Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jul. 01, 2017 | Aug. 11, 2017 | Dec. 31, 2016 | |
Document Entity Information [Abstract] | |||
Entity Registrant Name | SYSCO CORP | ||
Entity Central Index Key | 96,021 | ||
Current Fiscal Year End Date | --07-01 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jul. 1, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 527,881,766 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 27,403,829,196 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Current assets | ||
Cash and cash equivalents | $ 869,502 | $ 3,919,351 |
Accounts and notes receivable, less allowances of $31,059 and $37,880 | 4,012,393 | 3,380,971 |
Inventories, net | 2,995,598 | 2,639,174 |
Prepaid expenses and other current assets | 139,185 | 114,454 |
Income tax receivable | 16,760 | 0 |
Total current assets | 8,033,438 | 10,053,899 |
Plant and equipment at cost, less depreciation | 4,377,302 | 3,880,442 |
Long-term assets | ||
Goodwill | 3,916,128 | 2,121,661 |
Intangibles, less amortization | 1,037,511 | 207,461 |
Deferred income taxes | 142,472 | 207,320 |
Other assets | 249,804 | 251,021 |
Total long-term assets | 5,345,915 | 2,787,463 |
Total assets | 17,756,655 | 16,721,804 |
Current liabilities | ||
Notes payable | 3,938 | 89,563 |
Accounts payable | 3,971,112 | 2,935,982 |
Accrued expenses | 1,576,221 | 1,289,312 |
Accrued income taxes | 14,540 | 110,690 |
Current maturities of long-term debt | 530,075 | 8,909 |
Total current liabilities | 6,095,886 | 4,434,456 |
Long-term liabilities | ||
Long-term debt | 7,660,877 | 7,336,930 |
Deferred income taxes | 161,715 | 26,942 |
Other long-term liabilities | 1,373,822 | 1,368,482 |
Total long-term liabilities | 9,196,414 | 8,732,354 |
Commitments and contingencies | ||
Noncontrolling interests | 82,839 | 75,386 |
Shareholders’ equity | ||
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none | 0 | 0 |
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares | 765,175 | 765,175 |
Paid-in capital | 1,327,366 | 1,281,140 |
Retained earnings | 9,447,755 | 9,006,138 |
Accumulated other comprehensive loss | (1,262,737) | (1,358,118) |
Treasury stock at cost, 235,135,699 and 205,577,484 shares | (7,896,043) | (6,214,727) |
Total shareholders’ equity | 2,381,516 | 3,479,608 |
Total liabilities and shareholders’ equity | $ 17,756,655 | 16,721,804 |
Scenario, Previously Reported | ||
Current assets | ||
Cash and cash equivalents | $ 3,919,300 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 31,059 | $ 37,880 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 1,500,000 | 1,500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 765,174,900 | 765,174,900 |
Treasury stock (in shares) | 235,135,699 | 205,577,484 |
CONSOLIDATED RESULTS OF OPERATI
CONSOLIDATED RESULTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Statement [Abstract] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Cost of sales | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 11,145,053 | 9,859,966 | 9,996,812 | 10,324,616 | 44,813,632 | 41,326,447 | 40,129,236 |
Gross profit | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 2,502,838 | 2,142,825 | 2,156,814 | 2,237,995 | 10,557,507 | 9,040,472 | 8,551,516 |
Operating expenses | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 1,956,013 | 1,765,207 | 1,724,231 | 1,744,521 | 8,504,336 | 7,189,972 | 7,322,154 |
Operating income | 557,959 | 435,962 | 492,417 | 566,833 | 546,825 | 377,618 | 432,583 | 493,474 | 2,053,171 | 1,850,500 | 1,229,362 |
Interest expense | 76,020 | 81,004 | 72,231 | 73,623 | 74,305 | 57,699 | 47,235 | 126,907 | 302,878 | 306,146 | 254,807 |
Other expense (income), net | (1,586) | (4,815) | (2,320) | (7,216) | 141,303 | (6,952) | (7,764) | (15,240) | (15,937) | 111,347 | (33,592) |
Earnings before income taxes | 483,525 | 359,773 | 422,506 | 500,426 | 331,217 | 326,871 | 393,112 | 381,807 | 1,766,230 | 1,433,007 | 1,008,147 |
Income taxes | 178,354 | 121,495 | 147,339 | 176,539 | 115,550 | 109,735 | 120,713 | 137,387 | 623,727 | 483,385 | 321,374 |
Net earnings | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 215,667 | $ 217,136 | $ 272,399 | $ 244,420 | $ 1,142,503 | $ 949,622 | $ 686,773 |
Net earnings: | |||||||||||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 0.38 | $ 0.38 | $ 0.48 | $ 0.41 | $ 2.10 | $ 1.66 | $ 1.16 |
Diluted earnings per share (in dollars per share) | 0.57 | 0.44 | 0.50 | 0.58 | 0.38 | 0.38 | 0.48 | 0.41 | $ 2.08 | $ 1.64 | $ 1.15 |
Average shares outstanding (in shares) | 543,496,816 | 573,057,406 | 592,072,308 | ||||||||
Diluted shares outstanding (in shares) | 548,545,027 | 577,391,406 | 596,849,034 | ||||||||
Dividends declared per common share (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.3 | $ 1.3 | $ 1.23 | $ 1.19 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Net earnings | $ 1,142,503 | $ 949,622 | $ 686,773 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | (11,243) | (39,080) | (232,185) |
Items presented net of tax: | |||
Amortization of cash flow hedges | 7,082 | 7,111 | 5,116 |
Amortization of prior service cost | 7,004 | 6,992 | 6,949 |
Amortization of actuarial loss, net | 25,965 | 13,352 | 11,972 |
Actuarial gain (loss), net arising in current year | 97,283 | (419,517) | (38,275) |
Total other comprehensive income (loss) | 95,381 | (434,921) | (280,534) |
Comprehensive income | 1,237,884 | 514,701 | 406,239 |
Net investment hedging | |||
Items presented net of tax: | |||
Changes in derivatives qualifying as hedges | (24,012) | 0 | 0 |
Cash flow hedging | |||
Items presented net of tax: | |||
Changes in derivatives qualifying as hedges | (6,698) | 0 | 0 |
Fair value hedging | |||
Items presented net of tax: | |||
Changes in derivatives qualifying as hedges | $ 0 | $ (3,779) | $ (34,111) |
CHANGES IN CONSOLIDATED SHAREHO
CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance, shareholders' equity at Jun. 28, 2014 | $ 5,266,695 | $ 765,175 | $ 1,139,218 | $ 8,770,751 | $ (642,663) | $ (4,765,786) |
Beginning balance, shareholders' equity (in shares) at Jun. 28, 2014 | 765,174,900 | 179,050,186 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 686,773 | 686,773 | ||||
Foreign currency translation adjustment | (232,185) | (232,185) | ||||
Amortization of cash flow hedges, net of tax | 5,116 | 5,116 | ||||
Change in fair value of cash flow hedges, net of tax | (34,111) | (34,111) | ||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 18,921 | 18,921 | ||||
Pension funded status adjustment, net of tax | (38,275) | (38,275) | ||||
Dividends declared | (705,539) | (705,539) | ||||
Share-based compensation awards | 292,829 | 74,781 | $ 218,048 | |||
Share-based compensation awards (in shares) | (8,192,955) | |||||
Ending balance, shareholders' equity at Jun. 27, 2015 | 5,260,224 | $ 765,175 | 1,213,999 | 8,751,985 | (923,197) | $ (4,547,738) |
Ending balance, shareholders' equity (in shares) at Jun. 27, 2015 | 765,174,900 | 170,857,231 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 949,622 | 949,622 | ||||
Foreign currency translation adjustment | (39,080) | (39,080) | ||||
Amortization of cash flow hedges, net of tax | 7,111 | 7,111 | ||||
Change in fair value of cash flow hedges, net of tax | (3,779) | (3,779) | ||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 20,344 | 20,344 | ||||
Pension funded status adjustment, net of tax | (419,517) | (419,517) | ||||
Dividends declared | (695,469) | (695,469) | ||||
Treasury stock purchases | (1,949,445) | $ (1,949,445) | ||||
Treasury stock purchases (in shares) | 44,716,180 | |||||
Share-based compensation awards | 349,597 | 67,141 | $ 282,456 | |||
Share-based compensation awards (in shares) | (9,995,927) | |||||
Ending balance, shareholders' equity at Jul. 02, 2016 | 3,479,608 | $ 765,175 | 1,281,140 | 9,006,138 | (1,358,118) | $ (6,214,727) |
Ending balance, shareholders' equity (in shares) at Jul. 02, 2016 | 765,174,900 | 205,577,484 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net earnings | 1,142,503 | 1,142,503 | ||||
Foreign currency translation adjustment | (11,243) | (11,243) | ||||
Amortization of cash flow hedges, net of tax | 7,082 | |||||
Change in fair value of cash flow hedges, net of tax | (23,628) | (23,628) | ||||
Pension funded status adjustment, net of tax | 130,252 | 130,252 | ||||
Dividends declared | (700,886) | (700,886) | ||||
Treasury stock purchases | (1,886,121) | $ (1,886,121) | ||||
Treasury stock purchases (in shares) | 36,224,078 | |||||
Increase in ownership interest in subsidiaries | (39,991) | (39,991) | ||||
Share-based compensation awards | 291,022 | 86,217 | $ 204,805 | |||
Share-based compensation awards (in shares) | (6,665,863) | |||||
Ending balance, shareholders' equity at Jul. 01, 2017 | $ 2,381,516 | $ 765,175 | $ 1,327,366 | $ 9,447,755 | $ (1,262,737) | $ (7,896,043) |
Ending balance, shareholders' equity (in shares) at Jul. 01, 2017 | 765,174,900 | 235,135,699 |
CONSOLIDATED CASH FLOWS
CONSOLIDATED CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Cash flows from operating activities: | |||
Net earnings | $ 1,142,503 | $ 949,622 | $ 686,773 |
Adjustments to reconcile net earnings to cash provided by operating activities: | |||
Share-based compensation expense | 83,883 | 79,466 | 73,766 |
Depreciation and amortization | 901,992 | 662,710 | 553,021 |
Amortization of debt issuance and other debt-related costs | 31,852 | 45,137 | 27,943 |
Loss on extinguishment of debt | 0 | 86,460 | 0 |
Loss on foreign exchange remeasurement | 0 | 101,228 | 0 |
Deferred income taxes | (51,846) | 93,871 | (4,705) |
Provision for losses on receivables | 20,672 | 20,372 | 17,996 |
Other non-cash items | 6,704 | 23,347 | (24,205) |
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||
Decrease (increase) in receivables | 20,452 | (27,311) | (11,741) |
(Increase) decrease in inventories | (113,647) | 66,937 | (125,232) |
Decrease (increase) in prepaid expenses and other current assets | 8,158 | (8,468) | (10,508) |
Increase in accounts payable | 322,775 | 23,863 | 72,516 |
(Decrease) increase in accrued expenses | (28,422) | (178,275) | 464,403 |
(Decrease) increase in accrued income taxes | (74,590) | 231,542 | (32,843) |
(Increase) in other assets | (36,449) | (6,639) | (10,745) |
(Decrease) in other long-term liabilities | (18,629) | (196,190) | (105,501) |
Excess tax benefits from share-based compensation arrangements | (38,983) | (34,530) | (15,454) |
Net cash provided by operating activities | 2,176,425 | 1,933,142 | 1,555,484 |
Cash flows from investing activities: | |||
Additions to plant and equipment | (686,378) | (527,346) | (542,830) |
Proceeds from sales of plant and equipment | 23,715 | 23,511 | 24,472 |
Acquisition of businesses, net of cash acquired | (2,921,798) | (219,218) | (115,862) |
Decrease (increase) in restricted cash | 0 | 168,274 | (20,126) |
Purchase of foreign currency options | 0 | (103,501) | 0 |
Proceeds from the sales of foreign currency options | 0 | 57,452 | 0 |
Net cash used for investing activities | (3,584,461) | (600,828) | (654,346) |
Cash flows from financing activities: | |||
Bank and commercial paper borrowings (repayments), net | 119,700 | 0 | (129,999) |
Other debt borrowings including senior notes | 753,834 | 5,134,709 | 5,041,032 |
Other debt repayments | (143,664) | (126,797) | (354,007) |
Redemption of senior notes | 0 | (5,050,000) | 0 |
Debt issuance costs | (8,599) | (39,676) | (30,980) |
Cash paid for settlement of cash flow hedge | 0 | (6,134) | 0 |
Cash received (paid) from termination of interest rate swap agreements | 0 | 14,496 | (188,840) |
Proceeds from stock option exercises | 204,805 | 282,455 | 240,176 |
Treasury stock purchases | (1,886,121) | (1,949,445) | 0 |
Dividends paid | (698,647) | (698,869) | (695,274) |
Excess tax benefits from share-based compensation arrangements | 38,983 | 34,530 | 15,454 |
Net cash (used for) provided by financing activities | (1,619,709) | (2,404,731) | 3,897,562 |
Effect of exchange rates on cash and cash equivalents | (22,104) | (138,327) | (81,702) |
Net (decrease) increase in cash and cash equivalents | (3,049,849) | (1,210,744) | 4,716,998 |
Cash and cash equivalents at beginning of period | 3,919,351 | 5,130,044 | 413,046 |
Cash and cash equivalents at end of period | 869,502 | 3,919,351 | 5,130,044 |
Supplemental disclosures of cash flow information: | |||
Interest | 285,025 | 200,174 | 192,939 |
Income taxes | 761,384 | 180,565 | $ 376,508 |
Scenario, Previously Reported | |||
Cash flows from financing activities: | |||
Cash and cash equivalents at beginning of period | $ 3,919,300 | ||
Cash and cash equivalents at end of period | $ 3,919,300 |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 12 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | SUMMARY OF ACCOUNTING POLICIES Business and Consolidation Sysco Corporation, acting through its subsidiaries and divisions (Sysco or the company), is engaged in the marketing and distribution of a wide range of food and related products primarily to the foodservice or food-away-from-home industry. These services are performed for over 500,000 customers from 324 distribution facilities located throughout North America and Europe. Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended July 1, 2017 for fiscal 2017 , a 53 -week year ended July 2, 2016 for fiscal 2016 , and a 52 -week year ended June 27, 2015 for fiscal 2015 . The accompanying financial statements include the accounts of Sysco and its consolidated subsidiaries. All significant intercompany transactions and account balances have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses. Actual results could differ from the estimates used. Cash and Cash Equivalents Cash includes cash equivalents such as time deposits, certificates of deposit, short-term investments and all highly liquid instruments with original maturities of three months or less, which are recorded at fair value. Accounts Receivable Accounts receivable consist primarily of trade receivables from customers and receivables from suppliers for marketing or incentive programs. Sysco determines the past due status of trade receivables based on contractual terms with each customer. Sysco evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts based on a combination of factors. The company utilizes specific criteria to determine uncollectible receivables to be written off including whether a customer has filed for or been placed in bankruptcy, has had accounts referred to outside parties for collection or has had accounts past due over specified periods. In these instances, a specific allowance for doubtful accounts is recorded to reduce the receivable to the net amount reasonably expected to be collected. Allowances are recorded for all other receivables based on an analysis of historical trends of write-offs and recoveries. Inventories Inventories consisting primarily of finished goods include food and related products and lodging products held for resale and are valued at the lower of cost (first-in, first-out method) or market. Elements of costs include the purchase price of the product and freight charges to deliver the product to the company’s warehouses and are net of certain cash or non-cash consideration received from vendors (see “Vendor Consideration”). Plant and Equipment Capital additions, improvements and major replacements are classified as plant and equipment and are carried at cost. Depreciation is recorded using the straight-line method, which reduces the book value of each asset in equal amounts over its estimated useful life, and is included within operating expenses in the consolidated results of operations. Maintenance, repairs and minor replacements are charged to earnings when they are incurred. Upon the disposition of an asset, its accumulated depreciation is deducted from the original cost, and any gain or loss is reflected in current earnings. Certain internal and external costs related to the acquisition and development of internal use software are capitalized within plant and equipment during the application development stages of the project. Costs related to the acquisition and development of internal use software for the past three fiscal years was $23.5 million in fiscal 2017 , $82.1 million in fiscal 2016 and $25.0 million in fiscal 2015 . Applicable interest charges incurred during the construction of new facilities and development of software for internal use are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives. Interest capitalized for the past three fiscal years was $2.0 million in each of fiscal 2017 and fiscal 2016 , and $0.9 million in fiscal 2015 . Long-Lived Assets Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life based on updated projections on an undiscounted basis. For assets held for use, Sysco groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. Goodwill and Intangibles Goodwill and intangibles represent the excess of cost over the fair value of tangible net assets acquired. Goodwill and intangibles with indefinite lives are not amortized. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of a business combination. The recoverability of goodwill and indefinite-lived intangibles is assessed annually, or more frequently as needed when events or changes have occurred that would suggest an impairment of carrying value, by determining whether the fair values of the applicable reporting units exceed their carrying values. This annual testing may be performed utilizing either a qualitative or quantitative assessment; however, if a qualitative assessment is performed and it is determined that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative test is performed. For fiscal 2017 , the company analyzed its 15 operating segments as defined in Note 21 , "Business Segment Information." and determined that 21 reporting units existed for purposes of evaluating for goodwill impairment. For seven reporting units, the company utilized a qualitative assessment. For the remaining reporting units, Sysco performed a quantitative test using a combination of the income and market approaches. The evaluation of fair value requires the use of projections, estimates and assumptions as to the future performance of the operations in performing a discounted cash flow analysis, as well as assumptions regarding sales and earnings multiples that would be applied in comparable acquisitions. The company does not believe the estimates used in the analysis are reasonably likely to change materially in the future, but Sysco will continue to assess the estimates in the future based on the expectations of the reporting units. In the fiscal 2017 assessment, our estimates of fair value did not require additional analysis. However, the company would have performed additional analysis to determine if an impairment existed for our Brakes U.K. broadline, Fresh Direct specialty, Sweden broadline, Ireland broadline, Mexico broadline and Costa Rica broadline reporting units if our estimates of fair value were decreased by an amount in the range of 5% and 28% , with goodwill of $1.7 billion in the aggregate as of July 1, 2017 , recorded for these reporting units. Intangibles with definite lives are amortized over their useful lives in a manner consistent with underlying cash flow, which generally ranges from two to fifteen years. Management reviews finite-lived intangibles for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the finite-lived intangibles are estimated over the intangible asset’s useful life based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the finite-lived intangible asset may not be recoverable, the potential impairment is measured at fair value. Restricted Cash Sysco is required by its insurers to collateralize a part of the self-insured portion of its workers’ compensation and liability claims. Sysco has chosen to satisfy these collateral requirements by depositing funds in insurance trusts or by issuing letters of credit. Sysco chose to satisfy these collateral requirements by issuing letters of credit in fiscal 2017 and 2016 . Derivative Financial Instruments All derivatives are recognized as assets or liabilities within the consolidated balance sheets at fair value at their gross values. Gains or losses on derivative financial instruments designated as fair value hedges are recognized immediately in the consolidated results of operations, along with the offsetting gain or loss related to the underlying hedged item. Gains or losses on derivative financial instruments designated as cash flow hedges are recorded as a separate component of shareholders’ equity from inception of the hedges and are reclassified to the Consolidated Results of Operations in conjunction with the recognition of the underlying hedged item. For net investment hedges, the remeasurement gain or loss is recorded in accumulated other comprehensive income and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. Investments in Corporate-Owned Life Insurance Investments in corporate-owned life insurance (COLI) policies are recorded at their cash surrender values as of each balance sheet date. Changes in the cash surrender value during the period are recorded as a gain or loss within operating expenses. Sysco has the ability and intent to hold certain of its COLI policies to maturity; therefore, the company does not record deferred tax balances related to cash surrender value gains or losses for these policies. Deferred tax balances are recorded for those policies that Sysco intends to redeem prior to maturity. The total amounts related to the company’s investments in COLI policies included in other assets in the consolidated balance sheets were $163.7 million and $163.3 million at July 1, 2017 and July 2, 2016 , respectively. Treasury Stock The company records treasury stock purchases at cost. Shares removed from treasury are valued at cost using the average cost method. Sysco routinely repurchases shares in the normal course of business, however, in fiscal 2016 , Sysco executed a $1.5 billion accelerated share repurchase program, under which it repurchased a total of 34,716,180 shares. Foreign Currency Translation The assets and liabilities of all foreign subsidiaries are translated at current exchange rates. Related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). Revenue Recognition The company recognizes revenue from the sale of a product when it is considered to be realized or realizable and earned. The company determines these requirements to be met at the point at which the product is delivered to the customer. The company grants certain customers sales incentives such as rebates or discounts and treats these as a reduction of sales at the time the sale is recognized. Sales tax collected from customers is not included in revenue but rather recorded as a liability due to the respective taxing authorities. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are considered to be a single nonmonetary transaction. As such, the company records the net effect of such transactions in the consolidated results of operations within sales. Vendor Consideration Sysco recognizes consideration received from vendors as a reduction to cost of sales when the services performed in connection with the monies received are completed and when the related product has been sold by Sysco. There are several types of cash consideration received from vendors. In many instances, the vendor consideration is in the form of a specified amount per case or per pound. In these instances, Sysco will recognize the vendor consideration as a reduction of cost of sales when the product is sold. In the situations in which the vendor consideration is not related directly to specific product purchases, Sysco will recognize these as a reduction of cost of sales when the earnings process is complete, the related service is performed and the amounts are realized. Shipping and Handling Costs Shipping and handling costs include costs associated with the selection of products and delivery to customers. Included in operating expenses are shipping and handling costs of approximately $3.4 billion in fiscal 2017 and $2.6 billion each in fiscal 2016 and fiscal 2015 . Insurance Program Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. The company also maintains a fully self-insured group medical program. Liabilities associated with these risks are estimated in part by considering historical claims experience, medical cost trends, demographic factors, severity factors and other actuarial assumptions. Share-Based Compensation Sysco recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The fair value of performance share unit awards is determined based on the target number of shares of common stock and the company’s stock price on the date of grant and subsequently adjusted based on actual and forecasted performance compared to planned targets. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock and restricted stock unit awards are based on the company’s stock price on the date of grant. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. Cash flows resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) are classified as financing cash flows on the consolidated cash flows statements. Income Taxes Sysco recognizes deferred tax assets and liabilities based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. The determination of the company’s provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal and state, as well as various foreign jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. Acquisitions Acquisitions of businesses are accounted for using the acquisition method of accounting, and the financial statements include the results of the acquired operations from the respective dates of acquisition. The purchase price of the acquired entities is preliminarily allocated to the net assets acquired and liabilities assumed based on the estimated fair value at the dates of acquisition, with any excess of cost over the fair value of net assets acquired, including intangibles, recognized as goodwill. Subsequent changes to preliminary amounts are made prospectively. Basis of Presentation The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for all periods presented have been made. Sysco has interests in various jointly-owned foodservice operations in Mexico, Costa Rica and Panama for which it consolidates the results of the operations; therefore, the financial position, results of operations and cash flows for this company have been included in Sysco’s consolidated financial statements. The value of the noncontrolling interest in each entity is considered redeemable due to certain features of the investment agreement and has therefore been presented as mezzanine equity, which is outside of permanent equity, in the consolidated balance sheets. The income attributable to the noncontrolling interest is located within Other expense (income), net, in the consolidated results of operations, as this amount is not material. The non-cash add back for the change in the value of the noncontrolling interest is located within Other non-cash items on the consolidated cash flows. Reclassifications Prior year amounts have been reclassified to conform with the current year presentation. |
CHANGES IN ACCOUNTING
CHANGES IN ACCOUNTING | 12 Months Ended |
Jul. 01, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
CHANGES IN ACCOUNTING | CHANGES IN ACCOUNTING In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Topic 205-40) . This ASU required management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the company’s ability to continue as a going concern within one year after the date of the consolidated financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around the company’s plan to alleviate these doubts are required. The adoption of this standard did not have any effect on the company’s consolidated financial statements. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Jul. 01, 2017 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDS Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits ( Topic 715 ): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , requiring that an employer report the service cost component of pension and postretirement benefits in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. In addition, only the service cost component will be eligible for capitalization as applicable. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Simplifying the Test for Goodwill Impairment In January 2017, the FASB ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance is effective for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The fair value of the company’s reporting units exceeded its carrying value in its fiscal 2017 impairment analysis for goodwill and, therefore, early adoption was not considered in fiscal 2017. Guidance in Presentation of Cash Flows - Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending cash balances on the statement of cash flows. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2017, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16 amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact and expect the ASU will not have a material impact on our consolidated financial statements. Guidance in Presentation of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight specific issues are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Businesses Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Invitees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash and Application of the Predominance Principle. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Stock Compensation In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , as part of its initiative to reduce complexity in accounting standards. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. In addition, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment . The guidance is effective for interim and annual periods beginning after December 15, 2016, which is fiscal 2018 for Sysco. The company will adopt this ASU in the first quarter of fiscal 2018 by including excess tax benefits and deficiencies as a component of our income tax expense. This will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards are dependent on our stock price at the date the awards vest. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases . The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, which is fiscal 2020 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. The company does engage in leasing assets, so it does expect additional assets and liabilities to be recognized on its balance sheet upon implementation of this new standard. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This new standard will replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods beginning after December 15, 2017, which is fiscal 2019 for Sysco, and could be early adopted in fiscal 2018. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The company’s impact assessment of the standard is ongoing and the company does not intend to early adopt this standard in fiscal 2018. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. We will continue our assessment, which may identify other impacts of the adoption of ASC 606. The company will adopt the standard in the first quarter of fiscal 2019 and preliminarily expects to use the modified retrospective method. However, our adoption method is subject to change as we continue to evaluate the impact of the standard. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jul. 01, 2017 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During fiscal 2017 , the company paid cash of $2.9 billion for acquisitions, net of cash acquired. Certain prior year acquisitions involved contingent consideration that included earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of July 1, 2017 , aggregate contingent consideration outstanding was $15.3 million , of which $5.3 million was recorded as earnout liabilities. Brakes Group On July 5, 2016 , Sysco consummated its acquisition of Cucina Lux Investments Limited (a private company limited by shares organized under the laws of England and Wales), a holding company of the Brakes Group, pursuant to an agreement for the sale and purchase of securities in the capital of such holding company, dated as of February 19, 2016 (the Purchase Agreement), by and among Sysco, entities affiliated with Bain Capital Investors, LLC, and members of management of the Brakes Group (the Brakes Acquisition). Following the closing of the Brakes Acquisition, the Brakes Group became a wholly owned subsidiary of Sysco. The Brakes Group is a large European foodservice business supplying fresh, refrigerated and frozen food products, as well as non-food products and supplies, to foodservice customers ranging from large customers, including leisure, pub, restaurant, hotel and contract catering groups, to smaller customers, including independent restaurants, hotels, fast food outlets, schools and hospitals. Brakes Group businesses include: Brakes, Brakes Catering Equipment, Brake France, Country Choice, Davigel, Fresh Direct, Freshfayre, M&J Seafood, Menigo Foodservice, Pauley's, Wild Harvest and Woodward Foodservice. The Brakes Group’s largest businesses are in the U.K., France, and Sweden, in addition to a presence in Ireland, Belgium, Spain and Luxembourg. The principal reason for the Brakes Acquisition was the ability to expand Sysco's footprint and infrastructure in Europe and profitably grow Sysco's business. These contributed to a purchase price that resulted in recognition of goodwill. The assets, liabilities and operating results of the Brakes Group are reflected in the company’s consolidated financial statements in accordance with ASC Topic No. 805, Business Combinations , commencing from the acquisition date. Total consideration has been determined to be as follows (in thousands): Cash consideration paid, net of cash acquired $ 626,442 Payment for Brakes outstanding financial debt 2,284,100 Total consideration paid, net of cash acquired $ 2,910,542 During the fourth quarter of fiscal 2017 , the company completed the determination of fair value of the assets acquired and liabilities assumed. The company recorded certain measurement period adjustments during each quarter of fiscal 2017 , none of which were individually or in the aggregate material to the company’s financial statements. The final allocation of the purchase price of the Brakes Group was as follows (in thousands): Purchase Price Allocation Accounts receivable $ 686,776 Inventory 248,031 Plant and equipment 595,388 Other assets 47,217 Goodwill and other intangibles (1) 2,789,065 Total assets 4,366,477 Accounts payable (707,622 ) Accrued expenses (474,501 ) Deferred tax liabilities (197,629 ) Other liabilities (76,183 ) Total consideration, net of cash acquired $ 2,910,542 (1) The excess purchase price of $1.8 billion was assigned to goodwill, no ne of which is deductible for income tax purposes. This goodwill has been assigned to the International Foodservice Operations reportable segment. Intangible assets added include customer relationships of $832.6 million with a weighted average life of 12 years and trademarks and trade names of $141.0 million that are indefinite lived assets. Amortization expense is recognized on a straight line basis and was $76.2 million for fiscal 2017. The fiscal year ended July 1, 2017 includes the results of operations of the Brakes Group for the period from July 5, 2016 to July 1, 2017 . The consolidated statement of operations for fiscal 2017 includes $5.2 billion of sales and $47.0 million of net earnings attributable to the Brakes Group. Sysco incurred debt in order to fund the Brakes Acquisition; however, the interest expense on that debt is not reflected within the earnings from operations attributable to the Brakes Group. Unaudited Pro Forma Results The following table presents the company’s pro forma consolidated sales, earnings before income taxes, and net earnings for the fiscal year ended July 2, 2016 . The unaudited pro forma results include the historical statements of operations information of the company and of Brakes Group, giving effect to the Brakes Acquisition and related financing as if they had occurred at the beginning of the period presented (in thousands, except per share data). Year Ended Jul. 2, 2016 Sales $ 55,922,506 Income before taxes 1,441,667 Net earnings 954,888 Net earnings: Basic earnings per common share $ 1.67 Diluted earnings per common share 1.65 The pro forma results include the following pro forma adjustments related to the Brakes Acquisition: (i) Additional amortization expense related to the fair value of intangible assets acquired. (ii) Additional depreciation expense related to the fair value of property and equipment acquired. (iii) The elimination of interest expense, assuming the long-term debt paid off on behalf of the Brakes Group as of the Brakes Acquisition date had been retired as of June 28, 2015, the first day of fiscal 2016. (iv) The addition of interest expense incurred by Sysco due to the Brakes Acquisition. (v) The elimination of interest income from related party debt instruments issued to the Brakes Group prior to the Brakes Acquisition. (vi) The elimination of minority interests in the Brakes Group entities, as the majority of the interests were repurchased before the Brakes Acquisition. The unaudited pro forma results do not include any operating efficiencies, cost reductions or revenue enhancements that may be achieved through the business combination, or the impact of non-recurring items directly related to the business combination or the nature and amount of any material, nonrecurring pro forma adjustments. The unaudited pro forma results are not necessarily indicative of the operating results that would have occurred if the Brakes Acquisition had been completed as of the date for which the pro forma financial information is presented. In addition, the unaudited pro forma results do not purport to project the future consolidated operating results of the combined companies. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: • 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. Sysco’s policy is to invest in only high-quality investments. Cash equivalents primarily include time deposits, certificates of deposit, commercial paper, high-quality money market funds and all highly liquid instruments with original maturities of three months or less. Restricted cash consists of investments in high-quality money market funds. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value: • 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. These are included as Level 2 measurements in the tables below. • 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, pound sterling and Euro currencies, and credit default swap rates. These are included as Level 2 measurements in the tables below. • Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. These are included as Level 2 measurements in the tables below. • Fuel swap contracts are valued based on observable market transactions of forward commodity prices. These are included as Level 2 measurements in the tables below. The following tables present the company’s assets and liabilities measured at fair value on a recurring basis as of July 1, 2017 and July 2, 2016 : Assets and Liabilities Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 238,954 $ 49,430 $ — $ 288,384 Other assets Interest rate swaps — 707 — 707 Fuel swaps — 717 — 717 Total assets at fair value $ 238,954 $ 50,854 $ — $ 289,808 Liabilities: Other current liabilities: Fuel swaps $ — $ 6,160 $ — $ 6,160 Other long-term liabilities: Interest rate swap agreements — 21,390 — 21,390 Cross-currency swaps 5,816 5,816 Foreign currency swaps — 12,308 — 12,308 Foreign currency forwards — 154 — 154 Fuel swaps 160 160 Total liabilities at fair value $ — $ 45,988 $ — $ 45,988 Assets and Liabilities Measured at Fair Value as of Jul. 2, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 634,230 $ 43,270 $ — $ 677,500 Other assets Interest rate swaps — 36,805 — 36,805 Total assets at fair value $ 634,230 $ 80,075 $ — $ 714,305 The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of Sysco’s total debt is estimated based on the quoted market prices for the same or similar issue or on the current rates offered to the company for debt of the same remaining maturities and is considered a Level 2 measurement. The fair value of total debt was approximately $8.6 billion and $7.9 billion as of July 1, 2017 and July 2, 2016 , respectively. The carrying value of total debt was $8.2 billion and $7.4 billion as of July 1, 2017 and July 2, 2016 , respectively. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Jul. 01, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary of the activity in the allowance for doubtful accounts appears below: 2017 2016 2015 (In thousands) Balance at beginning of period $ 37,880 $ 41,720 $ 49,902 Charged to costs and expenses 20,672 20,372 17,996 Customer accounts written off, net of recoveries (26,943 ) (23,551 ) (25,719 ) Other adjustments (550 ) (661 ) (459 ) Balance at end of period $ 31,059 $ 37,880 $ 41,720 |
PLANT AND EQUIPMENT
PLANT AND EQUIPMENT | 12 Months Ended |
Jul. 01, 2017 | |
Property, Plant and Equipment [Abstract] | |
PLANT AND EQUIPMENT | PLANT AND EQUIPMENT A summary of plant and equipment, including the related accumulated depreciation, appears below: Jul. 1, 2017 Jul. 2, 2016 Estimated Useful Lives (In thousands) Plant and equipment at cost: Land $ 477,577 $ 448,981 Buildings and improvements 4,072,339 3,962,454 10-30 years Fleet and equipment 3,595,095 2,990,267 3-10 years Computer hardware and software 1,554,122 1,183,548 3-7 years Total plant and equipment at cost 9,699,133 8,585,250 Accumulated depreciation (5,321,831 ) (4,704,808 ) Total plant and equipment, net $ 4,377,302 $ 3,880,442 Depreciation expense, including amortization of capital leases, was $765.4 million in 2017 , $608.7 million in 2016 and $495.8 million in 2015 . In fiscal 2016 , Sysco announced its revised business technology strategy focused on improving the customer experience. In refocusing its technology approach, Sysco created plans to modernize and add new capability and functionality to its existing SUS Enterprise Resource Planning (ERP) system. In connection with this strategy, Sysco created plans to remove the SAP ERP platform then used by 12 of its operating companies by the end of fiscal 2017 . At the time of the decision, the company had $31.6 million recorded as construction in progress for incomplete projects for the SAP ERP platform and $251.1 million in net book value for internal use software for the SAP ERP platform, with a remaining life of three years . These are included within “computer hardware and software” in the table above. Sysco concluded that the projects under development would not be completed and expensed the $31.6 million in construction in progress in fiscal 2016 within operating expense in the consolidated results of operations. The company tested the internal use software for the SAP ERP platform for impairment on an undiscounted cash flow basis and concluded that those cash flows would be sufficient to recover the full asset value for the remaining period the asset is planned to be in use. Sysco shortened the remaining life of the internal use assets to be fully amortized by the end of fiscal 2017, concurrent with the expected time frame to fully migrate the 12 operating companies to the SUS ERP system, which was completed as of July 1, 2017. For fiscal years 2017 and 2016 , Sysco recognized an additional $111.3 million and $41.9 million , respectively, in amortization expense as a result of shortening the useful lives of these assets. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The changes in the carrying amount of goodwill by reportable segment for the years presented are as follows: U.S. Foodservice Operations International Foodservice Operations SYGMA Other Total (In thousands) Carrying amount as of June 27, 2015 $ 1,123,474 $ 615,402 $ 32,609 $ 188,332 $ 1,959,817 Goodwill acquired during year 97,351 31,447 — 47,419 176,217 Currency translation/other (123 ) (14,149 ) (2 ) (99 ) (14,373 ) Carrying amount as of July 2, 2016 $ 1,220,702 $ 632,700 $ 32,607 $ 235,652 $ 2,121,661 Goodwill acquired during year — 1,815,890 — — 1,815,890 Currency translation/other 10,343 (16,082 ) — (15,684 ) (21,423 ) Carrying amount as of July 1, 2017 $ 1,231,045 $ 2,432,508 $ 32,607 $ 219,968 $ 3,916,128 Amortizable intangible assets acquired during fiscal 2017 were $833.1 million , with a weighted-average amortization period of 12.0 years . Amortizable intangible assets acquired during fiscal 2017 by category were customer relationships and other of $832.6 million and $0.5 million , respectively, with a weighted-average amortization period of 12.0 years and 3.0 years , respectively. Fully amortized intangible assets have been removed in the period fully amortized in the table below, which presents the company’s amortizable intangible assets in total by category as follows: Jul. 1, 2017 Jul. 2, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (In thousands) Customer relationships $ 1,073,577 $ (209,253 ) $ 864,324 $ 265,441 $ (126,194 ) $ 139,247 Non-compete agreements 32,385 (25,384 ) 7,001 36,405 (21,312 ) 15,093 Trademarks 11,050 (7,002 ) 4,048 10,753 (5,363 ) 5,390 Other 13,622 (10,704 ) 2,917 13,622 (7,786 ) 5,836 Total amortizable intangible assets $ 1,130,634 $ (252,343 ) $ 878,291 $ 326,221 $ (160,655 ) $ 165,566 The table below presents the company’s indefinite-lived intangible assets by category as follows: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Trademarks $ 158,251 $ 40,929 Licenses 969 966 Total indefinite-lived intangible assets $ 159,220 $ 41,895 Amortization expense for 2017 , 2016 and 2015 was $112.9 million , $37.3 million and $40.0 million , respectively. The estimated future amortization expense for the next five fiscal years on intangible assets outstanding as of July 1, 2017 is shown below: Amount (In thousands) 2018 $ 105,474 2019 98,915 2020 94,880 2021 85,255 2022 83,548 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Jul. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, the company does not use derivative financial instruments for trading or speculative purposes. Hedging of interest rate risk Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates. Details of outstanding swap agreements as of July 1, 2017 are set forth below: Maturity Date of Swap Notional Value Fixed Coupon Rate on Hedged Debt Floating Interest Rate on Swap Floating Rate Reset Terms February 12, 2018 $ 500 5.25 % Six-month LIBOR Every six months in arrears April 1, 2019 $ 500 1.90 % Three-month LIBOR Every three months in advance October 1, 2020 $ 750 2.60 % Three-month LIBOR Every three months in advance July 15, 2021 $ 500 2.50 % Three-month LIBOR Every three months in advance Hedging of foreign currency risk In fiscal 2017 , Sysco entered into cross-currency swap contracts to hedge the foreign currency transaction risk of certain pound sterling-denominated intercompany loans with a total notional value of £234.2 million . These swaps have been designated as cash flow hedges and mature at the same time as the related loans in July 2021. There are no credit-risk-related contingent features associated with these swaps. These intercompany loans are considered to be of a long-term investment nature, therefore, the effective portion of the derivative gain or loss is recorded in accumulated other comprehensive income and will be subsequently reclassified to earnings when the loan balances are no longer considered to be of a long-term investment nature. The company entered into cross currency swap contracts to hedge the foreign currency exposure of our net investment in certain foreign operations. The effective portion of the derivative gain or loss is recorded in accumulated other comprehensive income and will be subsequently reclassified to earnings when the hedged net investment is either sold or substantially liquidated. Sysco designated its Euro-denominated debt of €500 million issued in June 2016 as a net investment hedge. Sysco also designated its cross currency swap contracts entered into in August 2016 as a net investment hedge with a total notional value of €534 million . The remeasurement gain or loss is recorded in accumulated other comprehensive income and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. Sysco's operations in the U.K. and Sweden have inventory purchases denominated in currencies other than their functional currency, such as the Euro, U.S. dollar, Polish zloty and Danish krone. These inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. The company enters into foreign currency forward swap contracts to sell the applicable entity's functional currency and buy currencies matching the inventory purchase, which operate as cash flow hedges of the company's foreign currency-denominated inventory purchases. These swap contracts are recorded at fair value on the balance sheet and within accumulated other comprehensive income. The amount of ineffectiveness, if any, is recorded in earnings. Amounts in accumulated other comprehensive income are reclassified into earnings in the same period during which the hedged forecasted transactions affect earnings, which is the period in which the company recognizes the sales associated with the specified foreign currency-denominated inventory purchases. Hedging of fuel price risk In fiscal 2017, Sysco began utilizing fuel commodity swap contracts to hedge against the risk of the change in the price of diesel on anticipated future purchases. These swaps, with a total notional value of $78 million , have maturity dates extending into June 2018 and have been designated as cash flow hedges. These swap contracts are recorded at fair value on the balance sheet and the effective portion of any derivative gain or loss is initially recorded in accumulated other comprehensive income. The amount of ineffectiveness, if any, is recorded in earnings. Amounts in accumulated other comprehensive income are reclassified into earnings in the same period during which the hedged forecasted transactions occur, which is when the fuel is consumed. The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of July 1, 2017 , July 2, 2016 and June 27, 2015 are as follows: Derivative Fair Value Balance Sheet Location Jul. 1, 2017 Jul. 2, 2016 Jun. 27, 2015 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ 707 $ — $ — Interest rate swaps Other assets 36,805 12,597 Interest rate swaps Other long-term liabilities (21,390 ) — — Cash Flow Hedges: Fuel swaps Other current assets $ 717 $ — $ — Fuel swaps Other current liabilities (6,160 ) Foreign currency forwards Other current liabilities (154 ) — — Fuel swaps Other long-term liabilities (160 ) Cross currency swaps Other long-term liabilities (5,816 ) — — Net Investment Hedges: Foreign currency swaps Other long-term liabilities $ (12,308 ) $ — $ — The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the fiscal periods ended July 1, 2017 , July 2, 2016 and June 27, 2015 presented on a pretax basis are as follows: Location of (Gain) or Loss Recognized Amount of (Gain) or Loss Recognized 2017 2016 2015 (In thousands) Fair Value Hedge Relationships: Interest rate swaps Interest expense $ (9,022 ) $ (12,033 ) $ (21,960 ) Cash Flow Hedge Relationships: Forward starting interest rate swaps (1) Interest expense $ 11,495 $ 11,543 $ 8,305 Forward starting interest rate swaps Other comprehensive income — (6,134 ) (55,374 ) Fuel swaps Other comprehensive income (5,335 ) — — Foreign currency forwards Other comprehensive income (4,389 ) — — Cross currency swaps Other comprehensive income (1,148 ) — — Net Investment Hedge Relationships: Foreign currency swaps Other comprehensive income $ (34,152 ) $ — $ — (1) Represents amortization of losses on forward starting interest rate swap agreements that were previously settled. For fair value hedges of interest rate risk, hedge ineffectiveness represents the difference between the changes in the fair value of the derivative instruments and the changes in fair value of the fixed rate debt attributable to changes in the benchmark interest rate. For cash flow hedges, hedge ineffectiveness is the difference of the change in the fair value of the derivative compared to the change in the hedged transaction. Hedge ineffectiveness is recorded directly in earnings within interest expense for interest rate swaps, other income and expense, net for hedging of the foreign exchange risk on intercompany loans, cost of sales for foreign exchange risk on inventory purchases and operating expense for fuel hedging. All amounts were immaterial for fiscal 2017 , 2016 and 2015 . None of the instruments contain credit-risk-related contingent features. |
SELF-INSURED LIABILITIES
SELF-INSURED LIABILITIES | 12 Months Ended |
Jul. 01, 2017 | |
Loss Contingency [Abstract] | |
SELF-INSURED LIABILITIES | SELF-INSURED LIABILITIES Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. The company also maintains a fully self-insured group medical program. A summary of the activity in self-insured liabilities appears below: 2017 2016 2015 (In thousands) Balance at beginning of period $ 199,059 $ 193,312 $ 194,476 Charged to costs and expenses 523,674 418,917 367,025 Payments (476,922 ) (413,170 ) (368,189 ) Balance at end of period $ 245,811 $ 199,059 $ 193,312 |
DEBT AND OTHER FINANCING ARRANG
DEBT AND OTHER FINANCING ARRANGEMENTS | 12 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER FINANCING ARRANGEMENTS | DEBT AND OTHER FINANCING ARRANGEMENTS Sysco’s debt consists of the following: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Commercial paper, interest at 1.42% as of July 1, 2017 $ 119,691 $ — Senior notes, interest at 5.25%, maturing in fiscal 2018 (1) 500,311 506,456 Senior notes, interest at 1.90%, maturing in fiscal 2019 (1) 491,260 502,151 Senior notes, interest at 5.375%, maturing in fiscal 2019 (1) 249,456 249,141 Senior notes, interest at 2.60%, maturing in fiscal 2021 (1) 739,239 762,227 Senior notes, interest at 2.50%, maturing in fiscal 2022 (1) 488,554 506,484 Senior notes, interest at 2.60%, maturing in fiscal 2022 (1) 445,853 445,026 Senior notes, interest at 1.25%, maturing in fiscal 2023 (1) 566,767 552,391 Senior notes, interest at 3.75%, maturing in fiscal 2026 (1) 746,288 746,023 Senior notes, interest at 3.30%, maturing in fiscal 2027 (1) 991,370 990,603 Debentures, interest at 7.16%, maturing in fiscal 2027 (2) 50,000 50,000 Senior notes, interest at 3.25%, maturing in fiscal 2028 (1) 742,526 — Debentures, interest at 6.50%, maturing in fiscal 2029 (1) 223,822 223,716 Senior notes, interest at 5.375%, maturing in fiscal 2036 (1) 497,089 496,932 Senior notes, interest at 6.625%, maturing in fiscal 2039 (1) 248,396 244,655 Senior notes, interest at 4.85%, maturing in fiscal 2046 (1) 495,552 495,395 Senior notes, interest at 4.50%, maturing in fiscal 2046 (1) 493,981 493,897 Notes payable, capital leases, and other debt, interest averaging 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 and 3.12% and maturing at various dates to fiscal 2025 as of July 2, 2016 104,735 170,305 Total debt 8,194,890 7,435,402 Less current maturities of long-term debt (530,075 ) (8,909 ) Less notes payable (3,938 ) (89,563 ) Net long-term debt $ 7,660,877 $ 7,336,930 (1) Represents senior notes that are unsecured, are not subject to any sinking fund requirement and include a redemption provision that allows Sysco to retire the debentures and notes at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture and note holders are not penalized by the early redemption. (2) This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity. As of July 1, 2017 , the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below: Amount (In thousands) 2018 $ 529,579 2019 774,138 2020 23,862 2021 762,906 2022 956,420 Sysco has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $2 billion . As of July 1, 2017 , there were $119.7 million in commercial paper issuances outstanding. Any outstanding amounts are classified within long-term debt, as the program is supported by a long-term revolving credit facility. During the first 52 weeks of 2017 , aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from zero to approximately $1.6 billion . Senior notes offering related to repayment of commercial paper borrowings On June 19, 2017, Sysco issued 3.25% senior notes totaling $750 million in principal amount. Sysco used the net proceeds from the offering to pay off a portion of its outstanding commercial paper borrowings. The notes are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes. Interest on the senior notes maturing in 2027 will be paid semi-annually in arrears on January 15 and July 15, commencing on January 15, 2018. At Sysco’s option, any or all of the senior notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem the notes before the date that is three months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed that would be due if such notes matured on the applicable date described above. If Sysco elects to redeem the notes on or after the date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the notes to be redeemed. Sysco will pay accrued and unpaid interest on the notes redeemed to the redemption date. Interest expense on redemption of senior notes related to US Foods Merger On June 26, 2015, Sysco terminated the US Foods merger agreement, triggering the redemption of the senior notes that had been issued in contemplation of the proposed merger at a redemption price equal to 101% of the principal of the senior notes. The repayment of these senior notes in July 2015 triggered a redemption loss of $86.5 million included in interest expense for the first quarter of fiscal 2016 . At the time of the offering of notes, the company entered into interest rate swap agreements that effectively converted $500 million of senior notes maturing in fiscal 2018 and $750 million of senior notes maturing in fiscal 2020 to floating rate debt. These transactions were designated as fair value hedges against the changes in fair value of fixed rate debt resulting from changes in interest rates. The company terminated the swaps in fiscal 2016 for proceeds of $14.5 million in connection with the redemption of these senior notes. Interest expense for fiscal 2016 includes the following amounts from these transactions: 53-Week Period Ended Jul. 2, 2016 (In thousands) Redemption premium payment $ 50,000 Debt issuance cost write-off 28,642 Bond discount write-off 17,869 Gain on swap termination (10,051 ) Loss on extinguishment of debt 86,460 Interest expense on senior notes 8,375 Total $ 94,835 As of July 1, 2017 and July 2, 2016 , letters of credit outstanding were $191.3 million and $207.7 million , respectively. |
LEASES
LEASES | 12 Months Ended |
Jul. 01, 2017 | |
Leases [Abstract] | |
LEASES | LEASES Sysco has obligations under capital and operating leases for certain distribution facilities, vehicles, equipment and computers. Total rental expense under operating leases was $170.5 million , $100.0 million , and $104.3 million in fiscal 2017 , 2016 and 2015 , respectively. Contingent rentals, subleases and assets and obligations under capital leases are not significant. Aggregate minimum lease payments by fiscal year under existing long-term operating leases are as follows: Amount (In thousands) 2018 $ 96,953 2019 79,929 2020 67,010 2021 54,456 2022 45,851 Thereafter 261,017 |
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES | 12 Months Ended |
Jul. 01, 2017 | |
Other Liabilities Disclosure [Abstract] | |
OTHER LONG-TERM LIABILITIES | OTHER LONG-TERM LIABILITIES The following table presents details of the company’s other long-term liabilities: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Retirement Plans $ 573,298 $ 689,310 Supplemental executive retirement plan 432,614 450,945 Self-insurance 153,144 119,689 Other 214,766 108,538 Total $ 1,373,822 $ 1,368,482 |
COMPANY-SPONSORED EMPLOYEE BENE
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Jul. 01, 2017 | |
Retirement Benefits [Abstract] | |
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS Sysco has company-sponsored defined benefit and defined contribution retirement plans for its employees. Also, the company provides certain health care benefits to eligible retirees and their dependents. Defined Contribution Plans The company operates a defined contribution 401(k) Plan as a Safe Harbor Plan, which is a plan that treats all employees’ benefits equally within the plan, under Sections 401(k) and 401(m) of the Internal Revenue Code with respect to non-union employees and those union employees whose unions adopted the Safe Harbor Plan provisions. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pre-tax contribution on the first 5% of the participant’s compensation contributed by the participant. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. For union employees who are members of unions that did not adopt the Safe Harbor Plan provisions, the plan provides that under certain circumstances the company may make matching contributions of up to 50% of the first 6% of a participant’s compensation. The company also has a nonqualified, unfunded Management Savings Plan (MSP) available to key management personnel who are participants in the Management Incentive Plan. Participants may defer up to 50% of their annual salary and up to 100% of their annual bonus. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pre-tax contribution on the first 5% of the participant’s eligible compensation that is deferred. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. All company contributions to the MSP are limited by the amounts contributed by the company to the participant’s 401(k) account. Sysco’s expense related to its defined contribution plans was $141.2 million in fiscal 2017 , $135.5 million in fiscal 2016 , and $ 125.4 million in fiscal 2015 . Defined Benefit Plans Sysco maintains various qualified pension plans (Retirement Plans) that pays benefits to participating employees at retirement, using formulas based on a participant’s years of service and compensation. The U.S. plan is frozen for all U.S.-based salaried and non-union hourly employees, as these employees are eligible for benefits under the company’s defined contribution 401(k) plan. In connection with the Brakes Acquisition, Sysco assumed the obligations of various defined benefit pension plans that were maintained by the Brakes Group that cover certain employees, primarily in the U.K., France and Sweden; however, the U.K. defined benefit plan is frozen to plan participants. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. In addition to receiving benefits upon retirement under the company’s Retirement Plan, certain key management personnel who were participants in the Management Incentive Plan (MIP) are entitled to receive benefits under a Supplemental Executive Retirement Plan (SERP). This plan is a nonqualified, unfunded supplementary retirement plan. This plan is frozen to all participants, and current MIP participants are eligible to participate in the MSP. The company also provides certain health care benefits to eligible retirees and their dependents. These health care benefits represent Sysco’s unfunded other postretirement medical plans. The plan had benefit obligations of $13.6 million as of July 1, 2017 and $13.4 million as of July 2, 2016 . Funded Status Accumulated pension assets measured against the obligation for pension benefits represents the funded status of a given plan. The funded status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “U.S. Pension Benefits” in the tables below includes both the Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,284,776 $ 3,679,127 $ 400,028 Service cost 14,287 11,815 2,880 Interest cost 171,282 174,602 9,951 Amendments 925 — (110 ) Curtailments — — (611 ) Actuarial (gain) loss, net (86,680 ) 517,070 26,528 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (4,052 ) Benefit obligation at end of year 4,224,231 4,284,776 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,115,040 3,003,128 271,821 Actual return on plan assets 333,890 52,268 1,938 Employer contribution (1) 53,091 157,482 4,530 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (5,037 ) Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 Funded status at end of year $ (882,569 ) $ (1,169,736 ) $ (161,362 ) In order to meet a portion of its obligations under the SERP, Sysco has contributed to a rabbi trust, COLI policies on the lives of participants and interests in corporate-owned real estate assets. These assets are not included as plan assets or in the funded status amounts in the tables above and below. The life insurance policies on the lives of the participants had carrying values of $95.3 million as of July 1, 2017 and $97.0 million as of July 2, 2016 . Sysco is the sole owner and beneficiary of such policies. The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Current accrued benefit liability (Accrued expenses) $ (30,538 ) $ (29,480 ) $ (1,477 ) Non-current accrued benefit liability (Other long-term liabilities) (852,031 ) (1,140,256 ) (159,886 ) Net amount recognized $ (882,569 ) $ (1,169,736 ) $ (161,363 ) Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 Accumulated other comprehensive loss (income) as of July 2, 2016 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits (In thousands) Prior service cost $ 38,907 Actuarial losses (gains) 1,760,556 Total $ 1,799,463 The accumulated benefit obligation, which does not consider any salary increases for the remaining active union employees in the U.S. Retirement Plan, for the company-sponsored defined benefit pension plans was $4.6 billion and $4.3 billion as of July 1, 2017 and July 2, 2016 , respectively. Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,213,318 $ 4,272,547 $ 413,552 Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 (1) Information under Pension Benefits as of July 1, 2017 and July 2, 2016 includes both the Retirement Plan and the SERP. Components of Net Benefit Costs and Other Comprehensive Income The components of net company-sponsored pension costs for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,287 $ 2,880 $ 11,815 $ 11,263 Interest cost 171,282 9,951 174,602 171,120 Expected return on plan assets (222,699 ) (10,033 ) (216,888 ) (228,624 ) Amortization of prior service cost 11,202 (1 ) 11,201 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Curtailment loss — (611 ) — — Net pension (benefits) costs $ 15,583 $ 2,148 $ 2,916 $ (15,259 ) Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 11,202 $ (1 ) $ 11,202 $ 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Prior service cost arising in current year (925 ) 110 — (914 ) Effect of exchange rates on amounts in AOCI — (1,269 ) — — Actuarial (loss) gain arising in current year 197,871 (34,623 ) (681,691 ) (62,270 ) Net pension costs $ 249,659 $ (35,821 ) $ (648,303 ) $ (32,202 ) Amounts included in accumulated other comprehensive loss (income) as of July 1, 2017 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2018 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 9,460 $ (10 ) $ 9,450 Amortization of actuarial losses (gains) 35,696 2 35,698 Total $ 45,156 $ (8 ) $ 45,148 Employer Contributions The company made cash contributions to its company-sponsored pension plans of $57.6 million and $157.5 million in fiscal years 2017 and 2016 , respectively. The $25 million contribution to the U.S. Retirement Plan in fiscal 2017 was voluntary, as there were no required contributions to meet ERISA minimum funding requirements in fiscal 2017 . There are no required contributions to the Retirement Plan to meet ERISA minimum funding requirements in fiscal 2018 . The company’s contributions to the SERP plan are made in the amounts needed to fund current year benefit payments. The estimated aggregate fiscal 2018 contribution to fund benefit payments for the SERP plan is $30.5 million . The estimated fiscal 2018 contributions to fund benefit payments for the international retirement plans are $9.2 million . Estimated Future Benefit Payments Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2018 $ 127,700 $ 9,169 2019 137,971 10,374 2020 147,995 11,045 2021 159,056 12,671 2022 170,078 12,965 Subsequent five years 1,005,292 84,500 Assumptions Weighted-average assumptions used to determine benefit obligations as of year-end were: Jul. 1, 2017 Jul. 2, 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % Discount rate — SERP 4.08 3.91 Discount rate — U.K. Retirement Plan 2.60 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 Rate of compensation increase — U.K. Retirement Plan N/A N/A As benefit accruals under the SERP are frozen, future pay is not projected in the determination of the benefit obligation as of July 1, 2017 or July 2, 2016 . Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2017 2016 2015 Discount rate — U.S. Retirement Plan 4.07 % 4.84 % 4.74 % Discount rate — SERP 3.91 4.63 4.59 Discount rate — U.K. Retirement Plan 2.80 N/A N/A Expected rate of return — U.S. Retirement Plan 7.25 7.25 7.75 Expected rate of return — U.K. Retirement Plan 4.15 N/A N/A Rate of compensation increase — U.S. Retirement Plan 2.62 3.89 3.89 Rate of compensation increase — U.K. Retirement Plan N/A N/A N/A For guidance in determining the discount rate for U.S. defined benefit plans, Sysco calculates the implied rate of return on a hypothetical portfolio of high-quality fixed-income investments for which the timing and amount of cash outflows approximates the estimated payouts of the company-sponsored pension plans. Sysco uses an annualized corporate bond yield curve to estimate the rate at which pension benefits could effectively be settled to estimate a discount rate for the U.K. Retirement Plan. The discount rate assumption is updated annually and revised as deemed appropriate. The discount rates to be used for the calculation of fiscal 2018 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 4.19% and 2.60% , respectively. The discount rate to be used for the calculation of fiscal 2018 net company-sponsored benefit costs for the SERP is 4.08% . The expected long-term rate of return on plan assets assumption for the Retirement Plans are net return on assets assumption, representing gross return on assets less plan expenses. The expected return for the U.S. Retirement Plan is derived from a mathematical asset model that incorporates assumptions as to the various asset class returns, reflecting a combination of rigorous historical performance analysis and the forward-looking views of the financial markets regarding the yield on bonds, the historical returns of the major stock markets and returns on alternative investments. The expected return for the U.K. Retirement Plan is derived from a long-term swap yield time horizon adjusted for the expected return based on the plan’s current asset allocation and historical results. The rate of return assumption is reviewed annually and revised as deemed appropriate. The expected long-term rate of return to be used in the calculation of fiscal 2018 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 7.0% and 4.55% , respectively. Plan Assets Investment Strategy The company’s overall strategic investment objectives for the U.S. Retirement Plan are to preserve capital for future benefit payments and to balance risk and return commensurate with ongoing changes in the valuation of plan liabilities. Over time, the company intends to decrease the risk of the U.S. Retirement Plan’s investments in order to preserve the U.S. Retirement Plan’s funded status. In order to accomplish these objectives, the company oversees the U.S. Retirement Plan’s investment objectives and policy design, decides proper plan asset class strategies and structures, monitors the performance of plan investment managers and investment funds and determines the proper investment allocation of pension plan contributions. The company has created an investment structure for the U.S. Retirement Plan that takes into account the nature of the U.S. Retirement Plan’s liabilities. This structure ensures the U.S. Retirement Plan’s investments are diversified within each asset class, in addition to being diversified across asset classes with the intent to build asset class portfolios that are structured without strategic bias for or against any subcategories within each asset class. The company has also created a set of investment guidelines for the U.S. Retirement Plan’s investment managers to specify prohibited transactions, including borrowing of money except for real estate, private equity or hedge fund portfolios where leverage is a key component of the investment strategy and permitted in the investments’ governing documents, the purchase of securities on margin unless fully collateralized by cash or cash equivalents or short sales, pledging, mortgaging or hypothecating of any securities, except for loans of securities that are fully collateralized, market timing transactions and the direct purchase of the securities of Sysco or the investment manager. The purchase or sale of derivatives for speculation or leverage is also prohibited; however, investment managers are allowed to use derivative securities so long as they do not increase the risk profile or leverage of the manager’s portfolio. The U.S. Retirement Plan’s target and actual investment allocation as of July 1, 2017 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation U.S. equity 24 % 27 % International equity 24 22 Long duration fixed income 27 26 High yield & emerging markets 7 7 Alternative investments 18 18 100 % Sysco’s U.S. Retirement Plan investment strategy is implemented through a combination of balanced and specialized investment managers, passive investment funds and actively managed investment funds. U.S. equity consists of both large-cap and small-to-mid-cap securities. Long duration fixed income investments include U.S. government and agency securities, corporate bonds from diversified industries, asset-backed securities, mortgage-backed securities, other debt securities and derivative securities. High yield fixed income consists of below investment grade corporate debt securities and may include derivative securities. Alternative investments may include private equity, private real estate, hedge funds, timberland, and commodities investments. Investment funds are selected based on each fund’s stated investment strategy to align with Sysco’s overall target mix of investments. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. The primary objective for the U.K. Retirement Plan is to provide sufficient assets to pay benefits as they fall due. The Retirement Plan has a return objective that aims to achieve a return on plan assets of 2.9% in excess of the return on the liability benchmark over rolling five year periods. The liability benchmark is the portfolio of swaps that best matches the liability profile of the Retirement Plan. The investment objective includes a risk statement that allows for the active risk within the plan asset portfolio to be below 12% per year, which may fluctuate over time as the composition of the portfolio changes and the levels of risk in markets change. The Retirement Plan’s Trustee and Solvency Manager seeks to achieve the Plan’s investment objectives by investing in a suitably diversified mix of assets. The company allows the Trustee and Solvency Manager to use derivatives such as forwards, futures, swaps and options for risk management and for the efficient implementation of the investment strategy. The company’s target and actual investment allocation as of July 1, 2017 is as follows: International Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 74 % Liability hedging assets 25 26 100 % The U.K. plan’s investment strategy is implemented primarily through a bespoke common contractual investment fund and liability hedging assets. The pooled investment fund consists of investment types including (1) equity investments covering a range of geographies and including investment managers that hold long and short positions, (2) credit investments including global investment grade and high yield bonds, loans and other debt and derivative securities, (3) property investments including global direct or indirect real estate holdings, (4) macro-oriented funds that seek to generate return by going long and short in a variety of markets and operate strategies which focus on markets rather than individual stocks and often use derivatives rather than physical assets, and (5) multi-strategy funds which combine a range of different credit, equity and macro-orientated ideas and dynamically allocate funds across asset classes. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. As discussed above, the Retirement Plans’ investments in equities, debt instruments and alternative investments provide a range of returns and also expose the plan to investment risk. However, the investment policies put in place by the company require diversification of plan assets across issuers, industries and countries. As such, the Retirement Plans do not have significant concentrations of risk in plan assets. Fair Value of Plan Assets Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). See Note 5 , "Fair Value Measurements," for a description of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The following is a description of the valuation methodologies used for assets and liabilities held by Sysco’s Retirement Plans measured at fair value. Cash and cash equivalents: Valued at amortized cost, which approximates fair value due to the short-term maturities of these investments. Cash and cash equivalents is included as a Level 1 measurement in the table below. Equity securities: Valued at the closing price reported on the exchange market. If a stock is not listed on a public exchange, such as an American Depository Receipt or some preferred stocks, the stock is valued using an evaluated bid price based on a compilation of observable market information. Inputs used include yields, the underlying security “best price”, adjustments for corporate actions and exchange prices of underlying and common stock of the same issuer. Equity securities valued at the closing price reported on the exchange market are classified as a Level 1 measurement in the table below. Fixed income securities: Valued using evaluated bid prices based on a compilation of observable market information or a broker quote in a non-active market. Inputs used vary by type of security, but include spreads, yields, rate benchmarks, rate of prepayment, cash flows, rating changes and collateral performance and type. All fixed income securities are included as a Level 2 measurement in the table below. Investment funds: Represents collective trust and funds holding debt, equity, hedge funds, private equity funds, exchange-traded real estate securities, and common contractual funds which are valued at the net asset value (NAV) provided by the manager of each fund. The NAV is calculated as the underlying net assets owned by the fund, divided by the number of shares outstanding. The NAV is based on the fair value of the underlying securities within the fund. Non-exchange traded real estate funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying real estate investments held by each fund. Each real estate investment is valued on the basis of a discounted cash flow approach. Inputs used include future rental receipts, expenses and residual values from a market participant view of the highest and best use of the real estate as rental property. The private equity funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying private equity investments held by each fund. The hedge funds are valued based on the hedge funds’ proportionate share of the net assets of the underlying private investment fund as determined by the underlying private investment fund’s general partner. Indirectly held investments are valued utilizing the latest financial reports supplied by the fund’s portfolio investments. Directly held investments are valued initially based on transaction price and are adjusted utilizing available market data and investment-specific factors, such as estimates of liquidation value, prices of recent transactions in the same or similar issuer, current operating performance and future expectations of the particular investment, changes in market outlook and the financing environment. Derivatives: Valuation method varies by type of derivative security. • Credit default and interest rate swaps: Valued using evaluated bid prices based on a compilation of observable market information. Inputs used for credit default swaps include spread curves and trade data about the credit quality of the counterparty. Inputs used for interest rate swaps include benchmark yields, swap curves, cash flow analysis, and interdealer broker rates. Credit default and interest rate swaps are included as a Level 2 measurement in the table below. • Foreign currency contracts: Valued using a standardized interpolation model that utilizes the quoted prices for standard-length forward foreign currency contracts and adjusts to the remaining term outstanding on the contract being valued. Foreign currency contracts are included as a Level 2 measurement in the table below. • Futures and option contracts: Valued at the closing price reported on the exchange market for exchange-traded futures and options. Over-the-counter options are valued using pricing models that are based on observable market information. Exchange-traded futures and options are included as a Level 1 measurement in the table below; over-the-counter options are included as a Level 2 measurement. The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . Investments in the funds may be redeemed once per day. (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 2, 2016 : Assets Measured at Fair Value as of Jul. 2, 2016 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 103,974 $ — $ — $ — $ 103,974 U.S. equity (1) 451,826 — — 270,501 722,327 International equity (1) 174,936 — — 547,719 722,655 Long duration fixed income: Corporate bonds — 631,927 — — 631,927 U.S. government and agency securities — 179,974 — — 179,974 Other (2) — 4,246 — — 4,246 High yield and emerging markets fixed income (3) — — — 214,735 214,735 Alternative investment funds: Hedge fund of funds (5) — — — 309,208 309,208 Real estate funds (6) 793 — — 162,108 162,901 Private equity funds (7) — — — 63,093 63,093 Total investments at fair value $ 731,529 $ 816,147 $ — $ 1,567,364 $ 3,115,040 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There were no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . (2) Include credit default swaps, interest rate swaps and futures. The fair value of asset positions totaled $0.3 million ; the fair value of liability positions totaled $0.3 million . (3) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 2, 2016 was $10 million . Approximately 20% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitments as of July 2, 2016 was $39.0 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . MULTIEMPLOYER EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans Sysco participates in several multiemployer defined benefit pension plans in the U.S. based on obligations arising under collective bargaining agreements covering union-represented employees. Expense is recognized at the time the contribution is made. Sysco does not directly manage these multiemployer plans, which are generally managed by boards of trustees, half of whom are appointed by the unions and the other half appointed by employers contributing to the plan. Approximately 13% of Sysco’s current employees in the U.S. are participants in such multiemployer plans as of July 1, 2017 . The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: • Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If Sysco chooses to stop participating in some of its multiemployer plans in the U.S, Sysco may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Based upon the information available from plan administrators, |
MULTIEMPLOYER EMPLOYEE BENEFIT
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Jul. 01, 2017 | |
Multiemployer Plans [Abstract] | |
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS | COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS Sysco has company-sponsored defined benefit and defined contribution retirement plans for its employees. Also, the company provides certain health care benefits to eligible retirees and their dependents. Defined Contribution Plans The company operates a defined contribution 401(k) Plan as a Safe Harbor Plan, which is a plan that treats all employees’ benefits equally within the plan, under Sections 401(k) and 401(m) of the Internal Revenue Code with respect to non-union employees and those union employees whose unions adopted the Safe Harbor Plan provisions. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pre-tax contribution on the first 5% of the participant’s compensation contributed by the participant. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. For union employees who are members of unions that did not adopt the Safe Harbor Plan provisions, the plan provides that under certain circumstances the company may make matching contributions of up to 50% of the first 6% of a participant’s compensation. The company also has a nonqualified, unfunded Management Savings Plan (MSP) available to key management personnel who are participants in the Management Incentive Plan. Participants may defer up to 50% of their annual salary and up to 100% of their annual bonus. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pre-tax contribution on the first 5% of the participant’s eligible compensation that is deferred. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. All company contributions to the MSP are limited by the amounts contributed by the company to the participant’s 401(k) account. Sysco’s expense related to its defined contribution plans was $141.2 million in fiscal 2017 , $135.5 million in fiscal 2016 , and $ 125.4 million in fiscal 2015 . Defined Benefit Plans Sysco maintains various qualified pension plans (Retirement Plans) that pays benefits to participating employees at retirement, using formulas based on a participant’s years of service and compensation. The U.S. plan is frozen for all U.S.-based salaried and non-union hourly employees, as these employees are eligible for benefits under the company’s defined contribution 401(k) plan. In connection with the Brakes Acquisition, Sysco assumed the obligations of various defined benefit pension plans that were maintained by the Brakes Group that cover certain employees, primarily in the U.K., France and Sweden; however, the U.K. defined benefit plan is frozen to plan participants. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. In addition to receiving benefits upon retirement under the company’s Retirement Plan, certain key management personnel who were participants in the Management Incentive Plan (MIP) are entitled to receive benefits under a Supplemental Executive Retirement Plan (SERP). This plan is a nonqualified, unfunded supplementary retirement plan. This plan is frozen to all participants, and current MIP participants are eligible to participate in the MSP. The company also provides certain health care benefits to eligible retirees and their dependents. These health care benefits represent Sysco’s unfunded other postretirement medical plans. The plan had benefit obligations of $13.6 million as of July 1, 2017 and $13.4 million as of July 2, 2016 . Funded Status Accumulated pension assets measured against the obligation for pension benefits represents the funded status of a given plan. The funded status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “U.S. Pension Benefits” in the tables below includes both the Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,284,776 $ 3,679,127 $ 400,028 Service cost 14,287 11,815 2,880 Interest cost 171,282 174,602 9,951 Amendments 925 — (110 ) Curtailments — — (611 ) Actuarial (gain) loss, net (86,680 ) 517,070 26,528 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (4,052 ) Benefit obligation at end of year 4,224,231 4,284,776 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,115,040 3,003,128 271,821 Actual return on plan assets 333,890 52,268 1,938 Employer contribution (1) 53,091 157,482 4,530 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (5,037 ) Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 Funded status at end of year $ (882,569 ) $ (1,169,736 ) $ (161,362 ) In order to meet a portion of its obligations under the SERP, Sysco has contributed to a rabbi trust, COLI policies on the lives of participants and interests in corporate-owned real estate assets. These assets are not included as plan assets or in the funded status amounts in the tables above and below. The life insurance policies on the lives of the participants had carrying values of $95.3 million as of July 1, 2017 and $97.0 million as of July 2, 2016 . Sysco is the sole owner and beneficiary of such policies. The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Current accrued benefit liability (Accrued expenses) $ (30,538 ) $ (29,480 ) $ (1,477 ) Non-current accrued benefit liability (Other long-term liabilities) (852,031 ) (1,140,256 ) (159,886 ) Net amount recognized $ (882,569 ) $ (1,169,736 ) $ (161,363 ) Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 Accumulated other comprehensive loss (income) as of July 2, 2016 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits (In thousands) Prior service cost $ 38,907 Actuarial losses (gains) 1,760,556 Total $ 1,799,463 The accumulated benefit obligation, which does not consider any salary increases for the remaining active union employees in the U.S. Retirement Plan, for the company-sponsored defined benefit pension plans was $4.6 billion and $4.3 billion as of July 1, 2017 and July 2, 2016 , respectively. Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,213,318 $ 4,272,547 $ 413,552 Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 (1) Information under Pension Benefits as of July 1, 2017 and July 2, 2016 includes both the Retirement Plan and the SERP. Components of Net Benefit Costs and Other Comprehensive Income The components of net company-sponsored pension costs for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,287 $ 2,880 $ 11,815 $ 11,263 Interest cost 171,282 9,951 174,602 171,120 Expected return on plan assets (222,699 ) (10,033 ) (216,888 ) (228,624 ) Amortization of prior service cost 11,202 (1 ) 11,201 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Curtailment loss — (611 ) — — Net pension (benefits) costs $ 15,583 $ 2,148 $ 2,916 $ (15,259 ) Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 11,202 $ (1 ) $ 11,202 $ 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Prior service cost arising in current year (925 ) 110 — (914 ) Effect of exchange rates on amounts in AOCI — (1,269 ) — — Actuarial (loss) gain arising in current year 197,871 (34,623 ) (681,691 ) (62,270 ) Net pension costs $ 249,659 $ (35,821 ) $ (648,303 ) $ (32,202 ) Amounts included in accumulated other comprehensive loss (income) as of July 1, 2017 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2018 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 9,460 $ (10 ) $ 9,450 Amortization of actuarial losses (gains) 35,696 2 35,698 Total $ 45,156 $ (8 ) $ 45,148 Employer Contributions The company made cash contributions to its company-sponsored pension plans of $57.6 million and $157.5 million in fiscal years 2017 and 2016 , respectively. The $25 million contribution to the U.S. Retirement Plan in fiscal 2017 was voluntary, as there were no required contributions to meet ERISA minimum funding requirements in fiscal 2017 . There are no required contributions to the Retirement Plan to meet ERISA minimum funding requirements in fiscal 2018 . The company’s contributions to the SERP plan are made in the amounts needed to fund current year benefit payments. The estimated aggregate fiscal 2018 contribution to fund benefit payments for the SERP plan is $30.5 million . The estimated fiscal 2018 contributions to fund benefit payments for the international retirement plans are $9.2 million . Estimated Future Benefit Payments Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2018 $ 127,700 $ 9,169 2019 137,971 10,374 2020 147,995 11,045 2021 159,056 12,671 2022 170,078 12,965 Subsequent five years 1,005,292 84,500 Assumptions Weighted-average assumptions used to determine benefit obligations as of year-end were: Jul. 1, 2017 Jul. 2, 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % Discount rate — SERP 4.08 3.91 Discount rate — U.K. Retirement Plan 2.60 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 Rate of compensation increase — U.K. Retirement Plan N/A N/A As benefit accruals under the SERP are frozen, future pay is not projected in the determination of the benefit obligation as of July 1, 2017 or July 2, 2016 . Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2017 2016 2015 Discount rate — U.S. Retirement Plan 4.07 % 4.84 % 4.74 % Discount rate — SERP 3.91 4.63 4.59 Discount rate — U.K. Retirement Plan 2.80 N/A N/A Expected rate of return — U.S. Retirement Plan 7.25 7.25 7.75 Expected rate of return — U.K. Retirement Plan 4.15 N/A N/A Rate of compensation increase — U.S. Retirement Plan 2.62 3.89 3.89 Rate of compensation increase — U.K. Retirement Plan N/A N/A N/A For guidance in determining the discount rate for U.S. defined benefit plans, Sysco calculates the implied rate of return on a hypothetical portfolio of high-quality fixed-income investments for which the timing and amount of cash outflows approximates the estimated payouts of the company-sponsored pension plans. Sysco uses an annualized corporate bond yield curve to estimate the rate at which pension benefits could effectively be settled to estimate a discount rate for the U.K. Retirement Plan. The discount rate assumption is updated annually and revised as deemed appropriate. The discount rates to be used for the calculation of fiscal 2018 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 4.19% and 2.60% , respectively. The discount rate to be used for the calculation of fiscal 2018 net company-sponsored benefit costs for the SERP is 4.08% . The expected long-term rate of return on plan assets assumption for the Retirement Plans are net return on assets assumption, representing gross return on assets less plan expenses. The expected return for the U.S. Retirement Plan is derived from a mathematical asset model that incorporates assumptions as to the various asset class returns, reflecting a combination of rigorous historical performance analysis and the forward-looking views of the financial markets regarding the yield on bonds, the historical returns of the major stock markets and returns on alternative investments. The expected return for the U.K. Retirement Plan is derived from a long-term swap yield time horizon adjusted for the expected return based on the plan’s current asset allocation and historical results. The rate of return assumption is reviewed annually and revised as deemed appropriate. The expected long-term rate of return to be used in the calculation of fiscal 2018 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 7.0% and 4.55% , respectively. Plan Assets Investment Strategy The company’s overall strategic investment objectives for the U.S. Retirement Plan are to preserve capital for future benefit payments and to balance risk and return commensurate with ongoing changes in the valuation of plan liabilities. Over time, the company intends to decrease the risk of the U.S. Retirement Plan’s investments in order to preserve the U.S. Retirement Plan’s funded status. In order to accomplish these objectives, the company oversees the U.S. Retirement Plan’s investment objectives and policy design, decides proper plan asset class strategies and structures, monitors the performance of plan investment managers and investment funds and determines the proper investment allocation of pension plan contributions. The company has created an investment structure for the U.S. Retirement Plan that takes into account the nature of the U.S. Retirement Plan’s liabilities. This structure ensures the U.S. Retirement Plan’s investments are diversified within each asset class, in addition to being diversified across asset classes with the intent to build asset class portfolios that are structured without strategic bias for or against any subcategories within each asset class. The company has also created a set of investment guidelines for the U.S. Retirement Plan’s investment managers to specify prohibited transactions, including borrowing of money except for real estate, private equity or hedge fund portfolios where leverage is a key component of the investment strategy and permitted in the investments’ governing documents, the purchase of securities on margin unless fully collateralized by cash or cash equivalents or short sales, pledging, mortgaging or hypothecating of any securities, except for loans of securities that are fully collateralized, market timing transactions and the direct purchase of the securities of Sysco or the investment manager. The purchase or sale of derivatives for speculation or leverage is also prohibited; however, investment managers are allowed to use derivative securities so long as they do not increase the risk profile or leverage of the manager’s portfolio. The U.S. Retirement Plan’s target and actual investment allocation as of July 1, 2017 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation U.S. equity 24 % 27 % International equity 24 22 Long duration fixed income 27 26 High yield & emerging markets 7 7 Alternative investments 18 18 100 % Sysco’s U.S. Retirement Plan investment strategy is implemented through a combination of balanced and specialized investment managers, passive investment funds and actively managed investment funds. U.S. equity consists of both large-cap and small-to-mid-cap securities. Long duration fixed income investments include U.S. government and agency securities, corporate bonds from diversified industries, asset-backed securities, mortgage-backed securities, other debt securities and derivative securities. High yield fixed income consists of below investment grade corporate debt securities and may include derivative securities. Alternative investments may include private equity, private real estate, hedge funds, timberland, and commodities investments. Investment funds are selected based on each fund’s stated investment strategy to align with Sysco’s overall target mix of investments. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. The primary objective for the U.K. Retirement Plan is to provide sufficient assets to pay benefits as they fall due. The Retirement Plan has a return objective that aims to achieve a return on plan assets of 2.9% in excess of the return on the liability benchmark over rolling five year periods. The liability benchmark is the portfolio of swaps that best matches the liability profile of the Retirement Plan. The investment objective includes a risk statement that allows for the active risk within the plan asset portfolio to be below 12% per year, which may fluctuate over time as the composition of the portfolio changes and the levels of risk in markets change. The Retirement Plan’s Trustee and Solvency Manager seeks to achieve the Plan’s investment objectives by investing in a suitably diversified mix of assets. The company allows the Trustee and Solvency Manager to use derivatives such as forwards, futures, swaps and options for risk management and for the efficient implementation of the investment strategy. The company’s target and actual investment allocation as of July 1, 2017 is as follows: International Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 74 % Liability hedging assets 25 26 100 % The U.K. plan’s investment strategy is implemented primarily through a bespoke common contractual investment fund and liability hedging assets. The pooled investment fund consists of investment types including (1) equity investments covering a range of geographies and including investment managers that hold long and short positions, (2) credit investments including global investment grade and high yield bonds, loans and other debt and derivative securities, (3) property investments including global direct or indirect real estate holdings, (4) macro-oriented funds that seek to generate return by going long and short in a variety of markets and operate strategies which focus on markets rather than individual stocks and often use derivatives rather than physical assets, and (5) multi-strategy funds which combine a range of different credit, equity and macro-orientated ideas and dynamically allocate funds across asset classes. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. As discussed above, the Retirement Plans’ investments in equities, debt instruments and alternative investments provide a range of returns and also expose the plan to investment risk. However, the investment policies put in place by the company require diversification of plan assets across issuers, industries and countries. As such, the Retirement Plans do not have significant concentrations of risk in plan assets. Fair Value of Plan Assets Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). See Note 5 , "Fair Value Measurements," for a description of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The following is a description of the valuation methodologies used for assets and liabilities held by Sysco’s Retirement Plans measured at fair value. Cash and cash equivalents: Valued at amortized cost, which approximates fair value due to the short-term maturities of these investments. Cash and cash equivalents is included as a Level 1 measurement in the table below. Equity securities: Valued at the closing price reported on the exchange market. If a stock is not listed on a public exchange, such as an American Depository Receipt or some preferred stocks, the stock is valued using an evaluated bid price based on a compilation of observable market information. Inputs used include yields, the underlying security “best price”, adjustments for corporate actions and exchange prices of underlying and common stock of the same issuer. Equity securities valued at the closing price reported on the exchange market are classified as a Level 1 measurement in the table below. Fixed income securities: Valued using evaluated bid prices based on a compilation of observable market information or a broker quote in a non-active market. Inputs used vary by type of security, but include spreads, yields, rate benchmarks, rate of prepayment, cash flows, rating changes and collateral performance and type. All fixed income securities are included as a Level 2 measurement in the table below. Investment funds: Represents collective trust and funds holding debt, equity, hedge funds, private equity funds, exchange-traded real estate securities, and common contractual funds which are valued at the net asset value (NAV) provided by the manager of each fund. The NAV is calculated as the underlying net assets owned by the fund, divided by the number of shares outstanding. The NAV is based on the fair value of the underlying securities within the fund. Non-exchange traded real estate funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying real estate investments held by each fund. Each real estate investment is valued on the basis of a discounted cash flow approach. Inputs used include future rental receipts, expenses and residual values from a market participant view of the highest and best use of the real estate as rental property. The private equity funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying private equity investments held by each fund. The hedge funds are valued based on the hedge funds’ proportionate share of the net assets of the underlying private investment fund as determined by the underlying private investment fund’s general partner. Indirectly held investments are valued utilizing the latest financial reports supplied by the fund’s portfolio investments. Directly held investments are valued initially based on transaction price and are adjusted utilizing available market data and investment-specific factors, such as estimates of liquidation value, prices of recent transactions in the same or similar issuer, current operating performance and future expectations of the particular investment, changes in market outlook and the financing environment. Derivatives: Valuation method varies by type of derivative security. • Credit default and interest rate swaps: Valued using evaluated bid prices based on a compilation of observable market information. Inputs used for credit default swaps include spread curves and trade data about the credit quality of the counterparty. Inputs used for interest rate swaps include benchmark yields, swap curves, cash flow analysis, and interdealer broker rates. Credit default and interest rate swaps are included as a Level 2 measurement in the table below. • Foreign currency contracts: Valued using a standardized interpolation model that utilizes the quoted prices for standard-length forward foreign currency contracts and adjusts to the remaining term outstanding on the contract being valued. Foreign currency contracts are included as a Level 2 measurement in the table below. • Futures and option contracts: Valued at the closing price reported on the exchange market for exchange-traded futures and options. Over-the-counter options are valued using pricing models that are based on observable market information. Exchange-traded futures and options are included as a Level 1 measurement in the table below; over-the-counter options are included as a Level 2 measurement. The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . Investments in the funds may be redeemed once per day. (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 2, 2016 : Assets Measured at Fair Value as of Jul. 2, 2016 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 103,974 $ — $ — $ — $ 103,974 U.S. equity (1) 451,826 — — 270,501 722,327 International equity (1) 174,936 — — 547,719 722,655 Long duration fixed income: Corporate bonds — 631,927 — — 631,927 U.S. government and agency securities — 179,974 — — 179,974 Other (2) — 4,246 — — 4,246 High yield and emerging markets fixed income (3) — — — 214,735 214,735 Alternative investment funds: Hedge fund of funds (5) — — — 309,208 309,208 Real estate funds (6) 793 — — 162,108 162,901 Private equity funds (7) — — — 63,093 63,093 Total investments at fair value $ 731,529 $ 816,147 $ — $ 1,567,364 $ 3,115,040 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There were no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . (2) Include credit default swaps, interest rate swaps and futures. The fair value of asset positions totaled $0.3 million ; the fair value of liability positions totaled $0.3 million . (3) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 2, 2016 was $10 million . Approximately 20% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitments as of July 2, 2016 was $39.0 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . MULTIEMPLOYER EMPLOYEE BENEFIT PLANS Defined Benefit Pension Plans Sysco participates in several multiemployer defined benefit pension plans in the U.S. based on obligations arising under collective bargaining agreements covering union-represented employees. Expense is recognized at the time the contribution is made. Sysco does not directly manage these multiemployer plans, which are generally managed by boards of trustees, half of whom are appointed by the unions and the other half appointed by employers contributing to the plan. Approximately 13% of Sysco’s current employees in the U.S. are participants in such multiemployer plans as of July 1, 2017 . The risks of participating in these multiemployer plans are different from single-employer plans in the following aspects: • Assets contributed to the multiemployer plan by one employer may be used to provide benefits to employees of other participating employers. • If a participating employer stops contributing to the plan, the unfunded obligations of the plan may be borne by the remaining participating employers. • If Sysco chooses to stop participating in some of its multiemployer plans in the U.S, Sysco may be required to pay those plans an amount based on the underfunded status of the plan, referred to as a withdrawal liability. Based upon the information available from plan administrators, |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share, Basic [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: 2017 2016 2015 (In thousands, except for share and per share data) Numerator: Net earnings $ 1,142,503 $ 949,622 $ 686,773 Denominator: Weighted-average basic shares outstanding 543,496,816 573,057,406 592,072,308 Dilutive effect of share-based awards 5,048,211 4,334,000 4,776,726 Weighted-average diluted shares outstanding 548,545,027 577,391,406 596,849,034 Basic earnings per share $ 2.10 $ 1.66 $ 1.16 Diluted earnings per share $ 2.08 $ 1.64 $ 1.15 The number of options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately 4,194,173 , 3,586,927 and 2,400,000 for fiscal 2017 , 2016 and 2015 , respectively. Dividends declared were $700.9 million , $695.5 million and $705.5 million in fiscal 2017 , 2016 and 2015 , respectively. Included in dividends declared for each year were dividends declared but not yet paid at year-end of approximately $174.9 million , $174.1 million and $178.3 million in fiscal 2017 , 2016 and 2015 , respectively. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Jul. 01, 2017 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
OTHER COMPREHENSIVE INCOME | OTHER COMPREHENSIVE INCOME Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity, such as foreign currency translation adjustment, amounts related to cash flow hedging arrangements and certain amounts related to pension and other postretirement plans. Comprehensive income was $1.2 billion , $514.7 million and $406.2 million for fiscal 2017 , 2016 and 2015 , respectively. A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows: 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 Operating expenses $ 11,370 $ 4,366 $ 7,004 Amortization of actuarial loss (gain), net Operating expenses 41,689 15,724 25,965 Total reclassification adjustments 53,059 20,090 32,969 Other comprehensive income before Net actuarial (loss) gain, net arising in the current year 168,498 71,215 97,283 Total other comprehensive income before 168,498 71,215 97,283 Foreign currency translation: Foreign currency translation adjustment N/A (11,243 ) — (11,243 ) Hedging instruments: Reclassification adjustments: Gains on cash flow hedges Interest expense 11,495 4,413 7,082 Other comprehensive income before Change in cash flow hedge (10,871 ) (4,173 ) (6,698 ) Change in net investment hedge N/A (34,152 ) (10,140 ) (24,012 ) Total other comprehensive income $ 176,786 $ 81,405 $ 95,381 2016 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 11,351 $ 4,359 $ 6,992 Amortization of actuarial loss (gain), net Operating expenses 21,677 8,325 13,352 Total reclassification adjustments 33,028 12,684 20,344 Other comprehensive income before reclassification adjustments: Net actuarial (loss) gain, net arising in the current year (681,034 ) (261,517 ) (419,517 ) Total other comprehensive income before reclassification adjustments (681,034 ) (261,517 ) (419,517 ) Foreign currency translation: Foreign currency translation adjustment N/A (39,080 ) — (39,080 ) Interest rate swaps: Reclassification adjustments: Gains on cash flow hedges Interest expense 11,543 4,432 7,111 Other comprehensive income before reclassification adjustments: Change in fair value of cash flow hedges (6,134 ) (2,355 ) (3,779 ) Total other comprehensive loss $ (681,677 ) $ (246,756 ) $ (434,921 ) 2015 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 11,279 $ 4,331 $ 6,949 Amortization of actuarial loss (gain), net Operating expenses 19,437 7,464 11,972 Total reclassification adjustments 30,716 11,795 18,921 Other comprehensive income before reclassification adjustments Prior service cost arising in the current year N/A (914 ) (351 ) (563 ) Net actuarial loss (gain) arising in the current year N/A (61,221 ) (23,509 ) (37,712 ) Total other comprehensive income before reclassification adjustments (62,135 ) (23,860 ) (38,275 ) Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A (232,185 ) — (232,185 ) Interest rate swaps: Reclassification adjustments: Gains on cash flow hedges Interest expense 8,305 3,189 5,116 Other comprehensive income before reclassification adjustments: Change in fair value of cash flow hedge N/A (55,374 ) (21,263 ) (34,111 ) Total other comprehensive loss $ (310,673 ) $ (30,139 ) $ (280,534 ) The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented: Pension and Other Postretirement Benefit Plans, net of tax Foreign Currency Translation Interest Rate Swap, net of tax Total (In thousands) Balance as of June 28, 2014 $ (685,957 ) $ 134,452 $ (91,158 ) $ (642,663 ) Other comprehensive income before reclassification adjustments (38,275 ) (232,185 ) (34,111 ) (304,571 ) Amounts reclassified from accumulated other comprehensive loss 18,921 — 5,116 24,037 Balance as of June 27, 2015 (705,311 ) (97,733 ) (120,153 ) (923,197 ) Other comprehensive income before reclassification adjustments (419,517 ) (39,080 ) (3,779 ) (462,376 ) Amounts reclassified from accumulated other comprehensive loss 20,344 — 7,111 27,455 Balance as of July 2, 2016 (1,104,484 ) (136,813 ) (116,821 ) (1,358,118 ) Other comprehensive income before reclassification adjustments 97,283 (11,243 ) (30,710 ) 55,330 Amounts reclassified from accumulated other comprehensive loss 32,969 — 7,082 40,051 Balance as of July 1, 2017 $ (974,232 ) $ (148,056 ) $ (140,449 ) $ (1,262,737 ) |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jul. 01, 2017 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Sysco provides compensation benefits to employees and non-employee directors under several share-based payment arrangements including various employee stock long-term incentive plans, a non-employee director plan and the Employees’ Stock Purchase Plan (ESPP). Stock Incentive Plans In November 2013, Sysco’s Long-term Incentive Plan (2013 Plan) was adopted and reserved up to 55,600,000 shares of Sysco common stock for share-based awards to employees, non-employee directors and key advisors. Of the 55,600,000 authorized shares, the full 55,600,000 shares may be issued as options or stock appreciation rights and up to 17,500,000 shares may be issued as restricted stock, restricted stock units or other types of stock-based awards. To date, Sysco has issued options, restricted stock units and performance share units under the 2013 Plan. Vesting requirements for awards under the 2013 Plan vary by individual grant and may include either time-based vesting or time-based vesting subject to acceleration based on performance criteria for fiscal periods of at least one year. The contractual life of all options granted under the 2013 Plan are and will be no greater than ten years. As of July 1, 2017 , there were 32,457,613 remaining shares authorized and available for grant in total under the 2013 Plan, of which the full 32,457,613 shares may be issued as options or stock appreciation rights, or as a combination of up to 12,611,851 shares that may be issued as restricted stock, restricted stock units or other types of stock-based awards, with the remainder available for issuance as options or stock appreciation rights. Sysco has also granted employee options under several previous employee stock option plans for which previously granted options remain outstanding as of July 1, 2017 . No new options will be issued under any of the prior plans, as future grants to employees will be made through the 2013 Plan or subsequently adopted plans. Awards under these plans are subject to time-based vesting with vesting periods that vary by individual grant. The contractual life of all options granted under these plans is seven years. In November 2009, Sysco’s 2009 Non-Employee Directors Stock Plan (2009 NED Plan) was adopted and provided for the issuance of up to 750,000 shares of Sysco common stock as share-based awards to non-employee directors. The authorized shares were granted as restricted stock, restricted stock units, elected shares or additional shares. Vesting requirements for awards under the 2009 NED Plan varied by individual grant and include either time-based vesting or vesting based on performance criteria. As of July 1, 2017 , there were no remaining shares authorized and available for grant under the 2009 NED Plan. Performance Share Units During fiscal 2017 , 829,460 performance share units (PSUs) were granted to employees. Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For PSUs granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per performance share unit granted during fiscal 2017 was $52.17 . The PSUs will convert into shares of Sysco common stock at the end of the performance period based on financial performance targets consisting of Sysco's earnings per share, compound annual growth rate and adjusted return on invested capital. Stock Options Sysco’s option awards are subject to graded vesting over a requisite service period with compensation cost recognized on a straight-line basis over the requisite service period over the duration of the award. In addition, certain of Sysco’s options provide that the options continue to vest as if the optionee continued as an employee or director if the optionee meets certain age and years of service thresholds upon retirement. In these cases, Sysco will recognize compensation cost for such awards over the period from the grant date to the date the employee or director first becomes eligible to retire with the options continuing to vest after retirement. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. Expected dividend yield is estimated based on the historical pattern of dividends and the average stock price for the year preceding the option grant. Expected volatility is based on historical volatility of Sysco’s stock, implied volatilities from traded options on Sysco’s stock and other factors. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Sysco utilizes historical data to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately in determining the expected life of awards for valuation purposes. The weighted average assumptions discussed above are noted in the table below for relevant periods as follows: 2017 2016 2015 Dividend yield 2.8 % 3.1 % 3.2 % Expected volatility 16.9 % 20.4 % 20.7 % Risk-free interest rate 1.4 % 2.0 % 2.0 % Expected life 7.2 years 7.2 years 7.3 years The following summary presents information regarding outstanding options as of July 1, 2017 and changes during the fiscal year then ended with regard to options under all stock incentive plans: Shares Under Option Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of July 2, 2016 21,228,328 $ 34.13 Granted 4,990,396 52.43 Exercised 4,850,087 30.60 Forfeited 268,433 44.94 Expired 29,368 27.69 Outstanding as of July 1, 2017 21,070,836 $ 39.16 6.53 $ 245,657 Vested or expected to vest as of July 1, 2017 13,515,614 $ 42.65 7.72 $ 113,962 Exercisable as of July 1, 2017 7,361,568 $ 32.58 4.28 $ 130,638 The total number of employee options granted was 4,990,396 , 4,367,764 and 4,497,954 in fiscal years 2017 , 2016 and 2015 , respectively. During fiscal 2017 , 1,529,997 and 3,460,399 options were granted to 9 executive officers and approximately 187 other key employees, respectively. During fiscal 2016 , 1,495,351 and 2,872,413 options were granted to 8 executive officers and approximately 169 other key employees, respectively. During fiscal 2015 , 1,286,533 and 3,211,421 options were granted to 6 executive officers and 173 other key employees, respectively. The weighted average grant date fair value of options granted in fiscal 2017 , 2016 and 2015 was $6.05 , $5.99 and $5.78 , respectively. The total intrinsic value of options exercised during fiscal 2017 , 2016 and 2015 was $22.1 million , $36.1 million and $21.6 million , respectively. Restricted Stock Units During fiscal 2017 , 2016 and 2015 , restricted stock units of 631,281 , 1,257,889 and 1,198,588 were granted to employees, respectively, the majority of which will vest ratably over a three -year period. Some of these restricted stock units were granted with dividend equivalents. The fair value of each restricted stock unit award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For restricted stock unit awards granted without dividend equivalents, the fair value was reduced by the present value of expected dividends as of the date of grant date during the vesting period. The weighted average grant date fair value per share of restricted stock units granted during fiscal 2017 , 2016 and 2015 was $50.04 , $42.78 and $37.59 , respectively. The total fair value of restricted stock units vested during fiscal 2017 , 2016 and 2015 was $46.0 million , $43.4 million and $52.5 million , respectively. Non-Employee Director Awards During fiscal 2017 , 2016 and 2015 , restricted awards of 40,498 , 43,362 and 37,035 were granted to non-employee directors (NEDs), respectively, that will vest over a one -year period. NEDs may elect to receive these awards in restricted stock shares that will vest at the end of the award stated vesting period or as deferred units that convert into shares of Sysco common stock on a date subsequent to the award stated vesting date selected by the NED. The fair value of the restricted awards is based on the company’s stock price as of the date of grant. The weighted average grant date fair value of the shares granted during fiscal 2017 , 2016 and 2015 was $53.49 , $40.59 and $38.89 , respectively. The total fair value of restricted stock shares vested and deferred units distributed during fiscal 2017 , 2016 and 2015 was $2.0 million , $1.6 million and $1.6 million , respectively. Restricted stock shares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date. NEDs may elect to receive up to 100% of their annual directors’ fees in Sysco common stock on either an annual or deferred basis. Sysco provides a matching grant of 50% of the number of shares received for the stock election subject to certain limitations. As a result of such elections, a total of 22,094 , 25,185 and 23,949 shares with a weighted-average grant date fair value of $51.46 , $39.31 and $38.26 per share were issued in fiscal 2017 , 2016 and 2015 , respectively, in the form of fully vested common stock or deferred units. The total fair value of common stock issued as a result of election shares and deferred units distributed during fiscal 2017 , 2016 and 2015 was $1.1 million , $1.0 million and $0.9 million , respectively. Common stock shares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date. As of July 1, 2017 , there were 112,779 fully vested deferred units outstanding that will convert into shares of Sysco common stock upon dates selected by the respective NED. Summary of Non-vested Awards The following summary presents information regarding outstanding non-vested awards as of July 1, 2017 and changes during the fiscal year then ended with regard to these awards under the stock incentive plans. Award types represented include restricted stock units granted to employees and restricted awards granted to non-employee directors. Shares Weighted Average Grant Date Fair Value Per Share Non-vested as of July 2, 2016 2,532,721 $ 38.93 Granted 1,499,610 51.31 Vested (1,264,408 ) 37.97 Forfeited (124,095 ) 42.65 Non-vested as of July 1, 2017 2,643,828 $ 46.23 Employees’ Stock Purchase Plan The Sysco ESPP permits employees to invest in Sysco common stock by means of periodic payroll deductions at a discount of 15% from the closing price on the last business day of each calendar quarter. The total number of shares which may be sold pursuant to the ESPP may not exceed 79,000,000 shares, of which 8,303,783 remained available as of July 1, 2017 . During fiscal 2017 , 1,103,995 shares of Sysco common stock were purchased by the participants, as compared to 1,275,765 shares purchased in fiscal 2016 and 1,243,275 shares purchased in fiscal 2015 . The weighted average fair value of employee stock purchase rights issued pursuant to the ESPP was $7.73 , $6.04 and $5.73 per share during fiscal 2017 , 2016 and 2015 , respectively. The fair value of the stock purchase rights was calculated as the difference between the stock price at date of issuance and the employee purchase price. All Share-Based Payment Arrangements The total share-based compensation cost included in operating expenses in the consolidated results of operations was $83.9 million , $79.5 million and $73.8 million for fiscal 2017 , 2016 and 2015 , respectively. The total income tax benefit for share-based compensation arrangements was $30.0 million , $30.7 million and $27.4 million for fiscal 2017 , 2016 and 2015 , respectively. As of July 1, 2017 , there was $95.4 million of total unrecognized share-based compensation cost, which is expected to be recognized over a weighted-average period of 2.07 years. Cash received from option exercises and purchases of shares under the ESPP was $204.8 million , $282.4 million and $240.2 million during fiscal 2017 , 2016 and 2015 , respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $38.9 million , $42.5 million and $20.7 million during fiscal 2017 , 2016 and 2015 , respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Tax Provisions For financial reporting purposes, earnings before income taxes consists of the following: 2017 2016 2015 (In thousands) U.S. $ 1,569,073 $ 1,225,142 $ 818,244 Foreign 197,157 207,865 189,903 Total $ 1,766,230 $ 1,433,007 $ 1,008,147 The income tax provision / (benefit) for each fiscal year consists of the following: 2017 2016 2015 (In thousands) U.S. federal income taxes $ 534,266 $ 429,658 $ 285,807 State and local income taxes 69,913 34,032 (2,737 ) Foreign income taxes 19,548 19,695 38,304 Total $ 623,727 $ 483,385 $ 321,374 The current and deferred components of the income tax provisions for each fiscal year are as follows: 2017 2016 2015 (In thousands) Current $ 675,573 $ 389,514 $ 326,079 Deferred (51,846 ) 93,871 (4,705 ) Total $ 623,727 $ 483,385 $ 321,374 The deferred tax provisions result from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred Tax Assets and Liabilities Significant components of Sysco’s deferred tax assets and liabilities are as follows: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 194,287 $ 66,471 Benefit on unrecognized tax benefits 9,218 12,842 Pension 360,864 453,394 Share-based compensation 48,077 43,698 Deferred compensation 39,830 38,840 Self-insured liabilities 84,401 67,050 Receivables 30,842 41,574 Inventory 21,332 24,138 Cash flow hedge 8,748 7,421 Foreign currency remeasurement losses and currency hedge 13,221 47,632 Other 36,653 29,550 Deferred tax assets before valuation allowances 847,473 832,610 Valuation allowances (114,151 ) — Total deferred tax assets 733,322 832,610 Deferred tax liabilities: Excess tax depreciation and basis differences of assets 247,510 346,900 Goodwill and intangible assets 455,340 254,202 Other 49,654 51,130 Total deferred tax liabilities 752,504 652,232 Total net deferred tax assets / (liabilities) $ (19,182 ) $ 180,378 The company’s deferred tax asset for net operating loss carryforwards as of July 1, 2017 consisted of state and foreign net operating tax loss carryforwards, whereas the deferred tax asset as of July 2, 2016 consisted primarily of state net operating tax loss carryforwards. The state net operating loss carryforwards outstanding as of July 1, 2017 expire in fiscal years 2018 through 2036. The foreign net operating loss carryfoward periods vary by jurisdiction, from 17 years to unlimited. The company assesses the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The company considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. As a result of the company's analysis, it was concluded that as of July 1, 2017 a valuation allowance of $114.2 million should be established through acquisition accounting against the portion of the deferred tax asset attributable to net operating losses of the Brakes Group. The company will continue to monitor facts and circumstances in the reassessment of the likelihood that net operating loss carryforwards will be realized. Effective Tax Rates Reconciliations of the statutory federal income tax rate to the effective income tax rates for each fiscal year are as follows: 2017 2016 2015 U.S. statutory federal income tax rate 35.00 % 35.00 % 35.00 % State and local income taxes, net of any applicable federal income tax benefit 2.61 1.79 0.91 Foreign tax rate differential (2.81 ) (2.40 ) (2.84 ) Uncertain tax position (1) 0.01 (1.96 ) — Other 0.50 1.30 (1.19 ) Effective income tax rate 35.31 % 33.73 % 31.88 % (1) Uncertain tax positions are included within “Other” for fiscal 2015 The effective tax rate of 35.3% for fiscal 2017 was favorably impacted by tax credits allowed against U.S. Federal and State income tax liabilities, as well as a reduction of the statutory tax rate in certain foreign jurisdictions. Indefinitely reinvested earnings taxed at foreign statutory rates less than our domestic tax rate also had the impact of reducing the effective tax rate. The effective tax rate of 33.7% for fiscal 2016 was favorably impacted by the favorable resolution of tax contingencies resulting in tax benefits of $29.6 million ( $10.6 million in tax and $19.0 million in interest). Costs associated with the redemption of the senior notes that had been issued in contemplation of the proposed merger with US Foods and charges incurred from the revision to the Company’s business technology strategy resulted in lower state taxes. Indefinitely reinvested earnings taxed at foreign statutory rates less than our domestic tax rate also had the impact of reducing the effective tax rate. The effective tax rate of 31.9% for fiscal 2015 was favorably impacted by lower earnings in the U.S. primarily from the termination of the US Foods merger agreement, litigation costs, merger integration planning costs and interest expense attributable to the proposed merger of $693 million for the fiscal year. These costs were attributed to the company’s U.S. earnings, which has the highest tax rate of all of the jurisdictions where it remits taxes. These losses created low levels of earnings in the U.S. and generated net operating losses in certain states, making the company’s indefinitely reinvested earnings in its foreign operations a more predominant factor in its effective tax rate because those operations have lower tax rates. Additionally, Sysco made the decision to amend a prior U.S. tax return in order to maximize a foreign tax credit as opposed to a foreign tax deduction which also created benefit in our effective tax rate. Uncertain Tax Positions A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: 2017 2016 (In thousands) Unrecognized tax benefits at beginning of year $ 24,614 $ 37,546 Additions for tax positions related to prior years 648 142 Reductions for tax positions related to prior years (2,147 ) (12,932 ) Reductions due to settlements with taxing authorities (6,837 ) (142 ) Unrecognized tax benefits at end of year $ 16,278 $ 24,614 As of July 1, 2017 , the gross amount of liability for accrued interest and penalties related to unrecognized tax benefits was $10.7 million . As of July 2, 2016 , the gross amount of liability for accrued interest and penalties related to unrecognized tax benefits was $14.9 million . The expense recorded for interest and penalties related to unrecognized tax benefits in fiscal 2017 was not material. If Sysco were to recognize all unrecognized tax benefits recorded as of July 1, 2017 , approximately $10.8 million of the $16.3 million reserve would reduce the effective tax rate. If Sysco were to recognize all unrecognized tax benefits recorded as of July 2, 2016 , approximately $16.9 million of the $24.6 million reserve would reduce the effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months either because Sysco’s positions are sustained on audit or because the company agrees to their disallowance. Items that may cause changes to unrecognized tax benefits primarily include the consideration of various filing requirements in various states and the allocation of income and expense between tax jurisdictions. In addition, the amount of unrecognized tax benefits recognized within the next twelve months may decrease due to the expiration of the statute of limitations for certain years in various jurisdictions; however, it is possible that a jurisdiction may open an audit on one of these years prior to the statute of limitations expiring. At this time, an estimate of the range of the reasonably possible change cannot be made. Sysco's federal tax returns for 2012 and subsequent tax years have been audited and/or have statutes of limitations that remain open for audit. As of July 1, 2017 , Sysco’s tax returns in the majority of the state and local jurisdictions and Canada are no longer subject to audit for the years before 2009. However, in Canada, the company remains open to transfer pricing adjustments back to 2003 for some entities. Certain tax jurisdictions require partial to full payment on audit assessments or the posting of letters of credit in order to proceed to the appeals process. Although the outcome of tax audits is generally uncertain, the company believes that adequate amounts of tax, including interest and penalties, have been accrued for any adjustments that may result from those open years. Other Undistributed income of certain consolidated foreign subsidiaries at July 1, 2017 amounted to $1.4 billion , for which no deferred U.S. income tax provision has been recorded because Sysco intends to indefinitely reinvest such income in those foreign operations. An estimate of any U.S. income or foreign withholding taxes that may be applicable upon actual or deemed repatriation is not practical due to the complexities associated with the hypothetical calculation. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings Sysco is engaged in various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the company. However, the final results of legal proceedings cannot be predicted with certainty, and if the company failed to prevail in one or more of these legal matters, and the associated realized losses were to exceed the company’s current estimates of the range of potential losses, the company’s consolidated financial position or results of operations could be materially adversely affected in future periods. Other Commitments Sysco has committed to aggregate product purchases for resale in order to benefit from a centralized approach to purchasing. A majority of these agreements expire within one year; however, certain agreements have terms through fiscal 2021 . These agreements commit the company to a minimum volume at various pricing terms, including fixed pricing, variable pricing or a combination thereof. Minimum amounts committed to as of July 1, 2017 totaled approximately $1.9 billion . Minimum amounts committed to by year are as follows: Amount (In thousands) 2018 $ 1,590,953 2019 338,805 2020 2,863 2021 1,451 Sysco has contracts with various third-party service providers to receive information technology services. The services have been committed for periods up to fiscal 2022 and may be extended. As of July 1, 2017 , the total remaining cost of the services over that period is expected to be approximately $445.1 million . A portion of this committed amount may be reduced by Sysco utilizing less than estimated resources and can be increased by Sysco utilizing more than estimated resources. Certain agreements allow adjustments for inflation. Sysco may also cancel a portion or all of the services provided subject to termination fees that decrease over time. If Sysco were to terminate all of the services in fiscal 2018 , the estimated termination fees incurred in fiscal 2018 would be approximately $70.5 million . |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The Acquisition, combined with a change in how the chief operating decision maker assesses performance and allocates resources, resulted in a change in Sysco’s segment reporting in the first quarter of fiscal 2017 . Sysco has aggregated certain of its operating companies into three reportable segments. “Other” financial information is attributable to the company’s other operating segments that do not meet the quantitative disclosure thresholds. • U.S. Foodservice Operations - primarily includes U.S. Broadline operations, custom-cut meat and seafood companies, FreshPoint (our specialty produce companies) and European Imports (a specialty import company); • International Foodservice Operations - primarily includes broadline operations in Canada and Europe (including the Brakes Group, which was acquired in fiscal 2017 ), Bahamas, Mexico, Costa Rica and Panama, as well as a company that distributes to international customers; • SYGMA - our 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 provides support for some of our business technology needs. Broadline operating companies distribute a full line of food products and a wide variety of non-food products to both traditional and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served. SYGMA operating companies distribute a full line of food products and a wide variety of non-food products to certain chain restaurant customer locations. The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Management evaluates the performance of each of our operating segments based on its respective operating income results. Corporate expenses generally include all expenses of the corporate office and Sysco’s shared services center. These also include all share-based compensation costs. While a segment’s operating income may be impacted in the short-term by increases or decreases in gross profits, expenses, or a combination thereof, over the long-term each business segment is expected to increase its operating income at a greater rate than sales growth. This is consistent with our long-term goal of leveraging earnings growth at a greater rate than sales growth. The following tables set forth certain financial information for Sysco’s business segments. Prior year amounts have been reclassified to conform to the current year presentation and include the impact of a change in allocation between corporate and these segments that is not material but is consistent with management’s assessment of segment performance in fiscal 2017 . Fiscal Year 2017 2016 2015 Sales: (In thousands) U.S. Foodservice Operations $ 37,604,698 $ 37,776,443 $ 36,098,977 International Foodservice Operations (1) 10,613,059 5,436,209 5,592,137 SYGMA 6,178,909 6,102,328 6,076,215 Other 974,473 1,051,939 913,423 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 Operating income: U.S. Foodservice Operations $ 2,891,612 $ 2,771,932 $ 2,493,210 International Foodservice Operations (1) 243,116 177,159 170,913 SYGMA 23,299 27,469 20,381 Other 20,279 32,586 26,596 Total segments 3,178,306 3,009,146 2,711,100 Corporate expenses (1,125,135 ) (1,158,646 ) (1,481,738 ) Total operating income 2,053,171 1,850,500 1,229,362 Interest expense 302,878 306,146 254,807 Other expense (income), net (15,937 ) 111,347 (33,592 ) Earnings before income taxes $ 1,766,230 $ 1,433,007 $ 1,008,147 Depreciation and amortization: U.S. Foodservice Operations $ 266,024 $ 252,392 $ 260,021 International Foodservice Operations (1) 243,628 70,184 63,037 SYGMA 34,890 31,792 29,753 Other 10,678 12,450 9,581 Total segments 555,220 366,818 362,392 Corporate 346,772 295,892 190,629 Total $ 901,992 $ 662,710 $ 553,021 Capital Expenditures: U.S. Foodservice Operations $ 194,714 $ 153,528 $ 184,567 International Foodservice Operations (1) 228,564 56,689 80,170 SYGMA 50,722 31,811 36,948 Other 13,237 20,702 4,287 Total segments 487,237 262,730 305,972 Corporate 199,141 264,616 236,858 Total $ 686,378 $ 527,346 $ 542,830 Fiscal Year 2017 2016 2015 Assets: (In thousands) U.S. Foodservice Operations $ 6,675,543 $ 6,753,056 $ 6,772,270 International Foodservice Operations (1) 6,433,815 2,019,406 1,915,011 SYGMA 625,653 539,639 510,626 Other 448,885 459,785 327,691 Total segments 14,183,896 9,771,886 9,525,598 Corporate 3,572,759 6,949,918 8,463,683 Total $ 17,756,655 $ 16,721,804 $ 17,989,281 (1) Amounts are impacted by changes in exchange rates used to translate foreign results into U.S. dollars. The sales mix for the principal product categories for each fiscal year is as follows: Fiscal Year 2017 2016 2015 (In thousands) Fresh and frozen meats $ 10,605,678 $ 10,273,247 $ 10,080,290 Canned and dry products 8,695,829 8,402,230 7,999,250 Frozen fruits, vegetables, bakery and other 8,444,260 6,719,648 6,339,537 Poultry 5,873,944 5,392,933 5,189,496 Dairy products 5,610,101 5,276,991 5,199,036 Fresh produce 4,701,440 4,156,978 3,828,298 Paper and disposables 3,596,470 3,557,514 3,507,007 Seafood 3,089,350 2,541,239 2,490,523 Beverage products 2,059,453 1,849,780 1,754,944 Janitorial products 1,331,019 1,251,821 1,102,855 Equipment and smallwares 794,087 593,595 661,254 Medical supplies 569,508 350,943 528,262 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 Information concerning geographic areas is as follows: Fiscal Year 2017 2016 2015 (In thousands) Sales: United States $ 44,395,765 $ 44,922,937 $ 43,146,591 Canada 4,346,894 4,486,282 4,727,742 United Kingdom 2,974,133 — — France 1,426,973 — — Other 2,227,374 957,700 806,419 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 Long-lived assets: United States $ 3,252,980 $ 3,461,505 $ 3,519,610 Canada 329,090 309,027 317,231 United Kingdom 303,178 — — France 284,611 — — Other 207,443 109,910 145,302 Total $ 4,377,302 $ 3,880,442 $ 3,982,143 |
SUPPLEMENTAL GUARANTOR INFORMAT
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES | 12 Months Ended |
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES | SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation entered into full and unconditional guarantees of all outstanding senior notes and debentures of Sysco Corporation. Borrowings under the company’s revolving credit facility supporting the company’s U.S. and Canadian commercial paper programs are also covered under these guarantees. As of July 1, 2017 , Sysco had a total of $8.2 billion in senior notes, debentures and commercial paper outstanding that was covered by these guarantees. All subsidiary guarantors are 100% owned by the parent company, all guarantees are full and unconditional and all guarantees are joint and several, except that the guarantee of any subsidiary guarantor with respect to a series of senior notes or debentures may be released under certain customary circumstances. If we exercise our defeasance option with respect to the senior notes or debentures of any series, then any subsidiary guarantor effectively will be released with respect to that series. Further, each subsidiary guarantee will remain in full force and effect until the earliest to occur of the date, if any, on which (1) the applicable subsidiary guarantor shall consolidate with or merge into Sysco Corporation or any successor of Sysco Corporation or (2) Sysco Corporation or any successor of Sysco Corporation consolidates with or merges into the applicable subsidiary guarantor. The following condensed consolidating financial statements present separately the financial position, comprehensive income and cash flows of the parent issuer (Sysco Corporation), the guarantors (the majority of the company’s U.S. Broadline subsidiaries), and all other non‑guarantor subsidiaries of Sysco (Other Non-Guarantor Subsidiaries) on a combined basis with eliminating entries. Condensed Consolidating Balance Sheet Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 177,495 $ 2,988,736 $ 4,867,207 $ — $ 8,033,438 Intercompany receivables 6,559,966 — — (6,559,966 ) — Investment in subsidiaries 6,451,994 — — (6,451,994 ) — Plant and equipment, net 258,527 1,276,342 2,842,433 — 4,377,302 Other assets 151,744 418,968 4,775,203 — 5,345,915 Total assets $ 13,599,726 $ 4,684,046 $ 12,484,843 $ (13,011,960 ) $ 17,756,655 Current liabilities $ 2,766,831 $ 2,605,828 $ 723,227 $ — $ 6,095,886 Intercompany payables — 1,642,663 4,917,303 (6,559,966 ) — Long-term debt 7,588,041 7,773 65,063 — 7,660,877 Other liabilities 863,338 103,784 568,415 — 1,535,537 Noncontrolling interest — — 82,839 — 82,839 Shareholders’ equity 2,381,516 323,998 6,127,996 (6,451,994 ) 2,381,516 Total liabilities and shareholders’ equity $ 13,599,726 $ 4,684,046 $ 12,484,843 $ (13,011,960 ) $ 17,756,655 Condensed Consolidating Balance Sheet Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 3,440,206 $ 3,813,524 $ 2,800,169 $ — $ 10,053,899 Intercompany receivables 1,348,425 — 749,083 (2,097,508 ) — Investment in subsidiaries 6,694,615 — — (6,694,615 ) — Plant and equipment, net 429,890 1,587,702 1,862,850 — 3,880,442 Other assets 213,186 642,525 1,931,752 — 2,787,463 Total assets $ 12,126,322 $ 6,043,751 $ 7,343,854 $ (8,792,123 ) $ 16,721,804 Current liabilities $ 621,925 $ 111,728 $ 3,700,803 $ — $ 4,434,456 Intercompany payables — 2,097,508 — (2,097,508 ) — Long-term debt 7,145,955 62,387 128,588 — 7,336,930 Other liabilities 878,834 248,493 268,097 — 1,395,424 Noncontrolling interest — — 75,386 — 75,386 Shareholders’ equity 3,479,608 3,523,635 3,170,980 (6,694,615 ) 3,479,608 Total liabilities and shareholders’ equity $ 12,126,322 $ 6,043,751 $ 7,343,854 $ (8,792,123 ) $ 16,721,804 Condensed Consolidating Statement of Comprehensive Income Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 27,200,744 $ 29,987,271 $ (1,816,876 ) $ 55,371,139 Cost of sales — 21,912,558 24,717,950 (1,816,876 ) 44,813,632 Gross profit — 5,288,186 5,269,321 — 10,557,507 Operating expenses 931,498 3,123,076 4,449,762 — 8,504,336 Operating income (loss) (931,498 ) 2,165,110 819,559 — 2,053,171 Interest expense (income) 260,365 (95,687 ) 138,200 — 302,878 Other expense (income), net (23,740 ) (837 ) 8,640 — (15,937 ) Earnings (losses) before income taxes (1,168,123 ) 2,261,634 672,719 — 1,766,230 Income tax (benefit) provision (412,511 ) 800,537 235,701 — 623,727 Equity in earnings of subsidiaries 1,898,115 — — (1,898,115 ) — Net earnings 1,142,503 1,461,097 437,018 (1,898,115 ) 1,142,503 Other comprehensive income (loss) 95,381 — (9,317 ) 9,317 95,381 Comprehensive income $ 1,237,884 $ 1,461,097 $ 427,701 $ (1,888,798 ) $ 1,237,884 Condensed Consolidating Statement of Comprehensive Income Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 33,932,334 $ 18,112,973 $ (1,678,388 ) $ 50,366,919 Cost of sales — 27,485,111 15,519,724 (1,678,388 ) 41,326,447 Gross profit — 6,447,223 2,593,249 — 9,040,472 Operating expenses 944,457 3,857,415 2,388,100 — 7,189,972 Operating income (loss) (944,457 ) 2,589,808 205,149 — 1,850,500 Interest expense (income) 381,122 (145,852 ) 70,876 — 306,146 Other expense (income), net 128,777 (1,876 ) (15,554 ) — 111,347 Earnings (losses) before income taxes (1,454,356 ) 2,737,536 149,827 — 1,433,007 Income tax (benefit) provision (490,579 ) 923,416 50,548 — 483,385 Equity in earnings of subsidiaries 1,913,399 — — (1,913,399 ) — Net earnings 949,622 1,814,120 99,279 (1,913,399 ) 949,622 Other comprehensive income (loss) (434,921 ) — (52,306 ) 52,306 (434,921 ) Comprehensive income $ 514,701 $ 1,814,120 $ 46,973 $ (1,861,093 ) $ 514,701 Condensed Consolidating Statement of Comprehensive Income Jun. 27, 2015 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 32,626,221 $ 17,477,986 $ (1,423,455 ) $ 48,680,752 Cost of sales — 26,572,257 14,980,434 (1,423,455 ) 40,129,236 Gross profit — 6,053,964 2,497,552 — 8,551,516 Operating expenses 1,232,956 3,709,320 2,379,878 — 7,322,154 Operating income (loss) (1,232,956 ) 2,344,644 117,674 — 1,229,362 Interest expense (income) 323,918 (108,233 ) 39,122 — 254,807 Other expense (income), net (9,496 ) (3,609 ) (20,487 ) — (33,592 ) Earnings (losses) before income taxes (1,547,378 ) 2,456,486 99,039 — 1,008,147 Income tax (benefit) provision (493,263 ) 783,066 31,571 — 321,374 Equity in earnings of subsidiaries 1,740,888 — — (1,740,888 ) — Net earnings 686,773 1,673,420 67,468 (1,740,888 ) 686,773 Other comprehensive income (loss) (280,534 ) (232,185 ) 232,185 (280,534 ) Comprehensive income $ 406,239 $ 1,673,420 $ (164,717 ) $ (1,508,703 ) $ 406,239 Condensed Consolidating Cash Flows Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 1,472,847 $ 2,908,792 $ 557,343 $ (2,762,557 ) $ 2,176,425 Investing activities (3,274,566 ) (142,124 ) (294,771 ) 127,000 (3,584,461 ) Financing activities (1,463,168 ) (2,782,134 ) (9,964 ) 2,635,557 (1,619,709 ) Effect of exchange rates on cash — — (22,104 ) — (22,104 ) Net increase (decrease) in cash and cash equivalents (3,264,887 ) (15,466 ) 230,504 — (3,049,849 ) Cash and cash equivalents at the beginning of period 3,376,463 34,069 508,819 — 3,919,351 Cash and cash equivalents at the end of period $ 111,576 $ 18,603 $ 739,323 — $ 869,502 Condensed Consolidating Cash Flows Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 990,695 $ 4,101,840 $ 767,607 $ (3,927,000 ) $ 1,933,142 Investing activities 20,094 (212,270 ) (408,652 ) — (600,828 ) Financing activities (2,485,444 ) (3,881,879 ) 35,592 3,927,000 (2,404,731 ) Effect of exchange rates on cash — — (138,327 ) — (138,327 ) Net increase (decrease) in cash and cash equivalents (1,474,655 ) 7,691 256,220 — (1,210,744 ) Cash and cash equivalents at the beginning of period 4,851,075 26,378 252,591 — 5,130,044 Cash and cash equivalents at the end of period $ 3,376,420 $ 34,069 $ 508,811 — $ 3,919,300 Condensed Consolidating Cash Flows Jun. 27, 2015 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 1,019,873 $ 191,181 $ 422,884 $ (78,454 ) $ 1,555,484 Investing activities (160,234 ) (108,099 ) (386,013 ) — (654,346 ) Financing activities 3,832,479 (84,476 ) 71,105 78,454 3,897,562 Effect of exchange rates on cash — — (81,702 ) — (81,702 ) Net increase (decrease) in cash and cash equivalents 4,692,118 (1,394 ) 26,274 — 4,716,998 Cash and cash equivalents at the beginning of period 158,957 27,772 226,317 — 413,046 Cash and cash equivalents at the end of period $ 4,851,075 $ 26,378 $ 252,591 — $ 5,130,044 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Jul. 01, 2017 | |
Quarterly Financial Data [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | QUARTERLY RESULTS (UNAUDITED) Financial information for each quarter in the years ended July 1, 2017 and July 2, 2016 is set forth below: Fiscal 2017 Quarter Ended October 1 December 31 April 1 July 1 Fiscal Year (In thousands except for per share data) Sales $ 13,968,654 $ 13,457,268 $ 13,524,172 $ 14,421,045 $ 55,371,139 Cost of sales 11,276,735 10,885,405 10,990,037 11,661,455 44,813,632 Gross profit 2,691,919 2,571,863 2,534,135 2,759,590 10,557,507 Operating expenses 2,125,086 2,079,446 2,098,173 2,201,631 8,504,336 Operating income 566,833 492,417 435,962 557,959 2,053,171 Interest expense 73,623 72,231 81,004 76,020 302,878 Other expense (income), net (7,216 ) (2,320 ) (4,815 ) (1,586 ) (15,937 ) Earnings before income taxes 500,426 422,506 359,773 483,525 1,766,230 Income taxes 176,539 147,339 121,495 178,354 623,727 Net earnings $ 323,887 $ 275,167 $ 238,278 $ 305,171 $ 1,142,503 Per share: Basic net earnings $ 0.58 $ 0.50 $ 0.44 $ 0.57 $ 2.10 Diluted net earnings 0.58 0.50 0.44 0.57 2.08 Dividends declared 0.31 0.33 0.33 0.33 1.30 Fiscal 2016 Quarter Ended September 26 (1) December 26 March 26 July 2 (2), (3) Fiscal Year (3) (In thousands except for per share data) Sales $ 12,562,611 $ 12,153,626 $ 12,002,791 $ 13,647,891 $ 50,366,919 Cost of sales 10,324,616 9,996,812 9,859,966 11,145,053 41,326,447 Gross profit 2,237,995 2,156,814 2,142,825 2,502,838 9,040,472 Operating expenses 1,744,521 1,724,231 1,765,207 1,956,013 7,189,972 Operating income 493,474 432,583 377,618 546,825 1,850,500 Interest expense 126,907 47,235 57,699 74,305 306,146 Other expense (income), net (15,240 ) (7,764 ) (6,952 ) 141,303 111,347 Earnings before income taxes 381,807 393,112 326,871 331,217 1,433,007 Income taxes 137,387 120,713 109,735 115,550 483,385 Net earnings $ 244,420 $ 272,399 $ 217,136 $ 215,667 $ 949,622 Per share: Basic net earnings $ 0.41 $ 0.48 $ 0.38 $ 0.38 $ 1.66 Diluted net earnings 0.41 0.48 0.38 0.38 1.64 Dividends declared 0.30 0.31 0.31 0.31 1.23 Percentage change — 2017 vs. 2016: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Year Sales 11 % 11 % 13 % 6 % 10 % Operating income 15 14 15 2 11 Net earnings 33 1 10 42 20 Basic net earnings per share 41 4 16 50 27 Diluted net earnings per share 41 4 16 50 27 (1) Sysco’s first quarter of fiscal 2016 included a charge for $94.8 million in interest expense related to the redemption of senior notes. See Note 11 "Debt and Other Financing Arrangements." (2) Sysco’s fourth quarter of fiscal 2016 includes a remeasurement loss of $101.2 million in other expense (income), net due to the remeasurement of foreign cash held by Sysco for the Brakes Acquisition. (3) Sysco’s fiscal year ends on the Saturday nearest to June 30 th , which resulted in a 14-week quarter and 53-week year ending July 2, 2016 for fiscal 2016 . |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jul. 01, 2017 | |
Accounting Policies [Abstract] | |
Business and Consolidation | Business and Consolidation Sysco Corporation, acting through its subsidiaries and divisions (Sysco or the company), is engaged in the marketing and distribution of a wide range of food and related products primarily to the foodservice or food-away-from-home industry. These services are performed for over 500,000 customers from 324 distribution facilities located throughout North America and Europe. Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended July 1, 2017 for fiscal 2017 , a 53 -week year ended July 2, 2016 for fiscal 2016 , and a 52 -week year ended June 27, 2015 for fiscal 2015 . The accompanying financial statements include the accounts of Sysco and its consolidated subsidiaries. All significant intercompany transactions and account balances have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses. Actual results could differ from the estimates used. |
Fiscal period | Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended July 1, 2017 for fiscal 2017 , a 53 -week year ended July 2, 2016 for fiscal 2016 , and a 52 -week year ended June 27, 2015 for fiscal 2015 . |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes cash equivalents such as time deposits, certificates of deposit, short-term investments and all highly liquid instruments with original maturities of three months or less, which are recorded at fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of trade receivables from customers and receivables from suppliers for marketing or incentive programs. Sysco determines the past due status of trade receivables based on contractual terms with each customer. Sysco evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts based on a combination of factors. The company utilizes specific criteria to determine uncollectible receivables to be written off including whether a customer has filed for or been placed in bankruptcy, has had accounts referred to outside parties for collection or has had accounts past due over specified periods. In these instances, a specific allowance for doubtful accounts is recorded to reduce the receivable to the net amount reasonably expected to be collected. Allowances are recorded for all other receivables based on an analysis of historical trends of write-offs and recoveries. |
Inventories | Inventories Inventories consisting primarily of finished goods include food and related products and lodging products held for resale and are valued at the lower of cost (first-in, first-out method) or market. Elements of costs include the purchase price of the product and freight charges to deliver the product to the company’s warehouses and are net of certain cash or non-cash consideration received from vendors (see “Vendor Consideration”). |
Plant and Equipment | Plant and Equipment Capital additions, improvements and major replacements are classified as plant and equipment and are carried at cost. Depreciation is recorded using the straight-line method, which reduces the book value of each asset in equal amounts over its estimated useful life, and is included within operating expenses in the consolidated results of operations. Maintenance, repairs and minor replacements are charged to earnings when they are incurred. Upon the disposition of an asset, its accumulated depreciation is deducted from the original cost, and any gain or loss is reflected in current earnings. Certain internal and external costs related to the acquisition and development of internal use software are capitalized within plant and equipment during the application development stages of the project. Costs related to the acquisition and development of internal use software for the past three fiscal years was $23.5 million in fiscal 2017 , $82.1 million in fiscal 2016 and $25.0 million in fiscal 2015 . Applicable interest charges incurred during the construction of new facilities and development of software for internal use are capitalized as one of the elements of cost and are amortized over the assets’ estimated useful lives. |
Long-Lived Assets | Long-Lived Assets Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life based on updated projections on an undiscounted basis. For assets held for use, Sysco groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill and intangibles represent the excess of cost over the fair value of tangible net assets acquired. Goodwill and intangibles with indefinite lives are not amortized. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of a business combination. The recoverability of goodwill and indefinite-lived intangibles is assessed annually, or more frequently as needed when events or changes have occurred that would suggest an impairment of carrying value, by determining whether the fair values of the applicable reporting units exceed their carrying values. This annual testing may be performed utilizing either a qualitative or quantitative assessment; however, if a qualitative assessment is performed and it is determined that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative test is performed. For fiscal 2017 , the company analyzed its 15 operating segments as defined in Note 21 , "Business Segment Information." and determined that 21 reporting units existed for purposes of evaluating for goodwill impairment. For seven reporting units, the company utilized a qualitative assessment. For the remaining reporting units, Sysco performed a quantitative test using a combination of the income and market approaches. The evaluation of fair value requires the use of projections, estimates and assumptions as to the future performance of the operations in performing a discounted cash flow analysis, as well as assumptions regarding sales and earnings multiples that would be applied in comparable acquisitions. The company does not believe the estimates used in the analysis are reasonably likely to change materially in the future, but Sysco will continue to assess the estimates in the future based on the expectations of the reporting units. In the fiscal 2017 assessment, our estimates of fair value did not require additional analysis. However, the company would have performed additional analysis to determine if an impairment existed for our Brakes U.K. broadline, Fresh Direct specialty, Sweden broadline, Ireland broadline, Mexico broadline and Costa Rica broadline reporting units if our estimates of fair value were decreased by an amount in the range of 5% and 28% , with goodwill of $1.7 billion in the aggregate as of July 1, 2017 , recorded for these reporting units. Intangibles with definite lives are amortized over their useful lives in a manner consistent with underlying cash flow, which generally ranges from two to fifteen years. Management reviews finite-lived intangibles for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the finite-lived intangibles are estimated over the intangible asset’s useful life based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the finite-lived intangible asset may not be recoverable, the potential impairment is measured at fair value. |
Restricted Cash | Restricted Cash Sysco is required by its insurers to collateralize a part of the self-insured portion of its workers’ compensation and liability claims. Sysco has chosen to satisfy these collateral requirements by depositing funds in insurance trusts or by issuing letters of credit. Sysco chose to satisfy these collateral requirements by issuing letters of credit in fiscal 2017 and 2016 . |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recognized as assets or liabilities within the consolidated balance sheets at fair value at their gross values. Gains or losses on derivative financial instruments designated as fair value hedges are recognized immediately in the consolidated results of operations, along with the offsetting gain or loss related to the underlying hedged item. Gains or losses on derivative financial instruments designated as cash flow hedges are recorded as a separate component of shareholders’ equity from inception of the hedges and are reclassified to the Consolidated Results of Operations in conjunction with the recognition of the underlying hedged item. For net investment hedges, the remeasurement gain or loss is recorded in accumulated other comprehensive income and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. |
Investments in Corporate-Owned Life Insurance | Investments in Corporate-Owned Life Insurance Investments in corporate-owned life insurance (COLI) policies are recorded at their cash surrender values as of each balance sheet date. Changes in the cash surrender value during the period are recorded as a gain or loss within operating expenses. Sysco has the ability and intent to hold certain of its COLI policies to maturity; therefore, the company does not record deferred tax balances related to cash surrender value gains or losses for these policies. Deferred tax balances are recorded for those policies that Sysco intends to redeem prior to maturity. |
Treasury Stock | Treasury Stock The company records treasury stock purchases at cost. Shares removed from treasury are valued at cost using the average cost method. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of all foreign subsidiaries are translated at current exchange rates. Related translation adjustments are recorded as a component of accumulated other comprehensive income (loss). |
Revenue Recognition | Revenue Recognition The company recognizes revenue from the sale of a product when it is considered to be realized or realizable and earned. The company determines these requirements to be met at the point at which the product is delivered to the customer. The company grants certain customers sales incentives such as rebates or discounts and treats these as a reduction of sales at the time the sale is recognized. Sales tax collected from customers is not included in revenue but rather recorded as a liability due to the respective taxing authorities. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are considered to be a single nonmonetary transaction. As such, the company records the net effect of such transactions in the consolidated results of operations within sales. |
Vendor Consideration | Vendor Consideration Sysco recognizes consideration received from vendors as a reduction to cost of sales when the services performed in connection with the monies received are completed and when the related product has been sold by Sysco. There are several types of cash consideration received from vendors. In many instances, the vendor consideration is in the form of a specified amount per case or per pound. In these instances, Sysco will recognize the vendor consideration as a reduction of cost of sales when the product is sold. In the situations in which the vendor consideration is not related directly to specific product purchases, Sysco will recognize these as a reduction of cost of sales when the earnings process is complete, the related service is performed and the amounts are realized. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs include costs associated with the selection of products and delivery to customers. |
Insurance Program | Insurance Program Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. The company also maintains a fully self-insured group medical program. Liabilities associated with these risks are estimated in part by considering historical claims experience, medical cost trends, demographic factors, severity factors and other actuarial assumptions. |
Share-Based Compensation | Share-Based Compensation Sysco recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The fair value of performance share unit awards is determined based on the target number of shares of common stock and the company’s stock price on the date of grant and subsequently adjusted based on actual and forecasted performance compared to planned targets. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock and restricted stock unit awards are based on the company’s stock price on the date of grant. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. Cash flows resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) are classified as financing cash flows on the consolidated cash flows statements. |
Income Taxes | Income Taxes Sysco recognizes deferred tax assets and liabilities based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. The determination of the company’s provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes primarily reflects a combination of income earned and taxed in the various U.S. federal and state, as well as various foreign jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. |
Acquisitions | Acquisitions Acquisitions of businesses are accounted for using the acquisition method of accounting, and the financial statements include the results of the acquired operations from the respective dates of acquisition. The purchase price of the acquired entities is preliminarily allocated to the net assets acquired and liabilities assumed based on the estimated fair value at the dates of acquisition, with any excess of cost over the fair value of net assets acquired, including intangibles, recognized as goodwill. Subsequent changes to preliminary amounts are made prospectively. |
Basis of Presentation | Basis of Presentation The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for all periods presented have been made. Sysco has interests in various jointly-owned foodservice operations in Mexico, Costa Rica and Panama for which it consolidates the results of the operations; therefore, the financial position, results of operations and cash flows for this company have been included in Sysco’s consolidated financial statements. The value of the noncontrolling interest in each entity is considered redeemable due to certain features of the investment agreement and has therefore been presented as mezzanine equity, which is outside of permanent equity, in the consolidated balance sheets. The income attributable to the noncontrolling interest is located within Other expense (income), net, in the consolidated results of operations, as this amount is not material. The non-cash add back for the change in the value of the noncontrolling interest is located within Other non-cash items on the consolidated cash flows. |
Reclassifications | Reclassifications Prior year amounts have been reclassified to conform with the current year presentation. |
New Accounting Pronouncements | In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Topic 205-40) . This ASU required management to evaluate, for each annual and interim reporting period, whether there are conditions and events, considered in the aggregate, that raise substantial doubt about the company’s ability to continue as a going concern within one year after the date of the consolidated financial statements are issued or are available to be issued. If substantial doubt is raised, additional disclosures around the company’s plan to alleviate these doubts are required. The adoption of this standard did not have any effect on the company’s consolidated financial statements. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits ( Topic 715 ): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , requiring that an employer report the service cost component of pension and postretirement benefits in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. In addition, only the service cost component will be eligible for capitalization as applicable. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Simplifying the Test for Goodwill Impairment In January 2017, the FASB ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. This guidance is effective for the annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The fair value of the company’s reporting units exceeded its carrying value in its fiscal 2017 impairment analysis for goodwill and, therefore, early adoption was not considered in fiscal 2017. Guidance in Presentation of Cash Flows - Restricted Cash In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning and ending cash balances on the statement of cash flows. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2017, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Intra-Entity Transfers of Assets Other Than Inventory In October 2016, the FASB issued ASU 2016-16 amending the accounting for income taxes. The new guidance requires the recognition of the income tax consequences of an intercompany asset transfer, other than transfers of inventory, when the transfer occurs. For intercompany transfers of inventory, the income tax effects will continue to be deferred until the inventory has been sold to a third party. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. We are currently evaluating the impact and expect the ASU will not have a material impact on our consolidated financial statements. Guidance in Presentation of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight specific issues are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Businesses Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Invitees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash and Application of the Predominance Principle. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Stock Compensation In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting , as part of its initiative to reduce complexity in accounting standards. The areas for simplification involve several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. In addition, the amendments eliminate the guidance in Topic 718 that was indefinitely deferred shortly after the issuance of FASB Statement No. 123 (revised 2004), Share-Based Payment . The guidance is effective for interim and annual periods beginning after December 15, 2016, which is fiscal 2018 for Sysco. The company will adopt this ASU in the first quarter of fiscal 2018 by including excess tax benefits and deficiencies as a component of our income tax expense. This will increase volatility within our provision for income taxes as the amount of excess tax benefits or deficiencies from stock-based compensation awards are dependent on our stock price at the date the awards vest. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases . The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Lessees and lessors will use a modified retrospective transition approach, which includes a number of practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, which is fiscal 2020 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. The company does engage in leasing assets, so it does expect additional assets and liabilities to be recognized on its balance sheet upon implementation of this new standard. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) and has issued subsequent amendments to this guidance. This new standard will replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods beginning after December 15, 2017, which is fiscal 2019 for Sysco, and could be early adopted in fiscal 2018. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The company’s impact assessment of the standard is ongoing and the company does not intend to early adopt this standard in fiscal 2018. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. We will continue our assessment, which may identify other impacts of the adoption of ASC 606. The company will adopt the standard in the first quarter of fiscal 2019 and preliminarily expects to use the modified retrospective method. However, our adoption method is subject to change as we continue to evaluate the impact of the standard. |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Business Combinations [Abstract] | |
Summary of purchase price | Total consideration has been determined to be as follows (in thousands): Cash consideration paid, net of cash acquired $ 626,442 Payment for Brakes outstanding financial debt 2,284,100 Total consideration paid, net of cash acquired $ 2,910,542 |
Summary of purchase price allocation | The final allocation of the purchase price of the Brakes Group was as follows (in thousands): Purchase Price Allocation Accounts receivable $ 686,776 Inventory 248,031 Plant and equipment 595,388 Other assets 47,217 Goodwill and other intangibles (1) 2,789,065 Total assets 4,366,477 Accounts payable (707,622 ) Accrued expenses (474,501 ) Deferred tax liabilities (197,629 ) Other liabilities (76,183 ) Total consideration, net of cash acquired $ 2,910,542 (1) The excess purchase price of $1.8 billion was assigned to goodwill, no ne of which is deductible for income tax purposes. This goodwill has been assigned to the International Foodservice Operations reportable segment. Intangible assets added include customer relationships of $832.6 million with a weighted average life of 12 years and trademarks and trade names of $141.0 million that are indefinite lived assets. Amortization expense is recognized on a straight line basis and was $76.2 million for fiscal 2017. |
Schedule of pro forma information | The following table presents the company’s pro forma consolidated sales, earnings before income taxes, and net earnings for the fiscal year ended July 2, 2016 . The unaudited pro forma results include the historical statements of operations information of the company and of Brakes Group, giving effect to the Brakes Acquisition and related financing as if they had occurred at the beginning of the period presented (in thousands, except per share data). Year Ended Jul. 2, 2016 Sales $ 55,922,506 Income before taxes 1,441,667 Net earnings 954,888 Net earnings: Basic earnings per common share $ 1.67 Diluted earnings per common share 1.65 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value table | The following tables present the company’s assets and liabilities measured at fair value on a recurring basis as of July 1, 2017 and July 2, 2016 : Assets and Liabilities Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 238,954 $ 49,430 $ — $ 288,384 Other assets Interest rate swaps — 707 — 707 Fuel swaps — 717 — 717 Total assets at fair value $ 238,954 $ 50,854 $ — $ 289,808 Liabilities: Other current liabilities: Fuel swaps $ — $ 6,160 $ — $ 6,160 Other long-term liabilities: Interest rate swap agreements — 21,390 — 21,390 Cross-currency swaps 5,816 5,816 Foreign currency swaps — 12,308 — 12,308 Foreign currency forwards — 154 — 154 Fuel swaps 160 160 Total liabilities at fair value $ — $ 45,988 $ — $ 45,988 Assets and Liabilities Measured at Fair Value as of Jul. 2, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 634,230 $ 43,270 $ — $ 677,500 Other assets Interest rate swaps — 36,805 — 36,805 Total assets at fair value $ 634,230 $ 80,075 $ — $ 714,305 |
ALLOWANCE FOR DOUBTFUL ACCOUN34
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of valuation and qualifying accounts disclosure table | A summary of the activity in the allowance for doubtful accounts appears below: 2017 2016 2015 (In thousands) Balance at beginning of period $ 37,880 $ 41,720 $ 49,902 Charged to costs and expenses 20,672 20,372 17,996 Customer accounts written off, net of recoveries (26,943 ) (23,551 ) (25,719 ) Other adjustments (550 ) (661 ) (459 ) Balance at end of period $ 31,059 $ 37,880 $ 41,720 |
PLANT AND EQUIPMENT (Tables)
PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of plant and equipment, including the related accumulated depreciation table | A summary of plant and equipment, including the related accumulated depreciation, appears below: Jul. 1, 2017 Jul. 2, 2016 Estimated Useful Lives (In thousands) Plant and equipment at cost: Land $ 477,577 $ 448,981 Buildings and improvements 4,072,339 3,962,454 10-30 years Fleet and equipment 3,595,095 2,990,267 3-10 years Computer hardware and software 1,554,122 1,183,548 3-7 years Total plant and equipment at cost 9,699,133 8,585,250 Accumulated depreciation (5,321,831 ) (4,704,808 ) Total plant and equipment, net $ 4,377,302 $ 3,880,442 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill rollforward table by reporting segments | The changes in the carrying amount of goodwill by reportable segment for the years presented are as follows: U.S. Foodservice Operations International Foodservice Operations SYGMA Other Total (In thousands) Carrying amount as of June 27, 2015 $ 1,123,474 $ 615,402 $ 32,609 $ 188,332 $ 1,959,817 Goodwill acquired during year 97,351 31,447 — 47,419 176,217 Currency translation/other (123 ) (14,149 ) (2 ) (99 ) (14,373 ) Carrying amount as of July 2, 2016 $ 1,220,702 $ 632,700 $ 32,607 $ 235,652 $ 2,121,661 Goodwill acquired during year — 1,815,890 — — 1,815,890 Currency translation/other 10,343 (16,082 ) — (15,684 ) (21,423 ) Carrying amount as of July 1, 2017 $ 1,231,045 $ 2,432,508 $ 32,607 $ 219,968 $ 3,916,128 |
Amortized intangible assets table | Fully amortized intangible assets have been removed in the period fully amortized in the table below, which presents the company’s amortizable intangible assets in total by category as follows: Jul. 1, 2017 Jul. 2, 2016 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (In thousands) Customer relationships $ 1,073,577 $ (209,253 ) $ 864,324 $ 265,441 $ (126,194 ) $ 139,247 Non-compete agreements 32,385 (25,384 ) 7,001 36,405 (21,312 ) 15,093 Trademarks 11,050 (7,002 ) 4,048 10,753 (5,363 ) 5,390 Other 13,622 (10,704 ) 2,917 13,622 (7,786 ) 5,836 Total amortizable intangible assets $ 1,130,634 $ (252,343 ) $ 878,291 $ 326,221 $ (160,655 ) $ 165,566 |
Indefinite-lived intangible assets table | The table below presents the company’s indefinite-lived intangible assets by category as follows: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Trademarks $ 158,251 $ 40,929 Licenses 969 966 Total indefinite-lived intangible assets $ 159,220 $ 41,895 |
Intangibles estimated amortization expense for the next five years table | The estimated future amortization expense for the next five fiscal years on intangible assets outstanding as of July 1, 2017 is shown below: Amount (In thousands) 2018 $ 105,474 2019 98,915 2020 94,880 2021 85,255 2022 83,548 |
DERIVATIVE FINANCIAL INSTRUME37
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of outstanding swap agreements | Details of outstanding swap agreements as of July 1, 2017 are set forth below: Maturity Date of Swap Notional Value Fixed Coupon Rate on Hedged Debt Floating Interest Rate on Swap Floating Rate Reset Terms February 12, 2018 $ 500 5.25 % Six-month LIBOR Every six months in arrears April 1, 2019 $ 500 1.90 % Three-month LIBOR Every three months in advance October 1, 2020 $ 750 2.60 % Three-month LIBOR Every three months in advance July 15, 2021 $ 500 2.50 % Three-month LIBOR Every three months in advance |
Derivatives balance sheet location table | The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of July 1, 2017 , July 2, 2016 and June 27, 2015 are as follows: Derivative Fair Value Balance Sheet Location Jul. 1, 2017 Jul. 2, 2016 Jun. 27, 2015 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ 707 $ — $ — Interest rate swaps Other assets 36,805 12,597 Interest rate swaps Other long-term liabilities (21,390 ) — — Cash Flow Hedges: Fuel swaps Other current assets $ 717 $ — $ — Fuel swaps Other current liabilities (6,160 ) Foreign currency forwards Other current liabilities (154 ) — — Fuel swaps Other long-term liabilities (160 ) Cross currency swaps Other long-term liabilities (5,816 ) — — Net Investment Hedges: Foreign currency swaps Other long-term liabilities $ (12,308 ) $ — $ — |
Derivatives financial statement performance table | The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the fiscal periods ended July 1, 2017 , July 2, 2016 and June 27, 2015 presented on a pretax basis are as follows: Location of (Gain) or Loss Recognized Amount of (Gain) or Loss Recognized 2017 2016 2015 (In thousands) Fair Value Hedge Relationships: Interest rate swaps Interest expense $ (9,022 ) $ (12,033 ) $ (21,960 ) Cash Flow Hedge Relationships: Forward starting interest rate swaps (1) Interest expense $ 11,495 $ 11,543 $ 8,305 Forward starting interest rate swaps Other comprehensive income — (6,134 ) (55,374 ) Fuel swaps Other comprehensive income (5,335 ) — — Foreign currency forwards Other comprehensive income (4,389 ) — — Cross currency swaps Other comprehensive income (1,148 ) — — Net Investment Hedge Relationships: Foreign currency swaps Other comprehensive income $ (34,152 ) $ — $ — (1) Represents amortization of losses on forward starting interest rate swap agreements that were previously settled. |
SELF-INSURED LIABILITIES (Table
SELF-INSURED LIABILITIES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Loss Contingency [Abstract] | |
Summary of the activity in the self-insured liabilities | A summary of the activity in self-insured liabilities appears below: 2017 2016 2015 (In thousands) Balance at beginning of period $ 199,059 $ 193,312 $ 194,476 Charged to costs and expenses 523,674 418,917 367,025 Payments (476,922 ) (413,170 ) (368,189 ) Balance at end of period $ 245,811 $ 199,059 $ 193,312 |
DEBT AND OTHER FINANCING ARRA39
DEBT AND OTHER FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Sysco’s debt consists of the following: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Commercial paper, interest at 1.42% as of July 1, 2017 $ 119,691 $ — Senior notes, interest at 5.25%, maturing in fiscal 2018 (1) 500,311 506,456 Senior notes, interest at 1.90%, maturing in fiscal 2019 (1) 491,260 502,151 Senior notes, interest at 5.375%, maturing in fiscal 2019 (1) 249,456 249,141 Senior notes, interest at 2.60%, maturing in fiscal 2021 (1) 739,239 762,227 Senior notes, interest at 2.50%, maturing in fiscal 2022 (1) 488,554 506,484 Senior notes, interest at 2.60%, maturing in fiscal 2022 (1) 445,853 445,026 Senior notes, interest at 1.25%, maturing in fiscal 2023 (1) 566,767 552,391 Senior notes, interest at 3.75%, maturing in fiscal 2026 (1) 746,288 746,023 Senior notes, interest at 3.30%, maturing in fiscal 2027 (1) 991,370 990,603 Debentures, interest at 7.16%, maturing in fiscal 2027 (2) 50,000 50,000 Senior notes, interest at 3.25%, maturing in fiscal 2028 (1) 742,526 — Debentures, interest at 6.50%, maturing in fiscal 2029 (1) 223,822 223,716 Senior notes, interest at 5.375%, maturing in fiscal 2036 (1) 497,089 496,932 Senior notes, interest at 6.625%, maturing in fiscal 2039 (1) 248,396 244,655 Senior notes, interest at 4.85%, maturing in fiscal 2046 (1) 495,552 495,395 Senior notes, interest at 4.50%, maturing in fiscal 2046 (1) 493,981 493,897 Notes payable, capital leases, and other debt, interest averaging 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 and 3.12% and maturing at various dates to fiscal 2025 as of July 2, 2016 104,735 170,305 Total debt 8,194,890 7,435,402 Less current maturities of long-term debt (530,075 ) (8,909 ) Less notes payable (3,938 ) (89,563 ) Net long-term debt $ 7,660,877 $ 7,336,930 (1) Represents senior notes that are unsecured, are not subject to any sinking fund requirement and include a redemption provision that allows Sysco to retire the debentures and notes at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture and note holders are not penalized by the early redemption. (2) This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity. |
Long-term debt principal payments for the next five years table | As of July 1, 2017 , the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below: Amount (In thousands) 2018 $ 529,579 2019 774,138 2020 23,862 2021 762,906 2022 956,420 |
Interest expense for fiscal 2016 | Interest expense for fiscal 2016 includes the following amounts from these transactions: 53-Week Period Ended Jul. 2, 2016 (In thousands) Redemption premium payment $ 50,000 Debt issuance cost write-off 28,642 Bond discount write-off 17,869 Gain on swap termination (10,051 ) Loss on extinguishment of debt 86,460 Interest expense on senior notes 8,375 Total $ 94,835 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Leases [Abstract] | |
Aggregate minimum lease payments for non-capitalized long-term leases for the next five years and thereafter table | Aggregate minimum lease payments by fiscal year under existing long-term operating leases are as follows: Amount (In thousands) 2018 $ 96,953 2019 79,929 2020 67,010 2021 54,456 2022 45,851 Thereafter 261,017 |
OTHER LONG-TERM LIABILITIES (Ta
OTHER LONG-TERM LIABILITIES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Summary of other long-term liabilities | The following table presents details of the company’s other long-term liabilities: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Retirement Plans $ 573,298 $ 689,310 Supplemental executive retirement plan 432,614 450,945 Self-insurance 153,144 119,689 Other 214,766 108,538 Total $ 1,373,822 $ 1,368,482 |
COMPANY-SPONSORED EMPLOYEE BE42
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Retirement Benefits [Abstract] | |
Defined benefit plans funded status table | The caption “U.S. Pension Benefits” in the tables below includes both the Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,284,776 $ 3,679,127 $ 400,028 Service cost 14,287 11,815 2,880 Interest cost 171,282 174,602 9,951 Amendments 925 — (110 ) Curtailments — — (611 ) Actuarial (gain) loss, net (86,680 ) 517,070 26,528 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (4,052 ) Benefit obligation at end of year 4,224,231 4,284,776 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,115,040 3,003,128 271,821 Actual return on plan assets 333,890 52,268 1,938 Employer contribution (1) 53,091 157,482 4,530 Total disbursements (1) (160,359 ) (97,838 ) (13,879 ) Exchange rate changes — — (5,037 ) Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 Funded status at end of year $ (882,569 ) $ (1,169,736 ) $ (161,362 ) |
Defined benefit plans amounts recognized in balance sheet table | The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Current accrued benefit liability (Accrued expenses) $ (30,538 ) $ (29,480 ) $ (1,477 ) Non-current accrued benefit liability (Other long-term liabilities) (852,031 ) (1,140,256 ) (159,886 ) Net amount recognized $ (882,569 ) $ (1,169,736 ) $ (161,363 ) |
Defined benefit plans amounts recognized in accumulated other comprehensive loss (income) table | Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 Accumulated other comprehensive loss (income) as of July 2, 2016 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits (In thousands) Prior service cost $ 38,907 Actuarial losses (gains) 1,760,556 Total $ 1,799,463 |
Defined benefit plans with accumulated/aggregate benefit obligation in excess of fair value of plan assets table | Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jul. 1, 2017 Jul. 2, 2016 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,213,318 $ 4,272,547 $ 413,552 Fair value of plan assets at end of year 3,341,662 3,115,040 259,373 (1) Information under Pension Benefits as of July 1, 2017 and July 2, 2016 includes both the Retirement Plan and the SERP. |
Defined benefit plans components of net benefit cost table | The components of net company-sponsored pension costs for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,287 $ 2,880 $ 11,815 $ 11,263 Interest cost 171,282 9,951 174,602 171,120 Expected return on plan assets (222,699 ) (10,033 ) (216,888 ) (228,624 ) Amortization of prior service cost 11,202 (1 ) 11,201 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Curtailment loss — (611 ) — — Net pension (benefits) costs $ 15,583 $ 2,148 $ 2,916 $ (15,259 ) |
Defined benefit plans other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income table | Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2017 2016 2015 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 11,202 $ (1 ) $ 11,202 $ 11,111 Amortization of actuarial loss 41,511 (38 ) 22,186 19,871 Prior service cost arising in current year (925 ) 110 — (914 ) Effect of exchange rates on amounts in AOCI — (1,269 ) — — Actuarial (loss) gain arising in current year 197,871 (34,623 ) (681,691 ) (62,270 ) Net pension costs $ 249,659 $ (35,821 ) $ (648,303 ) $ (32,202 ) |
Defined benefit plans amounts included accumulated other comprehensive loss (income) that are expected to be recognized in net company-sponsored benefit cost in next fiscal year table | Amounts included in accumulated other comprehensive loss (income) as of July 1, 2017 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2018 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 9,460 $ (10 ) $ 9,450 Amortization of actuarial losses (gains) 35,696 2 35,698 Total $ 45,156 $ (8 ) $ 45,148 |
Defined benefit plans estimated future benefit payments table | Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2018 $ 127,700 $ 9,169 2019 137,971 10,374 2020 147,995 11,045 2021 159,056 12,671 2022 170,078 12,965 Subsequent five years 1,005,292 84,500 |
Defined benefit plans weighted average assumptions used in calculating net periodic benefit costs table | Weighted-average assumptions used to determine benefit obligations as of year-end were: Jul. 1, 2017 Jul. 2, 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % Discount rate — SERP 4.08 3.91 Discount rate — U.K. Retirement Plan 2.60 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 Rate of compensation increase — U.K. Retirement Plan N/A N/A Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2017 2016 2015 Discount rate — U.S. Retirement Plan 4.07 % 4.84 % 4.74 % Discount rate — SERP 3.91 4.63 4.59 Discount rate — U.K. Retirement Plan 2.80 N/A N/A Expected rate of return — U.S. Retirement Plan 7.25 7.25 7.75 Expected rate of return — U.K. Retirement Plan 4.15 N/A N/A Rate of compensation increase — U.S. Retirement Plan 2.62 3.89 3.89 Rate of compensation increase — U.K. Retirement Plan N/A N/A N/A |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans fair value of plans assets by major category table | The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . Investments in the funds may be redeemed once per day. (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 2, 2016 : Assets Measured at Fair Value as of Jul. 2, 2016 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 103,974 $ — $ — $ — $ 103,974 U.S. equity (1) 451,826 — — 270,501 722,327 International equity (1) 174,936 — — 547,719 722,655 Long duration fixed income: Corporate bonds — 631,927 — — 631,927 U.S. government and agency securities — 179,974 — — 179,974 Other (2) — 4,246 — — 4,246 High yield and emerging markets fixed income (3) — — — 214,735 214,735 Alternative investment funds: Hedge fund of funds (5) — — — 309,208 309,208 Real estate funds (6) 793 — — 162,108 162,901 Private equity funds (7) — — — 63,093 63,093 Total investments at fair value $ 731,529 $ 816,147 $ — $ 1,567,364 $ 3,115,040 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There were no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . (2) Include credit default swaps, interest rate swaps and futures. The fair value of asset positions totaled $0.3 million ; the fair value of liability positions totaled $0.3 million . (3) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 2, 2016 , and there were no redemption restrictions as of July 2, 2016 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 2, 2016 was $10 million . Approximately 20% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2020 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitments as of July 2, 2016 was $39.0 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . |
US and International Plans | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans target and actual asset allocation table | The U.S. Retirement Plan’s target and actual investment allocation as of July 1, 2017 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation U.S. equity 24 % 27 % International equity 24 22 Long duration fixed income 27 26 High yield & emerging markets 7 7 Alternative investments 18 18 100 % |
International Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans target and actual asset allocation table | The company’s target and actual investment allocation as of July 1, 2017 is as follows: International Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 74 % Liability hedging assets 25 26 100 % |
MULTIEMPLOYER EMPLOYEE BENEFI43
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Multiemployer Plans [Abstract] | |
Multiemployer defined benefit pension plan contributions table | Sysco’s contributions to multiemployer defined benefit pension plans were as follows for each fiscal year: 2017 2016 2015 (In thousands) Individually significant plans $ 36,653 $ 33,787 $ 32,097 All other plans 7,898 7,260 6,047 Total contributions $ 44,551 $ 41,047 $ 38,144 |
Multiemployer individually significant plans statistics table | The following table provides information about the funded status of individually significant plans: • The “EIN-PN” column provides the Employer Identification Number (EIN) and the three-digit plan number (PN). • The “Pension Protection Act Zone Status” columns provide the two most recent Pension Protection Act zone statuses available from each plan. The zone status is based on information that the company received from the plan’s administrators and is certified by each plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The Multiemployer Protection Act of 2014 created a new zone called “critical and declining.” Plans are generally considered “critical and declining” if they are projected to become insolvent within 15 years. • The “FIP/RP Status” column indicates whether a financial improvement plan (FIP) for yellow/orange zone plans or a rehabilitation plan (RP) for red zone plans is pending or implemented in the current year or was put in place in a prior year. A status of “Pending” indicates a FIP/RP has been approved but actual period covered by the FIP/RP has not begun. A status of “Implemented” means the period covered by the FIP/RP began in the current year or is ongoing. • The “Surcharge Imposed” column indicates whether a surcharge was paid during the most recent annual period presented for the company’s contributions to each plan in the red zone. If the company’s current collective bargaining agreement (CBA) with a plan satisfies the requirements of a pending but not yet implemented RP, then the payment of surcharges is not required and “No” will be reflected in this column. If the company’s current CBA with a plan does not yet satisfy the requirements of a pending but not yet implemented RP, then the payment of surcharges is required and “Yes” will be reflected in this column. Pension Protection Act Pension Fund EIN-PN As of As of FIP/RP Surcharge Expiration Western Conference of Teamsters Pension Plan 91-6145047-001 Green Green N/A N/A 9/1/2018 to 1/6/2024 (1) Teamsters Pension Trust Fund of Philadelphia and Vicinity 23-1511735-001 Yellow Yellow Implemented N/A 7/20/2020 (2) New York State Teamsters Conference Pension and Retirement Fund 16-6063585-074 N/A Red (3) Implemented No Withdrew in fiscal 2017 Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund 52-6043608-001 Yellow Yellow Implemented N/A 3/1/2018 Minneapolis Food Distributing Industry Pension Plan 41-6047047-001 Green Green Implemented N/A 8/6/2017 (1) Sysco is party to 22 CBAs that require contributions to the Western Conference of Teamsters Pension Trust. Each agreement covers anywhere from less than 1% to 9% of the total contributions Sysco is required to pay the fund. (2) Sysco is party to 1 CBA that require contributions to the Teamsters Pension Trust Fund of Philadelphia and Vicinity. This agreement expires July 20, 2020 and covers approximately 5% of the total Contribution Sysco is required to pay the fund. (3) This fund has filed a Critical and Declining Notice. Sysco withdrew from this plan in the fourth quarter of fiscal 2017 . |
Multiemployer individually significant plans contributions table | The following table provides information about the company’s contributions to individually significant plans: • The “Sysco Contributions” columns provide contribution amounts based on Sysco’s fiscal years, which may not coincide with the plans’ fiscal years. • The “Sysco 5% of Total Plan Contributions” columns indicate whether Sysco was listed in the plan’s most recently filed Form 5500s as providing more than five percent of the total contributions to the plan, and the plan year-end is noted. Sysco Contributions Sysco 5% of Total Plan Contributions Pension Fund 2017 2016 2015 Year Ending Year Ending (In thousands) Western Conference of Teamsters Pension Plan $ 28,145 $ 24,684 $ 23,268 No No Teamsters Pension Trust Fund of Philadelphia and Vicinity 3,081 2,375 2,233 No No N.Y. State Teamsters Conference Pension and Retirement Fund — 1,496 1,455 No No Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund 2,430 2,237 2,068 Yes No Minneapolis Food Distributing Industry Pension Plan 2,996 2,996 3,073 Yes Yes |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Earnings Per Share, Basic [Abstract] | |
Computation of basic and diluted earnings per share table | The following table sets forth the computation of basic and diluted earnings per share: 2017 2016 2015 (In thousands, except for share and per share data) Numerator: Net earnings $ 1,142,503 $ 949,622 $ 686,773 Denominator: Weighted-average basic shares outstanding 543,496,816 573,057,406 592,072,308 Dilutive effect of share-based awards 5,048,211 4,334,000 4,776,726 Weighted-average diluted shares outstanding 548,545,027 577,391,406 596,849,034 Basic earnings per share $ 2.10 $ 1.66 $ 1.16 Diluted earnings per share $ 2.08 $ 1.64 $ 1.15 |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of components of other comprehensive (loss) income and related tax effects | A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows: 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 Operating expenses $ 11,370 $ 4,366 $ 7,004 Amortization of actuarial loss (gain), net Operating expenses 41,689 15,724 25,965 Total reclassification adjustments 53,059 20,090 32,969 Other comprehensive income before Net actuarial (loss) gain, net arising in the current year 168,498 71,215 97,283 Total other comprehensive income before 168,498 71,215 97,283 Foreign currency translation: Foreign currency translation adjustment N/A (11,243 ) — (11,243 ) Hedging instruments: Reclassification adjustments: Gains on cash flow hedges Interest expense 11,495 4,413 7,082 Other comprehensive income before Change in cash flow hedge (10,871 ) (4,173 ) (6,698 ) Change in net investment hedge N/A (34,152 ) (10,140 ) (24,012 ) Total other comprehensive income $ 176,786 $ 81,405 $ 95,381 2016 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 11,351 $ 4,359 $ 6,992 Amortization of actuarial loss (gain), net Operating expenses 21,677 8,325 13,352 Total reclassification adjustments 33,028 12,684 20,344 Other comprehensive income before reclassification adjustments: Net actuarial (loss) gain, net arising in the current year (681,034 ) (261,517 ) (419,517 ) Total other comprehensive income before reclassification adjustments (681,034 ) (261,517 ) (419,517 ) Foreign currency translation: Foreign currency translation adjustment N/A (39,080 ) — (39,080 ) Interest rate swaps: Reclassification adjustments: Gains on cash flow hedges Interest expense 11,543 4,432 7,111 Other comprehensive income before reclassification adjustments: Change in fair value of cash flow hedges (6,134 ) (2,355 ) (3,779 ) Total other comprehensive loss $ (681,677 ) $ (246,756 ) $ (434,921 ) 2015 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 11,279 $ 4,331 $ 6,949 Amortization of actuarial loss (gain), net Operating expenses 19,437 7,464 11,972 Total reclassification adjustments 30,716 11,795 18,921 Other comprehensive income before reclassification adjustments Prior service cost arising in the current year N/A (914 ) (351 ) (563 ) Net actuarial loss (gain) arising in the current year N/A (61,221 ) (23,509 ) (37,712 ) Total other comprehensive income before reclassification adjustments (62,135 ) (23,860 ) (38,275 ) Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A (232,185 ) — (232,185 ) Interest rate swaps: Reclassification adjustments: Gains on cash flow hedges Interest expense 8,305 3,189 5,116 Other comprehensive income before reclassification adjustments: Change in fair value of cash flow hedge N/A (55,374 ) (21,263 ) (34,111 ) Total other comprehensive loss $ (310,673 ) $ (30,139 ) $ (280,534 ) |
Rollforward of accumulated other comprehensive (loss) income | The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented: Pension and Other Postretirement Benefit Plans, net of tax Foreign Currency Translation Interest Rate Swap, net of tax Total (In thousands) Balance as of June 28, 2014 $ (685,957 ) $ 134,452 $ (91,158 ) $ (642,663 ) Other comprehensive income before reclassification adjustments (38,275 ) (232,185 ) (34,111 ) (304,571 ) Amounts reclassified from accumulated other comprehensive loss 18,921 — 5,116 24,037 Balance as of June 27, 2015 (705,311 ) (97,733 ) (120,153 ) (923,197 ) Other comprehensive income before reclassification adjustments (419,517 ) (39,080 ) (3,779 ) (462,376 ) Amounts reclassified from accumulated other comprehensive loss 20,344 — 7,111 27,455 Balance as of July 2, 2016 (1,104,484 ) (136,813 ) (116,821 ) (1,358,118 ) Other comprehensive income before reclassification adjustments 97,283 (11,243 ) (30,710 ) 55,330 Amounts reclassified from accumulated other comprehensive loss 32,969 — 7,082 40,051 Balance as of July 1, 2017 $ (974,232 ) $ (148,056 ) $ (140,449 ) $ (1,262,737 ) |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Share-based Compensation [Abstract] | |
Black-Scholes option model assumption table | The weighted average assumptions discussed above are noted in the table below for relevant periods as follows: 2017 2016 2015 Dividend yield 2.8 % 3.1 % 3.2 % Expected volatility 16.9 % 20.4 % 20.7 % Risk-free interest rate 1.4 % 2.0 % 2.0 % Expected life 7.2 years 7.2 years 7.3 years |
Option rollforward and other disclosures table | The following summary presents information regarding outstanding options as of July 1, 2017 and changes during the fiscal year then ended with regard to options under all stock incentive plans: Shares Under Option Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of July 2, 2016 21,228,328 $ 34.13 Granted 4,990,396 52.43 Exercised 4,850,087 30.60 Forfeited 268,433 44.94 Expired 29,368 27.69 Outstanding as of July 1, 2017 21,070,836 $ 39.16 6.53 $ 245,657 Vested or expected to vest as of July 1, 2017 13,515,614 $ 42.65 7.72 $ 113,962 Exercisable as of July 1, 2017 7,361,568 $ 32.58 4.28 $ 130,638 |
Non-vested awards rollforward table | The following summary presents information regarding outstanding non-vested awards as of July 1, 2017 and changes during the fiscal year then ended with regard to these awards under the stock incentive plans. Award types represented include restricted stock units granted to employees and restricted awards granted to non-employee directors. Shares Weighted Average Grant Date Fair Value Per Share Non-vested as of July 2, 2016 2,532,721 $ 38.93 Granted 1,499,610 51.31 Vested (1,264,408 ) 37.97 Forfeited (124,095 ) 42.65 Non-vested as of July 1, 2017 2,643,828 $ 46.23 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Income Tax Disclosure [Abstract] | |
Earnings before income taxes by jurisdiction table | For financial reporting purposes, earnings before income taxes consists of the following: 2017 2016 2015 (In thousands) U.S. $ 1,569,073 $ 1,225,142 $ 818,244 Foreign 197,157 207,865 189,903 Total $ 1,766,230 $ 1,433,007 $ 1,008,147 |
Income tax provision by jurisdiction table | The income tax provision / (benefit) for each fiscal year consists of the following: 2017 2016 2015 (In thousands) U.S. federal income taxes $ 534,266 $ 429,658 $ 285,807 State and local income taxes 69,913 34,032 (2,737 ) Foreign income taxes 19,548 19,695 38,304 Total $ 623,727 $ 483,385 $ 321,374 |
Income tax provision by component table | The current and deferred components of the income tax provisions for each fiscal year are as follows: 2017 2016 2015 (In thousands) Current $ 675,573 $ 389,514 $ 326,079 Deferred (51,846 ) 93,871 (4,705 ) Total $ 623,727 $ 483,385 $ 321,374 |
Components of deferred tax assets and liabilities table | Significant components of Sysco’s deferred tax assets and liabilities are as follows: Jul. 1, 2017 Jul. 2, 2016 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 194,287 $ 66,471 Benefit on unrecognized tax benefits 9,218 12,842 Pension 360,864 453,394 Share-based compensation 48,077 43,698 Deferred compensation 39,830 38,840 Self-insured liabilities 84,401 67,050 Receivables 30,842 41,574 Inventory 21,332 24,138 Cash flow hedge 8,748 7,421 Foreign currency remeasurement losses and currency hedge 13,221 47,632 Other 36,653 29,550 Deferred tax assets before valuation allowances 847,473 832,610 Valuation allowances (114,151 ) — Total deferred tax assets 733,322 832,610 Deferred tax liabilities: Excess tax depreciation and basis differences of assets 247,510 346,900 Goodwill and intangible assets 455,340 254,202 Other 49,654 51,130 Total deferred tax liabilities 752,504 652,232 Total net deferred tax assets / (liabilities) $ (19,182 ) $ 180,378 |
Tax rate reconciliation table | Reconciliations of the statutory federal income tax rate to the effective income tax rates for each fiscal year are as follows: 2017 2016 2015 U.S. statutory federal income tax rate 35.00 % 35.00 % 35.00 % State and local income taxes, net of any applicable federal income tax benefit 2.61 1.79 0.91 Foreign tax rate differential (2.81 ) (2.40 ) (2.84 ) Uncertain tax position (1) 0.01 (1.96 ) — Other 0.50 1.30 (1.19 ) Effective income tax rate 35.31 % 33.73 % 31.88 % (1) Uncertain tax positions are included within “Other” for fiscal 2015 |
Reconciliation of unrecognized tax benefits table | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: 2017 2016 (In thousands) Unrecognized tax benefits at beginning of year $ 24,614 $ 37,546 Additions for tax positions related to prior years 648 142 Reductions for tax positions related to prior years (2,147 ) (12,932 ) Reductions due to settlements with taxing authorities (6,837 ) (142 ) Unrecognized tax benefits at end of year $ 16,278 $ 24,614 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Unrecorded unconditional purchase obligations table | Minimum amounts committed to by year are as follows: Amount (In thousands) 2018 $ 1,590,953 2019 338,805 2020 2,863 2021 1,451 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Segment Reporting [Abstract] | |
Business segment table | The following tables set forth certain financial information for Sysco’s business segments. Prior year amounts have been reclassified to conform to the current year presentation and include the impact of a change in allocation between corporate and these segments that is not material but is consistent with management’s assessment of segment performance in fiscal 2017 . Fiscal Year 2017 2016 2015 Sales: (In thousands) U.S. Foodservice Operations $ 37,604,698 $ 37,776,443 $ 36,098,977 International Foodservice Operations (1) 10,613,059 5,436,209 5,592,137 SYGMA 6,178,909 6,102,328 6,076,215 Other 974,473 1,051,939 913,423 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 Operating income: U.S. Foodservice Operations $ 2,891,612 $ 2,771,932 $ 2,493,210 International Foodservice Operations (1) 243,116 177,159 170,913 SYGMA 23,299 27,469 20,381 Other 20,279 32,586 26,596 Total segments 3,178,306 3,009,146 2,711,100 Corporate expenses (1,125,135 ) (1,158,646 ) (1,481,738 ) Total operating income 2,053,171 1,850,500 1,229,362 Interest expense 302,878 306,146 254,807 Other expense (income), net (15,937 ) 111,347 (33,592 ) Earnings before income taxes $ 1,766,230 $ 1,433,007 $ 1,008,147 Depreciation and amortization: U.S. Foodservice Operations $ 266,024 $ 252,392 $ 260,021 International Foodservice Operations (1) 243,628 70,184 63,037 SYGMA 34,890 31,792 29,753 Other 10,678 12,450 9,581 Total segments 555,220 366,818 362,392 Corporate 346,772 295,892 190,629 Total $ 901,992 $ 662,710 $ 553,021 Capital Expenditures: U.S. Foodservice Operations $ 194,714 $ 153,528 $ 184,567 International Foodservice Operations (1) 228,564 56,689 80,170 SYGMA 50,722 31,811 36,948 Other 13,237 20,702 4,287 Total segments 487,237 262,730 305,972 Corporate 199,141 264,616 236,858 Total $ 686,378 $ 527,346 $ 542,830 Fiscal Year 2017 2016 2015 Assets: (In thousands) U.S. Foodservice Operations $ 6,675,543 $ 6,753,056 $ 6,772,270 International Foodservice Operations (1) 6,433,815 2,019,406 1,915,011 SYGMA 625,653 539,639 510,626 Other 448,885 459,785 327,691 Total segments 14,183,896 9,771,886 9,525,598 Corporate 3,572,759 6,949,918 8,463,683 Total $ 17,756,655 $ 16,721,804 $ 17,989,281 (1) Amounts are impacted by changes in exchange rates used to translate foreign results into U.S. dollars. |
Product sales mix table | The sales mix for the principal product categories for each fiscal year is as follows: Fiscal Year 2017 2016 2015 (In thousands) Fresh and frozen meats $ 10,605,678 $ 10,273,247 $ 10,080,290 Canned and dry products 8,695,829 8,402,230 7,999,250 Frozen fruits, vegetables, bakery and other 8,444,260 6,719,648 6,339,537 Poultry 5,873,944 5,392,933 5,189,496 Dairy products 5,610,101 5,276,991 5,199,036 Fresh produce 4,701,440 4,156,978 3,828,298 Paper and disposables 3,596,470 3,557,514 3,507,007 Seafood 3,089,350 2,541,239 2,490,523 Beverage products 2,059,453 1,849,780 1,754,944 Janitorial products 1,331,019 1,251,821 1,102,855 Equipment and smallwares 794,087 593,595 661,254 Medical supplies 569,508 350,943 528,262 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 |
Geographic area revenue and long-lived assets table | Information concerning geographic areas is as follows: Fiscal Year 2017 2016 2015 (In thousands) Sales: United States $ 44,395,765 $ 44,922,937 $ 43,146,591 Canada 4,346,894 4,486,282 4,727,742 United Kingdom 2,974,133 — — France 1,426,973 — — Other 2,227,374 957,700 806,419 Total $ 55,371,139 $ 50,366,919 $ 48,680,752 Long-lived assets: United States $ 3,252,980 $ 3,461,505 $ 3,519,610 Canada 329,090 309,027 317,231 United Kingdom 303,178 — — France 284,611 — — Other 207,443 109,910 145,302 Total $ 4,377,302 $ 3,880,442 $ 3,982,143 |
SUPPLEMENTAL GUARANTOR INFORM50
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed consolidating balance sheet table | The following condensed consolidating financial statements present separately the financial position, comprehensive income and cash flows of the parent issuer (Sysco Corporation), the guarantors (the majority of the company’s U.S. Broadline subsidiaries), and all other non‑guarantor subsidiaries of Sysco (Other Non-Guarantor Subsidiaries) on a combined basis with eliminating entries. Condensed Consolidating Balance Sheet Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 177,495 $ 2,988,736 $ 4,867,207 $ — $ 8,033,438 Intercompany receivables 6,559,966 — — (6,559,966 ) — Investment in subsidiaries 6,451,994 — — (6,451,994 ) — Plant and equipment, net 258,527 1,276,342 2,842,433 — 4,377,302 Other assets 151,744 418,968 4,775,203 — 5,345,915 Total assets $ 13,599,726 $ 4,684,046 $ 12,484,843 $ (13,011,960 ) $ 17,756,655 Current liabilities $ 2,766,831 $ 2,605,828 $ 723,227 $ — $ 6,095,886 Intercompany payables — 1,642,663 4,917,303 (6,559,966 ) — Long-term debt 7,588,041 7,773 65,063 — 7,660,877 Other liabilities 863,338 103,784 568,415 — 1,535,537 Noncontrolling interest — — 82,839 — 82,839 Shareholders’ equity 2,381,516 323,998 6,127,996 (6,451,994 ) 2,381,516 Total liabilities and shareholders’ equity $ 13,599,726 $ 4,684,046 $ 12,484,843 $ (13,011,960 ) $ 17,756,655 Condensed Consolidating Balance Sheet Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 3,440,206 $ 3,813,524 $ 2,800,169 $ — $ 10,053,899 Intercompany receivables 1,348,425 — 749,083 (2,097,508 ) — Investment in subsidiaries 6,694,615 — — (6,694,615 ) — Plant and equipment, net 429,890 1,587,702 1,862,850 — 3,880,442 Other assets 213,186 642,525 1,931,752 — 2,787,463 Total assets $ 12,126,322 $ 6,043,751 $ 7,343,854 $ (8,792,123 ) $ 16,721,804 Current liabilities $ 621,925 $ 111,728 $ 3,700,803 $ — $ 4,434,456 Intercompany payables — 2,097,508 — (2,097,508 ) — Long-term debt 7,145,955 62,387 128,588 — 7,336,930 Other liabilities 878,834 248,493 268,097 — 1,395,424 Noncontrolling interest — — 75,386 — 75,386 Shareholders’ equity 3,479,608 3,523,635 3,170,980 (6,694,615 ) 3,479,608 Total liabilities and shareholders’ equity $ 12,126,322 $ 6,043,751 $ 7,343,854 $ (8,792,123 ) $ 16,721,804 |
Condensed consolidating statement of comprehensive income table | Condensed Consolidating Statement of Comprehensive Income Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 27,200,744 $ 29,987,271 $ (1,816,876 ) $ 55,371,139 Cost of sales — 21,912,558 24,717,950 (1,816,876 ) 44,813,632 Gross profit — 5,288,186 5,269,321 — 10,557,507 Operating expenses 931,498 3,123,076 4,449,762 — 8,504,336 Operating income (loss) (931,498 ) 2,165,110 819,559 — 2,053,171 Interest expense (income) 260,365 (95,687 ) 138,200 — 302,878 Other expense (income), net (23,740 ) (837 ) 8,640 — (15,937 ) Earnings (losses) before income taxes (1,168,123 ) 2,261,634 672,719 — 1,766,230 Income tax (benefit) provision (412,511 ) 800,537 235,701 — 623,727 Equity in earnings of subsidiaries 1,898,115 — — (1,898,115 ) — Net earnings 1,142,503 1,461,097 437,018 (1,898,115 ) 1,142,503 Other comprehensive income (loss) 95,381 — (9,317 ) 9,317 95,381 Comprehensive income $ 1,237,884 $ 1,461,097 $ 427,701 $ (1,888,798 ) $ 1,237,884 Condensed Consolidating Statement of Comprehensive Income Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 33,932,334 $ 18,112,973 $ (1,678,388 ) $ 50,366,919 Cost of sales — 27,485,111 15,519,724 (1,678,388 ) 41,326,447 Gross profit — 6,447,223 2,593,249 — 9,040,472 Operating expenses 944,457 3,857,415 2,388,100 — 7,189,972 Operating income (loss) (944,457 ) 2,589,808 205,149 — 1,850,500 Interest expense (income) 381,122 (145,852 ) 70,876 — 306,146 Other expense (income), net 128,777 (1,876 ) (15,554 ) — 111,347 Earnings (losses) before income taxes (1,454,356 ) 2,737,536 149,827 — 1,433,007 Income tax (benefit) provision (490,579 ) 923,416 50,548 — 483,385 Equity in earnings of subsidiaries 1,913,399 — — (1,913,399 ) — Net earnings 949,622 1,814,120 99,279 (1,913,399 ) 949,622 Other comprehensive income (loss) (434,921 ) — (52,306 ) 52,306 (434,921 ) Comprehensive income $ 514,701 $ 1,814,120 $ 46,973 $ (1,861,093 ) $ 514,701 Condensed Consolidating Statement of Comprehensive Income Jun. 27, 2015 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Sales $ — $ 32,626,221 $ 17,477,986 $ (1,423,455 ) $ 48,680,752 Cost of sales — 26,572,257 14,980,434 (1,423,455 ) 40,129,236 Gross profit — 6,053,964 2,497,552 — 8,551,516 Operating expenses 1,232,956 3,709,320 2,379,878 — 7,322,154 Operating income (loss) (1,232,956 ) 2,344,644 117,674 — 1,229,362 Interest expense (income) 323,918 (108,233 ) 39,122 — 254,807 Other expense (income), net (9,496 ) (3,609 ) (20,487 ) — (33,592 ) Earnings (losses) before income taxes (1,547,378 ) 2,456,486 99,039 — 1,008,147 Income tax (benefit) provision (493,263 ) 783,066 31,571 — 321,374 Equity in earnings of subsidiaries 1,740,888 — — (1,740,888 ) — Net earnings 686,773 1,673,420 67,468 (1,740,888 ) 686,773 Other comprehensive income (loss) (280,534 ) (232,185 ) 232,185 (280,534 ) Comprehensive income $ 406,239 $ 1,673,420 $ (164,717 ) $ (1,508,703 ) $ 406,239 |
Condensed consolidating cash flows table | Condensed Consolidating Cash Flows Jul. 1, 2017 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 1,472,847 $ 2,908,792 $ 557,343 $ (2,762,557 ) $ 2,176,425 Investing activities (3,274,566 ) (142,124 ) (294,771 ) 127,000 (3,584,461 ) Financing activities (1,463,168 ) (2,782,134 ) (9,964 ) 2,635,557 (1,619,709 ) Effect of exchange rates on cash — — (22,104 ) — (22,104 ) Net increase (decrease) in cash and cash equivalents (3,264,887 ) (15,466 ) 230,504 — (3,049,849 ) Cash and cash equivalents at the beginning of period 3,376,463 34,069 508,819 — 3,919,351 Cash and cash equivalents at the end of period $ 111,576 $ 18,603 $ 739,323 — $ 869,502 Condensed Consolidating Cash Flows Jul. 2, 2016 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 990,695 $ 4,101,840 $ 767,607 $ (3,927,000 ) $ 1,933,142 Investing activities 20,094 (212,270 ) (408,652 ) — (600,828 ) Financing activities (2,485,444 ) (3,881,879 ) 35,592 3,927,000 (2,404,731 ) Effect of exchange rates on cash — — (138,327 ) — (138,327 ) Net increase (decrease) in cash and cash equivalents (1,474,655 ) 7,691 256,220 — (1,210,744 ) Cash and cash equivalents at the beginning of period 4,851,075 26,378 252,591 — 5,130,044 Cash and cash equivalents at the end of period $ 3,376,420 $ 34,069 $ 508,811 — $ 3,919,300 Condensed Consolidating Cash Flows Jun. 27, 2015 Sysco Certain U.S. Broadline Subsidiaries Other Non-Guarantor Subsidiaries Elimination (1) Consolidated Totals (In thousands) Cash flows provided by (used for): Operating activities $ 1,019,873 $ 191,181 $ 422,884 $ (78,454 ) $ 1,555,484 Investing activities (160,234 ) (108,099 ) (386,013 ) — (654,346 ) Financing activities 3,832,479 (84,476 ) 71,105 78,454 3,897,562 Effect of exchange rates on cash — — (81,702 ) — (81,702 ) Net increase (decrease) in cash and cash equivalents 4,692,118 (1,394 ) 26,274 — 4,716,998 Cash and cash equivalents at the beginning of period 158,957 27,772 226,317 — 413,046 Cash and cash equivalents at the end of period $ 4,851,075 $ 26,378 $ 252,591 — $ 5,130,044 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Jul. 01, 2017 | |
Quarterly Financial Data [Abstract] | |
Quarterly results (unaudited) table | Financial information for each quarter in the years ended July 1, 2017 and July 2, 2016 is set forth below: Fiscal 2017 Quarter Ended October 1 December 31 April 1 July 1 Fiscal Year (In thousands except for per share data) Sales $ 13,968,654 $ 13,457,268 $ 13,524,172 $ 14,421,045 $ 55,371,139 Cost of sales 11,276,735 10,885,405 10,990,037 11,661,455 44,813,632 Gross profit 2,691,919 2,571,863 2,534,135 2,759,590 10,557,507 Operating expenses 2,125,086 2,079,446 2,098,173 2,201,631 8,504,336 Operating income 566,833 492,417 435,962 557,959 2,053,171 Interest expense 73,623 72,231 81,004 76,020 302,878 Other expense (income), net (7,216 ) (2,320 ) (4,815 ) (1,586 ) (15,937 ) Earnings before income taxes 500,426 422,506 359,773 483,525 1,766,230 Income taxes 176,539 147,339 121,495 178,354 623,727 Net earnings $ 323,887 $ 275,167 $ 238,278 $ 305,171 $ 1,142,503 Per share: Basic net earnings $ 0.58 $ 0.50 $ 0.44 $ 0.57 $ 2.10 Diluted net earnings 0.58 0.50 0.44 0.57 2.08 Dividends declared 0.31 0.33 0.33 0.33 1.30 Fiscal 2016 Quarter Ended September 26 (1) December 26 March 26 July 2 (2), (3) Fiscal Year (3) (In thousands except for per share data) Sales $ 12,562,611 $ 12,153,626 $ 12,002,791 $ 13,647,891 $ 50,366,919 Cost of sales 10,324,616 9,996,812 9,859,966 11,145,053 41,326,447 Gross profit 2,237,995 2,156,814 2,142,825 2,502,838 9,040,472 Operating expenses 1,744,521 1,724,231 1,765,207 1,956,013 7,189,972 Operating income 493,474 432,583 377,618 546,825 1,850,500 Interest expense 126,907 47,235 57,699 74,305 306,146 Other expense (income), net (15,240 ) (7,764 ) (6,952 ) 141,303 111,347 Earnings before income taxes 381,807 393,112 326,871 331,217 1,433,007 Income taxes 137,387 120,713 109,735 115,550 483,385 Net earnings $ 244,420 $ 272,399 $ 217,136 $ 215,667 $ 949,622 Per share: Basic net earnings $ 0.41 $ 0.48 $ 0.38 $ 0.38 $ 1.66 Diluted net earnings 0.41 0.48 0.38 0.38 1.64 Dividends declared 0.30 0.31 0.31 0.31 1.23 Percentage change — 2017 vs. 2016: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Fiscal Year Sales 11 % 11 % 13 % 6 % 10 % Operating income 15 14 15 2 11 Net earnings 33 1 10 42 20 Basic net earnings per share 41 4 16 50 27 Diluted net earnings per share 41 4 16 50 27 (1) Sysco’s first quarter of fiscal 2016 included a charge for $94.8 million in interest expense related to the redemption of senior notes. See Note 11 "Debt and Other Financing Arrangements." (2) Sysco’s fourth quarter of fiscal 2016 includes a remeasurement loss of $101.2 million in other expense (income), net due to the remeasurement of foreign cash held by Sysco for the Brakes Acquisition. (3) Sysco’s fiscal year ends on the Saturday nearest to June 30 th , which resulted in a 14-week quarter and 53-week year ending July 2, 2016 for fiscal 2016 . |
SUMMARY OF ACCOUNTING POLICIE52
SUMMARY OF ACCOUNTING POLICIES (Details) customer in Thousands, $ in Millions | 12 Months Ended | ||
Jul. 01, 2017USD ($)customersegmentfacilityUnit | Jul. 02, 2016USD ($)shares | Jun. 27, 2015USD ($) | |
Accounting Policies [Abstract] | |||
Number of customers | customer | 500 | ||
Number of distribution facilities | facility | 324 | ||
Internal-use software, acquired and developed, cost incurred | $ 23.5 | $ 82.1 | $ 25 |
Capitalized interest | $ 2 | 2 | 0.9 |
Number of operating segments | segment | 15 | ||
Number of reporting units tested | Unit | 21 | ||
Number of reporting units requiring qualitative assessments | Unit | 7 | ||
Summary of Accounting Policies [Line Items] | |||
Aggregate goodwill threshold for requiring additional analysis | $ 1,700 | ||
Cash surrender value of corporate-owned life insurance | 163.7 | 163.3 | |
Shipping and handling costs | $ 3,400 | 2,600 | $ 2,600 |
September 23, 2015 | |||
Summary of Accounting Policies [Line Items] | |||
Value of shares repurchased | $ 1,500 | ||
Treasury stock purchases (in shares) | shares | 34,716,180 | ||
Minimum | |||
Summary of Accounting Policies [Line Items] | |||
Reporting unit impairment, decrease in fair value estimate requiring additional analysis, percent | 5.00% | ||
Intangible assets useful life (in years) | 2 years | ||
Maximum | |||
Summary of Accounting Policies [Line Items] | |||
Reporting unit impairment, decrease in fair value estimate requiring additional analysis, percent | 28.00% | ||
Intangible assets useful life (in years) | 15 years |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) | Jul. 05, 2016 | Jul. 01, 2017 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Business Combinations [Abstract] | |||||
Acquisition of businesses, net of cash acquired | $ 2,921,798,000 | $ 219,218,000 | $ 115,862,000 | ||
Contingent consideration maximum number of years | 3 years | ||||
Potential cash payout for contingent consideration arrangements | $ 15,300,000 | $ 15,300,000 | |||
Contingent consideration | 5,300,000 | 5,300,000 | |||
Purchase Price Allocation | |||||
Goodwill | 3,916,128,000 | 3,916,128,000 | 2,121,661,000 | $ 1,959,817,000 | |
Amortized intangibles acquired during year | $ 833,100,000 | ||||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 12 years | ||||
Customer relationships | |||||
Purchase Price Allocation | |||||
Amortized intangibles acquired during year | $ 832,600,000 | ||||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 12 years | ||||
Cucina Lux Investments Limited | |||||
Business Acquisition [Line Items] | |||||
Cash consideration paid, net of cash acquired | $ 626,442,000 | ||||
Payment for Brakes outstanding financial debt | 2,284,100,000 | ||||
Total consideration paid, net of cash acquired | 2,910,542,000 | ||||
Purchase Price Allocation | |||||
Accounts receivable | 686,776,000 | ||||
Inventory | 248,031,000 | ||||
Plant and equipment | 595,388,000 | ||||
Other assets | 47,217,000 | ||||
Goodwill and other intangibles | 2,789,065,000 | ||||
Total assets | 4,366,477,000 | ||||
Accounts payable | (707,622,000) | ||||
Accrued expenses | (474,501,000) | ||||
Deferred tax liabilities | (197,629,000) | ||||
Other liabilities | (76,183,000) | ||||
Total consideration, net of cash acquired | 2,910,542,000 | ||||
Goodwill | 1,800,000,000 | ||||
Goodwill expected to be tax deductible | 0 | ||||
Amortization of intangible assets | $ 76,200,000 | ||||
Business Acquisition, Pro Forma Information [Abstract] | |||||
Pro forma sales, actual | 5,200,000,000 | ||||
Pro forma net earnings, actual | $ 47,000,000 | ||||
Sales | 55,922,506,000 | ||||
Income before taxes | 1,441,667,000 | ||||
Net earnings | $ 954,888,000 | ||||
Net earnings: | |||||
Basic earnings per common share (in dollars per share) | $ 1.67 | ||||
Diluted earnings per common share (in dollars per share) | $ 1.65 | ||||
Cucina Lux Investments Limited | Customer relationships | |||||
Purchase Price Allocation | |||||
Amortized intangibles acquired during year | $ 832,600,000 | ||||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 12 years | ||||
Cucina Lux Investments Limited | Trademarks and Trade Names | |||||
Purchase Price Allocation | |||||
Amortized intangibles acquired during year | $ 141,000,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of total debt | $ 8,194,890 | $ 7,435,402 |
Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of total debt | 8,600,000 | 7,900,000 |
Carrying value of total debt | 8,200,000 | 7,400,000 |
Recurring Fair Value Measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 288,384 | 677,500 |
Total assets at fair value | 289,808 | 714,305 |
Total liabilities at fair value | 45,988 | |
Recurring Fair Value Measurements | Other assets | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 707 | 36,805 |
Recurring Fair Value Measurements | Other assets | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 717 | |
Recurring Fair Value Measurements | Other current liabilities | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 6,160 | |
Recurring Fair Value Measurements | Other long-term investments | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 21,390 | |
Recurring Fair Value Measurements | Other long-term investments | Cross-currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 5,816 | |
Recurring Fair Value Measurements | Other long-term investments | Foreign currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 12,308 | |
Recurring Fair Value Measurements | Other long-term investments | Foreign currency forwards | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 154 | |
Recurring Fair Value Measurements | Other long-term investments | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 160 | |
Recurring Fair Value Measurements | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 238,954 | 634,230 |
Total assets at fair value | 238,954 | 634,230 |
Total liabilities at fair value | 0 | |
Recurring Fair Value Measurements | Level 1 | Other assets | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 0 | 0 |
Recurring Fair Value Measurements | Level 1 | Other assets | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 0 | |
Recurring Fair Value Measurements | Level 1 | Other current liabilities | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 1 | Other long-term investments | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 1 | Other long-term investments | Foreign currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 1 | Other long-term investments | Foreign currency forwards | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 49,430 | 43,270 |
Total assets at fair value | 50,854 | 80,075 |
Total liabilities at fair value | 45,988 | |
Recurring Fair Value Measurements | Level 2 | Other assets | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 707 | 36,805 |
Recurring Fair Value Measurements | Level 2 | Other assets | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 717 | |
Recurring Fair Value Measurements | Level 2 | Other current liabilities | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 6,160 | |
Recurring Fair Value Measurements | Level 2 | Other long-term investments | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 21,390 | |
Recurring Fair Value Measurements | Level 2 | Other long-term investments | Cross-currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 5,816 | |
Recurring Fair Value Measurements | Level 2 | Other long-term investments | Foreign currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 12,308 | |
Recurring Fair Value Measurements | Level 2 | Other long-term investments | Foreign currency forwards | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 154 | |
Recurring Fair Value Measurements | Level 2 | Other long-term investments | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 160 | |
Recurring Fair Value Measurements | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0 | 0 |
Total assets at fair value | 0 | 0 |
Total liabilities at fair value | 0 | |
Recurring Fair Value Measurements | Level 3 | Other assets | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 0 | $ 0 |
Recurring Fair Value Measurements | Level 3 | Other assets | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative assets | 0 | |
Recurring Fair Value Measurements | Level 3 | Other current liabilities | Fuel swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 3 | Other long-term investments | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 3 | Other long-term investments | Foreign currency swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | 0 | |
Recurring Fair Value Measurements | Level 3 | Other long-term investments | Foreign currency forwards | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of derivative liabilities | $ 0 |
ALLOWANCE FOR DOUBTFUL ACCOUN55
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Allowance for Doubtful Accounts | |||
Balance at beginning of period | $ 37,880 | $ 41,720 | $ 49,902 |
Charged to costs and expenses | 20,672 | 20,372 | 17,996 |
Customer accounts written off, net of recoveries | (26,943) | (23,551) | (25,719) |
Other adjustments | (550) | (661) | (459) |
Balance at end of period | $ 31,059 | $ 37,880 | $ 41,720 |
PLANT AND EQUIPMENT (Details)
PLANT AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($)operating_company | Jun. 27, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 9,699,133 | $ 8,585,250 | |
Accumulated depreciation | (5,321,831) | (4,704,808) | |
Total plant and equipment, net | 4,377,302 | 3,880,442 | $ 3,982,143 |
Depreciation expense | 765,400 | $ 608,700 | $ 495,800 |
Number of operating companies | operating_company | 12 | ||
Construction in progress | $ 31,600 | ||
Intangible Assets, Amortization Period | |||
Property, Plant and Equipment [Line Items] | |||
Amortization | 111,300 | $ 41,900 | |
Software and Software Development Costs | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 3 years | ||
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | 477,577 | $ 448,981 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 4,072,339 | 3,962,454 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 10 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 30 years | ||
Fleet and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 3,595,095 | 2,990,267 | |
Fleet and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 3 years | ||
Fleet and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 10 years | ||
Computer hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 1,554,122 | 1,183,548 | |
Computer hardware and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 7 years | ||
Software Development | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment, net | $ 251,100 |
GOODWILL AND OTHER INTANGIBLE57
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | $ 2,121,661 | $ 1,959,817 | |
Goodwill acquired during year | 1,815,890 | 176,217 | |
Currency translation/other | (21,423) | (14,373) | |
Goodwill carrying amount, ending balance | 3,916,128 | 2,121,661 | $ 1,959,817 |
Amortized intangibles acquired during year | $ 833,100 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 12 years | ||
Intangibles gross carrying amount | $ 1,130,634 | 326,221 | |
Intangibles accumulated amortization | (252,343) | (160,655) | |
Intangibles net amount | 878,291 | 165,566 | |
Indefinite-lived intangible assets balance | 159,220 | 41,895 | |
Intangibles amortization expense | 112,900 | 37,300 | 40,000 |
Estimated Future Amortization Expense for the Next Five Fiscal Years | |||
2,018 | 105,474 | ||
2,019 | 98,915 | ||
2,020 | 94,880 | ||
2,021 | 85,255 | ||
2,022 | 83,548 | ||
Trademarks | |||
Goodwill [Roll Forward] | |||
Indefinite-lived intangible assets balance | 158,251 | 40,929 | |
Licenses | |||
Goodwill [Roll Forward] | |||
Indefinite-lived intangible assets balance | 969 | 966 | |
Customer relationships | |||
Goodwill [Roll Forward] | |||
Amortized intangibles acquired during year | $ 832,600 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 12 years | ||
Intangibles gross carrying amount | $ 1,073,577 | 265,441 | |
Intangibles accumulated amortization | (209,253) | (126,194) | |
Intangibles net amount | 864,324 | 139,247 | |
Non-compete agreements | |||
Goodwill [Roll Forward] | |||
Intangibles gross carrying amount | 32,385 | 36,405 | |
Intangibles accumulated amortization | (25,384) | (21,312) | |
Intangibles net amount | 7,001 | 15,093 | |
Other | |||
Goodwill [Roll Forward] | |||
Amortized intangibles acquired during year | $ 500 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 3 years | ||
Intangibles gross carrying amount | $ 13,622 | 13,622 | |
Intangibles accumulated amortization | (10,704) | (7,786) | |
Intangibles net amount | 2,917 | 5,836 | |
Trademarks | |||
Goodwill [Roll Forward] | |||
Intangibles gross carrying amount | 11,050 | 10,753 | |
Intangibles accumulated amortization | (7,002) | (5,363) | |
Intangibles net amount | 4,048 | 5,390 | |
U.S. Foodservice Operations | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 1,220,702 | 1,123,474 | |
Goodwill acquired during year | 0 | 97,351 | |
Currency translation/other | 10,343 | (123) | |
Goodwill carrying amount, ending balance | 1,231,045 | 1,220,702 | 1,123,474 |
International Foodservice Operations | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 632,700 | 615,402 | |
Goodwill acquired during year | 1,815,890 | 31,447 | |
Currency translation/other | (16,082) | (14,149) | |
Goodwill carrying amount, ending balance | 2,432,508 | 632,700 | 615,402 |
SYGMA | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 32,607 | 32,609 | |
Goodwill acquired during year | 0 | 0 | |
Currency translation/other | 0 | (2) | |
Goodwill carrying amount, ending balance | 32,607 | 32,607 | 32,609 |
Other | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 235,652 | 188,332 | |
Goodwill acquired during year | 0 | 47,419 | |
Currency translation/other | (15,684) | (99) | |
Goodwill carrying amount, ending balance | $ 219,968 | $ 235,652 | $ 188,332 |
DERIVATIVE FINANCIAL INSTRUME58
DERIVATIVE FINANCIAL INSTRUMENTS - SUMMARY OF INTEREST RATE SWAPS (Details) | Jul. 01, 2017USD ($) |
Interest Rate Swap - February 12, 2018 | |
Derivative [Line Items] | |
Notional Value | $ 500,000,000 |
Fixed Coupon Rate on Hedged Debt | 5.25% |
Interest Rate Swap - April 1, 2019 | |
Derivative [Line Items] | |
Notional Value | $ 500,000,000 |
Fixed Coupon Rate on Hedged Debt | 1.90% |
Interest Rate Swap - October 1, 2020 | |
Derivative [Line Items] | |
Notional Value | $ 750,000,000 |
Fixed Coupon Rate on Hedged Debt | 2.60% |
Interest Rate Swap - July 15, 2021 | |
Derivative [Line Items] | |
Notional Value | $ 500,000,000 |
Fixed Coupon Rate on Hedged Debt | 2.50% |
DERIVATIVE FINANCIAL INSTRUME59
DERIVATIVE FINANCIAL INSTRUMENTS (Details) - Hedging Instrument £ in Millions | 12 Months Ended | ||||||
Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | Jul. 01, 2017GBP (£) | Jul. 01, 2017USD ($) | Aug. 31, 2016EUR (€) | Jun. 30, 2016EUR (€) | |
Cross-currency swaps | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative | £ | £ 234.2 | ||||||
Cross-currency swaps | Net investment hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative | € | € 534,000,000 | ||||||
Cross-currency swaps | Cash flow hedging | Other Comprehensive Income (Loss) | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | $ (1,148,000) | $ 0 | $ 0 | ||||
Cross-currency swaps | Cash flow hedging | Other long-term liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | $ (5,816,000) | ||||
Interest rate swaps | Net investment hedging | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | € | € 500,000,000 | ||||||
Interest rate swaps | Fair value hedging | Interest expense | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | (9,022,000) | (12,033,000) | (21,960,000) | ||||
Interest rate swaps | Fair value hedging | Other current assets | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | 707,000 | ||||
Interest rate swaps | Fair value hedging | Other assets | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 36,805,000 | 12,597,000 | |||||
Interest rate swaps | Fair value hedging | Other long-term liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | (21,390,000) | ||||
Fuel swaps | Cash flow hedging | |||||||
Derivative [Line Items] | |||||||
Notional amount of derivative | 78,000,000 | ||||||
Fuel swaps | Cash flow hedging | Other Comprehensive Income (Loss) | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | (5,335,000) | 0 | 0 | ||||
Fuel swaps | Cash flow hedging | Other current assets | |||||||
Derivative [Line Items] | |||||||
Derivative asset, fair value | 0 | 0 | 717,000 | ||||
Fuel swaps | Cash flow hedging | Other long-term liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | (160,000) | ||||||
Fuel swaps | Cash flow hedging | Other current liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | (6,160,000) | ||||||
Foreign currency forwards | Cash flow hedging | Other Comprehensive Income (Loss) | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | (4,389,000) | 0 | 0 | ||||
Foreign currency forwards | Cash flow hedging | Other current liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | (154,000) | ||||
Foreign currency swaps | Net investment hedging | Other Comprehensive Income (Loss) | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | (34,152,000) | 0 | 0 | ||||
Foreign currency swaps | Net investment hedging | Other long-term liabilities | |||||||
Derivative [Line Items] | |||||||
Derivative liability, fair value | 0 | 0 | $ (12,308,000) | ||||
Forward starting interest rate swaps | Cash flow hedging | Other Comprehensive Income (Loss) | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | 0 | (6,134,000) | (55,374,000) | ||||
Forward starting interest rate swaps | Cash flow hedging | Interest expense | |||||||
Derivative [Line Items] | |||||||
Amount of (Gain) or Loss Recognized | $ 11,495,000 | $ 11,543,000 | $ 8,305,000 |
SELF-INSURED LIABILITIES (Detai
SELF-INSURED LIABILITIES (Details) - Self-insured liabilities - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Self-Insured Liabilities | |||
Balance at beginning of period | $ 199,059 | $ 193,312 | $ 194,476 |
Charged to costs and expenses | 523,674 | 418,917 | 367,025 |
Payments | (476,922) | (413,170) | (368,189) |
Balance at end of period | $ 245,811 | $ 199,059 | $ 193,312 |
DEBT AND OTHER FINANCING ARRA61
DEBT AND OTHER FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jun. 19, 2017 | Jul. 02, 2016 | |
Debt [Line Items] | |||
Total debt | $ 8,194,890 | $ 7,435,402 | |
Less current maturities of long-term debt | (530,075) | (8,909) | |
Less notes payable | (3,938) | (89,563) | |
Long-term debt | 7,660,877 | 7,336,930 | |
Principal payment required during next five years | |||
2,018 | 529,579 | ||
2,019 | 774,138 | ||
2,020 | 23,862 | ||
2,021 | 762,906 | ||
2,022 | 956,420 | ||
Commercial Paper | |||
Debt [Line Items] | |||
Total debt | $ 119,691 | 0 | |
Average interest rate on debt instruments (as a percent) | 1.42% | ||
Senior Notes | Senior notes, interest at 5.25%, maturing in fiscal 2018 | |||
Debt [Line Items] | |||
Total debt | $ 500,311 | 506,456 | |
Interest rate on debt instrument (as a percent) | 5.25% | ||
Maturity date on long-term debt stated in fiscal year | 2,018 | ||
Senior Notes | Senior notes, interest at 1.90%, maturing in fiscal 2019 | |||
Debt [Line Items] | |||
Total debt | $ 491,260 | 502,151 | |
Interest rate on debt instrument (as a percent) | 1.90% | ||
Maturity date on long-term debt stated in fiscal year | 2,019 | ||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2019 | |||
Debt [Line Items] | |||
Total debt | $ 249,456 | 249,141 | |
Interest rate on debt instrument (as a percent) | 5.375% | ||
Maturity date on long-term debt stated in fiscal year | 2,019 | ||
Senior Notes | Senior notes, interest at 2.60%, maturing in fiscal 2021 | |||
Debt [Line Items] | |||
Total debt | $ 739,239 | 762,227 | |
Interest rate on debt instrument (as a percent) | 2.60% | ||
Maturity date on long-term debt stated in fiscal year | 2,021 | ||
Senior Notes | Senior notes, interest at 2.50%, maturing in fiscal 2022 | |||
Debt [Line Items] | |||
Total debt | $ 488,554 | 506,484 | |
Interest rate on debt instrument (as a percent) | 2.50% | ||
Maturity date on long-term debt stated in fiscal year | 2,022 | ||
Senior Notes | Senior notes, interest at 2.60%, maturing in fiscal 2022 | |||
Debt [Line Items] | |||
Total debt | $ 445,853 | 445,026 | |
Interest rate on debt instrument (as a percent) | 2.60% | ||
Maturity date on long-term debt stated in fiscal year | 2,022 | ||
Senior Notes | Senior notes, interest at 1.25%, maturing in fiscal 2023 | |||
Debt [Line Items] | |||
Total debt | $ 566,767 | 552,391 | |
Interest rate on debt instrument (as a percent) | 1.25% | ||
Maturity date on long-term debt stated in fiscal year | 2,023 | ||
Senior Notes | Senior notes, interest at 3.75%, maturing in fiscal 2026 | |||
Debt [Line Items] | |||
Total debt | $ 746,288 | 746,023 | |
Interest rate on debt instrument (as a percent) | 3.75% | ||
Maturity date on long-term debt stated in fiscal year | 2,026 | ||
Senior Notes | Senior notes, interest at 3.30%, maturing in fiscal 2027 | |||
Debt [Line Items] | |||
Total debt | $ 991,370 | 990,603 | |
Interest rate on debt instrument (as a percent) | 3.30% | ||
Maturity date on long-term debt stated in fiscal year | 2,027 | ||
Senior Notes | Senior notes, interest at 3.25%, maturing in fiscal 2028 | |||
Debt [Line Items] | |||
Total debt | $ 742,526 | 0 | |
Interest rate on debt instrument (as a percent) | 3.25% | 3.25% | |
Maturity date on long-term debt stated in fiscal year | 2,028 | ||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2036 | |||
Debt [Line Items] | |||
Total debt | $ 497,089 | 496,932 | |
Interest rate on debt instrument (as a percent) | 5.375% | ||
Maturity date on long-term debt stated in fiscal year | 2,036 | ||
Senior Notes | Senior notes, interest at 6.625%, maturing in fiscal 2039 | |||
Debt [Line Items] | |||
Total debt | $ 248,396 | 244,655 | |
Interest rate on debt instrument (as a percent) | 6.625% | ||
Maturity date on long-term debt stated in fiscal year | 2,039 | ||
Senior Notes | Senior notes, interest at 4.85%, maturing in fiscal 2046 | |||
Debt [Line Items] | |||
Total debt | $ 495,552 | 495,395 | |
Interest rate on debt instrument (as a percent) | 4.85% | ||
Maturity date on long-term debt stated in fiscal year | 2,046 | ||
Senior Notes | Senior notes, interest at 4.50%, maturing in fiscal 2046 | |||
Debt [Line Items] | |||
Total debt | $ 493,981 | 493,897 | |
Interest rate on debt instrument (as a percent) | 4.50% | ||
Maturity date on long-term debt stated in fiscal year | 2,046 | ||
Debentures | Debentures, interest at 7.16%, maturing in fiscal 2027 | |||
Debt [Line Items] | |||
Total debt | $ 50,000 | 50,000 | |
Interest rate on debt instrument (as a percent) | 7.16% | ||
Maturity date on long-term debt stated in fiscal year | 2,027 | ||
Debentures | Debentures, interest at 6.50%, maturing in fiscal 2029 | |||
Debt [Line Items] | |||
Total debt | $ 223,822 | 223,716 | |
Interest rate on debt instrument (as a percent) | 6.50% | ||
Maturity date on long-term debt stated in fiscal year | 2,029 | ||
Notes payable, capital leases, and other debt, interest averaging 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 and 3.12% and maturing at various dates to fiscal 2025 as of July 2, 2016 | |||
Debt [Line Items] | |||
Total debt | $ 104,735 | $ 170,305 | |
Average interest rate on debt instruments (as a percent) | 6.14% | 3.12% |
DEBT AND OTHER FINANCING ARRA62
DEBT AND OTHER FINANCING ARRANGEMENTS - NARRATIVE (Details) - USD ($) | Jun. 26, 2015 | Jul. 31, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | Jun. 19, 2017 |
Debt [Line Items] | |||||||
Maximum commercial paper limit | $ 2,000,000,000 | ||||||
Carrying value of total debt | 8,194,890,000 | $ 7,435,402,000 | |||||
Short term bank borrowings and commercial paper borrowings, minimum amount during period | 0 | ||||||
Short term bank borrowings and commercial paper borrowings, maximum amount during period | 1,600,000,000 | ||||||
Redemption loss | $ 94,800,000 | 0 | 86,460,000 | $ 0 | |||
Cash received (paid) from termination of interest rate swap agreements | 0 | 14,496,000 | $ (188,840,000) | ||||
Letters of credit outstanding, amount | 191,300,000 | 207,700,000 | |||||
Interest rate swap 2018 | |||||||
Debt [Line Items] | |||||||
Notional amount of derivative | 500,000,000 | ||||||
Interest rate swap October 2020 | |||||||
Debt [Line Items] | |||||||
Notional amount of derivative | 750,000,000 | ||||||
Mandatory redemption | |||||||
Debt [Line Items] | |||||||
Redemption price of debt instrument (as a percent) | 101.00% | ||||||
Redemption loss | $ 86,500,000 | ||||||
Commercial Paper | |||||||
Debt [Line Items] | |||||||
Carrying value of total debt | 119,691,000 | 0 | |||||
Senior Notes | |||||||
Debt [Line Items] | |||||||
Redemption loss | 86,460,000 | ||||||
Senior Notes | Senior notes, interest at 3.25%, maturing in fiscal 2028 | |||||||
Debt [Line Items] | |||||||
Carrying value of total debt | $ 742,526,000 | $ 0 | |||||
Interest rate on debt instrument (as a percent) | 3.25% | 3.25% | |||||
Debt instrument face amount | $ 750,000,000 | ||||||
Senior Notes | Senior notes, interest at 3.25%, maturing in fiscal 2028 | Redemption prior to 3 months after maturity date | |||||||
Debt [Line Items] | |||||||
Redemption price of debt instrument (as a percent) | 100.00% | ||||||
Senior Notes | Senior notes, interest at 3.25%, maturing in fiscal 2028 | Redemption after 3 months after maturity date | |||||||
Debt [Line Items] | |||||||
Redemption price of debt instrument (as a percent) | 100.00% |
DEBT AND OTHER FINANCING ARRA63
DEBT AND OTHER FINANCING ARRANGEMENTS - SENIOR NOTES REDEMPTION (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Debt Instrument [Line Items] | ||||
Loss on extinguishment of debt | $ 94,800 | $ 0 | $ 86,460 | $ 0 |
Senior Notes | ||||
Debt Instrument [Line Items] | ||||
Redemption premium payment | 50,000 | |||
Debt issuance cost write-off | 28,642 | |||
Bond discount write-off | 17,869 | |||
Gain on swap termination | (10,051) | |||
Loss on extinguishment of debt | 86,460 | |||
Interest expense on senior notes | 8,375 | |||
Total interest and debt expense | $ 94,835 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Leases [Abstract] | |||
Operating leases, rent expense | $ 170,500 | $ 100,000 | $ 104,300 |
Aggregate minimum lease payments by fiscal year under existing long-term operating leases: | |||
2,018 | 96,953 | ||
2,019 | 79,929 | ||
2,020 | 67,010 | ||
2,021 | 54,456 | ||
2,022 | 45,851 | ||
Thereafter | $ 261,017 |
OTHER LONG-TERM LIABILITIES (De
OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Defined Benefit Plan Disclosure [Line Items] | ||
Self-insurance | $ 153,144 | $ 119,689 |
Other | 214,766 | 108,538 |
Total | 1,373,822 | 1,368,482 |
Retirement Plans | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Long-term defined benefit pension liabilities | 573,298 | 689,310 |
Supplemental executive retirement plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Long-term defined benefit pension liabilities | $ 432,614 | $ 450,945 |
COMPANY-SPONSORED EMPLOYEE BE66
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Defined contribution plans expense | $ 141.2 | $ 135.5 | $ 125.4 |
Safe Harbor 401(k) Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Non-elective employer contribution, percent of participant's compensation | 3.00% | ||
Employer matching contribution percent | 50.00% | ||
Employer matching contribution, percent of participant's compensation | 5.00% | ||
Safe Harbor 401(k) Plan Non Adopting Unions | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Employer matching contribution percent | 50.00% | ||
Employer matching contribution, percent of participant's compensation | 6.00% | ||
Management Savings Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Non-elective employer contribution, percent of participant's compensation | 3.00% | ||
Employer matching contribution percent | 50.00% | ||
Employer matching contribution, percent of participant's compensation | 5.00% | ||
Maximum annual contributions per employee, percent of salary | 50.00% | ||
Maximum annual contributions per employee, percent of bonus | 100.00% |
COMPANY-SPONSORED EMPLOYEE BE67
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - FUNDED STATUS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Change in plan assets: | |||
Cash surrender value of corporate-owned life insurance | $ 163,700 | $ 163,300 | |
Accumulated other comprehensive loss (income) | |||
Prior service cost | 28,744 | ||
Actuarial losses (gains) | 1,485,239 | ||
Total | 1,513,983 | ||
Accumulated benefit obligation for all pension benefit plans | 4,600,000 | 4,300,000 | |
Other Postretirement Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 13,400 | ||
Benefit obligation at end of year | 13,600 | 13,400 | |
Change in plan assets: | |||
Cash surrender value of corporate-owned life insurance | 95,300 | 97,000 | |
Pension Benefits and SERP | United States | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 4,284,776 | 3,679,127 | |
Service cost | 14,287 | 11,815 | |
Interest cost | 171,282 | 174,602 | |
Amendments | 925 | 0 | |
Curtailments | 0 | 0 | |
Actuarial (gain) loss, net | (86,680) | 517,070 | |
Total disbursements | (160,359) | (97,838) | |
Exchange rate changes | 0 | 0 | |
Benefit obligation at end of year | 4,224,231 | 4,284,776 | $ 3,679,127 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,115,040 | 3,003,128 | |
Actual return on plan assets | 333,890 | 52,268 | |
Employer contribution | 53,091 | 157,482 | |
Total disbursements | (160,359) | (97,838) | |
Exchange rate changes | 0 | 0 | |
Fair value of plan assets at end of year | 3,341,662 | 3,115,040 | 3,003,128 |
Funded status at end of year | (882,569) | (1,169,736) | |
Pension Benefits | United States | |||
Change in benefit obligation: | |||
Service cost | 14,287 | 11,815 | 11,263 |
Interest cost | 171,282 | 174,602 | $ 171,120 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,115,040 | ||
Fair value of plan assets at end of year | 3,341,662 | 3,115,040 | |
Amounts recognized in the balance sheets | |||
Current accrued benefit liability (Accrued expenses) | (30,538) | (29,480) | |
Non-current accrued benefit liability (Other long-term liabilities) | (852,031) | (1,140,256) | |
Net amount recognized | (882,569) | (1,169,736) | |
Accumulated other comprehensive loss (income) | |||
Prior service cost | 28,630 | 38,907 | |
Actuarial losses (gains) | 1,521,174 | 1,760,556 | |
Total | 1,549,804 | 1,799,463 | |
Accumulated benefit obligations/aggregate benefit obligation in excess of fair value of plan assets | |||
Pension Benefits, Accumulated benefit obligation/aggregate benefit obligation | 4,213,318 | 4,272,547 | |
Pension Benefits, Fair value of plan assets at end of year | 3,341,662 | 3,115,040 | |
Pension Benefits | International Plan | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 400,028 | ||
Service cost | 2,880 | ||
Interest cost | 9,951 | ||
Amendments | (110) | ||
Curtailments | (611) | ||
Actuarial (gain) loss, net | 26,528 | ||
Total disbursements | (13,879) | ||
Exchange rate changes | (4,052) | ||
Benefit obligation at end of year | 420,735 | 400,028 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 271,821 | ||
Actual return on plan assets | 1,938 | ||
Employer contribution | 4,530 | ||
Total disbursements | (13,879) | ||
Exchange rate changes | (5,037) | ||
Fair value of plan assets at end of year | 259,373 | $ 271,821 | |
Funded status at end of year | (161,362) | ||
Amounts recognized in the balance sheets | |||
Current accrued benefit liability (Accrued expenses) | (1,477) | ||
Non-current accrued benefit liability (Other long-term liabilities) | (159,886) | ||
Net amount recognized | (161,363) | ||
Accumulated other comprehensive loss (income) | |||
Prior service cost | 114 | ||
Actuarial losses (gains) | (35,935) | ||
Total | (35,821) | ||
Accumulated benefit obligations/aggregate benefit obligation in excess of fair value of plan assets | |||
Pension Benefits, Accumulated benefit obligation/aggregate benefit obligation | 413,552 | ||
Pension Benefits, Fair value of plan assets at end of year | $ 259,373 |
COMPANY-SPONSORED EMPLOYEE BE68
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - COMPONENTS OF NET BENEFIT COSTS AND OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of actuarial loss | $ (97,283) | $ 419,517 | $ 38,275 |
Prior service cost arising in current year | (7,004) | (6,992) | (6,949) |
Actuarial (loss) gain arising in current year | (25,965) | (13,352) | (11,972) |
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | 9,450 | ||
Amortization of actuarial losses (gains) | 35,698 | ||
Total | 45,148 | ||
Pension Benefits | United States | |||
Net benefit costs | |||
Service cost | 14,287 | 11,815 | 11,263 |
Interest cost | 171,282 | 174,602 | 171,120 |
Expected return on plan assets | (222,699) | (216,888) | (228,624) |
Amortization of prior service cost | 11,202 | 11,201 | 11,111 |
Amortization of actuarial loss | 41,511 | 22,186 | 19,871 |
Curtailment loss | 0 | 0 | 0 |
Net pension costs/ Net other postretirement benefit costs | 15,583 | 2,916 | (15,259) |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of prior service cost | 11,202 | 11,202 | 11,111 |
Amortization of actuarial loss | 41,511 | 22,186 | 19,871 |
Prior service cost arising in current year | (925) | 0 | (914) |
Effect of exchange rates on amounts in AOCI | 0 | 0 | 0 |
Actuarial (loss) gain arising in current year | 197,871 | (681,691) | (62,270) |
Net pension costs | 249,659 | $ (648,303) | $ (32,202) |
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | 9,460 | ||
Amortization of actuarial losses (gains) | 35,696 | ||
Total | 45,156 | ||
Pension Benefits | International Plan | |||
Net benefit costs | |||
Service cost | 2,880 | ||
Interest cost | 9,951 | ||
Expected return on plan assets | (10,033) | ||
Amortization of prior service cost | (1) | ||
Amortization of actuarial loss | (38) | ||
Curtailment loss | (611) | ||
Net pension costs/ Net other postretirement benefit costs | 2,148 | ||
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of prior service cost | (1) | ||
Amortization of actuarial loss | (38) | ||
Prior service cost arising in current year | 110 | ||
Effect of exchange rates on amounts in AOCI | (1,269) | ||
Actuarial (loss) gain arising in current year | (34,623) | ||
Net pension costs | (35,821) | ||
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | (10) | ||
Amortization of actuarial losses (gains) | 2 | ||
Total | $ (8) |
COMPANY-SPONSORED EMPLOYEE BE69
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - EMPLOYER CONTRIBUTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Pension Benefits | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Employer contribution | $ 57.6 | $ 157.5 |
Voluntary employer contribution | 25 | |
Pension Benefits | International Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Estimated contributions to defined benefit plans in next fiscal year | 9.2 | |
Supplemental executive retirement plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Estimated contributions to defined benefit plans in next fiscal year | $ 30.5 |
COMPANY-SPONSORED EMPLOYEE BE70
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - ESTIMATED FUTURE BENEFIT PAYMENTS (Details) - Pension Benefits $ in Thousands | Jul. 01, 2017USD ($) |
United States | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | $ 127,700 |
2,019 | 137,971 |
2,020 | 147,995 |
2,021 | 159,056 |
2,022 | 170,078 |
Subsequent five years | 1,005,292 |
International Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,018 | 9,169 |
2,019 | 10,374 |
2,020 | 11,045 |
2,021 | 12,671 |
2,022 | 12,965 |
Subsequent five years | $ 84,500 |
COMPANY-SPONSORED EMPLOYEE BE71
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - ASSUMPTIONS (Details) | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Pension Benefits | United States | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 4.19% | 4.07% | |
Rate of compensation increase (as a percent) | 2.62% | 2.62% | |
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate (as a percent) | 4.07% | 4.84% | 4.74% |
Expected rate of return (as a percent) | 7.25% | 7.25% | 7.75% |
Rate of compensation increase (as a percent) | 2.62% | 3.89% | 3.89% |
Discount rate used to calculate next year benefit costs (as a percent) | 4.19% | ||
Expected rate of return on plan assets used in calculating net periodic benefit cost for next fiscal year (as a percent) | 7.00% | ||
Pension Benefits | United Kingdom | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 2.60% | ||
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate (as a percent) | 2.80% | ||
Expected rate of return (as a percent) | 4.15% | ||
Discount rate used to calculate next year benefit costs (as a percent) | 2.60% | ||
Expected rate of return on plan assets used in calculating net periodic benefit cost for next fiscal year (as a percent) | 4.55% | ||
Supplemental executive retirement plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate (as a percent) | 4.08% | 3.91% | |
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate (as a percent) | 3.91% | 4.63% | 4.59% |
Discount rate used to calculate next year benefit costs (as a percent) | 4.08% |
COMPANY-SPONSORED EMPLOYEE BE72
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - INVESTMENTS STRATEGY (Details) - Pension Benefits | 12 Months Ended |
Jul. 01, 2017 | |
United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual investment allocation (as a percent) | 100.00% |
International Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual investment allocation (as a percent) | 100.00% |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 2.90% |
Maximum allowable portfolio annual risk (as a percent) | 12.00% |
U.S. equity | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 24.00% |
Actual investment allocation (as a percent) | 27.00% |
International equity | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 24.00% |
Actual investment allocation (as a percent) | 22.00% |
Long duration fixed income | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 27.00% |
Actual investment allocation (as a percent) | 26.00% |
High yield & emerging markets | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 7.00% |
Actual investment allocation (as a percent) | 7.00% |
Alternative investments | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 18.00% |
Actual investment allocation (as a percent) | 18.00% |
Common contractual fund | International Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 75.00% |
Actual investment allocation (as a percent) | 74.00% |
Liability hedging assets | International Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation (as a percent) | 25.00% |
Actual investment allocation (as a percent) | 26.00% |
COMPANY-SPONSORED EMPLOYEE BE73
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - FAIR VALUE MEASUREMENTS (Details) - Pension Benefits - USD ($) | Jul. 01, 2017 | Jul. 02, 2016 |
United States | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 3,341,662,000 | $ 3,115,040,000 |
Assets measured at NAV | 1,898,686,000 | 1,567,364,000 |
United States | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 40,335,000 | 103,974,000 |
Assets measured at NAV | 0 | 0 |
United States | U.S. and International Equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Unfunded commitments related to investments | 0 | 0 |
United States | U.S. equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 909,572,000 | 722,327,000 |
Assets measured at NAV | 577,626,000 | 270,501,000 |
United States | International equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 722,819,000 | 722,655,000 |
Assets measured at NAV | 537,317,000 | 547,719,000 |
United States | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 628,033,000 | 631,927,000 |
Assets measured at NAV | 0 | 0 |
United States | U.S. government and agency securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 250,940,000 | 179,974,000 |
Assets measured at NAV | 0 | 0 |
United States | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 6,220,000 | 4,246,000 |
Assets measured at NAV | 0 | 0 |
Fair value of derivative assets | 300,000 | |
Fair value of derivative liabilities | 300,000 | |
United States | High yield and emerging markets fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 226,358,000 | 214,735,000 |
Assets measured at NAV | 226,358,000 | 214,735,000 |
Unfunded commitments related to investments | 0 | 0 |
Maximum withdrawal limitation | $ 2,000,000 | $ 2,000,000 |
Maximum withdrawal limitation, percent of asset value | 5.00% | 5.00% |
United States | Alternative investment funds - Hedge fund of funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 336,812,000 | $ 309,208,000 |
Assets measured at NAV | 336,812,000 | 309,208,000 |
Unfunded commitments related to investments | 0 | 0 |
United States | Alternative investment funds - Real estate funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 145,208,000 | 162,901,000 |
Assets measured at NAV | 145,208,000 | 162,108,000 |
Unfunded commitments related to investments | $ 10,000,000 | $ 10,000,000 |
Nonredeemable portion of investment (as a percent) | 15.00% | 20.00% |
United States | Alternative investment funds - Private equity funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 75,365,000 | $ 63,093,000 |
Assets measured at NAV | 75,365,000 | 63,093,000 |
Unfunded commitments related to investments | 30,700,000 | 39,000,000 |
United States | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 520,437,000 | 731,529,000 |
United States | Level 1 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 2,989,000 | 103,974,000 |
United States | Level 1 | U.S. equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 331,946,000 | 451,826,000 |
United States | Level 1 | International equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 185,502,000 | 174,936,000 |
United States | Level 1 | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 1 | U.S. government and agency securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 1 | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 1 | High yield and emerging markets fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 1 | Alternative investment funds - Hedge fund of funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 1 | Alternative investment funds - Real estate funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 793,000 |
United States | Level 1 | Alternative investment funds - Private equity funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 922,539,000 | 816,147,000 |
United States | Level 2 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 37,346,000 | 0 |
United States | Level 2 | U.S. equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | International equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 628,033,000 | 631,927,000 |
United States | Level 2 | U.S. government and agency securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 250,940,000 | 179,974,000 |
United States | Level 2 | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 6,220,000 | 4,246,000 |
United States | Level 2 | High yield and emerging markets fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | Alternative investment funds - Hedge fund of funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | Alternative investment funds - Real estate funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 2 | Alternative investment funds - Private equity funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | U.S. equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | International equity | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Corporate bonds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | U.S. government and agency securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | High yield and emerging markets fixed income | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Alternative investment funds - Hedge fund of funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Alternative investment funds - Real estate funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
United States | Level 3 | Alternative investment funds - Private equity funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | 0 |
International Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 259,373,000 | $ 271,821,000 |
United Kingdom | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 259,023,000 | |
Assets measured at NAV | 191,508,000 | |
United Kingdom | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 26,992,000 | |
Assets measured at NAV | 0 | |
United Kingdom | U.K. government securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 9,327,000 | |
Assets measured at NAV | 0 | |
United Kingdom | Derivatives, net (1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 20,900,000 | |
Assets measured at NAV | 0 | |
Fair value of derivative assets | 47,400,000 | |
Fair value of derivative liabilities | 26,500,000 | |
United Kingdom | Pooled funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 10,296,000 | |
Assets measured at NAV | 0 | |
United Kingdom | Common contractual fund | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 191,508,000 | |
Assets measured at NAV | 191,508,000 | |
Unfunded commitments related to investments | 9,300,000 | |
United Kingdom | Level 1 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 26,992,000 | |
United Kingdom | Level 1 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 26,992,000 | |
United Kingdom | Level 1 | U.K. government securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 1 | Derivatives, net (1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 1 | Pooled funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 1 | Common contractual fund | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 2 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 40,523,000 | |
United Kingdom | Level 2 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 2 | U.K. government securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 9,327,000 | |
United Kingdom | Level 2 | Derivatives, net (1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 20,900,000 | |
United Kingdom | Level 2 | Pooled funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 10,296,000 | |
United Kingdom | Level 2 | Common contractual fund | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | Cash and cash equivalents | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | U.K. government securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | Derivatives, net (1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | Pooled funds | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | 0 | |
United Kingdom | Level 3 | Common contractual fund | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Fair value of plan assets | $ 0 |
MULTIEMPLOYER EMPLOYEE BENEFI74
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS (Details) - Multiemployer Defined Benefit Pension Plans $ in Millions | 12 Months Ended |
Jul. 01, 2017USD ($) | |
Multiemployer Plans [Line Items] | |
Percentage of employees participating in multi-employer plans | 13.00% |
New York State Teamsters Conference Pension and Retirement Fund | |
Multiemployer Plans [Line Items] | |
Withdrawal liability accrued | $ 35.6 |
MULTIEMPLOYER EMPLOYEE BENEFI75
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - PLAN CONTRIBUTIONS (Details) - Multiemployer Defined Benefit Pension Plans - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 44,551 | $ 41,047 | $ 38,144 |
Individually significant plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | 36,653 | 33,787 | 32,097 |
All other plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 7,898 | $ 7,260 | $ 6,047 |
MULTIEMPLOYER EMPLOYEE BENEFI76
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - INDIVIDUALLY SIGNIFICANT PLANS (Details) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017USD ($)agreement | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | |
Western Conference of Teamsters Pension Plan | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act Zone Status | Green | Green | |
Multiemployer plan number of collective bargaining agreements | agreement | 22 | ||
Multiemployer plan contributions | $ 28,145 | $ 24,684 | $ 23,268 |
Entity tax identification number | 916,145,047 | ||
Multiemployer plan number | 1 | ||
First expiration date | Sep. 1, 2018 | ||
Last expiration date | Jan. 6, 2024 | ||
Western Conference of Teamsters Pension Plan | Minimum | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan collective bargaining agreement average percentage of employer's contributions | 1.00% | ||
Western Conference of Teamsters Pension Plan | Maximum | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan collective bargaining agreement average percentage of employer's contributions | 9.00% | ||
Teamsters Pension Trust Fund of Philadelphia and Vicinity | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act Zone Status | Yellow | Yellow | |
Multiemployer plan number of collective bargaining agreements | agreement | 1 | ||
Multiemployer plan collective bargaining agreement average percentage of employer's contributions | 5.00% | ||
Multiemployer plan contributions | $ 3,081 | $ 2,375 | 2,233 |
Entity tax identification number | 231,511,735 | ||
Multiemployer plan number | 1 | ||
Expiration date | Jul. 20, 2020 | ||
New York State Teamsters Conference Pension and Retirement Fund | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act Zone Status | NA | Red | |
Multiemployer plan contributions | $ 0 | $ 1,496 | 1,455 |
Entity tax identification number | 166,063,585 | ||
Multiemployer plan number | 74 | ||
Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act Zone Status | Yellow | Yellow | |
Multiemployer plan contributions | $ 2,430 | $ 2,237 | 2,068 |
Entity tax identification number | 526,043,608 | ||
Multiemployer plan number | 1 | ||
Expiration date | Mar. 1, 2018 | ||
Minneapolis Food Distributing Industry Pension Plan | |||
Multiemployer Plans [Line Items] | |||
Pension Protection Act Zone Status | Green | Green | |
Multiemployer plan contributions | $ 2,996 | $ 2,996 | $ 3,073 |
Entity tax identification number | 416,047,047 | ||
Multiemployer plan number | 1 | ||
Expiration date | Aug. 6, 2017 |
MULTIEMPLOYER EMPLOYEE BENEFI77
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - OTHER POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Multiemployer Other Postretirement Benefit Plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 25.8 | $ 25.9 | $ 28.5 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Numerator: | |||||||||||
Net earnings | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 215,667 | $ 217,136 | $ 272,399 | $ 244,420 | $ 1,142,503 | $ 949,622 | $ 686,773 |
Denominator: | |||||||||||
Weighted-average basic shares outstanding (in shares) | 543,496,816 | 573,057,406 | 592,072,308 | ||||||||
Dilutive effect of share-based awards (in shares) | 5,048,211 | 4,334,000 | 4,776,726 | ||||||||
Weighted-average diluted shares outstanding (in shares) | 548,545,027 | 577,391,406 | 596,849,034 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 0.38 | $ 0.38 | $ 0.48 | $ 0.41 | $ 2.10 | $ 1.66 | $ 1.16 |
Diluted earnings per share (in dollars per share) | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 0.38 | $ 0.38 | $ 0.48 | $ 0.41 | $ 2.08 | $ 1.64 | $ 1.15 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Dividends declared | $ 700,886 | $ 695,469 | $ 705,539 | ||||||||
Dividends declared but not yet paid | $ 174,900 | $ 174,100 | $ 174,900 | $ 174,100 | $ 178,300 | ||||||
Stock options | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Anti-dilutive securities excluded (in shares) | 4,194,173 | 3,586,927 | 2,400,000 |
OTHER COMPREHENSIVE INCOME - CO
OTHER COMPREHENSIVE INCOME - COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Comprehensive income | $ 1,237,884 | $ 514,701 | $ 406,239 |
Before Tax Amount | |||
Total other comprehensive income (loss) | 176,786 | (681,677) | (310,673) |
Tax | |||
Total other comprehensive income (loss) | 81,405 | (246,756) | (30,139) |
Net of Tax Amount | |||
Total other comprehensive income (loss) | 95,381 | (434,921) | (280,534) |
Pension and other postretirement benefit plans | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | 168,498 | (681,034) | (62,135) |
Tax | |||
Before reclassifications tax | 71,215 | (261,517) | (23,860) |
Net of Tax Amount | |||
Reclassifications, net of tax | (32,969) | (20,344) | (18,921) |
Before reclassifications, net of tax | 97,283 | (419,517) | (38,275) |
Pension and other postretirement benefit plans | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 53,059 | 33,028 | 30,716 |
Tax | |||
Reclassifications tax | 20,090 | 12,684 | 11,795 |
Net of Tax Amount | |||
Reclassifications, net of tax | 32,969 | 20,344 | 18,921 |
Amortization of prior service cost | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (914) | ||
Tax | |||
Before reclassifications tax | (351) | ||
Net of Tax Amount | |||
Before reclassifications, net of tax | (563) | ||
Amortization of prior service cost | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 11,370 | 11,351 | 11,279 |
Tax | |||
Reclassifications tax | 4,366 | 4,359 | 4,331 |
Net of Tax Amount | |||
Reclassifications, net of tax | 7,004 | 6,992 | 6,949 |
Amortization of actuarial loss (gain), net | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | 168,498 | (681,034) | (61,221) |
Tax | |||
Before reclassifications tax | 71,215 | (261,517) | (23,509) |
Net of Tax Amount | |||
Before reclassifications, net of tax | 97,283 | (419,517) | (37,712) |
Amortization of actuarial loss (gain), net | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 41,689 | 21,677 | 19,437 |
Tax | |||
Reclassifications tax | 15,724 | 8,325 | 7,464 |
Net of Tax Amount | |||
Reclassifications, net of tax | 25,965 | 13,352 | 11,972 |
Foreign currency translation | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (11,243) | (39,080) | (232,185) |
Tax | |||
Before reclassifications tax | 0 | 0 | 0 |
Net of Tax Amount | |||
Reclassifications, net of tax | 0 | 0 | 0 |
Before reclassifications, net of tax | (11,243) | (39,080) | (232,185) |
Interest rate swaps | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (6,134) | (55,374) | |
Tax | |||
Before reclassifications tax | (2,355) | (21,263) | |
Net of Tax Amount | |||
Reclassifications, net of tax | (7,082) | (7,111) | (5,116) |
Before reclassifications, net of tax | (30,710) | (3,779) | (34,111) |
Interest rate swaps | Cash flow hedging | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (10,871) | ||
Tax | |||
Before reclassifications tax | (4,173) | ||
Net of Tax Amount | |||
Before reclassifications, net of tax | (6,698) | ||
Interest rate swaps | Net investment hedging | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (34,152) | ||
Tax | |||
Before reclassifications tax | (10,140) | ||
Net of Tax Amount | |||
Before reclassifications, net of tax | (24,012) | ||
Interest rate swaps | Interest expense | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 11,495 | 11,543 | 8,305 |
Tax | |||
Reclassifications tax | 4,413 | 4,432 | 3,189 |
Net of Tax Amount | |||
Reclassifications, net of tax | $ 7,082 | $ 7,111 | $ 5,116 |
OTHER COMPREHENSIVE INCOME - SU
OTHER COMPREHENSIVE INCOME - SUMMARY OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | $ 3,479,608 | $ 5,260,224 | $ 5,266,695 |
Ending balance, shareholders' equity | 2,381,516 | 3,479,608 | 5,260,224 |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (1,358,118) | (923,197) | (642,663) |
Other comprehensive income before reclassification adjustments | 55,330 | (462,376) | (304,571) |
Amounts reclassified from accumulated other comprehensive loss | 40,051 | 27,455 | 24,037 |
Ending balance, shareholders' equity | (1,262,737) | (1,358,118) | (923,197) |
Pension and Other Postretirement Benefit Plans, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (1,104,484) | (705,311) | (685,957) |
Other comprehensive income before reclassification adjustments | 97,283 | (419,517) | (38,275) |
Amounts reclassified from accumulated other comprehensive loss | 32,969 | 20,344 | 18,921 |
Ending balance, shareholders' equity | (974,232) | (1,104,484) | (705,311) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (136,813) | (97,733) | 134,452 |
Other comprehensive income before reclassification adjustments | (11,243) | (39,080) | (232,185) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Ending balance, shareholders' equity | (148,056) | (136,813) | (97,733) |
Interest Rate Swap, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (116,821) | (120,153) | (91,158) |
Other comprehensive income before reclassification adjustments | (30,710) | (3,779) | (34,111) |
Amounts reclassified from accumulated other comprehensive loss | 7,082 | 7,111 | 5,116 |
Ending balance, shareholders' equity | $ (140,449) | $ (116,821) | $ (120,153) |
SHARE-BASED COMPENSATION - STOC
SHARE-BASED COMPENSATION - STOCK INCENTIVE PLANS (Details) - shares | 1 Months Ended | 12 Months Ended | |
Nov. 30, 2013 | Jul. 01, 2017 | Nov. 30, 2009 | |
2013 Long-term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares authorized (in shares) | 55,600,000 | ||
Performance measurement period (in years) | 1 year | ||
Total number of shares available for grant (in shares) | 32,457,613 | ||
2013 Long-term Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period (in years) | 10 years | ||
2013 Long-term Incentive Plan | Restricted Stock, Restricted Stock Units Or Other Types Of Stock-Based Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares authorized (in shares) | 17,500,000 | ||
Total number of shares available for grant (in shares) | 12,611,851 | ||
2013 Long-term Incentive Plan | Options Or Stock Apppreciation Rights | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares available for grant (in shares) | 32,457,613 | ||
Long-term Incentive Plan prior to 2013 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award expiration period (in years) | 7 years | ||
2009 Non-Employee Directors Stock Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total number of shares authorized (in shares) | 750,000 | ||
Total number of shares available for grant (in shares) | 0 |
SHARE-BASED COMPENSATION - PERF
SHARE-BASED COMPENSATION - PERFORMANCE SHARE UNITS (Details) - Performance Share Units (PSUs) | 12 Months Ended |
Jul. 01, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Equity instruments other than options granted (in shares) | shares | 829,460 |
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ / shares | $ 52.17 |
SHARE-BASED COMPENSATION - ST83
SHARE-BASED COMPENSATION - STOCK OPTIONS (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017USD ($)employeeofficer$ / sharesshares | Jul. 02, 2016USD ($)employee$ / sharesshares | Jun. 27, 2015USD ($)employeeofficer$ / sharesshares | |
Fair Value Assumptions and Methodology | |||
Dividend yield | 2.80% | 3.10% | 3.20% |
Expected volatility | 16.90% | 20.40% | 20.70% |
Risk-free interest rate | 1.40% | 2.00% | 2.00% |
Expected life (in years) | 7 years 2 months 12 days | 7 years 2 months 12 days | 7 years 3 months 18 days |
Shares Under Option | |||
Outstanding, beginning balance (in shares) | 21,228,328 | ||
Granted (in shares) | 4,990,396 | 4,367,764 | 4,497,954 |
Exercised (in shares) | 4,850,087 | ||
Forfeited (in shares) | 268,433 | ||
Expired (in shares) | 29,368 | ||
Outstanding, ending balance (in shares) | 21,070,836 | 21,228,328 | |
Vested or expected to vest (in shares) | 13,515,614 | ||
Exercisable (in shares) | 7,361,568 | ||
Weighted Average Exercise Price Per Share | |||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 34.13 | ||
Granted (in dollars per share) | $ / shares | 52.43 | ||
Exercised (in dollars per share) | $ / shares | 30.60 | ||
Forfeited (in dollars per share) | $ / shares | 44.94 | ||
Expired (in dollars per share) | $ / shares | 27.69 | ||
Outstanding, ending balance (in dollars per share) | $ / shares | 39.16 | $ 34.13 | |
Vested or expected to vest (in dollars per share) | $ / shares | 42.65 | ||
Exercisable (in dollars per share) | $ / shares | $ 32.58 | ||
Additional Disclosures | |||
Outstanding, ending balance, weighted average remaining contractual term (in years) | 6 years 6 months 11 days | ||
Vested or expected to vest, weighted average remaining contractual term (in years) | 7 years 8 months 19 days | ||
Exercisable, weighted average remaining contractual term (in years) | 4 years 3 months 11 days | ||
Outstanding, ending balance, aggregate intrinsic value | $ | $ 245,657 | ||
Vested or expected to vest, aggregate intrinsic value | $ | 113,962 | ||
Exercisable, aggregate intrinsic value | $ | $ 130,638 | ||
Weighted average fair value of options granted in period (in USD per share) | $ / shares | $ 6.05 | $ 5.99 | $ 5.78 |
Total intrinsic value of options exercised in period | $ | $ 22,100 | $ 36,100 | $ 21,600 |
Key Employees | |||
Shares Under Option | |||
Granted (in shares) | 3,460,399 | 2,872,413 | 3,211,421 |
Additional Disclosures | |||
Number of employees/officers receiving options in period | employee | 187 | 169 | 173 |
Executive Officer | |||
Shares Under Option | |||
Granted (in shares) | 1,529,997 | 1,495,351 | 1,286,533 |
Additional Disclosures | |||
Number of employees/officers receiving options in period | 9 | 8 | 6 |
SHARE-BASED COMPENSATION - REST
SHARE-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options granted (in shares) | 631,281 | 1,257,889 | 1,198,588 |
Equity instruments other than options granted, award vesting period (in years) | 3 years | ||
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 50.04 | $ 42.78 | $ 37.59 |
Equity instruments other than options vested, total fair value | $ 46 | $ 43.4 | $ 52.5 |
SHARE-BASED COMPENSATION - NON-
SHARE-BASED COMPENSATION - NON-EMPLOYEE DIRECTOR AWARDS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options distributed, total fair value | $ 1.1 | $ 1 | $ 0.9 |
Equity instruments other than options vested (in shares) | 22,094 | 25,185 | 23,949 |
Equity instruments other than options vested, weighted average grant date fair value per share (in dollars per share) | $ 51.46 | $ 39.31 | $ 38.26 |
Director Restricted Award And Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options vested but not distributed ending balance (in shares) | 112,779 | ||
Director Restricted Award | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options granted (in shares) | 40,498 | 43,362 | 37,035 |
Equity instruments other than options granted, award vesting period (in years) | 1 year | ||
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 53.49 | $ 40.59 | $ 38.89 |
Equity instruments other than options distributed, total fair value | $ 2 | $ 1.6 | $ 1.6 |
2009 Non-Employee Directors Stock Plan | Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum percentage of annual director fees that can be received in common stock | 100.00% | ||
Matching percentage of shares received in the stock election | 50.00% |
SHARE-BASED COMPENSATION - SUMM
SHARE-BASED COMPENSATION - SUMMARY OF NONVESTED AWARDS (Details) - Nonvested Awards | 12 Months Ended |
Jul. 01, 2017$ / sharesshares | |
Shares | |
Nonvested beginning balance (in shares) | shares | 2,532,721 |
Granted (in shares) | shares | 1,499,610 |
Vested (in shares) | shares | (1,264,408) |
Forfeited (in shares) | shares | (124,095) |
Nonvested ending balance (in shares) | shares | 2,643,828 |
Weighted Average Grant Date Fair Value Per Share | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 38.93 |
Granted (in dollars per share) | $ / shares | 51.31 |
Vested (in dollars per share) | $ / shares | 37.97 |
Forfeited (in dollars per share) | $ / shares | 42.65 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 46.23 |
SHARE-BASED COMPENSATION - EMPL
SHARE-BASED COMPENSATION - EMPLOYEES' STOCK PURCHASE PLAN (Details) - Employees' Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment award, discount from market price | 15.00% | ||
Total number of shares authorized (in shares) | 79,000,000 | ||
Total number of shares available for grant (in shares) | 8,303,783 | ||
Equity instruments other than options vested (in shares) | 1,103,995 | 1,275,765 | 1,243,275 |
Equity instruments other than options vested, weighted average grant date fair value per share (in dollars per share) | $ 7.73 | $ 6.04 | $ 5.73 |
SHARE-BASED COMPENSATION - ALL
SHARE-BASED COMPENSATION - ALL SHARE-BASED PAYMENT ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Share-based Compensation [Abstract] | |||
Share-based compensation expense | $ 83,883 | $ 79,466 | $ 73,766 |
Total income tax benefit for share-based compensation arrangements | 30,000 | 30,700 | 27,400 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 95,400 | ||
Weighted average period of time for unrecognized compensation cost to be recognized (in years) | 2 years 26 days | ||
Cash received from options exercises and purchase of shares under the employees' stock purchase plan | $ 204,800 | 282,400 | 240,200 |
Share-based compensation | $ 38,900 | $ 42,500 | $ 20,700 |
INCOME TAXES - INCOME TAX PROVI
INCOME TAXES - INCOME TAX PROVISIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States pretax income | $ 1,569,073 | $ 1,225,142 | $ 818,244 | ||||||||
Foreign pretax income | 197,157 | 207,865 | 189,903 | ||||||||
Earnings before income taxes | $ 483,525 | $ 359,773 | $ 422,506 | $ 500,426 | $ 331,217 | $ 326,871 | $ 393,112 | $ 381,807 | 1,766,230 | 1,433,007 | 1,008,147 |
U.S. federal income taxes | 534,266 | 429,658 | 285,807 | ||||||||
State and local income taxes | 69,913 | 34,032 | (2,737) | ||||||||
Foreign income taxes | 19,548 | 19,695 | 38,304 | ||||||||
Current income tax expense | 675,573 | 389,514 | 326,079 | ||||||||
Deferred income tax expense (benefit) | (51,846) | 93,871 | (4,705) | ||||||||
Total income tax expense | $ 178,354 | $ 121,495 | $ 147,339 | $ 176,539 | $ 115,550 | $ 109,735 | $ 120,713 | $ 137,387 | $ 623,727 | $ 483,385 | $ 321,374 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 194,287 | $ 66,471 |
Benefit on unrecognized tax benefits | 9,218 | 12,842 |
Pension | 360,864 | 453,394 |
Share-based compensation | 48,077 | 43,698 |
Deferred compensation | 39,830 | 38,840 |
Self-insured liabilities | 84,401 | 67,050 |
Receivables | 30,842 | 41,574 |
Inventory | 21,332 | 24,138 |
Cash flow hedge | 8,748 | 7,421 |
Foreign currency remeasurement losses and currency hedge | 13,221 | 47,632 |
Other | 36,653 | 29,550 |
Deferred tax assets before valuation allowances | 847,473 | 832,610 |
Valuation allowances | (114,151) | 0 |
Total deferred tax assets | 733,322 | 832,610 |
Deferred tax liabilities: | ||
Excess tax depreciation and basis differences of assets | 247,510 | 346,900 |
Goodwill and intangible assets | 455,340 | 254,202 |
Other | 49,654 | 51,130 |
Total deferred tax liabilities | 752,504 | 652,232 |
Total net deferred tax (liability) | $ (19,182) | |
Total net deferred tax assets | $ 180,378 |
INCOME TAXES - EFFECTIVE TAX RA
INCOME TAXES - EFFECTIVE TAX RATES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory federal income tax rate | 35.00% | 35.00% | 35.00% |
State and local income taxes, net of any applicable federal income tax benefit | 2.61% | 1.79% | 0.91% |
Foreign tax rate differential | (2.81%) | (2.40%) | (2.84%) |
Uncertain tax position | 0.01% | (1.96%) | 0.00% |
Other | 0.50% | 1.30% | (1.19%) |
Effective income tax rate | 35.31% | 33.73% | 31.88% |
Income tax expense (benefit) for tax adjustments related to federal, state and foreign uncertain tax positions | $ (29.6) | ||
Favorable resolution of tax contingencies, tax benefit, tax portion | 10.6 | ||
Favorable resolution of tax contingencies, tax benefit, interest portion | 19 | ||
Favorable impact on tax rate | $ 693 |
INCOME TAXES - UNCERTAIN TAX PO
INCOME TAXES - UNCERTAIN TAX POSITIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Gross Unrecognized Tax Benefits, Excluding Interest and Penalties | ||
Unrecognized tax benefits at beginning of year | $ 24,614 | $ 37,546 |
Additions for tax positions related to prior years | 648 | 142 |
Reductions for tax positions related to prior years | (2,147) | (12,932) |
Reductions due to settlements with taxing authorities | (6,837) | (142) |
Unrecognized tax benefits at end of year | 16,278 | 24,614 |
Liability recorded for interest and penalties related to unrecognized tax benefits | 10,700 | 14,900 |
Interest and penalty expense related to unrecognized tax benefits | 0 | |
Amount of unrecognized tax benefits at balance sheet date that, if recognized, would impact effective tax rate | $ 10,800 | $ 16,900 |
INCOME TAXES - OTHER (Details)
INCOME TAXES - OTHER (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowances | $ 114,151 | $ 0 |
Undistributed income of foreign subsidiaries | $ 1,400,000 | |
Foreign Tax Authority | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward period | 17 years |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - FUEL COMMITMENTS (Details) $ in Billions | Jul. 01, 2017USD ($) |
Product Purchases for Resale Commitments | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Unrecorded unconditional purchase obligation as of balance sheet date | $ 1.9 |
COMMITMENTS AND CONTINGENCIES95
COMMITMENTS AND CONTINGENCIES - OTHER COMMITMENTS (Details) $ in Thousands | 12 Months Ended |
Jul. 01, 2017USD ($) | |
Product Purchases for Resale Commitments | |
Product purchases for resale commitments: | |
2,018 | $ 1,590,953 |
2,019 | 338,805 |
2,020 | 2,863 |
2,021 | 1,451 |
Information Technology Services Commitments | |
Product purchases for resale commitments: | |
Remaining amount of long-term purchase commitment | 445,100 |
Termination fee associated with long-term purchase commitment if terminated in next fiscal year | $ 70,500 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 01, 2016USD ($) | Jul. 02, 2016USD ($) | Mar. 26, 2016USD ($) | Dec. 26, 2015USD ($) | Sep. 26, 2015USD ($) | Jul. 01, 2017USD ($)segment | Jul. 02, 2016USD ($) | Jun. 27, 2015USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Operating income | 557,959 | 435,962 | 492,417 | 566,833 | 546,825 | 377,618 | 432,583 | 493,474 | 2,053,171 | 1,850,500 | 1,229,362 |
Interest expense | 76,020 | 81,004 | 72,231 | 73,623 | 74,305 | 57,699 | 47,235 | 126,907 | 302,878 | 306,146 | 254,807 |
Other expense (income), net | (1,586) | (4,815) | (2,320) | (7,216) | 141,303 | (6,952) | (7,764) | (15,240) | (15,937) | 111,347 | (33,592) |
Earnings before income taxes | 483,525 | $ 359,773 | $ 422,506 | $ 500,426 | 331,217 | $ 326,871 | $ 393,112 | $ 381,807 | 1,766,230 | 1,433,007 | 1,008,147 |
Depreciation and amortization | 901,992 | 662,710 | 553,021 | ||||||||
Capital expenditures | 686,378 | 527,346 | 542,830 | ||||||||
Assets | 17,756,655 | 16,721,804 | 17,756,655 | 16,721,804 | 17,989,281 | ||||||
Operating | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 55,371,139 | 50,366,919 | 48,680,752 | ||||||||
Operating income | 3,178,306 | 3,009,146 | 2,711,100 | ||||||||
Depreciation and amortization | 555,220 | 366,818 | 362,392 | ||||||||
Capital expenditures | 487,237 | 262,730 | 305,972 | ||||||||
Assets | 14,183,896 | 9,771,886 | 14,183,896 | 9,771,886 | 9,525,598 | ||||||
Operating | U.S. Foodservice Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 37,604,698 | 37,776,443 | 36,098,977 | ||||||||
Operating income | 2,891,612 | 2,771,932 | 2,493,210 | ||||||||
Depreciation and amortization | 266,024 | 252,392 | 260,021 | ||||||||
Capital expenditures | 194,714 | 153,528 | 184,567 | ||||||||
Assets | 6,675,543 | 6,753,056 | 6,675,543 | 6,753,056 | 6,772,270 | ||||||
Operating | International Foodservice Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 10,613,059 | 5,436,209 | 5,592,137 | ||||||||
Operating income | 243,116 | 177,159 | 170,913 | ||||||||
Depreciation and amortization | 243,628 | 70,184 | 63,037 | ||||||||
Capital expenditures | 228,564 | 56,689 | 80,170 | ||||||||
Assets | 6,433,815 | 2,019,406 | 6,433,815 | 2,019,406 | 1,915,011 | ||||||
Operating | SYGMA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 6,178,909 | 6,102,328 | 6,076,215 | ||||||||
Operating income | 23,299 | 27,469 | 20,381 | ||||||||
Depreciation and amortization | 34,890 | 31,792 | 29,753 | ||||||||
Capital expenditures | 50,722 | 31,811 | 36,948 | ||||||||
Assets | 625,653 | 539,639 | 625,653 | 539,639 | 510,626 | ||||||
Operating | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 974,473 | 1,051,939 | 913,423 | ||||||||
Operating income | 20,279 | 32,586 | 26,596 | ||||||||
Depreciation and amortization | 10,678 | 12,450 | 9,581 | ||||||||
Capital expenditures | 13,237 | 20,702 | 4,287 | ||||||||
Assets | 448,885 | 459,785 | 448,885 | 459,785 | 327,691 | ||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income | (1,125,135) | (1,158,646) | (1,481,738) | ||||||||
Depreciation and amortization | 346,772 | 295,892 | 190,629 | ||||||||
Capital expenditures | 199,141 | 264,616 | 236,858 | ||||||||
Assets | $ 3,572,759 | $ 6,949,918 | $ 3,572,759 | $ 6,949,918 | $ 8,463,683 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - PRODUCT MIX (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Fresh and frozen meats | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 10,605,678 | 10,273,247 | 10,080,290 | ||||||||
Canned and dry products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 8,695,829 | 8,402,230 | 7,999,250 | ||||||||
Frozen fruits, vegetables, bakery and other | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 8,444,260 | 6,719,648 | 6,339,537 | ||||||||
Poultry | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 5,873,944 | 5,392,933 | 5,189,496 | ||||||||
Dairy products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 5,610,101 | 5,276,991 | 5,199,036 | ||||||||
Fresh produce | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 4,701,440 | 4,156,978 | 3,828,298 | ||||||||
Paper and disposables | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 3,596,470 | 3,557,514 | 3,507,007 | ||||||||
Seafood | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 3,089,350 | 2,541,239 | 2,490,523 | ||||||||
Beverage products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 2,059,453 | 1,849,780 | 1,754,944 | ||||||||
Janitorial products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 1,331,019 | 1,251,821 | 1,102,855 | ||||||||
Equipment and smallwares | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 794,087 | 593,595 | 661,254 | ||||||||
Medical supplies | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 569,508 | $ 350,943 | $ 528,262 |
BUSINESS SEGMENT INFORMATION 98
BUSINESS SEGMENT INFORMATION - GEOGRAPHIC AREA (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Long-lived assets | 4,377,302 | 3,880,442 | 4,377,302 | 3,880,442 | 3,982,143 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 44,395,765 | 44,922,937 | 43,146,591 | ||||||||
Long-lived assets | 3,252,980 | 3,461,505 | 3,252,980 | 3,461,505 | 3,519,610 | ||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 4,346,894 | 4,486,282 | 4,727,742 | ||||||||
Long-lived assets | 329,090 | 309,027 | 329,090 | 309,027 | 317,231 | ||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 2,974,133 | 0 | 0 | ||||||||
Long-lived assets | 303,178 | 0 | 303,178 | 0 | 0 | ||||||
France | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 1,426,973 | 0 | 0 | ||||||||
Long-lived assets | 284,611 | 0 | 284,611 | 0 | 0 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 2,227,374 | 957,700 | 806,419 | ||||||||
Long-lived assets | $ 207,443 | $ 109,910 | $ 207,443 | $ 109,910 | $ 145,302 |
SUPPLEMENTAL GUARANTOR INFORM99
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jul. 01, 2017 | Jul. 02, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Carrying value of total debt | $ 8,194,890 | $ 7,435,402 |
Percentage ownership of subsidiary guarantors by parent | 100.00% |
SUPPLEMENTAL GUARANTOR INFOR100
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - BALANCE SHEET (Details) - USD ($) $ in Thousands | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | Jun. 28, 2014 |
Supplemental Guarantor Information [Line Items] | ||||
Current assets | $ 8,033,438 | $ 10,053,899 | ||
Intercompany receivables | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Plant and equipment, net | 4,377,302 | 3,880,442 | $ 3,982,143 | |
Other assets | 5,345,915 | 2,787,463 | ||
Total assets | 17,756,655 | 16,721,804 | 17,989,281 | |
Current liabilities | 6,095,886 | 4,434,456 | ||
Intercompany payables | 0 | 0 | ||
Long-term debt | 7,660,877 | 7,336,930 | ||
Other liabilities | 1,535,537 | 1,395,424 | ||
Noncontrolling interest | 82,839 | 75,386 | ||
Shareholders’ equity | 2,381,516 | 3,479,608 | $ 5,260,224 | $ 5,266,695 |
Total liabilities and shareholders’ equity | 17,756,655 | 16,721,804 | ||
Reportable Legal Entities | Sysco | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 177,495 | 3,440,206 | ||
Intercompany receivables | 6,559,966 | 1,348,425 | ||
Investment in subsidiaries | 6,451,994 | 6,694,615 | ||
Plant and equipment, net | 258,527 | 429,890 | ||
Other assets | 151,744 | 213,186 | ||
Total assets | 13,599,726 | 12,126,322 | ||
Current liabilities | 2,766,831 | 621,925 | ||
Intercompany payables | 0 | 0 | ||
Long-term debt | 7,588,041 | 7,145,955 | ||
Other liabilities | 863,338 | 878,834 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | 2,381,516 | 3,479,608 | ||
Total liabilities and shareholders’ equity | 13,599,726 | 12,126,322 | ||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 2,988,736 | 3,813,524 | ||
Intercompany receivables | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Plant and equipment, net | 1,276,342 | 1,587,702 | ||
Other assets | 418,968 | 642,525 | ||
Total assets | 4,684,046 | 6,043,751 | ||
Current liabilities | 2,605,828 | 111,728 | ||
Intercompany payables | 1,642,663 | 2,097,508 | ||
Long-term debt | 7,773 | 62,387 | ||
Other liabilities | 103,784 | 248,493 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | 323,998 | 3,523,635 | ||
Total liabilities and shareholders’ equity | 4,684,046 | 6,043,751 | ||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 4,867,207 | 2,800,169 | ||
Intercompany receivables | 0 | 749,083 | ||
Investment in subsidiaries | 0 | 0 | ||
Plant and equipment, net | 2,842,433 | 1,862,850 | ||
Other assets | 4,775,203 | 1,931,752 | ||
Total assets | 12,484,843 | 7,343,854 | ||
Current liabilities | 723,227 | 3,700,803 | ||
Intercompany payables | 4,917,303 | 0 | ||
Long-term debt | 65,063 | 128,588 | ||
Other liabilities | 568,415 | 268,097 | ||
Noncontrolling interest | 82,839 | 75,386 | ||
Shareholders’ equity | 6,127,996 | 3,170,980 | ||
Total liabilities and shareholders’ equity | 12,484,843 | 7,343,854 | ||
Eliminations | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 0 | 0 | ||
Intercompany receivables | (6,559,966) | (2,097,508) | ||
Investment in subsidiaries | (6,451,994) | (6,694,615) | ||
Plant and equipment, net | 0 | 0 | ||
Other assets | 0 | 0 | ||
Total assets | (13,011,960) | (8,792,123) | ||
Current liabilities | 0 | 0 | ||
Intercompany payables | (6,559,966) | (2,097,508) | ||
Long-term debt | 0 | 0 | ||
Other liabilities | 0 | 0 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | (6,451,994) | (6,694,615) | ||
Total liabilities and shareholders’ equity | $ (13,011,960) | $ (8,792,123) |
SUPPLEMENTAL GUARANTOR INFOR101
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Cost of sales | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 11,145,053 | 9,859,966 | 9,996,812 | 10,324,616 | 44,813,632 | 41,326,447 | 40,129,236 |
Gross profit | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 2,502,838 | 2,142,825 | 2,156,814 | 2,237,995 | 10,557,507 | 9,040,472 | 8,551,516 |
Operating expenses | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 1,956,013 | 1,765,207 | 1,724,231 | 1,744,521 | 8,504,336 | 7,189,972 | 7,322,154 |
Operating income | 557,959 | 435,962 | 492,417 | 566,833 | 546,825 | 377,618 | 432,583 | 493,474 | 2,053,171 | 1,850,500 | 1,229,362 |
Interest expense (income) | 76,020 | 81,004 | 72,231 | 73,623 | 74,305 | 57,699 | 47,235 | 126,907 | 302,878 | 306,146 | 254,807 |
Other expense (income), net | (1,586) | (4,815) | (2,320) | (7,216) | 141,303 | (6,952) | (7,764) | (15,240) | (15,937) | 111,347 | (33,592) |
Earnings before income taxes | 483,525 | 359,773 | 422,506 | 500,426 | 331,217 | 326,871 | 393,112 | 381,807 | 1,766,230 | 1,433,007 | 1,008,147 |
Income tax (benefit) provision | 178,354 | 121,495 | 147,339 | 176,539 | 115,550 | 109,735 | 120,713 | 137,387 | 623,727 | 483,385 | 321,374 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 215,667 | $ 217,136 | $ 272,399 | $ 244,420 | 1,142,503 | 949,622 | 686,773 |
Other comprehensive income (loss) | 95,381 | (434,921) | (280,534) | ||||||||
Comprehensive income | 1,237,884 | 514,701 | 406,239 | ||||||||
Reportable Legal Entities | Sysco | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 0 | 0 | 0 | ||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating expenses | 931,498 | 944,457 | 1,232,956 | ||||||||
Operating income | (931,498) | (944,457) | (1,232,956) | ||||||||
Interest expense (income) | 260,365 | 381,122 | 323,918 | ||||||||
Other expense (income), net | (23,740) | 128,777 | (9,496) | ||||||||
Earnings before income taxes | (1,168,123) | (1,454,356) | (1,547,378) | ||||||||
Income tax (benefit) provision | (412,511) | (490,579) | (493,263) | ||||||||
Equity in earnings of subsidiaries | 1,898,115 | 1,913,399 | 1,740,888 | ||||||||
Net earnings | 1,142,503 | 949,622 | 686,773 | ||||||||
Other comprehensive income (loss) | 95,381 | (434,921) | (280,534) | ||||||||
Comprehensive income | 1,237,884 | 514,701 | 406,239 | ||||||||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 27,200,744 | 33,932,334 | 32,626,221 | ||||||||
Cost of sales | 21,912,558 | 27,485,111 | 26,572,257 | ||||||||
Gross profit | 5,288,186 | 6,447,223 | 6,053,964 | ||||||||
Operating expenses | 3,123,076 | 3,857,415 | 3,709,320 | ||||||||
Operating income | 2,165,110 | 2,589,808 | 2,344,644 | ||||||||
Interest expense (income) | (95,687) | (145,852) | (108,233) | ||||||||
Other expense (income), net | (837) | (1,876) | (3,609) | ||||||||
Earnings before income taxes | 2,261,634 | 2,737,536 | 2,456,486 | ||||||||
Income tax (benefit) provision | 800,537 | 923,416 | 783,066 | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | 1,461,097 | 1,814,120 | 1,673,420 | ||||||||
Other comprehensive income (loss) | 0 | 0 | |||||||||
Comprehensive income | 1,461,097 | 1,814,120 | 1,673,420 | ||||||||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 29,987,271 | 18,112,973 | 17,477,986 | ||||||||
Cost of sales | 24,717,950 | 15,519,724 | 14,980,434 | ||||||||
Gross profit | 5,269,321 | 2,593,249 | 2,497,552 | ||||||||
Operating expenses | 4,449,762 | 2,388,100 | 2,379,878 | ||||||||
Operating income | 819,559 | 205,149 | 117,674 | ||||||||
Interest expense (income) | 138,200 | 70,876 | 39,122 | ||||||||
Other expense (income), net | 8,640 | (15,554) | (20,487) | ||||||||
Earnings before income taxes | 672,719 | 149,827 | 99,039 | ||||||||
Income tax (benefit) provision | 235,701 | 50,548 | 31,571 | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | 437,018 | 99,279 | 67,468 | ||||||||
Other comprehensive income (loss) | (9,317) | (52,306) | (232,185) | ||||||||
Comprehensive income | 427,701 | 46,973 | (164,717) | ||||||||
Eliminations | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | (1,816,876) | (1,678,388) | (1,423,455) | ||||||||
Cost of sales | (1,816,876) | (1,678,388) | (1,423,455) | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating expenses | 0 | 0 | 0 | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Interest expense (income) | 0 | 0 | 0 | ||||||||
Other expense (income), net | 0 | 0 | 0 | ||||||||
Earnings before income taxes | 0 | 0 | 0 | ||||||||
Income tax (benefit) provision | 0 | 0 | 0 | ||||||||
Equity in earnings of subsidiaries | (1,898,115) | (1,913,399) | (1,740,888) | ||||||||
Net earnings | (1,898,115) | (1,913,399) | (1,740,888) | ||||||||
Other comprehensive income (loss) | 9,317 | 52,306 | 232,185 | ||||||||
Comprehensive income | $ (1,888,798) | $ (1,861,093) | $ (1,508,703) |
SUPPLEMENTAL GUARANTOR INFOR102
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Supplemental Guarantor Information [Line Items] | |||
Operating activities | $ 2,176,425 | $ 1,933,142 | $ 1,555,484 |
Investing activities | (3,584,461) | (600,828) | (654,346) |
Financing activities | (1,619,709) | (2,404,731) | 3,897,562 |
Effect of exchange rates on cash and cash equivalents | (22,104) | (138,327) | (81,702) |
Net (decrease) increase in cash and cash equivalents | (3,049,849) | (1,210,744) | 4,716,998 |
Cash and cash equivalents at beginning of period | 3,919,351 | 5,130,044 | 413,046 |
Cash and cash equivalents at end of period | 869,502 | 3,919,351 | 5,130,044 |
Scenario, Previously Reported | |||
Supplemental Guarantor Information [Line Items] | |||
Cash and cash equivalents at beginning of period | 3,919,300 | ||
Cash and cash equivalents at end of period | 3,919,300 | ||
Reportable Legal Entities | Sysco | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 1,472,847 | 990,695 | 1,019,873 |
Investing activities | (3,274,566) | 20,094 | (160,234) |
Financing activities | (1,463,168) | (2,485,444) | 3,832,479 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | (3,264,887) | (1,474,655) | 4,692,118 |
Cash and cash equivalents at beginning of period | 3,376,463 | 4,851,075 | 158,957 |
Cash and cash equivalents at end of period | 111,576 | 3,376,463 | 4,851,075 |
Reportable Legal Entities | Sysco | Scenario, Previously Reported | |||
Supplemental Guarantor Information [Line Items] | |||
Cash and cash equivalents at beginning of period | 3,376,420 | ||
Cash and cash equivalents at end of period | 3,376,420 | ||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 2,908,792 | 4,101,840 | 191,181 |
Investing activities | (142,124) | (212,270) | (108,099) |
Financing activities | (2,782,134) | (3,881,879) | (84,476) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | (15,466) | 7,691 | (1,394) |
Cash and cash equivalents at beginning of period | 34,069 | 26,378 | 27,772 |
Cash and cash equivalents at end of period | 18,603 | 34,069 | 26,378 |
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | Scenario, Previously Reported | |||
Supplemental Guarantor Information [Line Items] | |||
Cash and cash equivalents at beginning of period | 34,069 | ||
Cash and cash equivalents at end of period | 34,069 | ||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 557,343 | 767,607 | 422,884 |
Investing activities | (294,771) | (408,652) | (386,013) |
Financing activities | (9,964) | 35,592 | 71,105 |
Effect of exchange rates on cash and cash equivalents | (22,104) | (138,327) | (81,702) |
Net (decrease) increase in cash and cash equivalents | 230,504 | 256,220 | 26,274 |
Cash and cash equivalents at beginning of period | 508,819 | 252,591 | 226,317 |
Cash and cash equivalents at end of period | 739,323 | 508,819 | 252,591 |
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | Scenario, Previously Reported | |||
Supplemental Guarantor Information [Line Items] | |||
Cash and cash equivalents at beginning of period | 508,811 | ||
Cash and cash equivalents at end of period | 508,811 | ||
Eliminations | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | (2,762,557) | (3,927,000) | (78,454) |
Investing activities | 127,000 | 0 | 0 |
Financing activities | 2,635,557 | 3,927,000 | 78,454 |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Net (decrease) increase in cash and cash equivalents | 0 | 0 | 0 |
Cash and cash equivalents at beginning of period | 0 | 0 | 0 |
Cash and cash equivalents at end of period | 0 | 0 | $ 0 |
Eliminations | Scenario, Previously Reported | |||
Supplemental Guarantor Information [Line Items] | |||
Cash and cash equivalents at beginning of period | $ 0 | ||
Cash and cash equivalents at end of period | $ 0 |
QUARTERLY RESULTS (UNAUDITED103
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jul. 02, 2016 | Mar. 26, 2016 | Dec. 26, 2015 | Sep. 26, 2015 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 | |
Quarterly Results [Line Items] | |||||||||||
Sales | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 13,647,891 | $ 12,002,791 | $ 12,153,626 | $ 12,562,611 | $ 55,371,139 | $ 50,366,919 | $ 48,680,752 |
Cost of sales | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 11,145,053 | 9,859,966 | 9,996,812 | 10,324,616 | 44,813,632 | 41,326,447 | 40,129,236 |
Gross profit | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 2,502,838 | 2,142,825 | 2,156,814 | 2,237,995 | 10,557,507 | 9,040,472 | 8,551,516 |
Operating expenses | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 1,956,013 | 1,765,207 | 1,724,231 | 1,744,521 | 8,504,336 | 7,189,972 | 7,322,154 |
Operating income | 557,959 | 435,962 | 492,417 | 566,833 | 546,825 | 377,618 | 432,583 | 493,474 | 2,053,171 | 1,850,500 | 1,229,362 |
Interest expense | 76,020 | 81,004 | 72,231 | 73,623 | 74,305 | 57,699 | 47,235 | 126,907 | 302,878 | 306,146 | 254,807 |
Other expense (income), net | (1,586) | (4,815) | (2,320) | (7,216) | 141,303 | (6,952) | (7,764) | (15,240) | (15,937) | 111,347 | (33,592) |
Earnings before income taxes | 483,525 | 359,773 | 422,506 | 500,426 | 331,217 | 326,871 | 393,112 | 381,807 | 1,766,230 | 1,433,007 | 1,008,147 |
Income taxes | 178,354 | 121,495 | 147,339 | 176,539 | 115,550 | 109,735 | 120,713 | 137,387 | 623,727 | 483,385 | 321,374 |
Net earnings | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 215,667 | $ 217,136 | $ 272,399 | $ 244,420 | $ 1,142,503 | $ 949,622 | $ 686,773 |
Per Share: | |||||||||||
Basic net earnings (in dollars per share) | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 0.38 | $ 0.38 | $ 0.48 | $ 0.41 | $ 2.10 | $ 1.66 | $ 1.16 |
Diluted net earnings (in dollars per share) | 0.57 | 0.44 | 0.50 | 0.58 | 0.38 | 0.38 | 0.48 | 0.41 | 2.08 | 1.64 | 1.15 |
Dividends declared (in dollars per share) | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.3 | $ 1.3 | $ 1.23 | $ 1.19 |
Percentage change in sales | 6.00% | 13.00% | 11.00% | 11.00% | 10.00% | ||||||
Percentage change in operating income | 2.00% | 15.00% | 14.00% | 15.00% | 11.00% | ||||||
Percentage change in net earnings | 42.00% | 10.00% | 1.00% | 33.00% | 20.00% | ||||||
Percentage change in basic net earnings per share | 50.00% | 16.00% | 4.00% | 41.00% | 27.00% | ||||||
Percentage change in diluted net earnings per share | 50.00% | 16.00% | 4.00% | 41.00% | 27.00% | ||||||
Loss on extinguishment of debt | $ 94,800 | $ 0 | $ 86,460 | $ 0 | |||||||
Brakes Group | Other Expense (Income) | |||||||||||
Per Share: | |||||||||||
Remeasurement loss on foreign cash held by Sysco for the Brakes Acquisition | $ 101,200 |