Sysco 2013 Annual Report Download - page 71

SYSCO CORPORATION-Form10-K60
PARTII
ITEM8Financial Statements and Supplementary Data
On June30,2011, a Canadian subsidiary of Sysco entered into a short-term demand loan facility for the purpose of facilitating a distribution from the Canadian
subsidiary to Sysco, and Sysco concurrently entered into an agreement with the bank to guarantee the loan. As of July2,2011, 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.
In December2011, Sysco terminated its previously existing revolving credit facility that supported the company’s U.S. and Canadian commercial paper
programs. At the same time, Sysco and one of its subsidiaries, Sysco International, ULC, entered into a new $1,000.0million credit facility supporting the
company’s U.S. and Canadian commercial paper programs. This facility provides for borrowings in both U.S. and Canadian dollars. Borrowings by Sysco
International, ULC under the credit agreement are guaranteed by Sysco, and borrowings by Sysco and Sysco International, ULC under the credit agreement
are guaranteed by all wholly-owned subsidiaries of Sysco that are guarantors of the company’s senior notes and debentures. The original facility in the amount
of $1,000.0million expires on December29,2016. In December2012, a portion of the facility was extended for an additional year. This extended facility,
which expires on December29,2017, is for $925.0million of the original $1,000.0million facility, but is subject to further extension. As of June29,2013,
commercial paper issuances outstanding were $95.5million and were classi ed as long-term debt, as the company’s commercial paper programs are
supported by the long-term revolving credit facility described above. There were no commercial paper issuances outstanding as of June30,2012.
During  scal 2013,2012, and 2011, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from approximately zero
to $330.0million, zero to $563.1million, and zero to $330.3million, respectively.
Fixed Rate Debt
In February2012, Sysco  led with the Securities and Exchange Commission an automatically effective well-known seasoned issuer shelf registration
statement for the issuance of an indeterminate amount of common stock, preferred stock, debt securities and guarantees of debt securities that may be
issued from time to time.
In June2012, Sysco repaid the 6.1% senior notes totaling $200.0million at maturity utilizing a combination of cash  ow from operations and commercial
paper issuances.
In June2012, Sysco issued 0.55% senior notes totaling $300.0million due June12,2015 (the 2015 notes) and 2.6% senior notes totaling $450.0million
due June12,2022 (the 2022 notes) under its February2012 shelf registration. The 2015 and 2022 notes, which were priced at 99.319% and 98.722% 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, re nancing of
debt, working capital, share repurchases and capital expenditures.
In February2013, Sysco repaid the 4.2% senior notes totaling $250.0million at maturity utilizing a combination of cash  ow from operations and cash on hand.
The 4.6% senior notes due March15,2014, the 5.25% senior notes due February12,2018, the 5.375% senior notes due March17,2019, the 6.5%
debentures due August1,2028, the 5.375% senior notes due September21,2035 and the 6.625% senior notes due March17,2039 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.
Total Debt
Total debt as of June29,2013 was $2,888.9million of which approximately 88% was at  xed rates with a weighted average of 4.7% and an average life
of 13 years, and the remainder was at  oating rates with a weighted average of 1.4% 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 speci ed level.
Sysco is currently in compliance with all debt covenants.
Other
As of June29,2013 and June30,2012, letters of credit outstanding were $42.2million and $29.8million, respectively.