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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Sysco Corp | NYSE:SYY | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.6442 | 0.85% | 76.0042 | 130 | 13:00:01 |
(Mark One)
|
|
þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
74-1648137
|
(State or other jurisdiction of incorporation or organization)
|
(IRS employer identification number)
|
|
|
1390 Enclave Parkway
|
|
Houston, Texas
|
77077-2099
|
(Address of principal executive offices)
|
(Zip Code)
|
Large Accelerated Filer
þ
|
|
Accelerated Filer
¨
|
Non-accelerated Filer
¨
|
|
Smaller Reporting Company
¨
|
(Do not check if a smaller reporting company)
|
|
Emerging growth company
¨
|
|
|
|
|
PART I – FINANCIAL INFORMATION
|
Page No.
|
|
PART II – OTHER INFORMATION
|
|
|
|
|
|
|
Sep. 29, 2018
|
|
Jun. 30, 2018
|
|
Sep. 30, 2017
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||||||
|
(unaudited)
|
|
|
|
(unaudited)
|
||||||
ASSETS
|
|||||||||||
Current assets
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
790,304
|
|
|
$
|
552,325
|
|
|
$
|
909,203
|
|
Accounts and notes receivable, less allowances of $26,373, $25,768 and $41,184
|
4,242,419
|
|
|
4,073,723
|
|
|
4,333,704
|
|
|||
Inventories, net
|
3,354,458
|
|
|
3,125,413
|
|
|
3,180,631
|
|
|||
Prepaid expenses and other current assets
|
215,714
|
|
|
187,880
|
|
|
173,464
|
|
|||
Income tax receivable
|
39,361
|
|
|
64,112
|
|
|
—
|
|
|||
Total current assets
|
8,642,256
|
|
|
8,003,453
|
|
|
8,597,002
|
|
|||
Plant and equipment at cost, less depreciation
|
4,466,903
|
|
|
4,521,660
|
|
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4,388,299
|
|
|||
Other long-term assets
|
|
|
|
|
|
||||||
Goodwill
|
3,936,961
|
|
|
3,955,485
|
|
|
3,970,617
|
|
|||
Intangibles, less amortization
|
944,525
|
|
|
979,812
|
|
|
1,052,704
|
|
|||
Deferred income taxes
|
59,003
|
|
|
83,666
|
|
|
149,932
|
|
|||
Other assets
|
492,434
|
|
|
526,328
|
|
|
260,036
|
|
|||
Total other long-term assets
|
5,432,923
|
|
|
5,545,291
|
|
|
5,433,289
|
|
|||
Total assets
|
$
|
18,542,082
|
|
|
$
|
18,070,404
|
|
|
$
|
18,418,590
|
|
|
|
|
|
|
|
||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|||||||||||
Current liabilities
|
|
|
|
|
|
||||||
Notes payable
|
$
|
4,414
|
|
|
$
|
4,176
|
|
|
$
|
4,513
|
|
Accounts payable
|
4,217,833
|
|
|
4,136,482
|
|
|
3,951,205
|
|
|||
Accrued expenses
|
1,502,794
|
|
|
1,608,966
|
|
|
1,502,021
|
|
|||
Accrued income taxes
|
132,910
|
|
|
56,793
|
|
|
148,902
|
|
|||
Current maturities of long-term debt
|
783,001
|
|
|
782,329
|
|
|
533,641
|
|
|||
Total current liabilities
|
6,640,952
|
|
|
6,588,746
|
|
|
6,140,282
|
|
|||
Long-term liabilities
|
|
|
|
|
|
||||||
Long-term debt
|
7,914,344
|
|
|
7,540,765
|
|
|
8,426,359
|
|
|||
Deferred income taxes
|
277,036
|
|
|
319,124
|
|
|
165,622
|
|
|||
Other long-term liabilities
|
1,034,289
|
|
|
1,077,163
|
|
|
1,367,965
|
|
|||
Total long-term liabilities
|
9,225,669
|
|
|
8,937,052
|
|
|
9,959,946
|
|
|||
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|||
Noncontrolling interest
|
36,887
|
|
|
37,649
|
|
|
83,108
|
|
|||
Shareholders’ equity
|
|
|
|
|
|
||||||
Preferred stock, par value $1 per share
Authorized 1,500,000 shares, issued none |
—
|
|
|
—
|
|
|
—
|
|
|||
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
|
1,438,097
|
|
|
1,383,619
|
|
|
1,348,349
|
|
|||
Retained earnings
|
10,592,490
|
|
|
10,348,628
|
|
|
9,638,386
|
|
|||
Accumulated other comprehensive loss
|
(1,450,843
|
)
|
|
(1,409,269
|
)
|
|
(1,142,578
|
)
|
|||
Treasury stock at cost, 245,025,271,
244,533,248 and 243,513,095 shares |
(8,706,345
|
)
|
|
(8,581,196
|
)
|
|
(8,374,078
|
)
|
|||
Total shareholders’ equity
|
2,638,574
|
|
|
2,506,957
|
|
|
2,235,254
|
|
|||
Total liabilities and shareholders' equity
|
$
|
18,542,082
|
|
|
$
|
18,070,404
|
|
|
$
|
18,418,590
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Sales
|
$
|
15,215,279
|
|
|
$
|
14,650,424
|
|
Cost of sales
|
12,311,494
|
|
|
11,856,756
|
|
||
Gross profit
|
2,903,785
|
|
|
2,793,668
|
|
||
Operating expenses
|
2,275,645
|
|
|
2,174,303
|
|
||
Operating income
|
628,140
|
|
|
619,365
|
|
||
Interest expense
|
89,016
|
|
|
80,884
|
|
||
Other expense (income), net
|
1,132
|
|
|
(7,975
|
)
|
||
Earnings before income taxes
|
537,992
|
|
|
546,456
|
|
||
Income taxes
|
106,950
|
|
|
178,816
|
|
||
Net earnings
|
$
|
431,042
|
|
|
$
|
367,640
|
|
|
|
|
|
||||
Net earnings:
|
|
|
|
|
|
||
Basic earnings per share
|
$
|
0.83
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
0.81
|
|
|
0.69
|
|
||
|
|
|
|
||||
Average shares outstanding
|
520,856,599
|
|
|
527,289,675
|
|
||
Diluted shares outstanding
|
529,034,470
|
|
|
533,063,426
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Net earnings
|
$
|
431,042
|
|
|
$
|
367,640
|
|
Other comprehensive income (loss):
|
|
|
|
||||
Foreign currency translation adjustment
|
(24,927
|
)
|
|
121,329
|
|
||
Items presented net of tax:
|
|
|
|
||||
Amortization of cash flow hedges
|
2,155
|
|
|
1,770
|
|
||
Change in net investment hedges
|
8,588
|
|
|
(12,024
|
)
|
||
Change in cash flow hedges
|
(3,008
|
)
|
|
2,203
|
|
||
Amortization of prior service cost
|
1,600
|
|
|
1,484
|
|
||
Amortization of actuarial loss, net
|
6,529
|
|
|
5,397
|
|
||
Actuarial loss, net
|
(32,511
|
)
|
|
—
|
|
||
Total other comprehensive (loss) income
|
(41,574
|
)
|
|
120,159
|
|
||
Comprehensive income
|
$
|
389,468
|
|
|
$
|
487,799
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net earnings
|
$
|
431,042
|
|
|
$
|
367,640
|
|
Adjustments to reconcile net earnings to cash provided by operating activities:
|
|
|
|
||||
Share-based compensation expense
|
29,193
|
|
|
27,955
|
|
||
Depreciation and amortization
|
187,627
|
|
|
179,662
|
|
||
Amortization of debt issuance and other debt-related costs
|
6,170
|
|
|
7,192
|
|
||
Deferred income taxes
|
(20,249
|
)
|
|
(3,706
|
)
|
||
Provision for losses on receivables
|
10,464
|
|
|
8,999
|
|
||
Other non-cash items
|
(3,695
|
)
|
|
6,849
|
|
||
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
|
|
|
|
||||
(Increase) in receivables
|
(182,233
|
)
|
|
(294,989
|
)
|
||
(Increase) in inventories
|
(229,100
|
)
|
|
(166,992
|
)
|
||
(Increase) in prepaid expenses and other current assets
|
(23,540
|
)
|
|
(28,312
|
)
|
||
Increase (decrease) in accou
nts payable
|
78,112
|
|
|
(57,368
|
)
|
||
(Decrease) in accrued expenses
|
(111,309
|
)
|
|
(83,883
|
)
|
||
Increase in accrued income taxes
|
100,868
|
|
|
165,944
|
|
||
(Increase) in other assets
|
(4,261
|
)
|
|
(13,616
|
)
|
||
Increase (decrease) in other long-term li
abilities
|
2,056
|
|
|
(32,600
|
)
|
||
Net cash provided by operating activities
|
271,145
|
|
|
82,775
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Additions to plant and equipment
|
(104,322
|
)
|
|
(136,261
|
)
|
||
Proceeds from sales of plant and equipment
|
3,839
|
|
|
1,722
|
|
||
Other investing activities
|
912
|
|
|
—
|
|
||
Net cash (used for) investing activities
|
(99,571
|
)
|
|
(134,539
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Bank and commercial paper borrowings, net
|
—
|
|
|
745,100
|
|
||
Other debt borrowings
|
386,142
|
|
|
1,512
|
|
||
Other debt repayments
|
(8,078
|
)
|
|
(5,186
|
)
|
||
Proceeds from stock option exercises
|
84,393
|
|
|
57,075
|
|
||
Treasury stock purchases
|
(204,640
|
)
|
|
(550,098
|
)
|
||
Dividends paid
|
(187,229
|
)
|
|
(174,864
|
)
|
||
Other financing activities
|
(2,200
|
)
|
|
(644
|
)
|
||
Net cash provided by financing activities
|
68,388
|
|
|
72,895
|
|
||
Effect of exchange rates on cash, cash equivalents and restricted cash
|
(2,435
|
)
|
|
18,570
|
|
||
Net increase in cash, cash equivalents and restricte
d cash
|
237,527
|
|
|
39,701
|
|
||
Cash, cash equivalents and restricted cash at beginning of period
|
715,844
|
|
|
869,502
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
$
|
953,371
|
|
|
$
|
909,203
|
|
Supplemental disclosures of cash flow information:
|
|
|
|
||||
Cash paid during the period for:
|
|
|
|
||||
Interest
|
$
|
81,392
|
|
|
$
|
72,057
|
|
Income taxes
|
70,675
|
|
|
28,714
|
|
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
|
(In thousands)
|
||||||
Cash and cash equivalents
|
$
|
790,304
|
|
|
$
|
909,203
|
|
Restricted cash
(1)
|
163,067
|
|
|
—
|
|
||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows
|
$
|
953,371
|
|
|
$
|
909,203
|
|
(1)
|
Restricted cash as of
September 29, 2018
primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, 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
September 29, 2018
.
|
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
|
US Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Principal Product Categories
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fresh and frozen meats
|
|
$
|
2,121,517
|
|
|
$
|
420,456
|
|
|
$
|
372,334
|
|
|
$
|
—
|
|
|
$
|
2,914,307
|
|
Canned and dry products
|
|
1,852,168
|
|
|
611,470
|
|
|
77,621
|
|
|
—
|
|
|
2,541,259
|
|
|||||
Frozen fruits, vegetables, bakery and other
|
|
1,423,386
|
|
|
628,559
|
|
|
291,864
|
|
|
—
|
|
|
2,343,809
|
|
|||||
Dairy products
|
|
1,086,404
|
|
|
318,347
|
|
|
154,806
|
|
|
—
|
|
|
1,559,557
|
|
|||||
Poultry
|
|
1,026,936
|
|
|
215,582
|
|
|
272,061
|
|
|
—
|
|
|
1,514,579
|
|
|||||
Fresh produce
|
|
937,580
|
|
|
257,544
|
|
|
64,849
|
|
|
—
|
|
|
1,259,973
|
|
|||||
Paper and disposables
|
|
710,759
|
|
|
104,539
|
|
|
188,616
|
|
|
16,409
|
|
|
1,020,323
|
|
|||||
Seafood
|
|
661,687
|
|
|
188,436
|
|
|
25,385
|
|
|
—
|
|
|
875,508
|
|
|||||
Beverage products
|
|
290,571
|
|
|
52,069
|
|
|
147,294
|
|
|
23,180
|
|
|
513,114
|
|
|||||
Other
(1)
|
|
288,403
|
|
|
123,948
|
|
|
26,627
|
|
|
233,872
|
|
|
672,850
|
|
|||||
Total Revenue
|
|
$
|
10,399,411
|
|
|
$
|
2,920,950
|
|
|
$
|
1,621,457
|
|
|
$
|
273,461
|
|
|
$
|
15,215,279
|
|
(1)
|
Other revenue relates to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription revenues for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.
|
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||
|
|
US Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Total
|
||||||||||
|
|
(In thousands)
|
||||||||||||||||||
Principal Product Categories
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Fresh and frozen meats
|
|
$
|
2,031,141
|
|
|
$
|
434,639
|
|
|
$
|
386,248
|
|
|
$
|
—
|
|
|
$
|
2,852,028
|
|
Canned and dry products
|
|
1,738,677
|
|
|
593,354
|
|
|
77,485
|
|
|
—
|
|
|
2,409,516
|
|
|||||
Frozen fruits, vegetables, bakery and other
|
|
1,266,732
|
|
|
626,065
|
|
|
272,592
|
|
|
—
|
|
|
2,165,389
|
|
|||||
Poultry
|
|
1,046,686
|
|
|
207,465
|
|
|
296,899
|
|
|
—
|
|
|
1,551,050
|
|
|||||
Dairy products
|
|
1,017,661
|
|
|
315,654
|
|
|
166,688
|
|
|
—
|
|
|
1,500,003
|
|
|||||
Fresh produce
|
|
923,792
|
|
|
265,583
|
|
|
65,546
|
|
|
—
|
|
|
1,254,921
|
|
|||||
Paper and disposables
|
|
656,309
|
|
|
104,110
|
|
|
181,829
|
|
|
15,390
|
|
|
957,638
|
|
|||||
Seafood
|
|
620,321
|
|
|
183,272
|
|
|
23,774
|
|
|
—
|
|
|
827,367
|
|
|||||
Beverage products
|
|
275,130
|
|
|
51,059
|
|
|
145,074
|
|
|
23,011
|
|
|
494,274
|
|
|||||
Other
(1)
|
|
272,493
|
|
|
122,054
|
|
|
24,536
|
|
|
219,155
|
|
|
638,238
|
|
|||||
Total Revenue
|
|
$
|
9,848,942
|
|
|
$
|
2,903,255
|
|
|
$
|
1,640,671
|
|
|
$
|
257,556
|
|
|
$
|
14,650,424
|
|
(1)
|
Other revenue relates to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription revenues for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.
|
•
|
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.
|
•
|
Cash deposits included in cash equivalents are valued at amortized cost, which approximates fair value. These are included within cash equivalents as a Level 1 measurement in the tables below.
|
•
|
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, Canadian 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.
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 29, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
366,173
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
366,373
|
|
Other assets
(1)
|
163,067
|
|
|
—
|
|
|
—
|
|
|
163,067
|
|
||||
Total assets at fair value
|
$
|
529,240
|
|
|
$
|
200
|
|
|
$
|
—
|
|
|
$
|
529,440
|
|
(1)
|
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.
|
|
Assets and Liabilities Measured at Fair Value as of Jun. 30, 2018
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
169,214
|
|
|
$
|
30,190
|
|
|
$
|
—
|
|
|
$
|
199,404
|
|
Other assets
(1)
|
163,519
|
|
|
—
|
|
|
—
|
|
|
163,519
|
|
||||
Total assets at fair value
|
$
|
332,733
|
|
|
$
|
30,190
|
|
|
$
|
—
|
|
|
$
|
362,923
|
|
(1)
|
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.
|
|
Assets and Liabilities Measured at Fair Value as of Sep. 30, 2017
|
||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
287,203
|
|
|
$
|
43,191
|
|
|
$
|
—
|
|
|
$
|
330,394
|
|
Total assets at fair value
|
$
|
287,203
|
|
|
$
|
43,191
|
|
|
$
|
—
|
|
|
$
|
330,394
|
|
Maturity Date of the Hedging Instrument
|
|
Currency / Unit of Measure
|
|
Notional Value
|
|
|
|
|
(In millions)
|
Hedging of interest rate risk
|
|
|
|
|
April 2019
|
|
U.S. Dollar
|
|
500
|
October 2020
|
|
U.S. Dollar
|
|
750
|
July 2021
|
|
U.S. Dollar
|
|
500
|
March 2025
|
|
U.S. Dollar
|
|
500
|
|
|
|
|
|
Hedging of foreign currency risk
(1)
|
|
|
|
|
Various (November 2018 to January 2019)
|
|
Swedish Krona
|
|
203
|
Various (October 2018 to June 2019)
|
|
U.S. Dollar
|
|
2
|
Various (November 2018 to October 2019)
|
|
British Pound Sterling
|
|
24
|
June 2021
|
|
U.S. Dollar
|
|
44
|
June 2021
|
|
Canadian Dollar
|
|
330
|
July 2021
|
|
British Pound Sterling
|
|
234
|
August 2021
|
|
British Pound Sterling
|
|
466
|
June 2023
|
|
Euro
|
|
500
|
|
|
|
|
|
Hedging of fuel risk
|
|
|
|
|
Various (September 30, 2018 to August 2019)
|
|
Gallons
|
|
49
|
(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.
|
|
|
|
Derivative Fair Value
|
||||||
|
Balance Sheet location
|
|
Sep. 29, 2018
|
|
Jun. 30, 2018
|
||||
|
|
|
(In thousands)
|
||||||
Fair Value Hedges:
|
|
|
|
|
|
||||
Interest rate swaps
|
Other current liabilities
|
|
$
|
6,797
|
|
|
$
|
6,820
|
|
Interest rate swaps
|
Other long-term liabilities
|
|
57,263
|
|
|
49,734
|
|
||
|
|
|
|
|
|
||||
Cash Flow Hedges:
|
|
|
|
|
|
||||
Fuel Swaps
|
Other current assets
|
|
$
|
16,578
|
|
|
$
|
15,316
|
|
Foreign currency forwards
|
Other current assets
|
|
198
|
|
|
693
|
|
||
Cross currency swaps
|
Other current assets
|
|
—
|
|
|
4,284
|
|
||
Cross currency swaps
|
Other assets
|
|
—
|
|
|
3,454
|
|
||
Foreign currency forwards
|
Other current liabilities
|
|
589
|
|
|
71
|
|
||
Cross currency swaps
|
Other long-term liabilities
|
|
10,658
|
|
|
14,201
|
|
||
|
|
|
|
|
|
||||
Net Investment Hedges:
|
|
|
|
|
|
||||
Foreign currency swaps
|
Other assets
|
|
$
|
13,268
|
|
|
$
|
10,709
|
|
Foreign currency swaps
|
Other long-term liabilities
|
|
36,230
|
|
|
39,690
|
|
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||
|
|
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
|
|
$
|
12,311,494
|
|
|
$
|
2,275,645
|
|
|
$
|
89,016
|
|
Gain or (loss) on fair value hedging relationships:
|
|
|
|
|
|
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
||||||
Hedged items
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(8,588
|
)
|
Derivatives designated as hedging instruments
|
|
—
|
|
|
—
|
|
|
(10,859
|
)
|
(1)
|
The hedged total includes interest expense of
$15.1 million
and change in fair value of debt of
$6.5 million
.
|
|
|
13-Week Period Ended Sep. 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
|
|
$
|
11,856,756
|
|
|
$
|
2,174,303
|
|
|
$
|
80,884
|
|
Gain or (loss) on fair value hedging relationships:
|
|
|
|
|
|
|
||||||
Interest rate swaps:
|
|
|
|
|
|
|
||||||
Hedged items
(1)
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(15,230
|
)
|
Derivatives designated as hedging instruments
|
|
—
|
|
|
—
|
|
|
(1,047
|
)
|
(1)
|
The hedged total includes interest expense of
$17.1 million
and change in fair value of debt of
$1.8 million
.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||
|
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
|
$
|
1,026
|
|
|
Operating expense
|
|
$
|
4,353
|
|
Foreign currency contracts
|
(4,803
|
)
|
|
Cost of goods sold
|
|
483
|
|
||
Total
|
$
|
(3,777
|
)
|
|
|
|
$
|
4,836
|
|
|
|
|
|
|
|
||||
Derivatives in net investment hedging relationships:
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
7,228
|
|
|
N/A
|
|
$
|
—
|
|
Foreign denominated debt
|
3,950
|
|
|
N/A
|
|
—
|
|
||
Total
|
$
|
11,178
|
|
|
|
|
$
|
—
|
|
|
13-Week Period Ended Sep. 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
|
$
|
11,201
|
|
|
Operating expense
|
|
$
|
(156
|
)
|
Foreign currency contracts
|
(21,793
|
)
|
|
Cost of goods sold
|
|
309
|
|
||
Total
|
$
|
(10,592
|
)
|
|
|
|
$
|
153
|
|
|
|
|
|
|
|
||||
Derivatives in net investment hedging relationships:
|
|
|
|
|
|
||||
Foreign currency contracts
|
$
|
(15,894
|
)
|
|
N/A
|
|
$
|
—
|
|
Foreign denominated debt
|
(19,150
|
)
|
|
N/A
|
|
—
|
|
||
Total
|
$
|
(35,044
|
)
|
|
|
|
$
|
—
|
|
|
Sep. 29, 2018
|
|
Sep. 29, 2018
|
||||
|
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
|
$
|
(499,739
|
)
|
|
$
|
3,609
|
|
Long-term debt
|
(1,744,043
|
)
|
|
55,569
|
|
|
Sep. 30, 2017
|
|
Sep. 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
|
$
|
(499,874
|
)
|
|
$
|
(223
|
)
|
Long-term debt
|
(1,746,904
|
)
|
|
22,259
|
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
|
(In thousands, except for share
and per share data) |
||||||
Numerator:
|
|
|
|
||||
Net earnings
|
$
|
431,042
|
|
|
$
|
367,640
|
|
Denominator:
|
|
|
|
||||
Weighted-average basic shares outstanding
|
520,856,599
|
|
|
527,289,675
|
|
||
Dilutive effect of share-based awards
|
8,177,871
|
|
|
5,773,751
|
|
||
Weighted-average diluted shares outstanding
|
529,034,470
|
|
|
533,063,426
|
|
||
Basic earnings per share
|
$
|
0.83
|
|
|
$
|
0.70
|
|
Diluted earnings per share
|
$
|
0.81
|
|
|
$
|
0.69
|
|
|
|
|
|
||||
Dividends declared per common share
|
$
|
0.36
|
|
|
$
|
0.33
|
|
(1)
|
Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.
|
|
|
|
13-Week Period Ended Sep. 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
|
Other expense, net
|
|
$
|
2,409
|
|
|
$
|
925
|
|
|
$
|
1,484
|
|
Amortization of actuarial loss (gain), net
|
Other expense, net
|
|
8,761
|
|
|
3,364
|
|
|
5,397
|
|
|||
Total reclassification adjustments
|
|
|
11,170
|
|
|
4,289
|
|
|
6,881
|
|
|||
Foreign currency translation:
|
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
|
N/A
|
|
121,329
|
|
|
—
|
|
|
121,329
|
|
|||
Hedging instruments:
|
|
|
|
|
|
|
|
||||||
Other comprehensive income (loss) before reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Change in cash flow hedges
|
Operating expenses
(1)
|
|
3,406
|
|
|
1,203
|
|
|
2,203
|
|
|||
Change in net investment hedges
|
N/A
|
|
(23,376
|
)
|
|
(11,352
|
)
|
|
(12,024
|
)
|
|||
Total other comprehensive income (loss) before reclassification adjustments
|
|
|
(19,970
|
)
|
|
(10,149
|
)
|
|
(9,821
|
)
|
|||
Reclassification adjustments:
|
|
|
|
|
|
|
|
||||||
Amortization of cash flow hedges
|
Interest expense
|
|
2,873
|
|
|
1,103
|
|
|
1,770
|
|
|||
Total other comprehensive income (loss)
|
|
|
$
|
115,402
|
|
|
$
|
(4,757
|
)
|
|
$
|
120,159
|
|
(1)
|
Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax |
|
Foreign Currency Translation
|
|
Hedging,
net of tax |
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jun. 30, 2018
|
$
|
(1,095,059
|
)
|
|
$
|
(171,043
|
)
|
|
$
|
(143,167
|
)
|
|
$
|
(1,409,269
|
)
|
Equity adjustment from foreign currency translation
|
—
|
|
|
(24,927
|
)
|
|
—
|
|
|
(24,927
|
)
|
||||
Amortization of cash flow hedges
|
—
|
|
|
—
|
|
|
2,155
|
|
|
2,155
|
|
||||
Change in net investment hedges
|
—
|
|
|
—
|
|
|
8,588
|
|
|
8,588
|
|
||||
Change in cash flow hedge
|
—
|
|
|
—
|
|
|
(3,008
|
)
|
|
(3,008
|
)
|
||||
Net actuarial loss
|
(32,511
|
)
|
|
—
|
|
|
—
|
|
|
(32,511
|
)
|
||||
Amortization of unrecognized prior service cost
|
1,600
|
|
|
—
|
|
|
—
|
|
|
1,600
|
|
||||
Amortization of unrecognized net actuarial losses
|
6,529
|
|
|
—
|
|
|
—
|
|
|
6,529
|
|
||||
Balance as of Balance as of Sep. 29, 2018
|
$
|
(1,119,441
|
)
|
|
$
|
(195,970
|
)
|
|
$
|
(135,432
|
)
|
|
$
|
(1,450,843
|
)
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||
|
Pension and Other Postretirement Benefit Plans,
net of tax |
|
Foreign Currency Translation
|
|
Hedging,
net of tax |
|
Total
|
||||||||
|
(In thousands)
|
||||||||||||||
Balance as of Jul. 1, 2017
|
$
|
(974,232
|
)
|
|
$
|
(148,056
|
)
|
|
$
|
(140,449
|
)
|
|
$
|
(1,262,737
|
)
|
Equity adjustment from foreign currency translation
|
—
|
|
|
121,329
|
|
|
—
|
|
|
121,329
|
|
||||
Amortization of cash flow hedges
|
—
|
|
|
—
|
|
|
1,770
|
|
|
1,770
|
|
||||
Change in cash flow hedges
|
—
|
|
|
—
|
|
|
2,203
|
|
|
2,203
|
|
||||
Change in net investment hedges
|
—
|
|
|
—
|
|
|
(12,024
|
)
|
|
(12,024
|
)
|
||||
Amortization of unrecognized prior service cost
|
1,484
|
|
|
—
|
|
|
—
|
|
|
1,484
|
|
||||
Amortization of unrecognized net actuarial losses
|
5,397
|
|
|
—
|
|
|
—
|
|
|
5,397
|
|
||||
Balance as of Balance as of Sep. 30, 2017
|
$
|
(967,351
|
)
|
|
$
|
(26,727
|
)
|
|
$
|
(148,500
|
)
|
|
$
|
(1,142,578
|
)
|
•
|
U.S. Foodservice Operations - primarily includes U.S. Broadline operations, which distribute a full line of food products including custom-cut meat, seafood, specialty produce, specialty imports and a wide variety of non-food products;
|
•
|
International Foodservice Operations - includes operations in the Americas and Europe, which distribute a full line of food products and a wide variety of non-food products. The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden;
|
•
|
SYGMA - our U.S. 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.
|
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Sales:
|
(In thousands)
|
||||||
U.S. Foodservice Operations
|
$
|
10,399,411
|
|
|
$
|
9,848,942
|
|
International Foodservice Operations
|
2,920,950
|
|
|
2,903,255
|
|
||
SYGMA
|
1,621,457
|
|
|
1,640,671
|
|
||
Other
|
273,461
|
|
|
257,556
|
|
||
Total
|
$
|
15,215,279
|
|
|
$
|
14,650,424
|
|
|
|
|
|
||||
|
13-Week Period Ended
|
||||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||||
Operating income:
|
(In thousands)
|
||||||
U.S. Foodservice Operations
|
$
|
815,758
|
|
|
$
|
782,076
|
|
International Foodservice Operations
|
66,772
|
|
|
76,804
|
|
||
SYGMA
|
2,431
|
|
|
4,845
|
|
||
Other
|
10,335
|
|
|
6,932
|
|
||
Total segments
|
895,296
|
|
|
870,657
|
|
||
Corporate
|
(267,156
|
)
|
|
(251,292
|
)
|
||
Total operating income
|
628,140
|
|
|
619,365
|
|
||
Interest expense
|
89,016
|
|
|
80,884
|
|
||
Other expense (income), net
|
1,132
|
|
|
(7,975
|
)
|
||
Earnings before income taxes
|
$
|
537,992
|
|
|
$
|
546,456
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
370,826
|
|
|
$
|
4,299,713
|
|
|
$
|
3,971,717
|
|
|
$
|
—
|
|
|
$
|
8,642,256
|
|
Intercompany receivables
|
6,861,262
|
|
|
83,000
|
|
|
6,301,987
|
|
|
(13,246,249
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
5,472,246
|
|
|
—
|
|
|
1,082,550
|
|
|
(6,554,796
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
278,439
|
|
|
2,150,263
|
|
|
2,038,201
|
|
|
—
|
|
|
4,466,903
|
|
|||||
Other assets
|
747,638
|
|
|
669,256
|
|
|
4,536,366
|
|
|
(520,337
|
)
|
|
5,432,923
|
|
|||||
Total assets
|
$
|
13,730,411
|
|
|
$
|
7,202,232
|
|
|
$
|
17,930,821
|
|
|
$
|
(20,321,382
|
)
|
|
$
|
18,542,082
|
|
Current liabilities
|
$
|
1,263,290
|
|
|
$
|
904,086
|
|
|
$
|
4,473,576
|
|
|
$
|
—
|
|
|
$
|
6,640,952
|
|
Intercompany payables
|
1,757,839
|
|
|
3,264,045
|
|
|
8,224,365
|
|
|
(13,246,249
|
)
|
|
—
|
|
|||||
Long-term debt
|
7,460,238
|
|
|
10,765
|
|
|
443,341
|
|
|
—
|
|
|
7,914,344
|
|
|||||
Other liabilities
|
610,469
|
|
|
550,171
|
|
|
671,022
|
|
|
(520,337
|
)
|
|
1,311,325
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
36,887
|
|
|
—
|
|
|
36,887
|
|
|||||
Shareholders’ equity
|
2,638,575
|
|
|
2,473,165
|
|
|
4,081,630
|
|
|
(6,554,796
|
)
|
|
2,638,574
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
13,730,411
|
|
|
$
|
7,202,232
|
|
|
$
|
17,930,821
|
|
|
$
|
(20,321,382
|
)
|
|
$
|
18,542,082
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Jun. 30, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
157,994
|
|
|
$
|
4,018,444
|
|
|
$
|
3,827,015
|
|
|
$
|
—
|
|
|
$
|
8,003,453
|
|
Intercompany receivables
|
6,621,438
|
|
|
270,748
|
|
|
5,793,352
|
|
|
(12,685,538
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
4,896,004
|
|
|
—
|
|
|
983,625
|
|
|
(5,879,629
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
278,855
|
|
|
2,181,576
|
|
|
2,061,229
|
|
|
—
|
|
|
4,521,660
|
|
|||||
Other assets
|
788,473
|
|
|
611,004
|
|
|
4,593,537
|
|
|
(447,723
|
)
|
|
5,545,291
|
|
|||||
Total assets
|
$
|
12,742,764
|
|
|
$
|
7,081,772
|
|
|
$
|
17,258,758
|
|
|
$
|
(19,012,890
|
)
|
|
$
|
18,070,404
|
|
Current liabilities
|
$
|
1,233,541
|
|
|
$
|
886,305
|
|
|
$
|
4,468,900
|
|
|
$
|
—
|
|
|
$
|
6,588,746
|
|
Intercompany payables
|
882,487
|
|
|
3,798,134
|
|
|
8,004,917
|
|
|
(12,685,538
|
)
|
|
—
|
|
|||||
Long-term debt
|
7,470,334
|
|
|
8,285
|
|
|
62,146
|
|
|
—
|
|
|
7,540,765
|
|
|||||
Other liabilities
|
649,445
|
|
|
508,387
|
|
|
686,178
|
|
|
(447,723
|
)
|
|
1,396,287
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
37,649
|
|
|
—
|
|
|
37,649
|
|
|||||
Shareholders’ equity
|
2,506,957
|
|
|
1,880,661
|
|
|
3,998,968
|
|
|
(5,879,629
|
)
|
|
2,506,957
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
12,742,764
|
|
|
$
|
7,081,772
|
|
|
$
|
17,258,758
|
|
|
$
|
(19,012,890
|
)
|
|
$
|
18,070,404
|
|
|
Condensed Consolidated Balance Sheet
|
||||||||||||||||||
|
Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Current assets
|
$
|
200,583
|
|
|
$
|
4,228,854
|
|
|
$
|
4,167,565
|
|
|
$
|
—
|
|
|
$
|
8,597,002
|
|
Intercompany receivables
|
4,275,051
|
|
|
966,873
|
|
|
—
|
|
|
(5,241,924
|
)
|
|
—
|
|
|||||
Investment in subsidiaries
|
7,138,247
|
|
|
—
|
|
|
—
|
|
|
(7,138,247
|
)
|
|
—
|
|
|||||
Plant and equipment, net
|
261,906
|
|
|
2,032,227
|
|
|
2,094,166
|
|
|
—
|
|
|
4,388,299
|
|
|||||
Other assets
|
151,031
|
|
|
514,392
|
|
|
4,767,866
|
|
|
—
|
|
|
5,433,289
|
|
|||||
Total assets
|
$
|
12,026,818
|
|
|
$
|
7,742,346
|
|
|
$
|
11,029,597
|
|
|
$
|
(12,380,171
|
)
|
|
$
|
18,418,590
|
|
Current liabilities
|
$
|
360,586
|
|
|
$
|
4,859,882
|
|
|
$
|
919,814
|
|
|
$
|
—
|
|
|
$
|
6,140,282
|
|
Intercompany payables
|
—
|
|
|
—
|
|
|
5,241,924
|
|
|
(5,241,924
|
)
|
|
—
|
|
|||||
Long-term debt
|
8,352,110
|
|
|
7,191
|
|
|
67,058
|
|
|
—
|
|
|
8,426,359
|
|
|||||
Other liabilities
|
1,078,868
|
|
|
20,268
|
|
|
434,451
|
|
|
—
|
|
|
1,533,587
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
83,108
|
|
|
—
|
|
|
83,108
|
|
|||||
Shareholders’ equity
|
2,235,254
|
|
|
2,855,005
|
|
|
4,283,242
|
|
|
(7,138,247
|
)
|
|
2,235,254
|
|
|||||
Total liabilities and shareholders’ equity
|
$
|
12,026,818
|
|
|
$
|
7,742,346
|
|
|
$
|
11,029,597
|
|
|
$
|
(12,380,171
|
)
|
|
$
|
18,418,590
|
|
|
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
9,479,806
|
|
|
$
|
6,234,158
|
|
|
$
|
(498,685
|
)
|
|
$
|
15,215,279
|
|
Cost of sales
|
—
|
|
|
7,660,101
|
|
|
5,150,078
|
|
|
(498,685
|
)
|
|
12,311,494
|
|
|||||
Gross profit
|
—
|
|
|
1,819,705
|
|
|
1,084,080
|
|
|
—
|
|
|
2,903,785
|
|
|||||
Operating expenses
|
220,281
|
|
|
1,052,350
|
|
|
1,003,014
|
|
|
—
|
|
|
2,275,645
|
|
|||||
Operating income (loss)
|
(220,281
|
)
|
|
767,355
|
|
|
81,066
|
|
|
—
|
|
|
628,140
|
|
|||||
Interest expense (income)
(1)
|
41,413
|
|
|
(21,538
|
)
|
|
69,141
|
|
|
—
|
|
|
89,016
|
|
|||||
Other expense (income), net
|
6,600
|
|
|
(54
|
)
|
|
(5,414
|
)
|
|
—
|
|
|
1,132
|
|
|||||
Earnings (losses) before income taxes
|
(268,294
|
)
|
|
788,947
|
|
|
17,339
|
|
|
—
|
|
|
537,992
|
|
|||||
Income tax (benefit) provision
|
(93,587
|
)
|
|
196,445
|
|
|
4,092
|
|
|
—
|
|
|
106,950
|
|
|||||
Equity in earnings of subsidiaries
|
605,750
|
|
|
—
|
|
|
94,341
|
|
|
(700,091
|
)
|
|
—
|
|
|||||
Net earnings
|
431,043
|
|
|
592,502
|
|
|
107,588
|
|
|
(700,091
|
)
|
|
431,042
|
|
|||||
Other comprehensive income (loss)
|
(41,574
|
)
|
|
—
|
|
|
(24,927
|
)
|
|
24,927
|
|
|
(41,574
|
)
|
|||||
Comprehensive income
|
$
|
389,469
|
|
|
$
|
592,502
|
|
|
$
|
82,661
|
|
|
$
|
(675,164
|
)
|
|
$
|
389,468
|
|
(1)
|
Interest expense (income) includes
$21.5 million
of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the
first
quarter ended
September 29, 2018
. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries.
|
|
Condensed Consolidated Statement of Comprehensive Income
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Eliminations
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Sales
|
$
|
—
|
|
|
$
|
9,021,657
|
|
|
$
|
6,120,313
|
|
|
$
|
(491,546
|
)
|
|
$
|
14,650,424
|
|
Cost of sales
|
—
|
|
|
7,275,423
|
|
|
5,072,879
|
|
|
(491,546
|
)
|
|
11,856,756
|
|
|||||
Gross profit
|
—
|
|
|
1,746,234
|
|
|
1,047,434
|
|
|
—
|
|
|
2,793,668
|
|
|||||
Operating expenses
|
202,956
|
|
|
1,006,152
|
|
|
965,195
|
|
|
—
|
|
|
2,174,303
|
|
|||||
Operating income (loss)
|
(202,956
|
)
|
|
740,082
|
|
|
82,239
|
|
|
—
|
|
|
619,365
|
|
|||||
Interest expense (income)
(1)
|
98,996
|
|
|
(23,351
|
)
|
|
5,239
|
|
|
—
|
|
|
80,884
|
|
|||||
Other expense (income), net
|
(8,707
|
)
|
|
785
|
|
|
(53
|
)
|
|
—
|
|
|
(7,975
|
)
|
|||||
Earnings (losses) before income taxes
|
(293,245
|
)
|
|
762,648
|
|
|
77,053
|
|
|
—
|
|
|
546,456
|
|
|||||
Income tax (benefit) provision
|
(95,959
|
)
|
|
249,561
|
|
|
25,214
|
|
|
—
|
|
|
178,816
|
|
|||||
Equity in earnings of subsidiaries
|
564,925
|
|
|
—
|
|
|
—
|
|
|
(564,925
|
)
|
|
—
|
|
|||||
Net earnings
|
367,639
|
|
|
513,087
|
|
|
51,839
|
|
|
(564,925
|
)
|
|
367,640
|
|
|||||
Other comprehensive income (loss)
|
120,159
|
|
|
—
|
|
|
121,329
|
|
|
(121,329
|
)
|
|
120,159
|
|
|||||
Comprehensive income
|
$
|
487,798
|
|
|
$
|
513,087
|
|
|
$
|
173,168
|
|
|
$
|
(686,254
|
)
|
|
$
|
487,799
|
|
(1)
|
Interest expense (income) includes
$23.4 million
of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the
first
quarter ended
September 30, 2017
. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries.
|
|
Condensed Consolidated Cash Flows
|
||||||||||||||||||
|
For the 13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Elimination
(1)
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
167,767
|
|
|
$
|
69,459
|
|
|
$
|
33,919
|
|
|
$
|
—
|
|
|
$
|
271,145
|
|
Investing activities
|
361,777
|
|
|
(42,188
|
)
|
|
(12,229
|
)
|
|
(406,931
|
)
|
|
(99,571
|
)
|
|||||
Financing activities
|
(332,988
|
)
|
|
(1,581
|
)
|
|
(3,974
|
)
|
|
406,931
|
|
|
68,388
|
|
|||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
(2,435
|
)
|
|
—
|
|
|
(2,435
|
)
|
|||||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
196,556
|
|
|
25,690
|
|
|
15,281
|
|
|
—
|
|
|
237,527
|
|
|||||
Cash, cash equivalents and restricted cash at the beginning of period
|
29,144
|
|
|
111,843
|
|
|
574,857
|
|
|
—
|
|
|
715,844
|
|
|||||
Cash, cash equivalents and restricted cash at the end of period
|
$
|
225,700
|
|
|
$
|
137,533
|
|
|
$
|
590,138
|
|
|
$
|
—
|
|
|
$
|
953,371
|
|
(1)
|
Represents primarily inter-company loans between the subsidiaries and the parent, Sysco Corporation.
|
|
Condensed Consolidated Cash Flows
|
||||||||||||||||||
|
For the Sep. 30, 2017
|
||||||||||||||||||
|
Sysco
|
|
Certain U.S.
Broadline Subsidiaries |
|
Other
Non-Guarantor Subsidiaries |
|
Elimination
|
|
Consolidated
Totals |
||||||||||
|
(In thousands)
|
||||||||||||||||||
Cash flows provided by (used for):
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating activities
|
$
|
(49,085
|
)
|
|
$
|
76,658
|
|
|
$
|
55,202
|
|
|
$
|
—
|
|
|
$
|
82,775
|
|
Investing activities
|
(18,365
|
)
|
|
(53,281
|
)
|
|
(62,893
|
)
|
|
—
|
|
|
(134,539
|
)
|
|||||
Financing activities
|
76,568
|
|
|
(4,872
|
)
|
|
1,199
|
|
|
—
|
|
|
72,895
|
|
|||||
Effect of exchange rates on cash
|
—
|
|
|
—
|
|
|
18,570
|
|
|
—
|
|
|
18,570
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
9,118
|
|
|
18,505
|
|
|
12,078
|
|
|
—
|
|
|
39,701
|
|
|||||
Cash and cash equivalents at the beginning of period
|
111,576
|
|
|
18,788
|
|
|
739,138
|
|
|
—
|
|
|
869,502
|
|
|||||
Cash and cash equivalents at the end of period
|
$
|
120,694
|
|
|
$
|
37,293
|
|
|
$
|
751,216
|
|
|
$
|
—
|
|
|
$
|
909,203
|
|
•
|
Sales:
|
◦
|
increased
3.9%
, or
$564.9 million
, to
$15.2 billion
;
|
•
|
Operating income:
|
◦
|
increased
1.4%
, or
$8.8 million
, to
$628.1 million
;
|
◦
|
adjusted operating income
increased
5.1%
, or
$33.5 million
, to
$691.7 million
;
|
•
|
Net earnings:
|
◦
|
increased
17.2%
, or
$63.4 million
, to
$431.0 million
;
|
◦
|
adjusted net earnings
increased
21.5%
, or
$84.7 million
, to
$479.2 million
;
|
•
|
Basic earnings per share:
|
◦
|
increased
18.6%
, or
$0.13
, to
$0.83
per share;
|
•
|
Diluted earnings per share:
|
◦
|
increased
17.4%
, or
$0.12
, to
$0.81
per share; and
|
◦
|
adjusted diluted earnings per share
increased
22.4%
, or
$0.17
, to
$0.91
per share.
|
•
|
A Finance Transformation Roadmap that increases centralization and standardization of our end-to-end global finance processes and workflow through a digital automation on a modern finance platform. This also allows for increased globalization of certain roles helping to lower our administrative costs;
|
•
|
A Smart Spending initiative focused on reducing our overall general and administrative indirect spend in certain categories to drive productivity and savings; and
|
•
|
A Canadian Regionalization project which is focused on streamlining our administrative support for our Canadian operations, while maintaining acute focus on our customers.
|
•
|
enrich the customer experience;
|
•
|
deliver operational excellence;
|
•
|
optimize our business; and
|
•
|
activate the power of our people.
|
•
|
reaching
$650 million
to
$700 million
of adjusted operating income growth as compared to fiscal 2017;
|
•
|
growing earnings per share faster than operating income; and
|
•
|
achieving
16%
in adjusted return on invested capital for existing businesses.
|
|
13-Week Period Ended
|
||||
|
Sep. 29, 2018
|
|
Sep. 30, 2017
|
||
Sales
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
80.9
|
|
|
80.9
|
|
Gross profit
|
19.1
|
|
|
19.1
|
|
Operating expenses
|
15.0
|
|
|
14.9
|
|
Operating income
|
4.1
|
|
|
4.2
|
|
Interest expense
|
0.6
|
|
|
0.6
|
|
Other expense (income), net
|
—
|
|
|
(0.1
|
)
|
Earnings before income taxes
|
3.5
|
|
|
3.7
|
|
Income taxes
|
0.7
|
|
|
1.2
|
|
Net earnings
|
2.8
|
%
|
|
2.5
|
%
|
|
13-Week Period Ended
|
|
|
Sep. 29, 2018
|
|
Sales
|
3.9
|
%
|
Cost of sales
|
3.8
|
|
Gross profit
|
3.9
|
|
Operating expenses
|
4.7
|
|
Operating income
|
1.4
|
|
Interest expense
|
10.1
|
|
Other expense (income), net
(1)
|
(114.2
|
)
|
Earnings before income taxes
|
(1.5
|
)
|
Income taxes
|
(40.2
|
)
|
Net earnings
|
17.2
|
%
|
Basic earnings per share
|
18.6
|
%
|
Diluted earnings per share
|
17.4
|
|
Average shares outstanding
|
(1.2
|
)
|
Diluted shares outstanding
|
(0.8
|
)
|
(1)
|
Other expense (income), net was expense of
$1.1 million
in the
first
quarter of fiscal
2019
and income of
$8.0 million
in the
first
quarter of fiscal
2018
.
|
|
13-Week Period Ended Sep. 29, 2018
|
||||||||||||||||||||||
|
U.S. Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Corporate
|
|
Consolidated
Totals |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Sales
|
$
|
10,399,411
|
|
|
$
|
2,920,950
|
|
|
$
|
1,621,457
|
|
|
$
|
273,461
|
|
|
$
|
—
|
|
|
$
|
15,215,279
|
|
Sales increase (decrease)
|
5.6
|
%
|
|
0.6
|
%
|
|
(1.2
|
)%
|
|
6.2
|
%
|
|
|
|
3.9
|
%
|
|||||||
Percentage of total
|
68.3
|
%
|
|
19.2
|
%
|
|
10.7
|
%
|
|
1.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
$
|
815,758
|
|
|
$
|
66,772
|
|
|
$
|
2,431
|
|
|
$
|
10,335
|
|
|
$
|
(267,156
|
)
|
|
$
|
628,140
|
|
Operating income increase (decrease)
|
4.3
|
%
|
|
(13.1
|
)%
|
|
(49.8
|
)%
|
|
49.1
|
%
|
|
|
|
1.4
|
%
|
|||||||
Percentage of total segments
|
91.1
|
%
|
|
7.5
|
%
|
|
0.3
|
%
|
|
1.1
|
%
|
|
|
|
100.0
|
%
|
|||||||
Operating income as a percentage of sales
|
7.8
|
%
|
|
2.3
|
%
|
|
0.1
|
%
|
|
3.8
|
%
|
|
|
|
4.1
|
%
|
|
13-Week Period Ended Sep. 30, 2017
|
||||||||||||||||||||||
|
U.S. Foodservice Operations
|
|
International Foodservice Operations
|
|
SYGMA
|
|
Other
|
|
Corporate
|
|
Consolidated
Totals |
||||||||||||
|
(In thousands)
|
||||||||||||||||||||||
Sales
|
$
|
9,848,942
|
|
|
$
|
2,903,255
|
|
|
$
|
1,640,671
|
|
|
$
|
257,556
|
|
|
$
|
—
|
|
|
$
|
14,650,424
|
|
Percentage of total
|
67.2
|
%
|
|
19.8
|
%
|
|
11.2
|
%
|
|
1.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income
|
$
|
782,076
|
|
|
$
|
76,804
|
|
|
$
|
4,845
|
|
|
$
|
6,932
|
|
|
$
|
(251,292
|
)
|
|
$
|
619,365
|
|
Percentage of total segments
|
89.8
|
%
|
|
8.8
|
%
|
|
0.6
|
%
|
|
0.8
|
%
|
|
|
|
100.0
|
%
|
|||||||
Operating income as a percentage of sales
|
7.9
|
%
|
|
2.6
|
%
|
|
0.3
|
%
|
|
2.7
|
%
|
|
|
|
4.2
|
%
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Sales
|
$
|
10,399,411
|
|
|
$
|
9,848,942
|
|
|
$
|
550,469
|
|
|
5.6
|
%
|
Gross profit
|
2,090,227
|
|
|
1,986,283
|
|
|
103,944
|
|
|
5.2
|
|
|||
Operating expenses
|
1,274,469
|
|
|
1,204,207
|
|
|
70,262
|
|
|
5.8
|
|
|||
Operating income
|
$
|
815,758
|
|
|
$
|
782,076
|
|
|
$
|
33,682
|
|
|
4.3
|
%
|
|
Increase (Decrease)
|
|||||
|
13-Week Period
|
|||||
|
(In millions)
|
|||||
Cause of change
|
Percentage
|
|
Dollars
|
|||
Case volume
|
3.9
|
%
|
|
$
|
379.4
|
|
Inflation
|
—
|
|
|
(3.4
|
)
|
|
Acquisitions
|
1.4
|
|
|
135.4
|
|
|
Other
(1)
|
0.3
|
|
|
39.0
|
|
|
Total sales increase
|
5.6
|
%
|
|
$
|
550.4
|
|
(1)
|
Case volume excludes the volume impact from our custom-cut meat companies that do not measure volume in cases. Any impact in volumes from these operations is included within “Other.”
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
Sales
|
$
|
2,920,950
|
|
|
$
|
2,903,255
|
|
|
$
|
17,695
|
|
|
0.6
|
%
|
Gross profit
|
615,505
|
|
|
615,103
|
|
|
402
|
|
|
0.1
|
|
|||
Operating expenses
|
548,733
|
|
|
538,299
|
|
|
10,434
|
|
|
1.9
|
|
|||
Operating income
|
$
|
66,772
|
|
|
$
|
76,804
|
|
|
$
|
(10,032
|
)
|
|
(13.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Gross profit
|
$
|
615,505
|
|
|
$
|
615,103
|
|
|
$
|
402
|
|
|
0.1
|
%
|
Adjusted operating expenses (Non-GAAP)
|
520,107
|
|
|
519,887
|
|
|
220
|
|
|
—
|
|
|||
Adjusted operating income (Non-GAAP)
|
$
|
95,398
|
|
|
$
|
95,216
|
|
|
$
|
182
|
|
|
0.2
|
%
|
|
Increase (Decrease)
|
|||||
|
13-Week Period
|
|||||
|
(In millions)
|
|||||
Cause of change
|
Percentage
|
|
Dollars
|
|||
Inflation
|
2.3
|
%
|
|
$
|
65.4
|
|
Acquisitions
|
1.1
|
|
|
30.4
|
|
|
Foreign currency
|
(2.1
|
)
|
|
(61.8
|
)
|
|
Other
(1)
|
(0.7
|
)
|
|
(16.3
|
)
|
|
Total sales increase
|
0.6
|
%
|
|
$
|
17.7
|
|
(1)
|
The impact of volumes as a component of sales growth from international operations are included within “Other.” Volume in our foreign operations includes volume metrics that differ from country to country and cannot be aggregated on a consistent, comparable basis.
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands, except for share and per share data)
|
|||||||||||||
Operating expenses (GAAP)
|
$
|
2,275,645
|
|
|
$
|
2,174,303
|
|
|
$
|
101,342
|
|
|
4.7
|
%
|
Impact of restructuring and transformational project costs
(1)
|
(40,903
|
)
|
|
(19,053
|
)
|
|
(21,850
|
)
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
(22,636
|
)
|
|
(19,745
|
)
|
|
(2,891
|
)
|
|
14.6
|
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
2,212,106
|
|
|
$
|
2,135,505
|
|
|
$
|
76,601
|
|
|
3.6
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
628,140
|
|
|
$
|
619,365
|
|
|
$
|
8,775
|
|
|
1.4
|
%
|
Impact of restructuring and transformational project costs
(1)
|
40,903
|
|
|
19,053
|
|
|
21,850
|
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
22,636
|
|
|
19,745
|
|
|
2,891
|
|
|
14.6
|
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
691,679
|
|
|
$
|
658,163
|
|
|
$
|
33,516
|
|
|
5.1
|
%
|
|
|
|
|
|
|
|
|
|||||||
Net earnings (GAAP)
|
$
|
431,042
|
|
|
$
|
367,640
|
|
|
$
|
63,402
|
|
|
17.2
|
%
|
Impact of restructuring and transformational project costs
(1)
|
40,903
|
|
|
19,053
|
|
|
21,850
|
|
|
114.7
|
|
|||
Impact of acquisition-related costs
(2)
|
22,636
|
|
|
19,745
|
|
|
2,891
|
|
|
14.6
|
|
|||
Tax impact of restructuring and transformational project costs
(3)
|
(10,674
|
)
|
|
(6,943
|
)
|
|
(3,731
|
)
|
|
53.7
|
|
|||
Tax impact of acquisition-related costs
(3)
|
(4,691
|
)
|
|
(4,998
|
)
|
|
307
|
|
|
(6.1
|
)
|
|||
Net earnings adjusted for Certain Items (Non-GAAP)
|
$
|
479,216
|
|
|
$
|
394,497
|
|
|
$
|
84,719
|
|
|
21.5
|
%
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share (GAAP)
|
$
|
0.81
|
|
|
$
|
0.69
|
|
|
$
|
0.12
|
|
|
17.4
|
%
|
Impact of restructuring and transformational project costs
(1)
|
0.08
|
|
|
0.04
|
|
|
0.04
|
|
|
100.0
|
|
|||
Impact of acquisition-related costs
(2)
|
0.04
|
|
|
0.04
|
|
|
—
|
|
|
—
|
|
|||
Tax impact of restructuring and transformational project costs
(3)
|
(0.02
|
)
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|
100.0
|
|
|||
Tax impact of acquisition-related costs
(3)
|
(0.01
|
)
|
|
(0.01
|
)
|
|
—
|
|
|
—
|
|
|||
Diluted EPS adjusted for certain items (Non-GAAP)
(4)
|
$
|
0.91
|
|
|
$
|
0.74
|
|
|
$
|
0.17
|
|
|
22.4
|
%
|
(1)
|
Fiscal
2019
includes
$26 million
related to various transformation initiative costs and
$15 million
related to severance, restructuring and facility closure charges. Fiscal
2018
includes
$13 million
related to business technology costs and professional fees on three-year financial objectives and
$6 million
related to restructuring charges.
|
(2)
|
Fiscal
2019
and fiscal
2018
include
$21 million
and
$13 million
, respectively, related to intangible amortization expense from the Brakes Acquisition, which is included in the results of Brakes, and
$1 million
and
$5 million
, respectively, in integration costs.
|
(3)
|
The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
|
(4)
|
Individual components of diluted earnings per share may not add to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
|
Change in Dollars
|
|
% Change
|
|||||||
|
(In thousands)
|
|||||||||||||
INTERNATIONAL FOODSERVICE OPERATIONS
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP)
|
$
|
548,733
|
|
|
$
|
538,299
|
|
|
$
|
10,434
|
|
|
1.9
|
%
|
Impact of restructuring and transformational project costs
(1)
|
(6,727
|
)
|
|
(3,898
|
)
|
|
(2,829
|
)
|
|
NM
|
|
|||
Impact of acquisition-related costs
(2)
|
(21,899
|
)
|
|
(14,514
|
)
|
|
(7,385
|
)
|
|
50.9
|
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
520,107
|
|
|
$
|
519,887
|
|
|
$
|
220
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
66,772
|
|
|
$
|
76,804
|
|
|
$
|
(10,032
|
)
|
|
(13.1
|
)%
|
Impact of restructuring and transformational project costs
(1)
|
6,727
|
|
|
3,898
|
|
|
2,829
|
|
|
NM
|
|
|||
Impact of acquisition related costs
(2)
|
21,899
|
|
|
14,514
|
|
|
7,385
|
|
|
50.9
|
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
95,398
|
|
|
$
|
95,216
|
|
|
$
|
182
|
|
|
0.2
|
%
|
|
|
|
|
|
|
|
|
|||||||
CORPORATE
|
|
|
|
|
|
|
|
|||||||
Operating expenses (GAAP)
|
$
|
264,348
|
|
|
$
|
250,140
|
|
|
$
|
14,208
|
|
|
5.7
|
%
|
Impact of restructuring and transformational project costs
(3)
|
(34,176
|
)
|
|
(15,154
|
)
|
|
(19,022
|
)
|
|
125.5
|
|
|||
Impact of acquisition-related costs
(4)
|
(737
|
)
|
|
(5,232
|
)
|
|
4,495
|
|
|
(85.9
|
)
|
|||
Operating expenses adjusted for Certain Items (Non-GAAP)
|
$
|
229,435
|
|
|
$
|
229,754
|
|
|
$
|
(319
|
)
|
|
(0.1
|
)%
|
|
|
|
|
|
|
|
|
|||||||
Operating income (GAAP)
|
$
|
(267,156
|
)
|
|
$
|
(251,292
|
)
|
|
$
|
(15,864
|
)
|
|
6.3
|
%
|
Impact of restructuring and transformational project costs
(3)
|
34,176
|
|
|
15,154
|
|
|
19,022
|
|
|
125.5
|
|
|||
Impact of acquisition-related costs
(4)
|
737
|
|
|
5,232
|
|
|
(4,495
|
)
|
|
(85.9
|
)
|
|||
Operating income adjusted for Certain Items (Non-GAAP)
|
$
|
(232,243
|
)
|
|
$
|
(230,906
|
)
|
|
$
|
(1,337
|
)
|
|
0.6
|
%
|
(1)
|
Includes restructuring charges and charges related to business transformation projects.
|
(2)
|
Fiscal
2019
and fiscal
2018
include
$21 million
and
$13 million
, respectively, related to intangible amortization expense from the Brakes Acquisition.
|
(3)
|
Fiscal
2019
and fiscal
2018
include various transformation initiative costs and severance charges related to restructuring.
|
(4)
|
Fiscal
2019
and fiscal
2018
include
$1 million
and
$5 million
, respectively, related to integration costs from the Brakes Acquisition.
|
Form of calculation:
|
Net earnings (GAAP)
|
Impact of Certain Items on net earnings
|
Adjusted net earnings (Non-GAAP)
|
|
Invested Capital (GAAP)
|
Adjustments to invested capital
|
Adjusted Invested capital (Non-GAAP)
|
|
Return on invested capital (GAAP)
|
Return on invested capital (Non-GAAP)
|
•
|
Cash flows from operations were
$271.1 million
in fiscal
2019
, compared to
$82.8 million
in fiscal
2018
;
|
•
|
Net capital expenditures totaled
$100.5 million
in fiscal
2019
, compared to
$134.5 million
in fiscal
2018
;
|
•
|
Free cash flow was
$170.7 million
in fiscal
2019
, compared to negative free cash flow of
$51.8 million
in fiscal
2018
(see “Non-GAAP Reconciliations” below under the heading “Free Cash Flow”);
|
•
|
There were
no
commercial paper issuances or net bank borrowings in fiscal
2019
, compared to
$745.1 million
of commercial paper issuances and net bank borrowings in fiscal
2018
;
|
•
|
Dividends paid were
$187.2 million
in fiscal
2019
, compared to
$174.9 million
in fiscal
2018
; and
|
•
|
Cash paid for treasury stock repurchases was
$204.6 million
in fiscal
2019
, compared to
$550.1 million
in fiscal
2018
.
|
•
|
We issued
$384.6 million
in new senior notes in fiscal
2019
within a Canadian subsidiary.
|
•
|
working capital requirements;
|
•
|
investments in facilities, systems, fleet, other equipment and technology;
|
•
|
cash dividends;
|
•
|
acquisitions compatible with our overall growth strategy;
|
•
|
contributions to our various retirement plans; and
|
•
|
debt repayments and share repurchases.
|
•
|
our cash flows from operations;
|
•
|
the availability of additional capital under our existing commercial paper programs, supported by our revolving credit facility and bank line of credit; and
|
•
|
our ability to access capital from financial markets, including issuances of debt securities, either privately or under our shelf registration statement filed with the Securities and Exchange Commission (SEC).
|
|
13-Week Period Ended Sep. 29, 2018
|
|
13-Week Period Ended Sep. 30, 2017
|
||||
|
(In thousands)
|
||||||
Net cash provided by operating activities (GAAP)
|
$
|
271,145
|
|
|
$
|
82,775
|
|
Additions to plant and equipment
|
(104,322
|
)
|
|
(136,261
|
)
|
||
Proceeds from sales of plant and equipment
|
3,839
|
|
|
1,722
|
|
||
Free Cash Flow (Non-GAAP)
|
$
|
170,662
|
|
|
$
|
(51,764
|
)
|
•
|
$38.9 million
outstanding from our commercial paper program; and
|
•
|
No
amounts outstanding from the credit facility supporting the company’s U.S. commercial paper program.
|
•
|
our expectations regarding the continued growth of foodservice sales internationally and related factors, including GDP and household consumption in the United Kingdom;
|
•
|
our expectations regarding a softening in year-over-year growth numbers and the moderation of our gross profit dollar growth;
|
•
|
statements regarding the execution of our long-term plans, including investments in transformation and integration in our International business;
|
•
|
our expectations regarding initiatives that will drive cost improvement and enhance customer service over the next several quarters, including (i) the Finance Transformation Roadmap and our expectation that we will receive financial benefits from this initiative, (ii) Smart Spending and our expectation that this initiative will provide unprecedented visibility, ownership and performance management in all areas of our business, and (iii) Canadian Regionalization and our expectation that this initiative will contribute to increased cost savings;
|
•
|
our four strategic priorities, including, but not limited to, enriching the customer experience, delivering operational excellence, optimizing the business and activating the power of our people;
|
•
|
projections of future performance under our three-year strategic financial plan, including, but not limited to, our expectation that we will reach $650 to $700 million of adjusted operating income growth, our goal of growing earnings per share faster than operating income, achieving 16% in adjusted return on invested capital improvement for existing businesses, and our goals of sales growth of 4% to 4.5%, adjusted operating growth of 9% and adjusted diluted earnings per share results in the range of $3.85 to $3.95 in fiscal 2020;
|
•
|
our expectation regarding the acceleration of locally managed customer case growth and driving leverage between gross profit and adjusted expense growth;
|
•
|
our expectations regarding accelerating growth with local, emerging concepts, also known as micro-chains;
|
•
|
our expectations regarding our ability to improve our overall cost structure and customer experience in the United Kingdom;
|
•
|
the impact of seasonal trends on our free cash flow;
|
•
|
our expectations regarding continued volume growth;
|
•
|
our expectations regarding modest operating income growth during our second fiscal quarter and improved performance in the second half of fiscal 2019;
|
•
|
our expectations regarding locally managed customer case growth and customer experience;
|
•
|
our expectations regarding the use of remaining cash generated from operations;
|
•
|
our expectations regarding the impact of potential acquisitions and sales of assets on our liquidity, borrowing capacity, leverage ratios and capital availability;
|
•
|
our expectations regarding the calculation of adjusted return on invested capital, adjusted operating income, adjusted net earnings and adjusted diluted earnings per share;
|
•
|
our expectations regarding the impact of future Certain Items on our projected future non-GAAP and GAAP results;
|
•
|
our expectations regarding cash held by international subsidiaries, including our need to repatriate cash held outside of the U.S. in a tax-efficient manner;
|
•
|
the sufficiency of our mechanisms for managing working capital and competitive pressures, and our beliefs regarding the impact of these mechanisms;
|
•
|
our ability to meet future cash requirements, including the ability to access financial markets effectively, including issuances of debt securities, and maintain sufficient liquidity;
|
•
|
our ability to effectively access the commercial paper market and long-term capital markets;
|
•
|
our intention to repay our long-term debt with cash on hand, cash flow from operations, issuances of commercial paper, issuances of senior notes, or a combination thereof; and
|
•
|
our expectations regarding share repurchases.
|
•
|
periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability;
|
•
|
risks related to unfavorable conditions in North America and Europe and the impact on our results of operations and financial condition;
|
•
|
the risks related to our efforts to meet our long-term strategic objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; the risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to us if past and future undertakings and the associated changes to our business do not prove to be cost effective or do not result in the level of cost savings and other benefits that we anticipated;
|
•
|
the impact of unexpected future changes to our business initiatives based on management’s subjective evaluation of our overall business needs;
|
•
|
the risk that competition in our industry and the impact of GPOs may adversely impact our margins and our ability to retain customers and make it difficult for us to maintain our market share, growth rate and profitability;
|
•
|
the risk that our relationships with long-term customers may be materially diminished or terminated;
|
•
|
the risk that changes in consumer eating habits could materially and adversely affect our business, financial condition, or results of operations;
|
•
|
the risk that changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results;
|
•
|
the risk that we may not be able to fully compensate for increases in fuel costs, and forward purchase commitments intended to contain fuel costs could result in above market fuel costs;
|
•
|
the risk of interruption of supplies and increase in product costs as a result of conditions beyond our control;
|
•
|
the potential impact on our reputation and earnings of adverse publicity or lack of confidence in our products;
|
•
|
risks related to unfavorable changes to the mix of locally managed customers versus corporate-managed customers;
|
•
|
the risk that we may not realize anticipated benefits from our operating cost reduction efforts;
|
•
|
difficulties in successfully expanding into international markets and complimentary lines of business;
|
•
|
the potential impact of product liability claims;
|
•
|
the risk that we fail to comply with requirements imposed by applicable law or government regulations;
|
•
|
risks related to our ability to effectively finance and integrate acquired businesses;
|
•
|
risks related to our access to borrowed funds in order to grow and any default by us under our indebtedness that could have a material adverse impact on cash flow and liquidity;
|
•
|
our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position;
|
•
|
the risk that the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending;
|
•
|
the risk that the U.K.’s anticipated exit from the European Union, commonly referred to as Brexit, may adversely impact our operations in the U.K., including those of the Brakes Group;
|
•
|
the risk that factors beyond management’s control, including fluctuations in the stock market, as well as management’s future subjective evaluation of the company’s needs, would impact the timing of share repurchases;
|
•
|
due to our reliance on technology, any technology disruption or delay in implementing new technology could have a material negative impact on our business;
|
•
|
the risk that a cybersecurity incident and other technology disruptions could negatively impact our business and our relationships with customers;
|
•
|
the potential requirement to pay material amounts under our multiemployer defined benefit pension plans;
|
•
|
our funding requirements for our company-sponsored qualified pension plan may increase should financial markets experience future declines;
|
•
|
labor issues, including the renegotiation of union contracts and shortage of qualified labor;
|
•
|
capital expenditures may vary based on changes in business plans and other factors, including risks related to the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending; and
|
•
|
the risk that the anti-takeover benefits provided by our preferred stock may not be viewed as beneficial to stockholders.
|
ISSUER PURCHASES OF EQUITY SECURITIES
|
||||||||||||
Period
|
(a) Total Number of Shares Purchased
(1)
|
|
(b) Average Price Paid per Share
|
|
(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
(d) Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
|
|||||
Month #1
|
|
|
|
|
|
|
|
|||||
July 1 – July 28
|
822,390
|
|
|
$
|
70.05
|
|
|
822,390
|
|
|
—
|
|
Month #2
|
|
|
|
|
|
|
|
|||||
July 29 – August 25
|
974,546
|
|
|
70.99
|
|
|
972,143
|
|
|
—
|
|
|
Month #3
|
|
|
|
|
|
|
|
|||||
August 26 – September 29
|
1,051,643
|
|
|
74.18
|
|
|
1,051,643
|
|
|
—
|
|
|
Totals
|
2,848,579
|
|
|
$
|
71.90
|
|
|
2,846,176
|
|
|
—
|
|
(1)
|
The total number of shares purchased includes
0
,
2,403
and
0
shares tendered by individuals in connection with stock option exercises in
Month #1
,
Month #2
and
Month #3
, respectively.
|
|
|
Sysco Corporation
|
|
|
(Registrant)
|
|
|
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ THOMAS L. BENÉ
|
|
|
Thomas L. Bené
|
|
|
President and Chief Executive Officer
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ JOEL T. GRADE
|
|
|
Joel T. Grade
|
|
|
Executive Vice President and
|
|
|
Chief Financial Officer
|
|
|
|
Date: November 5, 2018
|
By:
|
/s/ ANITA A. ZIELINSKI
|
|
|
Anita A. Zielinski
|
|
|
Senior Vice President and
|
|
|
Chief Accounting Officer
|
3.1
|
—
|
|
|
|
|
3.2
|
—
|
|
|
|
|
3.3
|
—
|
|
|
|
|
3.4
|
—
|
|
|
|
|
10.1#†
|
—
|
|
|
|
|
10.2#†
|
—
|
|
|
|
|
10.3#†
|
—
|
|
|
|
|
10.4†
|
—
|
|
|
|
|
31.1#
|
—
|
|
|
|
|
31.2#
|
—
|
|
|
|
|
32.1#
|
—
|
|
|
|
|
32.2#
|
—
|
|
|
|
|
101.1#
|
—
|
The following financial information from Sysco Corporation’s Quarterly Report on Form 10-Q for the quarter ended September 29, 2018 filed with the SEC on November 5, 2018, formatted in XBRL includes: (i) Consolidated Balance Sheets as of September 29, 2018, June 30, 2018 and September 30, 2017, (ii) Consolidated Results of Operations for the thirteen week period ended September 29, 2018 and September 30, 2017, (iii) Consolidated Statements of Comprehensive Income for the thirteen week period ended September 29, 2018 and September 30, 2017, (iv) Consolidated Cash Flows for the thirteen week period ended September 29, 2018 and September 30, 2017, and (v) the Notes to Consolidated Financial Statements.
|
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