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 September 30, 2017 , Sysco had a total of $9.0 billion in senior notes, debentures and commercial paper issuances 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. In conjunction with the preparation of our September 30, 2017 condensed consolidating financial statements, the company identified certain wholly owned U.S. Broadline subsidiaries that are guarantors of the outstanding senior notes and debentures of Sysco Corporation but were presented within Other Non-Guarantor Subsidiaries during fiscal 2017. The fiscal 2017 Condensed Consolidating Balance Sheet and Statements of Comprehensive Income and Cash flows included herein have been revised to present such U.S. Broadline subsidiaries as guarantor subsidiaries. The company assessed the materiality of the incorrect guarantor disclosures and concluded that the misstatement was not material to the financial statements as a whole, but have provided revised information below for the sake of consistency with the current period disclosures. 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 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 Sep. 30, 2017 Sysco U.S. Other Eliminations Consolidated (In thousands) Current assets $ 200,583 $ 4,228,854 $ 4,167,565 $ — $ 8,597,002 Intercompany receivables 4,275,051 966,873 — (5,241,924 ) — Investment in subsidiaries 7,138,247 — — (7,138,247 ) — Plant and equipment, net 261,906 2,032,227 2,094,166 — 4,388,299 Other assets 151,031 514,392 4,767,866 — 5,433,289 Total assets $ 12,026,818 $ 7,742,346 $ 11,029,597 $ (12,380,171 ) $ 18,418,590 Current liabilities $ 360,586 $ 4,859,882 $ 919,814 $ — $ 6,140,282 Intercompany payables — — 5,241,924 (5,241,924 ) — Long-term debt 8,352,110 7,191 67,058 — 8,426,359 Other liabilities 1,078,868 20,268 434,451 — 1,533,587 Noncontrolling interest — — 83,108 — 83,108 Shareholders’ equity 2,235,254 2,855,005 4,283,242 (7,138,247 ) 2,235,254 Total liabilities and shareholders’ equity $ 12,026,818 $ 7,742,346 $ 11,029,597 $ (12,380,171 ) $ 18,418,590 Condensed Consolidating Balance Sheet July 1, 2017 Sysco U.S. Other Eliminations Consolidated (In thousands) Current assets $ 177,495 $ 3,786,055 $ 4,069,888 $ — $ 8,033,438 Intercompany receivables 4,444,035 — — (4,444,035 ) — Investment in subsidiaries 6,451,994 — — (6,451,994 ) — Plant and equipment, net 258,527 2,039,761 2,079,014 — 4,377,302 Other assets 151,743 426,257 4,767,915 — 5,345,915 Total assets $ 11,483,794 $ 6,252,073 $ 10,916,817 $ (10,896,029 ) $ 17,756,655 Current liabilities $ 650,899 $ 3,521,661 $ 1,923,326 $ — $ 6,095,886 Intercompany payables — 276,933 4,167,102 (4,444,035 ) — Long-term debt 7,588,041 7,776 65,060 — 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 2,341,919 4,110,075 (6,451,994 ) 2,381,516 Total liabilities and shareholders’ equity $ 11,483,794 $ 6,252,073 $ 10,916,817 $ (10,896,029 ) $ 17,756,655 Condensed Consolidating Balance Sheet Oct. 1, 2016 Sysco U.S. Other Eliminations Consolidated (In thousands) Current assets $ 226,681 $ 4,130,493 $ 3,778,296 $ — $ 8,135,470 Intercompany receivables 3,408,107 — (3,408,107 ) Investment in subsidiaries 7,865,699 — — (7,865,699 ) — Plant and equipment, net 394,254 2,032,194 1,992,076 — 4,418,524 Other assets 199,918 1,111,301 4,159,597 — 5,470,816 Total assets $ 12,094,659 $ 7,273,988 $ 9,929,969 $ (11,273,806 ) $ 18,024,810 Current liabilities $ 433,751 $ 1,708,547 $ 3,224,252 $ — $ 5,366,550 Intercompany payables — 1,617,949 1,790,158 (3,408,107 ) — Long-term debt 7,607,826 61,663 174,028 — 7,843,517 Other liabilities 1,032,296 156,272 528,526 — 1,717,094 Noncontrolling interest — — 76,863 — 76,863 Shareholders’ equity 3,020,786 3,729,557 4,136,142 (7,865,699 ) 3,020,786 Total liabilities and shareholders’ equity $ 12,094,659 $ 7,273,988 $ 9,929,969 $ (11,273,806 ) $ 18,024,810 Condensed Consolidating Statement of Comprehensive Income For the 13-Week Period Ended Sep. 30, 2017 Sysco U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 9,021,657 $ 6,120,313 $ (491,546 ) $ 14,650,424 Cost of sales — 7,275,423 5,072,879 (491,546 ) 11,856,756 Gross profit — 1,746,234 1,047,434 — 2,793,668 Operating expenses 197,864 1,007,359 965,353 — 2,170,576 Operating income (loss) (197,864 ) 738,875 82,081 — 623,092 Interest expense (income) (1) 98,996 (23,351 ) 5,239 — 80,884 Other expense (income), net (3,615 ) (422 ) (211 ) — (4,248 ) Earnings (losses) before income taxes (293,245 ) 762,648 77,053 — 546,456 Income tax (benefit) provision (95,958 ) 249,561 25,213 — 178,816 Equity in earnings of subsidiaries 564,927 — — (564,927 ) — Net earnings 367,640 513,087 51,840 (564,927 ) 367,640 Other comprehensive income (loss) 120,159 — 121,329 (121,329 ) 120,159 Comprehensive income $ 487,799 $ 513,087 $ 173,169 $ (686,256 ) $ 487,799 (1) Interest expense (income) includes $27.8 million of intercompany interest income, net, for the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidating Statement of Comprehensive Income For the 52-Week Period Ended Jul. 1, 2017 Sysco U.S. Other Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) Sales $ — $ 34,325,884 $ 22,862,131 $ (1,816,876 ) $ 55,371,139 Cost of sales — 27,690,469 18,940,039 (1,816,876 ) 44,813,632 Gross profit — 6,635,415 3,922,092 — 10,557,507 Operating expenses 931,498 3,907,829 3,665,009 — 8,504,336 Operating income (loss) (931,498 ) 2,727,586 257,083 — 2,053,171 Interest expense (income) (1) 405,030 (122,012 ) 19,860 — 302,878 Other expense (income), net (23,740 ) (1,116 ) 8,919 — (15,937 ) Earnings (losses) before income taxes (1,312,788 ) 2,850,714 228,304 — 1,766,230 Income tax (benefit) provision (463,598 ) 1,006,703 80,622 — 623,727 Equity in earnings of subsidiaries 1,991,693 — — (1,991,693 ) — Net earnings 1,142,503 1,844,011 147,682 (1,991,693 ) 1,142,503 Other comprehensive income (loss) 95,381 — (9,317 ) 9,317 95,381 Comprehensive income $ 1,237,884 $ 1,844,011 $ 138,365 $ (1,982,376 ) $ 1,237,884 (1) Interest expense (income) includes $135.9 million of intercompany interest income, net, for the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidating Statement of Comprehensive Income For the 13-Week Period Ended Oct. 1, 2016 Sysco U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 8,706,151 $ 5,707,420 $ (444,917 ) $ 13,968,654 Cost of sales — 7,012,713 4,708,939 (444,917 ) 11,276,735 Gross profit — 1,693,438 998,481 — 2,691,919 Operating expenses 217,903 983,072 924,111 — 2,125,086 Operating income (loss) (217,903 ) 710,366 74,370 — 566,833 Interest expense (income) (1) 90,158 (21,210 ) 4,675 — 73,623 Other expense (income), net (14,891 ) (241 ) 7,916 — (7,216 ) Earnings (losses) before income taxes (293,170 ) 731,817 61,779 — 500,426 Income tax (benefit) provision (103,424 ) 258,169 21,794 — 176,539 Equity in earnings of subsidiaries 513,633 — — (513,633 ) — Net earnings 323,887 473,648 39,985 (513,633 ) 323,887 Other comprehensive income (loss) (76,822 ) — (89,553 ) 89,553 (76,822 ) Comprehensive income $ 247,065 $ 473,648 $ (49,568 ) $ (424,080 ) $ 247,065 (1) Interest expense (income) includes $24.8 million of intercompany interest income, net, for the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidating Cash Flows For the 13-Week Period Ended Sep. 30, 2017 Sysco U.S. Other Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ (49,085 ) $ 76,658 $ 55,202 $ 82,775 Investing activities (18,365 ) (53,281 ) (62,893 ) (134,539 ) Financing activities 76,568 (4,872 ) 1,199 72,895 Effect of exchange rates on cash — — 18,570 18,570 Net increase (decrease) in cash and cash equivalents 9,118 18,505 12,078 39,701 Cash and cash equivalents at the beginning of period 111,576 18,788 739,138 869,502 Cash and cash equivalents at the end of period $ 120,694 $ 37,293 $ 751,216 $ 909,203 Condensed Consolidating Cash Flows For the 52-Week Period Ended Jul. 1, 2017 Sysco U.S. Other Eliminations (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,511,881 $ 3,023,400 $ 658,229 $ (2,978,000 ) $ 2,215,510 Investing activities (3,274,566 ) (261,330 ) (175,565 ) 127,000 (3,584,461 ) Financing activities (1,502,151 ) (2,777,661 ) (229,931 ) 2,851,000 (1,658,743 ) Effect of exchange rates on cash — — (22,104 ) — (22,104 ) Net increase (decrease) in cash and cash equivalents (3,264,836 ) (15,591 ) 230,629 — (3,049,798 ) Cash and cash equivalents at the beginning of period 3,376,412 34,379 508,509 — 3,919,300 Cash and cash equivalents at the end of period $ 111,576 $ 18,788 $ 739,138 $ — $ 869,502 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. Condensed Consolidating Cash Flows For the 13-Week Period Ended Oct. 1, 2016 Sysco U.S. Other Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 151,435 $ 55,491 $ 47,016 $ 253,942 Investing activities (3,095,842 ) (48,677 ) 96,064 (3,048,455 ) Financing activities (301,193 ) (8,894 ) (84,840 ) (394,927 ) Effect of exchange rates on cash — — 30,038 30,038 Net increase (decrease) in cash and cash equivalents (3,245,600 ) (2,080 ) 88,278 (3,159,402 ) Cash and cash equivalents at the beginning of period 3,376,412 34,379 508,509 3,919,300 Cash and cash equivalents at the end of period $ 130,812 $ 32,299 $ 596,787 $ 759,898 |