Sysco 2014 Annual Report Download - page 41

SYSCO CORPORATION-Form10-K 29
PARTII
ITEM7Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
(Inthousands, except for share and per share data) 2014 2013 Change in Dollars % Change
Impact of FY13 acquisition-related charge - 0.01 (0.01)
Impact of change in estimate of self insurance 0.03 - 0.03
Impact of settlement liability 0.03 - 0.03
Impact of facility closure charges - - -
Impact of US Foods  nancing costs 0.01 - 0.01
ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP)(1)
$ 1.76 $ 1.78 $ (0.02) (1.1)%
Diluted shares outstanding 590,216,220 592,675,110
(1) The net earnings and diluted earnings per share impacts are shown net of tax, except as noted below. The aggregate tax impact of adjustments for executive retirement plans restructuring
charges, MEPP charges, severance charges, merger and integration costs associated with our pending US Foods merger, a fiscal 2013 acquisition related charge, change in estimate for
self-insurance costs, charges from a liability for a settlement, facility closure charges and amortization of US Foods financing costs was $67.2 million and $37.8 million for fiscal 2014 and
fiscal 2013, respectively. Amounts are calculated by multiplying the operating income impact of each item by the respective year’s effective tax rate, with the exception of the charges from the
settlement liability, which has an estimated non-deductible portion, and the fiscal 2013 acquisition-related charge, which has no tax impact.
Set forth below is a reconciliation of actual operating expenses, operating income, net earnings and diluted earnings per share to adjusted results for these
measures for  scal 2013 and  scal 2012:
(Inthousands, except for share and per share data) 2013 2012 Change in Dollars % Change
Operating expenses (GAAP) $ 6,338,129 $ 5,888,642 $ 449,487 7.6%
Impact of BTP costs (330,544) (193,126) (137,418) 71.2
Impact of MEPP charge (41,876) (21,899) (19,977) 91.2
Impact of severance charges (23,206) (14,452) (8,754) 60.6
Impact of restructuring executive retirement plans (20,990) - (20,990)
Impact of acquisition-related charge (5,998) - (5,998)
Impact of facility closure charges (2,645) - (2,645)
ADJUSTED OPERATING EXPENSES (NON-GAAP) $ 5,912,870 $ 5,659,165 $ 253,705 4.5%
Operating Income (GAAP) $ 1,658,478 $ 1,890,632 $ (232,154) (12.3)%
Impact of BTP costs 330,544 193,126 137,418 71.2
Impact of MEPP charge 41,876 21,899 19,977 91.2
Impact of severance charges 23,206 14,452 8,754 60.6
Impact of restructuring executive retirement plans 20,990 - 20,990
Impact of acquisition-related charge 5,998 - 5,998
Impact of facility closure charges 2,645 - 2,645
ADJUSTED OPERATING INCOME (NON-GAAP) $ 2,083,737 $ 2,120,109 $ (36,372) (1.7)%
Net earnings (GAAP)(1) $ 992,427 $ 1,121,585 $ (129,158) (11.5)%
Impact of BTP costs 211,978 121,418 90,560 74.6
Impact of MEPP charge 26,855 13,768 13,087 95.1
Impact of severance charges 14,882 9,086 5,796 63.8
Impact of restructuring executive retirement plans 13,461 - 13,461
Impact of acquisition-related charge 5,998 - 5,998
Impact of facility closure charges 1,696 - 1,696
ADJUSTED NET EARNINGS (NON-GAAP)(1) $ 1,267,297 $ 1,265,857 $ 1,440 0.1%
Diluted earnings per share (GAAP)(1) $ 1.67 $ 1.90 $ (0.23) (12.1)%
Impact of BTP costs 0.36 0.21 0.15 71.4
Impact of MEPP charge 0.05 0.02 0.03 150.0
Impact of severance charges 0.03 0.02 0.01 50.0
Impact of restructuring executive retirement plans 0.02 - 0.02
Impact of acquisition-related charge 0.01 - 0.01
Impact of facility closure charges - - -
ADJUSTED DILUTED EARNINGS PER SHARE (NON-GAAP)(1) $ 2.14 $ 2.15 $ (0.01) (0.5)%
Diluted shares outstanding 592,675,110 588,991,441
(1) The net earnings and diluted earnings per share impacts are shown net of tax, except as noted below. The aggregate tax impact of adjustments for Business Transformation Project, MEPP
charge, severance charges, executive retirement plans restructuring, and facility closure charges was $150.3 million and $85.2 million for fiscal 2013 and fiscal 2012, respectively. The fiscal
2013 acquisition-related charge had no tax impact.
Cost per case is an important metric management uses to measure our expense performance. This metric is calculated by taking the total operating
expense of our North American Broadline companies, divided by the number of cases sold. Adjusted cost per case is calculated similarly, however the
operating expense component excludes charges from executive retirement plans restructuring, multiemployer pension plans and severance which are the
Certain Items applicable to these companies, divided by the number of cases sold. Our corporate expenses are not included in the cost per cases metrics
because the metric is a measure of ef ciency in our operations. We seek to grow our sales and either minimize or reduce our costs on a per case basis.
Our North American Broadline companies represent approximately 80% of our of total sales and 80% of our total operating expenses prior to corporate
expenses. Sysco considers adjusted cost per case to be a measure that provides useful information to management and investors about Sysco’s expense
management. An analysis of any non-GAAP  nancial measure should be used in conjunction with results presented in accordance with GAAP. In the table
that follows, the change in adjusted cost per case is reconciled to cost per case for the periods presented.