Sysco 2007 Annual Report Download - page 75

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Other
As of June 30, 2007 and July 1, 2006, letters of credit outstanding were $62,645,000 and $60,000,000, respectively.
9. LEASES
Although SYSCO normally purchases assets, it has obligations under capital and operating leases for certain distribution
facilities, vehicles and computers. Total rental expense under operating leases was $94,163,000, $100,690,000, and
$92,710,000 in fiscal 2007, 2006 and 2005, respectively. Contingent rentals, subleases and assets and obligations under
capital leases are not significant.
Aggregate minimum lease payments by fiscal year under existing non-capitalized long-term leases are as follows:
Amount
2008 __________________________________________________________________________________________ $ 63,383,000
2009 __________________________________________________________________________________________ 53,315,000
2010 __________________________________________________________________________________________ 45,243,000
2011 __________________________________________________________________________________________ 36,197,000
2012 __________________________________________________________________________________________ 27,272,000
Thereafter _____________________________________________________________________________________ 142,300,000
10. EMPLOYEE BENEFIT PLANS
SYSCO has defined benefit and defined contribution retirement plans for its employees. Also, the company contributes to
various multi-employer plans under collective bargaining agreements and provides certain health care benefits to eligible
retirees and their dependents.
SYSCO maintains a qualified retirement plan (Retirement Plan) that pays benefits to employees at retirement, using
formulas based on a participant’s years of service and compensation.
The defined contribution 401(k) plan provides that under certain circumstances the company may make matching
contributions of up to 50% of the first 6% of a participant’s compensation. SYSCO’s contributions to this plan were
$26,032,000 in 2007, $21,898,000 in 2006, and $28,109,000 in 2005.
SYSCO’s contributions to multi-employer pension plans were $37,296,000, $29,796,000, and $28,822,000 in fiscal 2007,
2006 and 2005, respectively. See further discussion of SYSCO’s participation in multi-employer pension plans in Note 16,
Commitments and Contingencies.
In addition to receiving benefits upon retirement under the company’s defined benefit plan, participants in the
Management Incentive Plan (see “Management Incentive Compensation” under “Stock Based Compensation Plans”)
will receive benefits under a Supplemental Executive Retirement Plan (SERP). This plan is a nonqualified, unfunded
supplementary retirement plan.
Adoption of SFAS 158
On June 30, 2007, SYSCO adopted the recognition and disclosure provisions of SFAS 158. SFAS 158 requires the company
to recognize the funded status of its defined benefit plans in its statement of financial position, with a corresponding
adjustment to accumulated other comprehensive income, net of tax. The adjustment to accumulated other comprehensive
income at adoption represents the net unrecognized actuarial losses, unrecognized prior service costs, and unrecognized
transition obligation remaining from the initial adoption of SFAS 87/106, all of which were previously netted against the
funded status of the plans in the company’s statement of financial position pursuant to the provisions of SFAS 87/106.
These amounts will subsequently be recognized as net benefit cost consistent with the company’s historical accounting
policy for amortizing such amounts. In addition, actuarial gains and losses that arise in subsequent periods and are not
recognized as net periodic benefit cost in the same periods will be recognized as a component of other comprehensive
income. Those amounts will subsequently be recognized as a component of net periodic benefit cost on the same basis
as the amounts recognized in accumulated other comprehensive income at the adoption of SFAS 158.
The effects of the adoption of the recognition and disclosure provisions of SFAS 158 on the company’s consolidated
balance sheet as of June 30, 2007 are presented in the following table. The adoption of SFAS 158 had no effect on the
SYSCO Corporation ][ page 49