(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
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74-1648137
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(State or other jurisdiction of incorporation or organization)
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(IRS employer identification number)
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1390 Enclave Parkway
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Houston, Texas
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77077-2099
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(Address of principal executive offices)
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(Zip Code)
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Large Accelerated Filer
þ
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Accelerated Filer
¨
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Non-accelerated Filer
¨
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Smaller Reporting Company
¨
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(Do not check if a smaller reporting company)
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Emerging growth company
¨
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PART I – FINANCIAL INFORMATION
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Page No.
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PART II – OTHER INFORMATION
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|
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Sep. 29, 2018
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Jun. 30, 2018
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Sep. 30, 2017
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||||||
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(unaudited)
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(unaudited)
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||||||
ASSETS
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|||||||||||
Current assets
|
|
|
|
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||||||
Cash and cash equivalents
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$
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790,304
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$
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552,325
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$
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909,203
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|
Accounts and notes receivable, less allowances of $26,373, $25,768 and $41,184
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4,242,419
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4,073,723
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4,333,704
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|||
Inventories, net
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3,354,458
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3,125,413
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3,180,631
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|||
Prepaid expenses and other current assets
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215,714
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187,880
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173,464
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|||
Income tax receivable
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39,361
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64,112
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|
—
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|||
Total current assets
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8,642,256
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8,003,453
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8,597,002
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|||
Plant and equipment at cost, less depreciation
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4,466,903
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4,521,660
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4,388,299
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|||
Other long-term assets
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||||||
Goodwill
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3,936,961
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3,955,485
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3,970,617
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|||
Intangibles, less amortization
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944,525
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979,812
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1,052,704
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|||
Deferred income taxes
|
59,003
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83,666
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149,932
|
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|||
Other assets
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492,434
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526,328
|
|
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260,036
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|||
Total other long-term assets
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5,432,923
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5,545,291
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5,433,289
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|||
Total assets
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$
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18,542,082
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$
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18,070,404
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$
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18,418,590
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||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
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|||||||||||
Current liabilities
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||||||
Notes payable
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$
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4,414
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$
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4,176
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$
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4,513
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Accounts payable
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4,217,833
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4,136,482
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3,951,205
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|||
Accrued expenses
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1,502,794
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1,608,966
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1,502,021
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|||
Accrued income taxes
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132,910
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|
56,793
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|
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148,902
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|||
Current maturities of long-term debt
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783,001
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782,329
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533,641
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|||
Total current liabilities
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6,640,952
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6,588,746
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6,140,282
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|||
Long-term liabilities
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||||||
Long-term debt
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7,914,344
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7,540,765
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8,426,359
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|||
Deferred income taxes
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277,036
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319,124
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165,622
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|||
Other long-term liabilities
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1,034,289
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1,077,163
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1,367,965
|
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|||
Total long-term liabilities
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9,225,669
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8,937,052
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9,959,946
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|||
Commitments and contingencies
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|||
Noncontrolling interest
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36,887
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37,649
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83,108
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|||
Shareholders’ equity
|
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||||||
Preferred stock, par value $1 per share
Authorized 1,500,000 shares, issued none |
—
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—
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—
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|||
Common stock, par value $1 per share
Authorized 2,000,000,000 shares, issued 765,174,900 shares
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765,175
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765,175
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765,175
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|||
Paid-in capital
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1,438,097
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1,383,619
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1,348,349
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|||
Retained earnings
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10,592,490
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10,348,628
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9,638,386
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|||
Accumulated other comprehensive loss
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(1,450,843
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)
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(1,409,269
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)
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(1,142,578
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)
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|||
Treasury stock at cost, 245,025,271,
244,533,248 and 243,513,095 shares |
(8,706,345
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)
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(8,581,196
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)
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(8,374,078
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)
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|||
Total shareholders’ equity
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2,638,574
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2,506,957
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2,235,254
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|||
Total liabilities and shareholders' equity
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$
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18,542,082
|
|
|
$
|
18,070,404
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$
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18,418,590
|
|
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13-Week Period Ended
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||||||
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Sep. 29, 2018
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|
Sep. 30, 2017
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||||
Sales
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$
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15,215,279
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$
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14,650,424
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Cost of sales
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12,311,494
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11,856,756
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||
Gross profit
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2,903,785
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2,793,668
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Operating expenses
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2,275,645
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2,174,303
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Operating income
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628,140
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619,365
|
|
||
Interest expense
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89,016
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80,884
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|
||
Other expense (income), net
|
1,132
|
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(7,975
|
)
|
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Earnings before income taxes
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537,992
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546,456
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||
Income taxes
|
106,950
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|
178,816
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||
Net earnings
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$
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431,042
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$
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367,640
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|
||||
Net earnings:
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||
Basic earnings per share
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$
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0.83
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$
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0.70
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|
Diluted earnings per share
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0.81
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|
0.69
|
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||
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|
||||
Average shares outstanding
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520,856,599
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527,289,675
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|
||
Diluted shares outstanding
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529,034,470
|
|
|
533,063,426
|
|
|
13-Week Period Ended
|
||||||
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Sep. 29, 2018
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|
Sep. 30, 2017
|
||||
Net earnings
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$
|
431,042
|
|
|
$
|
367,640
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustment
|
(24,927
|
)
|
|
121,329
|
|
||
Items presented net of tax:
|
|
|
|
||||
Amortization of cash flow hedges
|
2,155
|
|
|
1,770
|
|
||
Change in net investment hedges
|
8,588
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|
|
(12,024
|
)
|
||
Change in cash flow hedges
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(3,008
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)
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|
2,203
|
|
||
Amortization of prior service cost
|
1,600
|
|
|
1,484
|
|
||
Amortization of actuarial loss, net
|
6,529
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|
|
5,397
|
|
||
Actuarial loss, net
|
(32,511
|
)
|
|
—
|
|
||
Total other comprehensive (loss) income
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(41,574
|
)
|
|
120,159
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|
||
Comprehensive income
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$
|
389,468
|
|
|
$
|
487,799
|
|
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13-Week Period Ended
|
||||||
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Sep. 29, 2018
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|
Sep. 30, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
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431,042
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|
|
$
|
367,640
|
|
Adjustments to reconcile net earnings to cash provided by operating activities:
|
|
|
|
||||
Share-based compensation expense
|
29,193
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|
|
27,955
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|
||
Depreciation and amortization
|
187,627
|
|
|
179,662
|
|
||
Amortization of debt issuance and other debt-related costs
|
6,170
|
|
|
7,192
|
|
||
Deferred income taxes
|
(20,249
|
)
|
|
(3,706
|
)
|
||
Provision for losses on receivables
|
10,464
|
|
|
8,999
|
|
||
Other non-cash items
|
(3,695
|
)
|
|
6,849
|
|
||
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
|
|
|
|
||||
(Increase) in receivables
|
(182,233
|
)
|
|
(294,989
|
)
|
||
(Increase) in inventories
|
(229,100
|
)
|
|
(166,992
|
)
|
||
(Increase) in prepaid expenses and other current assets
|
(23,540
|
)
|
|
(28,312
|
)
|
||
Increase (decrease) in accou
nts payable
|
78,112
|
|
|
(57,368
|
)
|
||
(Decrease) in accrued expenses
|
(111,309
|
)
|
|
(83,883
|
)
|
||
Increase in accrued income taxes
|
100,868
|
|
|
165,944
|
|
||
(Increase) in other assets
|
(4,261
|
)
|
|
(13,616
|
)
|
||
Increase (decrease) in other long-term li
abilities
|
2,056
|
|
|
(32,600
|
)
|
||
Net cash provided by operating activities
|
271,145
|
|
|
82,775
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to plant and equipment
|
(104,322
|
)
|
|
(136,261
|
)
|
||
Proceeds from sales of plant and equipment
|
3,839
|
|
|
1,722
|
|
||
Other investing activities
|
912
|
|
|
—
|
|
||
Net cash (used for) investing activities
|
(99,571
|
)
|
|
(134,539
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Bank and commercial paper borrowings, net
|
—
|
|
|
745,100
|
|
||
Other debt borrowings
|
386,142
|
|
|
1,512
|
|
||
Other debt repayments
|
(8,078
|
)
|
|
(5,186
|
)
|
||
Proceeds from stock option exercises
|
84,393
|
|
|
57,075
|
|
||
Treasury stock purchases
|
(204,640
|
)
|
|
(550,098
|
)
|
||
Dividends paid
|
(187,229
|
)
|
|
(174,864
|
)
|
||
Other financing activities
|
(2,200
|
)
|
|
(644
|
)
|
||
Net cash provided by financing activities
|
68,388
|
|
|
72,895
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(2,435
|
)
|
|
18,570
|
|
||
Net increase in cash, cash equivalents and restricte
d cash
|
237,527
|
|
|
39,701
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
715,844
|
|
|
869,502
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
953,371
|
|
|
$
|
909,203
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
81,392
|
|
|
$
|
72,057
|
|
Income taxes
|
70,675
|
|
|
28,714
|
|
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
790,304
|
|
|
$
|
909,203
|
|
Restricted cash
(1)
|
163,067
|
|
|
—
|
|
||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows
|
$
|
953,371
|
|
|
$
|
909,203
|
|
(1)
|
Restricted cash as of
September 29, 2018
primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in the consolidated balance sheet as of
September 29, 2018
.
|
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
|
US Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Principal Product Categories
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fresh and frozen meats
|
|
$
|
2,121,517
|
|
|
$
|
420,456
|
|
|
$
|
372,334
|
|
|
$
|
—
|
|
|
$
|
2,914,307
|
|
Canned and dry products
|
|
1,852,168
|
|
|
611,470
|
|
|
77,621
|
|
|
—
|
|
|
2,541,259
|
|
|||||
Frozen fruits, vegetables, bakery and other
|
|
1,423,386
|
|
|
628,559
|
|
|
291,864
|
|
|
—
|
|
|
2,343,809
|
|
|||||
Dairy products
|
|
1,086,404
|
|
|
318,347
|
|
|
154,806
|
|
|
—
|
|
|
1,559,557
|
|
|||||
Poultry
|
|
1,026,936
|
|
|
215,582
|
|
|
272,061
|
|
|
—
|
|
|
1,514,579
|
|
|||||
Fresh produce
|
|
937,580
|
|
|
257,544
|
|
|
64,849
|
|
|
—
|
|
|
1,259,973
|
|
|||||
Paper and disposables
|
|
710,759
|
|
|
104,539
|
|
|
188,616
|
|
|
16,409
|
|
|
1,020,323
|
|
|||||
Seafood
|
|
661,687
|
|
|
188,436
|
|
|
25,385
|
|
|
—
|
|
|
875,508
|
|
|||||
Beverage products
|
|
290,571
|
|
|
52,069
|
|
|
147,294
|
|
|
23,180
|
|
|
513,114
|
|
|||||
Other
(1)
|
|
288,403
|
|
|
123,948
|
|
|
26,627
|
|
|
233,872
|
|
|
672,850
|
|
|||||
Total Revenue
|
|
$
|
10,399,411
|
|
|
$
|
2,920,950
|
|
|
$
|
1,621,457
|
|
|
$
|
273,461
|
|
|
$
|
15,215,279
|
|
(1)
|
Other revenue relates to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription revenues for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.
|
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||
|
|
US Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Principal Product Categories
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fresh and frozen meats
|
|
$
|
2,031,141
|
|
|
$
|
434,639
|
|
|
$
|
386,248
|
|
|
$
|
—
|
|
|
$
|
2,852,028
|
|
Canned and dry products
|
|
1,738,677
|
|
|
593,354
|
|
|
77,485
|
|
|
—
|
|
|
2,409,516
|
|
|||||
Frozen fruits, vegetables, bakery and other
|
|
1,266,732
|
|
|
626,065
|
|
|
272,592
|
|
|
—
|
|
|
2,165,389
|
|
|||||
Poultry
|
|
1,046,686
|
|
|
207,465
|
|
|
296,899
|
|
|
—
|
|
|
1,551,050
|
|
|||||
Dairy products
|
|
1,017,661
|
|
|
315,654
|
|
|
166,688
|
|
|
—
|
|
|
1,500,003
|
|
|||||
Fresh produce
|
|
923,792
|
|
|
265,583
|
|
|
65,546
|
|
|
—
|
|
|
1,254,921
|
|
|||||
Paper and disposables
|
|
656,309
|
|
|
104,110
|
|
|
181,829
|
|
|
15,390
|
|
|
957,638
|
|
|||||
Seafood
|
|
620,321
|
|
|
183,272
|
|
|
23,774
|
|
|
—
|
|
|
827,367
|
|
|||||
Beverage products
|
|
275,130
|
|
|
51,059
|
|
|
145,074
|
|
|
23,011
|
|
|
494,274
|
|
|||||
Other
(1)
|
|
272,493
|
|
|
122,054
|
|
|
24,536
|
|
|
219,155
|
|
|
638,238
|
|
|||||
Total Revenue
|
|
$
|
9,848,942
|
|
|
$
|
2,903,255
|
|
|
$
|
1,640,671
|
|
|
$
|
257,556
|
|
|
$
|
14,650,424
|
|
(1)
|
Other revenue relates to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription revenues for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.
|
•
|
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.
|
•
|
Cash deposits included in cash equivalents are valued at amortized cost, which approximates fair value. These are included within cash equivalents as a Level 1 measurement in the tables below.
|
•
|
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 as Level 1 measurements in the tables below.
|
•
|
The interest rate swap agreements 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.
|
•
|
The foreign currency swap agreements, including cross-currency swaps, are valued using a swap valuation model that utilizes an income approach applying observable market inputs including interest rates, LIBOR swap rates for U.S. dollars, Canadian dollars, pound sterling and euro currencies, and credit default swap rates.
|
•
|
Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments.
|
•
|
Fuel swap contracts are valued based on observable market transactions of forward commodity prices.
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 29, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
366,173
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
366,373
|
|
Other assets
(1)
|
163,067
|
|
|
—
|
|
|
—
|
|
|
163,067
|
|
||||
Total assets at fair value
|
$
|
529,240
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
529,440
|
|
(1)
|
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.
|
|
Assets and Liabilities Measured at Fair Value as of Jun. 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
169,214
|
|
|
$
|
30,190
|
|
|
$
|
—
|
|
|
$
|
199,404
|
|
Other assets
(1)
|
163,519
|
|
|
—
|
|
|
—
|
|
|
163,519
|
|
||||
Total assets at fair value
|
$
|
332,733
|
|
|
$
|
30,190
|
|
|
$
|
—
|
|
|
$
|
362,923
|
|
(1)
|
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
287,203
|
|
|
$
|
43,191
|
|
|
$
|
—
|
|
|
$
|
330,394
|
|
Total assets at fair value
|
$
|
287,203
|
|
|
$
|
43,191
|
|
|
$
|
—
|
|
|
$
|
330,394
|
|
Maturity Date of the Hedging Instrument
|
|
Currency / Unit of Measure
|
|
Notional Value
|
|
|
|
|
(In millions)
|
Hedging of interest rate risk
|
|
|
|
|
April 2019
|
|
U.S. Dollar
|
|
500
|
October 2020
|
|
U.S. Dollar
|
|
750
|
July 2021
|
|
U.S. Dollar
|
|
500
|
March 2025
|
|
U.S. Dollar
|
|
500
|
|
|
|
|
|
Hedging of foreign currency risk
(1)
|
|
|
|
|
Various (November 2018 to January 2019)
|
|
Swedish Krona
|
|
203
|
Various (October 2018 to June 2019)
|
|
U.S. Dollar
|
|
2
|
Various (November 2018 to October 2019)
|
|
British Pound Sterling
|
|
24
|
June 2021
|
|
U.S. Dollar
|
|
44
|
June 2021
|
|
Canadian Dollar
|
|
330
|
July 2021
|
|
British Pound Sterling
|
|
234
|
August 2021
|
|
British Pound Sterling
|
|
466
|
June 2023
|
|
Euro
|
|
500
|
|
|
|
|
|
Hedging of fuel risk
|
|
|
|
|
Various (September 30, 2018 to August 2019)
|
|
Gallons
|
|
49
|
(1)
|
Foreign currency forward contracts used to hedge against foreign exchange exposures related to inventory purchases are not material to Sysco’s overall hedging portfolio.
|
|
|
|
Derivative Fair Value
|
||||||
|
Balance Sheet location
|
|
Sep. 29, 2018
|
|
Jun. 30, 2018
|
||||
|
|
|
(In thousands)
|
||||||
Fair Value Hedges:
|
|
|
|
|
|
||||
Interest rate swaps
|
Other current liabilities
|
|
$
|
6,797
|
|
|
$
|
6,820
|
|
Interest rate swaps
|
Other long-term liabilities
|
|
57,263
|
|
|
49,734
|
|
||
|
|
|
|
|
|
||||
Cash Flow Hedges:
|
|
|
|
|
|
||||
Fuel Swaps
|
Other current assets
|
|
$
|
16,578
|
|
|
$
|
15,316
|
|
Foreign currency forwards
|
Other current assets
|
|
198
|
|
|
693
|
|
||
Cross currency swaps
|
Other current assets
|
|
—
|
|
|
4,284
|
|
||
Cross currency swaps
|
Other assets
|
|
—
|
|
|
3,454
|
|
||
Foreign currency forwards
|
Other current liabilities
|
|
589
|
|
|
71
|
|
||
Cross currency swaps
|
Other long-term liabilities
|
|
10,658
|
|
|
14,201
|
|
||
|
|
|
|
|
|
||||
Net Investment Hedges:
|
|
|
|
|
|
||||
Foreign currency swaps
|
Other assets
|
|
$
|
13,268
|
|
|
$
|
10,709
|
|
Foreign currency swaps
|
Other long-term liabilities
|
|
36,230
|
|
|
39,690
|
|
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||
|
|
Cost of Goods Sold
|
|
Operating Expense
|
|
Interest Expense
|
||||||
|
|
(In thousands)
|
||||||||||
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded
|
|
$
|
12,311,494
|
|
|
$
|
2,275,645
|
|
|
$
|
89,016
|
|
Gain or (loss) on fair value hedging relationships:
|
|
|
|
|
|
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
||||||
Hedged items
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,588
|
)
|
Derivatives designated as hedging instruments
|
|
—
|
|
|
—
|
|
|
(10,859
|
)
|
(1)
|
The hedged total includes interest expense of
$15.1 million
and change in fair value of debt of
$6.5 million
.
|
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||
|
|
Cost of Goods Sold
|
|
Operating Expense
|
|
Interest Expense
|
||||||
|
|
(In thousands)
|
||||||||||
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded
|
|
$
|
11,856,756
|
|
|
$
|
2,174,303
|
|
|
$
|
80,884
|
|
Gain or (loss) on fair value hedging relationships:
|
|
|
|
|
|
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
||||||
Hedged items
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15,230
|
)
|
Derivatives designated as hedging instruments
|
|
—
|
|
|
—
|
|
|
(1,047
|
)
|
(1)
|
The hedged total includes interest expense of
$17.1 million
and change in fair value of debt of
$1.8 million
.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||
|
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives
|
|
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
|
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
||||
|
(In thousands)
|
|
|
|
(In thousands)
|
||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
||||
Fuel swaps
|
$
|
1,026
|
|
|
Operating expense
|
|
$
|
4,353
|
|
Foreign currency contracts
|
(4,803
|
)
|
|
Cost of goods sold
|
|
483
|
|
||
Total
|
$
|
(3,777
|
)
|
|
|
|
$
|
4,836
|
|
|
|
|
|
|
|
||||
Derivatives in net investment hedging relationships:
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
7,228
|
|
|
N/A
|
|
$
|
—
|
|
Foreign denominated debt
|
3,950
|
|
|
N/A
|
|
—
|
|
||
Total
|
$
|
11,178
|
|
|
|
|
$
|
—
|
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||
|
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives
|
|
Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
|
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
|
||||
|
(In thousands)
|
|
|
|
(In thousands)
|
||||
Derivatives in cash flow hedging relationships:
|
|
|
|
|
|
||||
Fuel swaps
|
$
|
11,201
|
|
|
Operating expense
|
|
$
|
(156
|
)
|
Foreign currency contracts
|
(21,793
|
)
|
|
Cost of goods sold
|
|
309
|
|
||
Total
|
$
|
(10,592
|
)
|
|
|
|
$
|
153
|
|
|
|
|
|
|
|
||||
Derivatives in net investment hedging relationships:
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
(15,894
|
)
|
|
N/A
|
|
$
|
—
|
|
Foreign denominated debt
|
(19,150
|
)
|
|
N/A
|
|
—
|
|
||
Total
|
$
|
(35,044
|
)
|
|
|
|
$
|
—
|
|
|
Sep. 29, 2018
|
|
Sep. 29, 2018
|
||||
|
Carrying Amount of Hedged Assets (Liabilities)
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
|
||||
|
(In thousands)
|
||||||
Balance sheet location:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
(499,739
|
)
|
|
$
|
3,609
|
|
Long-term debt
|
(1,744,043
|
)
|
|
55,569
|
|
|
Sep. 30, 2017
|
|
Sep. 30, 2017
|
||||
|
Carrying Amount of Hedged Assets (Liabilities)
|
|
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
|
||||
|
(In thousands)
|
||||||
Balance sheet location:
|
|
|
|
||||
Current maturities of long-term debt
|
$
|
(499,874
|
)
|
|
$
|
(223
|
)
|
Long-term debt
|
(1,746,904
|
)
|
|
22,259
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
|
(In thousands, except for share
and per share data) |
||||||
Numerator:
|
|
|
|
||||
Net earnings
|
$
|
431,042
|
|
|
$
|
367,640
|
|
Denominator:
|
|
|
|
||||
Weighted-average basic shares outstanding
|
520,856,599
|
|
|
527,289,675
|
|
||
Dilutive effect of share-based awards
|
8,177,871
|
|
|
5,773,751
|
|
||
Weighted-average diluted shares outstanding
|
529,034,470
|
|
|
533,063,426
|
|
||
Basic earnings per share
|
$
|
0.83
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
$
|
0.81
|
|
|
$
|
0.69
|
|
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
(1)
|
Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.
|
|
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||
|
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
|
Other expense, net
|
|
$
|
2,409
|
|
|
$
|
925
|
|
|
$
|
1,484
|
|
Amortization of actuarial loss (gain), net
|
Other expense, net
|
|
8,761
|
|
|
3,364
|
|
|
5,397
|
|
|||
Total reclassification adjustments
|
|
|
11,170
|
|
|
4,289
|
|
|
6,881
|
|
|||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
N/A
|
|
121,329
|
|
|
—
|
|
|
121,329
|
|
|||
Hedging instruments:
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Change in cash flow hedges
|
Operating expenses
(1)
|
|
3,406
|
|
|
1,203
|
|
|
2,203
|
|
|||
Change in net investment hedges
|
N/A
|
|
(23,376
|
)
|
|
(11,352
|
)
|
|
(12,024
|
)
|
|||
Total other comprehensive income (loss) before reclassification adjustments
|
|
|
(19,970
|
)
|
|
(10,149
|
)
|
|
(9,821
|
)
|
|||
Reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Amortization of cash flow hedges
|
Interest expense
|
|
2,873
|
|
|
1,103
|
|
|
1,770
|
|
|||
Total other comprehensive income (loss)
|
|
|
$
|
115,402
|
|
|
$
|
(4,757
|
)
|
|
$
|
120,159
|
|
(1)
|
Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax |
|
Foreign Currency Translation
|
|
Hedging,
net of tax |
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jun. 30, 2018
|
$
|
(1,095,059
|
)
|
|
$
|
(171,043
|
)
|
|
$
|
(143,167
|
)
|
|
$
|
(1,409,269
|
)
|
Equity adjustment from foreign currency translation
|
—
|
|
|
(24,927
|
)
|
|
—
|
|
|
(24,927
|
)
|
||||
Amortization of cash flow hedges
|
—
|
|
|
—
|
|
|
2,155
|
|
|
2,155
|
|
||||
Change in net investment hedges
|
—
|
|
|
—
|
|
|
8,588
|
|
|
8,588
|
|
||||
Change in cash flow hedge
|
—
|
|
|
—
|
|
|
(3,008
|
)
|
|
(3,008
|
)
|
||||
Net actuarial loss
|
(32,511
|
)
|
|
—
|
|
|
—
|
|
|
(32,511
|
)
|
||||
Amortization of unrecognized prior service cost
|
1,600
|
|
|
—
|
|
|
—
|
|
|
1,600
|
|
||||
Amortization of unrecognized net actuarial losses
|
6,529
|
|
|
—
|
|
|
—
|
|
|
6,529
|
|
||||
Balance as of Balance as of Sep. 29, 2018
|
$
|
(1,119,441
|
)
|
|
$
|
(195,970
|
)
|
|
$
|
(135,432
|
)
|
|
$
|
(1,450,843
|
)
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax |
|
Foreign Currency Translation
|
|
Hedging,
net of tax |
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jul. 1, 2017
|
$
|
(974,232
|
)
|
|
$
|
(148,056
|
)
|
|
$
|
(140,449
|
)
|
|
$
|
(1,262,737
|
)
|
Equity adjustment from foreign currency translation
|
—
|
|
|
121,329
|
|
|
—
|
|
|
121,329
|
|
||||
Amortization of cash flow hedges
|
—
|
|
|
—
|
|
|
1,770
|
|
|
1,770
|
|
||||
Change in cash flow hedges
|
—
|
|
|
—
|
|
|
2,203
|
|
|
2,203
|
|
||||
Change in net investment hedges
|
—
|
|
|
—
|
|
|
(12,024
|
)
|
|
(12,024
|
)
|
||||
Amortization of unrecognized prior service cost
|
1,484
|
|
|
—
|
|
|
—
|
|
|
1,484
|
|
||||
Amortization of unrecognized net actuarial losses
|
5,397
|
|
|
—
|
|
|
—
|
|
|
5,397
|
|
||||
Balance as of Balance as of Sep. 30, 2017
|
$
|
(967,351
|
)
|
|
$
|
(26,727
|
)
|
|
$
|
(148,500
|
)
|
|
$
|
(1,142,578
|
)
|
•
|
U.S. Foodservice Operations - primarily includes U.S. Broadline operations, which distribute a full line of food products including custom-cut meat, seafood, specialty produce, specialty imports and a wide variety of non-food products;
|
•
|
International Foodservice Operations - includes operations in the Americas and Europe, which distribute a full line of food products and a wide variety of non-food products. The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden;
|
•
|
SYGMA - our U.S. customized distribution subsidiary; and
|
•
|
Other - primarily our hotel supply operations and Sysco Labs, which includes our suite of technology solutions that help support the business needs of our customers and provide support for some of our business technology needs.
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Sales:
|
(In thousands)
|
||||||
U.S. Foodservice Operations
|
$
|
10,399,411
|
|
|
$
|
9,848,942
|
|
International Foodservice Operations
|
2,920,950
|
|
|
2,903,255
|
|
||
SYGMA
|
1,621,457
|
|
|
1,640,671
|
|
||
Other
|
273,461
|
|
|
257,556
|
|
||
Total
|
$
|
15,215,279
|
|
|
$
|
14,650,424
|
|
|
|
|
|
||||
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Operating income:
|
(In thousands)
|
||||||
U.S. Foodservice Operations
|
$
|
815,758
|
|
|
$
|
782,076
|
|
International Foodservice Operations
|
66,772
|
|
|
76,804
|
|
||
SYGMA
|
2,431
|
|
|
4,845
|
|
||
Other
|
10,335
|
|
|
6,932
|
|
||
Total segments
|
895,296
|
|
|
870,657
|
|
||
Corporate
|
(267,156
|
)
|
|
(251,292
|
)
|
||
Total operating income
|
628,140
|
|
|
619,365
|
|
||
Interest expense
|
89,016
|
|
|
80,884
|
|
||
Other expense (income), net
|
1,132
|
|
|
(7,975
|
)
|
||
Earnings before income taxes
|
$
|
537,992
|
|
|
$
|
546,456
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
370,826
|
|
|
$
|
4,299,713
|
|
|
$
|
3,971,717
|
|
|
$
|
—
|
|
|
$
|
8,642,256
|
|
Intercompany receivables
|
6,861,262
|
|
|
83,000
|
|
|
6,301,987
|
|
|
(13,246,249
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
5,472,246
|
|
|
—
|
|
|
1,082,550
|
|
|
(6,554,796
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
278,439
|
|
|
2,150,263
|
|
|
2,038,201
|
|
|
—
|
|
|
4,466,903
|
|
|||||
Other assets
|
747,638
|
|
|
669,256
|
|
|
4,536,366
|
|
|
(520,337
|
)
|
|
5,432,923
|
|
|||||
Total assets
|
$
|
13,730,411
|
|
|
$
|
7,202,232
|
|
|
$
|
17,930,821
|
|
|
$
|
(20,321,382
|
)
|
|
$
|
18,542,082
|
|
Current liabilities
|
$
|
1,263,290
|
|
|
$
|
904,086
|
|
|
$
|
4,473,576
|
|
|
$
|
—
|
|
|
$
|
6,640,952
|
|
Intercompany payables
|
1,757,839
|
|
|
3,264,045
|
|
|
8,224,365
|
|
|
(13,246,249
|
)
|
|
—
|
|
|||||
Long-term debt
|
7,460,238
|
|
|
10,765
|
|
|
443,341
|
|
|
—
|
|
|
7,914,344
|
|
|||||
Other liabilities
|
610,469
|
|
|
550,171
|
|
|
671,022
|
|
|
(520,337
|
)
|
|
1,311,325
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
36,887
|
|
|
—
|
|
|
36,887
|
|
|||||
Shareholders’ equity
|
2,638,575
|
|
|
2,473,165
|
|
|
4,081,630
|
|
|
(6,554,796
|
)
|
|
2,638,574
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
13,730,411
|
|
|
$
|
7,202,232
|
|
|
$
|
17,930,821
|
|
|
$
|
(20,321,382
|
)
|
|
$
|
18,542,082
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Jun. 30, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
157,994
|
|
|
$
|
4,018,444
|
|
|
$
|
3,827,015
|
|
|
$
|
—
|
|
|
$
|
8,003,453
|
|
Intercompany receivables
|
6,621,438
|
|
|
270,748
|
|
|
5,793,352
|
|
|
(12,685,538
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
4,896,004
|
|
|
—
|
|
|
983,625
|
|
|
(5,879,629
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
278,855
|
|
|
2,181,576
|
|
|
2,061,229
|
|
|
—
|
|
|
4,521,660
|
|
|||||
Other assets
|
788,473
|
|
|
611,004
|
|
|
4,593,537
|
|
|
(447,723
|
)
|
|
5,545,291
|
|
|||||
Total assets
|
$
|
12,742,764
|
|
|
$
|
7,081,772
|
|
|
$
|
17,258,758
|
|
|
$
|
(19,012,890
|
)
|
|
$
|
18,070,404
|
|
Current liabilities
|
$
|
1,233,541
|
|
|
$
|
886,305
|
|
|
$
|
4,468,900
|
|
|
$
|
—
|
|
|
$
|
6,588,746
|
|
Intercompany payables
|
882,487
|
|
|
3,798,134
|
|
|
8,004,917
|
|
|
(12,685,538
|
)
|
|
—
|
|
|||||
Long-term debt
|
7,470,334
|
|
|
8,285
|
|
|
62,146
|
|
|
—
|
|
|
7,540,765
|
|
|||||
Other liabilities
|
649,445
|
|
|
508,387
|
|
|
686,178
|
|
|
(447,723
|
)
|
|
1,396,287
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
37,649
|
|
|
—
|
|
|
37,649
|
|
|||||
Shareholders’ equity
|
2,506,957
|
|
|
1,880,661
|
|
|
3,998,968
|
|
|
(5,879,629
|
)
|
|
2,506,957
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
12,742,764
|
|
|
$
|
7,081,772
|
|
|
$
|
17,258,758
|
|
|
$
|
(19,012,890
|
)
|
|
$
|
18,070,404
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
200,583
|
|
|
$
|
4,228,854
|
|
|
$
|
4,167,565
|
|
|
$
|
—
|
|
|
$
|
8,597,002
|
|
Intercompany receivables
|
4,275,051
|
|
|
966,873
|
|
|
—
|
|
|
(5,241,924
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
7,138,247
|
|
|
—
|
|
|
—
|
|
|
(7,138,247
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
261,906
|
|
|
2,032,227
|
|
|
2,094,166
|
|
|
—
|
|
|
4,388,299
|
|
|||||
Other assets
|
151,031
|
|
|
514,392
|
|
|
4,767,866
|
|
|
—
|
|
|
5,433,289
|
|
|||||
Total assets
|
$
|
12,026,818
|
|
|
$
|
7,742,346
|
|
|
$
|
11,029,597
|
|
|
$
|
(12,380,171
|
)
|
|
$
|
18,418,590
|
|
Current liabilities
|
$
|
360,586
|
|
|
$
|
4,859,882
|
|
|
$
|
919,814
|
|
|
$
|
—
|
|
|
$
|
6,140,282
|
|
Intercompany payables
|
—
|
|
|
—
|
|
|
5,241,924
|
|
|
(5,241,924
|
)
|
|
—
|
|
|||||
Long-term debt
|
8,352,110
|
|
|
7,191
|
|
|
67,058
|
|
|
—
|
|
|
8,426,359
|
|
|||||
Other liabilities
|
1,078,868
|
|
|
20,268
|
|
|
434,451
|
|
|
—
|
|
|
1,533,587
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
83,108
|
|
|
—
|
|
|
83,108
|
|
|||||
Shareholders’ equity
|
2,235,254
|
|
|
2,855,005
|
|
|
4,283,242
|
|
|
(7,138,247
|
)
|
|
2,235,254
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
12,026,818
|
|
|
$
|
7,742,346
|
|
|
$
|
11,029,597
|
|
|
$
|
(12,380,171
|
)
|
|
$
|
18,418,590
|
|
|
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
9,479,806
|
|
|
$
|
6,234,158
|
|
|
$
|
(498,685
|
)
|
|
$
|
15,215,279
|
|
Cost of sales
|
—
|
|
|
7,660,101
|
|
|
5,150,078
|
|
|
(498,685
|
)
|
|
12,311,494
|
|
|||||
Gross profit
|
—
|
|
|
1,819,705
|
|
|
1,084,080
|
|
|
—
|
|
|
2,903,785
|
|
|||||
Operating expenses
|
220,281
|
|
|
1,052,350
|
|
|
1,003,014
|
|
|
—
|
|
|
2,275,645
|
|
|||||
Operating income (loss)
|
(220,281
|
)
|
|
767,355
|
|
|
81,066
|
|
|
—
|
|
|
628,140
|
|
|||||
Interest expense (income)
(1)
|
41,413
|
|
|
(21,538
|
)
|
|
69,141
|
|
|
—
|
|
|
89,016
|
|
|||||
Other expense (income), net
|
6,600
|
|
|
(54
|
)
|
|
(5,414
|
)
|
|
—
|
|
|
1,132
|
|
|||||
Earnings (losses) before income taxes
|
(268,294
|
)
|
|
788,947
|
|
|
17,339
|
|
|
—
|
|
|
537,992
|
|
|||||
Income tax (benefit) provision
|
(93,587
|
)
|
|
196,445
|
|
|
4,092
|
|
|
—
|
|
|
106,950
|
|
|||||
Equity in earnings of subsidiaries
|
605,750
|
|
|
—
|
|
|
94,341
|
|
|
(700,091
|
)
|
|
—
|
|
|||||
Net earnings
|
431,043
|
|
|
592,502
|
|
|
107,588
|
|
|
(700,091
|
)
|
|
431,042
|
|
|||||
Other comprehensive income (loss)
|
(41,574
|
)
|
|
—
|
|
|
(24,927
|
)
|
|
24,927
|
|
|
(41,574
|
)
|
|||||
Comprehensive income
|
$
|
389,469
|
|
|
$
|
592,502
|
|
|
$
|
82,661
|
|
|
$
|
(675,164
|
)
|
|
$
|
389,468
|
|
(1)
|
Interest expense (income) includes
$21.5 million
of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the
first
quarter ended
September 29, 2018
. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries.
|
|
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
9,021,657
|
|
|
$
|
6,120,313
|
|
|
$
|
(491,546
|
)
|
|
$
|
14,650,424
|
|
Cost of sales
|
—
|
|
|
7,275,423
|
|
|
5,072,879
|
|
|
(491,546
|
)
|
|
11,856,756
|
|
|||||
Gross profit
|
—
|
|
|
1,746,234
|
|
|
1,047,434
|
|
|
—
|
|
|
2,793,668
|
|
|||||
Operating expenses
|
202,956
|
|
|
1,006,152
|
|
|
965,195
|
|
|
—
|
|
|
2,174,303
|
|
|||||
Operating income (loss)
|
(202,956
|
)
|
|
740,082
|
|
|
82,239
|
|
|
—
|
|
|
619,365
|
|
|||||
Interest expense (income)
(1)
|
98,996
|
|
|
(23,351
|
)
|
|
5,239
|
|
|
—
|
|
|
80,884
|
|
|||||
Other expense (income), net
|
(8,707
|
)
|
|
785
|
|
|
(53
|
)
|
|
—
|
|
|
(7,975
|
)
|
|||||
Earnings (losses) before income taxes
|
(293,245
|
)
|
|
762,648
|
|
|
77,053
|
|
|
—
|
|
|
546,456
|
|
|||||
Income tax (benefit) provision
|
(95,959
|
)
|
|
249,561
|
|
|
25,214
|
|
|
—
|
|
|
178,816
|
|
|||||
Equity in earnings of subsidiaries
|
564,925
|
|
|
—
|
|
|
—
|
|
|
(564,925
|
)
|
|
—
|
|
|||||
Net earnings
|
367,639
|
|
|
513,087
|
|
|
51,839
|
|
|
(564,925
|
)
|
|
367,640
|
|
|||||
Other comprehensive income (loss)
|
120,159
|
|
|
—
|
|
|
121,329
|
|
|
(121,329
|
)
|
|
120,159
|
|
|||||
Comprehensive income
|
$
|
487,798
|
|
|
$
|
513,087
|
|
|
$
|
173,168
|
|
|
$
|
(686,254
|
)
|
|
$
|
487,799
|
|
(1)
|
Interest expense (income) includes
$23.4 million
of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the
first
quarter ended
September 30, 2017
. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries.
|
|
Condensed Consolidated Cash Flows
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Elimination
(1)
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
167,767
|
|
|
$
|
69,459
|
|
|
$
|
33,919
|
|
|
$
|
—
|
|
|
$
|
271,145
|
|
Investing activities
|
361,777
|
|
|
(42,188
|
)
|
|
(12,229
|
)
|
|
(406,931
|
)
|
|
(99,571
|
)
|
|||||
Financing activities
|
(332,988
|
)
|
|
(1,581
|
)
|
|
(3,974
|
)
|
|
406,931
|
|
|
68,388
|
|
|||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
(2,435
|
)
|
|
—
|
|
|
(2,435
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
196,556
|
|
|
25,690
|
|
|
15,281
|
|
|
—
|
|
|
237,527
|
|
|||||
Cash, cash equivalents and restricted cash at the beginning of period
|
29,144
|
|
|
111,843
|
|
|
574,857
|
|
|
—
|
|
|
715,844
|
|
|||||
Cash, cash equivalents and restricted cash at the end of period
|
$
|
225,700
|
|
|
$
|
137,533
|
|
|
$
|
590,138
|
|
|
$
|
—
|
|
|
$
|
953,371
|
|
(1)
|
Represents primarily inter-company loans between the subsidiaries and the parent, Sysco Corporation.
|
|
Condensed Consolidated Cash Flows
|
||||||||||||||||||
|
For the Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Elimination
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
(49,085
|
)
|
|
$
|
76,658
|
|
|
$
|
55,202
|
|
|
$
|
—
|
|
|
$
|
82,775
|
|
Investing activities
|
(18,365
|
)
|
|
(53,281
|
)
|
|
(62,893
|
)
|
|
—
|
|
|
(134,539
|
)
|
|||||
Financing activities
|
76,568
|
|
|
(4,872
|
)
|
|
1,199
|
|
|
—
|
|
|
72,895
|
|
|||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
18,570
|
|
|
—
|
|
|
18,570
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
9,118
|
|
|
18,505
|
|
|
12,078
|
|
|
—
|
|
|
39,701
|
|
|||||
Cash and cash equivalents at the beginning of period
|
111,576
|
|
|
18,788
|
|
|
739,138
|
|
|
—
|
|
|
869,502
|
|
|||||
Cash and cash equivalents at the end of period
|
$
|
120,694
|
|
|
$
|
37,293
|
|
|
$
|
751,216
|
|
|
$
|
—
|
|
|
$
|
909,203
|
|
•
|
Sales:
|
◦
|
increased
3.9%
, or
$564.9 million
, to
$15.2 billion
;
|
•
|
Operating income:
|
◦
|
increased
1.4%
, or
$8.8 million
, to
$628.1 million
;
|
◦
|
adjusted operating income
increased
5.1%
, or
$33.5 million
, to
$691.7 million
;
|
•
|
Net earnings:
|
◦
|
increased
17.2%
, or
$63.4 million
, to
$431.0 million
;
|
◦
|
adjusted net earnings
increased
21.5%
, or
$84.7 million
, to
$479.2 million
;
|
•
|
Basic earnings per share:
|
◦
|
increased
18.6%
, or
$0.13
, to
$0.83
per share;
|
•
|
Diluted earnings per share:
|
◦
|
increased
17.4%
, or
$0.12
, to
$0.81
per share; and
|
◦
|
adjusted diluted earnings per share
increased
22.4%
, or
$0.17
, to
$0.91
per share.
|
•
|
A Finance Transformation Roadmap that increases centralization and standardization of our end-to-end global finance processes and workflow through a digital automation on a modern finance platform. This also allows for increased globalization of certain roles helping to lower our administrative costs;
|
•
|
A Smart Spending initiative focused on reducing our overall general and administrative indirect spend in certain categories to drive productivity and savings; and
|
•
|
A Canadian Regionalization project which is focused on streamlining our administrative support for our Canadian operations, while maintaining acute focus on our customers.
|
•
|
enrich the customer experience;
|
•
|
deliver operational excellence;
|
•
|
optimize our business; and
|
•
|
activate the power of our people.
|
•
|
reaching
$650 million
to
$700 million
of adjusted operating income growth as compared to fiscal 2017;
|
•
|
growing earnings per share faster than operating income; and
|
•
|
achieving
16%
in adjusted return on invested capital for existing businesses.
|
|
13-Week Period Ended
|
||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
80.9
|
|
|
80.9
|
|
Gross profit
|
19.1
|
|
|
19.1
|
|
Operating expenses
|
15.0
|
|
|
14.9
|
|
Operating income
|
4.1
|
|
|
4.2
|
|
Interest expense
|
0.6
|
|
|
0.6
|
|
Other expense (income), net
|
—
|
|
|
(0.1
|
)
|
Earnings before income taxes
|
3.5
|
|
|
3.7
|
|
Income taxes
|
0.7
|
|
|
1.2
|
|
Net earnings
|
2.8
|
%
|
|
2.5
|
%
|
|
13-Week Period Ended
|
|
|
Sep. 29, 2018
|
|
Sales
|
3.9
|
%
|
Cost of sales
|
3.8
|
|
Gross profit
|
3.9
|
|
Operating expenses
|
4.7
|
|
Operating income
|
1.4
|
|
Interest expense
|
10.1
|
|
Other expense (income), net
(1)
|
(114.2
|
)
|
Earnings before income taxes
|
(1.5
|
)
|
Income taxes
|
(40.2
|
)
|
Net earnings
|
17.2
|
%
|
Basic earnings per share
|
18.6
|
%
|
Diluted earnings per share
|
17.4
|
|
Average shares outstanding
|
(1.2
|
)
|
Diluted shares outstanding
|
(0.8
|
)
|
(1)
|
Other expense (income), net was expense of
$1.1 million
in the
first
quarter of fiscal
2019
and income of
$8.0 million
in the
first
quarter of fiscal
2018
.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||||||
|
U.S. Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Corporate
|
|
Consolidated
Totals |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Sales
|
$
|
10,399,411
|
|
|
$
|
2,920,950
|
|
|
$
|
1,621,457
|
|
|
$
|
273,461
|
|
|
$
|
—
|
|
|
$
|
15,215,279
|
|
Sales increase (decrease)
|
5.6
|
%
|
|
0.6
|
%
|
|
(1.2
|
)%
|
|
6.2
|
%
|
|
|
|
3.9
|
%
|
|||||||
Percentage of total
|
68.3
|
%
|
|
19.2
|
%
|
|
10.7
|
%
|
|
1.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
$
|
815,758
|
|
|
$
|
66,772
|
|
|
$
|
2,431
|
|
|
$
|
10,335
|
|
|
$
|
(267,156
|
)
|
|
$
|
628,140
|
|
Operating income increase (decrease)
|
4.3
|
%
|
|
(13.1
|
)%
|
|
(49.8
|
)%
|
|
49.1
|
%
|
|
|
|
1.4
|
%
|
|||||||
Percentage of total segments
|
91.1
|
%
|
|
7.5
|
%
|
|
0.3
|
%
|
|
1.1
|
%
|
|
|
|
100.0
|
%
|
|||||||
Operating income as a percentage of sales
|
7.8
|
%
|
|
2.3
|
%
|
|
0.1
|
%
|
|
3.8
|
%
|
|
|
|
4.1
|
%
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||||||
|
U.S. Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Corporate
|
|
Consolidated
Totals |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Sales
|
$
|
9,848,942
|
|
|
$
|
2,903,255
|
|
|
$
|
1,640,671
|
|
|
$
|
257,556
|
|
|
$
|
—
|
|
|
$
|
14,650,424
|
|
Percentage of total
|
67.2
|
%
|
|
19.8
|
%
|
|
11.2
|
%
|
|
1.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
$
|
782,076
|
|
|
$
|
76,804
|
|
|
$
|
4,845
|
|
|
$
|
6,932
|
|
|
$
|
(251,292
|
)
|
|
$
|
619,365
|
|
Percentage of total segments
|
89.8
|
%
|
|
8.8
|
%
|
|
0.6
|
%
|
|
0.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
Operating income as a percentage of sales
|
7.9
|
%
|
|
2.6
|
%
|
|
0.3
|
%
|
|
2.7
|
%
|
|
|
|
4.2
|
%
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Sales
|
$
|
10,399,411
|
|
|
$
|
9,848,942
|
|
|
$
|
550,469
|
|
|
5.6
|
%
|
Gross profit
|
2,090,227
|
|
|
1,986,283
|
|
|
103,944
|
|
|
5.2
|
|
|||
Operating expenses
|
1,274,469
|
|
|
1,204,207
|
|
|
70,262
|
|
|
5.8
|
|
|||
Operating income
|
$
|
815,758
|
|
|
$
|
782,076
|
|
|
$
|
33,682
|
|
|
4.3
|
%
|
|
Increase (Decrease)
|
|||||
|
13-Week Period
|
|||||
|
(In millions)
|
|||||
Cause of change
|
Percentage
|
|
Dollars
|
|||
Case volume
|
3.9
|
%
|
|
$
|
379.4
|
|
Inflation
|
—
|
|
|
(3.4
|
)
|
|
Acquisitions
|
1.4
|
|
|
135.4
|
|
|
Other
(1)
|
0.3
|
|
|
39.0
|
|
|
Total sales increase
|
5.6
|
%
|
|
$
|
550.4
|
|
(1)
|
Case volume excludes the volume impact from our custom-cut meat companies that do not measure volume in cases. Any impact in volumes from these operations is included within “Other.”
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Sales
|
$
|
2,920,950
|
|
|
$
|
2,903,255
|
|
|
$
|
17,695
|
|
|
0.6
|
%
|
Gross profit
|
615,505
|
|
|
615,103
|
|
|
402
|
|
|
0.1
|
|
|||
Operating expenses
|
548,733
|
|
|
538,299
|
|
|
10,434
|
|
|
1.9
|
|
|||
Operating income
|
$
|
66,772
|
|
|
$
|
76,804
|
|
|
$
|
(10,032
|
)
|
|
(13.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
$
|
615,505
|
|
|
$
|
615,103
|
|
|
$
|
402
|
|
|
0.1
|
%
|
Adjusted operating expenses (Non-GAAP)
|
520,107
|
|
|
519,887
|
|
|
220
|
|
|
—
|
|
|||
Adjusted operating income (Non-GAAP)
|
$
|
95,398
|
|
|
$
|
95,216
|
|
|
$
|
182
|
|
|
0.2
|
%
|
|
Increase (Decrease)
|
|||||
|
13-Week Period
|
|||||
|
(In millions)
|
|||||
Cause of change
|
Percentage
|
|
Dollars
|
|||
Inflation
|
2.3
|
%
|
|
$
|
65.4
|
|
Acquisitions
|
1.1
|
|
|
30.4
|
|
|
Foreign currency
|
(2.1
|
)
|
|
(61.8
|
)
|
|
Other
(1)
|
(0.7
|
)
|
|
(16.3
|
)
|
|
Total sales increase
|
0.6
|
%
|
|
$
|
17.7
|
|
(1)
|
The impact of volumes as a component of sales growth from international operations are included within “Other.” Volume in our foreign operations includes volume metrics that differ from country to country and cannot be aggregated on a consistent, comparable basis.
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands, except for share and per share data)
|
|||||||||||||
Operating expenses (GAAP)
|
$
|
2,275,645
|
|
|
$
|
2,174,303
|
|
|
$
|
101,342
|
|
|
4.7
|
%
|
Impact of restructuring and transformational project costs
(1)
|
(40,903
|
)
|
|
(19,053
|
)
|
|
(21,850
|
)
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
(22,636
|
)
|
|
(19,745
|
)
|
|
(2,891
|
)
|
|
14.6
|
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
2,212,106
|
|
|
$
|
2,135,505
|
|
|
$
|
76,601
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
628,140
|
|
|
$
|
619,365
|
|
|
$
|
8,775
|
|
|
1.4
|
%
|
Impact of restructuring and transformational project costs
(1)
|
40,903
|
|
|
19,053
|
|
|
21,850
|
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
22,636
|
|
|
19,745
|
|
|
2,891
|
|
|
14.6
|
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
691,679
|
|
|
$
|
658,163
|
|
|
$
|
33,516
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Net earnings (GAAP)
|
$
|
431,042
|
|
|
$
|
367,640
|
|
|
$
|
63,402
|
|
|
17.2
|
%
|
Impact of restructuring and transformational project costs
(1)
|
40,903
|
|
|
19,053
|
|
|
21,850
|
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
22,636
|
|
|
19,745
|
|
|
2,891
|
|
|
14.6
|
|
|||
Tax impact of restructuring and transformational project costs
(3)
|
(10,674
|
)
|
|
(6,943
|
)
|
|
(3,731
|
)
|
|
53.7
|
|
|||
Tax impact of acquisition-related costs
(3)
|
(4,691
|
)
|
|
(4,998
|
)
|
|
307
|
|
|
(6.1
|
)
|
|||
Net earnings adjusted for Certain Items (Non-GAAP)
|
$
|
479,216
|
|
|
$
|
394,497
|
|
|
$
|
84,719
|
|
|
21.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share (GAAP)
|
$
|
0.81
|
|
|
$
|
0.69
|
|
|
$
|
0.12
|
|
|
17.4
|
%
|
Impact of restructuring and transformational project costs
(1)
|
0.08
|
|
|
0.04
|
|
|
0.04
|
|
|
100.0
|
|
|||
Impact of acquisition-related costs
(2)
|
0.04
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|||
Tax impact of restructuring and transformational project costs
(3)
|
(0.02
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
100.0
|
|
|||
Tax impact of acquisition-related costs
(3)
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|||
Diluted EPS adjusted for certain items (Non-GAAP)
(4)
|
$
|
0.91
|
|
|
$
|
0.74
|
|
|
$
|
0.17
|
|
|
22.4
|
%
|
(1)
|
Fiscal
2019
includes
$26 million
related to various transformation initiative costs and
$15 million
related to severance, restructuring and facility closure charges. Fiscal
2018
includes
$13 million
related to business technology costs and professional fees on three-year financial objectives and
$6 million
related to restructuring charges.
|
(2)
|
Fiscal
2019
and fiscal
2018
include
$21 million
and
$13 million
, respectively, related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, and
$1 million
and
$5 million
, respectively, in integration costs.
|
(3)
|
The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
|
(4)
|
Individual components of diluted earnings per share may not add to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP)
|
$
|
548,733
|
|
|
$
|
538,299
|
|
|
$
|
10,434
|
|
|
1.9
|
%
|
Impact of restructuring and transformational project costs
(1)
|
(6,727
|
)
|
|
(3,898
|
)
|
|
(2,829
|
)
|
|
NM
|
|
|||
Impact of acquisition-related costs
(2)
|
(21,899
|
)
|
|
(14,514
|
)
|
|
(7,385
|
)
|
|
50.9
|
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
520,107
|
|
|
$
|
519,887
|
|
|
$
|
220
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
66,772
|
|
|
$
|
76,804
|
|
|
$
|
(10,032
|
)
|
|
(13.1
|
)%
|
Impact of restructuring and transformational project costs
(1)
|
6,727
|
|
|
3,898
|
|
|
2,829
|
|
|
NM
|
|
|||
Impact of acquisition related costs
(2)
|
21,899
|
|
|
14,514
|
|
|
7,385
|
|
|
50.9
|
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
95,398
|
|
|
$
|
95,216
|
|
|
$
|
182
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
CORPORATE
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP)
|
$
|
264,348
|
|
|
$
|
250,140
|
|
|
$
|
14,208
|
|
|
5.7
|
%
|
Impact of restructuring and transformational project costs
(3)
|
(34,176
|
)
|
|
(15,154
|
)
|
|
(19,022
|
)
|
|
125.5
|
|
|||
Impact of acquisition-related costs
(4)
|
(737
|
)
|
|
(5,232
|
)
|
|
4,495
|
|
|
(85.9
|
)
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
229,435
|
|
|
$
|
229,754
|
|
|
$
|
(319
|
)
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
(267,156
|
)
|
|
$
|
(251,292
|
)
|
|
$
|
(15,864
|
)
|
|
6.3
|
%
|
Impact of restructuring and transformational project costs
(3)
|
34,176
|
|
|
15,154
|
|
|
19,022
|
|
|
125.5
|
|
|||
Impact of acquisition-related costs
(4)
|
737
|
|
|
5,232
|
|
|
(4,495
|
)
|
|
(85.9
|
)
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
(232,243
|
)
|
|
$
|
(230,906
|
)
|
|
$
|
(1,337
|
)
|
|
0.6
|
%
|
(1)
|
Includes restructuring charges and charges related to business transformation projects.
|
(2)
|
Fiscal
2019
and fiscal
2018
include
$21 million
and
$13 million
, respectively, related to intangible amortization expense from the Brakes Acquisition.
|
(3)
|
Fiscal
2019
and fiscal
2018
include various transformation initiative costs and severance charges related to restructuring.
|
(4)
|
Fiscal
2019
and fiscal
2018
include
$1 million
and
$5 million
, respectively, related to integration costs from the Brakes Acquisition.
|
Form of calculation:
|
Net earnings (GAAP)
|
Impact of Certain Items on net earnings
|
Adjusted net earnings (Non-GAAP)
|
|
Invested Capital (GAAP)
|
Adjustments to invested capital
|
Adjusted Invested capital (Non-GAAP)
|
|
Return on invested capital (GAAP)
|
Return on invested capital (Non-GAAP)
|
•
|
Cash flows from operations were
$271.1 million
in fiscal
2019
, compared to
$82.8 million
in fiscal
2018
;
|
•
|
Net capital expenditures totaled
$100.5 million
in fiscal
2019
, compared to
$134.5 million
in fiscal
2018
;
|
•
|
Free cash flow was
$170.7 million
in fiscal
2019
, compared to negative free cash flow of
$51.8 million
in fiscal
2018
(see “Non-GAAP Reconciliations” below under the heading “Free Cash Flow”);
|
•
|
There were
no
commercial paper issuances or net bank borrowings in fiscal
2019
, compared to
$745.1 million
of commercial paper issuances and net bank borrowings in fiscal
2018
;
|
•
|
Dividends paid were
$187.2 million
in fiscal
2019
, compared to
$174.9 million
in fiscal
2018
; and
|
•
|
Cash paid for treasury stock repurchases was
$204.6 million
in fiscal
2019
, compared to
$550.1 million
in fiscal
2018
.
|
•
|
We issued
$384.6 million
in new senior notes in fiscal
2019
within a Canadian subsidiary.
|
•
|
working capital requirements;
|
•
|
investments in facilities, systems, fleet, other equipment and technology;
|
•
|
cash dividends;
|
•
|
acquisitions compatible with our overall growth strategy;
|
•
|
contributions to our various retirement plans; and
|
•
|
debt repayments and share repurchases.
|
•
|
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; and
|
•
|
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).
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
||||
|
(In thousands)
|
||||||
Net cash provided by operating activities (GAAP)
|
$
|
271,145
|
|
|
$
|
82,775
|
|
Additions to plant and equipment
|
(104,322
|
)
|
|
(136,261
|
)
|
||
Proceeds from sales of plant and equipment
|
3,839
|
|
|
1,722
|
|
||
Free Cash Flow (Non-GAAP)
|
$
|
170,662
|
|
|
$
|
(51,764
|
)
|
•
|
$38.9 million
outstanding from our commercial paper program; and
|
•
|
No
amounts outstanding from the credit facility supporting the company’s U.S. commercial paper program.
|
•
|
our expectations regarding the continued growth of foodservice sales internationally and related factors, including GDP and household consumption in the United Kingdom;
|
•
|
our expectations regarding a softening in year-over-year growth numbers and the moderation of our gross profit dollar growth;
|
•
|
statements regarding the execution of our long-term plans, including investments in transformation and integration in our International business;
|
•
|
our expectations regarding initiatives that will drive cost improvement and enhance customer service over the next several quarters, including (i) the Finance Transformation Roadmap and our expectation that we will receive financial benefits from this initiative, (ii) Smart Spending and our expectation that this initiative will provide unprecedented visibility, ownership and performance management in all areas of our business, and (iii) Canadian Regionalization and our expectation that this initiative will contribute to increased cost savings;
|
•
|
our four strategic priorities, including, but not limited to, enriching the customer experience, delivering operational excellence, optimizing the business and activating the power of our people;
|
•
|
projections of future performance under our three-year strategic financial plan, including, but not limited to, our expectation that we will reach $650 to $700 million of adjusted operating income growth, our goal of growing earnings per share faster than operating income, achieving 16% in adjusted return on invested capital improvement for existing businesses, and our goals of sales growth of 4% to 4.5%, adjusted operating growth of 9% and adjusted diluted earnings per share results in the range of $3.85 to $3.95 in fiscal 2020;
|
•
|
our expectation regarding the acceleration of locally managed customer case growth and driving leverage between gross profit and adjusted expense growth;
|
•
|
our expectations regarding accelerating growth with local, emerging concepts, also known as micro-chains;
|
•
|
our expectations regarding our ability to improve our overall cost structure and customer experience in the United Kingdom;
|
•
|
the impact of seasonal trends on our free cash flow;
|
•
|
our expectations regarding continued volume growth;
|
•
|
our expectations regarding modest operating income growth during our second fiscal quarter and improved performance in the second half of fiscal 2019;
|
•
|
our expectations regarding locally managed customer case growth and customer experience;
|
•
|
our expectations regarding the use of remaining cash generated from operations;
|
•
|
our expectations regarding the impact of potential acquisitions and sales of assets on our liquidity, borrowing capacity, leverage ratios and capital availability;
|
•
|
our expectations regarding the calculation of adjusted return on invested capital, adjusted operating income, adjusted net earnings and adjusted diluted earnings per share;
|
•
|
our expectations regarding the impact of future Certain Items on our projected future non-GAAP and GAAP results;
|
•
|
our expectations regarding cash held by international subsidiaries, including our need to repatriate cash held outside of the U.S. in a tax-efficient manner;
|
•
|
the sufficiency of our mechanisms for managing working capital and competitive pressures, and our beliefs regarding the impact of these mechanisms;
|
•
|
our ability to meet future cash requirements, including the ability to access financial markets effectively, including issuances of debt securities, and maintain sufficient liquidity;
|
•
|
our ability to effectively access the commercial paper market and long-term capital markets;
|
•
|
our intention to repay our long-term debt with cash on hand, cash flow from operations, issuances of commercial paper, issuances of senior notes, or a combination thereof; and
|
•
|
our expectations regarding share repurchases.
|
•
|
periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability;
|
•
|
risks related to unfavorable conditions in North America and Europe and the impact on our results of operations and financial condition;
|
•
|
the risks related to our efforts to meet our long-term strategic objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; the risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to us if past and future undertakings and the associated changes to our business do not prove to be cost effective or do not result in the level of cost savings and other benefits that we anticipated;
|
•
|
the impact of unexpected future changes to our business initiatives based on management’s subjective evaluation of our overall business needs;
|
•
|
the risk that competition in our industry and the impact of GPOs 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 our relationships with long-term customers may be materially diminished or terminated;
|
•
|
the risk that changes in consumer eating habits could materially and adversely affect our business, financial condition, or results of operations;
|
•
|
the risk that changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results;
|
•
|
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;
|
•
|
risks related to 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 risk that the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending;
|
•
|
the risk that the U.K.’s anticipated exit from the European Union, commonly referred to as Brexit, may adversely impact our operations in the U.K., including those of the Brakes Group;
|
•
|
the risk that factors beyond management’s control, including fluctuations in the stock market, as well as management’s future subjective evaluation of the company’s needs, would impact the timing of share repurchases;
|
•
|
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;
|
•
|
capital expenditures may vary based on changes in business plans and other factors, including risks related to the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending; and
|
•
|
the risk that the anti-takeover benefits provided by our preferred stock may not be viewed as beneficial to stockholders.
|
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
|
|
|
|
|
|
|
|
|||||
July 1 – July 28
|
822,390
|
|
|
$
|
70.05
|
|
|
822,390
|
|
|
—
|
|
Month #2
|
|
|
|
|
|
|
|
|||||
July 29 – August 25
|
974,546
|
|
|
70.99
|
|
|
972,143
|
|
|
—
|
|
|
Month #3
|
|
|
|
|
|
|
|
|||||
August 26 – September 29
|
1,051,643
|
|
|
74.18
|
|
|
1,051,643
|
|
|
—
|
|
|
Totals
|
2,848,579
|
|
|
$
|
71.90
|
|
|
2,846,176
|
|
|
—
|
|
(1)
|
The total number of shares purchased includes
0
,
2,403
and
0
shares tendered by individuals in connection with stock option exercises in
Month #1
,
Month #2
and
Month #3
, respectively.
|
|
|
Sysco Corporation
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ THOMAS L. BENÉ
|
|
|
Thomas L. Bené
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ JOEL T. GRADE
|
|
|
Joel T. Grade
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ ANITA A. ZIELINSKI
|
|
|
Anita A. Zielinski
|
|
|
Senior Vice President and
|
|
|
Chief Accounting Officer
|
3.1
|
—
|
|
|
|
|
3.2
|
—
|
|
|
|
|
3.3
|
—
|
|
|
|
|
3.4
|
—
|
|
|
|
|
10.1#†
|
—
|
|
|
|
|
10.2#†
|
—
|
|
|
|
|
10.3#†
|
—
|
|
|
|
|
10.4†
|
—
|
|
|
|
|
31.1#
|
—
|
|
|
|
|
31.2#
|
—
|
|
|
|
|
32.1#
|
—
|
|
|
|
|
32.2#
|
—
|
|
|
|
|
101.1#
|
—
|
The following financial information from Sysco Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2018 filed with the SEC on November 5, 2018, formatted in XBRL includes: (i) Consolidated Balance Sheets as of September 29, 2018, June 30, 2018 and September 30, 2017, (ii) Consolidated Results of Operations for the thirteen week period ended September 29, 2018 and September 30, 2017, (iii) Consolidated Statements of Comprehensive Income for the thirteen week period ended September 29, 2018 and September 30, 2017, (iv) Consolidated Cash Flows for the thirteen week period ended September 29, 2018 and September 30, 2017, and (v) the Notes to Consolidated Financial Statements.
|
Participant’s Bonus Target Amount
|
X
|
Operating Income Bonus Percentage
|
X
|
50%
|
=
|
Operating Income Bonus
|
(BB)
|
Gross Profit Dollars Growth and US Broadline and Canadian Broadline Total Case Growth Bonus
–
|
Participant’s Bonus Target Amount
|
X
|
Gross Profit Dollars Growth and US Broadline and Canadian Broadline Cases Growth Bonus Percentage
|
X
|
25%
|
=
|
Gross Profit Dollars Growth and US Broadline and Canadian Broadline Cases Growth Bonus
|
Participant’s Bonus Target Amount
|
X
|
SBO Bonus Percentage
|
X
|
25%
|
=
|
SBO Bonus
|
(1)
|
General Conditions
. This Award is in the form of PSUs that settle in Stock on the Payment Date, except as otherwise provided in Section 3 below in the event of the Grantee’s death. If the conditions set forth in this Agreement are satisfied, the number of shares of Stock earned based on actual performance achieved will be calculated as of the Certification Date and issued to the Grantee on the Payment Date. If these conditions are not satisfied, the Award shall be forfeited. Capitalized terms in this Agreement refer to defined terms in the Plan, except as otherwise defined herein.
|
Event
|
Following commencement of Performance Period and prior to Payment Date
|
Employment with the Company or an Affiliated Company terminates because of Disability (as defined in Section 14, below).
|
•
The Grantee shall be entitled to earn a number of PSUs subject to the Award as if active employment continued for the entire Performance Period, taking into account the actual performance of the Company for the Performance Period.
•
After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date.
|
Employment with the Company or an Affiliated Company terminates as a result of a Retirement in Good Standing (as defined in Section 14, below).
|
•
If the Grantee incurs a Retirement in Good Standing before the end of the first fiscal year of the Company since the start of the Performance Period, the Award is forfeited.
•
If the Grantee incurs a Retirement in Good Standing on or after the complete fiscal year of the Company from start of the Performance Period, such recipient shall be entitled to retain a prorated number of PSUs subject to the Award if such PSUs have been earned. The PSUs will be prorated based on the number of complete calendar months of employment during the Performance Period through the date of termination of employment.
•
After the Performance Criteria are certified, shares of Stock equal to the pro-rated number of PSUs earned will be issued on the Payment Date.
|
Employment with the Company or an Affiliated Company terminates because of death.
|
•
The Grantee’s estate shall be paid a cash amount equal to the value of the Target Award. The value shall be determined based on the closing price of the Stock on the date of the Grantee’s death and shall be paid within 75 days after the Grantee’s death.
|
Employment with the Company or an Affiliated Company involuntarily terminates, for reasons other than for Cause and meets the requirements of a Change in Control Termination (as defined in Section 14, below).
|
•
Award shall be treated as described in Section 4.2(h)(ii) of the Plan, with immediate vesting and performance-criteria deemed to have been met at Target performance levels.
|
US military leave or other leave to the extent required by applicable law
|
•
For this purpose, employment is deemed to continue during the Performance Period.
•
After the Performance Criteria are certified, shares of Stock equal to the number of PSUs earned will be issued on the Payment Date.
|
(4)
|
Acceptance of Agreement
.
The Grantee shall indicate his or her acceptance of this Agreement, in the method directed by the Company.
|
(5)
|
Notices
.
Each notice relating to this Award shall be in writing. All notices to the Company shall be addressed to the Corporate Secretary, Sysco Corporation, 1390 Enclave Parkway, Houston, Texas 77077. All notices to the Grantee shall be addressed to the address of the Grantee on file with the Company or the Employer. Either the Company or the Grantee may designate a different address by written notice to the other. Written notice to said addresses shall be effective to bind the Company, the Grantee and the Grantee’s representatives and beneficiaries.
|
(1)
|
withholding from the Grantees’ wages or other cash compensation paid to the Grantee by the Company and/or the Employer, or any other payment of any kind otherwise due to the Grantee by the Company and/or the Employer; or
|
(2)
|
withholding from proceeds of the sale of shares of Stock acquired upon settlement of the Award, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization without further consent); or
|
(3)
|
retention of or withholding in shares of Stock to be issued upon settlement of the Award having a Fair Market Value that is sufficient to satisfy the Tax-Related Items.
|
(7)
|
Compensation Committee
. The Grantee hereby agrees that any change, interpretation, determination or modification of this Agreement by the Committee shall be final and conclusive for all purposes and on all persons including the Company and the Grantee; provided, however, that with respect to any amendment or modification of the Plan which affects the Award made hereby, the Committee shall have determined that such amendment or modification is in the best interests of the Grantee of such Award.
|
(8)
|
Prohibited Activities; Post-Employment Covenants; Additional Remedies of Clawback and Recoupment
.
|
(i)
|
to the extent the Grantee has received any Stock in satisfaction of this Award and the Grantee continues to hold those shares of Stock, the shares of Stock so acquired;
|
(ii)
|
to the extent the Grantee has received any Stock in satisfaction of this Award and no longer owns the shares of Stock so acquired, cash in an amount equal to the Fair Market Value of such shares of Stock on the date such payment is demanded by the Company (which, unless otherwise determined by the Committee, shall be equal to the closing sale price during regular trading hours of the shares of Stock as reported by the New York Stock Exchange on such date); and
|
(iii)
|
to the extent the Grantee has not received any Stock in satisfaction of this Award, all of the Grantee’s remaining rights, title or interest in the Award.
|
(9)
|
Modification of Agreement
.
If any of the terms of this Agreement may, in the opinion of the Company, conflict or be inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Agreement to be consistent with applicable laws or regulations. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against which enforcement is sought, except where specifically provided to the contrary herein.
|
(10)
|
Data Privacy
. To the extent that consent is required, the Grantee hereby consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in this Agreement and any other Award materials by and among, as applicable, the Employer, the Company and any Affiliated Company for the purpose of implementing, administering and managing the Grantee’s participation in the Plan.
|
(11)
|
Nature of Award
.
In accepting the Award, the Grantee acknowledges, understands and agrees that to the maximum extent permitted by law:
|
(12)
|
No Advice Regarding Grant
.
Neither the Company nor any Affiliated Company is providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, or the Grantee’s acquisition or sale of the underlying Stock. The Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
|
(13)
|
Entire Agreement; Severability
. The Plan and this Agreement set forth the entire understanding between the Grantee, the Employer, the Company, and any Affiliated Company regarding the acquisition of the Stock and supersedes all prior oral and written agreements pertaining to this Award. If all or any part or application of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between the Grantee and the Company, each and all of the other provisions of this Agreement shall remain in full force and effect.
|
(14)
|
Definitions
.
For purposes of this Agreement:
|
(i)
|
in the United States and Canada, termination of employment after the date the Grantee reaches (A) age 55 and the Grantee has 10 or more years of service with the Company and
|
(ii)
|
in all other jurisdictions, retirement, as determined by the Committee in its sole discretion.
|
(i)
|
in the United States, that the Grantee has been determined by the Social Security Administration to be totally disabled; and
|
(ii)
|
in all other jurisdictions, disability, as determined pursuant to the Employer’s long-term disability policy.
|
(15)
|
Compliance with Law
. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Stock, the Company shall not be required to deliver any Stock issuable upon settlement of the Award prior to the completion of any registration or qualification of the Stock under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Grantee understands that the Company is under no obligation to register or qualify the Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Stock. Further, the Grantee agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Grantee’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Stock.
|
(16)
|
Language
.
If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
|
(17)
|
Electronic Delivery and Acceptance
. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
|
(18)
|
Appendix A
. The Award shall be subject to any special terms and conditions for the Grantee’s country set forth in Appendix A. Moreover, if the Grantee relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to the Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A constitutes part of this Agreement.
|
(19)
|
Imposition of Other Requirements
.
The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on the Award and on any Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
(20)
|
Waiver
.
The Grantee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by the Grantee or any other Grantee.
|
(21)
|
Insider Trading Restrictions/Market Abuse Laws
.
The Grantee acknowledges that, depending on the Grantee’s country of residence, the Grantee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Grantee’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Awards) under the Plan during such times as the Grantee is considered to have “inside information” regarding the Company (as defined by the laws in the Grantee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s insider trading policy. The Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Grantee is advised to speak to his or her personal advisor on this matter.
|
(22)
|
Mobility
. If, during the course of the Grantee’s employment with the Company or any of its Subsidiaries or during the provision of services to the Company or any of its Subsidiaries, the Grantee relocates to another jurisdiction, the Company reserves the right to modify the terms of this Agreement and/or impose other requirements on the Grantee’s participation in the Plan, on the PSUs and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it is necessary or advisable to comply with local law, rules and/or regulations or to facilitate the operation and administration of the PSU and the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Grantee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Grantee’s country of residence (or employment, if different).
|
(23)
|
Governing Law and Venue
. This Award and this Agreement has been made in and shall be governed by, construed under and in accordance with the laws of the State of Texas, without regard to the conflict of law provisions, as provided in the Plan. Any and all disputes relating to, concerning or arising from this Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Award or this Agreement, shall be brought and heard exclusively in the United States District Court for the Southern District of Texas or Harris County, Texas. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; hereby irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
|
1.
|
General Conditions
. Please carefully review all of the provisions of the Plan. In addition to the conditions set forth in the Plan, the Option is contingent upon satisfying the terms and conditions set forth in this Agreement. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Plan.
|
2.
|
Vesting
. The Option will vest in three equal tranches over a period of three years (one-third on each of the first, second, and third anniversaries of the Grant Date), subject to any acceleration provisions contained in the Plan or otherwise set forth in this Agreement and the Optionee’s continuous employment or service with the Company or any of its Subsidiaries from the Grant Date through the applicable vesting date (each date on which a portion of the Option will vest pursuant to this Agreement, a “Vesting Date”).
|
3.
|
Maximum Term
. Unless terminated earlier in accordance with the terms of this Agreement, this Option will expire at the close of business on the final trading day immediately prior to the tenth anniversary of the Grant Date.
|
4.
|
Exercise Restrictions
.
Subject to any country-specific variations, the vested portion of the Option may be exercised at any time after its applicable Vesting Date and prior to the expiration of the Option, provided that at the time of the exercise all of the conditions set forth in the Plan and in this Agreement have been met. No portion of the Option may be exercised prior to the first anniversary of the Grant Date or after the expiration of the maximum term set forth in Section 3, above.
|
5.
|
Accelerated Vesting Events
. The Option awarded pursuant to this Agreement will vest according to the schedule set forth in Section 2 of this Agreement, subject to the Optionee’s continuous service with the Company or one of its Subsidiaries through each applicable Vesting Date. Notwithstanding the foregoing, provided that the Optionee has been in continuous service with the Company or one of its Subsidiaries since the Grant Date through the date of termination of his or her employment or service, (a) the Option shall remain in effect and continue to vest according to the vesting schedule set forth in Section 2 of this Agreement, irrespective of the continuous service limitations set forth in the first sentence of this Section 5, upon the occurrence of (i) the Optionee’s termination of employment by reason of Retirement in Good Standing (as defined in Section 19, below) or (ii) the Optionee’s termination of employment or service by reason of Disability (as defined in Section 19, below), and (b) the Option shall immediately vest upon the occurrence of (i) a “Change in Control Termination” (as defined in Section 19, below) in accordance with Section 4.2(h)(ii) of the Plan or (ii) the Optionee’s termination of employment or service by reason of death.
|
6.
|
Exercise Period
. The Option will normally terminate on the earlier of (i) the date of the expiration of the Option set forth in Section 3 of this Agreement or (ii) the 90th day after severance of the Optionee’s employment relationship with the Company or any Subsidiary, for any reason, for or without Cause. Whether an authorized leave of absence, or an absence for military or government service, constitutes severance of the Optionee’s employment or service relationship with the Company or a Subsidiary will be determined by the Committee administering the Plan at the time of the event. However, if before the expiration of the Option, the Optionee’s employment relationship with the Company or a Subsidiary terminates as a result of Retirement in Good Standing, Change in Control Termination, or Disability, the Option will remain exercisable in accordance with its terms as if Optionee remained in the employment or service of the Company or a Subsidiary, and in the event of the Optionee’s death while employed by or providing service to the Company or any Subsidiary, the Option may be exercised by the executors or administrators of the Optionee’s estate for up to
|
7.
|
Method of Exercise
.
At the time or times when the Optionee wishes to exercise the Option, the Optionee shall be required to follow the procedures established for doing so, which the Committee may revise from time to time. Notice of exercise of the Option must be accompanied by a payment equal to the applicable Option exercise price plus all Tax-Related Items (as defined below) required to be withheld, collected or accounted for, if any, such amount to be paid in cash or by tendering, either by actual delivery of shares of Stock or by attestation, shares of Stock that are acceptable to the Committee, such shares to be valued at Fair Market Value as of the day the shares are tendered, or paid in any combination of cash and shares, as determined by the Committee. To the extent permitted by applicable law and the policies adopted from time to time by the Committee, the Optionee may elect to pay the exercise price through the contemporaneous sale by a third party broker of shares of Stock acquired upon exercise yielding net sales proceeds equal to the exercise price and any withholding Tax-Related Items required to be withheld, collected or account for and the remission of those sale proceeds to the Company.
|
8.
|
No Assignment
.
No right or interest of the Optionee in the Option may be pledged, encumbered, or hypothecated or be made subject to any lien, obligation or liability of the Optionee other than as provided in this Section 8. The Option may not be sold, assigned, transferred or otherwise disposed of by the Optionee other than by will or the laws of descent and distribution.
|
9.
|
Nature of Option
.
In accepting the Option, the Optionee acknowledges, understands and agrees that:
|
a.
|
the Plan is established voluntarily by the Company, it is discretionary in nature and the Company can amend, modify, suspend, cancel or terminate it at any time, to the extent permitted under the Plan;
|
b.
|
this Option and any other awards under the Plan are voluntary and occasional and do not create any contractual or other right to receive future options, awards or benefits in lieu of any options or awards, even if similar options or awards have been granted repeatedly in the past;
|
c.
|
all determinations with respect to any future options or awards, including, but not limited to, the times when options or awards are made, the amount of the options or awards and other conditions attached to the options or awards, will be at the sole discretion of the Company and/or the Committee;
|
d.
|
participation in this Plan or program is voluntary;
|
e.
|
the Option and any shares of Stock acquired under the Plan upon exercise of the Option are extraordinary items and do not constitute compensation of any kind (and do not give a right of claim of any kind) for services of any kind rendered to the Company or any of its Subsidiaries (including, as applicable, the entity employing the Optionee or to which the Optionee provides services, (the “Employer”) and which are outside the scope of the Optionee’s employment or service contract, if any;
|
f.
|
this Option, and any income derived therefrom, are not paid in lieu of, and are not intended to replace, any pension rights or compensation and are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any termination, severance, resignation, redundancy, dismissal, end of service payments, bonuses, long-service awards, life or accident insurance benefits, pension or retirement or welfare benefits or similar payments;
|
g.
|
for the purposes of the Option, unless otherwise specified by the Company or any Affiliated Company, the Optionee’s employment or service will be considered terminated as of the date the Optionee is no longer actively providing services to the Company or any Subsidiary (regardless of the reason for such termination and whether or not later to be found invalid or in breach of employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any), and unless otherwise expressly provided in this Agreement or determined by the Company, the Optionee’s right to vest in the Option under the Plan, if any, will terminate as of such date and will not be extended by any notice period or period during with the Optionee is in receipt of pay in lieu of such notice or severance pay (e.g., the Optionee’s period of service would not include any contractual, statutory or common law notice period or period during which the Optionee is in the receipt of pay in lieu of such notice or severance pay or any period of “garden leave” or similar period mandated under employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Optionee is no longer actively providing services for the purposes of the Option (including whether the Optionee may still be considered to be providing services while on a leave of absence);
|
h.
|
the future value of the underlying Stock is unknown, indeterminable and cannot be predicted with certainty. If the shares of Stock subject to the Option do not increase in value following the Grant Date, the Option will have no value. If the Optionee exercises the Option and obtains the shares of Stock, the value of those shares of Stock acquired upon exercise may increase or decrease in value, even below the Option exercise price;
|
i.
|
no claim or entitlement to compensation or damages shall arise from forfeiture of the Option resulting from the termination of the Optionee’s employment or other service relationship (for any reason whatsoever whether or not later found to be invalid or in breach of employment laws in the jurisdiction where the Optionee is employed or the terms of the Optionee’s employment agreement, if any), and in consideration of the grant of the Option to which the Optionee is otherwise not entitled, the Optionee irrevocably agrees never to institute any claim against the Company, the Employer, any Subsidiary or any Affiliated Company; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, the Optionee shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;
|
j.
|
the Option and the Optionee’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or services contract with the Company, the Employer, any Subsidiary or any Affiliated Company and shall not interfere with the ability of the Company, the Employer, any Subsidiary or any Affiliated Company, as applicable, to terminate the Optionee’s employment or service relationship (if any). The right of the Company or Employer to terminate at will the Optionee’s employment or service at any time for any reason is specifically reserved;
|
k.
|
if the Optionee is providing services outside the United States, the Optionee acknowledges and agrees that neither the Company, the Employer, any Subsidiary nor any Affiliated
|
l.
|
in the event of any conflict between communications to the Optionee by the Company of the terms of this Agreement or the records of any third party administrator and the Plan, the Plan will prevail.
|
10.
|
Responsibility for Taxes.
|
a.
|
Irrespective of any action taken by the Company or the Employer, the Optionee hereby acknowledges and agrees that the ultimate liability for all income tax, social insurance, social security, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Optionee’s participation in the Plan and legally applicable to the Optionee (“Tax-Related Items”), is and remains the responsibility of the Optionee or the Optionee’s estate (as applicable) and may exceed the amount actually withheld by the Company or the Employer. The Optionee acknowledges and understands that the requirements with respect to the Tax-Related Items may change from time to time as applicable laws or interpretations change.
|
b.
|
Prior to any relevant taxable or tax withholding event, as applicable, the Optionee agrees to make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Optionee authorizes the Company, the Employer, and their respective agents, at their discretion, to satisfy the obligations with regard to all Tax-Related Items withholding obligations by one or a combination of the following:
|
i.
|
withholding from the Optionee’s wages or other cash compensation paid to the Optionee by the Company and/or the Employer, or any other payment of any kind otherwise due to the Optionee by the Company and/or the Employer; or
|
ii.
|
withholding from proceeds of the sale of shares of Stock acquired upon exercise of the Option, either through a voluntary sale or through a mandatory sale arranged by the Company (on the Optionee’s behalf pursuant to this authorization without further consent); or
|
iii.
|
retention of or withholding in shares of Stock to be issued upon exercise of the Option having a Fair Market Value that is sufficient to satisfy the Tax-Related Items.
|
c.
|
Notwithstanding the foregoing in Section 10(b) of the Agreement, if the Optionee is subject to Section 16 of the Exchange Act pursuant to Rule 16a-2 promulgated thereunder, the Company will withhold in shares of Stock unless the use of such withholding method is problematic under applicable law or has materially adverse accounting or tax consequences, in which case, the withholding obligation may be satisfied by one or a combination of methods set forth in Section 10(b)(i) and (ii) above.
|
d.
|
If the obligation for Tax-Related Items is satisfied by withholding in shares of Stock, for tax purposes, the Optionee is deemed to have been issued the full amount of Stock subject
|
e.
|
In addition, the Optionee shall pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of the Optionee’s participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the shares of Stock or the proceeds of the sale of shares of Stock, if the Optionee fails to comply with the Optionee’s obligations in connection with the Tax-Related Items.
|
f.
|
The Optionee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Option, including, but not limited to, the grant, vesting or exercise of the Option, the issuance of Stock upon exercise of the Option, the subsequent sale of Stock acquired pursuant to such exercise and the receipt of any dividends and/or dividend equivalents following the issuance of Stock upon the exercise of the Option; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Option to reduce or eliminate the Optionee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Optionee is subject to tax in more than one jurisdiction, the Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
|
11.
|
Prohibited Activities; Post-Employment Covenants; Additional Remedies of Clawback and Recoupment
.
|
a.
|
Notwithstanding any other term of the Agreement or any prior agreement to the contrary, in order to be eligible to benefit from any portion of the Option, the Optionee must have entered into an agreement containing restrictive covenants concerning limitations of the Optionee’s behavior both during employment or service and following termination of employment or service that is satisfactory to the Company or one of its Subsidiaries. In the event the Optionee engages in any action that violates any such restrictive covenants at any time during the term of the Agreement, the Option shall be forfeited. The Optionee further agrees that to the extent permitted by applicable law, upon demand by the Company or one of its Subsidiaries, the Optionee will forfeit, return or repay the “Benefits and Proceeds” (as defined below) in the event the Optionee breaches any post-employment or post-service covenant with the Company and/or any of its Subsidiaries.
|
b.
|
For the purposes of this Agreement, “Benefits and Proceeds” means:
|
i.
|
to the extent the Optionee has received any Stock in satisfaction of this Option and the Optionee continues to hold those shares of Stock, the shares of Stock so acquired;
|
ii.
|
to the extent the Optionee has received any Stock in satisfaction of this Option and no longer owns the shares of Stock so acquired, cash in an amount equal to the Fair Market Value of such shares of Stock on the date such payment is demanded by the Company (which, unless otherwise determined by the Committee, shall be equal to the closing sale price during regular trading hours of the shares of Stock as reported by the New York Stock Exchange on such date); and
|
iii.
|
to the extent the Optionee has not received any Stock in satisfaction of this Option, all of the Optionee’s remaining rights, title or interest in the Option.
|
12.
|
Electronic Delivery and Acceptance
. The Optionee consents and agrees to electronic delivery of any Plan documents, proxy materials, annual reports or other related documents, and to the electronic review, confirmation and acceptance procedures governing this Option. The Optionee consents and agrees that any such electronic procedures may be effected by a third party engaged by the Company to provide administrative services related to the Plan, including any program adopted under the Plan. The Optionee further agrees that his or her electronic signature is the same as, and shall have the same force and effect as, his or her manual signature. The Optionee acknowledges and agrees that the Company may provide personal information regarding the Optionee and any award of Options under the Plan, included but not limited to this Option, to any third party engaged by the Company to provide administrative or brokerage services related to the Plan.
|
13.
|
Data Privacy
.
|
a.
|
To the extent consent is required, the Optionee hereby consents to the collection, use and transfer, in electronic or other form, of the Optionee’s personal data as described in this Agreement and any other Option materials by and among, as applicable, the Employer, the Company any Subsidiary and any Affiliated Company for the purpose of implementing, administering and managing the Optionee’s participation in the Plan. The Employer and the Company will be joint data controllers in relation to the Optionee’s personal data.
|
b.
|
The Optionee understands that the Employer, the Company, any Subsidiary and any Affiliated Company may hold certain personal information about the Optionee, including but not limited to his or her name, home address, email address, telephone number, date of birth, social security number, passport number or other identification number, salary, nationality, job title, any shares of Stock or directorships held in the Company and details of all Options or any other entitlements to shares of Stock awarded, cancelled, vested, unvested, or outstanding in the Optionee’s favor (“Data”), for the purpose of implementing, administering or managing the Plan. Certain Data may also constitute “sensitive personal data” within the meaning of applicable local law. Such Data include, but are not limited to, the information provided above and any changes thereto and other appropriate personal and financial data about the Optionee. The Optionee hereby provides explicit consent to the Company, the Employer, any Subsidiary and any Affiliated Company to process any such Data to the extent it is necessary for the purposes of implementing, administering and managing the Optionee’s participation in the Plan.
|
c.
|
The Optionee understands that Data will be transferred, for the purposes of implementing, administering and managing the Optionee’s participation in the Plan, to such equity plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. The Optionee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipients’ country (e.g., the United States) may have data privacy laws and protections which provide standards of protection that are different to or lower than the standards provided by the data privacy laws in the Optionee’s country. The Optionee understands that if he or she resides outside the United States, he or she may request a list with the names and addresses of any potential recipients of the Data by contacting his or her local human resources representative. The Optionee authorizes the Company, the Company’s equity service plan provider and any other possible recipients which may assist the Company (presently or in the future) with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing his or her participation in the Plan. The Optionee understands that Data will be held only as long
|
14.
|
Notices
.
Each notice relating to this Option shall be in writing. All notices to the Company shall be addressed to the Corporate Secretary, Sysco Corporation, 1390 Enclave Parkway, Houston, Texas 77077. All notices to the Optionee shall be addressed to the address of the Optionee on file with the Company or the Employer. Either the Company or the Optionee may designate a different address by written notice to the other. Written notice to said addresses shall be effective to bind the Company, the Optionee and the Optionee’s representatives and beneficiaries.
|
15.
|
Committee
.
The Optionee hereby agrees that any change, interpretation, determination or modification of this Agreement by the Committee shall be final and conclusive for all purposes and on all persons including the Company and the Optionee; provided, however, that with respect to any amendment or modification of the Plan which affects the Option made hereby, the Committee shall have determined that such amendment or modification is in the best interests of the Optionee of such Option.
|
16.
|
Modification of Agreement
.
If any of the terms of this Agreement may, in the opinion of the Company, conflict or be inconsistent with any applicable law or regulation of any governmental agency having jurisdiction, the Company reserves the right to modify this Agreement to be consistent with applicable laws or regulations. If all or any part or application of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between Optionee and the Company, each and all of the other provisions of this Agreement shall remain in full force and effect. No change or modification of this Agreement shall be valid unless it is in writing and signed by the party against with enforcement is sought, except where specifically provided to the contrary herein.
|
17.
|
No Advice Regarding Grant
. None of the Company, any Subsidiary or any Affiliated Company is providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Optionee’s participation in the Plan, or the Optionee’s acquisition or sale of the underlying Stock. The Optionee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
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18.
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Entire Agreement; Severability
.
The Plan and this Agreement set forth the entire understanding between the Optionee, the Employer, the Company and any Subsidiary regarding the acquisition of the Stock and supersedes all prior oral and written agreements pertaining to this Option. If all or any part of the provisions of this Agreement are held or determined to be invalid or unenforceable for any reason whatsoever by a court of competent jurisdiction in an action between the Optionee and the Company, each and all of the other provisions of the Agreement shall remain in full force and effect.
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19.
|
Definitions
. For purposes of this Agreement:
|
a.
|
“Retirement in Good Standing” means:
|
i.
|
in the United States and Canada, termination of employment after the date the Optionee reaches (A) age 55 and the Optionee has 10 or more years of service with the Company and its Subsidiaries, or (B) age 65, regardless of years of service with the Company and its Subsidiaries; and
|
ii.
|
in all other jurisdictions, retirement, as determined by the Committee in its sole discretion.
|
b.
|
“Disability” means:
|
i.
|
in the United States, that the Optionee has been determined by the Social Security Administration to be totally disabled; and
|
ii.
|
in all other jurisdictions, disability, as determined pursuant to the Employer’s long-term disability policy.
|
c.
|
“Change in Control Termination” means the occurrence of both: (A) a Change in Control and (B) during the period commencing 12 months prior to the first occurrence of the Change in Control and ending 24 months after such Change in Control, the Company or one of its Subsidiaries involuntarily terminates the Optionee’s employment or Service without Cause or the Optionee terminates employment for Good Reason.
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20.
|
Compliance with Law
. Notwithstanding any other provision of the Plan or this Agreement, unless there is an available exemption from any registration, qualification or other legal requirement applicable to the Stock, the Company shall not be required to deliver any Stock issuable upon exercise of the Option prior to the completion of any registration or qualification of the Stock under any local, state, federal or foreign securities or exchange control law or under rulings or regulations of the U.S. Securities and Exchange Commission (“SEC”) or of any other governmental regulatory body, or prior to obtaining any approval or other clearance from any local, state, federal or foreign governmental agency, which registration, qualification or approval the Company shall, in its absolute discretion, deem necessary or advisable. The Optionee understands that the Company is under no obligation to register or qualify the Stock with the SEC or any state or foreign securities commission or to seek approval or clearance from any governmental authority for the issuance or sale of the Stock. Further, the Optionee agrees that the Company shall have unilateral authority to amend the Plan and the Agreement without the Optionee’s consent to the extent necessary to comply with securities or other laws applicable to issuance of Stock.
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21.
|
Language
. If the Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.
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22.
|
Appendix A
. The Option shall be subject to any special terms and conditions for the Optionee’s country set forth in Appendix A. Moreover, if the Optionee relocates to one of the countries included in Appendix A, the special terms and conditions for such country will apply to the Optionee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Appendix A constitutes part of this Agreement.
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23.
|
Imposition of Other Requirements.
The Company reserves the right to impose other requirements on the Optionee’s participation in the Plan, on the Option and on any Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
|
24.
|
Insider Trading Restrictions/Market Abuse Laws
. The Optionee acknowledges that, depending on the Optionee’s country of residence, the Optionee may be subject to insider trading restrictions and/or market abuse laws, which may affect the Optionee’s ability to acquire or sell shares of Stock or rights to shares of Stock (e.g., Options) under the Plan during such times as the Optionee is considered to have “inside information” regarding the Company (as defined by the laws in the Optionee’s country). Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under the Company’s insider trading policy. The Optionee acknowledges that it is his or her responsibility to comply with any applicable restrictions, and the Optionee is advised to speak to his or her personal advisor on this matter.
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25.
|
Waiver.
The Optionee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or acceptance of any subsequent breach by the Optionee or any other person claiming rights with respect to the Option.
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26.
|
Governing Law and Venue
. This Option has been granted and this Agreement has been made in and shall be governed by, construed under and in accordance with the laws of the State of Texas, without regard to the conflict of law provisions, as provided in the Plan. Any and all disputes relating to, concerning or arising from
this
Agreement, or relating to, concerning or arising from the relationship between the parties evidenced by the Option or this Agreement, shall be brought and heard exclusively in the United States District Court for the Southern District of Texas or Harris County, Texas. Each of the parties hereby represents and agrees that such party is subject to the personal jurisdiction of said courts; irrevocably consents to the jurisdiction of such courts in any legal or equitable proceedings related to, concerning or arising from such dispute, and waives, to the fullest extent permitted by law, any objection which such party may now or hereafter have that the laying of the venue of any legal or equitable proceedings related to, concerning or arising from such dispute which is brought in such courts is improper or that such proceedings have been brought in an inconvenient forum.
|
27.
|
Mobility
. If, during the course of the Optionee’s employment with the Company or any of its Subsidiaries or during the provision of services to the Company or any of its Subsidiaries, the Optionee relocates to another jurisdiction, the Company reserves the right to modify the terms of this Agreement and/or impose other requirements on the Optionee’s participation in the Plan, on the Option and on any shares of Stock acquired under the Plan, to the extent the Company or any of its Subsidiaries determine it is necessary or advisable to comply with local law, rules and/or regulations or to facilitate the operation and administration of the Option and the Plan, and to require the Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Optionee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Optionee’s country of residence (or employment, if different).
|
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 29, 2018
(“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 29, 2018
(“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.
|