Sysco 2009 Annual Report Download - page 84

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Sysco
Sysco
International
Other Non-Guarantor
Subsidiaries
Consolidated
Totals
Condensed Consolidating Cash Flows
Year Ended June 27, 2009
(In thousands)
Net cash provided by (used for):
Operating activities .................................. $ (354,022) $ 38,340 $ 1,898,023 $ 1,582,341
Investing activities . .................................. (82,684) — (575,979) (658,663)
Financing activities. .................................. (380,564) — 921 (379,643)
Effect of exchange rate on cash ......................... — — (8,503) (8,503)
Intercompany activity . . . .............................. 1,229,820 (38,340) (1,191,480) —
Net (decrease) increase in cash . ......................... 412,550 — 122,982 535,532
Cash at the beginning of the period . ...................... 486,646 — 64,906 551,552
Cash at the end of the period ........................... $ 899,196 $ — $ 187,888 $ 1,087,084
Sysco
Sysco
International
Other Non-Guarantor
Subsidiaries
Consolidated
Totals
Condensed Consolidating Cash Flows
Year Ended June 28, 2008
(In thousands)
Net cash provided by (used for):
Operating activities .................................. $ (266,597) $ 25,261 $ 1,837,465 $ 1,596,129
Investing activities . .................................. (64,561) — (490,999) (555,560)
Financing activities. .................................. (659,760) (44,035) 5,217 (698,578)
Effect of exchange rate on cash ......................... — — 1,689 1,689
Intercompany activity . . . .............................. 1,341,687 18,774 (1,360,461) —
Net decrease in cash . . . .............................. 350,769 — (7,089) 343,680
Cash at the beginning of the period . ...................... 135,877 — 71,995 207,872
Cash at the end of the period ........................... $ 486,646 $ — $ 64,906 $ 551,552
Sysco
Sysco
International
Other Non-Guarantor
Subsidiaries
Consolidated
Totals
Condensed Consolidating Cash Flows
Year Ended June 30, 2007
(In thousands)
Net cash provided by (used for):
Operating activities .................................. $ (238,228) $ (7,326) $ 1,648,476 $ 1,402,922
Investing activities . .................................. (28,970) — (619,741) (648,711)
Financing activities. .................................. (764,350) 19,540 (3,440) (748,250)
Effect of exchange rate on cash ......................... — — 14 14
Intercompany activity . . . .............................. 1,036,150 (12,214) (1,023,936) —
Net decrease in cash . . . .............................. 4,602 — 1,373 5,975
Cash at the beginning of the period . ...................... 131,275 — 70,622 201,897
Cash at the end of the period ........................... $ 135,877 $ — $ 71,995 $ 207,872
22. SUBSEQUENT EVENTS
Sysco’s affiliate, Baugh Supply Chain Cooperative (BSCC), is a cooperative taxed under subchapter T of the United States Internal Revenue
Code the operation of which has resulted in a deferral of tax payments. The IRS, in connection with its audits of the company’s 2003 through 2006
federal income tax returns proposed adjustments that would have accelerated amounts that the company had previously deferred and would have
resulted in the payment of interest on those deferred amounts. Sysco reached a settlement with the IRS on August 21, 2009 to cease paying
U.S. federal taxes related to BSCC on a deferred basis, pay the amounts currently recorded within deferred taxes related to BSCC over a three year
period and make a one-time payment of $41,000,000, of which approximately $39,000,000 is non-deductible.The settlement addresses the BSCC
deferred tax issue as it relates to the IRS audit of the company’s 2003 through 2006 federal income tax returns, and settles the matter for all
subsequent periods, including the 2007 and 2008 federal income tax returns already under audit. As a result of the settlement, the company will pay
the amounts owed in the following schedule:
Amounts paid annually:
Fiscal 2010 . ......................................................................... $ 528,000,000
Fiscal 2011 . ......................................................................... 212,000,000
Fiscal 2012 . ......................................................................... 212,000,000
Of the amounts to be paid in fiscal 2010 included in the table above, $316,000,000 will be paid in the first quarter of fiscal 2010 and the
remaining payments will be paid in quarterly installments beginning in the second quarter of fiscal 2010. Amounts to be paid in fiscal 2011 and 2012
will be paid with Sysco’s quarterly tax payments. The company believes it has access to sufficient cash on hand, cash flow from operations and
current access to capital to make payments on all of the amounts noted above. As of June 27, 2009, Sysco has recorded deferred income tax
liabilities of $750,755,000, net of federal benefit, and $429,189,000 within accrued income taxes related to the BSCC supply chain distributions.The
company had previously accrued interest during the period of appeals and as a result of the settlement with the IRS, Sysco will record an income tax
benefit of approximately $30,000,000 in the first quarter of fiscal 2010.
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