Sysco 2009 Annual Report Download - page 67

In March 2009, Sysco issued 5.375% senior notes totaling $250,000,000 due March 17, 2019 (the 2019 notes) and 6.625% senior notes
totaling $250,000,000 due March 17, 2039 (the 2039 notes) under its February 2009 shelf registration. The 2019 and 2039 notes, which were
priced at 99.321% and 98.061% of par, respectively, 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 early redemption. Proceeds from the notes will be utilized over a period of time for general corporate
purposes, which may include acquisitions, refinancing of debt, working capital, share repurchases and capital expenditures.
The 4.60% senior notes due March 15, 2014 and the 6.5% debentures due August 1, 2028 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 are no longer 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 allows 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 two to 17 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 27, 2009 was $2,476,649,000, of which approximately 99% was at fixed rates with a weighted average of 5.6% and an
average life of 15 years, and the remainder was at floating rates with a weighted average of 1.3%. Certain loan agreements contain typical debt
covenants to protect note holders, 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 27, 2009.
Other
As of June 27, 2009 and June 28, 2008 letters of credit outstanding were $74,679,000 and $35,785,000, respectively.
12. 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 $83,674,000, $95,315,000, and $94,163,000 in fiscal 2009, 2008 and 2007,
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
2010 . . . ............................................................................ $ 51,289,000
2011 . . . ............................................................................ 39,346,000
2012 . . . ............................................................................ 30,621,000
2013 . . . ............................................................................ 23,612,000
2014 . . . ............................................................................ 18,320,000
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