Sysco 2008 Annual Report Download - page 54

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these costs fully to our customers. Third, increased fuel costs impact the costs we incur to deliver product to our customers. During fiscal
2008, 2007 and 2006, fuel costs related to outbound deliveries represented approximately 0.6%, 0.6% and 0.5% of sales, respectively.
Fuel costs, excluding any amounts recovered through fuel surcharges, incurred by SYSCO increased by approximately $34,023,000 in fiscal
2008 over fiscal 2007 and $21,225,000 in fiscal 2007 over fiscal 2006.
From time to time, we will enter into forward purchase commitments for a portion of our projected monthly diesel fuel requirements. As
of June 28, 2008, we had no outstanding forward diesel fuel purchase commitments. In July and August 2008, we entered into forward
diesel fuel purchase commitments totaling approximately $195,000,000 through July 2009, which will lock in the price on approximately
50% of our fuel purchases through the first 26 weeks of fiscal 2009 and approximately 70% of our fuel purchases needs for the last
26 weeks of fiscal 2009.
If fuel prices continue at current levels, fuel costs in the first 26 weeks of fiscal 2009, exclusive of any amounts recovered through fuel
surcharges, are expected to increase by approximately $55,000,000 to $65,000,000 as compared to the first 26 weeks of fiscal 2008. Our
estimate is based upon the prevailing market prices for diesel mid-August 2008, the cost committed to in our forward fuel purchase
agreements currently in place and estimates of fuel consumption. Actual fuel costs could vary from our estimates if any of these
assumptions change, in particular if future fuel prices vary significantly from our current estimates. A 10% unfavorable or favorable change
in diesel prices from the market price used in our estimates above would change the range of potential increase to $50,000,000 to
$70,000,000.
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