Change in Dollars
|
|
13-Week Period
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Net cash (used in) provided by operating activities (GAAP)
|
$
|
(261,482
|
)
|
|
$
|
62,618
|
|
|
$
|
(324,100
|
)
|
|
(517.6
|
)%
|
Additions to plant and equipment
|
(121,243
|
)
|
|
(118,821
|
)
|
|
(2,422
|
)
|
|
—
|
|
|||
Proceeds from sales of plant and equipment
|
1,506
|
|
|
1,126
|
|
|
380
|
|
|
0.3
|
|
|||
Free Cash Flow (Non-GAAP)
|
$
|
(381,219
|
)
|
|
$
|
(55,077
|
)
|
|
$
|
(326,142
|
)
|
|
(592.2
|
)%
|
•
|
$484.0 million
amounts outstanding from our commercial paper program
|
•
|
No amounts outstanding from the credit facility supporting the company’s U.S. and Canadian commercial paper programs.
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
< 1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More Than
5 Years
|
||||||||||
|
(In thousands)
|
||||||||||||||||||
Recorded Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Long-term debt
|
$
|
3,004,615
|
|
|
$
|
746,724
|
|
|
$
|
1,226,769
|
|
|
$
|
8,313
|
|
|
$
|
1,022,809
|
|
Unrecorded Contractual Obligations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest payments related to long-term debt
|
$
|
1,323,974
|
|
|
$
|
115,953
|
|
|
$
|
231,905
|
|
|
$
|
164,605
|
|
|
$
|
811,511
|
|
Total contractual cash obligations
|
$
|
4,328,589
|
|
|
$
|
862,677
|
|
|
$
|
1,458,674
|
|
|
$
|
172,918
|
|
|
$
|
1,834,320
|
|
•
|
Sysco’s ability to increase its sales and market share and grow earnings, and our plan to continue to explore appropriate opportunities to profitably grow market share and create shareholder value;
|
•
|
Sysco’s belief regarding accounting treatment for certain transactions;
|
•
|
expectations regarding interest expense;
|
•
|
the impact of ongoing legal proceedings and estimates of potential liability;
|
•
|
the impact of general economic conditions on our business and our industry;
|
•
|
statements regarding inflation and other economic trends;
|
•
|
expectations regarding deflation and foreign currency translation and the related impact on our results;
|
•
|
expectations regarding earnings per share;
|
•
|
expectations regarding our efforts to manage expenses;
|
•
|
beliefs regarding factors that impact our operating margins;
|
•
|
our plans related to locally-managed sales and ongoing gross margin pressures;
|
•
|
expectations related to the strategies that we have identified to help us achieve our mission and vision;
|
•
|
our plans and expectations regarding our three-year financial targets, including goals related to operating income and return on invested capital;
|
•
|
expectations related to cost per case for our U.S. Broadline companies;
|
•
|
our goal of leveraging earnings growth at a greater rate than sales growth;
|
•
|
expectations regarding operating income and sales for our business segments over the long-term;
|
•
|
expectations regarding the allocation of cash generated from operations;
|
•
|
the impact of acquisitions and sales of assets and businesses on our liquidity, borrowing capacity, leverage ratios and capital availability;
|
•
|
Sysco’s expectations regarding cash held by international subsidiaries;
|
•
|
the sufficiency of our mechanisms for managing working capital and competitive pressures, and our beliefs regarding the impact of these mechanisms;
|
•
|
Sysco’s ability to meet future cash requirements, including the ability to access debt markets effectively, and remain profitable;
|
•
|
Sysco’s ability to effectively access the commercial paper market and long-term capital markets;
|
•
|
Sysco’s expectations regarding cash flows from operations over the long-term, and the factors impacting such cash flows;
|
•
|
our expectations regarding free cash flow;
|
•
|
expectations regarding tax expense and benefits;
|
•
|
expectations regarding acquisitions and related accounting treatment;
|
•
|
our strategy and expectations regarding share repurchases and shares outstanding; and
|
•
|
expectations related to our forward diesel fuel commitments.
|
•
|
periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability;
|
•
|
risks related to unfavorable conditions in the U.S. economy and local markets and the impact on our results of operations and financial condition;
|
•
|
the risk that competition in our industry may adversely impact our margins and our ability to retain customers and make it difficult for us to maintain our market share, growth rate and profitability;
|
•
|
the risk that we may not be able to fully compensate for increases in fuel costs, and forward purchase commitments intended to contain fuel costs could result in above market fuel costs;
|
•
|
the risk of interruption of supplies and increase in product costs as a result of conditions beyond our control;
|
•
|
the potential impact on our reputation and earnings of adverse publicity or lack of confidence in our products;
|
•
|
risks related to unfavorable changes to the mix of locally-managed customers versus corporate-managed customers;
|
•
|
the risk that we may not realize anticipated benefits from our operating cost reduction efforts;
|
•
|
difficulties in successfully expanding into international markets and complimentary lines of business;
|
•
|
the potential impact of product liability claims;
|
•
|
the risk that we fail to comply with requirements imposed by applicable law or government regulations;
|
•
|
risks related to our ability to effectively finance and integrate acquired businesses;
|
•
|
our access to borrowed funds in order to grow and any default by us under our indebtedness that could have a material adverse impact on cash flow and liquidity;
|
•
|
our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position;
|
•
|
the impact on our liquidity by payments required to appeal tax assessments with certain tax jurisdictions;
|
•
|
due to our reliance on technology, any technology disruption or delay in implementing new technology could have a material negative impact on our business;
|
•
|
the risk that a cybersecurity incident and other technology disruptions could negatively impact our business and our relationships with customers;
|
•
|
the potential requirement to pay material amounts under our multiemployer defined benefit pension plans;
|
•
|
our funding requirements for our company-sponsored qualified pension plan may increase should financial markets experience future declines;
|
•
|
labor issues, including the renegotiation of union contracts and shortage of qualified labor; and
|
•
|
the risk that the anti-takeover benefits provided by our preferred stock may not be viewed as beneficial to stockholders.
|
Maturity Date of Swap
|
|
Notional Value
(in millions)
|
|
Fixed Coupon Rate on Hedged Debt
|
|
Floating Interest Rate on Swap
|
|
Floating Rate Reset Terms
|
|
Location of Fair Value on Balance Sheet
|
|
Fair Value
of Asset (Liability)
(in thousands)
|
|||||
February 12, 2018
|
|
$
|
500
|
|
|
5.25
|
%
|
|
Six-month LIBOR
|
|
Every six months in advance
|
|
Other assets
|
|
$
|
8,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
|||||||||
Period
|
(a) Total Number of Shares Purchased
(1)
|
(b) Average Price Paid per Share
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
Month #1
|
|
|
|
|
|||||
June 28 – July 25
|
11,242
|
|
$
|
38.23
|
|
—
|
|
11,655,197
|
|
Month #2
|
|
|
|
|
|
||||
July 26 – August 22
|
7,394
|
|
40.03
|
|
—
|
|
11,655,197
|
|
|
Month #3
|
|
|
|
|
|
||||
August 23 – September 26
|
—
|
|
—
|
|
—
|
|
11,655,197
|
|
|
|
|
|
|
|
|||||
Total
|
18,636
|
|
$
|
38.94
|
|
—
|
|
11,655,197
|
|
|
Sysco Corporation
|
|
(Registrant)
|
|
By
|
/s/ WILLIAM J. DELANEY
|
|
|
William J. DeLaney
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: November 2, 2015
|
|
|
|
By
|
/s/ JOEL T. GRADE
|
|
|
Joel T. Grade
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
|
Date: November 2, 2015
|
|
|
3.1
|
|
—
|
Restated Certificate of Incorporation, incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544).
|
|
|
|
|
3.2
|
|
—
|
Certificate of Amendment to Restated Certificate of Incorporation increasing authorized shares, incorporated by reference to Exhibit 3(e) to Form 10-Q for the quarter ended December 27, 2003 (File No. 1-6544).
|
|
|
|
|
3.3
|
|
—
|
Form of Amended Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544).
|
|
|
|
|
3.4
|
|
—
|
Amended and Restated Bylaws of Sysco Corporation dated November 14, 2013, incorporated by reference to Exhibit 3.01 to Form 8-K filed on November 20, 2013 (File No. 1-6544).
|
|
|
|
|
4.1
|
|
—
|
Twenty-Second Supplemental Indenture dated as of September 28, 2015 among Sysco, the Guarantors and the Trustee relating to the addition of new guarantors under the Indenture, incorporated by reference to Exhibit 4.1 to Form 8-K filed on September 28, 2015 (File No. 1-6544).
|
|
|
|
|
4.2
|
|
—
|
Twenty-Third Supplemental Indenture, including form of Note, dated as of September 28, 2015 among Sysco, the Guarantors and the Trustee relating to the 2020 Notes, incorporated by reference to Exhibit 4.2 to Form 8-K filed on September 28, 2015 (File No. 1-6544).
|
|
|
|
|
4.3
|
|
—
|
Twenty-Fourth Supplemental Indenture, including form of Note, dated as of September 28, 2015 among Sysco, the Guarantors and the Trustee relating to the 2025 Notes, incorporated by reference to Exhibit 4.4 to Form 8-K filed on September 28, 2015 (File No. 1-6544).
|
|
|
|
|
4.4
|
|
—
|
Twenty-Fifth Supplemental Indenture, including form of Note, dated as of September 28, 2015 among Sysco, the Guarantors and the Trustee relating to the 2045 Notes, incorporated by reference to Exhibit 4.6 to Form 8-K filed on September 28, 2015 (File No. 1-6544).
|
|
|
|
|
10.1#†
|
|
Sysco Corporation Fiscal 2016 Management Incentive Program (MIP) For Corporate MIP Bonus-eligible Positions adopted effective August 20, 2015.
|
|
|
|
|
|
10.2#†
|
|
Sysco Corporation Fiscal Year 2016 Cash Performance Unit Program (Performance Period Fiscal 2016-2018) adopted effective August 20, 2015.
|
|
|
|
|
|
10.3#
|
|
Master Confirmation dated September 23, 2015, between Sysco Corporation and Goldman, Sachs & Co.
|
|
|
|
|
|
10.4#+
|
|
Supplemental Confirmation dated September 23, 2015, between Sysco Corporation and Goldman, Sachs & Co.
|
|
|
|
|
|
12.1#
|
—
|
Statement regarding Computation of Ratio of Earnings to Fixed Charges.
|
|
|
|
|
|
15.1#
|
—
|
Review Report from Ernst & Young LLP dated November 2, 2015, re: unaudited financial statements.
|
|
|
|
|
|
15.2#
|
—
|
Acknowledgement letter from Ernst & Young LLP.
|
|
|
|
|
|
31.1#
|
—
|
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
31.2#
|
—
|
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.1*
|
—
|
CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32.2*
|
—
|
CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
101.1#
|
—
|
The following financial information from Sysco Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2015 filed with the SEC on November 2, 2015, formatted in XBRL includes: (i) Consolidated Balance Sheets as of September 26, 2015, June 27, 2015 and September 27, 2014, (ii) Consolidated Results of Operations for the thirteen week period ended September 26, 2015 and September 27, 2014, (iii) Consolidated Statements of Comprehensive Income for the thirteen period ended September 26, 2015 and September 27, 2014, (iv) Consolidated Cash Flows for the thirteen week period ended September 26, 2015 and September 27, 2014, and (v) the Notes to Consolidated Financial Statements.
|
Participant’s Bonus Target Amount
|
X
|
Operating Income Bonus Percentage
|
X
|
50%
|
=
|
Operating Income Growth Bonus
|
(BB)
|
Sales Growth and Gross Profit Dollars Growth Bonus
–
|
Participant’s Bonus Target Amount
|
X
|
Sales Growth and Gross Profit Dollars Bonus Percentage
|
X
|
25%
|
=
|
Sales Growth and Gross Profit Dollars Bonus
|
Participant’s Bonus Target Amount
|
X
|
SBO Bonus Percentage
|
X
|
25%
|
=
|
SBO Bonus
|
Number of Performance Units Granted to Participant
|
X
|
Unit Value
|
X
|
Average Capital Efficiency Performance Factor
|
X
|
Relative TSR Performance Factor
|
=
|
Payment Amount
|
(i)
|
“Unit Value” is $1.00 per unit;
|
(ii)
|
“Average Capital Efficiency Performance Factor” is the quotient of the following calculation:
|
Sum of Annual ROIC Performance Factor for each fiscal year in the Performance Period
|
Divided by
|
Number of fiscal years in the Performance Period
|
(iii)
|
“Relative TSR Performance Factor” is the percentage corresponding to the Company’s TSR Percentile Rank for the Performance Period as set forth on the following table, with straight-line interpolation applied to determine the value of the Relative TSR Performance Multiplier for results that falls between the minimum and maximum performance thresholds specified in the table below:
|
Maximum, Target, Minimum Range
|
ROIC for fiscal year
|
Annual Capital Efficiency Performance Factor
|
Maximum
|
≥ 110% of Target ROIC
|
150%
|
Target
|
100% of Target ROIC
|
100%
|
Minimum
|
90% of Target ROIC
|
50%
|
Below Minimum
|
Less than 90% of Target ROIC
|
0%
|
To:
|
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
|
A/C:
|
51139897
|
From:
|
Goldman, Sachs & Co.
|
Re:
|
Accelerated Stock Buyback
|
Ref. No:
|
As provided in the Supplemental Confirmation
|
Date:
|
September 23, 2015
|
|
|
Trade Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
Buyer:
|
Counterparty
|
Seller:
|
GS&Co.
|
Shares:
|
Common stock, par value $1.00 per share, of Counterparty (Ticker: SYY)
|
Exchange:
|
New York Stock Exchange
|
Related Exchange(s):
|
All Exchanges.
|
Obligation:
|
Applicable
|
Prepayment Amount:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
Prepayment Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
VWAP Price:
|
For any Exchange Business Day, as determined by the Calculation Agent based on the New York 10b-18 Volume Weighted Average Price per Share for the regular trading session (including any extensions thereof) of the Exchange on such Exchange Business Day (without regard to pre-open or after hours trading outside of such regular trading session for such Exchange Business Day), as published by Bloomberg at 4:15 p.m. New York time (or 15 minutes following the end of any extension of the regular trading session) on such Exchange Business Day, on Bloomberg page “SYY.N <Equity> AQR_SEC” (or any successor thereto), or if such price is not so reported on such Exchange Business Day for any reason or is, in the Calculation Agent’s commercially reasonable discretion, erroneous, such VWAP Price shall be as commercially reasonably determined by the Calculation Agent.
For purposes of calculating the VWAP Price, the Calculation Agent will include only those trades that are reported during the period of time during which
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Forward Price:
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The average of the VWAP Prices for the Exchange Business Days in the Calculation Period, subject to “Valuation Disruption” below
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Adjustment Amount:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
Calculation Period:
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The period from and including the Calculation Period Start Date to and including the Termination Date.
|
Calculation Period Start Date:
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For each Transaction, as set forth in the related Supplemental Confirmation.
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Termination Date:
|
The Scheduled Termination Date;
provided
that GS&Co. shall have the right to designate any Exchange Business Day on or after the First Acceleration Date to be the Termination Date (the “
Accelerated Termination Date
”) by delivering notice to Counterparty of any such designation prior to 11:59 p.m. New York City time on the Exchange Business Day immediately following the designated Accelerated Termination Date.
|
Scheduled Termination Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation, subject to postponement as provided in “Valuation Disruption” below
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First Acceleration Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation
|
Valuation Disruption:
|
The definition of “Market Disruption Event” in Section 6.3(a) of the Equity Definitions is hereby amended by deleting the words “at any time during the one-hour period that ends at the relevant Valuation Time, Latest Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” and inserting the words “at any time on any Scheduled Trading Day during the Calculation Period or Settlement Valuation Period” after the word “material,” in the third line thereof.
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Settlement Procedures:
|
If the Number of Shares to be Delivered is positive, Physical Settlement shall be applicable;
provided
that GS&Co. does not, and shall not, make the agreement or the representations set forth in Section 9.11 of the Equity Definitions related to the restrictions imposed by applicable securities laws, to the extent arising as a result of the fact that Counterparty is the issuer of the Shares, with respect to any Shares delivered by GS&Co. to Counterparty under any Transaction. If the Number of Shares to be Delivered is negative, then the Counterparty Settlement Provisions in Annex A shall apply.
|
to be Delivered:
|
A number of Shares equal to (x)(a) the Prepayment Amount
divided by
(b) the Divisor Amount
minus
(y) the number of Initial Shares.
|
Divisor Amount:
|
The greater of (i) the Forward Price
minus
the Forward Price Adjustment Amount and (ii) $1.00.
|
Excess Dividend Amount:
|
For the avoidance of doubt, all references to the Excess Dividend Amount shall be deleted from Section 9.2(a)(iii) of the Equity Definitions.
|
Settlement Date:
|
If the Number of Shares to be Delivered is positive, the date that is one Settlement Cycle immediately following the Termination Date.
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Settlement Currency:
|
USD
|
Initial Share Delivery:
|
GS&Co. shall deliver a number of Shares equal to the Initial Shares to Counterparty on the Initial Share Delivery Date in accordance with Section 9.4 of the Equity Definitions, with the Initial Share Delivery Date deemed to be a “Settlement Date” for purposes of such Section 9.4.
|
Initial Share Delivery Date:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
Initial Shares:
|
For each Transaction, as set forth in the related Supplemental Confirmation.
|
Potential Adjustment Event:
|
Notwithstanding anything to the contrary in Section 11.2(e) of the Equity Definitions, an Extraordinary Dividend shall not constitute a Potential Adjustment Event.
|
Extraordinary Dividend:
|
For any calendar quarter, any dividend or distribution on the Shares with an ex-dividend date occurring during such calendar quarter (other than any dividend or distribution of the type described in Section 11.2(e)(i) or Section 11.2(e)(ii)(A) of the Equity Definitions) (a “
Dividend
”) the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, exceeds the Ordinary Dividend Amount for the Scheduled Ex-Dividend Date occurring in such calendar quarter. For the avoidance of doubt, except as provided under “Early Ordinary Dividend Payment” below, any Dividend the amount or value of which (as determined by the Calculation Agent), when aggregated with the amount or value (as determined by the Calculation Agent) of any and all previous Dividends with ex-dividend dates occurring in the same calendar quarter, is less than or equal to the Ordinary Dividend Amount, shall not constitute a Potential Adjustment Event.
|
Ordinary Dividend Amount:
|
For each Scheduled Ex-Dividend Date for each Transaction, as set forth in the related Supplemental Confirmation.
|
Method of Adjustment:
|
Calculation Agent Adjustment
|
Payment:
|
If an ex-dividend date for any Dividend that is not an Extraordinary Dividend occurs during any calendar quarter occurring (in whole or in part) during the Relevant Dividend Period (as defined below) and is prior to the Scheduled Ex-Dividend Date for such calendar quarter, the Calculation Agent shall make such adjustment to the exercise, settlement, payment or any other terms of the relevant Transaction as the Calculation Agent determines appropriate to preserve the fair value of such Transaction after taking into account the timing of such Dividend.
|
Dates:
|
For each Transaction for each calendar quarter, as set forth in the related Supplemental Confirmation.
|
(a)
|
Share-for-Share: Modified Calculation Agent Adjustment
|
(b)
|
Share-for-Other: Cancellation and Payment
|
(c)
|
Share-for-Combined: Component Adjustment
|
Tender Offer:
|
Applicable;
provided
that (i) Section 12.1(d) of the Equity Definitions shall be amended by replacing “10%” in the third line thereof with “20%,” (ii) Section 12.1(l) of the Equity Definitions shall be amended (x) by deleting the parenthetical in the fifth line thereof, (y) by replacing “that” in the fifth line thereof with “whether or not such announcement” and (z) by adding immediately after the words “Tender Offer” in the fifth line thereof “, and any publicly announced change or amendment to such an announcement (including the announcement of an abandonment of such intention)” and (iii) Sections 12.3(a) and 12.3(d) of the Equity Definitions shall each be amended by replacing each occurrence of the words “Tender Offer Date” by “Announcement Date.”
|
(a)
|
Share-for-Share: Modified Calculation Agent Adjustment
|
(b)
|
Share-for-Other: Modified Calculation Agent Adjustment
|
(c)
|
Share-for-Combined: Modified Calculation Agent Adjustment
|
Insolvency or Delisting:
|
Cancellation and Payment;
provided
that in addition to the provisions of Section 12.6(a)(iii) of the Equity Definitions, it shall also constitute a Delisting if the Exchange is located in the United States and the Shares are not immediately re-listed, re-traded or re-quoted on any of the New York Stock Exchange, NYSE MKT, The NASDAQ Global Select Market or The NASDAQ Global Market (or their respective successors); if the Shares are immediately re-listed, re-traded or re-quoted on any such exchange or quotation system, such exchange or quotation system shall be deemed to be the Exchange.
|
(a)
|
Change in Law: Applicable;
provided
that Section 12.9(a)(ii) of the Equity Definitions is hereby amended by (i) replacing the phrase “the interpretation” in the third line thereof with the phrase “, or public announcement of, the formal or informal interpretation”, (ii) replacing the word “Shares” where it appears in clause (X) thereof with the words “Hedge Position” and (iii) immediately following the word “Transaction” in clause (X) thereof, adding the phrase “in the manner contemplated by the Hedging Party on the Trade Date”; provided further that (i) any determination as to whether (A) the adoption of or any change in any applicable law or regulation (including, for the avoidance of doubt and without limitation, (x) any tax law or (y) adoption or promulgation of new regulations authorized or mandated by existing statute) or (B) the promulgation of or any change in the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law or regulation (including any action taken by a taxing authority), in each case,
|
(b)
|
Failure to Deliver: Applicable
|
(c)
|
Insolvency Filing: Applicable
|
(d)
|
Hedging Disruption: Applicable
|
(e)
|
Increased Cost of Hedging: Applicable
|
(f)
|
Loss of Stock Borrow: Applicable
|
(g)
|
Increased Cost of Stock Borrow: Applicable
|
Hedging Party:
|
For all applicable events, GS&Co.
|
Determining Party:
|
For all applicable events, GS&Co.;
provided
that all calculations, adjustments, specifications and determinations by GS&Co acting in its capacity as the Determining Party shall be made in good faith and in a commercially reasonable manner. Following any determination or calculation by the Determining Party hereunder, upon a written request by the Counterparty, the Determining Party will promptly (but in any event within five Scheduled Trading Days) provide to Counterparty by e-mail to the e-mail address provided by Counterparty in such written request a report (in a commonly used filed format for the storage and manipulations of financial data without disclosing GS&Co.’s proprietary or confidential models or any other confidential or proprietary information, in each case, used by it for such determination or calculation) displaying in reasonable detail the basis for such determination or calculation, as the case may be.
|
Additional Termination Event(s):
|
Notwithstanding anything to the contrary in the Equity Definitions, if, as a result of an Extraordinary Event, any Transaction would be cancelled or terminated (whether in whole or in part) pursuant to Article 12 of the Equity Definitions, an Additional Termination Event (with such terminated Transaction(s) (or portions thereof) being the Affected Transaction(s) and Counterparty being the sole Affected Party) shall be deemed to occur, and, in lieu of Sections 12.7, 12.8 and 12.9 of the Equity Definitions, Section 6 of the Agreement shall apply to such Affected Transaction(s).
|
Relevant Dividend Period:
|
The period from and including the Calculation Period Start Date to and including the Relevant Dividend Period End Date.
|
End Date:
|
If the Number of Shares to be Delivered is negative, the last day of the Settlement Valuation Period; otherwise, the Termination Date.
|
Acknowledgements:
|
Applicable
|
Hedging Adjustments:
|
For the avoidance of doubt, whenever the Calculation Agent or the Determining Party is called upon to make an adjustment pursuant to the terms of this Confirmation or the Equity Definitions or to take into account the effect of an event, the Calculation Agent or Determining Party, as the case may be, shall make such adjustment by reference to the effect of such event on GS&Co., assuming that GS&Co. maintains a commercially reasonable Hedge Position.
|
Transfer:
|
Notwithstanding anything to the contrary in the Agreement, GS&Co. may assign, transfer and set over all rights, title and interest, powers, privileges and remedies of GS&Co. under any Transaction, in whole or in part, to an affiliate of GS&Co. whose obligations are guaranteed by The Goldman Sachs Group, Inc. without the consent of Counterparty but only if (i) Counterparty would not, at the time and as a result of such transfer or assignment, reasonably be expected to be required to pay (including a payment in kind) to the transferee at such time or on any later date an amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) of the Agreement (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e) of the Agreement) greater than the amount in respect of which Counterparty would have been required to pay to GS&Co. in the absence of such transfer; (ii) Counterparty would not, at the time and as a result of such transfer or assignment, reasonably be expected to receive a payment (including a payment in kind) from which at such time or on any later date an amount had been withheld or deducted, on account of
|
GS&Co. Payment Instructions:
|
Chase Manhattan Bank New York
|
for Purpose of Giving Notice:
|
To be provided by Counterparty
|
Purpose of Giving Notice:
|
Goldman, Sachs & Co.
|
21.
|
Offices
.
|
By:
|
/s/ Gregory S. Keyes
|
To:
|
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
|
From:
|
Goldman, Sachs & Co.
|
Subject:
|
Accelerated Stock Buyback
|
Ref. No:
|
[Insert Reference No.]
|
Date:
|
[Insert Date]
|
Trade Date:
|
[ ]
|
Forward Price Adjustment Amount:
|
USD [ ]
|
Calculation Period Start Date:
|
[ ]
|
Scheduled Termination Date:
|
[ ]
|
First Acceleration Date:
|
[ ]
|
Prepayment Amount:
|
USD [ ]
|
Prepayment Date:
|
[ ]
|
Initial Shares:
|
[ ] Shares;
provided
that if, in connection with the Transaction, GS&Co. is unable after using good faith and commercially reasonable efforts to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire in order to establish a commercially reasonable hedge position.
For the avoidance of doubt, in using such commercially reasonable efforts, GS&Co. shall act in good faith and in accordance with its then current policies, practices and procedures (including without limitation any policies, practices or procedures relating to counterparty risk, market risk, reputational risk, credit, documentation, legal, regulatory capital, compliance and collateral), and shall not be required to enter into any securities lending transaction or transact with any potential securities lender if such transaction would not be in accordance with such policies, practices and procedures.
|
Initial Share Delivery Date:
|
[ ]
|
Ordinary Dividend Amount:
|
For any calendar quarter, USD [ ]
|
Scheduled Ex-Dividend Dates:
|
[ ]
|
Termination Price:
|
USD [ ] per Share
|
Additional Relevant Days
|
The [______] Exchange Business Days immediately following the Calculation Period
|
[Concurrent OMR Parameters:
|
Up to [__]% of ADTV (as defined in Rule 10b-18) daily repurchase amount.]
|
Settlement Currency:
|
USD
|
Settlement Method Election:
|
Applicable;
provided
that (i) Section 7.1 of the Equity Definitions is hereby amended by deleting the word “Physical” in the sixth line thereof and replacing it with the words “Net Share” and (ii) the Electing Party may make a settlement method election only if the Electing Party represents and warrants to GS&Co. in writing on the date it notifies GS&Co. of its election that, as of such date, the Electing Party is not aware of any material non-public information concerning Counterparty or the Shares and is electing the settlement method in good faith and not as part of a plan or scheme to evade compliance with the federal securities laws.
|
Electing Party:
|
Counterparty
|
Election Date:
|
The earlier of (i) the Scheduled Termination Date and (ii) the second Exchange Business Day immediately following the Accelerated Termination Date (in which case the election under Section 7.1 of the Equity Definitions shall be made no later than 10 minutes prior to the open of trading on the Exchange on such second Exchange Business Day), as the case may be
|
Default Settlement Method:
|
Cash Settlement
|
Amount:
|
The Number of Shares to be Delivered
multiplied by
the Settlement Price
|
Settlement Price:
|
The average of the VWAP Prices for the Exchange Business Days in the Settlement Valuation Period, subject to Valuation Disruption as specified in the Master Confirmation
|
Settlement Valuation Period:
|
A number of Scheduled Trading Days selected by GS&Co. in good faith and in a commercially reasonable manner, taking into consideration the length of time required to unwind a commercially reasonable Hedge Position, beginning on the Scheduled Trading Day immediately following the earlier of (i) the Scheduled Termination Date or (ii) the Exchange Business Day immediately following the Termination Date
|
Cash Settlement:
|
If Cash Settlement is applicable, then Buyer shall pay to Seller the absolute value of the Forward Cash Settlement Amount on the Cash Settlement Payment Date.
|
Payment Date:
|
The date one Settlement Cycle following the last day of the Settlement Valuation Period.
|
Procedures:
|
If Net Share Settlement is applicable, Net Share Settlement shall be made in accordance with paragraphs 2 through 7 below.
|
Where
|
A = the number of authorized but unissued shares of the Counterparty that are not reserved for future issuance on the date of the determination of the Capped Number; and
|
To:
|
Sysco Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
|
From:
|
Goldman, Sachs & Co.
|
Subject:
|
Accelerated Stock Buyback
|
Ref. No:
|
SDB2502817763
|
Date:
|
September 23, 2015
|
Trade Date:
|
September 23, 2015
|
Forward Price Adjustment Amount:
|
USD
[***]
|
Calculation Period Start Date:
|
September 24, 2015
|
Scheduled Termination Date:
|
May 23, 2016
|
First Acceleration Date:
|
[***]
|
Prepayment Amount:
|
USD
1,500,000,000
|
Prepayment Date:
|
September 28, 2015
|
Initial Shares:
|
32,319,392 Shares;
provided
that if, in connection with the Transaction, GS&Co. is unable after using good faith and commercially reasonable efforts to borrow or otherwise acquire a number of Shares equal to the Initial Shares for delivery to Counterparty on the Initial Share Delivery Date, the Initial Shares delivered on the Initial Share Delivery Date shall be reduced to such number of Shares that GS&Co. is able to so borrow or otherwise acquire in order to establish a commercially reasonable hedge position.
For the avoidance of doubt, in using such commercially reasonable efforts, GS&Co. shall act in good faith and in accordance with its then current policies, practices and procedures (including without limitation any policies, practices or procedures relating to counterparty risk, market risk, reputational risk, credit, documentation, legal, regulatory capital, compliance and collateral), and shall not be required to enter into any securities lending transaction or transact with any potential securities lender if such transaction would not be in accordance with such policies, practices and procedures.
|
Initial Share Delivery Date:
|
September 28, 2015
|
Ordinary Dividend Amount:
|
USD 0.30 for the Scheduled Ex-Dividend Date occurring on September 30, 2015 and USD 0.31 for each Scheduled Ex-Dividend Date thereafter
|
Scheduled Ex-Dividend Dates:
|
September 30, 2015, December 30, 2015 and March 30, 2016
|
Termination Price:
|
USD 19.73 per Share
|
Additional Relevant Days
|
The three Exchange Business Days immediately following the Calculation Period
|
Concurrent OMR Parameters:
|
Up to 3% of ADTV (as defined in Rule 10b-18) daily repurchase amount.
|
By:
|
/s/ Gregory S. Keyes
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sysco Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Sysco Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
The company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 2015 (“Quarterly Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
All of the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the company.
|
1.
|
The company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 26, 2015 (“Quarterly Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934; and
|
2.
|
All of the information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the company.
|