Sysco 2007 Annual Report Download - page 74

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ranged from approximately $356,804,000 to $755,180,000, $126,846,000 to $774,530,000, and $28,560,000 to $253,384,000,
respectively.
Fixed Rate Debt
In April 2005, SYSCO filed with the Securities and Exchange Commission a shelf registration statement covering
$1,500,000,000 in debt securities. The registration statement was declared effective in May 2005.
In June 2005, SYSCO repaid the 6.5% senior notes totaling $150,000,000 at maturity utilizing a combination of cash flow
from operations and commercial paper issuances. In July 2005, SYSCO repaid the 4.75% senior notes totaling $200,000,000
at maturity also utilizing a combination of cash flow from operations and commercial paper issuances.
In September 2005, SYSCO issued 5.375% senior notes totaling $500,000,000 due on September 21, 2035, under its April
2005 shelf registration. These notes, which were priced at 99.911% of par, are unsecured, are not subject to any sinking
fund requirement and include a redemption provision which allows SYSCO to retire the notes at any time prior to maturity
at the greater of par plus accrued interest or an amount designed to ensure that the noteholders are not penalized by
the early redemption. Proceeds from the notes were utilized to retire commercial paper issuances outstanding as of
September 2005.
In September 2005, in conjunction with the issuance of the 5.375% senior notes, SYSCO settled a $350,000,000 notional
amount forward-starting interest rate swap which was designated as a cash flow hedge of the variability in the cash
outflows of interest payments on the debt issuance due to changes in the benchmark interest rate. See Note 7, Derivative
Financial Instruments, for further discussion.
In May 2006, SYSCO repaid the 7.0% senior notes totaling $200,000,000 at maturity utilizing a combination of cash flow
from operations and commercial paper issuances.
In April 2007, SYSCO repaid the 7.25% senior notes totaling $100,000,000 at maturity utilizing a combination of cash flow
from operations and commercial paper issuances.
The 6.5% debentures due August 1, 2028 and the 4.60% senior notes due March 15, 2014 are unsecured, are not subject
to any sinking fund requirement and include a redemption provision that allows SYSCO to retire the debentures and notes
at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the
debenture and note holders are not penalized by the early redemption.
The 7.16% debentures due April 15, 2027 are unsecured, are not subject to any sinking fund requirement and were
redeemable at the option of the holder on April 15, 2007, but otherwise are not redeemable prior to maturity.
The 6.10% senior notes due June 1, 2012 , issued by SYSCO International, Co., a wholly-owned subsidiary of SYSCO, are
fully and unconditionally guaranteed by Sysco Corporation, are not subject to any sinking fund requirement, and include
a redemption provision which allow SYSCO International, Co. to retire the notes at any time prior to maturity at the
greater of par plus accrued interest or an amount designed to ensure that the note holders are not penalized by the
early redemption.
SYSCO’s Industrial Revenue Bonds have varying structures. Final maturities range from four to 19 years and certain of
the bonds provide SYSCO the right to redeem the bonds at various dates. These redemption provisions generally provide
the bondholder a premium in the early redemption years, declining to par value as the bonds approach maturity.
Total Debt
Total debt as of June 30, 2007 was $1,780,695,000, of which approximately 68% was at fixed rates averaging 5.8% with an
average life of 19 years, and the remainder was at floating rates averaging 5.2%. Certain loan agreements contain typical
debt covenants to protect noteholders, including provisions to maintain the company’s long-term debt to total capital ratio
below a specified level. SYSCO was in compliance with all debt covenants as of June 30, 2007.
The fair value of SYSCO’s total long-term debt is estimated based on the quoted market prices for the same or similar
issues or on the current rates offered to the company for debt of the same remaining maturities. The fair value of total
long-term debt approximated $1,693,619,000 as of June 30, 2007 and $1,669,999,000 as of July 1, 2006, respectively.
page 48 ][ SYSCO Corporation