Sysco 2008 Annual Report Download - page 69

The principal payments required to be made during the next five fiscal years on debt outstanding as of June 28, 2008 are shown below:
Amount
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,896,000
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,872,000
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,955,000
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201,949,000
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251,873,000
Short-term Borrowings
SYSCO has uncommitted bank lines of credit, which as of June 28, 2008 provided for unsecured borrowings for working capital of up to
$145,000,000. Borrowings outstanding under these lines of credit were zero and $18,900,000, as of June 28, 2008 and June 30, 2007,
respectively.
Commercial Paper
SYSCO has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to
exceed $1,300,000,000.
SYSCO and one of its subsidiaries, SYSCO International, Co., have a revolving credit facility supporting the company’s U.S. and
Canadian commercial paper programs.The facility in the amount of $1,000,000,000 terminates on November 4, 2012, subject to extension.
Since this long-term facility supports the company’s commercial paper programs, the $531,826,000 of outstanding commercial paper
issuances as of June 30, 2007 was classified as long-term debt. There were no commercial paper issuances outstanding as of June 28,
2008.
This facility was originally entered into in November 2005 in the amount of $500,000,000 and was increased to $750,000,000 in
March 2006. In September 2006, the termination date on the facility was extended to November 4, 2011, in accordance with the terms of
the agreement. In September 2007, the amount of the facility was increased to $1,000,000,000 and the termination date on the facility was
extended to November 4, 2012. This facility replaced the previous $450,000,000 (U.S. dollar) and $100,000,000 (Canadian dollar)
revolving credit agreements in the U.S. and Canada, respectively, both of which were terminated in November 2005.
During fiscal 2008, 2007 and 2006, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from
approximately zero to $1,113,241,000, $356,804,000 to $755,180,000, and $126,846,000 to $774,530,000 respectively.
Fixed Rate Debt
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 note holders 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 8, 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.
In January 2008, the SEC granted our request to terminate our then existing shelf registration statement that was filed with the SEC in
April 2005 for the issuance of debt securities. In February 2008, we filed an automatically effective well-known seasoned issuer shelf
registration statement for the issuance of up to $1,000,000,000 in debt securities with the SEC.
In February 2008, we issued 4.20% senior notes totaling $250,000,000 due February 12, 2013 (the “2013 notes”) and 5.25% senior
notes totaling $500,000,000 due February 12, 2018 (the “2018 notes”) under our February 2008 shelf registration. The 2013 and 2018
notes, which were priced at 99.835% and 99.310% of par, respectively, are unsecured, are not subject to any sinking fund requirement and
include a redemption provision which allows us 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. Proceeds from the notes were utilized to
retire commercial paper issuances outstanding as of February 2008.
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