Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Dec. 30, 2017 | Jan. 19, 2018 | |
Document Entity Information [Abstract] | ||
Entity Registrant Name | SYSCO CORP | |
Entity Central Index Key | 96,021 | |
Current Fiscal Year End Date | --06-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Dec. 30, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 521,918,747 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 |
Current assets | |||
Cash and cash equivalents | $ 961,067 | $ 869,502 | $ 847,292 |
Accounts and notes receivable, less allowances of $52,588, $31,059, and $48,612 | 3,953,643 | 4,012,393 | 3,963,458 |
Inventories, net | 3,174,012 | 2,995,598 | 3,031,548 |
Prepaid expenses and other current assets | 183,446 | 139,185 | 142,319 |
Income tax receivable | 0 | 16,760 | 26,589 |
Total current assets | 8,272,168 | 8,033,438 | 8,011,206 |
Plant and equipment at cost, less depreciation | 4,366,292 | 4,377,302 | 4,331,129 |
Long-term assets | |||
Goodwill | 4,001,020 | 3,916,128 | 3,714,355 |
Intangibles, less amortization | 1,056,335 | 1,037,511 | 1,094,927 |
Deferred income taxes | 92,950 | 142,472 | 193,663 |
Other assets | 430,605 | 249,804 | 284,786 |
Total long-term assets | 5,580,910 | 5,345,915 | 5,287,731 |
Total assets | 18,219,370 | 17,756,655 | 17,630,066 |
Current liabilities | |||
Notes payable | 6,629 | 3,938 | 22,600 |
Accounts payable | 3,745,817 | 3,971,112 | 3,549,554 |
Accrued expenses | 1,567,362 | 1,576,221 | 1,471,195 |
Accrued income taxes | 128,446 | 14,540 | 0 |
Current maturities of long-term debt | 534,716 | 530,075 | 8,937 |
Total current liabilities | 5,982,970 | 6,095,886 | 5,052,286 |
Long-term liabilities | |||
Long-term debt | 8,312,489 | 7,660,877 | 8,313,651 |
Deferred income taxes | 143,794 | 161,715 | 175,795 |
Other long-term liabilities | 1,477,991 | 1,373,822 | 1,533,390 |
Total long-term liabilities | 9,934,274 | 9,196,414 | 10,022,836 |
Commitments and contingencies | |||
Noncontrolling interests | 33,524 | 82,839 | 78,905 |
Shareholders’ equity | |||
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none | 0 | 0 | 0 |
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares | 765,175 | 765,175 | 765,175 |
Paid-in capital | 1,361,471 | 1,327,366 | 1,320,068 |
Retained earnings | 9,708,261 | 9,447,755 | 9,256,137 |
Accumulated other comprehensive loss | (1,116,028) | (1,262,737) | (1,582,596) |
Treasury stock at cost, 243,764,879, 235,135,699 and 224,792,348 shares | (8,450,277) | (7,896,043) | (7,282,745) |
Total shareholders’ equity | 2,268,602 | 2,381,516 | 2,476,039 |
Total liabilities and shareholders’ equity | $ 18,219,370 | $ 17,756,655 | $ 17,630,066 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts | $ 52,588 | $ 31,059 | $ 48,612 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 1,500,000 | 1,500,000 | 1,500,000 |
Preferred stock, issued (in shares) | 0 | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 765,174,900 | 765,174,900 | 765,174,900 |
Treasury stock (in shares) | 243,764,879 | 235,135,699 | 224,792,348 |
Consolidated Results of Operati
Consolidated Results of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Income Statement [Abstract] | ||||
Sales | $ 14,411,490 | $ 13,457,268 | $ 29,061,914 | $ 27,425,922 |
Cost of sales | 11,712,104 | 10,885,405 | 23,568,860 | 22,162,140 |
Gross profit | 2,699,386 | 2,571,863 | 5,493,054 | 5,263,782 |
Operating expenses | 2,167,104 | 2,079,446 | 4,337,680 | 4,204,532 |
Operating income | 532,282 | 492,417 | 1,155,374 | 1,059,250 |
Interest expense | 85,986 | 72,231 | 166,870 | 145,854 |
Other expense (income), net | (5,432) | (2,320) | (9,680) | (9,536) |
Earnings before income taxes | 451,728 | 422,506 | 998,184 | 922,932 |
Income taxes | 167,615 | 147,339 | 346,431 | 323,878 |
Net earnings | $ 284,113 | $ 275,167 | $ 651,753 | $ 599,054 |
Net earnings: | ||||
Basic earnings per share (in dollars per share) | $ 0.55 | $ 0.50 | $ 1.24 | $ 1.09 |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.50 | $ 1.23 | $ 1.08 |
Average shares outstanding (in shares) | 521,284,182 | 545,132,762 | 524,286,931 | 550,285,268 |
Diluted shares outstanding (in shares) | 527,249,587 | 550,372,067 | 530,156,510 | 555,663,073 |
Dividends declared per common share (in dollars per share) | $ 0.36 | $ 0.33 | $ 0.69 | $ 0.64 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
Net earnings | $ 284,113 | $ 275,167 | $ 651,753 | $ 599,054 |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustment | 19,254 | (202,195) | 140,584 | (279,683) |
Items presented net of tax: | ||||
Amortization of prior service cost | 1,807 | 1,752 | 3,291 | 3,504 |
Amortization of actuarial loss, net | 6,571 | 5,818 | 11,968 | 15,346 |
Total other comprehensive income (loss) | 26,551 | (147,656) | 146,709 | (224,478) |
Comprehensive income | 310,664 | 127,511 | 798,462 | 374,576 |
Cash Flow Hedging | ||||
Items presented net of tax: | ||||
Amortization of cash flow hedges | 2,155 | 1,770 | 3,925 | 3,540 |
Changes in derivatives | 917 | 7,873 | 3,118 | 7,554 |
Net Investment Hedging | ||||
Items presented net of tax: | ||||
Changes in derivatives | $ (4,153) | $ 37,326 | $ (16,177) | $ 25,261 |
Consolidated Cash Flows (Unaudi
Consolidated Cash Flows (Unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Cash flows from operating activities: | ||
Net earnings | $ 651,753 | $ 599,054 |
Adjustments to reconcile net earnings to cash provided by operating activities: | ||
Share-based compensation expense | 51,612 | 42,758 |
Depreciation and amortization | 370,316 | 448,959 |
Amortization of debt issuance and other debt-related costs | 14,395 | 13,143 |
Deferred income taxes | 37,005 | (18,313) |
Provision for losses on receivables | 20,151 | 7,936 |
Other non-cash items | 12,986 | 663 |
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | ||
Decrease in receivables | 99,713 | 24,509 |
(Increase) in inventories | (133,374) | (175,184) |
(Increase) decrease in prepaid expenses and other current assets | (33,484) | 1,491 |
(Decrease) in accounts payable | (286,899) | (51,381) |
(Decrease) in accrued expenses | (21,802) | (132,348) |
Increase (decrease) in accrued income taxes | 120,397 | (116,560) |
(Increase) in other assets | (29,508) | (32,751) |
Increase in other long-term liabilities | 59,943 | 27,425 |
Net cash provided by operating activities | 933,204 | 639,401 |
Cash flows from investing activities: | ||
Additions to plant and equipment | (258,577) | (285,692) |
Proceeds from sales of plant and equipment | 3,878 | 11,639 |
Acquisition of businesses, net of cash acquired | (147,644) | (2,910,461) |
Net cash used for investing activities | (402,343) | (3,184,514) |
Cash flows from financing activities: | ||
Bank and commercial paper borrowings (repayments), net | 630,265 | 999,579 |
Other debt borrowings | 5,465 | 30,939 |
Other debt repayments | (10,368) | (118,631) |
Debt issuance costs | (651) | (5,094) |
Proceeds from stock option exercises | 172,298 | 113,921 |
Cash paid for shares withheld to cover taxes | (9,485) | (13,298) |
Treasury stock purchases | (750,532) | (1,180,313) |
Dividends paid | (346,920) | (343,385) |
Net cash (used for) financing activities | (309,928) | (516,282) |
Effect of exchange rates on cash and cash equivalents | 23,510 | (10,613) |
Net increase (decrease) in cash and cash equivalents | 244,443 | (3,072,008) |
Cash and cash equivalents at beginning of period | 869,502 | 3,919,300 |
Cash and cash equivalents at end of period | 1,113,945 | 847,292 |
Supplemental disclosures of cash flow information: | ||
Interest | 136,279 | 128,887 |
Income taxes | $ 75,841 | $ 459,681 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | BASIS OF PRESENTATION The consolidated financial statements have been prepared by the company, without audit, with the exception of the July 1, 2017 consolidated balance sheet, which was derived from the audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended July 1, 2017 (our 2017 Form 10-K). 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. These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our 2017 Form 10-K. Certain footnote disclosures included in annual financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements. Reclassifications Prior year amounts have been reclassified to conform with the current year presentation. Supplemental Cash Flow Information The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Dec. 30, 2017 Dec. 31, 2016 (In thousands) Cash and cash equivalents $ 961,067 $ 847,292 Restricted cash (1) 152,878 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 1,113,945 $ 847,292 (1) Restricted cash as of December 30, 2017 represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, formed in the second quarter of fiscal 2018, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in the consolidated balance sheet as of December 30, 2017 . |
Changes in Accounting
Changes in Accounting | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Changes in Accounting | CHANGES IN ACCOUNTING Income Tax Accounting Implications of the Tax Cut and Jobs Act On December 22, 2017, the United States (U.S.) government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the Tax Act). The Tax Act makes broad and complex changes to the U.S. tax code that will affect the company’s fiscal year ending June 30, 2018. The Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cut and Jobs Act (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” (ASC 740). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Sysco has implemented SAB 118 and has provided required disclosures in Note 11 , “Income Taxes,” Targeted Improvements to Accounting for Hedging Activities In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Sysco has early adopted the standard using the modified retrospective approach to existing hedging relationships as of the second quarter of fiscal 2018, rather than in fiscal 2020 as required by the ASU. Sysco believes that an early adoption of the hedging standard will provide a better alignment between risk management activities and hedge accounting, and reduce total cost of ownership of the risk management program. All transition requirements have been applied to hedging relationships existing on the date of adoption and the effect of the adoption is reflected as of the beginning of fiscal 2018. The cumulative effect of the accounting change on the opening balance of retained earnings was immaterial to Sysco’s consolidated balance sheet. All required disclosures under ASU 2017-12 have been made in Note 6 , "Derivative Financial Instruments." Restricted Cash In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) . The ASU 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 between the beginning and ending cash balances on the statement of cash flows. We have retrospectively adopted the standard in the second quarter of fiscal 2018, which is one year earlier than required. The adoption increases the ending cash balance within our statement of cash flows by the aggregate amount of our restricted cash balances and requires a new disclosure to reconcile the cash balances within our statement of cash flows to the balance sheets. See Supplemental Cash Flow Information within Note 1, “Basis of Presentation.” There were no material restricted cash balances in prior periods, and, therefore, there is no material impact to amounts reported for prior periods due to the retrospective adoption of this ASU. Stock Compensation In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . The ASU identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The company elected to maintain the current policy to estimate forfeitures expected to occur to determine stock-based compensation expense. Further, the company adopted the provisions that have changed its accounting for excess tax benefits, or detriments. Excess tax benefits, or detriments, were previously included within additional paid-in capital in the consolidated balance sheet and were a part of the diluted share calculation. With the adoption of ASU 2016-09 on a prospective basis, excess tax benefits, or detriments, are included within income tax expense in the consolidated results of operations and are no longer a part of the diluted share calculation. In the second quarter and the first 26 weeks of fiscal 2018, the company recognized excess tax benefits of $14.8 million and $30.8 million from stock option exercises that occurred during the respective periods. The standard also requires several presentation changes with regard to the statement of cash flows. Cash flows related to excess tax benefits or detriments are included in net cash provided by operating activities, rather than as a financing activity. Sysco chose a retrospective application of this provision; therefore, amounts presented for fiscal 2017 reflect the guidance required by this ASU. The standard further requires that cash paid by an employer, when directly withholding shares for tax withholding purposes, should be classified as a financing activity and applied retrospectively. Cash payments of $ 9.5 million and $ 13.3 million to tax authorities in connection with shares withheld to meet statutory income tax withholding requirements are presented as a financing activity in the consolidated statement of cash flows for fiscal 2018 and fiscal 2017, respectively. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued 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. The company early adopted this ASU in the first quarter of fiscal 2018. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Standards | NEW ACCOUNTING STANDARDS 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 within new fiscal years 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. As of the end of the second quarter of fiscal 2018, the company was nearing the completion of its assessment of the accounting required under Topic 606 and is completing its documentation of these conclusions. Based on the work completed to date, Sysco does not expect that the implementation of the new standard will have a material effect on the company’s financial statements. The company will continue its assessment and will adopt the standard in the first quarter of fiscal 2019 and expects to use the modified retrospective method. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. 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. Topic 842 currently requires lessees and lessors to 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. |
Acquisitions
Acquisitions | 6 Months Ended |
Dec. 30, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | ACQUISITIONS During the first 26 weeks of fiscal 2018 , the company paid cash of $147.6 million for acquisitions. These acquisitions did not have a material effect on the company’s operating results, cash flows or financial position. Certain acquisitions involve contingent consideration that may include earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of December 30, 2017 , aggregate contingent consideration outstanding was $20.2 million , of which $9.0 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 the Brakes Group, 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). The company paid cash of $2.9 billion , net of cash acquired, for 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. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Dec. 30, 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. 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. • 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. • Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. • Fuel swap contracts are valued based on observable market transactions of forward commodity prices. The fair value of the company’s derivative instruments are all measured using inputs that are considered a Level 2 measurement, as they are not actively traded and are valued using pricing models that use observable market quotations. The location and the fair value of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 6 , "Derivative Financial Instruments." The following tables present the company’s assets measured at fair value on a recurring basis as of December 30, 2017 , July 1, 2017 and December 31, 2016 : Assets Measured at Fair Value as of Dec. 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 241,071 $ 43,191 $ — $ 284,262 Other assets 145,734 7,143 152,877 Total assets at fair value $ 386,805 $ 50,334 $ — $ 437,139 Assets 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 Total assets at fair value $ 238,954 $ 49,430 $ — $ 288,384 Assets Measured at Fair Value as of Dec. 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 11,500 $ 43,270 $ — $ 54,770 Total assets at fair value $ 11,500 $ 43,270 $ — $ 54,770 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 issues or on the current rates offered to the company for new debt with the same maturities as existing debt, and is considered a Level 2 measurement. The fair value of total debt was approximately $9.2 billion , $8.6 billion and $8.6 billion as of December 30, 2017 , July 1, 2017 and December 31, 2016 , respectively. The carrying value of total debt was $8.9 billion , $8.2 billion and $8.3 billion as of December 30, 2017 , July 1, 2017 and December 31, 2016 , respectively. |
Derivative Financial Instrument
Derivative Financial Instruments | 6 Months Ended |
Dec. 30, 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 strategies are used to manage interest rate risk, foreign currency risk and fuel price risk. 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. 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. There are no credit-risk related contingent features associated with these swaps, which have been designated as cash flow hedges. The company has also entered into cross-currency swap contracts and Euro-bond denominated debt that hedge the foreign currency exposure of our net investment in certain foreign operations. Additionally, 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. Sysco uses certain foreign currency contracts to hedge the effects of fluctuations in exchange rates on outstanding intercompany loans. The company does not formally designate and document such derivative instruments as hedging instruments; however, the instruments are an effective economic hedge of the underlying foreign currency exposure. Both the gain or loss on the derivative instrument and the offsetting gain or loss on the underlying intercompany loans are recognized in earnings immediately, thereby eliminating or reducing the impact of foreign currency exchange rate fluctuations on net earnings. 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 have been designated as cash flow hedges. None of these hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of December 30, 2017 are below: Maturity Date of the Hedging Instrument Currency / Unit of Measure Notional Value (In millions) Hedging of interest rate risk February 2018 U.S. Dollar 500 April 2019 U.S. Dollar 500 October 2020 U.S. Dollar 750 July 2021 U.S. Dollar 500 Hedging of foreign currency risk (1) July 2021 British Pound Sterling 234 August 2021 British Pound Sterling 466 June 2023 Euro 500 Hedging of fuel risk Various (January 2018 to November 2018) Gallons 44 (1) Foreign currency forward contracts used to hedge against foreign exchange exposures related to inventory purchases are not material to Sysco’s overall hedging portfolio. The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of December 30, 2017 , July 1, 2017 and December 31, 2016 are as follows: Derivative Fair Value Balance Sheet location Dec. 30, 2017 Jul. 1, 2017 Dec. 31, 2016 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ 118 $ 707 $ — Interest rate swaps Other assets — — 1,149 Interest rate swaps Other long-term liabilities 33,003 21,390 25,391 Cash Flow Hedges: Fuel swaps Other current assets $ 13,678 $ 717 $ 3,950 Foreign currency forwards Other current assets 555 — — Cross currency swaps Other assets — — 9,027 Fuel swaps Other current liabilities — 6,320 — Foreign currency forwards Other current liabilities 351 154 1,048 Cross currency swaps Other long-term liabilities 21,310 5,816 — Net Investment Hedges: Foreign currency swaps Other assets $ 7,822 $ — $ 28,395 Foreign currency swaps Other long-term liabilities 48,087 12,308 15,915 Foreign denominated debt Long-term debt 600,050 571,450 525,950 The location and amount of gains or losses recognized in the consolidated results of operations for fair value and cash flow hedging relationships for each of the periods, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 11,712,104 $ 2,167,104 $ 85,986 Gain or (loss) on fair value hedging relationships: Interest rate swaps: Hedged items (1) $ — $ — $ (7,515 ) Derivatives designated as hedging instruments — — (9,942 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 1,814 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 525 $ — $ — Interest rate swaps: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (2,873 ) (1) The hedged total includes interest expense of $17,078 and change in fair value of debt of $9,563 . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. 26-Week Period Ended Dec. 30, 2017 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 23,568,860 $ 4,337,680 $ 166,870 Gain or (loss) on fair value hedging relationships: Interest contracts: Hedged items (1) $ — $ — $ (22,745 ) Derivatives designated as hedging instruments — — (10,989 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 1,658 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 834 $ — $ — Interest contracts: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (5,746 ) (1) The hedged total includes interest expense of $34,156 and change in fair value of debt of $11,411 . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. The location and effect of derivatives not designated as hedging instruments on the consolidated results of operations for the 13-week period ended December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not designated as hedging instruments: (In thousands) Foreign currency contracts Other expense (income) $ (2,516 ) The location and effect of derivatives not designated as hedging instruments on the consolidated results of operations for the 26-week period ended December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not designated as hedging instruments: (In thousands) Foreign currency contracts Other expense (income) $ (2,280 ) The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week period ended December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 8,505 Operating income $ 1,814 Foreign currency contracts 6,331 Cost of goods sold 525 Total $ 14,836 $ 2,339 Derivatives in net investment hedging relationships: Foreign currency contracts $ (12,063 ) Other expense (income) $ — Foreign denominated debt (9,450 ) Other expense (income) — Total $ (21,513 ) $ — The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 26-week period ended December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 19,706 Operating income $ 1,658 Foreign currency contracts (15,462 ) Cost of goods sold 834 Total $ 4,244 $ 2,492 Derivatives in net investment hedging relationships: Foreign currency contracts $ (27,957 ) Other expense (income) $ — Foreign denominated debt (28,600 ) Other expense (income) — Total $ (56,557 ) $ — The location and carrying amount of hedged liabilities in the consolidated balance sheet as of December 30, 2017 are as follows: Dec. 30, 2017 Dec. 30, 2017 Carrying Amount of Hedged Assets (Liabilities) Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) (In thousands) Balance sheet location: Current maturities of long-term debt $ (499,960 ) $ — Long-term debt (1,747,194 ) 18,282 As of December 30, 2017 , the total notional amount of Sysco’s pay-fixed/receivable-variable interest rate swaps was $2.3 billion . The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 13-week period ending December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Location of (Gain) or Loss (1) Amount of (Gain) or Loss (In thousands) Fair Value Hedge Relationships: Interest rate swap agreements (1) Interest expense $ 379 (1) The effect of derivative instruments and related hedged items that are recorded in other comprehensive income (loss) are disclosed in Note 9, “Other Comprehensive Income.” The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 26-week period ending December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Location of (Gain) or Loss (1) Amount of (Gain) or Loss (In thousands) Fair Value Hedge Relationships: Interest rate swap agreements (1) Interest expense $ (422 ) (1) The effect of derivative instruments and related hedged items that are recorded in other comprehensive income (loss) are disclosed in Note 9, “Other Comprehensive Income.” |
Debt
Debt | 6 Months Ended |
Dec. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Sysco has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $2.0 billion . As of December 30, 2017 , there was $750.0 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 26 weeks of 2018 , aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from $254.5 million to approximately $1.2 billion . |
Earnings Per Share
Earnings Per Share | 6 Months Ended |
Dec. 30, 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: 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 (In thousands, except for share and per share data) (In thousands, except for share Numerator: Net earnings $ 284,113 $ 275,167 $ 651,753 $ 599,054 Denominator: Weighted-average basic shares outstanding 521,284,182 545,132,762 524,286,931 550,285,268 Dilutive effect of share-based awards 5,965,405 5,239,305 5,869,579 5,377,805 Weighted-average diluted shares outstanding 527,249,587 550,372,067 530,156,510 555,663,073 Basic earnings per share $ 0.55 $ 0.50 $ 1.24 $ 1.09 Diluted earnings per share $ 0.54 $ 0.50 $ 1.23 $ 1.08 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 2,749,000 and 4,900,000 for the second quarter of fiscal 2018 and fiscal 2017 , respectively. 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 4,594,000 and 3,500,000 for the first 26 weeks of fiscal 2018 and fiscal 2017 , respectively. |
Other Comprehensive Income
Other Comprehensive Income | 6 Months Ended |
Dec. 30, 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 $310.7 million and $127.5 million for the second quarter of fiscal 2018 and fiscal 2017 , respectively. Comprehensive income was $798.5 million and $374.6 million for the first 26 weeks of fiscal 2018 and fiscal 2017 , 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: 13-Week Period Ended Dec. 30, 2017 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 2,409 $ 602 $ 1,807 Amortization of actuarial loss (gain), net Operating expenses 8,761 2,190 6,571 Total reclassification adjustments 11,170 2,792 8,378 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A 19,254 — 19,254 Hedging instruments: Other comprehensive income before reclassification adjustments: Change in cash flow hedges N/A 2,944 2,027 917 Change in net investment hedges N/A (6,543 ) (2,390 ) (4,153 ) Total other comprehensive income before reclassification adjustments (3,599 ) (363 ) (3,236 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 2,873 718 2,155 Total other comprehensive income $ 29,698 $ 3,147 $ 26,551 13-Week Period Ended Dec. 31, 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 $ 2,844 $ 1,092 $ 1,752 Amortization of actuarial loss (gain), net Operating expenses 9,749 3,931 5,818 Total reclassification adjustments 12,593 5,023 7,570 Foreign currency translation: Other comprehensive income before Foreign currency translation adjustment N/A (202,195 ) — (202,195 ) Hedging instruments: Other comprehensive income before reclassification adjustments: Change in cash flow hedges Interest expense 12,058 4,185 7,873 Change in net investment hedges N/A 55,445 18,119 37,326 Total other comprehensive income before reclassification adjustments 67,503 22,304 45,199 Reclassification adjustments: Amortization of cash flow hedges Interest expense 2,873 1,103 1,770 Total other comprehensive income $ (119,226 ) $ 28,430 $ (147,656 ) 26-Week Period Ended Dec. 30, 2017 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 4,818 $ 1,527 $ 3,291 Amortization of actuarial loss (gain), net Operating expenses 17,522 5,554 11,968 Total reclassification adjustments 22,340 7,081 15,259 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A 140,584 — 140,584 Hedging instruments: Other comprehensive income before Change in cash flow hedges N/A 6,350 3,232 3,118 Change in net investment hedge N/A (29,919 ) (13,741 ) (16,177 ) Change in fuel hedge N/A — — Total other comprehensive income before reclassification adjustments (23,569 ) (10,509 ) (13,059 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 5,746 1,821 3,925 Total other comprehensive income $ 145,101 $ (1,607 ) $ 146,709 26-Week Period Ended Dec. 31, 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 $ 5,688 $ 2,184 $ 3,504 Amortization of actuarial loss (gain), net Operating expenses 23,208 7,862 15,346 Total reclassification adjustments 28,896 10,046 18,850 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A (279,683 ) — (279,683 ) Hedging instruments: Other comprehensive income before Change in cash flow hedges Interest expense 11,739 4,185 7,554 Change in net investment hedge N/A 43,380 18,119 25,261 Total other comprehensive income before reclassification adjustments 55,119 22,304 32,815 Reclassification adjustments: Amortization of cash flow hedges Interest expense 5,746 2,206 3,540 Total other comprehensive income $ (189,922 ) $ 34,556 $ (224,478 ) The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented: 26-Week Period Ended Dec. 30, 2017 Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, Total (In thousands) Balance as of Jul. 1, 2017 $ (974,232 ) $ (148,056 ) $ (140,449 ) $ (1,262,737 ) Equity adjustment from foreign currency translation — 140,584 140,584 Amortization of cash flow hedges — — 3,925 3,925 Change in net investment hedges — — (16,177 ) (16,177 ) Change in cash flow hedge — — 3,118 3,118 Amortization of unrecognized prior service cost 3,291 — — 3,291 Amortization of unrecognized net actuarial losses 11,968 — — 11,968 Balance as of Dec. 30, 2017 $ (958,973 ) $ (7,472 ) $ (149,583 ) $ (1,116,028 ) 26-Week Period Ended Dec. 31, 2016 Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, Total (In thousands) Balance as of Jul. 2, 2016 $ (1,104,484 ) $ (136,813 ) $ (116,821 ) $ (1,358,118 ) Equity adjustment from foreign currency translation — (279,683 ) (279,683 ) Amortization of cash flow hedges — — 3,540 3,540 Change in cash flow hedges — — 7,554 7,554 Change in net investment hedges — — 25,261 25,261 Amortization of unrecognized prior service cost 3,504 — — 3,504 Amortization of unrecognized net actuarial losses 15,346 — — 15,346 Balance as of Dec. 31, 2016 $ (1,085,634 ) $ (416,496 ) $ (80,466 ) $ (1,582,596 ) |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Dec. 30, 2017 | |
Share-based Compensation [Abstract] | |
Share-Based Compensation | SHARE-BASED COMPENSATION Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP). Stock Incentive Plans In the first 26 weeks of fiscal 2018 , options to purchase 4,042,415 shares were granted to employees. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value per option granted during the first 26 weeks of fiscal 2018 was $7.08 . In the first 26 weeks of fiscal 2018 , 867,619 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 the first 26 weeks of fiscal 2018 was $51.10 . 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. Employee Stock Purchase Plan Plan participants purchased 591,241 shares of common stock under the Sysco ESPP during the first 26 weeks of fiscal 2018 . The weighted average fair value per right of employee stock purchase rights issued pursuant to the ESPP was $7.83 during the first 26 weeks of fiscal 2018 . The fair value of the stock purchase rights is estimated as the difference between the stock price and the employee purchase price. All Share-Based Payment Arrangements The total share-based compensation cost that has been recognized in results of operations was $51.6 million and $42.8 million for the first 26 weeks of fiscal 2018 and fiscal 2017 , respectively. As of December 30, 2017 , there was $127.2 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.03 years . |
Income Taxes
Income Taxes | 6 Months Ended |
Dec. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted the Tax Act. The Tax Act makes broad and complex changes to the U.S. tax code that will affect the company’s fiscal year ending June 30, 2018, including, but not limited to: (1) reducing the U.S. federal corporate tax rate; (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over 8 years ; and (3) bonus depreciation that will allow for full expensing of qualified property placed in service after September 27, 2017 . The Tax Act also establishes new tax laws that could affect Sysco in future fiscal years, including, but not limited to (1) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (2) a new provision designed to tax global intangible low-taxed income (GILTI); (3) creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (4) a new limitation on deductible interest; (5) repeal of the domestic production activity deduction; and (6) increased limitations on the deductibility of certain executive compensation. The SEC staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” (ASC 740). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. For various reasons that are discussed in greater detail below, the company has not completed its accounting for the income tax effects of certain elements of the Tax Act. In cases where Sysco was able to make reasonable estimates of the effects of elements for which its analysis is not yet complete, the company recorded provisional adjustments. If Sysco was not yet able to make reasonable estimates of the impact of certain elements, the company has not recorded any adjustments related to those elements and has continued accounting for them in accordance with ASC 740 on the basis of the tax laws in effect before the Tax Act. Our accounting for the following elements of the Tax Act is incomplete. However, the company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments of $35.8 million , which is our initial estimate of the following impacts of the Tax Act: Reduction of U.S. federal corporate tax rate: As a result of enactment of the Tax Act, the company revised its estimated annual effective tax rate to reflect a change in the U.S. statutory tax rate. As noted above, the Tax Act reduces the U.S. federal corporate tax rate to 21% in our fiscal year; however, Section 15 of the Internal Revenue Code stipulates that the reduction in the corporate tax rate is applied to fiscal year taxpayers by computing a blended tax rate, based on the applicable tax rates before and after the effective date of the change in the statutory rate. When applied to Sysco’s fiscal year, this blended rate is estimated as 28% for fiscal 2018, a benefit of $64.7 million due to the retroactive application of this lower rate to the beginning of the company’s fiscal year. In addition, the company has recorded a provisional tax benefit of $14.5 million attributable to remeasuring Sysco’s accrued income taxes, deferred tax liabilities and deferred tax assets. Transition Tax: The company recorded a discrete tax expense of $115.0 million attributable to the provisional impact of the transition tax. The transition tax is payable in eight annual installments beginning in our first quarter of fiscal 2019. As a result of the 8 year payment period, approximately $95.0 million attributable to the portion of the provisional transition tax not due within 12 months is located within other long-term liabilities in the consolidated balance sheet as of December 30, 2017. Our accounting for the following elements of the Tax Act is incomplete, and we were not able to make reasonable estimates of the effects. Therefore, no provisional adjustments were recorded. GILTI: The Tax Act creates a new requirement that certain income earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. Sysco will not be subject to the GILTI provisions until fiscal 2019. Because of the complexity of the new GILTI tax rules, the company is continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, the company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Sysco’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether the company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether Sysco expects to have future U.S. inclusions in taxable income related to GILTI depends not only on our current structure and estimated future results of global operations but also the company’s intent and ability to modify its structure and/or its business, Sysco is not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, the company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI. Executive Compensation Limitation: The Tax Act expands the definition under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) of covered employee and provides that, for specified employees, status as a covered employee continues for all subsequent tax years, including years after the death of the individual, and, among other modifications, repeals the exception for performance-based compensation and commissions from the $1 million deduction limitation. In addition, the Tax Act provides for transitional guidance that will allow certain payments made under written and binding agreements entered into prior to November 2, 2017 to be treated as if they were made under the provisions of Section 162(m) that were in effect prior to enactment of the Tax Act. The company is in the process of gathering information on existing compensation arrangements for covered employees as well as assessing the impact of transitional guidance on the realizability of existing deferred tax assets related to compensation arrangements of its covered employees. As a result, the company has not made any adjustments related to impacts of the new executive compensation limitations in its financial statements. Indefinite Reinvestment Assertion: The company is in the process of assessing the impact of the Tax Act on its indefinite reinvestment assertion and the company’s plans to determine any associated impact on the financial statements. Therefore, no adjustments have been made in its financial statements with respect to its indefinite reinvestment assertion. Effective Tax Rate Sysco’s effective tax rate is reflective of the jurisdictions where the company has operations. The effective tax rates for the second quarter and first 26 weeks of fiscal 2018 were 37.11% and 34.71% , respectively. The effective tax rates for the second quarter and first 26 weeks of fiscal 2018 were negatively impacted by the transition tax described above resulting from the Tax Act. These effective tax rates were impacted favorably by a net tax benefit of $79.2 million attributable to the change in the federal statutory tax rate described above, along with the impact of tax law changes in certain foreign jurisdictions and excess tax benefits of equity-based compensation that totaled $8.1 million and $14.8 million , respectively. Sysco began recognizing these excess tax benefits within income tax expense in the first quarter of fiscal 2018 due to the adoption of ASU 2016-09. The effective tax rate for the second quarter of fiscal 2017 of 34.87% and the first 26 weeks of fiscal 2017 of 35.09% was favorably impacted by an increase in earnings in foreign jurisdictions due to the acquisition of the Brakes Group. Uncertain Tax Positions As of December 30, 2017 , the gross amount of unrecognized tax benefit and related accrued interest was $16.2 million and $11.5 million , respectively. It is reasonably possible that the amount of the unrecognized tax benefit with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months, either because Sysco prevails on positions challenged upon audit or because the company agrees to the disallowance. Items that may cause changes to unrecognized tax benefits primarily include the consideration of various filing requirements in numerous states and the allocation of income and expense between tax jurisdictions. At this time, an estimate of the range of the reasonably possible change cannot be made. Other The determination of the company’s provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes reflects a combination of income earned and taxed in the various U.S. federal and state, as well as foreign, jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Dec. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES Legal Proceedings Sysco is engaged in various legal proceedings that 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. |
Business Segment Information
Business Segment Information | 6 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Business Segment Information | BUSINESS SEGMENT INFORMATION The company has aggregated certain of its operating segments 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, Europe, 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 provide support for some of our business technology needs. The Broadline operations 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 distributes 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. The following tables set forth certain financial information for Sysco’s business segments. 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 Sales: (In thousands) (In thousands) U.S. Foodservice Operations $ 9,681,225 $ 9,085,565 $ 19,530,167 $ 18,566,681 International Foodservice Operations 2,869,043 2,625,949 5,772,298 5,354,310 SYGMA 1,633,145 1,520,182 3,273,816 3,024,874 Other 228,077 225,572 485,633 480,057 Total $ 14,411,490 $ 13,457,268 $ 29,061,914 $ 27,425,922 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 Operating income: (In thousands) (In thousands) U.S. Foodservice Operations $ 706,375 $ 681,321 $ 1,487,244 $ 1,426,552 International Foodservice Operations 52,438 84,814 129,084 164,249 SYGMA 3,353 3,155 8,198 8,062 Other 3,222 3,793 7,238 11,794 Total segments 765,388 773,083 1,631,764 1,610,657 Corporate (233,106 ) (280,666 ) (476,390 ) (551,407 ) Total operating income 532,282 492,417 1,155,374 1,059,250 Interest expense 85,986 72,231 166,870 145,854 Other expense (income), net (5,432 ) (2,320 ) (9,680 ) (9,536 ) Earnings before income taxes $ 451,728 $ 422,506 $ 998,184 $ 922,932 Dec. 30, 2017 Jul. 1, 2017 Dec. 31, 2016 Assets: (In thousands) U.S. Foodservice Operations $ 6,811,901 $ 6,675,543 $ 6,791,846 International Foodservice Operations 6,662,574 6,433,815 6,143,372 SYGMA 641,786 625,653 603,167 Other 756,165 448,885 438,196 Total segments 14,872,426 14,183,896 13,976,581 Corporate 3,346,944 3,572,759 3,653,485 Total $ 18,219,370 $ 17,756,655 $ 17,630,066 |
Supplemental Guarantor Informat
Supplemental Guarantor Information - Subsidiary Guarantees | 6 Months Ended |
Dec. 30, 2017 | |
Guarantees [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 December 30, 2017 , Sysco had a total of $8.8 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 that 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 has 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 (certain 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 Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 189,553 $ 3,803,349 $ 4,279,266 $ — $ 8,272,168 Intercompany receivables 2,945,188 1,276,341 — (4,221,529 ) — Investment in subsidiaries 7,623,839 — — (7,623,839 ) — Plant and equipment, net 262,790 2,018,365 2,085,137 — 4,366,292 Other assets 965,800 55,820 4,559,290 — 5,580,910 Total assets $ 11,987,170 $ 7,153,875 $ 10,923,693 $ (11,845,368 ) $ 18,219,370 Current liabilities $ 540,008 $ 3,781,141 $ 1,661,821 $ — $ 5,982,970 Intercompany payables — — 4,221,529 (4,221,529 ) — Long-term debt 8,239,844 6,995 65,650 — 8,312,489 Other liabilities 938,716 87,230 595,839 — 1,621,785 Noncontrolling interest — — 33,524 — 33,524 Shareholders’ equity 2,268,602 3,278,509 4,345,330 (7,623,839 ) 2,268,602 Total liabilities and shareholders’ equity $ 11,987,170 $ 7,153,875 $ 10,923,693 $ (11,845,368 ) $ 18,219,370 Condensed Consolidating Balance Sheet July 1, 2017 Sysco Certain 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 151,743 516,126 4,678,046 — 5,345,915 Total assets $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Current liabilities $ 650,899 $ 3,521,661 $ 1,923,326 $ — $ 6,095,886 Intercompany payables — 366,802 4,077,233 (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 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Condensed Consolidating Balance Sheet Dec. 31, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 137,816 $ 4,050,928 $ 3,822,462 $ — $ 8,011,206 Intercompany receivables 2,851,475 — — (2,851,475 ) — Investment in subsidiaries 8,168,683 — — (8,168,683 ) — Plant and equipment, net 364,716 2,023,350 1,943,063 — 4,331,129 Other assets 408,475 604,424 4,274,832 — 5,287,731 Total assets $ 11,931,165 $ 6,678,702 $ 10,040,357 $ (11,020,158 ) $ 17,630,066 Current liabilities $ 286,277 $ 2,307,139 $ 2,458,870 $ — $ 5,052,286 Intercompany payables — 35,463 2,816,012 (2,851,475 ) — Long-term debt 8,056,499 6,904 250,248 — 8,313,651 Other liabilities 1,112,350 163,640 433,195 — 1,709,185 Noncontrolling interest — — 78,905 — 78,905 Shareholders’ equity 2,476,039 4,165,556 4,003,127 (8,168,683 ) 2,476,039 Total liabilities and shareholders’ equity $ 11,931,165 $ 6,678,702 $ 10,040,357 $ (11,020,158 ) $ 17,630,066 Condensed Consolidating Statement of Comprehensive Income For the 13-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 8,754,170 $ 6,169,238 $ (511,918 ) $ 14,411,490 Cost of sales — 7,102,287 5,121,735 (511,918 ) 11,712,104 Gross profit — 1,651,883 1,047,503 — 2,699,386 Operating expenses 198,800 994,646 973,658 — 2,167,104 Operating income (loss) (198,800 ) 657,237 73,845 — 532,282 Interest expense (income) (1) 108,768 (27,955 ) 5,173 — 85,986 Other expense (income), net (5,030 ) (1,137 ) 735 — (5,432 ) Earnings (losses) before income taxes (302,538 ) 686,329 67,937 — 451,728 Income tax (benefit) provision (120,313 ) 262,820 25,108 — 167,615 Equity in earnings of subsidiaries 466,338 — — (466,338 ) — Net earnings 284,113 423,509 42,829 (466,338 ) 284,113 Other comprehensive income (loss) 26,551 — 19,254 (19,254 ) 26,551 Comprehensive income $ 310,664 $ 423,509 $ 62,083 $ (485,592 ) $ 310,664 (1) Interest expense (income) includes $28.0 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the second quarter ended December 30, 2017 . 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 Dec. 31, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 8,268,127 $ 7,167,072 $ (1,977,931 ) $ 13,457,268 Cost of sales — 6,676,641 6,186,695 (1,977,931 ) 10,885,405 Gross profit — 1,591,486 980,377 — 2,571,863 Operating expenses 239,292 956,196 883,958 — 2,079,446 Operating income (loss) (239,292 ) 635,290 96,419 — 492,417 Interest expense (income) (1) 100,947 (33,610 ) 4,894 — 72,231 Other expense (income), net (5,295 ) (729 ) 3,704 — (2,320 ) Earnings (losses) before income taxes (334,944 ) 669,629 87,821 — 422,506 Income tax (benefit) provision (116,996 ) 233,631 30,704 — 147,339 Equity in earnings of subsidiaries 493,115 — — (493,115 ) — Net earnings 275,167 435,998 57,117 (493,115 ) 275,167 Other comprehensive income (loss) (147,656 ) — (190,130 ) 190,130 (147,656 ) Comprehensive income $ 127,511 $ 435,998 $ (133,013 ) $ (302,985 ) $ 127,511 (1) Interest expense (income) includes $33.6 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the second quarter ended December 31, 2016 . 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 26-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) Sales $ — $ 17,775,826 $ 12,289,551 $ (1,003,463 ) $ 29,061,914 Cost of sales — 14,377,711 10,194,612 (1,003,463 ) 23,568,860 Gross profit — 3,398,115 2,094,939 — 5,493,054 Operating expenses 396,664 2,002,006 1,939,010 — 4,337,680 Operating income (loss) (396,664 ) 1,396,109 155,929 — 1,155,374 Interest expense (income) (1) 207,764 (51,305 ) 10,411 — 166,870 Other expense (income), net (8,645 ) (1,559 ) 524 — (9,680 ) Earnings (losses) before income taxes (595,783 ) 1,448,973 144,994 — 998,184 Income tax (benefit) provision (216,273 ) 512,383 50,321 — 346,431 Equity in earnings of subsidiaries 1,031,263 — — (1,031,263 ) — Net earnings 651,753 936,590 94,673 (1,031,263 ) 651,753 Other comprehensive income (loss) 146,709 — 140,583 (140,583 ) 146,709 Comprehensive income $ 798,462 $ 936,590 $ 235,256 $ (1,171,846 ) $ 798,462 (1) Interest expense (income) includes $51.3 million of intercompany interest income, net, for certain of 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 Certain 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 certain of 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 26-Week Period Ended Dec. 31, 2016 Sysco Certain U.S. Other Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) Sales $ — $ 16,974,279 $ 12,874,491 $ (2,422,848 ) $ 27,425,922 Cost of sales — 13,689,355 10,895,633 (2,422,848 ) 22,162,140 Gross profit — 3,284,924 1,978,858 — 5,263,782 Operating expenses 457,195 1,939,269 1,808,068 — 4,204,532 Operating income (loss) (457,195 ) 1,345,655 170,790 — 1,059,250 Interest expense (income) (1) 191,105 (54,820 ) 9,569 — 145,854 Other expense (income), net (20,186 ) (969 ) 11,619 — (9,536 ) Earnings (losses) before income taxes (628,114 ) 1,401,444 149,602 — 922,932 Income tax (benefit) provision (220,420 ) 491,799 52,499 — 323,878 Equity in earnings of subsidiaries 1,006,748 — — (1,006,748 ) — Net earnings 599,054 909,645 97,103 (1,006,748 ) 599,054 Other comprehensive income (loss) (224,478 ) — (279,683 ) 279,683 (224,478 ) Comprehensive income $ 374,576 $ 909,645 $ (182,580 ) $ (727,065 ) $ 374,576 (1) Interest expense (income) includes $54.8 million of intercompany interest income, net, for certain of 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 26-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 252,770 $ 195,650 $ 484,784 $ — $ 933,204 Investing activities (104,914 ) (112,513 ) (332,538 ) 147,622 (402,343 ) Financing activities (159,309 ) (3,890 ) 893 (147,622 ) (309,928 ) Effect of exchange rates on cash — — 23,510 — 23,510 Net increase (decrease) in cash and cash equivalents (11,453 ) 79,247 176,649 — 244,443 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 $ 100,123 $ 98,035 $ 915,787 $ — $ 1,113,945 Condensed Consolidating Cash Flows For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Eliminations (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,535,775 $ 3,023,400 $ 658,229 $ (2,978,000 ) $ 2,239,404 Investing activities (3,274,566 ) (261,330 ) (175,565 ) 127,000 (3,584,461 ) Financing activities (1,526,045 ) (2,777,661 ) (229,931 ) 2,851,000 (1,682,637 ) 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 26-Week Period Ended Dec. 31, 2016 Sysco Certain U.S. Other Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 292,547 $ 143,092 $ 203,762 $ 639,401 Investing activities (3,127,225 ) (102,923 ) 45,634 (3,184,514 ) Financing activities (430,216 ) (17,815 ) (68,251 ) (516,282 ) Effect of exchange rates on cash — — (10,613 ) (10,613 ) Net increase (decrease) in cash and cash equivalents (3,264,894 ) 22,354 170,532 (3,072,008 ) 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 $ 111,518 $ 56,733 $ 679,041 $ 847,292 |
New Accounting Standards (Polic
New Accounting Standards (Policies) | 6 Months Ended |
Dec. 30, 2017 | |
Accounting Policies [Abstract] | |
New Accounting Standards | Income Tax Accounting Implications of the Tax Cut and Jobs Act On December 22, 2017, the United States (U.S.) government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act of 2017 (the Tax Act). The Tax Act makes broad and complex changes to the U.S. tax code that will affect the company’s fiscal year ending June 30, 2018. The Securities and Exchange Commission (SEC) staff issued Staff Accounting Bulletin No. 118, Income Tax Accounting Implications of the Tax Cut and Jobs Act (SAB 118), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standards Codification Topic 740, “Income Taxes” (ASC 740). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Sysco has implemented SAB 118 and has provided required disclosures in Note 11 , “Income Taxes,” Targeted Improvements to Accounting for Hedging Activities In August 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Sysco has early adopted the standard using the modified retrospective approach to existing hedging relationships as of the second quarter of fiscal 2018, rather than in fiscal 2020 as required by the ASU. Sysco believes that an early adoption of the hedging standard will provide a better alignment between risk management activities and hedge accounting, and reduce total cost of ownership of the risk management program. All transition requirements have been applied to hedging relationships existing on the date of adoption and the effect of the adoption is reflected as of the beginning of fiscal 2018. The cumulative effect of the accounting change on the opening balance of retained earnings was immaterial to Sysco’s consolidated balance sheet. All required disclosures under ASU 2017-12 have been made in Note 6 , "Derivative Financial Instruments." Restricted Cash In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) . The ASU 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 between the beginning and ending cash balances on the statement of cash flows. We have retrospectively adopted the standard in the second quarter of fiscal 2018, which is one year earlier than required. The adoption increases the ending cash balance within our statement of cash flows by the aggregate amount of our restricted cash balances and requires a new disclosure to reconcile the cash balances within our statement of cash flows to the balance sheets. See Supplemental Cash Flow Information within Note 1, “Basis of Presentation.” There were no material restricted cash balances in prior periods, and, therefore, there is no material impact to amounts reported for prior periods due to the retrospective adoption of this ASU. Stock Compensation In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . The ASU identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The company elected to maintain the current policy to estimate forfeitures expected to occur to determine stock-based compensation expense. Further, the company adopted the provisions that have changed its accounting for excess tax benefits, or detriments. Excess tax benefits, or detriments, were previously included within additional paid-in capital in the consolidated balance sheet and were a part of the diluted share calculation. With the adoption of ASU 2016-09 on a prospective basis, excess tax benefits, or detriments, are included within income tax expense in the consolidated results of operations and are no longer a part of the diluted share calculation. In the second quarter and the first 26 weeks of fiscal 2018, the company recognized excess tax benefits of $14.8 million and $30.8 million from stock option exercises that occurred during the respective periods. The standard also requires several presentation changes with regard to the statement of cash flows. Cash flows related to excess tax benefits or detriments are included in net cash provided by operating activities, rather than as a financing activity. Sysco chose a retrospective application of this provision; therefore, amounts presented for fiscal 2017 reflect the guidance required by this ASU. The standard further requires that cash paid by an employer, when directly withholding shares for tax withholding purposes, should be classified as a financing activity and applied retrospectively. Cash payments of $ 9.5 million and $ 13.3 million to tax authorities in connection with shares withheld to meet statutory income tax withholding requirements are presented as a financing activity in the consolidated statement of cash flows for fiscal 2018 and fiscal 2017, respectively. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued 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. The company early adopted this ASU in the first quarter of fiscal 2018. 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 within new fiscal years 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. As of the end of the second quarter of fiscal 2018, the company was nearing the completion of its assessment of the accounting required under Topic 606 and is completing its documentation of these conclusions. Based on the work completed to date, Sysco does not expect that the implementation of the new standard will have a material effect on the company’s financial statements. The company will continue its assessment and will adopt the standard in the first quarter of fiscal 2019 and expects to use the modified retrospective method. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. 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. Topic 842 currently requires lessees and lessors to 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. |
Basis of Presentation (Tables)
Basis of Presentation (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of reconciliation of cash, cash equivalents and restricted cash | The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Dec. 30, 2017 Dec. 31, 2016 (In thousands) Cash and cash equivalents $ 961,067 $ 847,292 Restricted cash (1) 152,878 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 1,113,945 $ 847,292 (1) Restricted cash as of December 30, 2017 represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, formed in the second quarter of fiscal 2018, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. |
Restrictions on cash and cash equivalents | The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Dec. 30, 2017 Dec. 31, 2016 (In thousands) Cash and cash equivalents $ 961,067 $ 847,292 Restricted cash (1) 152,878 — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 1,113,945 $ 847,292 (1) Restricted cash as of December 30, 2017 represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, formed in the second quarter of fiscal 2018, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in the consolidated balance sheet as of December 30, 2017 . |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value table | The following tables present the company’s assets measured at fair value on a recurring basis as of December 30, 2017 , July 1, 2017 and December 31, 2016 : Assets Measured at Fair Value as of Dec. 30, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 241,071 $ 43,191 $ — $ 284,262 Other assets 145,734 7,143 152,877 Total assets at fair value $ 386,805 $ 50,334 $ — $ 437,139 Assets 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 Total assets at fair value $ 238,954 $ 49,430 $ — $ 288,384 Assets Measured at Fair Value as of Dec. 31, 2016 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash and cash equivalents Cash equivalents $ 11,500 $ 43,270 $ — $ 54,770 Total assets at fair value $ 11,500 $ 43,270 $ — $ 54,770 |
Derivative Financial Instrume24
Derivative Financial Instruments (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of outstanding swap agreements | Details of outstanding hedging instruments as of December 30, 2017 are below: Maturity Date of the Hedging Instrument Currency / Unit of Measure Notional Value (In millions) Hedging of interest rate risk February 2018 U.S. Dollar 500 April 2019 U.S. Dollar 500 October 2020 U.S. Dollar 750 July 2021 U.S. Dollar 500 Hedging of foreign currency risk (1) July 2021 British Pound Sterling 234 August 2021 British Pound Sterling 466 June 2023 Euro 500 Hedging of fuel risk Various (January 2018 to November 2018) Gallons 44 (1) Foreign currency forward contracts used to hedge against foreign exchange exposures related to inventory purchases are not material to Sysco’s overall hedging portfolio. |
Derivatives balance sheet location table | The location and carrying amount of hedged liabilities in the consolidated balance sheet as of December 30, 2017 are as follows: Dec. 30, 2017 Dec. 30, 2017 Carrying Amount of Hedged Assets (Liabilities) Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) (In thousands) Balance sheet location: Current maturities of long-term debt $ (499,960 ) $ — Long-term debt (1,747,194 ) 18,282 The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of December 30, 2017 , July 1, 2017 and December 31, 2016 are as follows: Derivative Fair Value Balance Sheet location Dec. 30, 2017 Jul. 1, 2017 Dec. 31, 2016 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ 118 $ 707 $ — Interest rate swaps Other assets — — 1,149 Interest rate swaps Other long-term liabilities 33,003 21,390 25,391 Cash Flow Hedges: Fuel swaps Other current assets $ 13,678 $ 717 $ 3,950 Foreign currency forwards Other current assets 555 — — Cross currency swaps Other assets — — 9,027 Fuel swaps Other current liabilities — 6,320 — Foreign currency forwards Other current liabilities 351 154 1,048 Cross currency swaps Other long-term liabilities 21,310 5,816 — Net Investment Hedges: Foreign currency swaps Other assets $ 7,822 $ — $ 28,395 Foreign currency swaps Other long-term liabilities 48,087 12,308 15,915 Foreign denominated debt Long-term debt 600,050 571,450 525,950 |
Schedule of location and effect of derivative instruments and related hedged items | The location and amount of gains or losses recognized in the consolidated results of operations for fair value and cash flow hedging relationships for each of the periods, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 11,712,104 $ 2,167,104 $ 85,986 Gain or (loss) on fair value hedging relationships: Interest rate swaps: Hedged items (1) $ — $ — $ (7,515 ) Derivatives designated as hedging instruments — — (9,942 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 1,814 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 525 $ — $ — Interest rate swaps: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (2,873 ) (1) The hedged total includes interest expense of $17,078 and change in fair value of debt of $9,563 . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. 26-Week Period Ended Dec. 30, 2017 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 23,568,860 $ 4,337,680 $ 166,870 Gain or (loss) on fair value hedging relationships: Interest contracts: Hedged items (1) $ — $ — $ (22,745 ) Derivatives designated as hedging instruments — — (10,989 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 1,658 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 834 $ — $ — Interest contracts: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (5,746 ) (1) The hedged total includes interest expense of $34,156 and change in fair value of debt of $11,411 . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 13-week period ending December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Location of (Gain) or Loss (1) Amount of (Gain) or Loss (In thousands) Fair Value Hedge Relationships: Interest rate swap agreements (1) Interest expense $ 379 (1) The effect of derivative instruments and related hedged items that are recorded in other comprehensive income (loss) are disclosed in Note 9, “Other Comprehensive Income.” The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 26-week period ending December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Location of (Gain) or Loss (1) Amount of (Gain) or Loss (In thousands) Fair Value Hedge Relationships: Interest rate swap agreements (1) Interest expense $ (422 ) (1) The effect of derivative instruments and related hedged items that are recorded in other comprehensive income (loss) are disclosed in Note 9, “Other Comprehensive Income.” |
Schedule of location and effect of derivatives not designated as hedging instruments | The location and effect of derivatives not designated as hedging instruments on the consolidated results of operations for the 13-week period ended December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not designated as hedging instruments: (In thousands) Foreign currency contracts Other expense (income) $ (2,516 ) The location and effect of derivatives not designated as hedging instruments on the consolidated results of operations for the 26-week period ended December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Location of Gain or (Loss) Recognized in Income on Derivative Amount of Gain or (Loss) Recognized in Income on Derivatives Derivatives not designated as hedging instruments: (In thousands) Foreign currency contracts Other expense (income) $ (2,280 ) |
Schedule of location and effect of fair value and cash flow hedge accounting | The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week period ended December 30, 2017, presented on a pretax basis, are as follows: 13-Week Period Ended Dec. 30, 2017 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 8,505 Operating income $ 1,814 Foreign currency contracts 6,331 Cost of goods sold 525 Total $ 14,836 $ 2,339 Derivatives in net investment hedging relationships: Foreign currency contracts $ (12,063 ) Other expense (income) $ — Foreign denominated debt (9,450 ) Other expense (income) — Total $ (21,513 ) $ — The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 26-week period ended December 30, 2017, presented on a pretax basis, are as follows: 26-Week Period Ended Dec. 30, 2017 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 19,706 Operating income $ 1,658 Foreign currency contracts (15,462 ) Cost of goods sold 834 Total $ 4,244 $ 2,492 Derivatives in net investment hedging relationships: Foreign currency contracts $ (27,957 ) Other expense (income) $ — Foreign denominated debt (28,600 ) Other expense (income) — Total $ (56,557 ) $ — |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 6 Months Ended |
Dec. 30, 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: 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 (In thousands, except for share and per share data) (In thousands, except for share Numerator: Net earnings $ 284,113 $ 275,167 $ 651,753 $ 599,054 Denominator: Weighted-average basic shares outstanding 521,284,182 545,132,762 524,286,931 550,285,268 Dilutive effect of share-based awards 5,965,405 5,239,305 5,869,579 5,377,805 Weighted-average diluted shares outstanding 527,249,587 550,372,067 530,156,510 555,663,073 Basic earnings per share $ 0.55 $ 0.50 $ 1.24 $ 1.09 Diluted earnings per share $ 0.54 $ 0.50 $ 1.23 $ 1.08 |
Other Comprehensive Income (Tab
Other Comprehensive Income (Tables) | 6 Months Ended |
Dec. 30, 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: 13-Week Period Ended Dec. 30, 2017 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 2,409 $ 602 $ 1,807 Amortization of actuarial loss (gain), net Operating expenses 8,761 2,190 6,571 Total reclassification adjustments 11,170 2,792 8,378 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A 19,254 — 19,254 Hedging instruments: Other comprehensive income before reclassification adjustments: Change in cash flow hedges N/A 2,944 2,027 917 Change in net investment hedges N/A (6,543 ) (2,390 ) (4,153 ) Total other comprehensive income before reclassification adjustments (3,599 ) (363 ) (3,236 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 2,873 718 2,155 Total other comprehensive income $ 29,698 $ 3,147 $ 26,551 13-Week Period Ended Dec. 31, 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 $ 2,844 $ 1,092 $ 1,752 Amortization of actuarial loss (gain), net Operating expenses 9,749 3,931 5,818 Total reclassification adjustments 12,593 5,023 7,570 Foreign currency translation: Other comprehensive income before Foreign currency translation adjustment N/A (202,195 ) — (202,195 ) Hedging instruments: Other comprehensive income before reclassification adjustments: Change in cash flow hedges Interest expense 12,058 4,185 7,873 Change in net investment hedges N/A 55,445 18,119 37,326 Total other comprehensive income before reclassification adjustments 67,503 22,304 45,199 Reclassification adjustments: Amortization of cash flow hedges Interest expense 2,873 1,103 1,770 Total other comprehensive income $ (119,226 ) $ 28,430 $ (147,656 ) 26-Week Period Ended Dec. 30, 2017 Location of Expense (Income) Recognized in Net Earnings Before Tax Amount Tax Net of Tax Amount (In thousands) Pension and other postretirement benefit plans: Reclassification adjustments: Amortization of prior service cost Operating expenses $ 4,818 $ 1,527 $ 3,291 Amortization of actuarial loss (gain), net Operating expenses 17,522 5,554 11,968 Total reclassification adjustments 22,340 7,081 15,259 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A 140,584 — 140,584 Hedging instruments: Other comprehensive income before Change in cash flow hedges N/A 6,350 3,232 3,118 Change in net investment hedge N/A (29,919 ) (13,741 ) (16,177 ) Change in fuel hedge N/A — — Total other comprehensive income before reclassification adjustments (23,569 ) (10,509 ) (13,059 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 5,746 1,821 3,925 Total other comprehensive income $ 145,101 $ (1,607 ) $ 146,709 26-Week Period Ended Dec. 31, 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 $ 5,688 $ 2,184 $ 3,504 Amortization of actuarial loss (gain), net Operating expenses 23,208 7,862 15,346 Total reclassification adjustments 28,896 10,046 18,850 Foreign currency translation: Other comprehensive income before reclassification adjustments: Foreign currency translation adjustment N/A (279,683 ) — (279,683 ) Hedging instruments: Other comprehensive income before Change in cash flow hedges Interest expense 11,739 4,185 7,554 Change in net investment hedge N/A 43,380 18,119 25,261 Total other comprehensive income before reclassification adjustments 55,119 22,304 32,815 Reclassification adjustments: Amortization of cash flow hedges Interest expense 5,746 2,206 3,540 Total other comprehensive income $ (189,922 ) $ 34,556 $ (224,478 ) |
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: 26-Week Period Ended Dec. 30, 2017 Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, Total (In thousands) Balance as of Jul. 1, 2017 $ (974,232 ) $ (148,056 ) $ (140,449 ) $ (1,262,737 ) Equity adjustment from foreign currency translation — 140,584 140,584 Amortization of cash flow hedges — — 3,925 3,925 Change in net investment hedges — — (16,177 ) (16,177 ) Change in cash flow hedge — — 3,118 3,118 Amortization of unrecognized prior service cost 3,291 — — 3,291 Amortization of unrecognized net actuarial losses 11,968 — — 11,968 Balance as of Dec. 30, 2017 $ (958,973 ) $ (7,472 ) $ (149,583 ) $ (1,116,028 ) 26-Week Period Ended Dec. 31, 2016 Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, Total (In thousands) Balance as of Jul. 2, 2016 $ (1,104,484 ) $ (136,813 ) $ (116,821 ) $ (1,358,118 ) Equity adjustment from foreign currency translation — (279,683 ) (279,683 ) Amortization of cash flow hedges — — 3,540 3,540 Change in cash flow hedges — — 7,554 7,554 Change in net investment hedges — — 25,261 25,261 Amortization of unrecognized prior service cost 3,504 — — 3,504 Amortization of unrecognized net actuarial losses 15,346 — — 15,346 Balance as of Dec. 31, 2016 $ (1,085,634 ) $ (416,496 ) $ (80,466 ) $ (1,582,596 ) |
Business Segment Information (T
Business Segment Information (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Segment Reporting [Abstract] | |
Business segment table | The following tables set forth certain financial information for Sysco’s business segments. 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 Sales: (In thousands) (In thousands) U.S. Foodservice Operations $ 9,681,225 $ 9,085,565 $ 19,530,167 $ 18,566,681 International Foodservice Operations 2,869,043 2,625,949 5,772,298 5,354,310 SYGMA 1,633,145 1,520,182 3,273,816 3,024,874 Other 228,077 225,572 485,633 480,057 Total $ 14,411,490 $ 13,457,268 $ 29,061,914 $ 27,425,922 13-Week Period Ended 26-Week Period Ended Dec. 30, 2017 Dec. 31, 2016 Dec. 30, 2017 Dec. 31, 2016 Operating income: (In thousands) (In thousands) U.S. Foodservice Operations $ 706,375 $ 681,321 $ 1,487,244 $ 1,426,552 International Foodservice Operations 52,438 84,814 129,084 164,249 SYGMA 3,353 3,155 8,198 8,062 Other 3,222 3,793 7,238 11,794 Total segments 765,388 773,083 1,631,764 1,610,657 Corporate (233,106 ) (280,666 ) (476,390 ) (551,407 ) Total operating income 532,282 492,417 1,155,374 1,059,250 Interest expense 85,986 72,231 166,870 145,854 Other expense (income), net (5,432 ) (2,320 ) (9,680 ) (9,536 ) Earnings before income taxes $ 451,728 $ 422,506 $ 998,184 $ 922,932 Dec. 30, 2017 Jul. 1, 2017 Dec. 31, 2016 Assets: (In thousands) U.S. Foodservice Operations $ 6,811,901 $ 6,675,543 $ 6,791,846 International Foodservice Operations 6,662,574 6,433,815 6,143,372 SYGMA 641,786 625,653 603,167 Other 756,165 448,885 438,196 Total segments 14,872,426 14,183,896 13,976,581 Corporate 3,346,944 3,572,759 3,653,485 Total $ 18,219,370 $ 17,756,655 $ 17,630,066 |
Supplemental Guarantor Inform28
Supplemental Guarantor Information - Subsidiary Guarantees (Tables) | 6 Months Ended |
Dec. 30, 2017 | |
Guarantees [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 (certain 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 Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 189,553 $ 3,803,349 $ 4,279,266 $ — $ 8,272,168 Intercompany receivables 2,945,188 1,276,341 — (4,221,529 ) — Investment in subsidiaries 7,623,839 — — (7,623,839 ) — Plant and equipment, net 262,790 2,018,365 2,085,137 — 4,366,292 Other assets 965,800 55,820 4,559,290 — 5,580,910 Total assets $ 11,987,170 $ 7,153,875 $ 10,923,693 $ (11,845,368 ) $ 18,219,370 Current liabilities $ 540,008 $ 3,781,141 $ 1,661,821 $ — $ 5,982,970 Intercompany payables — — 4,221,529 (4,221,529 ) — Long-term debt 8,239,844 6,995 65,650 — 8,312,489 Other liabilities 938,716 87,230 595,839 — 1,621,785 Noncontrolling interest — — 33,524 — 33,524 Shareholders’ equity 2,268,602 3,278,509 4,345,330 (7,623,839 ) 2,268,602 Total liabilities and shareholders’ equity $ 11,987,170 $ 7,153,875 $ 10,923,693 $ (11,845,368 ) $ 18,219,370 Condensed Consolidating Balance Sheet July 1, 2017 Sysco Certain 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 151,743 516,126 4,678,046 — 5,345,915 Total assets $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Current liabilities $ 650,899 $ 3,521,661 $ 1,923,326 $ — $ 6,095,886 Intercompany payables — 366,802 4,077,233 (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 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Condensed Consolidating Balance Sheet Dec. 31, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 137,816 $ 4,050,928 $ 3,822,462 $ — $ 8,011,206 Intercompany receivables 2,851,475 — — (2,851,475 ) — Investment in subsidiaries 8,168,683 — — (8,168,683 ) — Plant and equipment, net 364,716 2,023,350 1,943,063 — 4,331,129 Other assets 408,475 604,424 4,274,832 — 5,287,731 Total assets $ 11,931,165 $ 6,678,702 $ 10,040,357 $ (11,020,158 ) $ 17,630,066 Current liabilities $ 286,277 $ 2,307,139 $ 2,458,870 $ — $ 5,052,286 Intercompany payables — 35,463 2,816,012 (2,851,475 ) — Long-term debt 8,056,499 6,904 250,248 — 8,313,651 Other liabilities 1,112,350 163,640 433,195 — 1,709,185 Noncontrolling interest — — 78,905 — 78,905 Shareholders’ equity 2,476,039 4,165,556 4,003,127 (8,168,683 ) 2,476,039 Total liabilities and shareholders’ equity $ 11,931,165 $ 6,678,702 $ 10,040,357 $ (11,020,158 ) $ 17,630,066 |
Condensed consolidating statement of comprehensive income table | Condensed Consolidating Statement of Comprehensive Income For the 13-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 8,754,170 $ 6,169,238 $ (511,918 ) $ 14,411,490 Cost of sales — 7,102,287 5,121,735 (511,918 ) 11,712,104 Gross profit — 1,651,883 1,047,503 — 2,699,386 Operating expenses 198,800 994,646 973,658 — 2,167,104 Operating income (loss) (198,800 ) 657,237 73,845 — 532,282 Interest expense (income) (1) 108,768 (27,955 ) 5,173 — 85,986 Other expense (income), net (5,030 ) (1,137 ) 735 — (5,432 ) Earnings (losses) before income taxes (302,538 ) 686,329 67,937 — 451,728 Income tax (benefit) provision (120,313 ) 262,820 25,108 — 167,615 Equity in earnings of subsidiaries 466,338 — — (466,338 ) — Net earnings 284,113 423,509 42,829 (466,338 ) 284,113 Other comprehensive income (loss) 26,551 — 19,254 (19,254 ) 26,551 Comprehensive income $ 310,664 $ 423,509 $ 62,083 $ (485,592 ) $ 310,664 (1) Interest expense (income) includes $28.0 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the second quarter ended December 30, 2017 . 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 Dec. 31, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 8,268,127 $ 7,167,072 $ (1,977,931 ) $ 13,457,268 Cost of sales — 6,676,641 6,186,695 (1,977,931 ) 10,885,405 Gross profit — 1,591,486 980,377 — 2,571,863 Operating expenses 239,292 956,196 883,958 — 2,079,446 Operating income (loss) (239,292 ) 635,290 96,419 — 492,417 Interest expense (income) (1) 100,947 (33,610 ) 4,894 — 72,231 Other expense (income), net (5,295 ) (729 ) 3,704 — (2,320 ) Earnings (losses) before income taxes (334,944 ) 669,629 87,821 — 422,506 Income tax (benefit) provision (116,996 ) 233,631 30,704 — 147,339 Equity in earnings of subsidiaries 493,115 — — (493,115 ) — Net earnings 275,167 435,998 57,117 (493,115 ) 275,167 Other comprehensive income (loss) (147,656 ) — (190,130 ) 190,130 (147,656 ) Comprehensive income $ 127,511 $ 435,998 $ (133,013 ) $ (302,985 ) $ 127,511 (1) Interest expense (income) includes $33.6 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the second quarter ended December 31, 2016 . 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 26-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) Sales $ — $ 17,775,826 $ 12,289,551 $ (1,003,463 ) $ 29,061,914 Cost of sales — 14,377,711 10,194,612 (1,003,463 ) 23,568,860 Gross profit — 3,398,115 2,094,939 — 5,493,054 Operating expenses 396,664 2,002,006 1,939,010 — 4,337,680 Operating income (loss) (396,664 ) 1,396,109 155,929 — 1,155,374 Interest expense (income) (1) 207,764 (51,305 ) 10,411 — 166,870 Other expense (income), net (8,645 ) (1,559 ) 524 — (9,680 ) Earnings (losses) before income taxes (595,783 ) 1,448,973 144,994 — 998,184 Income tax (benefit) provision (216,273 ) 512,383 50,321 — 346,431 Equity in earnings of subsidiaries 1,031,263 — — (1,031,263 ) — Net earnings 651,753 936,590 94,673 (1,031,263 ) 651,753 Other comprehensive income (loss) 146,709 — 140,583 (140,583 ) 146,709 Comprehensive income $ 798,462 $ 936,590 $ 235,256 $ (1,171,846 ) $ 798,462 (1) Interest expense (income) includes $51.3 million of intercompany interest income, net, for certain of 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 Certain 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 certain of 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 26-Week Period Ended Dec. 31, 2016 Sysco Certain U.S. Other Non-Guarantor Subsidiaries Eliminations Consolidated (In thousands) Sales $ — $ 16,974,279 $ 12,874,491 $ (2,422,848 ) $ 27,425,922 Cost of sales — 13,689,355 10,895,633 (2,422,848 ) 22,162,140 Gross profit — 3,284,924 1,978,858 — 5,263,782 Operating expenses 457,195 1,939,269 1,808,068 — 4,204,532 Operating income (loss) (457,195 ) 1,345,655 170,790 — 1,059,250 Interest expense (income) (1) 191,105 (54,820 ) 9,569 — 145,854 Other expense (income), net (20,186 ) (969 ) 11,619 — (9,536 ) Earnings (losses) before income taxes (628,114 ) 1,401,444 149,602 — 922,932 Income tax (benefit) provision (220,420 ) 491,799 52,499 — 323,878 Equity in earnings of subsidiaries 1,006,748 — — (1,006,748 ) — Net earnings 599,054 909,645 97,103 (1,006,748 ) 599,054 Other comprehensive income (loss) (224,478 ) — (279,683 ) 279,683 (224,478 ) Comprehensive income $ 374,576 $ 909,645 $ (182,580 ) $ (727,065 ) $ 374,576 (1) Interest expense (income) includes $54.8 million of intercompany interest income, net, for certain of 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 table | Condensed Consolidating Cash Flows For the 26-Week Period Ended Dec. 30, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 252,770 $ 195,650 $ 484,784 $ — $ 933,204 Investing activities (104,914 ) (112,513 ) (332,538 ) 147,622 (402,343 ) Financing activities (159,309 ) (3,890 ) 893 (147,622 ) (309,928 ) Effect of exchange rates on cash — — 23,510 — 23,510 Net increase (decrease) in cash and cash equivalents (11,453 ) 79,247 176,649 — 244,443 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 $ 100,123 $ 98,035 $ 915,787 $ — $ 1,113,945 Condensed Consolidating Cash Flows For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Eliminations (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,535,775 $ 3,023,400 $ 658,229 $ (2,978,000 ) $ 2,239,404 Investing activities (3,274,566 ) (261,330 ) (175,565 ) 127,000 (3,584,461 ) Financing activities (1,526,045 ) (2,777,661 ) (229,931 ) 2,851,000 (1,682,637 ) 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 26-Week Period Ended Dec. 31, 2016 Sysco Certain U.S. Other Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 292,547 $ 143,092 $ 203,762 $ 639,401 Investing activities (3,127,225 ) (102,923 ) 45,634 (3,184,514 ) Financing activities (430,216 ) (17,815 ) (68,251 ) (516,282 ) Effect of exchange rates on cash — — (10,613 ) (10,613 ) Net increase (decrease) in cash and cash equivalents (3,264,894 ) 22,354 170,532 (3,072,008 ) 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 $ 111,518 $ 56,733 $ 679,041 $ 847,292 |
Basis of Presentation (Details)
Basis of Presentation (Details) - USD ($) | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 | Jul. 02, 2016 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 961,067,000 | $ 869,502,000 | $ 847,292,000 | |
Restricted cash | 152,878,000 | 0 | ||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows | $ 1,113,945,000 | $ 869,502,000 | $ 847,292,000 | $ 3,919,300,000 |
Changes in Accounting (Details)
Changes in Accounting (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |
Dec. 30, 2017 | Dec. 30, 2017 | Dec. 31, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Excess tax benefits of equity-based compensation | $ 14,800 | $ 30,800 | |
Cash paid for shares withheld to cover taxes | 9,485 | $ 13,298 | |
Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cash paid for shares withheld to cover taxes | $ 9,500 | $ 13,300 |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Thousands | Jul. 05, 2016 | Dec. 30, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | |||
Acquisition of businesses, net of cash acquired | $ 147,644 | $ 2,910,461 | |
Contingent consideration maximum number of years (in years) | 3 years | ||
Potential cash payout for contingent consideration arrangements | $ 20,200 | ||
Amount of recorded earnout liabilities | $ 9,000 | ||
Brakes Group | |||
Business Acquisition [Line Items] | |||
Acquisition of businesses, net of cash acquired | $ 2,900,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Carrying value of total debt | $ 8,800,000 | ||
Not Designated as Hedging Instrument | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Fair value of total debt | 9,200,000 | $ 8,600,000 | $ 8,600,000 |
Carrying value of total debt | 8,900,000 | 8,200,000 | 8,300,000 |
Recurring Fair Value Measurements | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 284,262 | 288,384 | 54,770 |
Other assets | 152,877 | ||
Total assets at fair value | 437,139 | 288,384 | 54,770 |
Recurring Fair Value Measurements | Level 1 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 241,071 | 238,954 | 11,500 |
Other assets | 145,734 | ||
Total assets at fair value | 386,805 | 238,954 | 11,500 |
Recurring Fair Value Measurements | Level 2 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 43,191 | 49,430 | 43,270 |
Other assets | 7,143 | ||
Total assets at fair value | 50,334 | 49,430 | 43,270 |
Recurring Fair Value Measurements | Level 3 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash equivalents | 0 | 0 | 0 |
Other assets | |||
Total assets at fair value | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume33
Derivative Financial Instruments - Hedging of Debt Portfolio (Details) - 6 months ended Dec. 30, 2017 € in Millions, £ in Millions, gal in Millions, $ in Millions | GBP (£)gal | EUR (€) | USD ($) |
Interest rate swap February 2018 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | $ 500 | ||
Interest rate swap, April 2019 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | 500 | ||
Interest rate swap October 2020 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | 750 | ||
Interest rate swap July 2021 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | $ 500 | ||
Hedging of foreign currency risk, July 2021 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | £ | £ 234 | ||
Hedging of foreign currency risk, August 2021 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | £ | £ 466 | ||
Hedging of foreign currency risk, June 2023 | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional Value | € | € 500 | ||
Fuel swaps | |||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |||
Notional amount (in gallons) | gal | 44 |
Derivative Financial Instrume34
Derivative Financial Instruments - Additional Information (Details) - Hedging Instrument - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 |
Fair Value Hedging | Interest rate swap agreements | Other current assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | $ 118 | $ 707 | $ 0 |
Fair Value Hedging | Interest rate swap agreements | Other assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | 0 | 0 | 1,149 |
Fair Value Hedging | Interest rate swap agreements | Other long-term liabilities | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | 33,003 | 21,390 | 25,391 |
Cash Flow Hedging | Fuel swaps | Other current assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | 13,678 | 717 | 3,950 |
Cash Flow Hedging | Fuel swaps | Other current liabilities | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | 0 | 6,320 | 0 |
Cash Flow Hedging | Foreign currency forwards | Other current assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | 555 | 0 | 0 |
Cash Flow Hedging | Foreign currency forwards | Other current liabilities | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | 351 | 154 | 1,048 |
Cash Flow Hedging | Cross-currency swaps | Other assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | 0 | 0 | 9,027 |
Cash Flow Hedging | Cross-currency swaps | Other long-term liabilities | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | 21,310 | 5,816 | 0 |
Net Investment Hedging | Foreign currency swaps | Other assets | |||
Derivative [Line Items] | |||
Fair value of derivative assets | 7,822 | 0 | 28,395 |
Net Investment Hedging | Foreign currency swaps | Other long-term liabilities | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | 48,087 | 12,308 | 15,915 |
Net Investment Hedging | Foreign denominated debt | Long-term debt | |||
Derivative [Line Items] | |||
Fair value of derivative liabilities | $ 600,050 | $ 571,450 | $ 525,950 |
Derivative Financial Instrume35
Derivative Financial Instruments - Location of Gain (Loss) on Derivatives (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Derivative [Line Items] | |||||
Cost of sales | $ 11,712,104 | $ 10,885,405 | $ 23,568,860 | $ 22,162,140 | $ 44,813,632 |
Operating expenses | 2,167,104 | 2,079,446 | 4,337,680 | 4,204,532 | 8,504,336 |
Interest expense | 85,986 | $ 72,231 | 166,870 | $ 145,854 | $ 302,878 |
Unrealized gain (loss) on hedged item in fair value hedge, interest expense | 17,078 | 34,156 | |||
Unrealized gain (loss) on hedged item in fair value hedge, change in fair value of debt | 9,563 | 11,411 | |||
Interest rate swaps | Interest expense | |||||
Derivative [Line Items] | |||||
Gain (loss) on fair value hedging relationship, designated as hedging instruments | (379) | 422 | |||
Hedging Instrument | Fair Value Hedging | Interest rate swaps | Cost of Goods Sold | |||||
Derivative [Line Items] | |||||
Gain (loss) on fair value hedging relationship, hedged items | 0 | 0 | |||
Gain (loss) on fair value hedging relationship, designated as hedging instruments | 0 | 0 | |||
Hedging Instrument | Fair Value Hedging | Interest rate swaps | Interest expense | |||||
Derivative [Line Items] | |||||
Gain (loss) on fair value hedging relationship, hedged items | (7,515) | (22,745) | |||
Gain (loss) on fair value hedging relationship, designated as hedging instruments | (9,942) | (10,989) | |||
Hedging Instrument | Fair Value Hedging | Interest rate swaps | Other expense (income) | |||||
Derivative [Line Items] | |||||
Gain (loss) on fair value hedging relationship, hedged items | 0 | 0 | |||
Gain (loss) on fair value hedging relationship, designated as hedging instruments | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 2,339 | 2,492 | |||
Hedging Instrument | Cash Flow Hedging | Interest rate swaps | Cost of Goods Sold | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | Interest rate swaps | Interest expense | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (2,873) | (5,746) | |||
Hedging Instrument | Cash Flow Hedging | Interest rate swaps | Other expense (income) | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | Fuel swaps | Cost of Goods Sold | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | Fuel swaps | Interest expense | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | Fuel swaps | Other expense (income) | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 1,814 | 1,658 | |||
Hedging Instrument | Cash Flow Hedging | Foreign denominated debt | Cost of Goods Sold | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 525 | 834 | |||
Hedging Instrument | Cash Flow Hedging | Foreign denominated debt | Interest expense | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 | |||
Hedging Instrument | Cash Flow Hedging | Foreign denominated debt | Other expense (income) | |||||
Derivative [Line Items] | |||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 0 | $ 0 |
Derivative Financial Instrume36
Derivative Financial Instruments - Non-designated Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Dec. 30, 2017 | Dec. 30, 2017 | |
Not Designated as Hedging Instrument | Foreign currency contracts | Other expense (income) | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Income on Derivatives | $ (2,516) | $ (2,280) |
Derivative Financial Instrume37
Derivative Financial Instruments - Cash Flow Hedges (Details) - Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Dec. 30, 2017 | Dec. 30, 2017 | |
Cash Flow Hedging | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | $ 14,836 | $ 4,244 |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 2,339 | 2,492 |
Cash Flow Hedging | Fuel swaps | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | 8,505 | 19,706 |
Cash Flow Hedging | Fuel swaps | Operating income | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 1,814 | 1,658 |
Cash Flow Hedging | Fuel swaps | Other expense (income) | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 1,814 | 1,658 |
Cash Flow Hedging | Foreign currency swaps | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (15,462) | |
Cash Flow Hedging | Foreign currency swaps | Cost of goods sold | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 834 | |
Cash Flow Hedging | Foreign denominated debt | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | 6,331 | |
Cash Flow Hedging | Foreign denominated debt | Cost of goods sold | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 525 | |
Cash Flow Hedging | Foreign denominated debt | Other expense (income) | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 |
Net Investment Hedging | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (21,513) | (56,557) |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 |
Net Investment Hedging | Foreign currency swaps | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (12,063) | (27,957) |
Net Investment Hedging | Foreign currency swaps | Other expense (income) | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | 0 |
Net Investment Hedging | Foreign denominated debt | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (9,450) | (28,600) |
Net Investment Hedging | Foreign denominated debt | Other expense (income) | ||
Derivative [Line Items] | ||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 0 | $ 0 |
Derivative Financial Instrume38
Derivative Financial Instruments - Location of Hedged Liabilities (Details) $ in Thousands | Dec. 30, 2017USD ($) |
Current maturities of long-term debt | |
Derivative [Line Items] | |
Carrying Amount of Hedged Assets (Liabilities) | $ (499,960) |
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | 0 |
Long-term debt | |
Derivative [Line Items] | |
Carrying Amount of Hedged Assets (Liabilities) | (1,747,194) |
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | 18,282 |
Interest rate swaps | |
Derivative [Line Items] | |
Notional Value | $ 2,300,000 |
Derivative Financial Instrume39
Derivative Financial Instruments - Fair Value Hedge (Gain) Loss Recognized (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Dec. 30, 2017 | Dec. 30, 2017 | |
Interest rate swap agreements | Interest expense | ||
Derivative [Line Items] | ||
Amount of (Gain) or Loss Recognized | $ 379 | $ (422) |
Debt (Details)
Debt (Details) | 6 Months Ended |
Dec. 30, 2017USD ($) | |
Debt [Line Items] | |
Maximum board-authorized aggregate commercial paper limit | $ 2,000,000,000 |
Carrying value of total debt | 8,800,000,000 |
Aggregate outstanding commercial paper and short-term debt minimum amount outstanding during period | 254,500,000 |
Maximum amount outstanding | 1,200,000,000 |
Commercial Paper | |
Debt [Line Items] | |
Carrying value of total debt | $ 750,000,000 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Numerator: | |||||
Net earnings | $ 284,113 | $ 275,167 | $ 651,753 | $ 599,054 | $ 1,142,503 |
Denominator: | |||||
Weighted-average basic shares outstanding (in shares) | 521,284,182 | 545,132,762 | 524,286,931 | 550,285,268 | |
Dilutive effect of share-based awards (in shares) | 5,965,405 | 5,239,305 | 5,869,579 | 5,377,805 | |
Weighted-average diluted shares outstanding (in shares) | 527,249,587 | 550,372,067 | 530,156,510 | 555,663,073 | |
Basic earnings per share (in dollars per share) | $ 0.55 | $ 0.50 | $ 1.24 | $ 1.09 | |
Diluted earnings per share (in dollars per share) | $ 0.54 | $ 0.50 | $ 1.23 | $ 1.08 | |
Employee Stock Option | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||
Anti-dilutive securities excluded (in shares) | 2,749,000 | 4,900,000 | 4,594,000 | 3,500,000 |
Other Comprehensive Income - Co
Other Comprehensive Income - Components of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||||
Comprehensive income | $ 310,664 | $ 127,511 | $ 798,462 | $ 374,576 | $ 1,237,884 |
Before Tax Amount | |||||
Total other comprehensive income | 29,698 | (119,226) | 145,101 | (189,922) | |
Tax | |||||
Total other comprehensive income | 3,147 | 28,430 | (1,607) | 34,556 | |
Net of Tax Amount | |||||
Total other comprehensive income (loss) | 26,551 | (147,656) | 146,709 | (224,478) | $ 95,381 |
Pension and other postretirement benefit plans: | Operating expenses | |||||
Before Tax Amount | |||||
Reclassification adjustments, before tax | 11,170 | 12,593 | 22,340 | 28,896 | |
Tax | |||||
Amortization of prior service cost | 2,792 | 5,023 | 7,081 | 10,046 | |
Net of Tax Amount | |||||
Amortization of prior service cost | 8,378 | 7,570 | 15,259 | 18,850 | |
Amortization of prior service cost | |||||
Net of Tax Amount | |||||
Amortization of prior service cost | 3,291 | 3,504 | |||
Amortization of prior service cost | Operating expenses | |||||
Before Tax Amount | |||||
Reclassification adjustments, before tax | 2,409 | 2,844 | 4,818 | 5,688 | |
Tax | |||||
Amortization of prior service cost | 602 | 1,092 | 1,527 | 2,184 | |
Net of Tax Amount | |||||
Amortization of prior service cost | 1,807 | 1,752 | 3,291 | 3,504 | |
Amortization of actuarial loss (gain), net | |||||
Net of Tax Amount | |||||
Amortization of prior service cost | 11,968 | 15,346 | |||
Amortization of actuarial loss (gain), net | Operating expenses | |||||
Before Tax Amount | |||||
Reclassification adjustments, before tax | 8,761 | 9,749 | 17,522 | 23,208 | |
Tax | |||||
Amortization of prior service cost | 2,190 | 3,931 | 5,554 | 7,862 | |
Net of Tax Amount | |||||
Amortization of prior service cost | 6,571 | 5,818 | 11,968 | 15,346 | |
Foreign currency translation: | |||||
Before Tax Amount | |||||
Other comprehensive income before reclassifications, before tax | 19,254 | (202,195) | 140,584 | (279,683) | |
Tax | |||||
Foreign currency translation adjustment | 0 | 0 | 0 | 0 | |
Net of Tax Amount | |||||
Foreign currency translation adjustment | 19,254 | (202,195) | 140,584 | (279,683) | |
Hedging, net of tax | |||||
Before Tax Amount | |||||
Other comprehensive income before reclassifications, before tax | (3,599) | 67,503 | (23,569) | 55,119 | |
Tax | |||||
Foreign currency translation adjustment | (363) | 22,304 | (10,509) | 22,304 | |
Net of Tax Amount | |||||
Foreign currency translation adjustment | (3,236) | 45,199 | (13,059) | 32,815 | |
Amortization of cash flow hedges | |||||
Before Tax Amount | |||||
Other comprehensive income before reclassifications, before tax | 2,944 | 12,058 | 6,350 | 11,739 | |
Tax | |||||
Foreign currency translation adjustment | 2,027 | 4,185 | 3,232 | 4,185 | |
Net of Tax Amount | |||||
Amortization of prior service cost | (3,925) | (3,540) | |||
Foreign currency translation adjustment | 917 | 7,873 | 3,118 | 7,554 | |
Amortization of cash flow hedges | Interest expense | |||||
Before Tax Amount | |||||
Reclassification adjustments, before tax | 2,873 | 2,873 | 5,746 | 5,746 | |
Tax | |||||
Amortization of prior service cost | 718 | 1,103 | 1,821 | 2,206 | |
Net of Tax Amount | |||||
Amortization of prior service cost | 2,155 | 1,770 | 3,925 | 3,540 | |
Change in net investment hedge | |||||
Before Tax Amount | |||||
Other comprehensive income before reclassifications, before tax | (6,543) | 55,445 | (29,919) | 43,380 | |
Tax | |||||
Foreign currency translation adjustment | (2,390) | 18,119 | (13,741) | 18,119 | |
Net of Tax Amount | |||||
Foreign currency translation adjustment | $ (4,153) | $ 37,326 | (16,177) | $ 25,261 | |
Change in fuel hedge | |||||
Before Tax Amount | |||||
Other comprehensive income before reclassifications, before tax | 0 | ||||
Net of Tax Amount | |||||
Foreign currency translation adjustment | $ 0 |
Other Comprehensive Income - Su
Other Comprehensive Income - Summary of Changes in Accumulated Other Comprehensive (Loss) Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance, shareholders' equity | $ 2,381,516 | |||
Ending balance, shareholders' equity | $ 2,268,602 | $ 2,476,039 | 2,268,602 | $ 2,476,039 |
Total | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance, shareholders' equity | (1,262,737) | (1,358,118) | ||
Ending balance, shareholders' equity | (1,116,028) | (1,582,596) | (1,116,028) | (1,582,596) |
Pension and Other Postretirement Benefit Plans, net of tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance, shareholders' equity | (974,232) | (1,104,484) | ||
Ending balance, shareholders' equity | (958,973) | (1,085,634) | (958,973) | (1,085,634) |
Amortization of prior service cost | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification adjustment, net of tax | 3,291 | 3,504 | ||
Amortization of actuarial loss (gain), net | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Reclassification adjustment, net of tax | 11,968 | 15,346 | ||
Foreign Currency Translation | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance, shareholders' equity | (148,056) | (136,813) | ||
Change in cash flow hedges | 19,254 | (202,195) | 140,584 | (279,683) |
Ending balance, shareholders' equity | (7,472) | (416,496) | (7,472) | (416,496) |
Hedging, net of tax | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Beginning balance, shareholders' equity | (140,449) | (116,821) | ||
Change in cash flow hedges | (3,236) | 45,199 | (13,059) | 32,815 |
Ending balance, shareholders' equity | (149,583) | (80,466) | (149,583) | (80,466) |
Amortization of cash flow hedges | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Change in cash flow hedges | 917 | 7,873 | 3,118 | 7,554 |
Reclassification adjustment, net of tax | (3,925) | (3,540) | ||
Change in net investment hedge | ||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | ||||
Change in cash flow hedges | $ (4,153) | $ 37,326 | $ (16,177) | $ 25,261 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Incentive Plans (Details) - USD ($) $ / shares in Units, $ in Thousands | 6 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Options granted (in shares) | 4,042,415 | |
Options granted, weighted average grant date fair value (in dollars per share) | $ 7.08 | |
Share-based compensation expense | $ 51,612 | $ 42,758 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 127,200 | |
Weighted average period of time for unrecognized compensation cost to be recognized (in years) | 2 years 11 days | |
Performance Share Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options granted (in shares) | 867,619 | |
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 51.10 | |
Employees' Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options vested (in shares) | 591,241 | |
Equity instruments other than options vested, weighted average grant date fair value per share (in dollars per share) | $ 7.83 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jun. 30, 2018 | |
Operating Loss Carryforwards [Line Items] | |||||
Reasonable estimate of income tax expense | $ 35.8 | ||||
Provisional income tax expense (benefit) | (64.7) | ||||
Tax benefit attributable to income taxes payable and deferred tax assets (liabilities) | (14.5) | ||||
Transition tax expense (benefit) | 115 | ||||
Transition tax as a result of Tax Cuts and Jobs Act, liability, noncurrent | $ 95 | $ 95 | |||
Effective income tax rate | 37.11% | 34.87% | 34.71% | 35.09% | |
Effective tax rates, net tax expense (benefit) | $ (79.2) | ||||
Excess tax benefits of equity-based compensation and tax law changes in foreign jurisdictions | $ 8.1 | 14.8 | |||
Unrecognized tax benefits | 16.2 | 16.2 | |||
Liability recorded for interest and penalties related to unrecognized tax benefits | $ 11.5 | $ 11.5 | |||
Scenario, Forecast | |||||
Operating Loss Carryforwards [Line Items] | |||||
Blended statutory tax rate | 28.00% |
Business Segment Information (D
Business Segment Information (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017USD ($) | Dec. 31, 2016USD ($) | Dec. 30, 2017USD ($)segment | Dec. 31, 2016USD ($) | Jul. 01, 2017USD ($) | |
Segment Reporting [Abstract] | |||||
Number of reporting segments | segment | 3 | ||||
Segment Reporting Information [Line Items] | |||||
Sales | $ 14,411,490 | $ 13,457,268 | $ 29,061,914 | $ 27,425,922 | $ 55,371,139 |
Operating income: | 532,282 | 492,417 | 1,155,374 | 1,059,250 | 2,053,171 |
Interest expense | 85,986 | 72,231 | 166,870 | 145,854 | 302,878 |
Other expense (income), net | (5,432) | (2,320) | (9,680) | (9,536) | (15,937) |
Earnings before income taxes | 451,728 | 422,506 | 998,184 | 922,932 | 1,766,230 |
Assets | 18,219,370 | 17,630,066 | 18,219,370 | 17,630,066 | 17,756,655 |
Operating Segments | |||||
Segment Reporting Information [Line Items] | |||||
Operating income: | 765,388 | 773,083 | 1,631,764 | 1,610,657 | |
Assets | 14,872,426 | 13,976,581 | 14,872,426 | 13,976,581 | 14,183,896 |
Operating Segments | U.S. Foodservice Operations | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 9,681,225 | 9,085,565 | 19,530,167 | 18,566,681 | |
Operating income: | 706,375 | 681,321 | 1,487,244 | 1,426,552 | |
Assets | 6,811,901 | 6,791,846 | 6,811,901 | 6,791,846 | 6,675,543 |
Operating Segments | International Foodservice Operations | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 2,869,043 | 2,625,949 | 5,772,298 | 5,354,310 | |
Operating income: | 52,438 | 84,814 | 129,084 | 164,249 | |
Assets | 6,662,574 | 6,143,372 | 6,662,574 | 6,143,372 | 6,433,815 |
Operating Segments | SYGMA | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 1,633,145 | 1,520,182 | 3,273,816 | 3,024,874 | |
Operating income: | 3,353 | 3,155 | 8,198 | 8,062 | |
Assets | 641,786 | 603,167 | 641,786 | 603,167 | 625,653 |
Operating Segments | Other | |||||
Segment Reporting Information [Line Items] | |||||
Sales | 228,077 | 225,572 | 485,633 | 480,057 | |
Operating income: | 3,222 | 3,793 | 7,238 | 11,794 | |
Assets | 756,165 | 438,196 | 756,165 | 438,196 | 448,885 |
Corporate | |||||
Segment Reporting Information [Line Items] | |||||
Operating income: | (233,106) | (280,666) | (476,390) | (551,407) | |
Assets | $ 3,346,944 | $ 3,653,485 | $ 3,346,944 | $ 3,653,485 | $ 3,572,759 |
Supplemental Guarantor Inform47
Supplemental Guarantor Information - Subsidiary Guarantees - Narrative (Details) $ in Billions | 6 Months Ended |
Dec. 30, 2017USD ($) | |
Guarantees [Abstract] | |
Carrying value of total debt | $ 8.8 |
Percentage ownership of subsidiary guarantors by parent | 100.00% |
Supplemental Guarantor Inform48
Supplemental Guarantor Information - Subsidiary Guarantees - Balance Sheet (Details) - USD ($) $ in Thousands | Dec. 30, 2017 | Jul. 01, 2017 | Dec. 31, 2016 |
Supplemental Guarantor Information [Line Items] | |||
Current assets | $ 8,272,168 | $ 8,033,438 | $ 8,011,206 |
Intercompany receivables | 0 | 0 | 0 |
Investment in subsidiaries | 0 | 0 | 0 |
Plant and equipment, net | 4,366,292 | 4,377,302 | 4,331,129 |
Other assets | 5,580,910 | 5,345,915 | 5,287,731 |
Total assets | 18,219,370 | 17,756,655 | 17,630,066 |
Current liabilities | 5,982,970 | 6,095,886 | 5,052,286 |
Intercompany payables | 0 | 0 | 0 |
Long-term debt | 8,312,489 | 7,660,877 | 8,313,651 |
Other liabilities | 1,621,785 | 1,535,537 | 1,709,185 |
Noncontrolling interests | 33,524 | 82,839 | 78,905 |
Shareholders’ equity | 2,268,602 | 2,381,516 | 2,476,039 |
Total liabilities and shareholders’ equity | 18,219,370 | 17,756,655 | 17,630,066 |
Reportable Legal Entities | Sysco | |||
Supplemental Guarantor Information [Line Items] | |||
Current assets | 189,553 | 177,495 | 137,816 |
Intercompany receivables | 2,945,188 | 4,444,035 | 2,851,475 |
Investment in subsidiaries | 7,623,839 | 6,451,994 | 8,168,683 |
Plant and equipment, net | 262,790 | 258,527 | 364,716 |
Other assets | 965,800 | 151,743 | 408,475 |
Total assets | 11,987,170 | 11,483,794 | 11,931,165 |
Current liabilities | 540,008 | 650,899 | 286,277 |
Intercompany payables | 0 | 0 | 0 |
Long-term debt | 8,239,844 | 7,588,041 | 8,056,499 |
Other liabilities | 938,716 | 863,338 | 1,112,350 |
Noncontrolling interests | 0 | 0 | 0 |
Shareholders’ equity | 2,268,602 | 2,381,516 | 2,476,039 |
Total liabilities and shareholders’ equity | 11,987,170 | 11,483,794 | 11,931,165 |
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Current assets | 3,803,349 | 3,786,055 | 4,050,928 |
Intercompany receivables | 1,276,341 | 0 | 0 |
Investment in subsidiaries | 0 | 0 | 0 |
Plant and equipment, net | 2,018,365 | 2,039,761 | 2,023,350 |
Other assets | 55,820 | 516,126 | 604,424 |
Total assets | 7,153,875 | 6,341,942 | 6,678,702 |
Current liabilities | 3,781,141 | 3,521,661 | 2,307,139 |
Intercompany payables | 0 | 366,802 | 35,463 |
Long-term debt | 6,995 | 7,776 | 6,904 |
Other liabilities | 87,230 | 103,784 | 163,640 |
Noncontrolling interests | 0 | 0 | 0 |
Shareholders’ equity | 3,278,509 | 2,341,919 | 4,165,556 |
Total liabilities and shareholders’ equity | 7,153,875 | 6,341,942 | 6,678,702 |
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Current assets | 4,279,266 | 4,069,888 | 3,822,462 |
Intercompany receivables | 0 | 0 | 0 |
Investment in subsidiaries | 0 | 0 | 0 |
Plant and equipment, net | 2,085,137 | 2,079,014 | 1,943,063 |
Other assets | 4,559,290 | 4,678,046 | 4,274,832 |
Total assets | 10,923,693 | 10,826,948 | 10,040,357 |
Current liabilities | 1,661,821 | 1,923,326 | 2,458,870 |
Intercompany payables | 4,221,529 | 4,077,233 | 2,816,012 |
Long-term debt | 65,650 | 65,060 | 250,248 |
Other liabilities | 595,839 | 568,415 | 433,195 |
Noncontrolling interests | 33,524 | 82,839 | 78,905 |
Shareholders’ equity | 4,345,330 | 4,110,075 | 4,003,127 |
Total liabilities and shareholders’ equity | 10,923,693 | 10,826,948 | 10,040,357 |
Eliminations | |||
Supplemental Guarantor Information [Line Items] | |||
Current assets | 0 | 0 | 0 |
Intercompany receivables | (4,221,529) | (4,444,035) | (2,851,475) |
Investment in subsidiaries | (7,623,839) | (6,451,994) | (8,168,683) |
Plant and equipment, net | 0 | 0 | 0 |
Other assets | 0 | 0 | 0 |
Total assets | (11,845,368) | (10,896,029) | (11,020,158) |
Current liabilities | 0 | 0 | 0 |
Intercompany payables | (4,221,529) | (4,444,035) | (2,851,475) |
Long-term debt | 0 | 0 | 0 |
Other liabilities | 0 | 0 | 0 |
Noncontrolling interests | 0 | 0 | 0 |
Shareholders’ equity | (7,623,839) | (6,451,994) | (8,168,683) |
Total liabilities and shareholders’ equity | $ (11,845,368) | $ (10,896,029) | $ (11,020,158) |
Supplemental Guarantor Inform49
Supplemental Guarantor Information - Subsidiary Guarantees - Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Dec. 31, 2016 | Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Supplemental Guarantor Information [Line Items] | |||||
Sales | $ 14,411,490 | $ 13,457,268 | $ 29,061,914 | $ 27,425,922 | $ 55,371,139 |
Cost of sales | 11,712,104 | 10,885,405 | 23,568,860 | 22,162,140 | 44,813,632 |
Gross profit | 2,699,386 | 2,571,863 | 5,493,054 | 5,263,782 | 10,557,507 |
Operating expenses | 2,167,104 | 2,079,446 | 4,337,680 | 4,204,532 | 8,504,336 |
Operating income | 532,282 | 492,417 | 1,155,374 | 1,059,250 | 2,053,171 |
Interest expense (income) | 85,986 | 72,231 | 166,870 | 145,854 | 302,878 |
Other expense (income), net | (5,432) | (2,320) | (9,680) | (9,536) | (15,937) |
Earnings before income taxes | 451,728 | 422,506 | 998,184 | 922,932 | 1,766,230 |
Income tax (benefit) provision | 167,615 | 147,339 | 346,431 | 323,878 | 623,727 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 |
Net earnings | 284,113 | 275,167 | 651,753 | 599,054 | 1,142,503 |
Other comprehensive income (loss) | 26,551 | (147,656) | 146,709 | (224,478) | 95,381 |
Comprehensive income | 310,664 | 127,511 | 798,462 | 374,576 | 1,237,884 |
Reportable Legal Entities | Sysco | |||||
Supplemental Guarantor Information [Line Items] | |||||
Sales | 0 | 0 | 0 | 0 | 0 |
Cost of sales | 0 | 0 | 0 | 0 | 0 |
Gross profit | 0 | 0 | 0 | 0 | 0 |
Operating expenses | 198,800 | 239,292 | 396,664 | 457,195 | 931,498 |
Operating income | (198,800) | (239,292) | (396,664) | (457,195) | (931,498) |
Interest expense (income) | 108,768 | 100,947 | 207,764 | 191,105 | 405,030 |
Other expense (income), net | (5,030) | (5,295) | (8,645) | (20,186) | (23,740) |
Earnings before income taxes | (302,538) | (334,944) | (595,783) | (628,114) | (1,312,788) |
Income tax (benefit) provision | (120,313) | (116,996) | (216,273) | (220,420) | (463,598) |
Equity in earnings of subsidiaries | 466,338 | 493,115 | 1,031,263 | 1,006,748 | 1,991,693 |
Net earnings | 284,113 | 275,167 | 651,753 | 599,054 | 1,142,503 |
Other comprehensive income (loss) | 26,551 | (147,656) | 146,709 | (224,478) | 95,381 |
Comprehensive income | 310,664 | 127,511 | 798,462 | 374,576 | 1,237,884 |
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||||
Supplemental Guarantor Information [Line Items] | |||||
Sales | 8,754,170 | 8,268,127 | 17,775,826 | 16,974,279 | 34,325,884 |
Cost of sales | 7,102,287 | 6,676,641 | 14,377,711 | 13,689,355 | 27,690,469 |
Gross profit | 1,651,883 | 1,591,486 | 3,398,115 | 3,284,924 | 6,635,415 |
Operating expenses | 994,646 | 956,196 | 2,002,006 | 1,939,269 | 3,907,829 |
Operating income | 657,237 | 635,290 | 1,396,109 | 1,345,655 | 2,727,586 |
Interest expense (income) | (27,955) | (33,610) | (51,305) | (54,820) | (122,012) |
Other expense (income), net | (1,137) | (729) | (1,559) | (969) | (1,116) |
Earnings before income taxes | 686,329 | 669,629 | 1,448,973 | 1,401,444 | 2,850,714 |
Income tax (benefit) provision | 262,820 | 233,631 | 512,383 | 491,799 | 1,006,703 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 |
Net earnings | 423,509 | 435,998 | 936,590 | 909,645 | 1,844,011 |
Other comprehensive income (loss) | 0 | 0 | 0 | 0 | 0 |
Comprehensive income | 423,509 | 435,998 | 936,590 | 909,645 | 1,844,011 |
Intercompany interest income, net | 28,000 | 33,600 | 51,300 | 54,800 | 135,900 |
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||||
Supplemental Guarantor Information [Line Items] | |||||
Sales | 6,169,238 | 7,167,072 | 12,289,551 | 12,874,491 | 22,862,131 |
Cost of sales | 5,121,735 | 6,186,695 | 10,194,612 | 10,895,633 | 18,940,039 |
Gross profit | 1,047,503 | 980,377 | 2,094,939 | 1,978,858 | 3,922,092 |
Operating expenses | 973,658 | 883,958 | 1,939,010 | 1,808,068 | 3,665,009 |
Operating income | 73,845 | 96,419 | 155,929 | 170,790 | 257,083 |
Interest expense (income) | 5,173 | 4,894 | 10,411 | 9,569 | 19,860 |
Other expense (income), net | 735 | 3,704 | 524 | 11,619 | 8,919 |
Earnings before income taxes | 67,937 | 87,821 | 144,994 | 149,602 | 228,304 |
Income tax (benefit) provision | 25,108 | 30,704 | 50,321 | 52,499 | 80,622 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | 0 | 0 |
Net earnings | 42,829 | 57,117 | 94,673 | 97,103 | 147,682 |
Other comprehensive income (loss) | 19,254 | (190,130) | 140,583 | (279,683) | (9,317) |
Comprehensive income | 62,083 | (133,013) | 235,256 | (182,580) | 138,365 |
Intercompany interest income, net | 0 | 0 | 0 | 0 | 0 |
Eliminations | |||||
Supplemental Guarantor Information [Line Items] | |||||
Sales | (511,918) | (1,977,931) | (1,003,463) | (2,422,848) | (1,816,876) |
Cost of sales | (511,918) | (1,977,931) | (1,003,463) | (2,422,848) | (1,816,876) |
Gross profit | 0 | 0 | 0 | 0 | 0 |
Operating expenses | 0 | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 | 0 |
Interest expense (income) | 0 | 0 | 0 | 0 | 0 |
Other expense (income), net | 0 | 0 | 0 | 0 | 0 |
Earnings before income taxes | 0 | 0 | 0 | 0 | 0 |
Income tax (benefit) provision | 0 | 0 | 0 | 0 | 0 |
Equity in earnings of subsidiaries | (466,338) | (493,115) | (1,031,263) | (1,006,748) | (1,991,693) |
Net earnings | (466,338) | (493,115) | (1,031,263) | (1,006,748) | (1,991,693) |
Other comprehensive income (loss) | (19,254) | 190,130 | (140,583) | 279,683 | 9,317 |
Comprehensive income | $ (485,592) | $ (302,985) | $ (1,171,846) | $ (727,065) | $ (1,982,376) |
Supplemental Guarantor Inform50
Supplemental Guarantor Information - Subsidiary Guarantees - Cash Flows (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended | |
Dec. 30, 2017 | Dec. 31, 2016 | Jul. 01, 2017 | |
Cash flows provided by (used for): | |||
Operating activities | $ 933,204 | $ 639,401 | $ 2,239,404 |
Investing activities | (402,343) | (3,184,514) | (3,584,461) |
Financing activities | (309,928) | (516,282) | (1,682,637) |
Effect of exchange rates on cash and cash equivalents | 23,510 | (10,613) | (22,104) |
Intercompany activity | 0 | ||
Net increase (decrease) in cash and cash equivalents | 244,443 | (3,072,008) | (3,049,798) |
Cash and cash equivalents at beginning of period | 869,502 | 3,919,300 | 3,919,300 |
Cash and cash equivalents at end of period | 1,113,945 | 847,292 | 869,502 |
Reportable Legal Entities | Sysco | |||
Cash flows provided by (used for): | |||
Operating activities | 252,770 | 292,547 | 1,535,775 |
Investing activities | (104,914) | (3,127,225) | (3,274,566) |
Financing activities | (159,309) | (430,216) | (1,526,045) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Intercompany activity | 0 | ||
Net increase (decrease) in cash and cash equivalents | (11,453) | (3,264,894) | (3,264,836) |
Cash and cash equivalents at beginning of period | 111,576 | 3,376,412 | 3,376,412 |
Cash and cash equivalents at end of period | 100,123 | 111,518 | 111,576 |
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||
Cash flows provided by (used for): | |||
Operating activities | 195,650 | 143,092 | 3,023,400 |
Investing activities | (112,513) | (102,923) | (261,330) |
Financing activities | (3,890) | (17,815) | (2,777,661) |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | 0 |
Intercompany activity | 0 | ||
Net increase (decrease) in cash and cash equivalents | 79,247 | 22,354 | (15,591) |
Cash and cash equivalents at beginning of period | 18,788 | 34,379 | 34,379 |
Cash and cash equivalents at end of period | 98,035 | 56,733 | 18,788 |
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||
Cash flows provided by (used for): | |||
Operating activities | 484,784 | 203,762 | 658,229 |
Investing activities | (332,538) | 45,634 | (175,565) |
Financing activities | 893 | (68,251) | (229,931) |
Effect of exchange rates on cash and cash equivalents | 23,510 | (10,613) | (22,104) |
Intercompany activity | 0 | ||
Net increase (decrease) in cash and cash equivalents | 176,649 | 170,532 | 230,629 |
Cash and cash equivalents at beginning of period | 739,138 | 508,509 | 508,509 |
Cash and cash equivalents at end of period | 915,787 | 679,041 | 739,138 |
Eliminations | |||
Cash flows provided by (used for): | |||
Operating activities | 0 | (2,978,000) | |
Investing activities | 147,622 | 127,000 | |
Financing activities | (147,622) | 2,851,000 | |
Effect of exchange rates on cash and cash equivalents | 0 | 0 | |
Net increase (decrease) in cash and cash equivalents | 0 | 0 | |
Cash and cash equivalents at beginning of period | 0 | $ 0 | 0 |
Cash and cash equivalents at end of period | $ 0 | $ 0 |