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SYSCO CORPORATION-Form10-K36
PARTII
ITEM7Management’s Discussion and Analysis ofFinancial Condition and Results of Operations
Fiscal 2013 capital expenditures included:
• eet replacements;
•construction of a fold-out facility in southern California;
•
replacement or signi cant expansion of facilities in Atlanta, Georgia; British Columbia, Canada; Boston, Massachusetts and Columbia, South Carolina; and
•investments in technology.
Fiscal 2012 capital expenditures included:
•
replacement or signi cant expansion of facilities in San Diego, California; Boston, Massachusetts; Lincoln, Nebraska; Syracuse, New York and central Texas;
•construction of fold-out facilities in southern California and Long Island, New York;
•the continued remodeling of our shared services facility purchased in  scal 2010;
• eet replacements; and
•investments in technology including our Business Transformation Project.
The level of capital expenditures in  scal 2014 was mostly consistent with  scal 2013, representing a small increase of $11.3 million. Capital expenditures in
scal 2013 decreased by $272.6 million from  scal 2012 primarily due to less investment in technology in  scal 2013 related to our Business Transformation
Project due to the initiation of the project’s deployment phase in August 2012. Capital expenditures in  scal 2014, 2013 and 2012 for our Business
Transformation Project were $33.4 million, $20.0 million and $146.2 million, respectively.
We estimate our capital expenditures, net of proceeds from sales of assets, in  scal 2015 should be in the range of $500 million to $550 million. Fiscal
2015 expenditures will include facility,  eet and other equipment replacements and expansions; new facility construction, including fold-out facilities; and
investments in technology.
During  scal 2014, in the aggregate, the company paid cash of $79.3 million for operations acquired during  scal 2014 and for contingent consideration
related to operations acquired in previous  scal years. During  scal 2014, we acquired for cash operations in Meridian, Idaho; Landover, Maryland; St.
Louis, Missouri; Cleveland, Ohio and Philadelphia, Pennsylvania.
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, we 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.
During  scal 2012, in the aggregate, the company paid cash of $110.6 million for operations acquired during  scal 2012 and for contingent consideration
related to operations acquired in previous  scal years. During  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.
Free Cash Flow
Free cash  ow represents net cash provided from operating activities less purchases of plant and equipment plus proceeds from sales of plant and
equipment. Sysco considers free cash  ow to be a non-GAAP liquidity measure that provides useful information to management and investors about the
amount of cash generated by the business after the purchases and sales of buildings,  eet, equipment and technology, which may potentially be used to
pay for, among other things, strategic uses of cash including dividend payments, share repurchases and acquisitions. We do not mean to imply that free
cash  ow is necessarily available for discretionary expenditures, however, as it may be necessary that we use it to make mandatory debt service or other
payments. As a result of decreased cash provided by operating activities and increased capital spending, partially offset by increased proceeds from sales
of plant and equipment, free cash  ow for  scal 2014 decreased 2.0%, or $19.9 million, to $995.4 million as compared to  scal 2013. Increased cash
provided by operating activities, partially offset by increased capital spending, resulted in free cash  ow for  scal 2013 increasing 61.7%, or $387.4 million,
to $1.0 billion as compared to  scal 2012.