Sysco 2011 Annual Report Download - page 78

Aggregate minimum lease payments by fiscal year under existing non-capitalized long-term leases are as follows:
Amount
(In thousands)
2012 ................................................................................. $ 50,962
2013 ................................................................................. 39,239
2014 ................................................................................. 30,531
2015 ................................................................................. 24,814
2016 ................................................................................. 18,665
Thereafter . . . .......................................................................... 57,426
12. EMPLOYEE BENEFIT PLANS
Sysco has defined benefit and defined contribution retirement plans for its employees. Also, the company contributes to various multi-
employer plans under collective bargaining agreements and provides certain health care benefits to eligible retirees and their dependents.
Sysco maintains a qualified pension plan (Retirement Plan) that pays benefits to employees at retirement, using formulas based on a
participant’s years of service and compensation.
The company’s defined contribution 401(k) plan provides that under certain circumstances the company may make matching contributions
of up to 50% of the first 6% of a participant’s compensation. Sysco’s expense related to this plan was $19.8 million in fiscal 2011, $22.8 million in
fiscal 2010, and $30.2 million in fiscal 2009.
Sysco’s contributions to multi-employer pension plans, which include payments for voluntary withdrawals, were $32.8 million, $51.5 million,
and $48.0 million in fiscal 2011, 2010 and 2009, respectively. Payments for voluntary withdrawals included in contributions were approximately
zero, $17.4 million and $15.0 million in fiscal 2011, 2010 and 2009, respectively. See further discussion of Sysco’s participation in multi-employer
pension plans in Note 18, “Commitments and Contingencies.”
In addition to receiving benefits upon retirement under the company’s Retirement Plan, participants in the Management Incentive Plan (see
“Management Incentive Compensation”in Note 15, “Share-Based Compensation”) will receive benefits under a Supplemental Executive
Retirement Plan (SERP). This plan is a nonqualified, unfunded supplementary retirement plan.
Funded Status
Accumulated pension assets measured against the obligation for pension benefits represents the funded status of a given plan. The funded
status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “Pension Benefits” in the tables below
includes both the Retirement Plan and the SERP.
July 2, 2011 July 3, 2010 July 2, 2011 July 3, 2010
Pension Benefits Other Postretirement Plans
(In thousands)
Change in benefit obligation:
Benefit obligation at beginning of year ........................ $ 2,212,304 $ 1,551,944 $ 8,461 $ 7,197
Service cost........................................... 99,443 66,650 396 328
Interest cost . . . ....................................... 134,973 119,593 524 562
Amendments . . . ....................................... 8,252 — 987 —
Recognized net actuarial loss . . . ............................ 121,913 523,432 157 734
Total disbursements ..................................... (60,225) (49,315) 287 (360)
Benefit obligation at end of year . ............................ 2,516,660 2,212,304 10,812 8,461
Change in plan assets:
Fair value of plan assets at beginning of year . . . ................. 1,666,972 1,244,085 — —
Actual return on plan assets . . . ............................ 337,889 174,269 — —
Employer contribution .................................... 161,677 297,933 (287) 360
Total disbursements ..................................... (60,225) (49,315) 287 (360)
Fair value of plan assets at end of year ........................ 2,106,313 1,666,972 — —
Funded status at end of year . . . ............................ $ (410,347) $ (545,332) $ (10,812) $ (8,461)
In order to meet a portion of its obligations under the SERP, Sysco maintains life insurance policies on the lives of the participants with
carrying values of $170.0 million as of July 2, 2011 and $149.5 million as of July 3, 2010. These policies are not included as plan assets or in the
funded status amounts in the tables above and below. Sysco is the sole owner and beneficiary of such policies. The projected benefit obligation
for the SERP of $402.0 million and $363.5 million as of July 2, 2011 and July 3, 2010, respectively, was included in Other long-term liabilities on the
balance sheet.
The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows:
July 2, 2011 July 3, 2010 July 2, 2011 July 3, 2010
Pension Benefits Other Postretirement Plans
(In thousands)
Current accrued benefit liability (Accrued expenses) ................ $ (22,426) $ (21,574) $ (336) $ (333)
Non-current accrued benefit liability (Other long-term liabilities) ........ (387,921) (523,758) (10,476) (8,128)
Net amount recognized .................................... $ (410,347) $ (545,332) $ (10,812) $ (8,461)
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