Sysco 2011 Annual Report Download - page 77

the amount outstanding under the facility was $182.0 million. The interest rate under the facility was 2.0% and payable on the due date. The loan
was repaid in full on July 4, 2011.
Commercial Paper and Revolving Credit Facility
Sysco has a Board-approved commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount
not to exceed $1,300.0 million.
Sysco and one of its subsidiaries, Sysco International, ULC., have a revolving credit facility supporting the company’s U.S. and Canadian
commercial paper programs. The facility in the amount of $1,000.0 million expires on November 4, 2012, but is subject to extension.
During fiscal 2011, 2010 and 2009, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from
approximately zero to $330.3 million, zero to $1.8 million, and zero to $165.0 million, respectively. There were no commercial paper issuances
outstanding as of July 2, 2011 and July 3, 2010, respectively.
Fixed Rate Debt
In February 2009, Sysco deregistered the securities remaining unsold under its then existing shelf registration statement that was filed with
the SEC in February 2008 for the issuance of debt securities. In February 2009, Sysco filed with the SEC an automatically effective well-known
seasoned issuer shelf registration statement for the issuance of an indeterminate amount of debt securities that may be issued from time to time.
In March 2009, Sysco issued 5.375% senior notes totaling $250.0 million due March 17, 2019 (the 2019 notes) and 6.625% senior notes
totaling $250.0 million 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 note holders 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 4.20% senior notes due February 12, 2013, 4.60% senior notes due March 15, 2014, the 5.25% senior notes due February 12, 2018, the
5.375% senior notes due September 21, 2035 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 now known as Sysco
International, ULC, 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, ULC. 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 four to 15 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 July 2, 2011 was $2,668.5 million of which approximately 75% was at fixed rates with a weighted average of 5.9% and an
average life of 15 years, and the remainder was at floating rates with a weighted average of 2.1% and an average life of one year. 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 is currently in compliance with all debt covenants.
Other
As of July 2, 2011 and July 3, 2010 letters of credit outstanding were $23.0 million and $28.4 million, respectively.
11. LEASES
Sysco has obligations under capital and operating leases for certain distribution facilities, vehicles and computers. Total rental expense under
operating leases was $79.3 million, $80.7 million, and $83.7 million in fiscal 2011, 2010 and 2009, respectively. Contingent rentals, subleases and
assets and obligations under capital leases are not significant.
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