Sysco 2011 Annual Report Download - page 93

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utilizing more than estimated resources and the adjustments for inflation provided for in the agreements. Sysco may also cancel a portion or all of
the services provided subject to termination fees which decrease over time. If Sysco were to terminate all of the services in fiscal 2012, the
estimated termination fee incurred in fiscal 2012 would be approximately $13.6 million.
19. BUSINESS SEGMENT INFORMATION
The company has aggregated its operating companies into a number of segments, of which only Broadline and SYGMA are reportable
segments as defined in the accounting literature related to disclosures about segments of an enterprise. The Broadline reportable segment is an
aggregation of the company’s United States, Canadian and European Broadline segments. Broadline operating companies distribute a full line of
food products and a wide variety of non-food products to its customers. SYGMA operating companies distribute a full line of food products and a
wide variety of non-food products to certain chain restaurant customer locations. “Other” financial information is attributable to the company’s
other operating segments, including the company’s specialty produce and lodging industry segments and a company that distributes to
international customers.
Beginning in the third quarter of fiscal 2011, the company’s custom-cut meat operations were reorganized to function as part of the United
States Broadline segment. As a result, the custom-cut meat operations are included in the Broadline reportable segment in the segment reporting
presented below. Previously, these operations were an independent segment and were presented with the “Other” financial information relating
to non-reportable segments. Segment reporting for the comparable prior year periods has been revised to conform to the new classification of
the custom-cut meat operations as part of the Broadline reportable segment.
The accounting policies for the segments are the same as those disclosed by Sysco. Intersegment sales represent specialty produce products
distributed by the Broadline and SYGMA operating companies. The segment results include certain centrally incurred costs for shared services that
are charged to our segments. These centrally incurred costs are charged based upon the relative level of service used by each operating company
consistent with how Sysco’s management views the performance of its operating segments. Management evaluates the performance of each of
our operating segments based on its respective operating income results, which include the allocation of certain centrally incurred costs.
Included in corporate expenses, among other items, are:
• Gains and losses recognized to adjust COLI policies to their cash surrender values;
• Share-based compensation expense;
• Expenses related to the company’s Business Transformation Project; and
• Corporate-level depreciation and amortization expense.
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