Sysco (SYY) 10-Q 3 Nov 09 2010 Q1 Quarterly report Financial data

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Sep. 26, 2009	Jun. 27, 2009	Sep. 27, 2008
Current assets
Cash and cash equivalents	$851,036	$1,087,084	$345,625
Short-term investments	27,438	0	0
Accounts and notes receivable, less allowances of $51,089, $36,078 and $46,493	2,575,293	2,468,511	2,873,502
Inventories	1,747,773	1,650,666	1,933,703
Deferred taxes	91,262	0	101,811
Prepaid expenses and other current assets	69,013	64,418	69,065
Total current assets	5,361,815	5,270,679	5,323,706
Plant and equipment at cost, less depreciation	3,014,341	2,979,200	2,876,081
Other assets
Goodwill	1,529,066	1,510,795	1,421,460
Intangibles, less amortization	116,731	121,089	83,709
Restricted cash	121,755	93,858	93,077
Prepaid pension cost	48,750	26,746	256,017
Other assets	237,247	214,252	231,005
Total other assets	2,053,549	1,966,740	2,085,268
Total assets	10,429,705	10,216,619	10,285,055
Current liabilities
Accounts payable	1,960,354	1,856,887	2,051,112
Accrued expenses	767,742	797,756	757,455
Accrued income taxes	345,420	323,983	584,608
Deferred taxes	0	162,365	0
Current maturities of long-term debt	8,743	9,163	5,269
Total current liabilities	3,082,259	3,150,154	3,398,444
Other liabilities
Long-term debt	2,468,783	2,467,486	1,974,053
Deferred taxes	616,142	526,377	717,587
Other long-term liabilities	548,163	622,900	689,745
Total other liabilities	3,633,088	3,616,763	3,381,385
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	764,902	760,352	727,558
Retained earnings	6,724,058	6,539,890	6,185,935
Accumulated other comprehensive loss	(233,932)	(277,986)	(98,308)
Treasury stock at cost, 173,860,981, 175,148,403 and 164,083,709 shares	(4,305,845)	(4,337,729)	(4,075,134)
Total shareholders' equity	3,714,358	3,449,702	3,505,226
Total liabilities and shareholders' equity	$10,429,705	$10,216,619	$10,285,055

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data	Sep. 26, 2009	Jun. 27, 2009	Sep. 27, 2008
Consolidated Balance Sheets (Parenthetical)
Allowance for doubtful accounts	$51,089	$36,078	$46,493
Preferred Stock Par Value	$1	$1	$1
Preferred Stock Authorized Shares	1,500,000	1,500,000	1,500,000
Preferred Stock Issued Shares	0	0	0
Common Stock Par Value	$1	$1	$1
Common Stock Authorized Shares	2,000,000,000	2,000,000,000	2,000,000,000
Common Stock Issued Shares	765,174,900	765,174,900	765,174,900
Treasury Shares Outstanding	173,860,981	175,148,403	164,083,709

Consolidated Results of Operati

Consolidated Results of Operations (USD $)
In Thousands, except Share data	3 Months Ended Sep. 26, 2009	3 Months Ended Sep. 27, 2008
Sales	$9,081,426	$9,877,429
Cost of sales	7,334,067	7,990,873
Gross margin	1,747,359	1,886,556
Operating expenses	1,250,031	1,381,804
Operating income	497,328	504,752
Interest expense	33,800	26,410
Other income, net	(2,012)	(2,813)
Earnings before income taxes	465,540	481,155
Income taxes	139,335	204,341
Net earnings	$326,205	$276,814
Net earnings:
Basic earnings per share	0.55	0.46
Diluted earnings per share	0.55	0.46
Average shares outstanding	591,568,212	602,257,425
Diluted shares outstanding	591,983,474	605,707,175
Dividends declared per common share	0.24	0.22

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (USD $)
In Thousands	3 Months Ended Sep. 26, 2009	3 Months Ended Sep. 27, 2008
Net earnings	$326,205	$276,814
Other comprehensive income:
Foreign currency translation adjustment	37,082	(14,127)
Items presented net of tax:
Amortization of cash flow hedge	107	107
Amortization of unrecognized prior service cost	676	231
Amortization of unrecognized actuarial losses (gains), net	6,166	2,706
Amortization of unrecognized transition obligation	23	23
Pension liability assumption	0	(18,480)
Total other comprehensive income (loss)	44,054	(29,540)
Comprehensive income	$370,259	$247,274

Consolidated Cash Flows

Consolidated Cash Flows (USD $)
In Thousands	3 Months Ended Sep. 26, 2009	3 Months Ended Sep. 27, 2008
Cash flows from operating activities:
Net earnings	$326,205	$276,814
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense	12,748	10,833
Depreciation and amortization	93,906	94,351
Deferred tax (benefit) provision	(207,546)	182,824
Provision for losses on receivables	8,152	11,774
(Gain) on sale of assets	(157)	(20)
Additional investment in certain assets and liabilities, net of effect of businesses acquired:
(Increase) in receivables	(100,167)	(165,659)
(Increase) in inventories	(86,167)	(100,650)
(Increase) in prepaid expenses and other current assets	(4,242)	(5,171)
Increase in accounts payable	89,669	6,269
(Decrease) in accrued expenses	(33,896)	(149,281)
Increase (decrease) in accrued income taxes	56,113	(34,982)
(Increase) in other assets	(22,083)	(26,225)
(Decrease) in other long-term liabilities and prepaid pension cost, net	(85,596)	(34,507)
Excess tax benefits from share-based compensation arrangements	(465)	(3,000)
Net cash provided by operating activities	46,474	63,370
Cash flows from investing activities:
Additions to plant and equipment	(109,405)	(80,046)
Proceeds from sales of plant and equipment	1,346	1,023
Acquisition of businesses, net of cash acquired	(8,334)	(13,534)
Purchases of short-term investments	(27,217)	0
(Increase) in restricted cash	(27,897)	(490)
Net cash used for investing activities	(171,507)	(93,047)
Cash flows from financing activities:
Other debt borrowings	2,417	1,153
Other debt repayments	(2,593)	(1,581)
Common stock reissued from treasury for share-based compensation awards	21,907	73,535
Treasury stock purchases	0	(118,389)
Dividends paid	(141,729)	(132,383)
Excess tax benefits from share-based compensation arrangements	465	3,000
Net cash used for financing activities	(119,533)	(174,665)
Effect of exchange rates on cash	8,518	(1,585)
Net (decrease) in cash and cash equivalents	(236,048)	(205,927)
Cash and cash equivalents at beginning of period	1,087,084	551,552
Cash and cash equivalents at end of period	851,036	345,625
Supplemental disclosures of cash flow information:
Interest	59,509	44,446
Income taxes	$334,833	$42,425

Basis of Presentation

Basis of Presentation
	3 Months Ended Sep. 26, 2009 USD / shares
Basis of Presentation
Basis of Presentation	1. BASIS OF PRESENTATION The consolidated financial statements have been prepared by the company, without audit, with the exception of the June27, 2009 consolidated balance sheet which was taken from the audited financial statements included in the company's Fiscal 2009 Annual Report on 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, 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 the company's Fiscal 2009 Annual Report on Form 10-K. A review of the financial information herein has been made by Ernst Young LLP, independent auditors, in accordance with established professional standards and procedures for such a review. A report from Ernst Young LLP concerning their review is included as Exhibit 15.1 to this Form 10-Q.

Changes in Accounting

Changes in Accounting
	3 Months Ended Sep. 26, 2009 USD / shares
Changes in Accounting
Changes in Accounting	2. CHANGES IN ACCOUNTING Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities In June 2008, the Financial Accounting Standards Board (FASB) issued FASB Staff Position No. EITF 03-06-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities, which was subsequently codified within Accounting Standards Codification (ASC) 260, Earnings Per Share. This standard addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method. This standard is effective for Sysco beginning in fiscal 2010 and interim periods within that year. All prior-period earnings per share data presented in filings subsequent to adoption must be adjusted retrospectively to conform with the provisions of this standard. Early application of this standard was not permitted. The adoption of this standard did not have a material impact on the companys consolidated financial statements. Interim Disclosures about Fair Value of Financial Instruments In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which was subsequently codified within ASC 825, Financial Instruments. This standard amended previous guidance to require disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies. Prior disclosure requirements only applied to annual financial statements. This standard is effective for interim reporting periods ending after June 15, 2009, which is the first quarter of fiscal 2010 for Sysco. The company has included the required disclosures for this standard in Note 4, Fair Value Measurements.

New Accounting Standards

New Accounting Standards
	3 Months Ended Sep. 26, 2009 USD / shares
New Accounting Standards
New Accounting Standards	3. NEW ACCOUNTING STANDARDS Measuring Liabilities at Fair Value In August 2009, the FASB issued Accounting Standards Update 2009-05, Measuring Liabilities at Fair Value. This update provides additional guidance, including illustrative examples, clarifying the measurement of liabilities at fair value. This update is effective for the first reporting period beginning after its issuance. The company will adopt the provisions of this update in the second quarter of fiscal 2010 and is currently evaluating the impact the adoption of these provisions will have on its consolidated financial statements.

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Sep. 26, 2009 USD / shares
Fair Value Measurements
Fair Value Measurements	4. 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 managements own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. Syscos policy is to invest in only high-quality investments. Cash equivalents primarily include time deposits, certificates of deposit, commercial paper and all highly liquid instruments with original maturities of three months or less. Short-term investments consist of commercial paper with original maturities of greater than three months but less than one year. These investments are considered available-for-sale and are recorded at fair value. As of September 26, 2009, the difference between the fair value of the short term investments and the original cost was not material. Restricted cash consists of investments in high-quality money market funds. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. Time deposits, certificates of deposit and commercial paper included in cash equivalents are valued at amortized cost, which approximates fair value. Commercial paper included in short-term investments is valued using broker quotes that utilize observable market inputs. Money market funds are valued at the closing price reported on the exchange market. The interest rate swap agreement is valued using a swap valuation model that utilizes observable market inputs. The following tables present the companys assets and liabilities measured at fair value on a recurring basis as of September 26, 2009, June 27, 2009 and September 27, 2008: Assets and Liabilities Measured at Fair Value as of September 26, 2009 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents Cash equivalents $ 511,913,000 $ 124,057,000 $ - $ 635,970,000 Short-term investments - 27,438,000 - 27,438,000 Restricted cash 121,755,000 - - 121,755,000 Total assets at fair value $ 633,668,000 $ 151,495,000 $ - $ 785,163,000 Liabilities: Other long-term liabilities Interest rate swap agreement $ - $ 446,000 $ - $ 446,000 Assets Measured at Fair Value as of June 27, 2009 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents Cash equiv

Derivative Financial Instrument

Derivative Financial Instruments
	3 Months Ended Sep. 26, 2009 USD / shares
Derivative Financial Instruments
Derivative Financial Instruments	5. DERIVATIVE FINANCIAL INSTRUMENTS Sysco manages its debt portfolio by targeting an overall desired position of fixed and floating rates and may employ interest rate swaps from time to time to achieve this goal. The company does not use derivative financial instruments for trading or speculative purposes. During the first quarter of fiscal 2010, the company entered into an interest rate swap agreement that effectively converted $200,000,000 of fixed rate debt maturing in fiscal 2014 to floating rate debt with the goal of reducing overall borrowing cost. This transaction was designated as a fair value hedge since the swap hedges against the change in fair value of fixed rate debt resulting from changes in interest rates. The location and the fair value of derivative instruments in the consolidated balance sheet as of September 26, 2009 are as follows: Asset Derivatives Liability Derivatives Balance Sheet Location Fair Value Balance Sheet Location Fair Value Interest rate swap agreement N/A N/A Other long-term liabilities $ 446,000 The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 13-week period ended September 26, 2009 presented on a pre-tax basis are as follows: Location of (Gain) or Loss Recognized in Income Amount of (Gain) or Loss Recognized in Income Fair Value Hedge Relationships: Interest rate swap agreement Interest expense $ 225,000 Hedged item - debt Interest expense (92,000) Hedge ineffectiveness represents the difference between the change in the fair value of the derivative instrument and the change in fair value of the fixed-rate debt attributable to changes in the benchmark interest rate. Hedge ineffectiveness is recorded directly in earnings within Interest expense and was immaterial for the 13-week period ended September 26, 2009. The interest rate swap does not contain a credit-risk-related contingent feature.

Debt

Debt
	3 Months Ended Sep. 26, 2009 USD / shares
Debt
Debt	6. DEBT As of September 26, 2009, Sysco had uncommitted bank lines of credit which provided for unsecured borrowings for working capital of up to $88,000,000, of which none was outstanding. The companys Irish Subsidiary, Pallas Foods Limited, has a 20,000,000 (Euro) committed facility for unsecured borrowings for working capital, which expires March 31, 2010. There were no borrowings outstanding under this facility as of September 26, 2009. As of September 26, 2009, there were no commercial paper issuances outstanding. During the 13-week period ended September 26, 2009, there were no commercial paper issuances or short-term bank borrowings.

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Sep. 26, 2009 USD / shares
Employee Benefit Plans
Employee Benefit Plans	7. EMPLOYEE BENEFIT PLANS The components of net company-sponsored benefit cost for the 13-week periods presented are as follows: Pension Benefits Other Postretirement Plans September 26, 2009 September 27, 2008 September 26, 2009 September 27, 2008 Service cost $ 16,663,000 $ 20,131,000 $ 82,000 $ 122,000 Interest cost 29,899,000 28,051,000 140,000 156,000 Expected return on plan assets (26,215,000) (31,855,000) - - Amortization of prior service cost 1,051,000 343,000 47,000 32,000 Recognized net actuarial loss (gain) 10,132,000 4,432,000 (123,000) (39,000) Amortization of transition obligation - - 38,000 38,000 Net periodic benefit cost $ 31,530,000 $ 21,102,000 $ 184,000 $ 309,000 Syscos contributions to its company-sponsored defined benefit plans were $38,808,000 and $83,881,000 during the 13-week periods ended September 26, 2009 and September 27, 2008, respectively. Syscos minimum required contribution to its company-sponsored qualified pension plan (Retirement Plan) for the calendar 2009 plan year is estimated at $95,000,000 to meet ERISA minimum funding requirements. The company will be required to pay quarterly contributions for the calendar 2010 plan year, the first installment of which must be made in fiscal 2010. The company anticipates it will make $140,000,000 of contributions to the Retirement Plan in fiscal 2010. The company's contributions to the Supplemental Executive Retirement Plan (SERP) and other post-retirement plans are made in the amounts needed to fund current year benefit payments. The estimated fiscal 2010 contributions to fund benefit payments for the SERP and other post-retirement plans are $19,445,000 and $372,000, respectively.

Earnings Per Share

Earnings Per Share
	3 Months Ended Sep. 26, 2009 USD / shares
Earnings Per Share
Earnings Per Share	8. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: 13-Week Period Ended September 26, 2009 September 27, 2008 Numerator: Net earnings $ 326,205,000 $ 276,814,000 Denominator: Weighted-average basic shares outstanding 591,568,212 602,257,425 Dilutive effect of employee and director stock options 415,262 3,449,750 Weighted-average diluted shares outstanding 591,983,474 605,707,175 Basic earnings per share: $ 0.55 $ 0.46 Diluted earnings per share: $ 0.55 $ 0.46 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 66,000,000 and 35,000,000 for the first quarter of fiscal 2010 and 2009, respectively.

Share-Based Compensation

Share-Based Compensation
	3 Months Ended Sep. 26, 2009 USD / shares
Share-Based Compensation
Share-Based Compensation	9. SHARE-BASED COMPENSATION Sysco provides compensation benefits to employees and non-employee directors under several share-based payment arrangements including various employee stock incentive plans, the Employees Stock Purchase Plan, and various non-employee director plans. Sysco also previously provided share-based compensation under its Management Incentive Plans. Stock Incentive Plans There were no share-based award grants to employees or non-employee directors during the first quarter of fiscal 2010. Employees' Stock Purchase Plan Plan participants purchased 540,517 shares of Sysco common stock under the Sysco Employees Stock Purchase Plan during the first quarter of fiscal 2010. The weighted average fair value per share of employee stock purchase rights issued pursuant to the Employees' Stock Purchase Plan was $3.37 during the first quarter of fiscal 2010. The fair value of the stock purchase rights was calculated 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 $12,748,000 for the first quarter of fiscal 2010. As of September 26, 2009, there was $53,986,000 of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 2.92 years.

Income Taxes

Income Taxes
	3 Months Ended Sep. 26, 2009 USD / shares
Income Taxes
Income Taxes	10. INCOME TAXES Internal Revenue Service Settlement Syscos affiliate, Baugh Supply Chain Cooperative (BSCC), is a cooperative taxed under subchapter T of the United States Internal Revenue Code the operation of which has resulted in a deferral of tax payments. The IRS, in connection with its audits of the companys 2003 through 2006 federal income tax returns, proposed adjustments that would have accelerated amounts that the company had previously deferred and would have resulted in the payment of interest on those deferred amounts. Sysco reached a settlement with the Internal Revenue Service (IRS) on August 21, 2009 to cease paying U.S. federal taxes related to BSCC on a deferred basis, pay the amounts currently recorded within deferred taxes related to BSCC over a three year period and make a one-time payment of $41,000,000, of which approximately $39,000,000 is non-deductible. The settlement addresses the BSCC deferred tax issue as it relates to the IRS audit of the companys 2003 through 2006 federal income tax returns, and settles the matter for all subsequent periods, including the 2007 and 2008 federal income tax returns already under audit. As a result of the settlement, the company will pay the amounts owed in the following schedule: Amounts paid annually: Fiscal 2010 $ 528,000,000 Fiscal 2011 212,000,000 Fiscal 2012 212,000,000 Of the amounts to be paid in fiscal 2010 included in the table above, $316,000,000 was paid in the first quarter of fiscal 2010 and the remaining payments will be paid in equal quarterly installments beginning in the second quarter of fiscal 2010. Amounts to be paid in fiscal 2011 and 2012 will be paid with Syscos quarterly tax payments. The company believes it has access to sufficient cash on hand, cash flow from operations and current access to capital to make payments on all of the amounts noted above. The company had previously accrued interest for a portion of the exposure pertaining to the IRS proposed adjustments and as a result of the settlement with the IRS, Sysco recorded an income tax benefit of approximately $29,000,000 in the first quarter of fiscal 2010. Uncertain Tax Benefits As of September 26, 2009, the gross amount of unrecognized tax benefits was $92,287,000 and the gross amount of accrued interest liabilities was $37,121,000. Accrued interest decreased from the amount accrued as of June 27, 2009 of $146,998,000 due to the settlement with the IRS. It is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of the companys unrecognized tax positions will increase or decrease in the next twelve months either because Sysco prevails on positions that were being challenged upon audit or because the company agrees to their disallowance. Items that may cause changes to unrecognized tax benefits primarily include the consideration of various filing requirements in various states and the allocation of income and expense between tax jurisdictions. At this time, an estimate of the range of the reasonably possible change cannot be made. Effective Tax Rates The effective tax rate of 29.93% for the first quar

Acquisitions

Acquisitions
	3 Months Ended Sep. 26, 2009 USD / shares
Acquisitions
Acquisitions	11. ACQUISITIONS During the first quarter of fiscal 2010, in the aggregate, the company paid cash of $8,334,000 for acquisitions made during fiscal 2010 and for contingent consideration related to operations acquired in previous fiscal years. The fiscal 2010 acquisitions were immaterial to the consolidated financial statements. Certain acquisitions involve contingent consideration typically payable over periods up to four years only in the event that certain operating results are attained or certain outstanding contingencies are resolved. As of September 26, 2009, aggregate contingent consideration amounts outstanding relating to acquisitions completed prior to fiscal 2010 included $73,361,000 in cash which, if earned, could result in the recording of additional goodwill.

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Sep. 26, 2009 USD / shares
Commitments and Contingencies
Commitments and Contingencies	12. COMMITMENTS AND CONTINGENCIES Sysco is engaged in various legal proceedings which have arisen but have not been fully adjudicated. These proceedings, in the opinion of management, will not have a material adverse effect upon the consolidated financial position or results of operations of the company when ultimately concluded. Multi-Employer Pension Plans Sysco contributes to several multi-employer defined benefit pension plans based on obligations arising under collective bargaining agreements covering union-represented employees. Sysco does not directly manage these multi-employer plans, which are generally managed by boards of trustees, half of whom are appointed by the unions and the other half by other employers contributing to the plan. Based upon the information available from plan administrators, management believes that several of these multi-employer plans are underfunded. In addition, pension related legislation requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. As a result, Sysco expects its contributions to these plans to increase in the future. Under current law regarding multi-employer defined benefit plans, a plans termination, Syscos voluntary withdrawal, or the mass withdrawal of all contributing employers from any underfunded multi-employer defined benefit plan would require Sysco to make payments to the plan for Syscos proportionate share of the multi-employer plans unfunded vested liabilities. Based on the information available from plan administrators, Sysco estimates its share of withdrawal liability on most of the multi-employer plans in which it participates could have been as much as $107,000,000 as of September 26, 2009 based on a voluntary withdrawal. However, because the company is not provided the information by the plan administrators on a timely basis and the company expects that many multi-employer pension plans assets have declined due to calendar 2008 stock market performance, management believes its current share of the withdrawal liability could be greater. In addition, if a multi-employer defined benefit plan fails to satisfy certain minimum funding requirements, the IRS may impose a nondeductible excise tax of 5% on the amount of the accumulated funding deficiency for those employers contributing to the fund. As of September 26, 2009, Sysco had approximately $17,000,000 in liabilities recorded in total related to certain multi-employer defined benefit plans for which Syscos voluntary withdrawal had already occurred, all of which are expected to be paid during fiscal 2010. Fuel Commitments From time to time, Sysco may enter into forward purchase commitments for a portion of its projected diesel fuel requirements. As of September 26, 2009, outstanding forward diesel fuel purchase commitments totaled approximately $42,000,000 at a fixed price through June 2010.

Business Segment Information

Business Segment Information
	3 Months Ended Sep. 26, 2009 USD / shares
Business Segment Information
Business Segment Information	13. BUSINESS SEGMENT INFORMATION The company has aggregated its operating companies into a number of segments, of which only Broadline and SYGMA are reportable segments as defined in the accounting literature related to disclosures about segments of an enterprise. Broadline operating companies distribute a full line of food products and a wide variety of non-food products to their customers. SYGMA operating companies distribute a full line of food products and a wide variety of non-food products to certain chain restaurant customer locations. Other financial information is attributable to the company's other operating segments, including the company's specialty produce, custom-cut meat and lodging industry segments and a company that distributes to international customers. The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Intersegment sales represent specialty produce and meat company products distributed by the Broadline and SYGMA operating companies. The segment results include certain centrally incurred costs for shared services that are charged to our segments. These centrally incurred costs are charged based upon the relative level of service used by each operating company consistent with how Syscos management views the performance of its operating segments. Management evaluates the performance of each of our operating segments based on its respective operating income results, which include the allocation of certain centrally incurred costs. Included in corporate expenses, among other items, are: Gains and losses recognized to adjust corporate-owned life insurance policies to their cash surrender values; Share-based compensation expense related to stock option grants, restricted stock grants, issuances of stock pursuant to the Employees Stock Purchase Plan and restricted stock grants to non-employee directors; and Corporate-level depreciation and amortization expense. The following table sets forth certain financial information for Syscos business segments: 13-Week Period Ended September 26, 2009 September 27, 2008 Sales (in thousands): Broadline $ 7,308,706 $ 7,872,567 SYGMA 1,150,861 1,228,235 Other 742,877 895,740 Intersegment sales (121,018) (119,113) Total $ 9,081,426 $ 9,877,429 13-Week Period Ended September 26, 2009 September 27, 2008 Operating income (in thousands): Broadline $ 509,024 $ 523,410 SYGMA 5,838 4,621 Other 25,814 28,764 Total segments 540,676 556,795 Corporate expenses (43,348) (52,043) Total operating income 497,328 504,752 Interest expense 33,800 26,410 Other income, net (2,012) (2,813) Earnings before income taxes $ 465,540 $ 481,155 September 26, 2009 June 27, 2009 September 27, 2008 Assets (in thousands): Broadline $ 6,043,482 $ 5,706,431 $ 6,235,158 SYGMA 347,854 366,539 40

Supplemental Guarantor Informat

Supplemental Guarantor Information
	3 Months Ended Sep. 26, 2009 USD / shares
Supplemental Guarantor Information
Supplemental Guarantor Information	14. SUPPLEMENTAL GUARANTOR INFORMATION Sysco International, Co. is an unlimited liability company organized under the laws of the Province of Nova Scotia, Canada and is a wholly-owned subsidiary of Sysco. In May 2002, Sysco International, Co. issued, in a private offering, $200,000,000 of 6.10% notes due in 2012. These notes are fully and unconditionally guaranteed by Sysco. The following condensed consolidating financial statements present separately the financial position, results of operations and cash flows of the parent guarantor (Sysco), the subsidiary issuer (Sysco International) and all other non-guarantor subsidiaries of Sysco (Other Non-Guarantor Subsidiaries) on a combined basis with eliminating entries. Condensed Consolidating Balance Sheet September 26, 2009 Sysco Sysco International Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 678,541 $ 24 $ 4,683,250 $ - $ 5,361,815 Investment in subsidiaries 13,735,447 432,460 149,296 (14,317,203) - Plant and equipment, net 277,217 - 2,737,124 - 3,014,341 Other assets 422,235 805 1,630,509 - 2,053,549 Total assets $ 15,113,440 $ 433,289 $ 9,200,179 $ (14,317,203) $ 10,429,705 Current liabilities $ 363,660 $ 4,056 $ 2,714,543 $ - $ 3,082,259 Intercompany payables (receivables) 8,527,393 69,303 (8,596,696) - - Long-term debt 2,219,338 199,832 49,613 - 2,468,783 Other liabilities 405,335 - 758,970 - 1,164,305 Shareholders equity 3,597,714 160,098 14,273,749 (14,317,203) 3,714,358 Total liabilities and shareholders equity $ 15,113,440 $ 433,289 $ 9,200,179 $ (14,317,203) $ 10,429,705 Condensed Consolidating Balance Sheet June 27, 2009 Sysco Sysco International Other Non-Guarantor Subsidiaries Eliminations Consolidated Totals (In thousands) Current assets $ 937,335 $ 36 $ 4,333,308 $ - $ 5,270,679 Investment in subsidiaries 13,293,437 403,363 165,197 (13,861,997) - Plant and equipment, net 264,657 - 2,714,543 - 2,979,200 Other assets 421,371 830 1,544,539 - 1,966,740 Total assets $ 14,916,800 $ 404,229 $ 8,757,587 $ (13,861,997) $ 10,216,619 Current liabilities $ 380,195 $ 954 $ 2,769,005 $ - $ 3,150,154 Intercompany payables (receivables) 8,533,159 54,785 (8,587,944) - - Long-term debt 2,219,655 199,816 48,015 - 2,467,486 Other liabilities 413,651 - 735,626 - 1,149,277 Shareholders equity 3,370,140 148,674 13,792,885 (13,861,997) 3,449,702 Total liabilities and shareholders equity $ 14,91

Subsequent Event

Subsequent Event
	3 Months Ended Sep. 26, 2009 USD / shares
Subsequent Event
Subsequent Event	15. SUBSEQUENT EVENT Sysco has evaluated subsequent events through the date these financial statements were issued, November 3, 2009. In October 2009, the company entered into an interest rate swap agreement that effectively converted $250,000,000 of fixed rate debt maturing in fiscal 2013 to floating rate debt with the goal of reducing overall borrowing cost. This transaction was designated as a fair value hedge since the swap hedges against the change in fair value of fixed rate debt resulting from changes in interest rates.

Document and Entity Information

Document and Entity Information (USD $)
	3 Months Ended Sep. 26, 2009	Oct. 24, 2009
Document and Entity Information
Entity Registrant Name	Sysco Corporation
Entity Central Index Key	0000096021
Current Fiscal Year End Date	--07-03
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		591,839,181
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-26