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SYSCO CORPORATION-Form10-K66
PARTII
ITEM8Financial Statements and Supplementary Data
of the extended facility are substantially the same. Commercial paper issuances outstanding were $130.0 million and $95.5 million as of June 28, 2014
and June 29, 2013, respectively, 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.
During  scal 2014, 2013, and 2012, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from approximately
zeroto $770.5 million, zero to $330.0 million, and zero to $563.1 million, respectively.
Bridge Facility
In December 2013, Sysco secured a commitment for an unsecured bridge facility in the amount of $3.3865 billion in connection with its proposed
merger with US Foods (discussed further in Note 4, Acquisitions). In January 2014, this bridge facility commitment was replaced with a $3.3865 billion
bridge term loan agreement with multiple lenders. Sysco may borrow up to $3.3865 billion in term loans on the closing date of the US Foods acquisition
to fund the acquisition, re nance certain indebtedness of US Foods and pay related fees and expenses. The facility expires on March 8, 2015, but is
subject to extension if regulatory approvals have not yet been obtained. Borrowings under the bridge term loan agreement are guaranteed by the same
subsidiaries of Sysco that guarantee the company’s revolving credit facility, and in certain circumstances, may also be guaranteed by US Foods after
closing of the merger.
Fixed Rate Debt
In February 2012, Sysco  led with the Securities and Exchange Commission (SEC) 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.
In March 2014, Sysco repaid the 4.6% senior notes totaling $200.0 million at maturity utilizing a combination of cash  ow from operations and commercial
paper issuances.
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 28, 2014 was $2,759.9 million, of which approximately 74% was at  xed rates with a weighted average of 4.6% and an average life
of 13 years, and the remainder was at  oating rates with a weighted average of 2.7% and an average life of three years. 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 28, 2014 and June 29, 2013, letters of credit outstanding were $45.7 million and $42.2 million, respectively.