Sysco (SYY) 10-Q 2 Feb 10 2010 Q2 Quarterly report Financial data

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Thousands	Dec. 26, 2009	Jun. 27, 2009	Dec. 27, 2008
Current assets
Cash and cash equivalents	$647,606	$1,087,084	$373,074
Short-term investments	61,860	0	0
Accounts and notes receivable, less allowances of $67,035, $36,078 and $67,400	2,526,044	2,468,511	2,623,509
Inventories	1,790,327	1,650,666	1,862,187
Prepaid expenses and other current assets	63,674	64,418	60,938
Total current assets	5,089,511	5,270,679	4,919,708
Plant and equipment at cost, less depreciation	3,072,721	2,979,200	2,890,641
Other assets
Goodwill	1,551,550	1,510,795	1,384,790
Intangibles, less amortization	118,032	121,089	78,976
Restricted cash	128,683	93,858	93,541
Prepaid pension cost	70,753	26,746	249,840
Other assets	245,716	214,252	193,926
Total other assets	2,114,734	1,966,740	2,001,073
Total assets	10,276,966	10,216,619	9,811,422
Current liabilities
Accounts payable	1,906,745	1,856,887	1,707,331
Accrued expenses	793,303	797,756	806,055
Accrued income taxes	56,775	323,983	538,790
Deferred taxes	18,482	162,365	234,286
Current maturities of long-term debt	8,438	9,163	6,747
Total current liabilities	2,783,743	3,150,154	3,293,209
Other liabilities
Long-term debt	2,468,690	2,467,486	1,972,612
Deferred taxes	545,863	526,377	539,534
Other long-term liabilities	548,383	622,900	712,055
Total other liabilities	3,562,936	3,616,763	3,224,201
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	788,138	760,352	750,843
Retained earnings	6,844,095	6,539,890	6,281,575
Accumulated other comprehensive loss	(180,095)	(277,986)	(197,287)
Treasury stock at cost, 173,100,605, 175,148,403 and 173,746,062 shares	(4,287,026)	(4,337,729)	(4,306,294)
Total shareholders' equity	3,930,287	3,449,702	3,294,012
Total liabilities and shareholders' equity	$10,276,966	$10,216,619	$9,811,422

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data	Dec. 26, 2009	Jun. 27, 2009	Dec. 27, 2008
Consolidated Balance Sheets (Parenthetical)
Allowance for doubtful accounts	$67,035	$36,078	$67,400
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	173,100,605	175,148,403	173,746,062

Consolidated Results of Operati

Consolidated Results of Operations (USD $)
In Thousands, except Share data	3 Months Ended Dec. 26, 2009	3 Months Ended Dec. 27, 2008	6 Months Ended Dec. 26, 2009	6 Months Ended Dec. 27, 2008
Sales	$8,868,499	$9,149,803	$17,949,925	$19,027,232
Cost of sales	7,173,612	7,399,690	14,507,679	15,390,563
Gross margin	1,694,887	1,750,113	3,442,246	3,636,669
Operating expenses	1,232,536	1,328,249	2,482,567	2,710,053
Operating income	462,351	421,864	959,679	926,616
Interest expense	31,522	28,400	65,322	54,810
Other income, net	(1,138)	(5,223)	(3,150)	(8,036)
Earnings before income taxes	431,967	398,687	897,507	879,842
Income taxes	163,618	161,033	302,953	365,374
Net earnings	$268,349	$237,654	$594,554	$514,468
Net earnings:
Basic earnings per share	0.45	0.4	$1	0.86
Diluted earnings per share	0.45	0.4	$1	0.86
Average shares outstanding	592,651,712	597,549,831	592,110,975	599,903,629
Diluted shares outstanding	593,372,477	598,233,384	592,678,989	601,100,591
Dividends declared per common share	0.25	0.24	0.49	0.46

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (USD $)
In Thousands	3 Months Ended Dec. 26, 2009	3 Months Ended Dec. 27, 2008	6 Months Ended Dec. 26, 2009	6 Months Ended Dec. 27, 2008
Net earnings	$268,349	$237,654	$594,554	$514,468
Other comprehensive income (loss):
Foreign currency translation adjustment	46,864	(104,574)	83,946	(118,701)
Items presented net of tax:
Amortization of cash flow hedge	107	107	214	214
Amortization of unrecognized prior service cost	677	730	1,353	961
Amortization of unrecognized actuarial losses (gains), net	6,166	2,705	12,332	5,411
Amortization of unrecognized transition obligation	23	23	46	46
Pension liability assumption	0	2,030	0	(16,450)
Total other comprehensive income (loss)	53,837	(98,979)	97,891	(128,519)
Comprehensive income	$322,186	$138,675	$692,445	$385,949

Consolidated Cash Flows

Consolidated Cash Flows (USD $)
In Thousands	6 Months Ended Dec. 26, 2009	6 Months Ended Dec. 27, 2008
Cash flows from operating activities:
Net earnings	$594,554	$514,468
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense	39,913	35,129
Depreciation and amortization	189,428	190,609
Deferred taxes	(172,756)	337,453
Provision for losses on receivables	19,815	30,652
Other non-cash items	536	(112)
Additional investment in certain assets and liabilities, net of effect of businesses acquired:
(Increase) decrease in receivables	(53,597)	26,769
(Increase) in inventories	(121,626)	(57,859)
Decrease in prepaid expenses and other current assets	1,307	2,144
Increase (decrease) in accounts payable	27,688	(301,018)
(Decrease) in accrued expenses	(16,974)	(149,811)
(Decrease) in accrued income taxes	(236,099)	(68,877)
(Increase) decrease in other assets	(30,372)	2,087
(Decrease) increase in other long-term liabilities and prepaid pension cost, net	(97,343)	2,889
Excess tax benefits from share-based compensation arrangements	(475)	(2,774)
Net cash provided by operating activities	143,999	561,749
Cash flows from investing activities:
Additions to plant and equipment	(247,575)	(178,596)
Proceeds from sales of plant and equipment	2,422	2,077
Acquisition of businesses, net of cash acquired	(9,161)	(16,277)
Purchases of short-term investments	(60,162)	0
(Increase) in restricted cash	(34,825)	(954)
Net cash used for investing activities	(349,301)	(193,750)
Cash flows from financing activities:
Other debt borrowings	4,580	9,316
Other debt repayments	(5,601)	(5,610)
Common stock reissued from treasury for share-based compensation awards	36,914	85,628
Treasury stock purchases	0	(358,751)
Dividends paid	(283,766)	(264,687)
Excess tax benefits from share-based compensation arrangements	475	2,774
Net cash used for financing activities	(247,398)	(531,330)
Effect of exchange rates on cash	13,222	(15,147)
Net (decrease) in cash and cash equivalents	(439,478)	(178,478)
Cash and cash equivalents at beginning of period	1,087,084	551,552
Cash and cash equivalents at end of period	647,606	373,074
Supplemental disclosures of cash flow information:
Interest	67,670	55,577
Income taxes	$759,704	$73,830

Basis of Presentation

Basis of Presentation
	6 Months Ended Dec. 26, 2009 USD / shares
Basis of Presentation [Abstract]
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 companys 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 companys Fiscal 2009 Annual Report on Form 10-K. Sysco has evaluated subsequent events through the date these financial statements were issued, February2, 2010. 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 Exhibit15.1 to this Form 10-Q.

Changes in Accounting

Changes in Accounting
	6 Months Ended Dec. 26, 2009 USD / shares
Changes in Accounting [Abstract]
Changes in Accounting	2. CHANGES IN ACCOUNTING Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities In June2008, 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 was 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 April2009, 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 was effective for interim reporting periods ending after June15, 2009, which was the first quarter of fiscal 2010 for Sysco. The company has included the required disclosures for this standard in Note 4, Fair Value Measurements. Measuring Liabilities at Fair Value In August2009, 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 adopted the provisions of this update in the second quarter of fiscal 2010. The adoption of this update did not have a material impact on the companys consolidated financial statements.

New Accounting Standards

New Accounting Standards
	6 Months Ended Dec. 26, 2009 USD / shares
New Accounting Standards [Abstract]
New Accounting Standards	3. NEW ACCOUNTING STANDARDS Improving Disclosures About Fair Value Measurements In January2010, the FASB issued Accounting Standards Update 2010-06, Improving Disclosures about Fair Value Measurements. This update requires some new disclosures and clarifies some existing disclosure requirements about fair value measurements codified within ASC 820, Fair Value Measurements and Disclosures. The majority of the provisions of this update, including those applicable to Sysco, are effective for interim and annual reporting periods beginning after December15, 2009. Early application of the provisions of this update is permitted. The company will adopt the applicable provisions of this update in the third quarter of fiscal 2010 and is currently evaluating the impact the adoption of these provisions will have on its consolidated financial statement disclosures.

Fair Value Measurements

Fair Value Measurements
	6 Months Ended Dec. 26, 2009 USD / shares
Fair Value Measurements [Abstract]
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 December26, 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 by the fund sponsor on an actively traded exchange. The interest rate swap agreements are 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 December26, 2009, June27, 2009 and December27, 2008: Assets and Liabilities Measured at Fair Value as of December 26, 2009 Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents Cash equivalents $ 357,800,000 $ 102,846,000 $ $ 460,646,000 Short-term investments 61,860,000 61,860,000 Restricted cash 128,683,000 128,683,000 Interest rate swap agreements 534,000 534,000 Total assets at fair value $ 486,483,000 $ 165,240,000 $ $ 651,723,000 Liabilities:

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Dec. 26, 2009 USD / shares
Derivative Financial Instruments [Abstract]
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. In September2009, 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. In October2009, 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. Both transactions were entered into with the goal of reducing overall borrowing cost. These transactions were designated as fair value hedges since the swaps hedge against the changes 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 December26, 2009 are as follows: Asset Derivatives Liability Derivatives Balance Sheet Balance Sheet Location Fair Value Location Fair Value Interest rate swap agreements Other assets $ 534,000 Other long-term liabilities $ 1,109,000 The location and effect of derivative instruments and related hedged items on the consolidated results of operations for the 26-week period and 13-week period ended December26, 2009 presented on a pre-tax basis are as follows: Amount of (Gain) or Loss Recognized in Income Location of (Gain) 26-Week 13-Week or Loss Recognized Period Ended Period Ended in Income Dec. 26, 2009 Dec. 26, 2009 Fair Value Hedge Relationships: Interest rate swap agreements Interest expense $ (1,454,000 ) $ (1,679,000 ) Hedged items debt Interest expense (104,000 ) (12,000 ) Hedge ineffectiveness represents the difference between the changes in the fair value of the derivative instruments and the changes in fair value of the fixed rate debt attributable to changes in the benchmark interest rate. Hedge ineffectiveness is recorded directly in earnings within interest expense and was immaterial for the 26-week period and the 13-week periods ended December 26, 2009. The interest rate swaps do not contain a credit-risk-related contingent feature.

Debt

Debt
	6 Months Ended Dec. 26, 2009 USD / shares
Debt [Abstract]
Debt	6. DEBT As of December26, 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. As of December26, 2009, the companys Irish Subsidiary, Pallas Foods Limited, had a 20,000,000 (Euro) committed facility for unsecured borrowings for working capital expiring March 31, 2010, which consisted of a 12,000,000 (Euro) overdraft and a 8,000,000 (Euro) revolver. There were no borrowings outstanding under either portion of this facility as of December26, 2009. In January2010, the 8,000,000 (Euro) revolver portion of the facility was discontinued, leaving the 12,000,000 (Euro) overdraft line portion of the facility with the same expiration date of March31, 2010. Sysco and one of its subsidiaries, Sysco International, Co., have a revolving credit facility supporting the companys U.S. and Canadian commercial paper programs. The facility in the amount of $1,000,000,000 expires on November4, 2012, but is subject to extension. As of December26, 2009, there were no commercial paper issuances outstanding. During the 26-week period ended December26, 2009, aggregate commercial paper issuances and short-term bank borrowings ranged from zero to approximately $1,820,000.

Employee Benefit Plans

Employee Benefit Plans
	6 Months Ended Dec. 26, 2009 USD / shares
Employee Benefit Plans [Abstract]
Employee Benefit Plans	7. EMPLOYEE BENEFIT PLANS The components of net company-sponsored benefit cost for the 26-week period presented are as follows: Pension Benefits Other Postretirement Plans Dec. 26, 2009 Dec. 27, 2008 Dec. 26, 2009 Dec. 27, 2008 Service cost $ 33,326,000 $ 40,387,000 $ 164,000 $ 245,000 Interest cost 59,797,000 56,606,000 281,000 312,000 Expected return on plan assets (52,430,000 ) (63,711,000 ) Amortization of prior service cost 2,104,000 1,494,000 93,000 65,000 Recognized net actuarial loss (gain) 20,262,000 8,863,000 (245,000 ) (79,000 ) Amortization of transition obligation 76,000 76,000 Net periodic benefit cost $ 63,059,000 $ 43,639,000 $ 369,000 $ 619,000 The components of net company-sponsored benefit cost for the 13-week period presented are as follows: Pension Benefits Other Postretirement Plans Dec. 26, 2009 Dec. 27, 2008 Dec. 26, 2009 Dec. 27, 2008 Service cost $ 16,663,000 $ 20,256,000 $ 82,000 $ 123,000 Interest cost 29,898,000 28,555,000 141,000 156,000 Expected return on plan assets (26,215,000 ) (31,856,000 ) Amortization of prior service cost 1,053,000 1,151,000 46,000 33,000 Recognized net actuarial loss (gain) 10,130,000 4,431,000 (122,000 ) (40,000 ) Amortization of transition obligation 38,000 38,000 Net periodic benefit cost $ 31,529,000 $ 22,537,000 $ 185,000 $ 310,000 Syscos contributions to its company-sponsored defined benefit plans were $77,690,000 and $87,394,000 during the 26-week periods ended December26, 2009 and December27, 2008, respectively. Syscos minimum required contribution to its company-sponsored qualified pension plan (Retirement Plan) for the calendar 2009 plan year was 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 companys 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
	6 Months Ended Dec. 26, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	8. EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: 26-Week Period Ended 13-Week Period Ended Dec. 26, 2009 Dec. 27, 2008 Dec. 26, 2009 Dec. 27, 2008 Numerator: Net earnings $ 594,554,000 $ 514,568,000 $ 268,349,000 $ 237,654,000 Denumerator: Weighted-average basic shares outstanding 592,110,975 599,903,629 592,651,712 597,549,831 Dilutive effect of share-based awards 568,014 1,196,962 720,765 683,553 Weighted-average diluted shares outstanding 592,678,989 601,100,591 593,372,477 598,233,384 Basic earnings per share: $ 1.00 $ 0.86 $ 0.45 $ 0.40 Diluted earnings per share: $ 1.00 $ 0.86 $ 0.45 $ 0.40 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 65,900,000 and 61,300,000 for the first 26weeks of fiscal 2010 and 2009, 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 66,300,000 and 63,000,000 for the second quarter of fiscal 2010 and 2009, respectively.

Share-Based Compensation

Share-Based Compensation
	6 Months Ended Dec. 26, 2009 USD / shares
Share-based Compensation [Abstract]
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 Syscos 2007 Stock Incentive Plan was amended in November2009 to increase the total number of shares authorized for issuance under the plan from 30,000,000 to 55,000,000 shares. The number of shares available for issuance as options or stock appreciation rights was increased from 25,000,000 to 55,000,000 shares. The number of shares available for issuance as restricted stock, restricted stock units or other types of stock-based awards was increased from 5,000,000 to 10,000,000 shares. The amendment also removed the provision that allowed for issuance of restricted stock, restricted stock units and other types of stock-based awards in excess of the 5,000,000 share limitation if the aggregate number of shares available for issuance under the plan was reduced by four shares for each share issued in excess of the limitation. In the first 26weeks of fiscal 2010, options to purchase 8,494,200 shares were granted to employees from the 2007 Stock Incentive Plan. 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 share of options granted during the first 26weeks of fiscal 2010 was $4.53. In the first 26weeks of fiscal 2010, 652,300 restricted stock units were granted to employees from the 2007 Stock Incentive Plan. The majority of these restricted stock units were granted with dividend equivalents. The fair value of each restricted stock unit award granted with a dividend equivalent is based on the companys stock price as of the date of grant. For restricted stock unit awards granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per share of restricted stock units granted during the first 26weeks of fiscal 2010 was $27.24. In the first 26weeks of fiscal 2010, 58,310 shares of restricted stock were granted to non-employee directors from the 2005 Non-Employee Directors Stock Plan. The fair value of the restricted stock awards is based on the companys stock price as of the date of grant. The weighted average grant-date fair value per share of restricted stock granted during the first 26 weeks of fiscal 2010 was $27.44. Syscos 2009 Non-Employee Directors Stock Plan was adopted in November2009 and provides for the issuance of up to 750,000 shares of Sysco common stock for share-based awards to non-employee directors. The authorized shares may be granted as restricted stock, restricted stock units, elected shares or additional shares. This plan will replace the 2005 Non-Employee Directors Stock Plan once all remaining shares in the 2005 Plan have been issued. Employees Stock Purchase Plan Plan participants purchased 1

Income Taxes

Income Taxes
	6 Months Ended Dec. 26, 2009 USD / shares
Income Taxes [Abstract]
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 Internal Revenue Service (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 IRS on August21, 2009 to cease paying U.S. federal taxes related to BSCC on a deferred basis, pay the amounts that were 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 was 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, $422,000,000 was paid in the first 26weeks of fiscal 2010 and the remaining payments will be paid in equal installments with Syscos remaining quarterly tax payments. 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. Syscos deferred taxes were impacted by the timing of these installment payments. Sysco reclassified amounts due within one year from deferred taxes to accrued income taxes at the beginning of fiscal 2010. Additionally, beginning in fiscal 2010, the company is not deferring taxes for federal purposes according to its agreement with the IRS. Uncertain Tax Benefits As of December26, 2009, the gross amount of unrecognized tax benefits was $86,740,000 and the gross amount of accrued interest liabilities was $36,483,000. Accrued interest decreased from the amount accrued as of June27, 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 unrecogniz

Acquisitions

Acquisitions
	6 Months Ended Dec. 26, 2009 USD / shares
Acquisitions [Abstract]
Acquisitions	11. ACQUISITIONS During the first 26weeks of fiscal 2010, in the aggregate, the company paid cash of $9,161,000 primarily for contingent consideration related to operations acquired in previous fiscal years and for acquisitions made during fiscal 2010. 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 December26, 2009, aggregate contingent consideration amounts outstanding relating to acquisitions completed prior to fiscal 2010 included $73,383,000 in cash which, if earned, could result in the recording of additional goodwill.

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Dec. 26, 2009 USD / shares
Commitments and Contingencies [Abstract]
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, which has valuation dates ranging from December 31, 2007 to June30, 2009, Sysco estimates its share of withdrawal liability on most of the multi-employer plans in which it participates could have been as much as $174,000,000 as of December26, 2009 based on a voluntary withdrawal. The majority of the estimated withdrawal liability results from plans for which the valuation date was December31, 2008; therefore, the companys estimated liability reflects the asset losses incurred by the financial markets as of that date. In general, the financial markets improved during calendar year 2009; therefore, management believes Syscos current share of the withdrawal liability could differ from this estimate. 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 December26, 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 December26, 2009, outstanding forward diesel fuel purchase commitments totaled approximately $66,000,000 at a fixed price through December2010.

Business Segment Information

Business Segment Information
	6 Months Ended Dec. 26, 2009 USD / shares
Business Segment Information [Abstract]
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 companys other operating segments, including the companys 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 COLI 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: 26-Week Period Ended 13-Week Period Ended Dec. 26, 2009 Dec. 27, 2008 Dec. 26, 2009 Dec. 27, 2008 Sales (in thousands): Broadline $ 14,393,429 $ 15,077,939 $ 7,084,723 $ 7,205,372 SYGMA 2,308,174 2,460,809 1,157,313 1,232,574 Other 1,495,543 1,726,797 752,666 831,057 Intersegment sales (247,221 ) (238,313 ) (126,203 ) (119,200 ) Total $ 17,949,925 $ 19,027,232 $ 8,868,499 $ 9,149,803 26-Week Period Ended 13-Week Period Ended Dec. 26, 2009 Dec. 27, 2008 Dec. 26, 2009 Dec. 27, 2008 Operating income (in thousands): Broadline $ 1,009,924 $ 995,124 $ 500,900 $ 471,714 SYGMA 17,857 14,342 12,019 9,721 Other 55,799 60,455 29,985 31,691 Total segments 1,083,580 1,069,921 542,904 513,

Supplemental Guarantor Informat

Supplemental Guarantor Information
	6 Months Ended Dec. 26, 2009 USD / shares
Supplemental Guarantor Information [Abstract]
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 May2002, 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 December 26, 2009 Other Sysco Non-Guarantor Consolidated Sysco International Subsidiaries Eliminations Totals (In thousands) Current assets $ 499,453 $ 10 $ 4,590,048 $ $ 5,089,511 Investment in subsidiaries 14,134,945 458,012 137,741 (14,730,698 ) Plant and equipment, net 301,018 2,771,703 3,072,721 Other assets 482,452 761 1,631,521 2,114,734 Total assets $ 15,417,868 $ 458,783 $ 9,131,013 $ (14,730,698 ) $ 10,276,966 Current liabilities $ 416,043 $ 929 $ 2,366,771 $ $ 2,783,743 Intercompany payables (receivables) 8,590,840 79,443 (8,670,283 ) Long-term debt 2,219,095 199,847 49,748 2,468,690 Other liabilities 425,110 669,136 1,094,246 Shareholders equity 3,766,780 178,564 14,715,641 (14,730,698 ) 3,930,287 Total liabilities and shareholders equity $ 15,417,868 $ 458,783 $ 9,131,013 $ (14,730,698 ) $ 10,276,966 Condensed Consolidating Balance Sheet June 27, 2009 Other Sysco Non-Guarantor Consolidated Sysco International Subsidiaries Eliminations 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 )

Document and Entity Information

Document and Entity Information (USD $)
	6 Months Ended Dec. 26, 2009	Jan. 23, 2010
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		592,548,417
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-12-26