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SYSCO CORPORATION-Form10-K78
PARTII
ITEM8Financial Statements and Supplementary Data
Other
Undistributed income of certain consolidated foreign subsidiaries at June29,2013 amounted to $1,052.0million for which no deferred U.S. income tax
provision has been recorded because Sysco intends to permanently reinvest such income in those foreign operations. An estimate of any U.S. or foreign
withholding taxes that may be applicable upon actual or deemed repatriation is not practical due to the complexities associated with the hypothetical
calculation.
NOTE19 Acquisitions
During  scal 2013, in the aggregate, the company paid cash of $397.4million for operations acquired during  scal 2013 and for contingent consideration
related to operations acquired in previous  scal years. During  scal 2013, Sysco acquired for cash foodservice operations in Nassau, Bahamas; San
Francisco, California; San Jose, California; Stockton, California; Ontario, Canada; Quebec, Canada; Orlando, Florida; Dublin, Ireland; St. Cloud, Minnesota;
Co. Down, Northern Ireland; Greenville, Ohio and Houston, Texas. The  scal 2013 acquisitions were immaterial, individually and in the aggregate, to the
consolidated  nancial statements.
Certain acquisitions involve contingent consideration typically payable over periods up to  ve years only in the event that certain outstanding contingencies
are resolved. As of June29,2013, aggregate contingent consideration amounts outstanding relating to acquisitions was $108.0million, of which $25.3million
could result in the recording of additional goodwill when paid and $68.9million was recorded as earnout liabilities as of June29,2013.
NOTE20 Commitments and Contingencies
Legal Proceedings
Sysco is engaged in various legal proceedings which have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings,
based on de nitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable, the losses have
been accrued. Based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of
these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated  nancial position or results of operations
of the company. However, the  nal results of legal proceedings cannot be predicted with certainty and if the company failed to prevail in one or more of
these legal matters, and the associated realized losses were to exceed the company’s current estimates of the range of potential losses, the company’s
consolidated  nancial position or results of operations could be materially adversely affected in future periods.
Fuel Commitments
Sysco routinely enters into forward purchase commitments for a portion of its projected diesel fuel requirements. As of June29,2013, we had forward
diesel fuel commitments totaling approximately $204.0million through August2014.
Other Commitments
Sysco has committed to aggregate product purchases for resale in order to bene t from a centralized approach to purchasing. A majority of these agreements expire
within one year; however, certain agreements have terms through  scal 2018. These agreements commit the company to a minimum volume at various pricing
terms, including  xed pricing, variable pricing or a combination thereof. Minimum amounts committed to as of June29,2013 totaled approximately $1,819.1million.
Minimum amounts committed to by year are as follows:
(Inthousands)
Amount
2014 $ 1,157,103
2015 426,362
2016 141,893
2017 93,266
2018 444
Sysco has contracts with various third party service providers to receive information technology services. The services have been committed for periods
up to  scal 2016 and may be extended. As of June29,2013, the total remaining cost of the services over that period is expected to be approximately
$531.7million. A portion of this amount may be reduced by Sysco utilizing less than estimated resources and can be increased by Sysco utilizing more
than estimated resources. Certain agreements allow adjustments for in ation. 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  scal 2014, the estimated termination fee incurred in  scal 2014
would range from approximately $22.8million to $32.6million.