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SYSCO CORPORATION-Form10-K30
PARTII
ITEM7Management’s Discussion and Analysis of Financial Condition and Results of Operations
Fiscal 2011 capital expenditures included:
•investments in technology including our Business Transformation Project;
•fl eet replacements;
•replacement or signifi cant expansion of facilities in Philadelphia, Pennsylvania and central Texas;
•the purchase of land for a fold-out facility in southern California; and
•the remodeling of our shared services facility purchased in fi scal 2010.
Fiscal 2010 capital expenditures included:
•investments in technology including our Business Transformation Project;
•fl eet replacements;
•
replacement or signifi cant expansion of facilities in Vancouver, British Columbia, Canada; Winnipeg, Manitoba, Canada; Billings, Montana; Plainfi eld,
New Jersey; Philadelphia, Pennsylvania and Houston, Texas;
•the purchase of a facility for our future shared services operations in connection with our Business Transformation Project; and
•the purchase of land for a fold-out facility in Long Island, NewYork.
Capital expenditures in fi scal 2012 increased by $148.1million primarily due to a greater number of new facilities and expansion projects underway this
year. Capital expenditures in fi scal 2012 and 2011 for our Business Transformation Project were $146.2million and $195.8million, respectively.
We expect total capital expenditures in fi scal 2013 to be in the range of $600million to $650million. Fiscal 2013 expenditures will include facility, fl eet and
other equipment replacements and expansions; new facility construction, including fold-out facilities; and investments in technology.
During fi scal 2012, in the aggregate, the company paid cash of $110.6million for operations acquired during fi scal 2012 and for contingent consideration
related to operations acquired in previous fi scal years. During fi scal 2012, we acquired for cash broadline foodservice operations in Sacramento, California;
Quebec, Canada; New Haven, Connecticut; Grand Rapids, Michigan; Minneapolis, Minnesota; Columbia, South Carolina and Spokane, Washington. In
addition, Sysco acquired for cash a company that distributes specialty imported products headquartered in Chicago, Illinois.
During fi scal 2011, in the aggregate, the company paid cash of $101.1million for operations acquired during fi scal 2011 and for contingent consideration
related to operations acquired in previous fi scal years. During fi scal 2011, we acquired for cash broadline foodservice operations in central California;
LosAngeles, California; Ontario, Canada; Lincoln, Nebraska; and Trenton, New Jersey.
During fi scal 2010, in the aggregate, the company paid cash of $29.3million for operations acquired during fi scal 2010 and for contingent consideration
related to operations acquired in previous fi scal years. During fi scal 2010, we acquired for cash a broadline foodservice operation in Syracuse, NewYork,
a produce distributor in Atlanta, Georgia and a seafood distributor in Edmonton, Alberta, Canada.
Financing Activities
Equity Transactions
Proceeds from common stock reissued from treasury for share-based compensation awards were $99.4million in fi scal 2012, $332.7million in fi scal
2011 and $94.8million in fi scal 2010. The increase in proceeds in fi scal 2011 was due to an increase in the number of options exercised in fi scal 2011,
as compared to fi scal 2012 and 2010. The level of option exercises, and thus proceeds, will vary from period to period and is largely dependent on
movements in our stock price.
We traditionally have engaged in Board-approved share repurchase programs. The number of shares acquired and their cost during the past three fi scal
years were 10,000,000shares for $272.3million in fi scal 2012, 10,000,000shares for $291.6million in fi scal 2011 and 6,000,000shares for $179.2million
in fi scal 2010. There were 75,200 additional shares repurchased through August15,2012, resulting in a remaining authorization by our Board of Directors
to repurchase up to 23,311,400shares, based on the trades made through that date. Our current share repurchase strategy is to purchase enough shares
to keep our diluted average shares outstanding relatively constant. To achieve this goal, we believe we will not have to purchase as many shares in fi scal
2013 as were purchased in fi scal 2012.
We have made dividend payments to our shareholders in each fi scal year since our company inception over 40 years ago. We target a dividend payout of
40% to 50% of net earnings. We paid in excess of that range in fi scal 2012 primarily due to increased expenses from our Business Transformation Project.
We believe as we realize benefi ts from this project, our dividend payout will return to this targeted range. Dividends paid were $622.9million, or $1.06 per
share, in fi scal 2012, $597.1million, or $1.02 per share, in fi scal 2011 and $579.8million, or $0.98 per share, in fi scal 2010. In May2012, we declared
our regular quarterly dividend for the fi rst quarter of fi scal 2013 of $0.27 per share, which was paid in July2012.