Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Jun. 30, 2018 | Aug. 10, 2018 | Dec. 30, 2017 | |
Document Entity Information [Abstract] | |||
Entity Registrant Name | SYSCO CORP | ||
Entity Central Index Key | 96,021 | ||
Current Fiscal Year End Date | --06-30 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Jun. 30, 2018 | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 519,774,992 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 28,886,944,016 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 |
Current assets | ||
Cash and cash equivalents | $ 552,325 | $ 869,502 |
Accounts and notes receivable, less allowances of $25,768 and $31,059 | 4,073,723 | 4,012,393 |
Inventories, net | 3,125,413 | 2,995,598 |
Prepaid expenses and other current assets | 187,880 | 139,185 |
Income tax receivable | 64,112 | 16,760 |
Total current assets | 8,003,453 | 8,033,438 |
Plant and equipment at cost, less depreciation | 4,521,660 | 4,377,302 |
Other long-term assets | ||
Goodwill | 3,955,485 | 3,916,128 |
Intangibles, less amortization | 979,812 | 1,037,511 |
Deferred income taxes | 83,666 | 142,472 |
Other assets | 526,328 | 249,804 |
Total other long-term assets | 5,545,291 | 5,345,915 |
Total assets | 18,070,404 | 17,756,655 |
Current liabilities | ||
Notes payable | 4,176 | 3,938 |
Accounts payable | 4,136,482 | 3,971,112 |
Accrued expenses | 1,608,966 | 1,576,221 |
Accrued income taxes | 56,793 | 14,540 |
Current maturities of long-term debt | 782,329 | 530,075 |
Total current liabilities | 6,588,746 | 6,095,886 |
Long-term liabilities | ||
Long-term debt | 7,540,765 | 7,660,877 |
Deferred income taxes | 319,124 | 161,715 |
Other long-term liabilities | 1,077,163 | 1,373,822 |
Total long-term liabilities | 8,937,052 | 9,196,414 |
Commitments and contingencies | ||
Noncontrolling interest | 37,649 | 82,839 |
Shareholders' equity | ||
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none | 0 | 0 |
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares | 765,175 | 765,175 |
Paid-in capital | 1,383,619 | 1,327,366 |
Retained earnings | 10,348,628 | 9,447,755 |
Accumulated other comprehensive loss | (1,409,269) | (1,262,737) |
Treasury stock at cost, 244,533,248 and 235,135,699 shares | (8,581,196) | (7,896,043) |
Total shareholders' equity | 2,506,957 | 2,381,516 |
Total liabilities and shareholders' equity | $ 18,070,404 | $ 17,756,655 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 25,768 | $ 31,059 |
Preferred stock, par value (in dollars per share) | $ 1 | $ 1 |
Preferred stock, authorized (in shares) | 1,500,000 | 1,500,000 |
Preferred stock, issued (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 1 | $ 1 |
Common stock, authorized (in shares) | 2,000,000,000 | 2,000,000,000 |
Common stock, issued (in shares) | 765,174,900 | 765,174,900 |
Treasury stock (in shares) | 244,533,248 | 235,135,699 |
CONSOLIDATED RESULTS OF OPERATI
CONSOLIDATED RESULTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Statement [Abstract] | |||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 |
Cost of sales | 12,399,197 | 11,673,876 | 11,712,104 | 11,856,756 | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 47,641,933 | 44,813,632 | 41,326,447 |
Gross profit | 2,916,709 | 2,675,628 | 2,699,386 | 2,793,668 | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 11,085,391 | 10,557,507 | 9,040,472 |
Operating expenses | 2,229,042 | 2,189,695 | 2,167,104 | 2,170,576 | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 8,756,417 | 8,504,336 | 7,189,972 |
Operating income | 687,667 | 485,933 | 532,282 | 623,092 | 557,959 | 435,962 | 492,417 | 566,833 | 2,328,974 | 2,053,171 | 1,850,500 |
Interest expense | 92,468 | 136,145 | 85,986 | 80,884 | 76,020 | 81,004 | 72,231 | 73,623 | 395,483 | 302,878 | 306,146 |
Other expense (income), net | 2,043 | (15,096) | (5,432) | (4,248) | (1,586) | (4,815) | (2,320) | (7,216) | (22,733) | (15,937) | 111,347 |
Earnings before income taxes | 593,156 | 364,884 | 451,728 | 546,456 | 483,525 | 359,773 | 422,506 | 500,426 | 1,956,224 | 1,766,230 | 1,433,007 |
Income taxes | 144,228 | 34,799 | 167,615 | 178,816 | 178,354 | 121,495 | 147,339 | 176,539 | 525,458 | 623,727 | 483,385 |
Net earnings | $ 448,928 | $ 330,085 | $ 284,113 | $ 367,640 | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 1,430,766 | $ 1,142,503 | $ 949,622 |
Net earnings: | |||||||||||
Basic earnings per share (in dollars per share) | $ 0.86 | $ 0.63 | $ 0.55 | $ 0.70 | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 2.74 | $ 2.10 | $ 1.66 |
Diluted earnings per share (in dollars per share) | 0.85 | 0.63 | 0.54 | 0.69 | 0.57 | 0.44 | 0.50 | 0.58 | $ 2.70 | $ 2.08 | $ 1.64 |
Average shares outstanding (in shares) | 522,926,914 | 543,496,816 | 573,057,406 | ||||||||
Diluted shares outstanding (in shares) | 529,089,854 | 548,545,027 | 577,391,406 | ||||||||
Dividends declared per common share (in dollars per share) | $ 0.36 | $ 0.36 | $ 0.36 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 1.41 | $ 1.3 | $ 1.23 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Net earnings | $ 1,430,766 | $ 1,142,503 | $ 949,622 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | (22,987) | (11,243) | (39,080) |
Items presented net of tax: | |||
Amortization of cash flow hedges | 8,240 | 7,082 | 7,111 |
Amortization of prior service cost | 6,905 | 7,004 | 6,992 |
Amortization of actuarial loss, net | 25,110 | 25,965 | 13,352 |
Actuarial gain (loss), net arising in current year | 52,511 | 97,283 | (419,517) |
Total other comprehensive income (loss) | 89,913 | 95,381 | (434,921) |
Comprehensive income | 1,520,679 | 1,237,884 | 514,701 |
Net investment hedging | |||
Items presented net of tax: | |||
Changes in derivatives qualifying as hedges | 5,791 | (24,012) | 0 |
Cash flow hedging | |||
Items presented net of tax: | |||
Changes in derivatives qualifying as hedges | $ 14,343 | $ (6,698) | $ (3,779) |
CHANGES IN CONSOLIDATED SHAREHO
CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Cash flow hedging | Net investment hedging | Common Stock | Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive LossCash flow hedging | Accumulated Other Comprehensive LossNet investment hedging | Treasury Stock | |
Beginning balance, shareholders' equity at Jun. 27, 2015 | $ 5,260,224 | $ 765,175 | $ 1,213,999 | $ 8,751,985 | $ (923,197) | $ (4,547,738) | |||||
Beginning balance, shareholders' equity (in shares) at Jun. 27, 2015 | 765,174,900 | 170,857,231 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net earnings | 949,622 | 949,622 | |||||||||
Foreign currency translation adjustment | (39,080) | (39,080) | |||||||||
Amortization of cash flow hedges, net of tax | 7,111 | 7,111 | |||||||||
Change in fair value of cash flow hedges, net of tax | (3,779) | (3,779) | |||||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 20,344 | 20,344 | |||||||||
Pension funded status adjustment, net of tax | (419,517) | (419,517) | |||||||||
Dividends declared | (695,469) | (695,469) | |||||||||
Treasury stock purchases | (1,949,445) | $ (1,949,445) | |||||||||
Treasury stock purchases (in shares) | 44,716,180 | ||||||||||
Share-based compensation awards | 349,597 | 67,141 | $ 282,456 | ||||||||
Share-based compensation awards (in shares) | (9,995,927) | ||||||||||
Ending balance, shareholders' equity at Jul. 02, 2016 | 3,479,608 | $ 765,175 | 1,281,140 | 9,006,138 | (1,358,118) | $ (6,214,727) | |||||
Ending balance, shareholders' equity (in shares) at Jul. 02, 2016 | 765,174,900 | 205,577,484 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Net earnings | 1,142,503 | 1,142,503 | |||||||||
Increase in ownership interest in subsidiaries | (39,991) | (39,991) | |||||||||
Foreign currency translation adjustment | (11,243) | (11,243) | |||||||||
Amortization of cash flow hedges, net of tax | 7,082 | 7,082 | |||||||||
Change in fair value of cash flow hedges, net of tax | $ (6,698) | $ (24,012) | $ (6,698) | $ (24,012) | |||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 32,969 | 32,969 | |||||||||
Pension funded status adjustment, net of tax | 97,283 | 97,283 | |||||||||
Dividends declared | (700,886) | (700,886) | |||||||||
Treasury stock purchases | (1,886,121) | $ (1,886,121) | |||||||||
Treasury stock purchases (in shares) | 36,224,078 | ||||||||||
Share-based compensation awards | 291,022 | 86,217 | $ 204,805 | ||||||||
Share-based compensation awards (in shares) | (6,665,863) | ||||||||||
Ending balance, shareholders' equity at Jul. 01, 2017 | 2,381,516 | $ 765,175 | 1,327,366 | 9,447,755 | (1,262,737) | $ (7,896,043) | |||||
Ending balance, shareholders' equity (in shares) at Jul. 01, 2017 | 765,174,900 | 235,135,699 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Reclassification of accumulated other comprehensive loss to retained earnings | [1] | 0 | 236,445 | (236,445) | |||||||
Net earnings | 1,430,766 | 1,430,766 | |||||||||
Increase in ownership interest in subsidiaries | (31,072) | (31,072) | |||||||||
Foreign currency translation adjustment | (22,987) | (22,987) | |||||||||
Amortization of cash flow hedges, net of tax | 8,240 | 8,240 | |||||||||
Change in fair value of cash flow hedges, net of tax | $ 14,343 | $ 5,791 | $ 14,343 | $ 5,791 | |||||||
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax | 32,015 | 32,015 | |||||||||
Pension funded status adjustment, net of tax | 52,511 | 52,511 | |||||||||
Dividends declared | (735,266) | (735,266) | |||||||||
Treasury stock purchases | (956,502) | $ (956,502) | |||||||||
Treasury stock purchases (in shares) | 17,473,973 | ||||||||||
Share-based compensation awards | 327,602 | 56,253 | $ 271,349 | ||||||||
Share-based compensation awards (in shares) | (8,076,424) | ||||||||||
Ending balance, shareholders' equity at Jun. 30, 2018 | $ 2,506,957 | $ 765,175 | $ 1,383,619 | $ 10,348,628 | $ (1,409,269) | $ (8,581,196) | |||||
Ending balance, shareholders' equity (in shares) at Jun. 30, 2018 | 765,174,900 | 244,533,248 | |||||||||
[1] | Deferred taxes stranded in accumulated other comprehensive income (AOCI) as a result of the Tax Cuts and Jobs Act of 2017 (the Tax Act) were reclassified to retained earnings as a result of early adopting Accounting Standards Update (ASU) 2018-02. |
CONSOLIDATED CASH FLOWS
CONSOLIDATED CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Cash flows from operating activities: | |||
Net earnings | $ 1,430,766 | $ 1,142,503 | $ 949,622 |
Adjustments to reconcile net earnings to cash provided by operating activities: | |||
Share-based compensation expense | 93,841 | 83,883 | 79,466 |
Depreciation and amortization | 765,498 | 901,992 | 662,710 |
Amortization of debt issuance and other debt-related costs | 28,474 | 31,852 | 45,137 |
Loss on extinguishment of debt | 53,104 | 0 | 86,460 |
Loss on foreign exchange remeasurement | 0 | 0 | 101,228 |
Deferred income taxes | 187,908 | (51,846) | 93,871 |
Provision for losses on receivables | 21,448 | 20,672 | 20,372 |
Other non-cash items | 3,986 | 6,704 | 23,347 |
Additional changes in certain assets and liabilities, net of effect of businesses acquired: | |||
(Increase) decrease in receivables | (37,457) | 20,452 | (27,311) |
(Increase) decrease in inventories | (89,737) | (113,647) | 66,937 |
(Increase) decrease in prepaid expenses and other current assets | (19,643) | 8,158 | (8,468) |
Increase in accounts payable | 76,897 | 322,775 | 23,863 |
Increase (decrease) in accrued expenses | 47,105 | (4,476) | (157,600) |
(Decrease) increase in accrued income taxes | (10,652) | (74,590) | 231,542 |
(Increase) in other assets | (77,852) | (36,449) | (6,639) |
(Decrease) in other long-term liabilities | (315,054) | (18,629) | (196,190) |
Net cash provided by operating activities | 2,158,632 | 2,239,354 | 1,988,347 |
Cash flows from investing activities: | |||
Additions to plant and equipment | (687,815) | (686,378) | (527,346) |
Proceeds from sales of plant and equipment | 22,255 | 23,715 | 23,511 |
Acquisition of businesses, net of cash acquired | (248,105) | (2,921,798) | (219,218) |
Purchase of foreign currency options | 0 | 0 | (103,501) |
Proceeds from sale of foreign currency options | 0 | 0 | 57,452 |
Net cash used for investing activities | (913,665) | (3,584,461) | (769,102) |
Cash flows from financing activities: | |||
Bank and commercial paper borrowings, net | (119,700) | 119,700 | 0 |
Other debt borrowings | 1,000,599 | 753,834 | 5,134,709 |
Other debt repayments | (552,036) | (143,664) | (126,797) |
Tender and redemption premiums for senior notes | (281,762) | 0 | 0 |
Redemption of senior notes | 0 | 0 | (5,050,000) |
Proceeds from stock option exercises | 268,751 | 204,805 | 282,455 |
Treasury stock purchases | (978,901) | (1,886,121) | (1,949,445) |
Dividends paid | (722,158) | (698,647) | (698,869) |
Other financing activities | (25,262) | (32,494) | (51,989) |
Net cash used for financing activities | (1,410,469) | (1,682,587) | (2,459,936) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 11,844 | (22,104) | (138,327) |
Net decrease in cash, cash equivalents and restricted cash | (153,658) | (3,049,798) | (1,379,018) |
Cash, cash equivalents and restricted cash at beginning of period | 869,502 | 3,919,300 | 5,298,318 |
Cash, cash equivalents and restricted cash at end of period | 715,844 | 869,502 | 3,919,300 |
Supplemental disclosures of cash flow information: | |||
Interest | 301,672 | 285,025 | 200,174 |
Income taxes | $ 268,384 | $ 761,384 | $ 180,565 |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
SUMMARY OF ACCOUNTING POLICIES | SUMMARY OF ACCOUNTING POLICIES Business and Consolidation Sysco Corporation, acting through its subsidiaries and divisions (Sysco or the company), is engaged in the marketing and distribution of a wide range of food and related products primarily to the foodservice or food-away-from-home industry. These services are performed for over 600,000 customers from 332 distribution facilities located throughout North America and Europe. Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended June 30, 2018 for fiscal 2018 , a 52 -week year ended July 1, 2017 for fiscal 2017 , and a 53 -week year ended July 2, 2016 for fiscal 2016 . The accompanying financial statements include the accounts of Sysco and its consolidated subsidiaries. All significant intercompany transactions and account balances have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses. Actual results could differ from the estimates used. Cash and Cash Equivalents Cash includes cash equivalents such as cash deposits, time deposits, certificates of deposit, commercial paper, high-quality money market funds and all highly liquid instruments with original maturities of three months or less, which are recorded at fair value. Accounts Receivable Accounts receivable consist primarily of trade receivables from customers and receivables from suppliers for marketing or incentive programs. Sysco determines the past due status of trade receivables based on contractual terms with each customer. Sysco evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts based on a combination of factors. The company utilizes specific criteria to determine uncollectible receivables to be written off including whether a customer has filed for or been placed in bankruptcy, has had accounts referred to outside parties for collection or has had accounts past due over specified periods. In these instances, a specific allowance for doubtful accounts is recorded to reduce the receivable to the net amount reasonably expected to be collected. Allowances are recorded for all other receivables based on an analysis of historical trends of write-offs and recoveries. Inventories Inventories consisting primarily of finished goods include food and related products and lodging products held for resale and are valued at the lower of cost (first-in, first-out method) and net realizable value. Elements of costs include the purchase price of the product and freight charges to deliver the product to the company’s warehouses and are net of certain cash received from vendors (see “Vendor Consideration”). Plant and Equipment Capital additions, improvements and major replacements are classified as plant and equipment and are carried at cost. Depreciation is recorded using the straight-line method, which reduces the book value of each asset in equal amounts over its estimated useful life, and is included within operating expenses in the consolidated results of operations. Maintenance, repairs and minor replacements are charged to earnings when they are incurred. Upon the disposition of an asset, its accumulated depreciation is deducted from the original cost, and any gain or loss is reflected in current earnings. Long-Lived Assets Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life based on updated projections on an undiscounted basis. For assets held for use, Sysco groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. Goodwill and Intangibles Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill and intangibles with indefinite lives are not amortized. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of a business combination. The recoverability of goodwill and indefinite-lived intangibles is assessed annually, or more frequently as needed when events or changes have occurred that would suggest an impairment of carrying value, by determining whether the fair values of the applicable reporting units exceed their carrying values. This annual testing may be performed utilizing either a qualitative or quantitative assessment; however, if a qualitative assessment is performed and it is determined that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative test is performed. For fiscal 2018 , the company analyzed its 7 operating segments and determined that 18 reporting units existed for purposes of evaluating for goodwill impairment. For certain reporting units, the company utilized a qualitative assessment. For the remaining reporting units, Sysco performed a quantitative test using a combination of the income and market approaches. The evaluation of fair value requires the use of projections, estimates and assumptions as to the future performance of the operations in performing a discounted cash flow analysis, as well as assumptions regarding sales and earnings multiples that would be applied in comparable acquisitions. The company does not believe the estimates used in the analysis are reasonably likely to change materially in the future, but Sysco will continue to assess the estimates in the future based on the expectations of the reporting units. In the fiscal 2018 assessment, the estimated fair values exceeded the carrying values for two international reporting units by 15% and 18% , respectively, with goodwill of $341.0 million in the aggregate as of June 30, 2018 , recorded for these reporting units. Intangibles with definite lives are amortized over their useful lives in a manner consistent with underlying cash flow, which generally ranges from two to fifteen years. Management reviews finite-lived intangibles for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the finite-lived intangibles are estimated over the intangible asset’s useful life based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the finite-lived intangible asset may not be recoverable, the potential impairment is measured at fair value. Derivative Financial Instruments All derivatives are recognized as assets or liabilities within the consolidated balance sheets at fair value at their gross values. Gains or losses on derivative financial instruments designated as fair value hedges are recognized immediately in the consolidated results of operations, along with the offsetting gain or loss related to the underlying hedged item. Gains or losses on derivative financial instruments designated as cash flow hedges are recorded as a separate component of shareholders’ equity from inception of the hedges and are reclassified to the Consolidated Results of Operations in conjunction with the recognition of the underlying hedged item. For net investment hedges, the remeasurement gain or loss is recorded in AOCI and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. Investments in Corporate-Owned Life Insurance Investments in corporate-owned life insurance (COLI) policies are recorded at their cash surrender values as of each balance sheet date. Changes in the cash surrender value during the period are recorded as a gain or loss within operating expenses. Sysco has the ability and intent to hold certain of its COLI policies to maturity; therefore, the company does not record deferred tax balances related to cash surrender value gains or losses for these policies. The company invests in two COLI policies relating to its executive deferred compensation plan and Supplemental Executive Retirement Plan (SERP). The total amounts related to the company’s investments in COLI policies included in other assets in the consolidated balance sheets were $167.9 million and $163.7 million at June 30, 2018 and July 1, 2017 , respectively. Treasury Stock The company records treasury stock purchases at cost. Shares removed from treasury are valued at cost using the average cost method. Sysco routinely repurchases shares in the normal course of business; however, in fiscal 2016, Sysco executed a $1.5 billion accelerated share repurchase program, under which it repurchased a total of 34,716,180 shares. Foreign Currency Translation The assets and liabilities of all foreign subsidiaries are translated at current exchange rates. Related translation adjustments are recorded as a component of AOCI (loss). Revenue Recognition The company recognizes revenue from the sale of a product when it is considered to be realized or realizable and earned. The company determines these requirements to be met at the point at which the product is delivered to the customer. The company grants certain customers sales incentives such as rebates or discounts and treats these as a reduction of sales at the time the sale is recognized. Sales tax collected from customers is not included in revenue but rather recorded as a liability due to the respective taxing authorities. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are considered to be a single nonmonetary transaction. As such, the company records the net effect of such transactions in the consolidated results of operations within sales. Vendor Consideration Sysco recognizes consideration received from vendors as a reduction to cost of sales when the services performed in connection with the monies received are completed and when the related product has been sold by Sysco. There are several types of cash consideration received from vendors. In many instances, the vendor consideration is in the form of a specified amount per case or per pound. In these instances, Sysco will recognize the vendor consideration as a reduction of cost of sales when the product is sold. In the situations in which the vendor consideration is not related directly to specific product purchases, Sysco will recognize these as a reduction of cost of sales when the earnings process is complete, the related service is performed and the amounts are realized. Shipping and Handling Costs Shipping and handling costs include costs associated with the selection of products and delivery to customers. Included in operating expenses are shipping and handling costs of approximately $3.6 billion , $3.4 billion and $2.6 billion in fiscal 2018 , 2017 and 2016 , respectively. Insurance Program Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. In fiscal 2018, Sysco created a wholly owned captive insurance subsidiary (the Captive) with the primary purpose to enhance Sysco’s risk financing strategies by providing Sysco the opportunity to negotiate insurance premiums in the non-retail insurance market. The Captive must maintain a sufficient level of cash to fund future reserve payments and secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. The Captive holds restricted cash and restricted cash equivalents in a cash deposit account in order to meet solvency requirements. Further, Sysco has letters of credit available to collateralize the remaining liabilities not covered by restricted cash and restricted cash equivalents. The company also maintains a fully self-insured group medical program. Liabilities associated with these risks are estimated in part by considering historical claims experience, medical cost trends, demographic factors, severity factors and other actuarial assumptions. Share-Based Compensation Sysco recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The fair value of performance share unit awards is determined based on the target number of shares of common stock and the company’s stock price on the date of grant and subsequently adjusted based on actual and forecasted performance compared to planned targets. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock and restricted stock unit awards are based on the company’s stock price on the date of grant. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. The method for estimating the fair value of stock options has not changed in the past 3 years. Income Taxes Sysco recognizes deferred tax assets and liabilities based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. The determination of the company’s provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes primarily reflects a combination of income earned and taxed in the various United States (U.S.) federal and state, as well as various foreign jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. In fiscal 2018, the U.S. government enacted the Tax Act, comprehensive tax legislation that decreased the federal corporate tax rate from 35% to 21%. For fiscal 2018, Sysco has a 28% rate, rather than 21%, because the law was enacted during the midpoint of the company’s fiscal year, requiring us to use a blended average rate. The company’s U.S. federal statutory tax rate for fiscal 2019 and beyond will be 21%. As discussed in Note 18 , “Income Taxes,” Sysco has recorded provisional estimates for some components of the Tax Act and will refine estimates and determine applicability for other components in future periods. Acquisitions Acquisitions of businesses are accounted for using the acquisition method of accounting, and the financial statements include the results of the acquired operations from the respective dates of acquisition. The purchase price of the acquired entities is preliminarily allocated to the net assets acquired and liabilities assumed based on the estimated fair value at the dates of acquisition, with any excess of cost over the fair value of net assets acquired, including intangibles, recognized as goodwill. Subsequent changes to preliminary amounts are made prospectively. Basis of Presentation The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income, changes in consolidated shareholders’ equity and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for all periods presented have been made. Sysco has interests in various jointly owned foodservice operations in Mexico, Panama and Sweden for which it consolidates the results of the operations; therefore, the financial position, results of operations and cash flows for these companies have been included in Sysco’s consolidated financial statements. The value of the noncontrolling interest in each entity is considered redeemable due to certain features of the investment agreement and has, therefore, been presented as mezzanine equity, which is outside of permanent equity, in the consolidated balance sheets. The income attributable to the noncontrolling interest is located within Other expense (income), net, in the consolidated results of operations, as this amount is not material. The non-cash add back for the change in the value of the noncontrolling interest is located within Other non-cash items on the consolidated cash flows. Reclassifications Prior year amounts have been reclassified to conform with the current year presentation. Supplemental Cash Flow Information Within the Consolidated Statement of Cash Flows, certain items have been grouped as other financing activities. These primarily includes cash paid for shares withheld to cover taxes from share-based compensation and debt issuance costs. The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Jun. 30, 2018 Jul. 1, 2017 July 2, 2016 (In thousands) Cash and cash equivalents $ 552,325 $ 869,502 $ 3,919,300 Restricted cash 163,519 — — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 715,844 $ 869,502 $ 3,919,300 |
CHANGES IN ACCOUNTING
CHANGES IN ACCOUNTING | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
CHANGES IN ACCOUNTING | CHANGES IN ACCOUNTING Stock Compensation In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . The ASU identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The company adopted this ASU in the first quarter of fiscal 2018. The company elected to maintain the current policy to estimate forfeitures expected to occur to determine stock-based compensation expense. Further, the company adopted the provisions that have changed its accounting for excess tax benefits or detriments. Excess tax benefits or detriments were previously included within additional paid-in capital in the consolidated balance sheet and were a part of the diluted share calculation. On a prospective basis, excess tax benefits or detriments are included within income tax expense in the consolidated results of operations and are no longer a part of the diluted share calculation. Prior periods have not been adjusted. In fiscal 2018 , the company recognized excess tax benefits of $52.1 million from stock option exercises and restricted stock unit vestings that occurred during the period. The standard also requires several presentation changes with regard to the statement of cash flows, which the company adopted on a retrospective basis; therefore, amounts presented for fiscal 2017 and 2016 in the statement of cash flows reflect the guidance required by this ASU. Cash flows related to excess tax benefits or detriments are included in net cash provided by operating activities, rather than as a financing activity. The standard further requires that cash paid by an employer, when directly withholding shares for tax withholding purposes, should be classified as a financing activity and applied retrospectively. Cash payments to tax authorities in connection with shares withheld to meet statutory income tax withholding requirements are presented as a financing activity in the consolidated statement of cash flows. Restricted Cash In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) . The ASU clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling between the beginning and ending cash balances on the statement of cash flows. We retrospectively adopted the standard in the second quarter of fiscal 2018, which was one year earlier than required. The adoption increases the ending cash balance within our statement of cash flows by the aggregate amount of our restricted cash balances and requires a new disclosure to reconcile the cash balances within our statement of cash flows to the balance sheets for each period presented. See Supplemental Cash Flow Information within Note 1 , “Summary of Accounting Policies.” For fiscal 2018, $163.5 million of restricted cash is included with cash, cash equivalents and restricted cash. There were no material restricted cash balances in fiscal 2017 and, therefore, there is no material impact to amounts reported for that period. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The company early adopted this ASU in the first quarter of fiscal 2018. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Sysco has early adopted the standard using the modified retrospective approach to existing hedging relationships as of the second quarter of fiscal 2018, rather than in fiscal 2020, as required by the ASU. Sysco believes that the early adoption of the hedging standard provides a better alignment between risk management activities and hedge accounting, and reduce total cost of ownership of the risk management program. All transition requirements have been applied to hedging relationships existing on the date of adoption and the effect of the adoption is reflected as of the beginning of fiscal 2018. The cumulative effect of the accounting change on the opening balance of retained earnings was immaterial to Sysco’s consolidated balance sheet. All required disclosures under ASU 2017-12 have been made in Note 9 , “Derivative Financial Instruments.” Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), to allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Act. The amendments in this update eliminate the stranded tax effects resulting from the Tax Act; however, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, which is fiscal 2020 for Sysco, with early adoption permitted. The company early adopted this ASU in the fourth quarter of fiscal 2018, resulting in $236.4 million of accumulated other comprehensive loss being reclassified into retained earnings. |
NEW ACCOUNTING STANDARDS
NEW ACCOUNTING STANDARDS | 12 Months Ended |
Jun. 30, 2018 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
NEW ACCOUNTING STANDARDS | NEW ACCOUNTING STANDARDS Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and has issued subsequent amendments to this guidance. This new standard will replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods within new fiscal years beginning after December 15, 2017, which is fiscal 2019 for Sysco. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The company has substantially completed its assessment of the accounting required under Topic 606. Sysco does not expect that the implementation of the new standard will have a material effect on the company’s financial statements. The company will adopt the standard in the first quarter of fiscal 2019 using the modified retrospective method. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases . The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Topic 842 currently requires lessees and lessors to use a modified retrospective transition approach, which includes a number of practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, which is fiscal 2020 for Sysco, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , to simplify the lease standard’s implementation. The amended guidance relieves businesses and other organizations of the requirement to present prior comparative years’ results when they adopt the new lease standard. Instead of recasting prior year results using the new accounting when they adopt the guidance, companies can choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to the opening balance of retained earnings. The company is currently reviewing the provisions of the new leases standards. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Guidance in Presentation of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight specific issues are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Businesses Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Invitees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash and Application of the Predominance Principle. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco. The company has completed its assessment of the accounting required under ASU 2016-15 and does not expect that the implementation of the new standard will have a material effect on the company’s cash flow statement. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits ( Topic 715 ): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , requiring that an employer report the service cost component of pension and postretirement benefits in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. In addition, only the service cost component will be eligible for capitalization as applicable. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, and will be applied retroactively. The company has substantially completed its assessment of the accounting required under ASU 2017-07, concluding it will result in net periodic income of $15.0 million for fiscal 2018 and net periodic cost of $1.3 million for fiscal 2017 being recorded in other expense (income) that was previously included in operating expense. |
ACQUISITIONS
ACQUISITIONS | 12 Months Ended |
Jun. 30, 2018 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS During fiscal 2018 , the company paid cash of $248.1 million for acquisitions. These acquisitions did not have a material effect on the company’s operating results, cash flows or financial position. Certain acquisitions involve contingent consideration that may include earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of June 30, 2018 , aggregate contingent consideration outstanding was $15.6 million , of which $10.6 million was recorded as earnout liabilities. Brakes Group On July 5, 2016 , Sysco consummated its acquisition of Cucina Lux Investments Limited (a private company limited by shares organized under the laws of England and Wales), a holding company of the Brakes Group, pursuant to an agreement for the sale and purchase of securities in the capital of the Brakes Group, dated as of February 19, 2016 , by and among Sysco, entities affiliated with Bain Capital Investors, LLC, and members of management of the Brakes Group (the Brakes Acquisition). The company paid cash of $2.9 billion, net of cash acquired, for the Brakes Acquisition. Following the closing of the Brakes Acquisition, the Brakes Group became a wholly owned subsidiary of Sysco. Purchase accounting for this acquisition was finalized in fiscal 2017. The Brakes Group is a large European foodservice business supplying fresh, refrigerated and frozen food products, as well as non-food products and supplies, to foodservice customers ranging from large customers, including leisure, pub, restaurant, hotel and contract catering groups, to smaller customers, including independent restaurants, hotels, fast food outlets, schools and hospitals. Brakes Group businesses include: Brakes, Brakes Catering Equipment, Brake France, Country Choice, Davigel, Fresh Direct, Freshfayre, M&J Seafood, Menigo Foodservice, Pauley’s, Wild Harvest and Woodward Foodservice. The Brakes Group’s largest businesses are in the United Kingdom (U.K.), France, and Sweden, in addition to a presence in Ireland, Belgium, Spain and Luxembourg. |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e., an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows: • Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets; • Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and • Level 3 – Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk. Sysco’s policy is to invest in only high-quality investments. Cash equivalents primarily include cash deposits, time deposits, certificates of deposit, commercial paper, high-quality money market funds and all highly liquid instruments with original maturities of three months or less. The following is a description of the valuation methodologies used for assets and liabilities measured at fair value: • Cash deposits included in cash equivalents are valued at amortized cost, which approximates fair value. These are included within cash equivalents as a Level 1 measurement in the tables below. • Time deposits and commercial paper included in cash equivalents are valued at amortized cost, which approximates fair value. These are included within cash equivalents as a Level 2 measurement in the tables below. • Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. These are included within cash equivalents as Level 1 measurements in the tables below. • The interest rate swap agreements are valued using a swap valuation model that utilizes an income approach using observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. • The foreign currency swap agreements, including cross-currency swaps, are valued using a swap valuation model that utilizes an income approach applying observable market inputs, including interest rates, LIBOR swap rates for U.S. dollars, Canadian dollars, pound sterling and Euro currencies, and credit default swap rates. • Foreign currency forwards are valued based on exchange rates quoted by domestic and foreign banks for similar instruments. • Fuel swap contracts are valued based on observable market transactions of forward commodity prices. The fair value of the company’s derivative instruments are all measured using inputs that are considered a Level 2 measurement, as they are not actively traded and are valued using pricing models that use observable market quotations. The location and the fair value of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 9 , “Derivative Financial Instruments.” The following tables present the company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and July 1, 2017 : Assets and Liabilities Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash equivalents Cash and cash equivalents $ 169,214 $ 30,190 $ — $ 199,404 Other assets (1) 163,519 — — 163,519 Total assets at fair value $ 332,733 $ 30,190 $ — $ 362,923 (1) Represents restricted cash balance recorded within other assets in the consolidated balance sheet. Assets and Liabilities Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash equivalents Cash and cash equivalents $ 238,954 $ 49,430 $ — $ 288,384 Total assets at fair value $ 238,954 $ 49,430 $ — $ 288,384 The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of Sysco’s total debt is estimated based on the quoted market prices for the same or similar issue or on the current rates offered to the company for new debt with the same maturities as existing debt, and is considered a Level 2 measurement. The fair value of total debt was approximately $8.4 billion and $8.6 billion as of June 30, 2018 and July 1, 2017 , respectively. The carrying value of total debt was $8.3 billion and $8.2 billion as of June 30, 2018 and July 1, 2017 , respectively. |
ALLOWANCE FOR DOUBTFUL ACCOUNTS
ALLOWANCE FOR DOUBTFUL ACCOUNTS | 12 Months Ended |
Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
ALLOWANCE FOR DOUBTFUL ACCOUNTS | ALLOWANCE FOR DOUBTFUL ACCOUNTS A summary of the activity in the allowance for doubtful accounts appears below: 2018 2017 2016 (In thousands) Balance at beginning of period $ 31,059 $ 37,880 $ 41,720 Charged to costs and expenses 21,448 20,672 20,372 Customer accounts written off, net of recoveries (27,120 ) (26,943 ) (23,551 ) Other adjustments 381 (550 ) (661 ) Balance at end of period $ 25,768 $ 31,059 $ 37,880 |
PLANT AND EQUIPMENT
PLANT AND EQUIPMENT | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
PLANT AND EQUIPMENT | PLANT AND EQUIPMENT A summary of plant and equipment, including the related accumulated depreciation, appears below: Jun. 30, 2018 Jul. 1, 2017 Estimated Useful Lives (In thousands) Plant and equipment at cost: Land $ 495,909 $ 477,577 Buildings and improvements 4,268,687 4,072,339 10-30 years Fleet and equipment 3,808,133 3,595,095 3-10 years Computer hardware and software 1,628,121 1,554,122 3-7 years Total plant and equipment at cost 10,200,850 9,699,133 Accumulated depreciation (5,679,190 ) (5,321,831 ) Total plant and equipment, net $ 4,521,660 $ 4,377,302 Depreciation expense, including amortization of capital leases, was $614.8 million in 2018 , $765.4 million in 2017 and $608.7 million in 2016 . In fiscal 2016 , Sysco announced its revised business technology strategy focused on improving the customer experience. In refocusing its technology approach, Sysco created plans to modernize and add new capability and functionality to its existing SUS Enterprise Resource Planning (ERP) system. In connection with this strategy, Sysco created plans to remove the SAP ERP platform then used by 12 of its operating companies by the end of fiscal 2017 . Sysco concluded that the projects under development would not be completed and expensed the $31.6 million in construction in progress in fiscal 2016 within operating expense in the consolidated results of operations. The company tested the internal use software for the SAP ERP platform for impairment on an undiscounted cash flow basis and concluded that those cash flows would be sufficient to recover the full asset value; however, Sysco shortened the remaining life of the internal use assets to fiscal 2017, concurrent with the expected time frame to fully migrate the 12 operating companies to the SUS ERP system, which was completed as of July 1, 2017. For fiscal years 2017 and 2016 , Sysco recognized an additional $111.3 million and $41.9 million , respectively, in accelerated depreciation expense as a result of shortening the useful lives of these assets. |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES The changes in the carrying amount of goodwill by reportable segment for the years presented are as follows: U.S. Foodservice Operations International Foodservice Operations SYGMA Other Total (In thousands) Carrying amount as of July 2, 2016 $ 1,220,702 $ 632,700 $ 32,607 $ 235,652 $ 2,121,661 Goodwill acquired during year — 1,815,890 — — 1,815,890 Currency translation/other 10,343 (16,082 ) — (15,684 ) (21,423 ) Carrying amount as of July 1, 2017 $ 1,231,045 $ 2,432,508 $ 32,607 $ 219,968 $ 3,916,128 Goodwill acquired during year 36,020 20,648 — — 56,668 Currency translation/other (6,165 ) (12,335 ) — 1,189 (17,311 ) Carrying amount as of June 30, 2018 $ 1,260,900 $ 2,440,821 $ 32,607 $ 221,157 $ 3,955,485 Amortizable intangible assets acquired during fiscal 2018 were $31.4 million , with a weighted-average amortization period of 14.0 years . Amortizable intangible assets acquired during fiscal 2018 by category were customer relationships and non-compete of $30.6 million and $0.8 million , respectively, with a weighted-average amortization period of 14.4 years and 4.0 years , respectively. Fully amortized intangible assets have been removed in the period fully amortized in the table below, which presents the company’s amortizable intangible assets in total by category as follows: Jun. 30, 2018 Jul. 1, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (In thousands) Customer relationships $ 1,119,136 $ (307,408 ) $ 811,728 $ 1,073,577 $ (209,253 ) $ 864,324 Non-compete agreements 31,754 (28,819 ) 2,935 32,385 (25,384 ) 7,001 Trademarks 10,073 (7,058 ) 3,015 11,050 (7,002 ) 4,048 Other 13,623 (13,548 ) 75 13,622 (10,704 ) 2,918 Total amortizable intangible $ 1,174,586 $ (356,833 ) $ 817,753 $ 1,130,634 $ (252,343 ) $ 878,291 The table below presents the company’s indefinite-lived intangible assets by category as follows: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Trademarks $ 161,093 $ 158,251 Licenses 966 969 Total indefinite-lived intangible assets $ 162,059 $ 159,220 Amortization expense for 2018 , 2017 and 2016 was $114.7 million , $112.9 million and $37.3 million , respectively. The estimated future amortization expense for the next five fiscal years on intangible assets outstanding as of June 30, 2018 is shown below: Amount (In thousands) 2019 $ 102,586 2020 98,536 2021 89,469 2022 86,878 2023 82,634 |
DERIVATIVE FINANCIAL INSTRUMENT
DERIVATIVE FINANCIAL INSTRUMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
DERIVATIVE FINANCIAL INSTRUMENTS | DERIVATIVE FINANCIAL INSTRUMENTS Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, the company does not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate risk, foreign currency risk and fuel price risk. Hedging of interest rate risk Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates. In March 2018 , the company entered into an interest rate swap agreement that effectively converted $500.0 million of fixed rate debt maturing in 2025 to floating rate debt. Hedging of foreign currency risk Sysco entered into cross-currency swap contracts to hedge the foreign currency transaction risk of certain Canadian dollar and pound sterling-denominated intercompany loans in fiscal 2018 and fiscal 2017, respectively. There are no credit-risk related contingent features associated with these swaps, which have been designated as cash flow hedges. In fiscal 2017, the company had also entered into cross-currency swap contracts and Euro-bond denominated debt that hedge the foreign currency exposure of our net investment in certain foreign operations. Additionally, Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the Euro, U.S. dollar, Polish zloty and Danish krone. These inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. The company enters into foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases. Sysco uses certain foreign currency contracts to hedge the effects of fluctuations in exchange rates on certain intercompany loans. The company does not formally designate and document such derivative instruments as hedging instruments; however, the instruments are an effective economic hedge of the underlying foreign currency exposure. Both the gain or loss on the derivative instrument and the offsetting gain or loss on the underlying intercompany loans are recognized in earnings immediately, thereby eliminating or reducing the impact of foreign currency exchange rate fluctuations on net earnings. Hedging of fuel price risk In fiscal 2017, Sysco began utilizing fuel commodity swap contracts to hedge against the risk of the change in the price of diesel on anticipated future purchases. These swaps have been designated as cash flow hedges. None of the Company’s hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of June 30, 2018 are below: Maturity Date of the Hedging Instrument Currency / Unit of Measure Notional Value (In millions) Hedging of interest rate risk April 2019 U.S. Dollar 500 October 2020 U.S. Dollar 750 July 2021 U.S. Dollar 500 March 2025 U.S. Dollar 500 Hedging of foreign currency risk (1) June 2019 U.S. Dollar 384 June 2021 U.S. Dollar 44 June 2021 Canadian Dollar 300 July 2021 Canadian Dollar 30 July 2021 British Pound Sterling 234 August 2021 British Pound Sterling 466 June 2023 Euro 500 Hedging of fuel risk Various (July 2018 to June 2019) Gallons 46 (1) Foreign currency forward contracts used to hedge against foreign exchange exposures related to inventory purchases are not material to Sysco’s overall hedging portfolio. The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of June 30, 2018 , July 1, 2017 and July 2, 2016 are as follows: Derivative Fair Value Balance Sheet Location Jun. 30, 2018 Jul. 1, 2017 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ — $ 707 Interest rate swaps Other current liabilities 6,820 — Interest rate swaps Other long-term liabilities 49,734 21,390 Cash Flow Hedges: Fuel Swaps Other current assets $ 15,316 $ 717 Foreign currency forwards Other current assets 693 — Cross currency swaps Other current assets 4,284 — Cross currency swaps Other assets 3,454 — Fuel Swaps Other current liabilities — 6,160 Foreign currency forwards Other current liabilities 71 154 Fuel swaps Other long-term liabilities — 160 Cross currency swaps Other long-term liabilities 14,201 5,816 Net Investment Hedges: Foreign currency swaps Other assets $ 10,709 $ — Foreign currency swaps Other long-term liabilities 39,690 12,308 Foreign denominated debt Long-term debt 584,150 571,450 The location and amount of gains or losses recognized in the consolidated results of operations for fair value and cash flow hedging relationships for each of the periods, presented on a pretax basis, are as follows: 2018 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 47,641,933 $ 8,756,417 $ 395,483 Gain or (loss) on fair value hedging relationships: Interest contracts: Hedged items (1) $ — $ — $ (30,418 ) Derivatives designated as hedging instruments — — (39,540 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 13,983 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 1,776 $ — $ — Interest contracts: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (11,499 ) (1) The hedged total includes interest expense of $63.5 million and change in fair value of debt of $33.1 million . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the fiscal period ended June 30, 2018 , presented on a pretax basis, are as follows: 2018 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 21,878 Operating expense $ 13,983 Foreign currency contracts 1,118 Cost of goods sold 1,776 Total $ 22,996 $ 15,759 Derivatives in net investment hedging relationships: Foreign currency contracts $ (20,584 ) N/A $ — Foreign denominated debt (12,700 ) N/A — Total $ (33,284 ) $ — The location and carrying amount of hedged liabilities in the consolidated balance sheet as of June 30, 2018 are as follows: Jun. 30, 2018 Carrying Amount of Hedged Assets (Liabilities) Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) (In thousands) Balance sheet location: Current maturities of long-term debt $ (499,610 ) $ 5,097 Long-term debt (1,743,732 ) 47,555 |
SELF-INSURED LIABILITIES
SELF-INSURED LIABILITIES | 12 Months Ended |
Jun. 30, 2018 | |
Loss Contingency [Abstract] | |
SELF-INSURED LIABILITIES | SELF-INSURED LIABILITIES Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. The company also maintains a fully self-insured group medical program. A summary of the activity in self-insured liabilities appears below: 2018 2017 2016 (In thousands) Balance at beginning of period $ 245,811 $ 199,059 $ 193,312 Charged to costs and expenses 461,867 523,674 418,917 Payments (436,692 ) (476,922 ) (413,170 ) Balance at end of period $ 270,986 $ 245,811 $ 199,059 The long-term portion of the self-insured liability balance was $167.1 million and $153.1 million as of June 30, 2018 and July 1, 2017, respectively. |
DEBT AND OTHER FINANCING ARRANG
DEBT AND OTHER FINANCING ARRANGEMENTS | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
DEBT AND OTHER FINANCING ARRANGEMENTS | DEBT AND OTHER FINANCING ARRANGEMENTS Sysco’s debt consists of the following: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Commercial paper, interest at 1.42% as of July 1, 2017 $ — $ 119,691 Senior notes, interest at 5.25%, matured in fiscal 2018 (1) — 500,311 Senior notes, interest at 1.90%, maturing in fiscal 2019 (1) 491,700 491,260 Senior notes, interest at 5.375%, maturing in fiscal 2019 (1) 249,701 249,456 Senior notes, interest at 2.60%, maturing in fiscal 2021 (1) 724,047 739,239 Senior notes, interest at 2.50%, maturing in fiscal 2022 (1) 477,411 488,554 Senior notes, interest at 2.60%, maturing in fiscal 2022 (1) 446,681 445,853 Senior notes, interest at 1.25%, maturing in fiscal 2023 (1) 580,196 566,767 Senior notes, interest at 3.55%, maturing in fiscal 2025 (1) 492,606 — Senior notes, interest at 3.75%, maturing in fiscal 2026 (1) 746,879 746,288 Senior notes, interest at 3.30%, maturing in fiscal 2027 (1) 992,176 991,370 Debentures, interest at 7.16%, maturing in fiscal 2027 (2) 44,276 50,000 Senior notes, interest at 3.25%, maturing in fiscal 2028 (1) 742,555 742,526 Debentures, interest at 6.50%, maturing in fiscal 2029 (1) 162,276 223,822 Senior notes, interest at 5.375%, maturing in fiscal 2036 (1) 382,010 497,089 Senior notes, interest at 6.625%, maturing in fiscal 2039 (1) 201,766 248,396 Senior notes, interest at 4.85%, maturing in fiscal 2046 (1) 495,709 495,552 Senior notes, interest at 4.50%, maturing in fiscal 2046 (1) 494,090 493,981 Senior notes, interest at 4.45%, maturing in fiscal 2048 (1) 493,165 — Notes payable, capital leases, and other debt, interest averaging 6.33% and maturing at various dates to fiscal 2026 as of June 30, 2018 and 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 110,026 104,735 Total debt 8,327,270 8,194,890 Less current maturities of long-term debt (782,329 ) (530,075 ) Less notes payable (4,176 ) (3,938 ) Net long-term debt $ 7,540,765 $ 7,660,877 (1) Represents senior notes that 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. (2) This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity. As of June 30, 2018 , the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below: Amount (In thousands) 2019 $ 788,309 2020 23,764 2021 768,076 2022 962,884 2023 590,112 Sysco has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $2 billion . As of June 30, 2018 , there were no commercial paper issuances outstanding. Any outstanding amounts are classified within long-term debt, as the program is supported by a long-term revolving credit facility. During the first 52 weeks of 2018 , aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from zero to approximately $1.5 billion . Senior notes offering On March 19, 2018 , Sysco issued senior notes (the Notes) totaling $1.0 billion . Details of the Notes are as follows: Maturity Date Par Value Coupon Rate Pricing March 15, 2025 (the 2025 Notes) $ 500 3.55 % 99.480 % March 15, 2048 (the 2048 Notes) 500 4.45 99.378 The Notes initially are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes issued under the indenture governing the Notes or any of Sysco’s other indebtedness. Interest on the Notes will be paid semi-annually on March 15 and September 15, beginning September 15, 2018. At Sysco’s option, any or all of the Notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem (i) the 2025 Notes before the date that is two months prior to the maturity date or (ii) the 2048 Notes before the date that is six months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the Notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed. If Sysco elects to redeem a series of Notes on or after the applicable date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the Notes to be redeemed. Sysco will pay accrued and unpaid interest on the Notes redeemed to the redemption date. Senior notes and debentures redemption related to the tender offer Sysco used a portion of the net proceeds of the offering to fund the purchase, pursuant to a tender offer, of $230.5 million in combined aggregate principal amount of the following securities: its 7.160% debentures due 2027, its 6.500% debentures due 2028, its 5.375% senior notes due 2035 and its 6.625% senior notes due 2039. Holders of securities received an early tender payment of $50 per $1,000 principal amount of securities. Holders of such securities also received accrued and unpaid interest from, and including, the last interest payment date for their tendered securities, but not including, the early settlement date, which was March 23, 2018. The tender offer transaction was considered to be a debt extinguishment. As such, Sysco recognized a loss on extinguishment of $53.1 million , which was recorded as a component of interest expense in the accompanying consolidated results of operations. Of this loss, $51.2 million was attributable to the purchase premium paid to the lenders, $1.1 million was attributable to the write-off of unamortized debt issuance costs associated with the redeemed debentures and notes, and $0.8 million was attributable to an accelerated charge on the debt discount related to these debentures and notes. Details of the debentures and senior notes purchased are as follows: Maturity Date Par Value Coupon Rate Principal amount tendered Remaining Par Value after tender offer Cash amount paid (including interest) (Dollars in millions) April 15, 2027 $ 50 7.160 % $ 5.7 $ 44.3 $ 7.4 August 1, 2028 225 6.500 61.9 163.1 77.3 September 21, 2035 500 5.375 115.9 384.1 134.3 March 17, 2039 250 6.625 47.0 203.0 63.7 The remaining net proceeds from the offering were used to fund a pension contribution, repay outstanding borrowings under Sysco’s commercial paper program and for other general corporate purposes. In February 2018, Sysco repaid 5.25% senior notes totaling $500.0 million at maturity utilizing commercial paper borrowings. As of June 30, 2018 and July 1, 2017 , letters of credit outstanding were $221.7 million and $191.3 million , respectively. |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
LEASES | LEASES Sysco has obligations under capital and operating leases for certain distribution facilities, vehicles, equipment and computers. Total rental expense under operating leases was $184.1 million , $170.5 million , and $100 million in fiscal 2018 , 2017 and 2016 , respectively. Contingent rentals, subleases and assets and obligations under capital leases are not significant. Aggregate minimum lease payments by fiscal year under existing long-term operating leases are as follows: Amount (In thousands) 2019 $ 111,560 2020 94,012 2021 77,319 2022 65,157 2023 51,173 Thereafter 266,137 |
COMPANY-SPONSORED EMPLOYEE BENE
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS | COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS Sysco has company-sponsored defined benefit and defined contribution retirement plans for its employees. Also, the company provides certain health care benefits to eligible retirees and their dependents. Defined Contribution Plans The company operates a defined contribution 401(k) Plan as a Safe Harbor Plan, which is a plan that treats all employees’ benefits equally within the plan, under Sections 401(k) and 401(m) of the Internal Revenue Code with respect to non-union employees and those union employees whose unions adopted the Safe Harbor Plan provisions. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pretax contribution on the first 6% of the participant’s compensation contributed by the participant. The pretax matching contribution limit was increased from 5% to 6% effective January 1, 2018. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. For union employees who are members of unions that did not adopt the Safe Harbor Plan provisions, the plan provides that under certain circumstances the company may make matching contributions of up to 50% of the first 6% of a participant’s compensation. The company also has a nonqualified, unfunded Management Savings Plan (MSP) available to key management personnel who are participants in the Management Incentive Plan (MIP). Participants may defer up to 50% of their annual salary and up to 100% of their annual bonus. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pretax contribution on the first 5% of the participant’s eligible compensation that is deferred. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. All company contributions to the MSP are limited by the amounts contributed by the company to the participant’s 401(k) account. Sysco’s expense related to its defined contribution plans was $151.0 million in fiscal 2018 , $141.2 million in fiscal 2017 , and $ 135.5 million in fiscal 2016 . Defined Benefit Plans Sysco maintains various qualified pension plans that pay benefits to participating employees at retirement, using formulas based on a participant’s years of service and compensation. The U.S. pension plan (U.S. Retirement Plan) is frozen for all U.S.-based salaried and non-union hourly employees, as these employees are eligible for benefits under the company’s defined contribution 401(k) plan. Various defined benefit pension plans cover certain employees, primarily in the U.K., France and Sweden; however, the U.K. pension plan (U.K. Retirement Plan) is frozen to new plan participants. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. In addition to receiving benefits upon retirement under the company’s U.S. Retirement Plan, certain key management personnel who were participants in the MIP are entitled to receive benefits under the SERP. This plan is a nonqualified, unfunded supplementary retirement plan. This plan is frozen to all participants, and current MIP participants are eligible to participate in the MSP. The company also provides certain health care benefits to eligible retirees and their dependents. These health care benefits represent Sysco’s unfunded other postretirement medical plans. The plan had benefit obligations of $14.3 million as of June 30, 2018 and $13.6 million as of July 1, 2017 . Funded Status Accumulated pension assets measured against the obligation for pension benefits represents the funded status of a given plan. The funded status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “U.S. Pension Benefits” in the tables below includes both the U.S. Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,224,231 $ 4,284,776 $ 420,735 $ 400,028 Service cost 14,514 14,287 3,219 2,880 Interest cost 173,827 171,282 10,667 9,951 Amendments — 925 (4,624 ) (110 ) Curtailments — — — (611 ) Actuarial (gain) loss, net (89,253 ) (86,680 ) (21,162 ) 26,528 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,879 ) Exchange rate changes — — 3,982 (4,052 ) Benefit obligation at end of year 4,043,011 4,224,231 399,000 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,341,662 3,115,040 259,372 271,821 Actual return on plan assets 196,051 333,890 897 1,938 Employer contribution 409,003 53,091 7,960 4,530 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,880 ) Exchange rate changes — — 3,616 (5,037 ) Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 Funded status at end of year $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) As of June 30, 2018 and July 1, 2017 , the SERP had benefit obligations of $440.5 million and $463.2 million , respectively. In order to meet a portion of its obligations under the SERP, Sysco has contributed to a rabbi trust, COLI policies on the lives of participants and interests in corporate-owned real estate assets. These assets are not included as plan assets or in the funded status amounts in the tables above and below. The life insurance policies on the lives of the participants had carrying values of $96.5 million as of June 30, 2018 and $95.3 million as of July 1, 2017 . Sysco is the sole owner and beneficiary of such policies. The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Noncurrent assets (Other assets) $ 63,945 $ — $ — $ — Current accrued benefit liability (Accrued expenses) (31,313 ) (30,538 ) (1,280 ) (1,477 ) Noncurrent accrued benefit liability (Other long-term liabilities) (409,235 ) (852,031 ) (139,692 ) (159,886 ) Net amount recognized $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) Accumulated other comprehensive loss (income) as of June 30, 2018 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 19,170 $ 2,679 $ 21,849 Actuarial losses (gains) 1,434,160 (26,106 ) 1,408,054 Total $ 1,453,330 $ (23,427 ) $ 1,429,903 Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 The accumulated benefit obligation, which does not consider any salary increases for the remaining active union employees in the U.S. Retirement Plan was $4.4 billion and $4.6 billion as of June 30, 2018 and July 1, 2017 , respectively. Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,034,383 $ 4,213,318 $ 392,457 413,552 Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 (1) Information under Pension Benefits as of June 30, 2018 and July 1, 2017 includes both the U.S. Retirement Plan and the SERP. Components of Net Benefit Costs and Other Comprehensive Income The components of net company-sponsored pension costs for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,514 $ 3,219 $ 14,287 $ 2,880 $ 11,815 Interest cost 173,827 10,667 171,282 9,951 174,602 Expected return on plan assets (233,987 ) (11,653 ) (222,699 ) (10,033 ) (216,888 ) Amortization of prior service cost 9,460 (2,003 ) 11,202 (1 ) 11,201 Amortization of actuarial loss 35,696 (67 ) 41,511 (38 ) 22,186 Curtailment loss — — — (611 ) — Settlement (gain) / Loss recognized — 16 — — — Net pension (benefits) costs $ (490 ) $ 179 $ 15,583 $ 2,148 $ 2,916 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 9,460 $ (2,003 ) $ 11,202 $ (1 ) $ 11,202 Amortization of actuarial loss 35,696 (51 ) 41,511 (38 ) 22,186 Prior service cost arising in current year — 4,624 (925 ) 110 — Effect of exchange rates on amounts in AOCI — (583 ) — (1,269 ) — Actuarial (loss) gain arising in current year 51,318 10,406 197,871 (34,623 ) (681,691 ) Net pension costs $ 96,474 $ 12,393 $ 249,659 $ (35,821 ) $ (648,303 ) Amounts included in accumulated other comprehensive loss (income) as of June 30, 2018 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2019 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 8,380 $ (207 ) $ 8,173 Amortization of actuarial losses (gains) 34,393 (113 ) 34,280 Total $ 42,773 $ (320 ) $ 42,453 Employer Contributions The company made cash contributions to its company-sponsored pension plans of $415.0 million and $57.6 million in fiscal years 2018 and 2017 , respectively. Contributions of $380 million to the U.S. Retirement Plan in fiscal 2018 were voluntary, as there were no required contributions to meet ERISA minimum funding requirements in fiscal 2018 . There are no required contributions to the U.S. Retirement Plan to meet ERISA minimum funding requirements in fiscal 2019 . The company’s contributions to the SERP plan are made in the amounts needed to fund current year benefit payments. The estimated aggregate fiscal 2019 contribution to fund benefit payments for the SERP plan is $31.3 million . The estimated fiscal 2019 contributions to fund benefit payments for the international retirement plans are $7.3 million . Estimated Future Benefit Payments Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2019 $ 138,963 $ 10,279 2020 148,968 10,359 2021 159,879 12,305 2022 170,508 12,373 2023 180,863 13,887 Subsequent five years 1,041,354 89,281 Assumptions Weighted-average assumptions used to determine benefit obligations as of year-end were: Jun. 30, 2018 Jul. 1, 2017 Discount rate — U.S. Retirement Plan 4.28 % 4.19 % Discount rate — SERP 4.41 4.08 Discount rate — U.K. Retirement Plan 2.85 2.60 Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 As benefit accruals under the SERP and U.K. Retirement Plan are frozen, future pay is not projected in the determination of the benefit obligation as of June 30, 2018 or July 1, 2017 . Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2018 2017 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % 4.84 % Discount rate — SERP 4.08 3.91 4.63 Discount rate — U.K. Retirement Plan 2.60 2.80 N/A Expected rate of return — U.S. Retirement Plan 7.00 7.25 7.25 Expected rate of return — U.K. Retirement Plan 4.55 4.15 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 3.89 For guidance in determining the discount rate for U.S. defined benefit plans, Sysco calculates the implied rate of return on a hypothetical portfolio of high-quality fixed-income investments for which the timing and amount of cash outflows approximates the estimated payouts of the company-sponsored pension plans. Sysco uses an annualized corporate bond yield curve to estimate the rate at which pension benefits could effectively be settled to estimate a discount rate for the U.K. Retirement Plan. The discount rate assumption is updated annually and revised as deemed appropriate. The discount rates to be used for the calculation of fiscal 2019 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 4.28% and 2.85% , respectively. The discount rate to be used for the calculation of fiscal 2019 net company-sponsored benefit costs for the SERP is 4.41% . The expected long-term rate of return on plan assets assumption for the retirement plans are net return on assets assumption, representing gross return on assets less plan expenses. The expected return for the U.S. Retirement Plan is derived from a mathematical asset model that incorporates assumptions as to the various asset class returns, reflecting a combination of rigorous historical performance analysis and the forward-looking views of the financial markets regarding the yield on bonds, the historical returns of the major stock markets and returns on alternative investments. The expected return for the U.K. Retirement Plan is derived from a long-term swap yield time horizon adjusted for the expected return based on the plan’s current asset allocation and historical results. The rate of return assumption is reviewed annually and revised as deemed appropriate. The expected long-term rate of return to be used in the calculation of fiscal 2019 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 5.0% and 4.55% , respectively. Plan Assets Investment Strategy The company’s overall strategic investment objectives for the U.S. Retirement Plan are to preserve capital for future benefit payments and to balance risk and return commensurate with ongoing changes in the valuation of plan liabilities. In fiscal 2018, the company made voluntary contributions totaling $380 million to the U.S. Retirement Plan, allowing the company to set an investment strategy that more closely aligns the duration of the U.S. Retirement Plan’s assets with the duration of its liabilities. In order to accomplish these objectives, the company oversees the U.S. Retirement Plan’s investment objectives and policy design, decides proper plan asset class strategies and structures, monitors the performance of plan investment managers and investment funds and determines the proper investment allocation of pension plan contributions. The strategy results in an asset portfolio that more closely matches the behavior of the liability, thereby reducing the volatility of the U.S. Retirement Plan’s funded status. This structure ensures the U.S. Retirement Plan’s investments are diversified within each asset class, in addition to being diversified across asset classes with the intent to build asset class portfolios that are structured without strategic bias for or against any subcategories within each asset class. The company has also created a set of investment guidelines for the U.S. Retirement Plan’s investment managers to specify prohibited transactions, including borrowing of money except for real estate, private equity or hedge fund portfolios where leverage is a key component of the investment strategy and permitted in the investments’ governing documents, the purchase of securities on margin unless fully collateralized by cash or cash equivalents or short sales, pledging, mortgaging or hypothecating of any securities, except for loans of securities that are fully collateralized, market timing transactions and the direct purchase of the securities of Sysco or the investment manager. The purchase or sale of derivatives for speculation or leverage is also prohibited; however, investment managers are allowed to use derivative securities so long as they do not increase the risk profile or leverage of the manager’s portfolio. The U.S. Retirement Plan’s target and actual investment allocation as of June 30, 2018 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation Growth assets 30 % 29 % Liability hedging assets 70 % 71 % 100 % Sysco’s U.S. Retirement Plan investment strategy is implemented through a combination of balanced and specialized investment managers, passive investment funds and actively managed investment funds. Growth assets include, but are not limited to, equities, alternatives, real estate, and growth fixed income intended to generate returns in excess of the liability growth rate. The Liability Hedging assets will be comprised primarily of fixed income investments, including interest rate and credit derivatives, intended to reduce funded status volatility due to changes in interest rates and credit spreads, while generating returns consistent with the projected liability growth rate. The U.S. Retirement Plan’s portfolio includes investment funds which are selected based on each fund’s stated investment strategy to align with Sysco’s overall target mix of investments. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. The primary objective for the U.K. Retirement Plan is to provide sufficient assets to pay benefits as they fall due. The U.K. Retirement Plan has a return objective that aims to achieve a return on plan assets of 2.9% in excess of the return on the liability benchmark over rolling five year periods. The liability benchmark is the portfolio of swaps that best matches the liability profile of the U.K. Retirement Plan. The investment objective includes a risk statement that allows for the active risk within the plan asset portfolio to be below 12% per year, which may fluctuate over time as the composition of the portfolio changes and the levels of risk in markets change. The U.K. Retirement Plan’s Trustee and Solvency Manager seeks to achieve the Plan’s investment objectives by investing in a suitably diversified mix of assets. The U.K. Retirement Plan uses derivatives such as forwards, futures, swaps and options for risk management and for the efficient implementation of the investment strategy. The company’s target and actual investment allocation as of June 30, 2018 is as follows: U.K. Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 75 % Liability hedging assets 25 25 100 % The U.K. plan’s investment strategy is implemented primarily through a common contractual investment fund and liability hedging assets. The pooled investment fund consists of investment types including (1) equity investments covering a range of geographies and including investment managers that hold long and short positions, (2) credit investments including global investment grade and high yield bonds, loans and other debt and derivative securities, (3) property investments including global direct or indirect real estate holdings, (4) macro-oriented funds that seek to generate return by going long and short in a variety of markets and operate strategies which focus on markets rather than individual stocks and often use derivatives rather than physical assets, and (5) multi-strategy funds which combine a range of different credit, equity and macro-orientated ideas and dynamically allocate funds across asset classes. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. As discussed above, the retirement plans’ investments in equities, debt instruments and alternative investments provide a range of returns and also expose the plan to investment risk. However, the investment policies put in place by the company require diversification of plan assets across issuers, industries and countries. As such, the retirement plans do not have significant concentrations of risk in plan assets. Fair Value of Plan Assets Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). See Note 5 , “Fair Value Measurements,” for a description of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The following is a description of the valuation methodologies used for assets and liabilities held by Sysco’s retirement plans measured at fair value. Cash and cash equivalents: Valued at amortized cost, which approximates fair value due to the short-term maturities of these investments. Cash and cash equivalents is included as a Level 1 and Level 2 measurement in the table below. Equity securities: Valued at the closing price reported on the exchange market. If a stock is not listed on a public exchange, such as an American Depository Receipt or some preferred stocks, the stock is valued using an evaluated bid price based on a compilation of observable market information. Inputs used include yields, the underlying security “best price”, adjustments for corporate actions and exchange prices of underlying and common stock of the same issuer. Equity securities valued at the closing price reported on the exchange market are classified as a Level 1 measurement in the table below. Fixed income securities: Valued using evaluated bid prices based on a compilation of observable market information or a broker quote in a non-active market. Inputs used vary by type of security, but include spreads, yields, rate benchmarks, rate of prepayment, cash flows, rating changes and collateral performance and type. All fixed income securities are included as a Level 2 measurement in the table below. Investment funds: Represents collective trust and funds holding debt, equity, hedge funds, private equity funds, exchange-traded real estate securities, and common contractual funds which are valued at the net asset value (NAV) provided by the manager of each fund. The NAV for funds within the U.S. and U.K Retirement Plans is calculated as the underlying net assets owned by the fund, divided by the number of shares outstanding. The NAV is based on the fair value of the underlying securities within the fund. Non-exchange traded real estate funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying real estate investments held by each fund. Each real estate investment is valued on the basis of a discounted cash flow approach. Inputs used include future rental receipts, expenses and residual values from a market participant view of the highest and best use of the real estate as rental property. The private equity funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying private equity investments held by each fund. The hedge funds are valued based on the hedge funds’ proportionate share of the net assets of the underlying private investment fund as determined by the underlying private investment fund’s general partner. Indirectly held investments are valued utilizing the latest financial reports supplied by the fund’s portfolio investments. Directly held investments are valued initially based on transaction price and are adjusted utilizing available market data and investment-specific factors, such as estimates of liquidation value, prices of recent transactions in the same or similar issuer, current operating performance and future expectations of the particular investment, changes in market outlook and the financing environment. Derivatives: Valuation method varies by type of derivative security. • Credit default and interest rate swaps: Valued using evaluated bid prices based on a compilation of observable market information. Inputs used for credit default swaps include spread curves and trade data about the credit quality of the counterparty. Inputs used for interest rate swaps include benchmark yields, swap curves, cash flow analysis, and interdealer broker rates. Credit default and interest rate swaps are included as a Level 2 measurement in the table below. • Foreign currency contracts: Valued using a standardized interpolation model that utilizes the quoted prices for standard-length forward foreign currency contracts and adjusts to the remaining term outstanding on the contract being valued. Foreign currency contracts are included as a Level 2 measurement in the table below. • Futures and option contracts: Valued at the closing price reported on the exchange market for exchange-traded futures and options. Over-the-counter options are valued using pricing models that are based on observable market information. Exchange-traded futures and options are included as a Level 1 measurement in the table below; over-the-counter options are included as a Level 2 measurement. The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (7) Total (In thousands) Cash and cash equivalents $ 25,810 $ 34,430 $ — $ — $ 60,240 Growth assets: U.S. equity (1) 80,719 — — 143,701 224,420 International equity (1) 57,959 — — 109,186 167,145 Hedge fund of funds (2) — — — 388,281 388,281 Real estate funds (3) — — — 146,389 146,389 Private equity funds (4) — — — 84,003 84,003 Liability hedging assets: Corporate bonds — 1,775,324 — — 1,775,324 U.S. government and agency securities (1) — 277,986 — 469,868 747,854 Other (5) — 27,324 — — 27,324 High yield and emerging markets fixed income (6) — — — 45,428 45,428 Total investments at fair value $ 164,488 $ 2,115,064 $ — $ 1,386,856 $ 3,666,408 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of June 30, 2018 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (2) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per quarter. (3) The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (4) Total unfunded commitments as of June 30, 2018 was $22.6 million . The investments cannot be redeemed, but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2018 to 2031 . (5) Include foreign government and state and municipal debt securities. (6) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (7) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 30,987 $ — $ — $ — $ 30,987 U.K. government securities — 9,336 — — 9,336 Derivatives, net (1) — 17,658 — — 17,658 Pooled funds — 5,387 — — 5,387 Investment funds: Common contractual fund (2) — — — 194,660 194,660 Total investments at fair value $ 30,987 $ 32,381 $ — $ 194,660 $ 258,028 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $45.2 million ; the fair value of liability positions totaled $27.5 million . (2) There were $20.8 million of unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 Derivatives, net (2) — — — — — High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair v |
MULTIEMPLOYER EMPLOYEE BENEFIT
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS | 12 Months Ended |
Jun. 30, 2018 | |
Multiemployer Plans [Abstract] | |
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS | COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS Sysco has company-sponsored defined benefit and defined contribution retirement plans for its employees. Also, the company provides certain health care benefits to eligible retirees and their dependents. Defined Contribution Plans The company operates a defined contribution 401(k) Plan as a Safe Harbor Plan, which is a plan that treats all employees’ benefits equally within the plan, under Sections 401(k) and 401(m) of the Internal Revenue Code with respect to non-union employees and those union employees whose unions adopted the Safe Harbor Plan provisions. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pretax contribution on the first 6% of the participant’s compensation contributed by the participant. The pretax matching contribution limit was increased from 5% to 6% effective January 1, 2018. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. For union employees who are members of unions that did not adopt the Safe Harbor Plan provisions, the plan provides that under certain circumstances the company may make matching contributions of up to 50% of the first 6% of a participant’s compensation. The company also has a nonqualified, unfunded Management Savings Plan (MSP) available to key management personnel who are participants in the Management Incentive Plan (MIP). Participants may defer up to 50% of their annual salary and up to 100% of their annual bonus. The company will make a non-elective contribution each pay period equal to 3% of a participant’s compensation. Additionally, the company will make matching contributions of 50% of a participant’s pretax contribution on the first 5% of the participant’s eligible compensation that is deferred. Certain employees are also eligible for a transition contribution, and the company may also make discretionary contributions. All company contributions to the MSP are limited by the amounts contributed by the company to the participant’s 401(k) account. Sysco’s expense related to its defined contribution plans was $151.0 million in fiscal 2018 , $141.2 million in fiscal 2017 , and $ 135.5 million in fiscal 2016 . Defined Benefit Plans Sysco maintains various qualified pension plans that pay benefits to participating employees at retirement, using formulas based on a participant’s years of service and compensation. The U.S. pension plan (U.S. Retirement Plan) is frozen for all U.S.-based salaried and non-union hourly employees, as these employees are eligible for benefits under the company’s defined contribution 401(k) plan. Various defined benefit pension plans cover certain employees, primarily in the U.K., France and Sweden; however, the U.K. pension plan (U.K. Retirement Plan) is frozen to new plan participants. The funding policy for each plan complies with the requirements of relevant governmental laws and regulations. In addition to receiving benefits upon retirement under the company’s U.S. Retirement Plan, certain key management personnel who were participants in the MIP are entitled to receive benefits under the SERP. This plan is a nonqualified, unfunded supplementary retirement plan. This plan is frozen to all participants, and current MIP participants are eligible to participate in the MSP. The company also provides certain health care benefits to eligible retirees and their dependents. These health care benefits represent Sysco’s unfunded other postretirement medical plans. The plan had benefit obligations of $14.3 million as of June 30, 2018 and $13.6 million as of July 1, 2017 . Funded Status Accumulated pension assets measured against the obligation for pension benefits represents the funded status of a given plan. The funded status of Sysco’s company-sponsored defined benefit plans is presented in the table below. The caption “U.S. Pension Benefits” in the tables below includes both the U.S. Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,224,231 $ 4,284,776 $ 420,735 $ 400,028 Service cost 14,514 14,287 3,219 2,880 Interest cost 173,827 171,282 10,667 9,951 Amendments — 925 (4,624 ) (110 ) Curtailments — — — (611 ) Actuarial (gain) loss, net (89,253 ) (86,680 ) (21,162 ) 26,528 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,879 ) Exchange rate changes — — 3,982 (4,052 ) Benefit obligation at end of year 4,043,011 4,224,231 399,000 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,341,662 3,115,040 259,372 271,821 Actual return on plan assets 196,051 333,890 897 1,938 Employer contribution 409,003 53,091 7,960 4,530 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,880 ) Exchange rate changes — — 3,616 (5,037 ) Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 Funded status at end of year $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) As of June 30, 2018 and July 1, 2017 , the SERP had benefit obligations of $440.5 million and $463.2 million , respectively. In order to meet a portion of its obligations under the SERP, Sysco has contributed to a rabbi trust, COLI policies on the lives of participants and interests in corporate-owned real estate assets. These assets are not included as plan assets or in the funded status amounts in the tables above and below. The life insurance policies on the lives of the participants had carrying values of $96.5 million as of June 30, 2018 and $95.3 million as of July 1, 2017 . Sysco is the sole owner and beneficiary of such policies. The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Noncurrent assets (Other assets) $ 63,945 $ — $ — $ — Current accrued benefit liability (Accrued expenses) (31,313 ) (30,538 ) (1,280 ) (1,477 ) Noncurrent accrued benefit liability (Other long-term liabilities) (409,235 ) (852,031 ) (139,692 ) (159,886 ) Net amount recognized $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) Accumulated other comprehensive loss (income) as of June 30, 2018 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 19,170 $ 2,679 $ 21,849 Actuarial losses (gains) 1,434,160 (26,106 ) 1,408,054 Total $ 1,453,330 $ (23,427 ) $ 1,429,903 Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 The accumulated benefit obligation, which does not consider any salary increases for the remaining active union employees in the U.S. Retirement Plan was $4.4 billion and $4.6 billion as of June 30, 2018 and July 1, 2017 , respectively. Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,034,383 $ 4,213,318 $ 392,457 413,552 Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 (1) Information under Pension Benefits as of June 30, 2018 and July 1, 2017 includes both the U.S. Retirement Plan and the SERP. Components of Net Benefit Costs and Other Comprehensive Income The components of net company-sponsored pension costs for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,514 $ 3,219 $ 14,287 $ 2,880 $ 11,815 Interest cost 173,827 10,667 171,282 9,951 174,602 Expected return on plan assets (233,987 ) (11,653 ) (222,699 ) (10,033 ) (216,888 ) Amortization of prior service cost 9,460 (2,003 ) 11,202 (1 ) 11,201 Amortization of actuarial loss 35,696 (67 ) 41,511 (38 ) 22,186 Curtailment loss — — — (611 ) — Settlement (gain) / Loss recognized — 16 — — — Net pension (benefits) costs $ (490 ) $ 179 $ 15,583 $ 2,148 $ 2,916 Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 9,460 $ (2,003 ) $ 11,202 $ (1 ) $ 11,202 Amortization of actuarial loss 35,696 (51 ) 41,511 (38 ) 22,186 Prior service cost arising in current year — 4,624 (925 ) 110 — Effect of exchange rates on amounts in AOCI — (583 ) — (1,269 ) — Actuarial (loss) gain arising in current year 51,318 10,406 197,871 (34,623 ) (681,691 ) Net pension costs $ 96,474 $ 12,393 $ 249,659 $ (35,821 ) $ (648,303 ) Amounts included in accumulated other comprehensive loss (income) as of June 30, 2018 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2019 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 8,380 $ (207 ) $ 8,173 Amortization of actuarial losses (gains) 34,393 (113 ) 34,280 Total $ 42,773 $ (320 ) $ 42,453 Employer Contributions The company made cash contributions to its company-sponsored pension plans of $415.0 million and $57.6 million in fiscal years 2018 and 2017 , respectively. Contributions of $380 million to the U.S. Retirement Plan in fiscal 2018 were voluntary, as there were no required contributions to meet ERISA minimum funding requirements in fiscal 2018 . There are no required contributions to the U.S. Retirement Plan to meet ERISA minimum funding requirements in fiscal 2019 . The company’s contributions to the SERP plan are made in the amounts needed to fund current year benefit payments. The estimated aggregate fiscal 2019 contribution to fund benefit payments for the SERP plan is $31.3 million . The estimated fiscal 2019 contributions to fund benefit payments for the international retirement plans are $7.3 million . Estimated Future Benefit Payments Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2019 $ 138,963 $ 10,279 2020 148,968 10,359 2021 159,879 12,305 2022 170,508 12,373 2023 180,863 13,887 Subsequent five years 1,041,354 89,281 Assumptions Weighted-average assumptions used to determine benefit obligations as of year-end were: Jun. 30, 2018 Jul. 1, 2017 Discount rate — U.S. Retirement Plan 4.28 % 4.19 % Discount rate — SERP 4.41 4.08 Discount rate — U.K. Retirement Plan 2.85 2.60 Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 As benefit accruals under the SERP and U.K. Retirement Plan are frozen, future pay is not projected in the determination of the benefit obligation as of June 30, 2018 or July 1, 2017 . Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2018 2017 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % 4.84 % Discount rate — SERP 4.08 3.91 4.63 Discount rate — U.K. Retirement Plan 2.60 2.80 N/A Expected rate of return — U.S. Retirement Plan 7.00 7.25 7.25 Expected rate of return — U.K. Retirement Plan 4.55 4.15 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 3.89 For guidance in determining the discount rate for U.S. defined benefit plans, Sysco calculates the implied rate of return on a hypothetical portfolio of high-quality fixed-income investments for which the timing and amount of cash outflows approximates the estimated payouts of the company-sponsored pension plans. Sysco uses an annualized corporate bond yield curve to estimate the rate at which pension benefits could effectively be settled to estimate a discount rate for the U.K. Retirement Plan. The discount rate assumption is updated annually and revised as deemed appropriate. The discount rates to be used for the calculation of fiscal 2019 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 4.28% and 2.85% , respectively. The discount rate to be used for the calculation of fiscal 2019 net company-sponsored benefit costs for the SERP is 4.41% . The expected long-term rate of return on plan assets assumption for the retirement plans are net return on assets assumption, representing gross return on assets less plan expenses. The expected return for the U.S. Retirement Plan is derived from a mathematical asset model that incorporates assumptions as to the various asset class returns, reflecting a combination of rigorous historical performance analysis and the forward-looking views of the financial markets regarding the yield on bonds, the historical returns of the major stock markets and returns on alternative investments. The expected return for the U.K. Retirement Plan is derived from a long-term swap yield time horizon adjusted for the expected return based on the plan’s current asset allocation and historical results. The rate of return assumption is reviewed annually and revised as deemed appropriate. The expected long-term rate of return to be used in the calculation of fiscal 2019 net company-sponsored benefit costs for the U.S. Retirement Plan and U.K. Retirement Plan are 5.0% and 4.55% , respectively. Plan Assets Investment Strategy The company’s overall strategic investment objectives for the U.S. Retirement Plan are to preserve capital for future benefit payments and to balance risk and return commensurate with ongoing changes in the valuation of plan liabilities. In fiscal 2018, the company made voluntary contributions totaling $380 million to the U.S. Retirement Plan, allowing the company to set an investment strategy that more closely aligns the duration of the U.S. Retirement Plan’s assets with the duration of its liabilities. In order to accomplish these objectives, the company oversees the U.S. Retirement Plan’s investment objectives and policy design, decides proper plan asset class strategies and structures, monitors the performance of plan investment managers and investment funds and determines the proper investment allocation of pension plan contributions. The strategy results in an asset portfolio that more closely matches the behavior of the liability, thereby reducing the volatility of the U.S. Retirement Plan’s funded status. This structure ensures the U.S. Retirement Plan’s investments are diversified within each asset class, in addition to being diversified across asset classes with the intent to build asset class portfolios that are structured without strategic bias for or against any subcategories within each asset class. The company has also created a set of investment guidelines for the U.S. Retirement Plan’s investment managers to specify prohibited transactions, including borrowing of money except for real estate, private equity or hedge fund portfolios where leverage is a key component of the investment strategy and permitted in the investments’ governing documents, the purchase of securities on margin unless fully collateralized by cash or cash equivalents or short sales, pledging, mortgaging or hypothecating of any securities, except for loans of securities that are fully collateralized, market timing transactions and the direct purchase of the securities of Sysco or the investment manager. The purchase or sale of derivatives for speculation or leverage is also prohibited; however, investment managers are allowed to use derivative securities so long as they do not increase the risk profile or leverage of the manager’s portfolio. The U.S. Retirement Plan’s target and actual investment allocation as of June 30, 2018 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation Growth assets 30 % 29 % Liability hedging assets 70 % 71 % 100 % Sysco’s U.S. Retirement Plan investment strategy is implemented through a combination of balanced and specialized investment managers, passive investment funds and actively managed investment funds. Growth assets include, but are not limited to, equities, alternatives, real estate, and growth fixed income intended to generate returns in excess of the liability growth rate. The Liability Hedging assets will be comprised primarily of fixed income investments, including interest rate and credit derivatives, intended to reduce funded status volatility due to changes in interest rates and credit spreads, while generating returns consistent with the projected liability growth rate. The U.S. Retirement Plan’s portfolio includes investment funds which are selected based on each fund’s stated investment strategy to align with Sysco’s overall target mix of investments. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. The primary objective for the U.K. Retirement Plan is to provide sufficient assets to pay benefits as they fall due. The U.K. Retirement Plan has a return objective that aims to achieve a return on plan assets of 2.9% in excess of the return on the liability benchmark over rolling five year periods. The liability benchmark is the portfolio of swaps that best matches the liability profile of the U.K. Retirement Plan. The investment objective includes a risk statement that allows for the active risk within the plan asset portfolio to be below 12% per year, which may fluctuate over time as the composition of the portfolio changes and the levels of risk in markets change. The U.K. Retirement Plan’s Trustee and Solvency Manager seeks to achieve the Plan’s investment objectives by investing in a suitably diversified mix of assets. The U.K. Retirement Plan uses derivatives such as forwards, futures, swaps and options for risk management and for the efficient implementation of the investment strategy. The company’s target and actual investment allocation as of June 30, 2018 is as follows: U.K. Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 75 % Liability hedging assets 25 25 100 % The U.K. plan’s investment strategy is implemented primarily through a common contractual investment fund and liability hedging assets. The pooled investment fund consists of investment types including (1) equity investments covering a range of geographies and including investment managers that hold long and short positions, (2) credit investments including global investment grade and high yield bonds, loans and other debt and derivative securities, (3) property investments including global direct or indirect real estate holdings, (4) macro-oriented funds that seek to generate return by going long and short in a variety of markets and operate strategies which focus on markets rather than individual stocks and often use derivatives rather than physical assets, and (5) multi-strategy funds which combine a range of different credit, equity and macro-orientated ideas and dynamically allocate funds across asset classes. Actual asset allocation is regularly reviewed and periodically rebalanced to the target allocation when considered appropriate. As discussed above, the retirement plans’ investments in equities, debt instruments and alternative investments provide a range of returns and also expose the plan to investment risk. However, the investment policies put in place by the company require diversification of plan assets across issuers, industries and countries. As such, the retirement plans do not have significant concentrations of risk in plan assets. Fair Value of Plan Assets Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). See Note 5 , “Fair Value Measurements,” for a description of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The following is a description of the valuation methodologies used for assets and liabilities held by Sysco’s retirement plans measured at fair value. Cash and cash equivalents: Valued at amortized cost, which approximates fair value due to the short-term maturities of these investments. Cash and cash equivalents is included as a Level 1 and Level 2 measurement in the table below. Equity securities: Valued at the closing price reported on the exchange market. If a stock is not listed on a public exchange, such as an American Depository Receipt or some preferred stocks, the stock is valued using an evaluated bid price based on a compilation of observable market information. Inputs used include yields, the underlying security “best price”, adjustments for corporate actions and exchange prices of underlying and common stock of the same issuer. Equity securities valued at the closing price reported on the exchange market are classified as a Level 1 measurement in the table below. Fixed income securities: Valued using evaluated bid prices based on a compilation of observable market information or a broker quote in a non-active market. Inputs used vary by type of security, but include spreads, yields, rate benchmarks, rate of prepayment, cash flows, rating changes and collateral performance and type. All fixed income securities are included as a Level 2 measurement in the table below. Investment funds: Represents collective trust and funds holding debt, equity, hedge funds, private equity funds, exchange-traded real estate securities, and common contractual funds which are valued at the net asset value (NAV) provided by the manager of each fund. The NAV for funds within the U.S. and U.K Retirement Plans is calculated as the underlying net assets owned by the fund, divided by the number of shares outstanding. The NAV is based on the fair value of the underlying securities within the fund. Non-exchange traded real estate funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying real estate investments held by each fund. Each real estate investment is valued on the basis of a discounted cash flow approach. Inputs used include future rental receipts, expenses and residual values from a market participant view of the highest and best use of the real estate as rental property. The private equity funds are valued based on the proportionate interest held by the U.S. Retirement Plan, which is based on the valuations of the underlying private equity investments held by each fund. The hedge funds are valued based on the hedge funds’ proportionate share of the net assets of the underlying private investment fund as determined by the underlying private investment fund’s general partner. Indirectly held investments are valued utilizing the latest financial reports supplied by the fund’s portfolio investments. Directly held investments are valued initially based on transaction price and are adjusted utilizing available market data and investment-specific factors, such as estimates of liquidation value, prices of recent transactions in the same or similar issuer, current operating performance and future expectations of the particular investment, changes in market outlook and the financing environment. Derivatives: Valuation method varies by type of derivative security. • Credit default and interest rate swaps: Valued using evaluated bid prices based on a compilation of observable market information. Inputs used for credit default swaps include spread curves and trade data about the credit quality of the counterparty. Inputs used for interest rate swaps include benchmark yields, swap curves, cash flow analysis, and interdealer broker rates. Credit default and interest rate swaps are included as a Level 2 measurement in the table below. • Foreign currency contracts: Valued using a standardized interpolation model that utilizes the quoted prices for standard-length forward foreign currency contracts and adjusts to the remaining term outstanding on the contract being valued. Foreign currency contracts are included as a Level 2 measurement in the table below. • Futures and option contracts: Valued at the closing price reported on the exchange market for exchange-traded futures and options. Over-the-counter options are valued using pricing models that are based on observable market information. Exchange-traded futures and options are included as a Level 1 measurement in the table below; over-the-counter options are included as a Level 2 measurement. The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (7) Total (In thousands) Cash and cash equivalents $ 25,810 $ 34,430 $ — $ — $ 60,240 Growth assets: U.S. equity (1) 80,719 — — 143,701 224,420 International equity (1) 57,959 — — 109,186 167,145 Hedge fund of funds (2) — — — 388,281 388,281 Real estate funds (3) — — — 146,389 146,389 Private equity funds (4) — — — 84,003 84,003 Liability hedging assets: Corporate bonds — 1,775,324 — — 1,775,324 U.S. government and agency securities (1) — 277,986 — 469,868 747,854 Other (5) — 27,324 — — 27,324 High yield and emerging markets fixed income (6) — — — 45,428 45,428 Total investments at fair value $ 164,488 $ 2,115,064 $ — $ 1,386,856 $ 3,666,408 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of June 30, 2018 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (2) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per quarter. (3) The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (4) Total unfunded commitments as of June 30, 2018 was $22.6 million . The investments cannot be redeemed, but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2018 to 2031 . (5) Include foreign government and state and municipal debt securities. (6) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (7) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 30,987 $ — $ — $ — $ 30,987 U.K. government securities — 9,336 — — 9,336 Derivatives, net (1) — 17,658 — — 17,658 Pooled funds — 5,387 — — 5,387 Investment funds: Common contractual fund (2) — — — 194,660 194,660 Total investments at fair value $ 30,987 $ 32,381 $ — $ 194,660 $ 258,028 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $45.2 million ; the fair value of liability positions totaled $27.5 million . (2) There were $20.8 million of unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 Derivatives, net (2) — — — — — High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair v |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share, Basic [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The following table sets forth the computation of basic and diluted earnings per share: 2018 2017 2016 (In thousands, except for share and per share data) Numerator: Net earnings $ 1,430,766 $ 1,142,503 $ 949,622 Denominator: Weighted-average basic shares outstanding 522,926,914 543,496,816 573,057,406 Dilutive effect of share-based awards 6,162,940 5,048,211 4,334,000 Weighted-average diluted shares outstanding 529,089,854 548,545,027 577,391,406 Basic earnings per share $ 2.74 $ 2.10 $ 1.66 Diluted earnings per share $ 2.70 $ 2.08 $ 1.64 The number of securities that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately 2,302,946 , 4,194,173 and 3,586,927 for fiscal 2018 , 2017 and 2016 , respectively. Dividends declared were $735.3 million , $700.9 million and $695.5 million in fiscal 2018 , 2017 and 2016 , respectively. Included in dividends declared for each year were dividends declared but not yet paid at year-end of approximately $187.4 million , $174.9 million and $174.1 million in fiscal 2018 , 2017 and 2016 , respectively. |
OTHER COMPREHENSIVE INCOME
OTHER COMPREHENSIVE INCOME | 12 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
OTHER COMPREHENSIVE INCOME | OTHER COMPREHENSIVE INCOME Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity, such as foreign currency translation adjustment, amounts related to cash flow hedging arrangements and certain amounts related to pension and other postretirement plans. Comprehensive income was $1.5 billion , $1.2 billion and $514.7 million for fiscal 2018 , 2017 and 2016 , respectively. A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows: 2018 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments: Net actuarial gain (loss), arising in the current year $ 69,476 $ 16,965 $ 52,511 Reclassification adjustments: Amortization of prior service cost Operating expenses 9,636 2,731 6,905 Amortization of actuarial loss (gain), net Operating expenses 35,044 9,934 25,110 Total reclassification adjustments 44,680 12,665 32,015 Foreign currency translation: Foreign currency translation adjustment N/A (22,987 ) — (22,987 ) Hedging instruments: Other comprehensive income (loss) before reclassification adjustments: Change in cash flow hedges Operating expenses (1) 23,872 9,529 14,343 Change in net investment hedges N/A (2,443 ) (8,234 ) 5,791 Total other comprehensive income (loss) before reclassification adjustments 21,429 1,295 20,134 Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,499 3,259 8,240 Total other comprehensive income (loss) $ 124,097 $ 34,184 $ 89,913 (1) Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. 2017 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments: Net actuarial (loss) gain, net arising in the current year $ 168,498 $ 71,215 $ 97,283 Reclassification adjustments: Amortization of prior service cost Operating expenses 11,370 4,366 7,004 Amortization of actuarial loss (gain), net Operating expenses 41,689 15,724 25,965 Total reclassification adjustments 53,059 20,090 32,969 Foreign currency translation: Foreign currency translation adjustment N/A (11,243 ) — (11,243 ) Hedging instruments: Other comprehensive income (loss) before reclassification adjustments: Change in cash flow hedges Operating expenses (1) (10,871 ) (4,173 ) (6,698 ) Change in net investment hedges N/A (34,152 ) (10,140 ) (24,012 ) Total other comprehensive income (loss) before reclassification adjustments (45,023 ) (14,313 ) (30,710 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,495 4,413 7,082 Total other comprehensive income (loss) $ 176,786 $ 81,405 $ 95,381 (1) Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. 2016 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments Net actuarial (loss) gain, net arising in the current year $ (681,034 ) $ (261,517 ) $ (419,517 ) Reclassification adjustments: Amortization of prior service cost Operating expenses 11,351 4,359 6,992 Amortization of actuarial loss (gain), net Operating expenses 21,677 8,325 13,352 Total reclassification adjustments 33,028 12,684 20,344 Foreign currency translation: Foreign currency translation adjustment N/A (39,080 ) — (39,080 ) Interest rate swaps: Other comprehensive income before reclassification adjustments: Change in cash flow hedges (6,134 ) (2,355 ) (3,779 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,543 4,432 7,111 Total other comprehensive loss $ (681,677 ) $ (246,756 ) $ (434,921 ) The following tables provide a summary of the changes in accumulated other comprehensive (loss) income (AOCI) for the periods presented: Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, net of tax Total (In thousands) Balance as of Jun. 27, 2015 $ (705,311 ) $ (97,733 ) $ (120,153 ) $ (923,197 ) Other comprehensive income before (419,517 ) (39,080 ) (3,779 ) (462,376 ) Amounts reclassified from accumulated 20,344 — 7,111 27,455 Balance as of Jul. 2, 2016 (1,104,484 ) (136,813 ) (116,821 ) (1,358,118 ) Other comprehensive income before 97,283 (11,243 ) (30,710 ) 55,330 Amounts reclassified from accumulated 32,969 — 7,082 40,051 Balance as of Jul. 1, 2017 (974,232 ) (148,056 ) (140,449 ) (1,262,737 ) Other comprehensive income before 52,511 (22,987 ) 20,134 49,658 Amounts reclassified from accumulated 32,015 — 8,240 40,255 Amounts reclassified to retained earnings (1) (205,353 ) — (31,092 ) (236,445 ) Balance as of Jun. 30, 2018 $ (1,095,059 ) $ (171,043 ) $ (143,167 ) $ (1,409,269 ) (1) Deferred taxes stranded in AOCI as a result of the Tax Act were reclassified to retained earnings as a result of early adopting ASU 2018-02. |
SHARE-BASED COMPENSATION
SHARE-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
SHARE-BASED COMPENSATION | SHARE-BASED COMPENSATION Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP). Stock Incentive Plans In November 2013, Sysco’s Long-term Incentive Plan (2013 Plan) was adopted and reserved up to 55,600,000 shares of Sysco common stock for share-based awards to employees, non-employee directors and key advisors. Of the 55,600,000 authorized shares, the full 55,600,000 shares may be issued as options or stock appreciation rights and up to 17,500,000 shares may be issued as restricted stock, restricted stock units or other types of stock-based awards. To date, Sysco has issued options, restricted stock units and performance share units under the 2013 Plan. Vesting requirements for awards under the 2013 Plan vary by individual grant and may include either time-based vesting or time-based vesting subject to acceleration based on performance criteria for fiscal periods of at least one year. The contractual life of all options granted under the 2013 Plan are and will be no greater than ten years. As of June 30, 2018 , there were 27,297,349 remaining shares authorized and available for grant in total under the 2013 Plan, of which the full 27,297,349 shares may be issued as options or stock appreciation rights, or as a combination of up to 11,197,918 shares that may be issued as restricted stock, restricted stock units or other types of stock-based awards, with the remainder available for issuance as options or stock appreciation rights. Sysco has also granted employee options under several previous employee stock option plans for which previously granted options remain outstanding as of June 30, 2018 . No new options will be issued under any of the prior plans, as future grants to employees will be made through the 2013 Plan or subsequently adopted plans. Awards under these plans are subject to time-based vesting with vesting periods that vary by individual grant. The contractual life of all options granted under these plans is seven years. Performance Share Units During fiscal 2018 and 2017 , performance share units (PSUs) of 895,968 and 829,460 , respectively, were granted to employees. Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For PSUs granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per performance share unit granted during fiscal 2018 and 2017 was $51.11 and $52.17 , respectively. The PSUs granted will vest and convert into shares of Sysco common stock at the end of the performance periods, which conclude at the end of fiscal 2020 and fiscal 2019, respectively, based on financial performance targets consisting of Sysco’s earnings per share, compound annual growth rate and adjusted return on invested capital. Stock Options Sysco’s option awards are subject to graded vesting over a requisite service period with compensation cost recognized on a straight-line basis over the requisite service period over the duration of the award. In addition, certain of Sysco’s options provide that the options continue to vest as if the optionee continued as an employee or director if the optionee meets certain age and years of service thresholds upon retirement. In these cases, Sysco will recognize compensation cost for such awards over the period from the grant date to the date the employee or director first becomes eligible to retire with the options continuing to vest after retirement. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. Expected dividend yield is estimated based on the historical pattern of dividends and the average stock price for the year preceding the option grant. Expected volatility is based on historical volatility of Sysco’s stock, implied volatilities from traded options on Sysco’s stock and other factors. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant. Sysco utilizes historical data to estimate option exercise and employee termination behavior within the valuation model; separate groups of employees that have similar historical exercise behavior are considered separately in determining the expected life of awards for valuation purposes. The weighted average assumptions discussed above are noted in the table below for relevant periods as follows: 2018 2017 2016 Dividend yield 2.6 % 2.8 % 3.1 % Expected volatility 17.5 % 16.9 % 20.4 % Risk-free interest rate 2.0 % 1.4 % 2.0 % Expected Life 7.0 years 7.2 years 7.2 years The following summary presents information regarding outstanding options as of June 30, 2018 and changes during the fiscal year then ended with regard to options under all stock incentive plans: Shares Under Option Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of July 1, 2017 21,070,836 $ 39.16 Granted 4,042,415 51.24 Exercised 6,400,982 32.65 Forfeited 299,584 48.48 Expired 21,075 28.87 Outstanding as of June 30, 2018 18,391,610 $ 43.92 7.23 $ 448,133 Vested or expected to vest as of June 30, 2018 12,006,173 $ 46.30 7.87 $ 263,972 Exercisable as of June 30, 2018 6,232,851 $ 39.23 5.96 $ 181,146 The total number of employee options granted was 4,042,415 , 4,990,396 and 4,367,764 in fiscal years 2018 , 2017 and 2016 , respectively. During fiscal 2018 , 955,344 and 3,087,071 options were granted to 10 executive officers and approximately 181 other key employees, respectively. During fiscal 2017 , 1,529,997 and 3,460,399 options were granted to 9 executive officers and approximately 187 other key employees, respectively. During fiscal 2016 , 1,495,351 and 2,872,413 options were granted to 8 executive officers and 169 other key employees, respectively. The weighted average grant date fair value of options granted in fiscal 2018 , 2017 and 2016 was $7.08 , $6.05 and $5.99 , respectively. The total intrinsic value of options exercised during fiscal 2018 , 2017 and 2016 was $17.7 million , $22.1 million and $36.1 million , respectively. Restricted Stock Units During fiscal 2018 , 2017 and 2016 , restricted stock units of 660,923 , 631,281 and 1,257,889 were granted to employees, respectively, the majority of which will vest ratably over a three -year period. Some of these restricted stock units were granted with dividend equivalents. The fair value of each restricted stock unit award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For restricted stock unit awards granted without dividend equivalents, the fair value was reduced by the present value of expected dividends as of the date of grant date during the vesting period. The weighted average grant date fair value per share of restricted stock units granted during fiscal 2018 , 2017 and 2016 was $55.81 , $50.04 and $42.78 , respectively. The total fair value of restricted stock units vested during fiscal 2018 , 2017 and 2016 was $40.4 million , $46.0 million and $43.4 million , respectively. The total intrinsic value of options exercised during fiscal 2018 , 2017 and 2016 was $56.4 million , $65.1 million and $53.9 million , respectively. Non-Employee Director Awards During fiscal 2018 , 2017 and 2016 , restricted awards of 35,672 , 40,498 and 43,362 were granted to non-employee directors (NEDs), respectively, that will vest over a one -year period. NEDs may elect to receive these awards in restricted stock shares that will vest at the end of the award stated vesting period or as deferred units that convert into shares of Sysco common stock on a date subsequent to the award stated vesting date selected by the NED. The fair value of the restricted awards is based on the company’s stock price as of the date of grant. The weighted average grant date fair value of the shares granted during fiscal 2018 , 2017 and 2016 was $54.10 , $53.49 and $40.59 , respectively. The total fair value of restricted stock shares vested and deferred units distributed during fiscal 2018 , 2017 and 2016 was $2.9 million , $2.0 million and $1.6 million , respectively. Restricted stock shares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date. NEDs may elect to receive up to 100% of their annual directors’ fees in Sysco common stock on either an annual or deferred basis. Sysco provides a matching grant of 50% of the number of shares received for the stock election subject to certain limitations. As a result of such elections, a total of 21,478 , 22,094 and 25,185 shares with a weighted-average grant date fair value of $54.69 , $51.46 and $39.31 per share were issued in fiscal 2018 , 2017 and 2016 , respectively, in the form of fully vested common stock or deferred units. The total fair value of common stock issued as a result of election shares and deferred units distributed during fiscal 2018 , 2017 and 2016 was $1.2 million , $1.1 million and $1.0 million , respectively. Common stock shares are valued on their vesting date. Vested deferred units are valued on their subsequent conversion and distribution date. As of June 30, 2018 , there were 70,691 fully vested deferred units outstanding that will convert into shares of Sysco common stock upon dates selected by the respective NED. Summary of Equity Instruments Other Than Stock Options The following summary presents information regarding outstanding non-vested awards as of June 30, 2018 and changes during the fiscal year then ended with regard to these awards under the stock incentive plans. Award types represented include restricted stock units granted to employees, restricted awards granted to non-employee directors and PSUs. Shares Weighted Average Grant Date Fair Value Per Share Non-vested as of July 1, 2017 2,643,599 $ 46.24 Granted 1,592,564 53.13 Vested (975,994 ) 41.44 Forfeited (173,285 ) 50.35 Non-vested as of June 30, 2018 3,086,884 $ 51.08 2015 Employee Stock Purchase Plan The Sysco ESPP permits employees to invest in Sysco common stock by means of periodic payroll deductions at a discount of 15% from the closing price on the last business day of each calendar quarter. The total number of shares which may be sold pursuant to the ESPP may not exceed 79,000,000 shares, of which 7,225,186 remained available as of June 30, 2018 . During fiscal 2018 , 1,078,597 shares of Sysco common stock were purchased by the participants, as compared to 1,103,995 shares purchased in fiscal 2017 and 1,275,765 shares purchased in fiscal 2016 . The weighted average fair value of employee stock purchase rights issued pursuant to the ESPP was $8.38 , $7.73 and $6.04 per share during fiscal 2018 , 2017 and 2016 , respectively. The fair value of the stock purchase rights was calculated as the difference between the stock price at date of issuance and the employee purchase price. All Share-Based Payment Arrangements The total share-based compensation cost included in operating expenses in the consolidated results of operations was $93.8 million , $83.9 million and $79.5 million for fiscal 2018 , 2017 and 2016 , respectively. The total income tax benefit for share-based compensation arrangements was $19.4 million , $30.0 million and $30.7 million for fiscal 2018 , 2017 and 2016 , respectively. As of June 30, 2018 , there was $121.3 million of total unrecognized share-based compensation cost, which is expected to be recognized over a weighted-average period of 1.8 years . Cash received from option exercises and purchases of shares under the ESPP was $268.8 million , $204.8 million and $282.4 million during fiscal 2018 , 2017 and 2016 , respectively. The actual tax benefit realized for the tax deductions from option exercises totaled $38.4 million , $38.9 million and $42.5 million during fiscal 2018 , 2017 and 2016 , respectively. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES Income Tax Provisions For financial reporting purposes, earnings before income taxes consists of the following: 2018 2017 2016 (In thousands) U.S. $ 1,765,793 $ 1,569,073 $ 1,225,142 Foreign 190,431 197,157 207,865 Total $ 1,956,224 $ 1,766,230 $ 1,433,007 The income tax provision for each fiscal year consists of the following: 2018 2017 2016 (In thousands) U.S. federal income taxes $ 399,254 $ 534,266 $ 429,658 State and local income taxes 62,670 69,913 34,032 Foreign income taxes 63,534 19,548 19,695 Total $ 525,458 $ 623,727 $ 483,385 The current and deferred components of the income tax provisions for each fiscal year are as follows: 2018 2017 2016 (In thousands) Current $ 337,550 $ 675,573 $ 389,514 Deferred 187,908 (51,846 ) 93,871 Total $ 525,458 $ 623,727 $ 483,385 The deferred tax provisions result from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred Tax Assets and Liabilities Significant components of Sysco’s deferred tax assets and liabilities are as follows: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 226,274 $ 194,287 Pension 115,361 360,864 Share-based compensation 34,486 48,077 Deferred compensation 29,512 39,830 Self-insured liabilities — 84,401 Receivables 13,001 30,842 Inventory 14,728 21,332 Foreign currency remeasurement losses and currency hedge 15,796 13,221 Other 33,386 54,619 Deferred tax assets before valuation allowances 482,544 847,473 Valuation allowances (123,237 ) (114,151 ) Total deferred tax assets 359,307 733,322 Deferred tax liabilities: Excess tax depreciation and basis differences of assets 180,950 247,510 Goodwill and intangible assets 373,041 455,340 Other 40,774 49,654 Total deferred tax liabilities 594,765 752,504 Total net deferred tax assets / (liabilities) $ (235,458 ) $ (19,182 ) The company’s deferred tax asset for net operating loss carryforwards as of June 30, 2018 and July 1, 2017 consisted of state and foreign net operating tax loss carryforwards. The state net operating loss carryforwards outstanding as of June 30, 2018 expire in fiscal years 2019 through 2036. The foreign net operating loss carryforward periods vary by jurisdiction, from 17 years to unlimited. The company assesses the recoverability of its deferred tax assets each period by considering whether it is more likely than not that all or a portion of the deferred tax assets will not be realized. The company considers all available evidence (both positive and negative) in determining whether a valuation allowance is required. As a result of the company’s analysis, it was concluded that, as of June 30, 2018 , a valuation allowance of $123.2 million should be established against the portion of the deferred tax asset attributable to certain foreign losses. The company will continue to monitor facts and circumstances in the reassessment of the likelihood that net operating loss carryforwards will be realized. Tax Cuts and Jobs Act On December 22, 2017 , the U.S. government enacted the Tax Act. The Tax Act made broad and complex changes to the U.S. tax code that affected the company’s fiscal year ending June 30, 2018, including, but not limited to: (1) reducing the U.S. federal corporate tax rate; (2) requiring a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries that is payable over 8 years ; and (3) bonus depreciation that will allow for full expensing of qualified property placed in service after September 27, 2017 . The Tax Act also establishes new tax laws that could affect Sysco in future fiscal years, including, but not limited to (1) a general elimination of U.S. federal income taxes on dividends from foreign subsidiaries; (2) a new provision designed to tax global intangible low-taxed income (GILTI); (3) creation of the base erosion anti-abuse tax (BEAT), a new minimum tax; (4) a new limitation on deductible interest; (5) repeal of the domestic production activity deduction; and (6) increased limitations on the deductibility of certain executive compensation. Also, in December 2017, the Securities and Exchange Commission staff issued SAB 118, which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under ASC Topic 740, “Income Taxes” (ASC 740). In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company’s accounting for certain income tax effects of the Tax Act is incomplete, but it is able to determine a reasonable estimate, it must record a provisional estimate in its financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act. Our accounting for the following elements of the Tax Act is incomplete. However, the company was able to make reasonable estimates of certain effects and, therefore, recorded provisional adjustments, described below, which represent our provisional estimate of each of the following impacts of the Tax Act. Once Sysco has completed its accounting for the income tax effects of the Tax Act, the ultimate impact may differ from the provisional amounts recorded due to additional analysis, changes in interpretations and assumptions the company has made, additional regulatory guidance that may be issued, and actions the company may take as a result of the Tax Act. The accounting is not expected to extend beyond one year from the Tax Act enactment date. Reduction of U.S. federal corporate tax rate: As noted above, the Tax Act reduces the U.S. federal corporate tax rate to 21% in our fiscal year; however, Section 15 of the Internal Revenue Code stipulates that the reduction in the corporate tax rate is applied to fiscal year taxpayers by computing a blended tax rate, based on the applicable tax rates before and after the effective date of the change in the statutory rate. When applied to Sysco’s fiscal year, this blended rate is 28% for fiscal 2018. In fiscal 2018, the company recorded a provisional tax benefit attributable to remeasuring Sysco’s deferred tax liabilities and deferred tax assets of $74.1 million . Transition Tax: In the second quarter of fiscal 2018, the company recorded a discrete tax expense of $115.0 million attributable to the provisional impact of the transition tax. In the fourth quarter of fiscal 2018, this was reduced to $80.0 million due to changes in the provisional estimate. The transition tax is payable in eight annual installments beginning in our first quarter of fiscal 2019. As a result of the 8 year payment period, approximately $73.6 million attributable to the portion of the provisional transition tax not due within 12 months is located within other long-term liabilities in the consolidated balance sheet as of June 30, 2018 . Our accounting for the following elements of the Tax Act is incomplete, and we were not able to make reasonable estimates of the effects. Therefore, no provisional adjustments were recorded. GILTI: The Tax Act creates a new requirement that certain income earned by controlled foreign corporations (CFCs) must be included currently in the gross income of the CFCs’ U.S. shareholder. GILTI is the excess of the shareholder’s “net CFC tested income” over the net deemed tangible income return, which is currently defined as the excess of (1) 10 percent of the aggregate of the U.S. shareholder’s pro rata share of the qualified business asset investment of each CFC with respect to which it is a U.S. shareholder over (2) the amount of certain interest expense taken into account in the determination of net CFC-tested income. Sysco will not be subject to the GILTI provisions until fiscal 2019. Because of the complexity of the new GILTI tax rules, the company is continuing to evaluate this provision of the Tax Act and the application of ASC 740. Under U.S. GAAP, the company is allowed to make an accounting policy choice of either (1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the “period cost method”) or (2) factoring such amounts into a company’s measurement of its deferred taxes (the “deferred method”). Sysco’s selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether the company expects to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Because whether Sysco expects to have future U.S. inclusions in taxable income related to GILTI depends not only on our current structure and estimated future results of global operations but also the company’s intent and ability to modify its structure and/or its business, Sysco is not yet able to reasonably estimate the effect of this provision of the Tax Act. Therefore, the company has not made any adjustments related to potential GILTI tax in its financial statements and has not made a policy decision regarding whether to record deferred taxes on GILTI. Executive Compensation Limitation: The Tax Act expands the definition under Section 162(m) of the Internal Revenue Code (“Section 162(m)”) of covered employee and provides that, for specified employees, status as a covered employee continues for all subsequent tax years, including years after the death of the individual, and, among other modifications, repeals the exception for performance-based compensation and commissions from the $1 million deduction limitation. In addition, the Tax Act provides for transitional guidance that will allow certain payments made under written and binding agreements entered into prior to November 2, 2017 to be treated as if they were made under the provisions of Section 162(m) that were in effect prior to enactment of the Tax Act. The company is in the process of gathering information on existing compensation arrangements for covered employees as well as assessing the impact of transitional guidance on the realizability of existing deferred tax assets related to compensation arrangements of its covered employees. As a result, the company has not made any adjustments related to impacts of the new executive compensation limitations in its financial statements. Indefinite Reinvestment Assertion: Prior to the enactment of the Tax Act, the company intended to indefinitely reinvest $1.4 billion of undistributed income of certain consolidated foreign subsidiaries, for which no deferred U.S. income tax provision had been recorded. However, upon enactment of the Tax Act, those undistributed earnings became subject to the U.S. transition tax. As a result, in the fourth quarter, the company repatriated $1.0 billion of foreign earnings of certain non-U.S. subsidiaries and recognized foreign income and non-income based taxes of $50.2 million. The company is in the process of assessing the impact of the Tax Act on its indefinite reinvestment assertion and the company’s plans to determine any associated impact on the financial statements. Therefore, no adjustments have been made in the financial statements with respect to its indefinite reinvestment assertion. An estimate of any U.S. or foreign income or non-income based taxes that may be applicable upon any future actual or deemed repatriation is not practical due to the complexities associated with the hypothetical calculation. Effective Tax Rates Reconciliations of the statutory federal income tax rate to the effective income tax rates for each fiscal year are as follows: 2018 2017 2016 U.S. statutory federal income tax rate 28.00 % 35.00 % 35.00 % State and local income taxes, net of any 2.48 2.61 1.79 Foreign income taxes 0.07 (2.81 ) (2.40 ) Uncertain tax position (0.22 ) 0.01 (1.96 ) Tax benefit of equity-based compensation (2.66 ) — — Impact of US Tax Reform 0.13 — — Other (0.95 ) 0.50 1.30 Effective income tax rate 26.85 % 35.31 % 33.73 % The effective tax rate of 26.85% for fiscal 2018 was favorably impacted by the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718), as well as a reduction of the statutory tax rate in the U.S. and certain foreign jurisdictions. Foreign earnings taxed at rates different than our domestic tax rate had the impact of increasing the effective tax rate. The effective tax rate of 35.31% for fiscal 2017 was favorably impacted by tax credits allowed against U.S. Federal and State income tax liabilities, as well as a reduction of the statutory tax rate in certain foreign jurisdictions. Indefinitely reinvested earnings taxed at foreign statutory rates less than our domestic tax rate also had the impact of reducing the effective tax rate. The effective tax rate of 33.73% for fiscal 2016 was favorably impacted by the favorable resolution of tax contingencies resulting in tax benefits of $29.6 million ( $10.6 million in tax and $19.0 million in interest). Costs associated with the redemption of the senior notes that had been issued in contemplation of the proposed merger with US Foods and charges incurred from the revision to the Company’s business technology strategy resulted in lower state taxes. Indefinitely reinvested earnings taxed at foreign statutory rates less than our domestic tax rate also had the impact of reducing the effective tax rate. Uncertain Tax Positions A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: 2018 2017 (In thousands) Unrecognized tax benefits at beginning of year $ 16,278 $ 24,614 Additions for tax positions related to prior years 652 648 Reductions for tax positions related to prior years (4,033 ) (2,147 ) Reductions due to settlements with taxing authorities (702 ) (6,837 ) Unrecognized tax benefits at end of year $ 12,195 $ 16,278 As of June 30, 2018 , the gross amount of liability for accrued interest and penalties related to unrecognized tax benefits was $8.5 million . As of July 1, 2017 , the gross amount of liability for accrued interest and penalties related to unrecognized tax benefits was $10.7 million . The expense recorded for interest and penalties related to unrecognized tax benefits was not material in any year presented. If Sysco were to recognize all unrecognized tax benefits recorded as of June 30, 2018 , approximately $9.6 million of the $12.2 million reserve would reduce the effective tax rate. If Sysco were to recognize all unrecognized tax benefits recorded as of July 1, 2017 , approximately $10.8 million of the $16.3 million reserve would reduce the effective tax rate. It is reasonably possible that the amount of the unrecognized tax benefits with respect to certain of the company’s unrecognized tax positions will increase or decrease in the next twelve months either because Sysco’s positions are sustained on audit or because the company agrees to their disallowance. Items that may cause changes to unrecognized tax benefits primarily include the consideration of various filing requirements in various jurisdictions and the allocation of income and expense between tax jurisdictions. In addition, the amount of unrecognized tax benefits recognized within the next twelve months may decrease due to the expiration of the statute of limitations for certain years in various jurisdictions; however, it is possible that a jurisdiction may open an audit on one of these years prior to the statute of limitations expiring. Sysco anticipates an immaterial decrease to the reserve within twelve months as a result of lapse of statutes. Sysco’s federal tax returns for 2016 and subsequent tax years have statutes of limitations that remain open for audit. As of June 30, 2018 , Sysco’s tax returns in the majority of the state and local and material foreign jurisdictions are no longer subject to audit for the years before 2010. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Legal Proceedings Sysco is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Although the final results of legal proceedings cannot be predicted with certainty, 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 financial position or results of operations of the company. Other Commitments Sysco has committed to aggregate product purchases for resale in order to benefit from a centralized approach to purchasing. A majority of these agreements expire within one year; however, certain agreements have terms through fiscal 2021 . These agreements commit the company to a minimum volume at various pricing terms, including fixed pricing, variable pricing or a combination thereof. Minimum amounts committed to as of June 30, 2018 totaled approximately $2.1 billion . Minimum amounts committed to by year are as follows: Amount (In thousands) 2019 $ 1,762,782 2020 339,016 2021 1,459 Sysco has contracts with various third-party service providers to receive information technology services. The services have been committed for periods up to fiscal 2023 and may be extended. As of June 30, 2018 , the total remaining cost of the services over that period is expected to be approximately $325.0 million . A portion of this committed 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 inflation. Sysco may also cancel a portion or all of the services provided subject to termination fees that decrease over time. If Sysco were to terminate all of the services in fiscal 2019 , the estimated termination fees incurred in fiscal 2019 would be approximately $76.7 million . |
BUSINESS SEGMENT INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
BUSINESS SEGMENT INFORMATION | BUSINESS SEGMENT INFORMATION The company has aggregated certain of its operating segments into three reportable segments. “Other” financial information is attributable to the company’s other operating segments that do not meet the quantitative disclosure thresholds. • U.S. Foodservice Operations - primarily includes U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, specialty produce, specialty imports and a wide variety of non-food products; • International Foodservice Operations - includes operations in the Americas and Europe, which distribute a full line of food products and a wide variety of non-food products. The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden; • SYGMA - our U.S. customized distribution subsidiary; and • Other - primarily our hotel supply operations and Sysco Labs, which includes our suite of technology solutions that help support the business needs of our customers and provide support for some of our business technology needs. The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Corporate expenses generally include all expenses of the corporate office and Sysco’s shared services center. These also include all share-based compensation costs. The following tables set forth certain financial information for Sysco’s business segments. Fiscal Year 2018 2017 2016 Sales: (In thousands) U.S. Foodservice Operations $ 39,642,263 $ 37,604,698 $ 37,776,443 International Foodservice Operations 11,518,565 10,613,059 5,436,209 SYGMA 6,557,033 6,178,909 6,102,328 Other 1,009,463 974,473 1,051,939 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 Fiscal Year 2018 2017 2016 Operating income: (In thousands) U.S. Foodservice Operations $ 3,051,991 $ 2,891,612 $ 2,771,932 International Foodservice Operations 193,240 243,116 177,159 SYGMA 24,318 23,299 27,469 Other 39,485 30,218 32,586 Total segments 3,309,034 3,188,245 3,009,146 Corporate (980,060 ) (1,135,074 ) (1,158,646 ) Total operating income 2,328,974 2,053,171 1,850,500 Interest expense 395,483 302,878 306,146 Other expense (income), net (22,733 ) (15,937 ) 111,347 Earnings before income taxes $ 1,956,224 $ 1,766,230 $ 1,433,007 Fiscal Year 2018 2017 2016 Depreciation and amortization: (In thousands) U.S. Foodservice Operations $ 348,041 $ 266,024 $ 252,392 International Foodservice Operations 258,156 243,628 70,184 SYGMA 36,367 34,890 31,792 Other 9,599 10,678 12,450 Total segments 652,163 555,220 366,818 Corporate 113,335 346,772 295,892 Total $ 765,498 $ 901,992 $ 662,710 Fiscal Year 2018 2017 2016 Capital Expenditures: (In thousands) U.S. Foodservice Operations $ 262,887 $ 194,714 $ 153,528 International Foodservice Operations 157,139 228,564 56,689 SYGMA 45,132 50,722 31,811 Other 11,406 13,237 20,702 Total segments 476,564 487,237 262,730 Corporate 211,251 199,141 264,616 Total $ 687,815 $ 686,378 $ 527,346 Fiscal Year 2018 2017 2016 Assets: (In thousands) U.S. Foodservice Operations $ 7,039,354 $ 6,675,543 $ 6,753,056 International Foodservice Operations 6,112,666 6,433,815 2,019,406 SYGMA 662,290 625,653 539,639 Other 452,426 448,885 459,785 Total segments 14,266,736 14,183,896 9,771,886 Corporate 3,803,668 3,572,759 6,949,918 Total $ 18,070,404 $ 17,756,655 $ 16,721,804 The sales mix for the principal product categories for each fiscal year is as follows: Fiscal Year 2018 2017 2016 (In thousands) Fresh and frozen meats $ 11,312,969 $ 10,605,678 $ 10,273,247 Canned and dry products 9,768,206 8,695,829 8,402,230 Frozen fruits, vegetables, bakery and other 9,025,762 8,444,260 6,719,648 Dairy products 6,037,409 5,610,101 5,276,991 Poultry 5,979,399 5,873,944 5,392,933 Fresh produce 4,929,366 4,701,440 4,156,978 Paper and disposables 3,837,943 3,596,470 3,557,514 Seafood 3,280,308 3,089,350 2,541,239 Beverage products 1,965,251 2,059,453 1,849,780 Janitorial products 1,395,100 1,331,019 1,251,821 Equipment and smallwares 795,406 794,087 593,595 Medical supplies 400,205 569,508 350,943 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 Information concerning geographic areas is as follows: Fiscal Year 2018 2017 2016 (In thousands) Sales: United States $ 46,812,297 $ 44,395,765 $ 44,922,937 Canada 4,661,615 4,346,894 4,486,282 United Kingdom 3,176,069 2,974,133 — France 1,625,407 1,426,973 — Other 2,451,936 2,227,374 957,700 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 Long-lived assets: United States $ 3,448,164 $ 3,252,980 $ 3,461,505 United Kingdom 319,664 303,178 — Canada 318,410 329,090 309,027 France 240,507 284,611 — Other 194,915 207,443 109,910 Total $ 4,521,660 $ 4,377,302 $ 3,880,442 |
SUPPLEMENTAL GUARANTOR INFORMAT
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES | 12 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES | SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation entered into full and unconditional guarantees of all outstanding senior notes and debentures of Sysco Corporation. All subsequent issuances of senior notes and debentures have also been guaranteed by these subsidiaries. As of June 30, 2018 , Sysco had a total of $8.3 billion in senior notes and debentures that was covered by these guarantees. All subsidiary guarantors are 100% owned by the parent company, all guarantees are full and unconditional and all guarantees are joint and several, except that the guarantee of any subsidiary guarantor with respect to a series of senior notes or debentures may be released under certain customary circumstances. If we exercise our defeasance option with respect to the senior notes or debentures of any series, then any subsidiary guarantor effectively will be released with respect to that series. Further, each subsidiary guarantee will remain in full force and effect until the earliest to occur of the date, if any, on which (1) the applicable subsidiary guarantor shall consolidate with or merge into Sysco Corporation or any successor of Sysco Corporation or (2) Sysco Corporation or any successor of Sysco Corporation consolidates with or merges into the applicable subsidiary guarantor. In conjunction with the preparation of our September 30, 2017 condensed consolidating financial statements, the company identified certain wholly owned U.S. Broadline subsidiaries that are guarantors of the outstanding senior notes and debentures of Sysco Corporation that were presented within Other Non-Guarantor Subsidiaries during fiscal 2017. The fiscal 2017 Condensed Consolidating Balance Sheet and Statements of Comprehensive Income and Cash Flows included herein have been revised to present such U.S. Broadline subsidiaries as guarantor subsidiaries. The company assessed the materiality of the incorrect guarantor disclosures and concluded that the misstatement was not material to the financial statements as a whole, but has provided revised information below for the sake of consistency with the current period disclosures. The following condensed consolidating financial statements present separately the financial position, comprehensive income and cash flows of the parent issuer (Sysco Corporation), the guarantors (certain of the company’s U.S. Broadline subsidiaries), and all other non-guarantor subsidiaries of Sysco (Other Non-Guarantor Subsidiaries) on a combined basis with eliminating entries. Condensed Consolidated Balance Sheet Jun. 30, 2018 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 157,994 $ 4,018,444 $ 3,827,015 $ — $ 8,003,453 Intercompany receivables 6,621,438 270,748 5,793,352 (12,685,538 ) — Investment in subsidiaries 4,896,004 — 983,625 (5,879,629 ) — Plant and equipment, net 278,855 2,181,576 2,061,229 — 4,521,660 Other assets 788,473 611,004 4,593,537 (447,723 ) 5,545,291 Total assets $ 12,742,764 $ 7,081,772 $ 17,258,758 $ (19,012,890 ) $ 18,070,404 Current liabilities $ 1,233,541 $ 886,305 $ 4,468,900 $ — $ 6,588,746 Intercompany payables 882,487 3,798,134 8,004,917 (12,685,538 ) — Long-term debt 7,470,334 8,285 62,146 — 7,540,765 Other liabilities 649,445 508,387 686,178 (447,723 ) 1,396,287 Noncontrolling interest — — 37,649 — 37,649 Shareholders’ equity 2,506,957 1,880,661 3,998,968 (5,879,629 ) 2,506,957 Total liabilities and shareholders’ equity $ 12,742,764 $ 7,081,772 $ 17,258,758 $ (19,012,890 ) $ 18,070,404 Condensed Consolidated Balance Sheet Jul. 1, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 177,495 $ 3,786,055 $ 4,069,888 $ — $ 8,033,438 Intercompany receivables 4,444,035 — — (4,444,035 ) — Investment in subsidiaries 6,451,994 — — (6,451,994 ) — Plant and equipment, net 258,527 2,039,761 2,079,014 — 4,377,302 Other assets 151,743 516,126 4,678,046 — 5,345,915 Total assets $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Current liabilities $ 650,899 $ 3,521,661 $ 1,923,326 $ — $ 6,095,886 Intercompany payables — 366,802 4,077,233 (4,444,035 ) — Long-term debt 7,588,041 7,776 65,060 — 7,660,877 Other liabilities 863,338 103,784 568,415 — 1,535,537 Noncontrolling interest — — 82,839 — 82,839 Shareholders’ equity 2,381,516 2,341,919 4,110,075 (6,451,994 ) 2,381,516 Total liabilities and shareholders’ equity $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Condensed Consolidated Statement of Comprehensive Income For the 52-Week Period Ended Jun. 30, 2018 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 35,963,053 $ 24,784,842 $ (2,020,571 ) $ 58,727,324 Cost of sales — 29,102,278 20,560,226 (2,020,571 ) 47,641,933 Gross profit — 6,860,775 4,224,616 — 11,085,391 Operating expenses 783,834 4,012,391 3,960,192 — 8,756,417 Operating income (loss) (783,834 ) 2,848,384 264,424 — 2,328,974 Interest expense (income) (1) 294,401 (110,715 ) 211,797 — 395,483 Other expense (income), net (19,135 ) (2,556 ) (1,042 ) — (22,733 ) Earnings (losses) before income taxes (1,059,100 ) 2,961,655 53,669 — 1,956,224 Income tax (benefit) provision (135,385 ) 655,824 5,019 — 525,458 Equity in earnings of subsidiaries 2,354,481 — — (2,354,481 ) — Net earnings 1,430,766 2,305,831 48,650 (2,354,481 ) 1,430,766 Other comprehensive income (loss) 89,913 — (22,987 ) 22,987 89,913 Comprehensive income $ 1,520,679 $ 2,305,831 $ 25,663 $ (2,331,494 ) $ 1,520,679 (1) Interest expense (income) includes $110.7 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidated Statement of Comprehensive Income For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 34,325,884 $ 22,862,131 $ (1,816,876 ) $ 55,371,139 Cost of sales — 27,690,469 18,940,039 (1,816,876 ) 44,813,632 Gross profit — 6,635,415 3,922,092 — 10,557,507 Operating expenses 931,498 3,907,829 3,665,009 — 8,504,336 Operating income (loss) (931,498 ) 2,727,586 257,083 — 2,053,171 Interest expense (income) (1) 405,030 (122,012 ) 19,860 — 302,878 Other expense (income), net (23,740 ) (1,116 ) 8,919 — (15,937 ) Earnings (losses) before income taxes (1,312,788 ) 2,850,714 228,304 — 1,766,230 Income tax (benefit) provision (463,598 ) 1,006,703 80,622 — 623,727 Equity in earnings of subsidiaries 1,991,693 — — (1,991,693 ) — Net earnings 1,142,503 1,844,011 147,682 (1,991,693 ) 1,142,503 Other comprehensive income (loss) 95,381 — (9,317 ) 9,317 95,381 Comprehensive income $ 1,237,884 $ 1,844,011 $ 138,365 $ (1,982,376 ) $ 1,237,884 (1) Interest expense (income) includes $122.0 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidated Statement of Comprehensive Income For the 53-Week Period Ended Jul. 2, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 33,932,334 $ 18,112,973 $ (1,678,388 ) $ 50,366,919 Cost of sales — 27,485,111 15,519,724 (1,678,388 ) 41,326,447 Gross profit — 6,447,223 2,593,249 — 9,040,472 Operating expenses 944,457 3,857,415 2,388,100 — 7,189,972 Operating income (loss) (944,457 ) 2,589,808 205,149 — 1,850,500 Interest expense (income) (1) 381,122 (145,852 ) 70,876 — 306,146 Other expense (income), net 128,777 (1,876 ) (15,554 ) — 111,347 Earnings (losses) before income taxes (1,454,356 ) 2,737,536 149,827 — 1,433,007 Income tax (benefit) provision (490,579 ) 923,416 50,548 — 483,385 Equity in earnings of subsidiaries 1,913,399 — — (1,913,399 ) — Net earnings 949,622 1,814,120 99,279 (1,913,399 ) 949,622 Other comprehensive income (loss) (434,921 ) — (52,306 ) 52,306 (434,921 ) Comprehensive income $ 514,701 $ 1,814,120 $ 46,973 $ (1,861,093 ) $ 514,701 (1) Interest expense (income) includes $145.9 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidated Cash Flows For the 52-Week Period Ended Jun. 30, 2018 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,055,228 $ 2,548,139 $ 799,062 $ (2,243,797 ) $ 2,158,632 Investing activities 55,612 (439,178 ) (503,745 ) (26,354 ) (913,665 ) Financing activities (1,193,272 ) (2,015,906 ) (471,442 ) 2,270,151 (1,410,469 ) Effect of exchange rates on cash — — 11,844 — 11,844 Net increase (decrease) in cash, cash equivalents and restricted cash (82,432 ) 93,055 (164,281 ) — (153,658 ) Cash, cash equivalents and restricted cash at the beginning of period 111,576 18,788 739,138 — 869,502 Cash, cash equivalents and restricted cash at the end of period $ 29,144 $ 111,843 $ 574,857 $ — $ 715,844 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation, partially offset by intercompany loans issued. Condensed Consolidated Cash Flows For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,535,725 $ 3,023,400 $ 658,229 $ (2,978,000 ) $ 2,239,354 Investing activities (3,274,566 ) (261,330 ) (175,565 ) 127,000 (3,584,461 ) Financing activities (1,525,995 ) (2,777,661 ) (229,931 ) 2,851,000 (1,682,587 ) Effect of exchange rates on cash — — (22,104 ) — (22,104 ) Net increase (decrease) in cash and cash equivalents (3,264,836 ) (15,591 ) 230,629 — (3,049,798 ) Cash and cash equivalents at the beginning of period 3,376,412 34,379 508,509 — 3,919,300 Cash and cash equivalents at the end of period $ 111,576 $ 18,788 $ 739,138 $ — $ 869,502 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. Condensed Consolidated Cash Flows For the 53-Week Period Ended Jul. 2, 2016 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,045,900 $ 4,101,840 $ 767,607 $ (3,927,000 ) $ 1,988,347 Investing activities (145,444 ) (212,270 ) (411,388 ) — (769,102 ) Financing activities (2,540,649 ) (3,881,879 ) 35,592 3,927,000 (2,459,936 ) Effect of exchange rates on cash — — (138,327 ) — (138,327 ) Intercompany activity — — — — — Net increase (decrease) in cash and cash equivalents (1,640,193 ) 7,691 253,484 — (1,379,018 ) Cash and cash equivalents at the beginning of period 5,016,605 26,688 255,025 — 5,298,318 Cash and cash equivalents at the end of period $ 3,376,412 $ 34,379 $ 508,509 $ — $ 3,919,300 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. |
QUARTERLY RESULTS (UNAUDITED)
QUARTERLY RESULTS (UNAUDITED) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Data [Abstract] | |
QUARTERLY RESULTS (UNAUDITED) | QUARTERLY RESULTS (UNAUDITED) Sysco’s fiscal year includes four quarterly periods that are comprised of thirteen weeks each. Financial information for each quarter in the years ended June 30, 2018 and July 1, 2017 is set forth below: Fiscal 2018 Quarter Ended September 30 December 30 March 31 (1) June 3 0 Fiscal Year (In thousands except for per share data) Sales $ 14,650,424 $ 14,411,490 $ 14,349,504 $ 15,315,906 $ 58,727,324 Cost of sales 11,856,756 11,712,104 11,673,876 12,399,197 47,641,933 Gross profit 2,793,668 2,699,386 2,675,628 2,916,709 11,085,391 Operating expenses 2,170,576 2,167,104 2,189,695 2,229,042 8,756,417 Operating income 623,092 532,282 485,933 687,667 2,328,974 Interest expense 80,884 85,986 136,145 92,468 395,483 Other expense (income), net (4,248 ) (5,432 ) (15,096 ) 2,043 (22,733 ) Earnings before income taxes 546,456 451,728 364,884 593,156 1,956,224 Income taxes 178,816 167,615 34,799 144,228 525,458 Net earnings $ 367,640 $ 284,113 $ 330,085 $ 448,928 $ 1,430,766 Per share: Basic net earnings $ 0.70 $ 0.55 $ 0.63 $ 0.86 $ 2.74 Diluted net earnings 0.69 0.54 0.63 0.85 2.70 Dividends declared 0.33 0.36 0.36 0.36 1.41 (1) Sysco’s third quarter of fiscal 2018 included a charge for $53.1 million in interest expense related to the redemption of senior notes as well as tax benefits derived from our $380.0 million contribution to our U.S. Retirement Plan. See Note 11 , “Debt and Other Financing Arrangements” and Note 18 , “Income Taxes.” Fiscal 2017 Quarter Ended October 1 December 31 April 1 July 1 Fiscal Year (In thousands except for per share data) Sales $ 13,968,654 $ 13,457,268 $ 13,524,172 $ 14,421,045 $ 55,371,139 Cost of sales 11,276,735 10,885,405 10,990,037 11,661,455 44,813,632 Gross profit 2,691,919 2,571,863 2,534,135 2,759,590 10,557,507 Operating expenses 2,125,086 2,079,446 2,098,173 2,201,631 8,504,336 Operating income 566,833 492,417 435,962 557,959 2,053,171 Interest expense 73,623 72,231 81,004 76,020 302,878 Other expense (income), net (7,216 ) (2,320 ) (4,815 ) (1,586 ) (15,937 ) Earnings before income taxes 500,426 422,506 359,773 483,525 1,766,230 Income taxes 176,539 147,339 121,495 178,354 623,727 Net earnings $ 323,887 $ 275,167 $ 238,278 $ 305,171 $ 1,142,503 Per share: Basic net earnings $ 0.58 $ 0.50 $ 0.44 $ 0.57 $ 2.10 Diluted net earnings 0.58 0.50 0.44 0.57 2.08 Dividends declared 0.31 0.33 0.33 0.33 1.30 |
SUMMARY OF ACCOUNTING POLICIES
SUMMARY OF ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Business and Consolidation | Business and Consolidation Sysco Corporation, acting through its subsidiaries and divisions (Sysco or the company), is engaged in the marketing and distribution of a wide range of food and related products primarily to the foodservice or food-away-from-home industry. These services are performed for over 600,000 customers from 332 distribution facilities located throughout North America and Europe. Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended June 30, 2018 for fiscal 2018 , a 52 -week year ended July 1, 2017 for fiscal 2017 , and a 53 -week year ended July 2, 2016 for fiscal 2016 . The accompanying financial statements include the accounts of Sysco and its consolidated subsidiaries. All significant intercompany transactions and account balances have been eliminated. The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates that affect the reported amounts of assets, liabilities, sales and expenses. Actual results could differ from the estimates used. |
Fiscal period | Sysco’s fiscal year ends on the Saturday nearest to June 30 th . This resulted in a 52 -week year ended June 30, 2018 for fiscal 2018 , a 52 -week year ended July 1, 2017 for fiscal 2017 , and a 53 -week year ended July 2, 2016 for fiscal 2016 . |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash includes cash equivalents such as cash deposits, time deposits, certificates of deposit, commercial paper, high-quality money market funds and all highly liquid instruments with original maturities of three months or less, which are recorded at fair value. |
Accounts Receivable | Accounts Receivable Accounts receivable consist primarily of trade receivables from customers and receivables from suppliers for marketing or incentive programs. Sysco determines the past due status of trade receivables based on contractual terms with each customer. Sysco evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts based on a combination of factors. The company utilizes specific criteria to determine uncollectible receivables to be written off including whether a customer has filed for or been placed in bankruptcy, has had accounts referred to outside parties for collection or has had accounts past due over specified periods. In these instances, a specific allowance for doubtful accounts is recorded to reduce the receivable to the net amount reasonably expected to be collected. Allowances are recorded for all other receivables based on an analysis of historical trends of write-offs and recoveries. |
Inventories | Inventories Inventories consisting primarily of finished goods include food and related products and lodging products held for resale and are valued at the lower of cost (first-in, first-out method) and net realizable value. Elements of costs include the purchase price of the product and freight charges to deliver the product to the company’s warehouses and are net of certain cash received from vendors (see “Vendor Consideration”). |
Plant and Equipment | Plant and Equipment Capital additions, improvements and major replacements are classified as plant and equipment and are carried at cost. Depreciation is recorded using the straight-line method, which reduces the book value of each asset in equal amounts over its estimated useful life, and is included within operating expenses in the consolidated results of operations. Maintenance, repairs and minor replacements are charged to earnings when they are incurred. Upon the disposition of an asset, its accumulated depreciation is deducted from the original cost, and any gain or loss is reflected in current earnings. |
Long-Lived Assets | Long-Lived Assets Management reviews long-lived assets for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the related assets are estimated over the asset’s useful life based on updated projections on an undiscounted basis. For assets held for use, Sysco groups assets and liabilities at the lowest level for which cash flows are separately identifiable. If the evaluation indicates that the carrying value of the asset may not be recoverable, the potential impairment is measured using fair value. Impairment losses for assets to be disposed of, if any, are based on the estimated proceeds to be received, less costs of disposal. |
Goodwill and Intangibles | Goodwill and Intangibles Goodwill represents the excess of cost over the fair value of net assets acquired. Goodwill and intangibles with indefinite lives are not amortized. Goodwill is assigned to the reporting units that are expected to benefit from the synergies of a business combination. The recoverability of goodwill and indefinite-lived intangibles is assessed annually, or more frequently as needed when events or changes have occurred that would suggest an impairment of carrying value, by determining whether the fair values of the applicable reporting units exceed their carrying values. This annual testing may be performed utilizing either a qualitative or quantitative assessment; however, if a qualitative assessment is performed and it is determined that the fair value of a reporting unit is more likely than not (i.e., a likelihood of more than 50 percent) to be less than its carrying amount, a quantitative test is performed. For fiscal 2018 , the company analyzed its 7 operating segments and determined that 18 reporting units existed for purposes of evaluating for goodwill impairment. For certain reporting units, the company utilized a qualitative assessment. For the remaining reporting units, Sysco performed a quantitative test using a combination of the income and market approaches. The evaluation of fair value requires the use of projections, estimates and assumptions as to the future performance of the operations in performing a discounted cash flow analysis, as well as assumptions regarding sales and earnings multiples that would be applied in comparable acquisitions. The company does not believe the estimates used in the analysis are reasonably likely to change materially in the future, but Sysco will continue to assess the estimates in the future based on the expectations of the reporting units. In the fiscal 2018 assessment, the estimated fair values exceeded the carrying values for two international reporting units by 15% and 18% , respectively, with goodwill of $341.0 million in the aggregate as of June 30, 2018 , recorded for these reporting units. Intangibles with definite lives are amortized over their useful lives in a manner consistent with underlying cash flow, which generally ranges from two to fifteen years. Management reviews finite-lived intangibles for indicators of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Cash flows expected to be generated by the finite-lived intangibles are estimated over the intangible asset’s useful life based on updated projections on an undiscounted basis. If the evaluation indicates that the carrying value of the finite-lived intangible asset may not be recoverable, the potential impairment is measured at fair value. |
Derivative Financial Instruments | Derivative Financial Instruments All derivatives are recognized as assets or liabilities within the consolidated balance sheets at fair value at their gross values. Gains or losses on derivative financial instruments designated as fair value hedges are recognized immediately in the consolidated results of operations, along with the offsetting gain or loss related to the underlying hedged item. Gains or losses on derivative financial instruments designated as cash flow hedges are recorded as a separate component of shareholders’ equity from inception of the hedges and are reclassified to the Consolidated Results of Operations in conjunction with the recognition of the underlying hedged item. For net investment hedges, the remeasurement gain or loss is recorded in AOCI and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated. |
Investments in Corporate-Owned Life Insurance | Investments in Corporate-Owned Life Insurance Investments in corporate-owned life insurance (COLI) policies are recorded at their cash surrender values as of each balance sheet date. Changes in the cash surrender value during the period are recorded as a gain or loss within operating expenses. Sysco has the ability and intent to hold certain of its COLI policies to maturity; therefore, the company does not record deferred tax balances related to cash surrender value gains or losses for these policies. |
Treasury Stock | Treasury Stock The company records treasury stock purchases at cost. Shares removed from treasury are valued at cost using the average cost method. |
Foreign Currency Translation | Foreign Currency Translation The assets and liabilities of all foreign subsidiaries are translated at current exchange rates. Related translation adjustments are recorded as a component of AOCI (loss). |
Revenue Recognition | Revenue Recognition The company recognizes revenue from the sale of a product when it is considered to be realized or realizable and earned. The company determines these requirements to be met at the point at which the product is delivered to the customer. The company grants certain customers sales incentives such as rebates or discounts and treats these as a reduction of sales at the time the sale is recognized. Sales tax collected from customers is not included in revenue but rather recorded as a liability due to the respective taxing authorities. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are considered to be a single nonmonetary transaction. As such, the company records the net effect of such transactions in the consolidated results of operations within sales. |
Vendor Consideration | Vendor Consideration Sysco recognizes consideration received from vendors as a reduction to cost of sales when the services performed in connection with the monies received are completed and when the related product has been sold by Sysco. There are several types of cash consideration received from vendors. In many instances, the vendor consideration is in the form of a specified amount per case or per pound. In these instances, Sysco will recognize the vendor consideration as a reduction of cost of sales when the product is sold. In the situations in which the vendor consideration is not related directly to specific product purchases, Sysco will recognize these as a reduction of cost of sales when the earnings process is complete, the related service is performed and the amounts are realized. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs include costs associated with the selection of products and delivery to customers. |
Insurance Program | Insurance Program Sysco maintains a self-insurance program covering portions of workers’ compensation, general and vehicle liability and property insurance costs. The amounts in excess of the self-insured levels are fully insured by third party insurers. In fiscal 2018, Sysco created a wholly owned captive insurance subsidiary (the Captive) with the primary purpose to enhance Sysco’s risk financing strategies by providing Sysco the opportunity to negotiate insurance premiums in the non-retail insurance market. The Captive must maintain a sufficient level of cash to fund future reserve payments and secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. The Captive holds restricted cash and restricted cash equivalents in a cash deposit account in order to meet solvency requirements. Further, Sysco has letters of credit available to collateralize the remaining liabilities not covered by restricted cash and restricted cash equivalents. The company also maintains a fully self-insured group medical program. Liabilities associated with these risks are estimated in part by considering historical claims experience, medical cost trends, demographic factors, severity factors and other actuarial assumptions. |
Share-Based Compensation | Share-Based Compensation Sysco recognizes expense for its share-based compensation based on the fair value of the awards that are granted. The fair value of performance share unit awards is determined based on the target number of shares of common stock and the company’s stock price on the date of grant and subsequently adjusted based on actual and forecasted performance compared to planned targets. The fair value of stock options is estimated at the date of grant using the Black-Scholes option pricing model. Option pricing methods require the input of highly subjective assumptions, including the expected stock price volatility. The fair value of restricted stock and restricted stock unit awards are based on the company’s stock price on the date of grant. Measured compensation cost is recognized ratably over the vesting period of the related share-based compensation award. The method for estimating the fair value of stock options has not changed in the past 3 years. |
Income Taxes | Income Taxes Sysco recognizes deferred tax assets and liabilities based on the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured pursuant to tax laws using rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The impact on deferred tax assets and liabilities of a change in tax rate is recognized in income in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amount more likely than not to be realized. The determination of the company’s provision for income taxes requires significant judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes primarily reflects a combination of income earned and taxed in the various United States (U.S.) federal and state, as well as various foreign jurisdictions. Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for tax contingencies or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate. |
Acquisitions | Acquisitions Acquisitions of businesses are accounted for using the acquisition method of accounting, and the financial statements include the results of the acquired operations from the respective dates of acquisition. The purchase price of the acquired entities is preliminarily allocated to the net assets acquired and liabilities assumed based on the estimated fair value at the dates of acquisition, with any excess of cost over the fair value of net assets acquired, including intangibles, recognized as goodwill. Subsequent changes to preliminary amounts are made prospectively. |
Basis of Presentation | Basis of Presentation The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income, changes in consolidated shareholders’ equity and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for all periods presented have been made. Sysco has interests in various jointly owned foodservice operations in Mexico, Panama and Sweden for which it consolidates the results of the operations; therefore, the financial position, results of operations and cash flows for these companies have been included in Sysco’s consolidated financial statements. The value of the noncontrolling interest in each entity is considered redeemable due to certain features of the investment agreement and has, therefore, been presented as mezzanine equity, which is outside of permanent equity, in the consolidated balance sheets. The income attributable to the noncontrolling interest is located within Other expense (income), net, in the consolidated results of operations, as this amount is not material. The non-cash add back for the change in the value of the noncontrolling interest is located within Other non-cash items on the consolidated cash flows. |
Reclassifications | Reclassifications Prior year amounts have been reclassified to conform with the current year presentation. |
New Accounting Pronouncements | Stock Compensation In March 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) . The ASU identifies areas for simplification involving several aspects of accounting for share-based payment transactions, including the income tax consequences, classification of awards as equity or liabilities, an option to recognize gross stock compensation expense with actual forfeitures recognized as they occur, as well as certain classifications on the statement of cash flows. The company adopted this ASU in the first quarter of fiscal 2018. The company elected to maintain the current policy to estimate forfeitures expected to occur to determine stock-based compensation expense. Further, the company adopted the provisions that have changed its accounting for excess tax benefits or detriments. Excess tax benefits or detriments were previously included within additional paid-in capital in the consolidated balance sheet and were a part of the diluted share calculation. On a prospective basis, excess tax benefits or detriments are included within income tax expense in the consolidated results of operations and are no longer a part of the diluted share calculation. Prior periods have not been adjusted. In fiscal 2018 , the company recognized excess tax benefits of $52.1 million from stock option exercises and restricted stock unit vestings that occurred during the period. The standard also requires several presentation changes with regard to the statement of cash flows, which the company adopted on a retrospective basis; therefore, amounts presented for fiscal 2017 and 2016 in the statement of cash flows reflect the guidance required by this ASU. Cash flows related to excess tax benefits or detriments are included in net cash provided by operating activities, rather than as a financing activity. The standard further requires that cash paid by an employer, when directly withholding shares for tax withholding purposes, should be classified as a financing activity and applied retrospectively. Cash payments to tax authorities in connection with shares withheld to meet statutory income tax withholding requirements are presented as a financing activity in the consolidated statement of cash flows. Restricted Cash In August 2016, the FASB issued ASU 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) . The ASU clarifies the presentation of restricted cash on the statement of cash flows. Amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling between the beginning and ending cash balances on the statement of cash flows. We retrospectively adopted the standard in the second quarter of fiscal 2018, which was one year earlier than required. The adoption increases the ending cash balance within our statement of cash flows by the aggregate amount of our restricted cash balances and requires a new disclosure to reconcile the cash balances within our statement of cash flows to the balance sheets for each period presented. See Supplemental Cash Flow Information within Note 1 , “Summary of Accounting Policies.” For fiscal 2018, $163.5 million of restricted cash is included with cash, cash equivalents and restricted cash. There were no material restricted cash balances in fiscal 2017 and, therefore, there is no material impact to amounts reported for that period. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment , which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. The amendments also eliminate the requirements for any reporting unit with a zero or negative carrying amount to perform a qualitative assessment and, if it fails that qualitative test, to perform Step 2 of the goodwill impairment test. An entity still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary. The company early adopted this ASU in the first quarter of fiscal 2018. Targeted Improvements to Accounting for Hedging Activities In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging , which expands and refines hedge accounting for both financial and non-financial risk components, aligns the recognition and presentation of the effects of hedging instruments and hedge items in the financial statements, and includes certain targeted improvements to ease the application of current guidance related to the assessment of hedge effectiveness. Sysco has early adopted the standard using the modified retrospective approach to existing hedging relationships as of the second quarter of fiscal 2018, rather than in fiscal 2020, as required by the ASU. Sysco believes that the early adoption of the hedging standard provides a better alignment between risk management activities and hedge accounting, and reduce total cost of ownership of the risk management program. All transition requirements have been applied to hedging relationships existing on the date of adoption and the effect of the adoption is reflected as of the beginning of fiscal 2018. The cumulative effect of the accounting change on the opening balance of retained earnings was immaterial to Sysco’s consolidated balance sheet. All required disclosures under ASU 2017-12 have been made in Note 9 , “Derivative Financial Instruments.” Reporting Comprehensive Income In February 2018, the FASB issued ASU 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220), to allow a reclassification from AOCI to retained earnings for stranded tax effects resulting from the Tax Act. The amendments in this update eliminate the stranded tax effects resulting from the Tax Act; however, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The guidance is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years, which is fiscal 2020 for Sysco, with early adoption permitted. The company early adopted this ASU in the fourth quarter of fiscal 2018, resulting in $236.4 million of accumulated other comprehensive loss being reclassified into retained earnings. Revenue from Contracts with Customers In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), and has issued subsequent amendments to this guidance. This new standard will replace all current guidance on this topic and eliminate all industry-specific guidance. The new revenue recognition standard provides a unified model to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration for which the entity expects to be entitled in exchange for those goods or services. The guidance is effective for interim and annual periods within new fiscal years beginning after December 15, 2017, which is fiscal 2019 for Sysco. The standard may be applied either retrospectively to each period presented or as a cumulative-effect adjustment as of the date of adoption. The company has substantially completed its assessment of the accounting required under Topic 606. Sysco does not expect that the implementation of the new standard will have a material effect on the company’s financial statements. The company will adopt the standard in the first quarter of fiscal 2019 using the modified retrospective method. Enhanced disclosures, including revenue recognition policies to identify performance obligations to customers and significant judgments in measurement and recognition, are required. Leases In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) , specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases . The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount, timing, and uncertainty of cash flows arising from a lease. Lessees are permitted to make an accounting policy election to not recognize the asset and liability for leases with a term of twelve months or less. Lessors’ accounting is largely unchanged from the previous accounting standard. In addition, Topic 842 expands the disclosure requirements of lease arrangements. Topic 842 currently requires lessees and lessors to use a modified retrospective transition approach, which includes a number of practical expedients. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018, which is fiscal 2020 for Sysco, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements , to simplify the lease standard’s implementation. The amended guidance relieves businesses and other organizations of the requirement to present prior comparative years’ results when they adopt the new lease standard. Instead of recasting prior year results using the new accounting when they adopt the guidance, companies can choose to recognize the cumulative effect of applying the new standard to leased assets and liabilities as an adjustment to the opening balance of retained earnings. The company is currently reviewing the provisions of the new leases standards. Financial Instruments - Credit Losses In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which introduces a forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. This ASU also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years-and interim periods within those fiscal years-beginning after December 15, 2019, which is the first quarter of fiscal 2021 for Sysco, with early adoption permitted. The company is currently reviewing the provisions of the new standard. Guidance in Presentation of Cash Flows - Classification of Certain Cash Receipts and Cash Payments In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) : Classification of Certain Cash Receipts and Cash Payments , to address eight specific cash flow issues with the objective of reducing the existing diversity in practice. The eight specific issues are: (1) Debt Prepayment or Debt Extinguishment Costs; (2) Settlement of Zero-Coupon Debt Instruments or Other Debt Instruments with Coupon Interest Rates That Are Insignificant in Relation to the Effective Interest Rate of the Borrowing; (3) Contingent Consideration Payments Made after a Businesses Combination; (4) Proceeds from the Settlement of Insurance Claims; (5) Proceeds from the Settlement of Corporate-Owned Life Insurance Policies, including Bank-Owned Life Insurance Policies; (6) Distributions Received from Equity Method Invitees; (7) Beneficial Interests in Securitization Transactions; and (8) Separately Identifiable Cash and Application of the Predominance Principle. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco. The company has completed its assessment of the accounting required under ASU 2016-15 and does not expect that the implementation of the new standard will have a material effect on the company’s cash flow statement. Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost In March 2017, the FASB issued ASU 2017-07, Compensation - Retirement Benefits ( Topic 715 ): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost , requiring that an employer report the service cost component of pension and postretirement benefits in the same line item or items as other compensation costs. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside of a subtotal of income from operations. In addition, only the service cost component will be eligible for capitalization as applicable. The guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods, which is the first quarter of fiscal 2019 for Sysco, and will be applied retroactively. The company has substantially completed its assessment of the accounting required under ASU 2017-07, concluding it will result in net periodic income of $15.0 million for fiscal 2018 and net periodic cost of $1.3 million for fiscal 2017 being recorded in other expense (income) that was previously included in operating expense. |
SUMMARY OF ACCOUNTING POLICIE31
SUMMARY OF ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Cash and Cash Equivalents | The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Jun. 30, 2018 Jul. 1, 2017 July 2, 2016 (In thousands) Cash and cash equivalents $ 552,325 $ 869,502 $ 3,919,300 Restricted cash 163,519 — — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 715,844 $ 869,502 $ 3,919,300 |
Schedule of Restrictions on Cash and Cash Equivalents | The following table sets forth the company’s reconciliation of cash, cash equivalents and restricted cash reported within the Consolidated Statement of Cash Flows that sum to the total of the same such amounts shown in the Consolidated Statement of Cash Flows: Jun. 30, 2018 Jul. 1, 2017 July 2, 2016 (In thousands) Cash and cash equivalents $ 552,325 $ 869,502 $ 3,919,300 Restricted cash 163,519 — — Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows $ 715,844 $ 869,502 $ 3,919,300 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Assets and liabilities measured at fair value table | The following tables present the company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2018 and July 1, 2017 : Assets and Liabilities Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash equivalents Cash and cash equivalents $ 169,214 $ 30,190 $ — $ 199,404 Other assets (1) 163,519 — — 163,519 Total assets at fair value $ 332,733 $ 30,190 $ — $ 362,923 (1) Represents restricted cash balance recorded within other assets in the consolidated balance sheet. Assets and Liabilities Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Total (In thousands) Assets: Cash equivalents Cash and cash equivalents $ 238,954 $ 49,430 $ — $ 288,384 Total assets at fair value $ 238,954 $ 49,430 $ — $ 288,384 |
ALLOWANCE FOR DOUBTFUL ACCOUN33
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract] | |
Schedule of valuation and qualifying accounts disclosure table | A summary of the activity in the allowance for doubtful accounts appears below: 2018 2017 2016 (In thousands) Balance at beginning of period $ 31,059 $ 37,880 $ 41,720 Charged to costs and expenses 21,448 20,672 20,372 Customer accounts written off, net of recoveries (27,120 ) (26,943 ) (23,551 ) Other adjustments 381 (550 ) (661 ) Balance at end of period $ 25,768 $ 31,059 $ 37,880 |
PLANT AND EQUIPMENT (Tables)
PLANT AND EQUIPMENT (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Summary of plant and equipment, including the related accumulated depreciation table | A summary of plant and equipment, including the related accumulated depreciation, appears below: Jun. 30, 2018 Jul. 1, 2017 Estimated Useful Lives (In thousands) Plant and equipment at cost: Land $ 495,909 $ 477,577 Buildings and improvements 4,268,687 4,072,339 10-30 years Fleet and equipment 3,808,133 3,595,095 3-10 years Computer hardware and software 1,628,121 1,554,122 3-7 years Total plant and equipment at cost 10,200,850 9,699,133 Accumulated depreciation (5,679,190 ) (5,321,831 ) Total plant and equipment, net $ 4,521,660 $ 4,377,302 |
GOODWILL AND OTHER INTANGIBLES
GOODWILL AND OTHER INTANGIBLES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill rollforward table by reporting segments | The changes in the carrying amount of goodwill by reportable segment for the years presented are as follows: U.S. Foodservice Operations International Foodservice Operations SYGMA Other Total (In thousands) Carrying amount as of July 2, 2016 $ 1,220,702 $ 632,700 $ 32,607 $ 235,652 $ 2,121,661 Goodwill acquired during year — 1,815,890 — — 1,815,890 Currency translation/other 10,343 (16,082 ) — (15,684 ) (21,423 ) Carrying amount as of July 1, 2017 $ 1,231,045 $ 2,432,508 $ 32,607 $ 219,968 $ 3,916,128 Goodwill acquired during year 36,020 20,648 — — 56,668 Currency translation/other (6,165 ) (12,335 ) — 1,189 (17,311 ) Carrying amount as of June 30, 2018 $ 1,260,900 $ 2,440,821 $ 32,607 $ 221,157 $ 3,955,485 |
Amortized intangible assets table | Fully amortized intangible assets have been removed in the period fully amortized in the table below, which presents the company’s amortizable intangible assets in total by category as follows: Jun. 30, 2018 Jul. 1, 2017 Gross Carrying Amount Accumulated Amortization Net Gross Carrying Amount Accumulated Amortization Net (In thousands) Customer relationships $ 1,119,136 $ (307,408 ) $ 811,728 $ 1,073,577 $ (209,253 ) $ 864,324 Non-compete agreements 31,754 (28,819 ) 2,935 32,385 (25,384 ) 7,001 Trademarks 10,073 (7,058 ) 3,015 11,050 (7,002 ) 4,048 Other 13,623 (13,548 ) 75 13,622 (10,704 ) 2,918 Total amortizable intangible $ 1,174,586 $ (356,833 ) $ 817,753 $ 1,130,634 $ (252,343 ) $ 878,291 |
Indefinite-lived intangible assets table | The table below presents the company’s indefinite-lived intangible assets by category as follows: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Trademarks $ 161,093 $ 158,251 Licenses 966 969 Total indefinite-lived intangible assets $ 162,059 $ 159,220 |
Intangibles estimated amortization expense for the next five years table | The estimated future amortization expense for the next five fiscal years on intangible assets outstanding as of June 30, 2018 is shown below: Amount (In thousands) 2019 $ 102,586 2020 98,536 2021 89,469 2022 86,878 2023 82,634 |
DERIVATIVE FINANCIAL INSTRUME36
DERIVATIVE FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Summary of outstanding swap agreements | Details of outstanding hedging instruments as of June 30, 2018 are below: Maturity Date of the Hedging Instrument Currency / Unit of Measure Notional Value (In millions) Hedging of interest rate risk April 2019 U.S. Dollar 500 October 2020 U.S. Dollar 750 July 2021 U.S. Dollar 500 March 2025 U.S. Dollar 500 Hedging of foreign currency risk (1) June 2019 U.S. Dollar 384 June 2021 U.S. Dollar 44 June 2021 Canadian Dollar 300 July 2021 Canadian Dollar 30 July 2021 British Pound Sterling 234 August 2021 British Pound Sterling 466 June 2023 Euro 500 Hedging of fuel risk Various (July 2018 to June 2019) Gallons 46 (1) Foreign currency forward contracts used to hedge against foreign exchange exposures related to inventory purchases are not material to Sysco’s overall hedging portfolio. |
Derivatives balance sheet location table | The location and carrying amount of hedged liabilities in the consolidated balance sheet as of June 30, 2018 are as follows: Jun. 30, 2018 Carrying Amount of Hedged Assets (Liabilities) Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) (In thousands) Balance sheet location: Current maturities of long-term debt $ (499,610 ) $ 5,097 Long-term debt (1,743,732 ) 47,555 The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of June 30, 2018 , July 1, 2017 and July 2, 2016 are as follows: Derivative Fair Value Balance Sheet Location Jun. 30, 2018 Jul. 1, 2017 (In thousands) Fair Value Hedges: Interest rate swaps Other current assets $ — $ 707 Interest rate swaps Other current liabilities 6,820 — Interest rate swaps Other long-term liabilities 49,734 21,390 Cash Flow Hedges: Fuel Swaps Other current assets $ 15,316 $ 717 Foreign currency forwards Other current assets 693 — Cross currency swaps Other current assets 4,284 — Cross currency swaps Other assets 3,454 — Fuel Swaps Other current liabilities — 6,160 Foreign currency forwards Other current liabilities 71 154 Fuel swaps Other long-term liabilities — 160 Cross currency swaps Other long-term liabilities 14,201 5,816 Net Investment Hedges: Foreign currency swaps Other assets $ 10,709 $ — Foreign currency swaps Other long-term liabilities 39,690 12,308 Foreign denominated debt Long-term debt 584,150 571,450 |
Derivatives financial statement performance table | The location and amount of gains or losses recognized in the consolidated results of operations for fair value and cash flow hedging relationships for each of the periods, presented on a pretax basis, are as follows: 2018 Cost of Goods Sold Operating Expense Interest Expense (In thousands) Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value or cash flow hedges are recorded $ 47,641,933 $ 8,756,417 $ 395,483 Gain or (loss) on fair value hedging relationships: Interest contracts: Hedged items (1) $ — $ — $ (30,418 ) Derivatives designated as hedging instruments — — (39,540 ) Gain or (loss) on cash flow hedging relationships: Fuel swaps: Gain or (loss) reclassified from AOCI into income $ — $ 13,983 $ — Foreign currency contracts: Gain or (loss) reclassified from AOCI into income $ 1,776 $ — $ — Interest contracts: Gain or (loss) reclassified from AOCI into income (2) $ — $ — $ (11,499 ) (1) The hedged total includes interest expense of $63.5 million and change in fair value of debt of $33.1 million . (2) Losses reclassified from AOCI into income represent amortization of losses on forward starting interest rate swap agreements that were previously settled. |
Schedule of location and effect of fair value and cash flow hedge accounting | The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the fiscal period ended June 30, 2018 , presented on a pretax basis, are as follows: 2018 Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income (In thousands) (In thousands) Derivatives in cash flow hedging relationships: Fuel swaps $ 21,878 Operating expense $ 13,983 Foreign currency contracts 1,118 Cost of goods sold 1,776 Total $ 22,996 $ 15,759 Derivatives in net investment hedging relationships: Foreign currency contracts $ (20,584 ) N/A $ — Foreign denominated debt (12,700 ) N/A — Total $ (33,284 ) $ — |
SELF-INSURED LIABILITIES (Table
SELF-INSURED LIABILITIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Loss Contingency [Abstract] | |
Summary of the activity in the self-insured liabilities | A summary of the activity in self-insured liabilities appears below: 2018 2017 2016 (In thousands) Balance at beginning of period $ 245,811 $ 199,059 $ 193,312 Charged to costs and expenses 461,867 523,674 418,917 Payments (436,692 ) (476,922 ) (413,170 ) Balance at end of period $ 270,986 $ 245,811 $ 199,059 The long-term portion of the self-insured liability balance was $167.1 million and $153.1 million as of June 30, 2018 and July 1, 2017, respectively. |
DEBT AND OTHER FINANCING ARRA38
DEBT AND OTHER FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of debt | Sysco’s debt consists of the following: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Commercial paper, interest at 1.42% as of July 1, 2017 $ — $ 119,691 Senior notes, interest at 5.25%, matured in fiscal 2018 (1) — 500,311 Senior notes, interest at 1.90%, maturing in fiscal 2019 (1) 491,700 491,260 Senior notes, interest at 5.375%, maturing in fiscal 2019 (1) 249,701 249,456 Senior notes, interest at 2.60%, maturing in fiscal 2021 (1) 724,047 739,239 Senior notes, interest at 2.50%, maturing in fiscal 2022 (1) 477,411 488,554 Senior notes, interest at 2.60%, maturing in fiscal 2022 (1) 446,681 445,853 Senior notes, interest at 1.25%, maturing in fiscal 2023 (1) 580,196 566,767 Senior notes, interest at 3.55%, maturing in fiscal 2025 (1) 492,606 — Senior notes, interest at 3.75%, maturing in fiscal 2026 (1) 746,879 746,288 Senior notes, interest at 3.30%, maturing in fiscal 2027 (1) 992,176 991,370 Debentures, interest at 7.16%, maturing in fiscal 2027 (2) 44,276 50,000 Senior notes, interest at 3.25%, maturing in fiscal 2028 (1) 742,555 742,526 Debentures, interest at 6.50%, maturing in fiscal 2029 (1) 162,276 223,822 Senior notes, interest at 5.375%, maturing in fiscal 2036 (1) 382,010 497,089 Senior notes, interest at 6.625%, maturing in fiscal 2039 (1) 201,766 248,396 Senior notes, interest at 4.85%, maturing in fiscal 2046 (1) 495,709 495,552 Senior notes, interest at 4.50%, maturing in fiscal 2046 (1) 494,090 493,981 Senior notes, interest at 4.45%, maturing in fiscal 2048 (1) 493,165 — Notes payable, capital leases, and other debt, interest averaging 6.33% and maturing at various dates to fiscal 2026 as of June 30, 2018 and 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 110,026 104,735 Total debt 8,327,270 8,194,890 Less current maturities of long-term debt (782,329 ) (530,075 ) Less notes payable (4,176 ) (3,938 ) Net long-term debt $ 7,540,765 $ 7,660,877 (1) Represents senior notes that 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. (2) This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity. |
Long-term debt principal payments for the next five years table | As of June 30, 2018 , the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below: Amount (In thousands) 2019 $ 788,309 2020 23,764 2021 768,076 2022 962,884 2023 590,112 |
Schedule of senior notes | On March 19, 2018 , Sysco issued senior notes (the Notes) totaling $1.0 billion . Details of the Notes are as follows: Maturity Date Par Value Coupon Rate Pricing March 15, 2025 (the 2025 Notes) $ 500 3.55 % 99.480 % March 15, 2048 (the 2048 Notes) 500 4.45 99.378 |
Debentures and senior notes purchased | Details of the debentures and senior notes purchased are as follows: Maturity Date Par Value Coupon Rate Principal amount tendered Remaining Par Value after tender offer Cash amount paid (including interest) (Dollars in millions) April 15, 2027 $ 50 7.160 % $ 5.7 $ 44.3 $ 7.4 August 1, 2028 225 6.500 61.9 163.1 77.3 September 21, 2035 500 5.375 115.9 384.1 134.3 March 17, 2039 250 6.625 47.0 203.0 63.7 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Leases [Abstract] | |
Aggregate minimum lease payments for non-capitalized long-term leases for the next five years and thereafter table | Aggregate minimum lease payments by fiscal year under existing long-term operating leases are as follows: Amount (In thousands) 2019 $ 111,560 2020 94,012 2021 77,319 2022 65,157 2023 51,173 Thereafter 266,137 |
COMPANY-SPONSORED EMPLOYEE BE40
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Retirement Benefits [Abstract] | |
Defined benefit plans funded status table | The caption “U.S. Pension Benefits” in the tables below includes both the U.S. Retirement Plan and the SERP. U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Change in benefit obligation: Benefit obligation at beginning of year $ 4,224,231 $ 4,284,776 $ 420,735 $ 400,028 Service cost 14,514 14,287 3,219 2,880 Interest cost 173,827 171,282 10,667 9,951 Amendments — 925 (4,624 ) (110 ) Curtailments — — — (611 ) Actuarial (gain) loss, net (89,253 ) (86,680 ) (21,162 ) 26,528 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,879 ) Exchange rate changes — — 3,982 (4,052 ) Benefit obligation at end of year 4,043,011 4,224,231 399,000 420,735 Change in plan assets: Fair value of plan assets at beginning of year 3,341,662 3,115,040 259,372 271,821 Actual return on plan assets 196,051 333,890 897 1,938 Employer contribution 409,003 53,091 7,960 4,530 Total disbursements (280,308 ) (160,359 ) (13,817 ) (13,880 ) Exchange rate changes — — 3,616 (5,037 ) Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 Funded status at end of year $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) |
Defined benefit plans amounts recognized in balance sheet table | The amounts recognized on Sysco’s consolidated balance sheets related to its company-sponsored defined benefit plans are as follows: U.S. Pension Benefits International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Noncurrent assets (Other assets) $ 63,945 $ — $ — $ — Current accrued benefit liability (Accrued expenses) (31,313 ) (30,538 ) (1,280 ) (1,477 ) Noncurrent accrued benefit liability (Other long-term liabilities) (409,235 ) (852,031 ) (139,692 ) (159,886 ) Net amount recognized $ (376,603 ) $ (882,569 ) $ (140,972 ) $ (161,363 ) |
Defined benefit plans amounts recognized in accumulated other comprehensive loss (income) table | Accumulated other comprehensive loss (income) as of June 30, 2018 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 19,170 $ 2,679 $ 21,849 Actuarial losses (gains) 1,434,160 (26,106 ) 1,408,054 Total $ 1,453,330 $ (23,427 ) $ 1,429,903 Accumulated other comprehensive loss (income) as of July 1, 2017 consists of the following amounts that had not, as of that date, been recognized in net benefit cost: U.S. Pension Benefits International Pension Benefits Total (In thousands) Prior service cost $ 28,630 $ 114 $ 28,744 Actuarial losses (gains) 1,521,174 (35,935 ) 1,485,239 Total $ 1,549,804 $ (35,821 ) $ 1,513,983 |
Defined benefit plans with accumulated/aggregate benefit obligation in excess of fair value of plan assets table | Information for plans with accumulated benefit obligation/aggregate benefit obligation in excess of fair value of plan assets is as follows: U.S. Pension Benefits (1) International Pension Benefits Jun. 30, 2018 Jul. 1, 2017 Jun. 30, 2018 Jul. 1, 2017 (In thousands) Accumulated benefit obligation/aggregate benefit obligation $ 4,034,383 $ 4,213,318 $ 392,457 413,552 Fair value of plan assets at end of year 3,666,408 3,341,662 258,028 259,372 (1) Information under Pension Benefits as of June 30, 2018 and July 1, 2017 includes both the U.S. Retirement Plan and the SERP. |
Defined benefit plans components of net benefit cost table | The components of net company-sponsored pension costs for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Service cost $ 14,514 $ 3,219 $ 14,287 $ 2,880 $ 11,815 Interest cost 173,827 10,667 171,282 9,951 174,602 Expected return on plan assets (233,987 ) (11,653 ) (222,699 ) (10,033 ) (216,888 ) Amortization of prior service cost 9,460 (2,003 ) 11,202 (1 ) 11,201 Amortization of actuarial loss 35,696 (67 ) 41,511 (38 ) 22,186 Curtailment loss — — — (611 ) — Settlement (gain) / Loss recognized — 16 — — — Net pension (benefits) costs $ (490 ) $ 179 $ 15,583 $ 2,148 $ 2,916 |
Defined benefit plans other changes in plan assets and benefit obligations recognized in other comprehensive (loss) income table | Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) related to company-sponsored pension plans for each fiscal year are as follows: 2018 2017 2016 U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits International Pension Benefits U.S. Pension Benefits (In thousands) Amortization of prior service cost $ 9,460 $ (2,003 ) $ 11,202 $ (1 ) $ 11,202 Amortization of actuarial loss 35,696 (51 ) 41,511 (38 ) 22,186 Prior service cost arising in current year — 4,624 (925 ) 110 — Effect of exchange rates on amounts in AOCI — (583 ) — (1,269 ) — Actuarial (loss) gain arising in current year 51,318 10,406 197,871 (34,623 ) (681,691 ) Net pension costs $ 96,474 $ 12,393 $ 249,659 $ (35,821 ) $ (648,303 ) |
Defined benefit plans amounts included accumulated other comprehensive loss (income) that are expected to be recognized in net company-sponsored benefit cost in next fiscal year table | Amounts included in accumulated other comprehensive loss (income) as of June 30, 2018 that are expected to be recognized as components of net company-sponsored benefit cost during fiscal 2019 are: U.S. Pension Benefits International Pension Benefits Total (In thousands) Amortization of prior service cost $ 8,380 $ (207 ) $ 8,173 Amortization of actuarial losses (gains) 34,393 (113 ) 34,280 Total $ 42,773 $ (320 ) $ 42,453 |
Defined benefit plans estimated future benefit payments table | Estimated future benefit payments for vested participants, based on actuarial assumptions, are as follows: U.S. Pension Benefits International Pension Benefits (In thousands) 2019 $ 138,963 $ 10,279 2020 148,968 10,359 2021 159,879 12,305 2022 170,508 12,373 2023 180,863 13,887 Subsequent five years 1,041,354 89,281 |
Defined benefit plans weighted average assumptions used in calculating net periodic benefit costs table | Weighted-average assumptions used to determine net company-sponsored pension costs for each fiscal year were: 2018 2017 2016 Discount rate — U.S. Retirement Plan 4.19 % 4.07 % 4.84 % Discount rate — SERP 4.08 3.91 4.63 Discount rate — U.K. Retirement Plan 2.60 2.80 N/A Expected rate of return — U.S. Retirement Plan 7.00 7.25 7.25 Expected rate of return — U.K. Retirement Plan 4.55 4.15 N/A Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 3.89 Weighted-average assumptions used to determine benefit obligations as of year-end were: Jun. 30, 2018 Jul. 1, 2017 Discount rate — U.S. Retirement Plan 4.28 % 4.19 % Discount rate — SERP 4.41 4.08 Discount rate — U.K. Retirement Plan 2.85 2.60 Rate of compensation increase — U.S. Retirement Plan 2.62 2.62 |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans fair value of plans assets by major category table | The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (7) Total (In thousands) Cash and cash equivalents $ 25,810 $ 34,430 $ — $ — $ 60,240 Growth assets: U.S. equity (1) 80,719 — — 143,701 224,420 International equity (1) 57,959 — — 109,186 167,145 Hedge fund of funds (2) — — — 388,281 388,281 Real estate funds (3) — — — 146,389 146,389 Private equity funds (4) — — — 84,003 84,003 Liability hedging assets: Corporate bonds — 1,775,324 — — 1,775,324 U.S. government and agency securities (1) — 277,986 — 469,868 747,854 Other (5) — 27,324 — — 27,324 High yield and emerging markets fixed income (6) — — — 45,428 45,428 Total investments at fair value $ 164,488 $ 2,115,064 $ — $ 1,386,856 $ 3,666,408 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of June 30, 2018 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (2) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per quarter. (3) The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day with advanced written notice and subject to applicable limits. (4) Total unfunded commitments as of June 30, 2018 was $22.6 million . The investments cannot be redeemed, but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2018 to 2031 . (5) Include foreign government and state and municipal debt securities. (6) There were no unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (7) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of June 30, 2018 : Assets Measured at Fair Value as of Jun. 30, 2018 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 30,987 $ — $ — $ — $ 30,987 U.K. government securities — 9,336 — — 9,336 Derivatives, net (1) — 17,658 — — 17,658 Pooled funds — 5,387 — — 5,387 Investment funds: Common contractual fund (2) — — — 194,660 194,660 Total investments at fair value $ 30,987 $ 32,381 $ — $ 194,660 $ 258,028 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $45.2 million ; the fair value of liability positions totaled $27.5 million . (2) There were $20.8 million of unfunded commitments as of June 30, 2018 , and there were no redemption restrictions as of June 30, 2018 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet The following table presents the fair value of the U.S. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (4) Total (In thousands) Cash and cash equivalents $ 2,989 $ 37,346 $ — $ — $ 40,335 U.S. equity (1) 331,946 — — 577,626 909,572 International equity (1) 185,502 — — 537,317 722,819 Long duration fixed income: Corporate bonds — 628,033 — — 628,033 U.S. government and agency securities — 250,940 — — 250,940 Other (2) — 6,220 — — 6,220 Derivatives, net (2) — — — — — High yield and emerging markets fixed income (3) — — — 226,358 226,358 Alternative investment funds: Hedge fund of funds (5) — — — 336,812 336,812 Real estate funds (6) — — — 145,208 145,208 Private equity funds (7) — — — 75,365 75,365 Total investments at fair value $ 520,437 $ 922,539 $ — $ 1,898,686 $ 3,341,662 (1) Include direct investments in equity securities and within investment funds for which fair value is measured at NAV. There are no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . (2) Include foreign government and state and municipal debt securities. (3) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per day. The daily maximum withdrawal limitation is the greater of $2.0 million or 5% of the asset value. (4) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet. (5) There was no unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per quarter. (6) For investments in the funds listed in this category, total unfunded commitment as of July 1, 2017 was $10.0 million . Approximately 15% of the investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period for these funds varies from 2018 to 2021 . The remaining investments may be redeemed once per day or once per quarter. (7) Total unfunded commitment as of July 1, 2017 was $30.7 million . The investments cannot be redeemed but the fund will make distributions through liquidation. The estimate of the liquidation period varies for each fund from 2017 to 2031 . The following table presents the fair value of the U.K. Retirement Plan’s assets by major asset category as of July 1, 2017 : Assets Measured at Fair Value as of Jul. 1, 2017 Level 1 Level 2 Level 3 Measured at NAV (3) Total (In thousands) Liability hedging assets: Cash and cash equivalents $ 26,992 $ — $ — $ — $ 26,992 U.K. government securities — 9,327 — — 9,327 Derivatives, net (1) — 20,900 — — 20,900 Pooled funds — 10,296 — — 10,296 Investment funds: Common contractual fund (2) — — — 191,508 191,508 Total investments at fair value $ 26,992 $ 40,523 $ — $ 191,508 $ 259,023 (1) Include interest rate swaps and zero coupon swaps. The fair value of asset positions totaled $47.4 million ; the fair value of liability positions totaled $26.5 million . (2) There were $9.3 million of unfunded commitments as of July 1, 2017 , and there were no redemption restrictions as of July 1, 2017 . The investment may be redeemed once per week. (3) Include certain investments that are measured at fair value using the NAV practical expedient have not been classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the consolidated balance sheet |
Domestic Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans target and actual asset allocation table | The U.S. Retirement Plan’s target and actual investment allocation as of June 30, 2018 is as follows: U.S. Retirement Plan Target Asset Allocation Actual Asset Allocation Growth assets 30 % 29 % Liability hedging assets 70 % 71 % 100 % |
International Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Defined benefit plans target and actual asset allocation table | The company’s target and actual investment allocation as of June 30, 2018 is as follows: U.K. Retirement Plan Target Asset Allocation Actual Asset Allocation Common contractual fund 75 % 75 % Liability hedging assets 25 25 100 % |
MULTIEMPLOYER EMPLOYEE BENEFI41
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Multiemployer Plans [Abstract] | |
Multiemployer defined benefit pension plan contributions table | Sysco’s contributions to multiemployer defined benefit pension plans were as follows for each fiscal year: 2018 2017 2016 (In thousands) Individually significant plans $ 39,121 $ 36,653 $ 33,787 All other plans 7,254 7,898 7,260 Total contributions $ 46,375 $ 44,551 $ 41,047 |
Multiemployer individually significant plans statistics table | The following table provides information about the funded status of individually significant plans: • The “EIN-PN” column provides the Employer Identification Number (EIN) and the three-digit plan number (PN). • The “Pension Protection Act Zone Status” columns provide the two most recent Pension Protection Act zone statuses available from each plan. The zone status is based on information that the company received from the plan’s administrators and is certified by each plan’s actuary. Among other factors, plans in the red zone are generally less than 65% funded, plans in the orange zone are both less than 80% funded and have an accumulated funding deficiency or are expected to have a deficiency in any of the next six plan years, plans in the yellow zone are less than 80% funded and plans in the green zone are at least 80% funded. The Multiemployer Protection Act of 2014 created a new zone called “critical and declining.” Plans are generally considered “critical and declining” if they are projected to become insolvent within 15 years. • The “FIP/RP Status” column indicates whether a financial improvement plan (FIP) for yellow/orange zone plans or a rehabilitation plan (RP) for red zone plans is pending or implemented in the current year or was put in place in a prior year. A status of “Pending” indicates a FIP/RP has been approved but actual period covered by the FIP/RP has not begun. A status of “Implemented” means the period covered by the FIP/RP began in the current year or is ongoing. • The “Surcharge Imposed” column indicates whether a surcharge was paid during the most recent annual period presented for the company’s contributions to each plan in the red zone. If the company’s current collective bargaining agreement (CBA) with a plan satisfies the requirements of a pending but not yet implemented RP, then the payment of surcharges is not required and “No” will be reflected in this column. If the company’s current CBA with a plan does not yet satisfy the requirements of a pending but not yet implemented RP, then the payment of surcharges is required and “Yes” will be reflected in this column. Pension Protection Act Pension Fund EIN-PN As of As of FIP/RP Surcharge Expiration Western Conference of Teamsters Pension Plan 91-6145047-001 Green Green N/A N/A 9/1/2018 to 1/6/2024 (1) Teamsters Pension Trust Fund of Philadelphia and Vicinity 23-1511735-001 Yellow Yellow Implemented N/A 7/20/2020 Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund 52-6043608-001 Yellow Yellow Implemented N/A 2/28/2022 Minneapolis Food Distributing Industry Pension Plan 41-6047047-001 Green Green Implemented N/A 8/1/2021 (1) Sysco is party to 22 CBAs that require contributions to the Western Conference of Teamsters Pension Trust. Each agreement covers anywhere from less than 1% to 11% of the total contributions Sysco is required to pay the fund. |
Multiemployer individually significant plans contributions table | The following table provides information about the company’s contributions to individually significant plans: • The “Sysco Contributions” columns provide contribution amounts based on Sysco’s fiscal years, which may not coincide with the plans’ fiscal years. • The “Sysco 5% of Total Plan Contributions” columns indicate whether Sysco was listed in the plan’s most recently filed Form 5500s as providing more than five percent of the total contributions to the plan, and the plan year-end is noted. Sysco Contributions Sysco 5% of Total Plan Contributions Pension Fund 2018 2017 2016 Year Ending Year Ending (In thousands) Western Conference of Teamsters Pension Plan $ 30,460 $ 28,145 $ 24,684 No No Teamsters Pension Trust Fund of Philadelphia and Vicinity 3,313 3,081 2,375 No No Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund 2,245 2,430 2,237 Yes Yes Minneapolis Food Distributing Industry Pension Plan 3,103 2,996 2,996 Yes Yes |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Earnings Per Share, Basic [Abstract] | |
Computation of basic and diluted earnings per share table | The following table sets forth the computation of basic and diluted earnings per share: 2018 2017 2016 (In thousands, except for share and per share data) Numerator: Net earnings $ 1,430,766 $ 1,142,503 $ 949,622 Denominator: Weighted-average basic shares outstanding 522,926,914 543,496,816 573,057,406 Dilutive effect of share-based awards 6,162,940 5,048,211 4,334,000 Weighted-average diluted shares outstanding 529,089,854 548,545,027 577,391,406 Basic earnings per share $ 2.74 $ 2.10 $ 1.66 Diluted earnings per share $ 2.70 $ 2.08 $ 1.64 |
OTHER COMPREHENSIVE INCOME (Tab
OTHER COMPREHENSIVE INCOME (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of components of other comprehensive (loss) income and related tax effects | A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows: 2018 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments: Net actuarial gain (loss), arising in the current year $ 69,476 $ 16,965 $ 52,511 Reclassification adjustments: Amortization of prior service cost Operating expenses 9,636 2,731 6,905 Amortization of actuarial loss (gain), net Operating expenses 35,044 9,934 25,110 Total reclassification adjustments 44,680 12,665 32,015 Foreign currency translation: Foreign currency translation adjustment N/A (22,987 ) — (22,987 ) Hedging instruments: Other comprehensive income (loss) before reclassification adjustments: Change in cash flow hedges Operating expenses (1) 23,872 9,529 14,343 Change in net investment hedges N/A (2,443 ) (8,234 ) 5,791 Total other comprehensive income (loss) before reclassification adjustments 21,429 1,295 20,134 Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,499 3,259 8,240 Total other comprehensive income (loss) $ 124,097 $ 34,184 $ 89,913 (1) Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. 2017 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments: Net actuarial (loss) gain, net arising in the current year $ 168,498 $ 71,215 $ 97,283 Reclassification adjustments: Amortization of prior service cost Operating expenses 11,370 4,366 7,004 Amortization of actuarial loss (gain), net Operating expenses 41,689 15,724 25,965 Total reclassification adjustments 53,059 20,090 32,969 Foreign currency translation: Foreign currency translation adjustment N/A (11,243 ) — (11,243 ) Hedging instruments: Other comprehensive income (loss) before reclassification adjustments: Change in cash flow hedges Operating expenses (1) (10,871 ) (4,173 ) (6,698 ) Change in net investment hedges N/A (34,152 ) (10,140 ) (24,012 ) Total other comprehensive income (loss) before reclassification adjustments (45,023 ) (14,313 ) (30,710 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,495 4,413 7,082 Total other comprehensive income (loss) $ 176,786 $ 81,405 $ 95,381 (1) Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges. 2016 Location of Expense Before Tax Tax Net of Tax (In thousands) Pension and other postretirement benefit plans: Other comprehensive income before reclassification adjustments Net actuarial (loss) gain, net arising in the current year $ (681,034 ) $ (261,517 ) $ (419,517 ) Reclassification adjustments: Amortization of prior service cost Operating expenses 11,351 4,359 6,992 Amortization of actuarial loss (gain), net Operating expenses 21,677 8,325 13,352 Total reclassification adjustments 33,028 12,684 20,344 Foreign currency translation: Foreign currency translation adjustment N/A (39,080 ) — (39,080 ) Interest rate swaps: Other comprehensive income before reclassification adjustments: Change in cash flow hedges (6,134 ) (2,355 ) (3,779 ) Reclassification adjustments: Amortization of cash flow hedges Interest expense 11,543 4,432 7,111 Total other comprehensive loss $ (681,677 ) $ (246,756 ) $ (434,921 ) |
Rollforward of accumulated other comprehensive (loss) income | The following tables provide a summary of the changes in accumulated other comprehensive (loss) income (AOCI) for the periods presented: Pension and Other Postretirement Benefit Plans, Foreign Currency Translation Hedging, net of tax Total (In thousands) Balance as of Jun. 27, 2015 $ (705,311 ) $ (97,733 ) $ (120,153 ) $ (923,197 ) Other comprehensive income before (419,517 ) (39,080 ) (3,779 ) (462,376 ) Amounts reclassified from accumulated 20,344 — 7,111 27,455 Balance as of Jul. 2, 2016 (1,104,484 ) (136,813 ) (116,821 ) (1,358,118 ) Other comprehensive income before 97,283 (11,243 ) (30,710 ) 55,330 Amounts reclassified from accumulated 32,969 — 7,082 40,051 Balance as of Jul. 1, 2017 (974,232 ) (148,056 ) (140,449 ) (1,262,737 ) Other comprehensive income before 52,511 (22,987 ) 20,134 49,658 Amounts reclassified from accumulated 32,015 — 8,240 40,255 Amounts reclassified to retained earnings (1) (205,353 ) — (31,092 ) (236,445 ) Balance as of Jun. 30, 2018 $ (1,095,059 ) $ (171,043 ) $ (143,167 ) $ (1,409,269 ) (1) Deferred taxes stranded in AOCI as a result of the Tax Act were reclassified to retained earnings as a result of early adopting ASU 2018-02. |
SHARE-BASED COMPENSATION (Table
SHARE-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Share-based Compensation [Abstract] | |
Black-Scholes option model assumption table | The weighted average assumptions discussed above are noted in the table below for relevant periods as follows: 2018 2017 2016 Dividend yield 2.6 % 2.8 % 3.1 % Expected volatility 17.5 % 16.9 % 20.4 % Risk-free interest rate 2.0 % 1.4 % 2.0 % Expected Life 7.0 years 7.2 years 7.2 years |
Option rollforward and other disclosures table | The following summary presents information regarding outstanding options as of June 30, 2018 and changes during the fiscal year then ended with regard to options under all stock incentive plans: Shares Under Option Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding as of July 1, 2017 21,070,836 $ 39.16 Granted 4,042,415 51.24 Exercised 6,400,982 32.65 Forfeited 299,584 48.48 Expired 21,075 28.87 Outstanding as of June 30, 2018 18,391,610 $ 43.92 7.23 $ 448,133 Vested or expected to vest as of June 30, 2018 12,006,173 $ 46.30 7.87 $ 263,972 Exercisable as of June 30, 2018 6,232,851 $ 39.23 5.96 $ 181,146 |
Non-vested awards rollforward table | The following summary presents information regarding outstanding non-vested awards as of June 30, 2018 and changes during the fiscal year then ended with regard to these awards under the stock incentive plans. Award types represented include restricted stock units granted to employees, restricted awards granted to non-employee directors and PSUs. Shares Weighted Average Grant Date Fair Value Per Share Non-vested as of July 1, 2017 2,643,599 $ 46.24 Granted 1,592,564 53.13 Vested (975,994 ) 41.44 Forfeited (173,285 ) 50.35 Non-vested as of June 30, 2018 3,086,884 $ 51.08 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Earnings before income taxes by jurisdiction table | For financial reporting purposes, earnings before income taxes consists of the following: 2018 2017 2016 (In thousands) U.S. $ 1,765,793 $ 1,569,073 $ 1,225,142 Foreign 190,431 197,157 207,865 Total $ 1,956,224 $ 1,766,230 $ 1,433,007 |
Income tax provision by jurisdiction table | The income tax provision for each fiscal year consists of the following: 2018 2017 2016 (In thousands) U.S. federal income taxes $ 399,254 $ 534,266 $ 429,658 State and local income taxes 62,670 69,913 34,032 Foreign income taxes 63,534 19,548 19,695 Total $ 525,458 $ 623,727 $ 483,385 |
Income tax provision by component table | The current and deferred components of the income tax provisions for each fiscal year are as follows: 2018 2017 2016 (In thousands) Current $ 337,550 $ 675,573 $ 389,514 Deferred 187,908 (51,846 ) 93,871 Total $ 525,458 $ 623,727 $ 483,385 |
Components of deferred tax assets and liabilities table | Significant components of Sysco’s deferred tax assets and liabilities are as follows: Jun. 30, 2018 Jul. 1, 2017 (In thousands) Deferred tax assets: Net operating loss carryforwards $ 226,274 $ 194,287 Pension 115,361 360,864 Share-based compensation 34,486 48,077 Deferred compensation 29,512 39,830 Self-insured liabilities — 84,401 Receivables 13,001 30,842 Inventory 14,728 21,332 Foreign currency remeasurement losses and currency hedge 15,796 13,221 Other 33,386 54,619 Deferred tax assets before valuation allowances 482,544 847,473 Valuation allowances (123,237 ) (114,151 ) Total deferred tax assets 359,307 733,322 Deferred tax liabilities: Excess tax depreciation and basis differences of assets 180,950 247,510 Goodwill and intangible assets 373,041 455,340 Other 40,774 49,654 Total deferred tax liabilities 594,765 752,504 Total net deferred tax assets / (liabilities) $ (235,458 ) $ (19,182 ) |
Tax rate reconciliation table | Reconciliations of the statutory federal income tax rate to the effective income tax rates for each fiscal year are as follows: 2018 2017 2016 U.S. statutory federal income tax rate 28.00 % 35.00 % 35.00 % State and local income taxes, net of any 2.48 2.61 1.79 Foreign income taxes 0.07 (2.81 ) (2.40 ) Uncertain tax position (0.22 ) 0.01 (1.96 ) Tax benefit of equity-based compensation (2.66 ) — — Impact of US Tax Reform 0.13 — — Other (0.95 ) 0.50 1.30 Effective income tax rate 26.85 % 35.31 % 33.73 % |
Reconciliation of unrecognized tax benefits table | A reconciliation of the beginning and ending amount of gross unrecognized tax benefits, excluding interest and penalties, is as follows: 2018 2017 (In thousands) Unrecognized tax benefits at beginning of year $ 16,278 $ 24,614 Additions for tax positions related to prior years 652 648 Reductions for tax positions related to prior years (4,033 ) (2,147 ) Reductions due to settlements with taxing authorities (702 ) (6,837 ) Unrecognized tax benefits at end of year $ 12,195 $ 16,278 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Unrecorded unconditional purchase obligations table | Minimum amounts committed to by year are as follows: Amount (In thousands) 2019 $ 1,762,782 2020 339,016 2021 1,459 |
BUSINESS SEGMENT INFORMATION (T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Segment Reporting [Abstract] | |
Business segment table | The following tables set forth certain financial information for Sysco’s business segments. Fiscal Year 2018 2017 2016 Sales: (In thousands) U.S. Foodservice Operations $ 39,642,263 $ 37,604,698 $ 37,776,443 International Foodservice Operations 11,518,565 10,613,059 5,436,209 SYGMA 6,557,033 6,178,909 6,102,328 Other 1,009,463 974,473 1,051,939 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 Fiscal Year 2018 2017 2016 Operating income: (In thousands) U.S. Foodservice Operations $ 3,051,991 $ 2,891,612 $ 2,771,932 International Foodservice Operations 193,240 243,116 177,159 SYGMA 24,318 23,299 27,469 Other 39,485 30,218 32,586 Total segments 3,309,034 3,188,245 3,009,146 Corporate (980,060 ) (1,135,074 ) (1,158,646 ) Total operating income 2,328,974 2,053,171 1,850,500 Interest expense 395,483 302,878 306,146 Other expense (income), net (22,733 ) (15,937 ) 111,347 Earnings before income taxes $ 1,956,224 $ 1,766,230 $ 1,433,007 Fiscal Year 2018 2017 2016 Depreciation and amortization: (In thousands) U.S. Foodservice Operations $ 348,041 $ 266,024 $ 252,392 International Foodservice Operations 258,156 243,628 70,184 SYGMA 36,367 34,890 31,792 Other 9,599 10,678 12,450 Total segments 652,163 555,220 366,818 Corporate 113,335 346,772 295,892 Total $ 765,498 $ 901,992 $ 662,710 Fiscal Year 2018 2017 2016 Capital Expenditures: (In thousands) U.S. Foodservice Operations $ 262,887 $ 194,714 $ 153,528 International Foodservice Operations 157,139 228,564 56,689 SYGMA 45,132 50,722 31,811 Other 11,406 13,237 20,702 Total segments 476,564 487,237 262,730 Corporate 211,251 199,141 264,616 Total $ 687,815 $ 686,378 $ 527,346 Fiscal Year 2018 2017 2016 Assets: (In thousands) U.S. Foodservice Operations $ 7,039,354 $ 6,675,543 $ 6,753,056 International Foodservice Operations 6,112,666 6,433,815 2,019,406 SYGMA 662,290 625,653 539,639 Other 452,426 448,885 459,785 Total segments 14,266,736 14,183,896 9,771,886 Corporate 3,803,668 3,572,759 6,949,918 Total $ 18,070,404 $ 17,756,655 $ 16,721,804 |
Product sales mix table | The sales mix for the principal product categories for each fiscal year is as follows: Fiscal Year 2018 2017 2016 (In thousands) Fresh and frozen meats $ 11,312,969 $ 10,605,678 $ 10,273,247 Canned and dry products 9,768,206 8,695,829 8,402,230 Frozen fruits, vegetables, bakery and other 9,025,762 8,444,260 6,719,648 Dairy products 6,037,409 5,610,101 5,276,991 Poultry 5,979,399 5,873,944 5,392,933 Fresh produce 4,929,366 4,701,440 4,156,978 Paper and disposables 3,837,943 3,596,470 3,557,514 Seafood 3,280,308 3,089,350 2,541,239 Beverage products 1,965,251 2,059,453 1,849,780 Janitorial products 1,395,100 1,331,019 1,251,821 Equipment and smallwares 795,406 794,087 593,595 Medical supplies 400,205 569,508 350,943 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 |
Geographic area revenue and long-lived assets table | Information concerning geographic areas is as follows: Fiscal Year 2018 2017 2016 (In thousands) Sales: United States $ 46,812,297 $ 44,395,765 $ 44,922,937 Canada 4,661,615 4,346,894 4,486,282 United Kingdom 3,176,069 2,974,133 — France 1,625,407 1,426,973 — Other 2,451,936 2,227,374 957,700 Total $ 58,727,324 $ 55,371,139 $ 50,366,919 Long-lived assets: United States $ 3,448,164 $ 3,252,980 $ 3,461,505 United Kingdom 319,664 303,178 — Canada 318,410 329,090 309,027 France 240,507 284,611 — Other 194,915 207,443 109,910 Total $ 4,521,660 $ 4,377,302 $ 3,880,442 |
SUPPLEMENTAL GUARANTOR INFORM48
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Condensed consolidating balance sheet table | Condensed Consolidated Balance Sheet Jun. 30, 2018 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 157,994 $ 4,018,444 $ 3,827,015 $ — $ 8,003,453 Intercompany receivables 6,621,438 270,748 5,793,352 (12,685,538 ) — Investment in subsidiaries 4,896,004 — 983,625 (5,879,629 ) — Plant and equipment, net 278,855 2,181,576 2,061,229 — 4,521,660 Other assets 788,473 611,004 4,593,537 (447,723 ) 5,545,291 Total assets $ 12,742,764 $ 7,081,772 $ 17,258,758 $ (19,012,890 ) $ 18,070,404 Current liabilities $ 1,233,541 $ 886,305 $ 4,468,900 $ — $ 6,588,746 Intercompany payables 882,487 3,798,134 8,004,917 (12,685,538 ) — Long-term debt 7,470,334 8,285 62,146 — 7,540,765 Other liabilities 649,445 508,387 686,178 (447,723 ) 1,396,287 Noncontrolling interest — — 37,649 — 37,649 Shareholders’ equity 2,506,957 1,880,661 3,998,968 (5,879,629 ) 2,506,957 Total liabilities and shareholders’ equity $ 12,742,764 $ 7,081,772 $ 17,258,758 $ (19,012,890 ) $ 18,070,404 Condensed Consolidated Balance Sheet Jul. 1, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Current assets $ 177,495 $ 3,786,055 $ 4,069,888 $ — $ 8,033,438 Intercompany receivables 4,444,035 — — (4,444,035 ) — Investment in subsidiaries 6,451,994 — — (6,451,994 ) — Plant and equipment, net 258,527 2,039,761 2,079,014 — 4,377,302 Other assets 151,743 516,126 4,678,046 — 5,345,915 Total assets $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 Current liabilities $ 650,899 $ 3,521,661 $ 1,923,326 $ — $ 6,095,886 Intercompany payables — 366,802 4,077,233 (4,444,035 ) — Long-term debt 7,588,041 7,776 65,060 — 7,660,877 Other liabilities 863,338 103,784 568,415 — 1,535,537 Noncontrolling interest — — 82,839 — 82,839 Shareholders’ equity 2,381,516 2,341,919 4,110,075 (6,451,994 ) 2,381,516 Total liabilities and shareholders’ equity $ 11,483,794 $ 6,341,942 $ 10,826,948 $ (10,896,029 ) $ 17,756,655 |
Condensed consolidating statement of comprehensive income table | Condensed Consolidated Statement of Comprehensive Income For the 52-Week Period Ended Jun. 30, 2018 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 35,963,053 $ 24,784,842 $ (2,020,571 ) $ 58,727,324 Cost of sales — 29,102,278 20,560,226 (2,020,571 ) 47,641,933 Gross profit — 6,860,775 4,224,616 — 11,085,391 Operating expenses 783,834 4,012,391 3,960,192 — 8,756,417 Operating income (loss) (783,834 ) 2,848,384 264,424 — 2,328,974 Interest expense (income) (1) 294,401 (110,715 ) 211,797 — 395,483 Other expense (income), net (19,135 ) (2,556 ) (1,042 ) — (22,733 ) Earnings (losses) before income taxes (1,059,100 ) 2,961,655 53,669 — 1,956,224 Income tax (benefit) provision (135,385 ) 655,824 5,019 — 525,458 Equity in earnings of subsidiaries 2,354,481 — — (2,354,481 ) — Net earnings 1,430,766 2,305,831 48,650 (2,354,481 ) 1,430,766 Other comprehensive income (loss) 89,913 — (22,987 ) 22,987 89,913 Comprehensive income $ 1,520,679 $ 2,305,831 $ 25,663 $ (2,331,494 ) $ 1,520,679 (1) Interest expense (income) includes $110.7 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidated Statement of Comprehensive Income For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 34,325,884 $ 22,862,131 $ (1,816,876 ) $ 55,371,139 Cost of sales — 27,690,469 18,940,039 (1,816,876 ) 44,813,632 Gross profit — 6,635,415 3,922,092 — 10,557,507 Operating expenses 931,498 3,907,829 3,665,009 — 8,504,336 Operating income (loss) (931,498 ) 2,727,586 257,083 — 2,053,171 Interest expense (income) (1) 405,030 (122,012 ) 19,860 — 302,878 Other expense (income), net (23,740 ) (1,116 ) 8,919 — (15,937 ) Earnings (losses) before income taxes (1,312,788 ) 2,850,714 228,304 — 1,766,230 Income tax (benefit) provision (463,598 ) 1,006,703 80,622 — 623,727 Equity in earnings of subsidiaries 1,991,693 — — (1,991,693 ) — Net earnings 1,142,503 1,844,011 147,682 (1,991,693 ) 1,142,503 Other comprehensive income (loss) 95,381 — (9,317 ) 9,317 95,381 Comprehensive income $ 1,237,884 $ 1,844,011 $ 138,365 $ (1,982,376 ) $ 1,237,884 (1) Interest expense (income) includes $122.0 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. Condensed Consolidated Statement of Comprehensive Income For the 53-Week Period Ended Jul. 2, 2016 Sysco Certain U.S. Other Eliminations Consolidated (In thousands) Sales $ — $ 33,932,334 $ 18,112,973 $ (1,678,388 ) $ 50,366,919 Cost of sales — 27,485,111 15,519,724 (1,678,388 ) 41,326,447 Gross profit — 6,447,223 2,593,249 — 9,040,472 Operating expenses 944,457 3,857,415 2,388,100 — 7,189,972 Operating income (loss) (944,457 ) 2,589,808 205,149 — 1,850,500 Interest expense (income) (1) 381,122 (145,852 ) 70,876 — 306,146 Other expense (income), net 128,777 (1,876 ) (15,554 ) — 111,347 Earnings (losses) before income taxes (1,454,356 ) 2,737,536 149,827 — 1,433,007 Income tax (benefit) provision (490,579 ) 923,416 50,548 — 483,385 Equity in earnings of subsidiaries 1,913,399 — — (1,913,399 ) — Net earnings 949,622 1,814,120 99,279 (1,913,399 ) 949,622 Other comprehensive income (loss) (434,921 ) — (52,306 ) 52,306 (434,921 ) Comprehensive income $ 514,701 $ 1,814,120 $ 46,973 $ (1,861,093 ) $ 514,701 (1) Interest expense (income) includes $145.9 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries. |
Condensed consolidating cash flows table | Condensed Consolidated Cash Flows For the 52-Week Period Ended Jun. 30, 2018 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,055,228 $ 2,548,139 $ 799,062 $ (2,243,797 ) $ 2,158,632 Investing activities 55,612 (439,178 ) (503,745 ) (26,354 ) (913,665 ) Financing activities (1,193,272 ) (2,015,906 ) (471,442 ) 2,270,151 (1,410,469 ) Effect of exchange rates on cash — — 11,844 — 11,844 Net increase (decrease) in cash, cash equivalents and restricted cash (82,432 ) 93,055 (164,281 ) — (153,658 ) Cash, cash equivalents and restricted cash at the beginning of period 111,576 18,788 739,138 — 869,502 Cash, cash equivalents and restricted cash at the end of period $ 29,144 $ 111,843 $ 574,857 $ — $ 715,844 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation, partially offset by intercompany loans issued. Condensed Consolidated Cash Flows For the 52-Week Period Ended Jul. 1, 2017 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,535,725 $ 3,023,400 $ 658,229 $ (2,978,000 ) $ 2,239,354 Investing activities (3,274,566 ) (261,330 ) (175,565 ) 127,000 (3,584,461 ) Financing activities (1,525,995 ) (2,777,661 ) (229,931 ) 2,851,000 (1,682,587 ) Effect of exchange rates on cash — — (22,104 ) — (22,104 ) Net increase (decrease) in cash and cash equivalents (3,264,836 ) (15,591 ) 230,629 — (3,049,798 ) Cash and cash equivalents at the beginning of period 3,376,412 34,379 508,509 — 3,919,300 Cash and cash equivalents at the end of period $ 111,576 $ 18,788 $ 739,138 $ — $ 869,502 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. Condensed Consolidated Cash Flows For the 53-Week Period Ended Jul. 2, 2016 Sysco Certain U.S. Other Elimination (1) Consolidated (In thousands) Cash flows provided by (used for): Operating activities $ 1,045,900 $ 4,101,840 $ 767,607 $ (3,927,000 ) $ 1,988,347 Investing activities (145,444 ) (212,270 ) (411,388 ) — (769,102 ) Financing activities (2,540,649 ) (3,881,879 ) 35,592 3,927,000 (2,459,936 ) Effect of exchange rates on cash — — (138,327 ) — (138,327 ) Intercompany activity — — — — — Net increase (decrease) in cash and cash equivalents (1,640,193 ) 7,691 253,484 — (1,379,018 ) Cash and cash equivalents at the beginning of period 5,016,605 26,688 255,025 — 5,298,318 Cash and cash equivalents at the end of period $ 3,376,412 $ 34,379 $ 508,509 $ — $ 3,919,300 (1) Represents primarily inter-company dividends paid from the subsidiaries to the parent, Sysco Corporation. |
QUARTERLY RESULTS (UNAUDITED) (
QUARTERLY RESULTS (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 30, 2018 | |
Quarterly Financial Data [Abstract] | |
Quarterly results (unaudited) table | Financial information for each quarter in the years ended June 30, 2018 and July 1, 2017 is set forth below: Fiscal 2018 Quarter Ended September 30 December 30 March 31 (1) June 3 0 Fiscal Year (In thousands except for per share data) Sales $ 14,650,424 $ 14,411,490 $ 14,349,504 $ 15,315,906 $ 58,727,324 Cost of sales 11,856,756 11,712,104 11,673,876 12,399,197 47,641,933 Gross profit 2,793,668 2,699,386 2,675,628 2,916,709 11,085,391 Operating expenses 2,170,576 2,167,104 2,189,695 2,229,042 8,756,417 Operating income 623,092 532,282 485,933 687,667 2,328,974 Interest expense 80,884 85,986 136,145 92,468 395,483 Other expense (income), net (4,248 ) (5,432 ) (15,096 ) 2,043 (22,733 ) Earnings before income taxes 546,456 451,728 364,884 593,156 1,956,224 Income taxes 178,816 167,615 34,799 144,228 525,458 Net earnings $ 367,640 $ 284,113 $ 330,085 $ 448,928 $ 1,430,766 Per share: Basic net earnings $ 0.70 $ 0.55 $ 0.63 $ 0.86 $ 2.74 Diluted net earnings 0.69 0.54 0.63 0.85 2.70 Dividends declared 0.33 0.36 0.36 0.36 1.41 (1) Sysco’s third quarter of fiscal 2018 included a charge for $53.1 million in interest expense related to the redemption of senior notes as well as tax benefits derived from our $380.0 million contribution to our U.S. Retirement Plan. See Note 11 , “Debt and Other Financing Arrangements” and Note 18 , “Income Taxes.” Fiscal 2017 Quarter Ended October 1 December 31 April 1 July 1 Fiscal Year (In thousands except for per share data) Sales $ 13,968,654 $ 13,457,268 $ 13,524,172 $ 14,421,045 $ 55,371,139 Cost of sales 11,276,735 10,885,405 10,990,037 11,661,455 44,813,632 Gross profit 2,691,919 2,571,863 2,534,135 2,759,590 10,557,507 Operating expenses 2,125,086 2,079,446 2,098,173 2,201,631 8,504,336 Operating income 566,833 492,417 435,962 557,959 2,053,171 Interest expense 73,623 72,231 81,004 76,020 302,878 Other expense (income), net (7,216 ) (2,320 ) (4,815 ) (1,586 ) (15,937 ) Earnings before income taxes 500,426 422,506 359,773 483,525 1,766,230 Income taxes 176,539 147,339 121,495 178,354 623,727 Net earnings $ 323,887 $ 275,167 $ 238,278 $ 305,171 $ 1,142,503 Per share: Basic net earnings $ 0.58 $ 0.50 $ 0.44 $ 0.57 $ 2.10 Diluted net earnings 0.58 0.50 0.44 0.57 2.08 Dividends declared 0.31 0.33 0.33 0.33 1.30 |
SUMMARY OF ACCOUNTING POLICIE50
SUMMARY OF ACCOUNTING POLICIES (Details) customer in Thousands | 12 Months Ended | ||
Jun. 30, 2018USD ($)customerreporting_unitsegmentfacility | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($)shares | |
Accounting Policies [Abstract] | |||
Number of customers | customer | 600 | ||
Number of distribution facilities | facility | 332 | ||
Number of operating segments | segment | 7 | ||
Number of reporting units tested | reporting_unit | 18 | ||
Number of reporting units with goodwill fair value in excess of carrying value | reporting_unit | 2 | ||
Summary of Accounting Policies [Line Items] | |||
Aggregate goodwill threshold for requiring additional analysis | $ 341,000,000 | ||
Cash surrender value of corporate-owned life insurance | 167,900,000 | $ 163,700,000 | |
Value of shares repurchased | $ 1,500,000,000 | ||
Shipping and handling costs | $ 3,600,000,000 | $ 3,400,000,000 | $ 2,600,000,000 |
Blended tax rate | 28.00% | ||
September 23, 2015 | |||
Summary of Accounting Policies [Line Items] | |||
Treasury stock purchases (in shares) | shares | 34,716,180 | ||
Minimum | |||
Summary of Accounting Policies [Line Items] | |||
Reporting unit impairment, decrease in fair value estimate requiring additional analysis, percent | 15.00% | ||
Intangible assets useful life (in years) | 2 years | ||
Maximum | |||
Summary of Accounting Policies [Line Items] | |||
Reporting unit impairment, decrease in fair value estimate requiring additional analysis, percent | 18.00% | ||
Intangible assets useful life (in years) | 15 years |
SUMMARY OF ACCOUNTING POLICIE51
SUMMARY OF ACCOUNTING POLICIES - RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 552,325 | $ 869,502 | $ 3,919,300 | $ 5,298,318 |
Restricted cash | 163,519 | 0 | 0 | |
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows | $ 715,844 | $ 869,502 | $ 3,919,300 | $ 5,298,318 |
CHANGES IN ACCOUNTING (Details)
CHANGES IN ACCOUNTING (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | ||
Accounting Changes and Error Corrections [Abstract] | ||||
Excess tax benefits from stock option exercises | $ 52,100 | |||
Restricted cash | $ 163,519 | $ 0 | $ 0 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Reclassification of accumulated other comprehensive loss to retained earnings | [1] | 0 | ||
Retained Earnings | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Reclassification of accumulated other comprehensive loss to retained earnings | [1] | $ 236,445 | ||
[1] | Deferred taxes stranded in accumulated other comprehensive income (AOCI) as a result of the Tax Cuts and Jobs Act of 2017 (the Tax Act) were reclassified to retained earnings as a result of early adopting Accounting Standards Update (ASU) 2018-02. |
NEW ACCOUNTING STANDARDS NEW AC
NEW ACCOUNTING STANDARDS NEW ACCOUNTING STANDARDS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Other expense (income), net | $ (2,043) | $ 15,096 | $ 5,432 | $ 4,248 | $ 1,586 | $ 4,815 | $ 2,320 | $ 7,216 | $ 22,733 | $ 15,937 | $ (111,347) |
ASU 2017-07 | Pro Forma | |||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||
Other expense (income), net | $ 15,000 | $ (1,300) |
ACQUISITIONS (Details)
ACQUISITIONS (Details) - USD ($) $ in Thousands | Jul. 05, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 |
Business Acquisition [Line Items] | ||||
Acquisition of businesses, net of cash acquired | $ 248,105 | $ 2,921,798 | $ 219,218 | |
Contingent consideration maximum number of years | 3 years | |||
Potential cash payout for contingent consideration arrangements | $ 15,600 | |||
Contingent consideration | $ 10,600 | |||
Cucina Lux Investments Limited | ||||
Business Acquisition [Line Items] | ||||
Acquisition of businesses, net of cash acquired | $ 2,900,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of total debt | $ 8,327,270 | $ 8,194,890 |
Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of total debt | 8,400,000 | 8,600,000 |
Carrying value of total debt | 8,300,000 | 8,200,000 |
Recurring Fair Value Measurements | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 199,404 | 288,384 |
Other assets | 163,519 | |
Total assets at fair value | 362,923 | 288,384 |
Recurring Fair Value Measurements | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 169,214 | 238,954 |
Other assets | 163,519 | |
Total assets at fair value | 332,733 | 238,954 |
Recurring Fair Value Measurements | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 30,190 | 49,430 |
Other assets | 0 | |
Total assets at fair value | 30,190 | 49,430 |
Recurring Fair Value Measurements | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Other assets | 0 | |
Total assets at fair value | $ 0 | $ 0 |
ALLOWANCE FOR DOUBTFUL ACCOUN56
ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Allowance for Doubtful Accounts | |||
Balance at beginning of period | $ 31,059 | $ 37,880 | $ 41,720 |
Charged to costs and expenses | 21,448 | 20,672 | 20,372 |
Customer accounts written off, net of recoveries | (27,120) | (26,943) | (23,551) |
Other adjustments | 381 | (550) | (661) |
Balance at end of period | $ 25,768 | $ 31,059 | $ 37,880 |
PLANT AND EQUIPMENT (Details)
PLANT AND EQUIPMENT (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018USD ($) | Jul. 01, 2017USD ($)operating_company | Jul. 02, 2016USD ($) | |
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 10,200,850 | $ 9,699,133 | |
Accumulated depreciation | (5,679,190) | (5,321,831) | |
Total plant and equipment, net | 4,521,660 | 4,377,302 | $ 3,880,442 |
Depreciation expense | 614,800 | $ 765,400 | 608,700 |
Number of operating companies | operating_company | 12 | ||
Construction in progress | 31,600 | ||
Intangible Assets, Amortization Period | |||
Property, Plant and Equipment [Line Items] | |||
Amortization | $ 111,300 | $ 41,900 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | 495,909 | 477,577 | |
Buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 4,268,687 | 4,072,339 | |
Buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 10 years | ||
Buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 30 years | ||
Fleet and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 3,808,133 | 3,595,095 | |
Fleet and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 3 years | ||
Fleet and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 10 years | ||
Computer hardware and software | |||
Property, Plant and Equipment [Line Items] | |||
Total plant and equipment at cost | $ 1,628,121 | $ 1,554,122 | |
Computer hardware and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 3 years | ||
Computer hardware and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Remaining life (in years) | 7 years |
GOODWILL AND OTHER INTANGIBLE58
GOODWILL AND OTHER INTANGIBLES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | $ 3,916,128 | $ 2,121,661 | |
Goodwill acquired during year | 56,668 | 1,815,890 | |
Currency translation/other | (17,311) | (21,423) | |
Goodwill carrying amount, ending balance | 3,955,485 | 3,916,128 | $ 2,121,661 |
Amortized intangibles acquired during year | $ 31,400 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 14 years | ||
Intangibles gross carrying amount | $ 1,174,586 | 1,130,634 | |
Intangibles accumulated amortization | (356,833) | (252,343) | |
Intangibles net amount | 817,753 | 878,291 | |
Indefinite-lived intangible assets balance | 162,059 | 159,220 | |
Intangibles amortization expense | 114,700 | 112,900 | 37,300 |
Estimated Future Amortization Expense for the Next Five Fiscal Years | |||
2,019 | 102,586 | ||
2,020 | 98,536 | ||
2,021 | 89,469 | ||
2,022 | 86,878 | ||
2,023 | 82,634 | ||
Trademarks | |||
Goodwill [Roll Forward] | |||
Indefinite-lived intangible assets balance | 161,093 | 158,251 | |
Licenses | |||
Goodwill [Roll Forward] | |||
Indefinite-lived intangible assets balance | 966 | 969 | |
Customer relationships | |||
Goodwill [Roll Forward] | |||
Amortized intangibles acquired during year | $ 30,600 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 14 years 160 days | ||
Intangibles gross carrying amount | $ 1,119,136 | 1,073,577 | |
Intangibles accumulated amortization | (307,408) | (209,253) | |
Intangibles net amount | 811,728 | 864,324 | |
Non-compete agreements | |||
Goodwill [Roll Forward] | |||
Amortized intangibles acquired during year | $ 800 | ||
Weighted-average amortization period of amortized intangibles acquired during year (in years) | 4 years | ||
Intangibles gross carrying amount | $ 31,754 | 32,385 | |
Intangibles accumulated amortization | (28,819) | (25,384) | |
Intangibles net amount | 2,935 | 7,001 | |
Trademarks | |||
Goodwill [Roll Forward] | |||
Intangibles gross carrying amount | 10,073 | 11,050 | |
Intangibles accumulated amortization | (7,058) | (7,002) | |
Intangibles net amount | 3,015 | 4,048 | |
Other | |||
Goodwill [Roll Forward] | |||
Intangibles gross carrying amount | 13,623 | 13,622 | |
Intangibles accumulated amortization | (13,548) | (10,704) | |
Intangibles net amount | 75 | 2,918 | |
U.S. Foodservice Operations | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 1,231,045 | 1,220,702 | |
Goodwill acquired during year | 36,020 | 0 | |
Currency translation/other | (6,165) | 10,343 | |
Goodwill carrying amount, ending balance | 1,260,900 | 1,231,045 | 1,220,702 |
International Foodservice Operations | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 2,432,508 | 632,700 | |
Goodwill acquired during year | 20,648 | 1,815,890 | |
Currency translation/other | (12,335) | (16,082) | |
Goodwill carrying amount, ending balance | 2,440,821 | 2,432,508 | 632,700 |
SYGMA | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 32,607 | 32,607 | |
Goodwill acquired during year | 0 | 0 | |
Currency translation/other | 0 | 0 | |
Goodwill carrying amount, ending balance | 32,607 | 32,607 | 32,607 |
Other | |||
Goodwill [Roll Forward] | |||
Goodwill carrying amount, beginning balance | 219,968 | 235,652 | |
Goodwill acquired during year | 0 | 0 | |
Currency translation/other | 1,189 | (15,684) | |
Goodwill carrying amount, ending balance | $ 221,157 | $ 219,968 | $ 235,652 |
DERIVATIVE FINANCIAL INSTRUME59
DERIVATIVE FINANCIAL INSTRUMENTS - ADDITIONAL INFORMATION (Details) $ in Millions | Mar. 31, 2018USD ($) |
Interest Rate Swap - March 2025 | |
Derivative [Line Items] | |
Notional amount of derivative | $ 500 |
DERIVATIVE FINANCIAL INSTRUME60
DERIVATIVE FINANCIAL INSTRUMENTS - SUMMARY OF INTEREST RATE SWAPS (Details) € in Millions, £ in Millions, gal in Millions, $ in Millions | 12 Months Ended | |||
Jun. 30, 2018GBP (£)gal | Jun. 30, 2018EUR (€) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | |
Interest Rate Swap - April 1, 2019 | ||||
Derivative [Line Items] | ||||
Notional Value | $ 500 | |||
Interest Rate Swap - October 1, 2020 | ||||
Derivative [Line Items] | ||||
Notional Value | 750 | |||
Interest Rate Swap - July 15, 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | 500 | |||
Interest Rate Swap - March 2025 | ||||
Derivative [Line Items] | ||||
Notional Value | $ 500 | |||
Hedging of foreign currency risk - June 2019 | ||||
Derivative [Line Items] | ||||
Notional Value | 384 | |||
Hedging of foreign currency risk - June 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | 44 | |||
Hedging of foreign currency risk - June 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | 300 | |||
Hedging of foreign currency risk - July 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | $ 30 | |||
Hedging of foreign currency risk - July 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | £ | £ 234 | |||
Hedging of foreign currency risk - August 2021 | ||||
Derivative [Line Items] | ||||
Notional Value | £ | £ 466 | |||
Hedging of foreign currency risk - June 2023 | ||||
Derivative [Line Items] | ||||
Notional Value | € | € 500 | |||
Hedging of fuel risk | ||||
Derivative [Line Items] | ||||
Notional amount (in gallons) | gal | 46 |
DERIVATIVE FINANCIAL INSTRUME61
DERIVATIVE FINANCIAL INSTRUMENTS - BALANCE SHEET LOCATION (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 |
Long-term debt | ||
Derivative [Line Items] | ||
Carrying Amount of Hedged Assets (Liabilities) | $ (1,743,732) | |
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | 47,555 | |
Current maturities of long-term debt | ||
Derivative [Line Items] | ||
Carrying Amount of Hedged Assets (Liabilities) | (499,610) | |
Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities) | 5,097 | |
Hedging Instrument | Interest rate swaps | Fair value hedging | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 0 | $ 707 |
Hedging Instrument | Interest rate swaps | Fair value hedging | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 6,820 | 0 |
Hedging Instrument | Interest rate swaps | Fair value hedging | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 49,734 | 21,390 |
Hedging Instrument | Fuel swaps | Cash flow hedging | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 15,316 | 717 |
Hedging Instrument | Fuel swaps | Cash flow hedging | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | 6,160 |
Hedging Instrument | Fuel swaps | Cash flow hedging | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 0 | 160 |
Hedging Instrument | Foreign currency forwards | Cash flow hedging | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 693 | 0 |
Hedging Instrument | Foreign currency forwards | Cash flow hedging | Other current liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 71 | 154 |
Hedging Instrument | Cross currency swaps | Cash flow hedging | Other current assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 4,284 | 0 |
Hedging Instrument | Cross currency swaps | Cash flow hedging | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 14,201 | 5,816 |
Hedging Instrument | Cross currency swaps | Cash flow hedging | Other assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 3,454 | 0 |
Hedging Instrument | Foreign currency swaps | Net investment hedging | Other long-term liabilities | ||
Derivative [Line Items] | ||
Derivative liability, fair value | 39,690 | 12,308 |
Hedging Instrument | Foreign currency swaps | Net investment hedging | Other assets | ||
Derivative [Line Items] | ||
Derivative asset, fair value | 10,709 | 0 |
Hedging Instrument | Foreign denominated debt | Net investment hedging | Long-term debt | ||
Derivative [Line Items] | ||
Derivative liability, fair value | $ 584,150 | $ 571,450 |
DERIVATIVE FINANCIAL INSTRUME62
DERIVATIVE FINANCIAL INSTRUMENTS - LOCATION OF GAIN (LOSS) ON DERIVATIVES (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Derivative [Line Items] | |||||||||||
Cost of sales | $ 12,399,197 | $ 11,673,876 | $ 11,712,104 | $ 11,856,756 | $ 11,661,455 | $ 10,990,037 | $ 10,885,405 | $ 11,276,735 | $ 47,641,933 | $ 44,813,632 | $ 41,326,447 |
Operating expenses | 2,229,042 | 2,189,695 | 2,167,104 | 2,170,576 | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 8,756,417 | 8,504,336 | 7,189,972 |
Interest expense | $ 92,468 | $ 136,145 | $ 85,986 | $ 80,884 | $ 76,020 | $ 81,004 | $ 72,231 | $ 73,623 | 395,483 | $ 302,878 | $ 306,146 |
Unrealized gain (loss) on hedged item in fair value hedge, interest expense | 63,500 | ||||||||||
Unrealized gain (loss) on hedged item in fair value hedge, change in fair value of debt | 33,100 | ||||||||||
Hedging Instrument | Fair value hedging | Cost of Goods Sold | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge | 0 | ||||||||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | 0 | ||||||||||
Hedging Instrument | Fair value hedging | Operating Expense | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge | 0 | ||||||||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | 0 | ||||||||||
Hedging Instrument | Fair value hedging | Interest Expense | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Change in Unrealized Gain (Loss) on Hedged Item in Fair Value Hedge | (30,418) | ||||||||||
Change in Unrealized Gain (Loss) on Fair Value Hedging Instruments | (39,540) | ||||||||||
Hedging Instrument | Cash flow hedging | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 15,759 | ||||||||||
Hedging Instrument | Cash flow hedging | Cost of Goods Sold | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Cash flow hedging | Cost of Goods Sold | Hedging of fuel risk | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Cash flow hedging | Cost of Goods Sold | Foreign denominated debt | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 1,776 | ||||||||||
Hedging Instrument | Cash flow hedging | Operating Expense | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Cash flow hedging | Operating Expense | Hedging of fuel risk | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 13,983 | ||||||||||
Hedging Instrument | Cash flow hedging | Operating Expense | Foreign denominated debt | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Cash flow hedging | Interest Expense | Interest rate swaps | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | (11,499) | ||||||||||
Hedging Instrument | Cash flow hedging | Interest Expense | Hedging of fuel risk | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Cash flow hedging | Interest Expense | Foreign denominated debt | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Net investment hedging | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 | ||||||||||
Hedging Instrument | Net investment hedging | Foreign denominated debt | |||||||||||
Derivative [Line Items] | |||||||||||
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 0 |
DERIVATIVE FINANCIAL INSTRUME63
DERIVATIVE FINANCIAL INSTRUMENTS - CASH FLOW HEDGES (Details) - Hedging Instrument $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Cash flow hedging | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | $ 22,996 |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 15,759 |
Cash flow hedging | Hedging of fuel risk | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | 21,878 |
Cash flow hedging | Foreign denominated debt | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | 1,118 |
Net investment hedging | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (33,284) |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 |
Net investment hedging | Foreign denominated debt | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (12,700) |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 |
Net investment hedging | Foreign currency swaps | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives | (20,584) |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 0 |
Operating income | Cash flow hedging | Hedging of fuel risk | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | 13,983 |
Cost of goods sold | Cash flow hedging | Foreign denominated debt | |
Derivative [Line Items] | |
Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income | $ 1,776 |
SELF-INSURED LIABILITIES (Detai
SELF-INSURED LIABILITIES (Details) - Self-insured liabilities - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Self-Insured Liabilities | |||
Balance at beginning of period | $ 245,811 | $ 199,059 | $ 193,312 |
Charged to costs and expenses | 461,867 | 523,674 | 418,917 |
Payments | (436,692) | (476,922) | (413,170) |
Balance at end of period | 270,986 | $ 245,811 | 199,059 |
Long-term portion of self-insured liability balance | $ 167,100 | $ 153,100 |
DEBT AND OTHER FINANCING ARRA65
DEBT AND OTHER FINANCING ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Jun. 30, 2018 | Mar. 23, 2018 | Mar. 19, 2018 | Feb. 28, 2018 | Jul. 01, 2017 | |
Debt [Line Items] | |||||
Total debt | $ 8,327,270 | $ 8,194,890 | |||
Less current maturities of long-term debt | (782,329) | (530,075) | |||
Less notes payable | (4,176) | (3,938) | |||
Long-term debt | 7,540,765 | 7,660,877 | |||
Principal payment required during next five years | |||||
2,019 | 788,309 | ||||
2,020 | 23,764 | ||||
2,021 | 768,076 | ||||
2,022 | 962,884 | ||||
2,023 | 590,112 | ||||
Commercial Paper | |||||
Debt [Line Items] | |||||
Total debt | $ 0 | 119,691 | |||
Average interest rate on debt instruments (as a percent) | 1.42% | ||||
Senior Notes | Senior notes, interest at 5.25%, maturing in fiscal 2018 | |||||
Debt [Line Items] | |||||
Total debt | $ 0 | 500,311 | |||
Interest rate on debt instrument (as a percent) | 5.25% | 5.25% | |||
Maturity date on long-term debt stated in fiscal year | 2,018 | ||||
Senior Notes | Senior notes, interest at 1.90%, maturing in fiscal 2019 | |||||
Debt [Line Items] | |||||
Total debt | $ 491,700 | 491,260 | |||
Interest rate on debt instrument (as a percent) | 1.90% | ||||
Maturity date on long-term debt stated in fiscal year | 2,019 | ||||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2019 | |||||
Debt [Line Items] | |||||
Total debt | $ 249,701 | 249,456 | |||
Interest rate on debt instrument (as a percent) | 5.375% | ||||
Maturity date on long-term debt stated in fiscal year | 2,019 | ||||
Senior Notes | Senior notes, interest at 2.60%, maturing in fiscal 2021 | |||||
Debt [Line Items] | |||||
Total debt | $ 724,047 | 739,239 | |||
Interest rate on debt instrument (as a percent) | 2.60% | ||||
Maturity date on long-term debt stated in fiscal year | 2,021 | ||||
Senior Notes | Senior notes, interest at 2.50%, maturing in fiscal 2022 | |||||
Debt [Line Items] | |||||
Total debt | $ 477,411 | 488,554 | |||
Interest rate on debt instrument (as a percent) | 2.50% | ||||
Maturity date on long-term debt stated in fiscal year | 2,022 | ||||
Senior Notes | Senior notes, interest at 2.60%, maturing in fiscal 2022 | |||||
Debt [Line Items] | |||||
Total debt | $ 446,681 | 445,853 | |||
Interest rate on debt instrument (as a percent) | 2.60% | ||||
Maturity date on long-term debt stated in fiscal year | 2,022 | ||||
Senior Notes | Senior notes, interest at 1.25%, maturing in fiscal 2023 | |||||
Debt [Line Items] | |||||
Total debt | $ 580,196 | 566,767 | |||
Interest rate on debt instrument (as a percent) | 1.25% | ||||
Maturity date on long-term debt stated in fiscal year | 2,023 | ||||
Senior Notes | Senior notes, interest at 3.55%, maturing in fiscal 2025 | |||||
Debt [Line Items] | |||||
Total debt | $ 492,606 | 0 | |||
Interest rate on debt instrument (as a percent) | 3.55% | 3.55% | |||
Maturity date on long-term debt stated in fiscal year | 2,025 | ||||
Senior Notes | Senior notes, interest at 3.75%, maturing in fiscal 2026 | |||||
Debt [Line Items] | |||||
Total debt | $ 746,879 | 746,288 | |||
Interest rate on debt instrument (as a percent) | 3.75% | ||||
Maturity date on long-term debt stated in fiscal year | 2,026 | ||||
Senior Notes | Senior notes, interest at 3.30%, maturing in fiscal 2027 | |||||
Debt [Line Items] | |||||
Total debt | $ 992,176 | 991,370 | |||
Interest rate on debt instrument (as a percent) | 3.30% | ||||
Maturity date on long-term debt stated in fiscal year | 2,027 | ||||
Senior Notes | Debentures, interest at 7.16%, maturing in fiscal 2027 | |||||
Debt [Line Items] | |||||
Interest rate on debt instrument (as a percent) | 7.16% | ||||
Senior Notes | Senior notes, interest at 3.25%, maturing in fiscal 2028 | |||||
Debt [Line Items] | |||||
Total debt | $ 742,555 | 742,526 | |||
Interest rate on debt instrument (as a percent) | 3.25% | ||||
Maturity date on long-term debt stated in fiscal year | 2,028 | ||||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2036 | |||||
Debt [Line Items] | |||||
Total debt | $ 382,010 | 497,089 | |||
Interest rate on debt instrument (as a percent) | 5.375% | ||||
Maturity date on long-term debt stated in fiscal year | 2,036 | ||||
Senior Notes | Senior notes, interest at 6.625%, maturing in fiscal 2039 | |||||
Debt [Line Items] | |||||
Total debt | $ 201,766 | 248,396 | |||
Interest rate on debt instrument (as a percent) | 6.625% | 6.625% | |||
Maturity date on long-term debt stated in fiscal year | 2,039 | ||||
Senior Notes | Senior notes, interest at 4.85%, maturing in fiscal 2046 | |||||
Debt [Line Items] | |||||
Total debt | $ 495,709 | 495,552 | |||
Interest rate on debt instrument (as a percent) | 4.85% | ||||
Maturity date on long-term debt stated in fiscal year | 2,046 | ||||
Senior Notes | Senior notes, interest at 4.50%, maturing in fiscal 2046 | |||||
Debt [Line Items] | |||||
Total debt | $ 494,090 | 493,981 | |||
Interest rate on debt instrument (as a percent) | 4.50% | ||||
Maturity date on long-term debt stated in fiscal year | 2,046 | ||||
Senior Notes | Senior notes, interest at 4.45%, maturing in fiscal 2048 | |||||
Debt [Line Items] | |||||
Total debt | $ 493,165 | 0 | |||
Interest rate on debt instrument (as a percent) | 4.45% | 4.45% | |||
Maturity date on long-term debt stated in fiscal year | 2,048 | ||||
Debentures | Debentures, interest at 7.16%, maturing in fiscal 2027 | |||||
Debt [Line Items] | |||||
Total debt | $ 44,276 | 50,000 | |||
Interest rate on debt instrument (as a percent) | 7.16% | ||||
Maturity date on long-term debt stated in fiscal year | 2,027 | ||||
Debentures | Debentures, interest at 6.50%, maturing in fiscal 2029 | |||||
Debt [Line Items] | |||||
Total debt | $ 162,276 | 223,822 | |||
Interest rate on debt instrument (as a percent) | 6.50% | ||||
Maturity date on long-term debt stated in fiscal year | 2,029 | ||||
Notes payable, capital leases, and other debt, interest averaging 6.33% and maturing at various dates to fiscal 2026 as of June 30, 2018 and 6.14% and maturing at various dates to fiscal 2026 as of July 1, 2017 | |||||
Debt [Line Items] | |||||
Total debt | $ 110,026 | $ 104,735 | |||
Average interest rate on debt instruments (as a percent) | 6.33% | 6.14% |
DEBT AND OTHER FINANCING ARRA66
DEBT AND OTHER FINANCING ARRANGEMENTS - NARRATIVE (Details) - USD ($) | Mar. 23, 2018 | Mar. 19, 2018 | Mar. 31, 2018 | Mar. 31, 2018 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | Mar. 24, 2018 | Feb. 28, 2018 |
Debt [Line Items] | |||||||||
Maximum commercial paper limit | $ 2,000,000,000 | ||||||||
Carrying value of total debt | 8,327,270,000 | $ 8,194,890,000 | |||||||
Short term bank borrowings and commercial paper borrowings, minimum amount during period | 0 | ||||||||
Short term bank borrowings and commercial paper borrowings, maximum amount during period | 1,500,000,000 | ||||||||
Cash amount paid (including interest) | $ 230,500,000 | 0 | 0 | $ 5,050,000,000 | |||||
Redemption loss | $ (53,100,000) | $ 53,100,000 | 53,104,000 | 0 | $ 86,460,000 | ||||
Loss on redemption of debt | (51,200,000) | ||||||||
Write-off of deferred debt issuance costs | 1,100,000 | ||||||||
Loss on extinguishment of debt, portion attributable to accelerated charge on debt discount | 800,000 | ||||||||
Letters of credit outstanding, amount | 221,700,000 | 191,300,000 | |||||||
Commercial Paper | |||||||||
Debt [Line Items] | |||||||||
Carrying value of total debt | 0 | 119,691,000 | |||||||
Senior Notes | |||||||||
Debt [Line Items] | |||||||||
Debt instrument face amount | $ 1,000,000,000 | ||||||||
Tender offer, payment amount per $1,000 | 50 | ||||||||
Senior Notes | Senior notes, interest at 3.55%, maturing in fiscal 2025 | |||||||||
Debt [Line Items] | |||||||||
Carrying value of total debt | $ 492,606,000 | 0 | |||||||
Debt instrument face amount | $ 500,000,000 | ||||||||
Period prior to maturity for early redemption | 2 months | ||||||||
Percent of principal due upon early repayment | 100.00% | ||||||||
Percent of principal due after applicable date | 100.00% | ||||||||
Interest rate on debt instrument (as a percent) | 3.55% | 3.55% | |||||||
Senior Notes | Senior notes, interest at 4.45%, maturing in fiscal 2048 | |||||||||
Debt [Line Items] | |||||||||
Carrying value of total debt | $ 493,165,000 | 0 | |||||||
Debt instrument face amount | $ 500,000,000 | ||||||||
Period prior to maturity for early redemption | 6 months | ||||||||
Interest rate on debt instrument (as a percent) | 4.45% | 4.45% | |||||||
Senior Notes | Debentures, interest at 7.16%, maturing in fiscal 2027 | |||||||||
Debt [Line Items] | |||||||||
Debt instrument face amount | 50,000,000 | $ 44,300,000 | |||||||
Cash amount paid (including interest) | $ 7,400,000 | ||||||||
Interest rate on debt instrument (as a percent) | 7.16% | ||||||||
Principal amount tendered | $ 5,700,000 | ||||||||
Senior Notes | Senior Notes, interest at 6.500%, maturing in fiscal 2028 | |||||||||
Debt [Line Items] | |||||||||
Debt instrument face amount | 225,000,000 | 163,100,000 | |||||||
Cash amount paid (including interest) | $ 77,300,000 | ||||||||
Interest rate on debt instrument (as a percent) | 6.50% | ||||||||
Principal amount tendered | $ 61,900,000 | ||||||||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2035 | |||||||||
Debt [Line Items] | |||||||||
Debt instrument face amount | 500,000,000 | 384,100,000 | |||||||
Cash amount paid (including interest) | $ 134,300,000 | ||||||||
Interest rate on debt instrument (as a percent) | 5.375% | ||||||||
Principal amount tendered | $ 115,900,000 | ||||||||
Senior Notes | Senior notes, interest at 6.625%, maturing in fiscal 2039 | |||||||||
Debt [Line Items] | |||||||||
Carrying value of total debt | $ 201,766,000 | 248,396,000 | |||||||
Debt instrument face amount | 250,000,000 | $ 203,000,000 | |||||||
Cash amount paid (including interest) | $ 63,700,000 | ||||||||
Interest rate on debt instrument (as a percent) | 6.625% | 6.625% | |||||||
Principal amount tendered | $ 47,000,000 | ||||||||
Senior Notes | Senior notes, interest at 5.25%, maturing in fiscal 2018 | |||||||||
Debt [Line Items] | |||||||||
Carrying value of total debt | $ 0 | $ 500,311,000 | |||||||
Interest rate on debt instrument (as a percent) | 5.25% | 5.25% | |||||||
Principal amount tendered | $ 500,000,000 |
DEBT AND OTHER FINANCING ARRA67
DEBT AND OTHER FINANCING ARRANGEMENTS - SCHEDULE OF SENIOR NOTES (Details) - Senior Notes - USD ($) | Jun. 30, 2018 | Mar. 19, 2018 |
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 1,000,000,000 | |
Senior notes, interest at 3.55%, maturing in fiscal 2025 | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 500,000,000 | |
Interest rate on debt instrument (as a percent) | 3.55% | 3.55% |
Pricing (percentage of par) | 99.48% | |
Senior notes, interest at 4.45%, maturing in fiscal 2048 | ||
Debt Instrument [Line Items] | ||
Debt instrument face amount | $ 500,000,000 | |
Interest rate on debt instrument (as a percent) | 4.45% | 4.45% |
Pricing (percentage of par) | 99.378% |
DEBT AND OTHER FINANCING ARRA68
DEBT AND OTHER FINANCING ARRANGEMENTS - SENIOR NOTES REDEMPTION (Details) - USD ($) | Mar. 23, 2018 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | Mar. 24, 2018 | Mar. 19, 2018 |
Debt Instrument [Line Items] | ||||||
Cash amount paid (including interest) | $ 230,500,000 | $ 0 | $ 0 | $ 5,050,000,000 | ||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 1,000,000,000 | |||||
Senior Notes | Debentures, interest at 7.16%, maturing in fiscal 2027 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 50,000,000 | $ 44,300,000 | ||||
Interest rate on debt instrument (as a percent) | 7.16% | |||||
Principal amount tendered | $ 5,700,000 | |||||
Cash amount paid (including interest) | 7,400,000 | |||||
Senior Notes | Senior Notes, interest at 6.500%, maturing in fiscal 2028 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 225,000,000 | 163,100,000 | ||||
Interest rate on debt instrument (as a percent) | 6.50% | |||||
Principal amount tendered | $ 61,900,000 | |||||
Cash amount paid (including interest) | 77,300,000 | |||||
Senior Notes | Senior notes, interest at 5.375%, maturing in fiscal 2035 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 500,000,000 | 384,100,000 | ||||
Interest rate on debt instrument (as a percent) | 5.375% | |||||
Principal amount tendered | $ 115,900,000 | |||||
Cash amount paid (including interest) | 134,300,000 | |||||
Senior Notes | Senior notes, interest at 6.625%, maturing in fiscal 2039 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 250,000,000 | $ 203,000,000 | ||||
Interest rate on debt instrument (as a percent) | 6.625% | 6.625% | ||||
Principal amount tendered | $ 47,000,000 | |||||
Cash amount paid (including interest) | $ 63,700,000 |
LEASES (Details)
LEASES (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Leases [Abstract] | |||
Operating leases, rent expense | $ 184,100 | $ 170,500 | $ 100,000 |
Aggregate minimum lease payments by fiscal year under existing long-term operating leases: | |||
2,019 | 111,560 | ||
2,020 | 94,012 | ||
2,021 | 77,319 | ||
2,022 | 65,157 | ||
2,023 | 51,173 | ||
Thereafter | $ 266,137 |
COMPANY-SPONSORED EMPLOYEE BE70
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - DEFINED CONTRIBUTION PLAN (Details) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | ||
Dec. 30, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Defined contribution plans expense | $ 151 | $ 141.2 | $ 135.5 | |
Safe Harbor 401(k) Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Non-elective employer contribution, percent of participant's compensation | 3.00% | |||
Employer matching contribution percent | 50.00% | |||
Employer matching contribution, percent of participant's compensation | 5.00% | 6.00% | ||
Safe Harbor 401(k) Plan Non Adopting Unions | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Employer matching contribution percent | 50.00% | |||
Employer matching contribution, percent of participant's compensation | 6.00% | |||
Management Savings Plan | ||||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||||
Non-elective employer contribution, percent of participant's compensation | 3.00% | |||
Employer matching contribution percent | 50.00% | |||
Employer matching contribution, percent of participant's compensation | 5.00% | |||
Maximum annual contributions per employee, percent of salary | 50.00% | |||
Maximum annual contributions per employee, percent of bonus | 100.00% |
COMPANY-SPONSORED EMPLOYEE BE71
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - FUNDED STATUS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Change in plan assets: | |||
Cash surrender value of corporate-owned life insurance | $ 167,900 | $ 163,700 | |
Accumulated other comprehensive loss (income) | |||
Prior service cost | 21,849 | 28,744 | |
Actuarial losses (gains) | 1,408,054 | 1,485,239 | |
Total | 1,429,903 | 1,513,983 | |
Accumulated benefit obligation for all pension benefit plans | 4,400,000 | 4,600,000 | |
Other Postretirement Plans | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 13,600 | ||
Benefit obligation at end of year | 14,300 | 13,600 | |
Change in plan assets: | |||
Cash surrender value of corporate-owned life insurance | 96,500 | 95,300 | |
Pension Benefits and SERP | United States | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 4,224,231 | 4,284,776 | |
Service cost | 14,514 | 14,287 | |
Interest cost | 173,827 | 171,282 | |
Amendments | 0 | 925 | |
Curtailments | 0 | 0 | |
Actuarial (gain) loss, net | (89,253) | (86,680) | |
Total disbursements | (280,308) | (160,359) | |
Exchange rate changes | 0 | 0 | |
Benefit obligation at end of year | 4,043,011 | 4,224,231 | $ 4,284,776 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,341,662 | 3,115,040 | |
Actual return on plan assets | 196,051 | 333,890 | |
Employer contribution | 409,003 | 53,091 | |
Total disbursements | (280,308) | (160,359) | |
Exchange rate changes | 0 | 0 | |
Fair value of plan assets at end of year | 3,666,408 | 3,341,662 | 3,115,040 |
Funded status at end of year | (376,603) | (882,569) | |
Accumulated benefit obligations/aggregate benefit obligation in excess of fair value of plan assets | |||
Pension Benefits, Accumulated benefit obligation/aggregate benefit obligation | 4,034,383 | 4,213,318 | |
Pension Benefits, Fair value of plan assets at end of year | 3,666,408 | 3,341,662 | |
Pension Benefits | United States | |||
Change in benefit obligation: | |||
Service cost | 14,514 | 14,287 | 11,815 |
Interest cost | 173,827 | 171,282 | 174,602 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 3,341,662 | ||
Fair value of plan assets at end of year | 3,666,408 | 3,341,662 | |
Amounts recognized in the balance sheets | |||
Noncurrent assets (Other assets) | 63,945 | 0 | |
Current accrued benefit liability (Accrued expenses) | (31,313) | (30,538) | |
Noncurrent accrued benefit liability (Other long-term liabilities) | (409,235) | (852,031) | |
Net amount recognized | (376,603) | (882,569) | |
Accumulated other comprehensive loss (income) | |||
Prior service cost | 19,170 | 28,630 | |
Actuarial losses (gains) | 1,434,160 | 1,521,174 | |
Total | 1,453,330 | 1,549,804 | |
Pension Benefits | International Plan | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 420,735 | 400,028 | |
Service cost | 3,219 | 2,880 | |
Interest cost | 10,667 | 9,951 | |
Amendments | (4,624) | (110) | |
Curtailments | 0 | (611) | |
Actuarial (gain) loss, net | (21,162) | 26,528 | |
Total disbursements | (13,817) | (13,879) | |
Exchange rate changes | 3,982 | (4,052) | |
Benefit obligation at end of year | 399,000 | 420,735 | 400,028 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 259,372 | 271,821 | |
Actual return on plan assets | 897 | 1,938 | |
Employer contribution | 7,960 | 4,530 | |
Total disbursements | (13,817) | (13,880) | |
Exchange rate changes | 3,616 | (5,037) | |
Fair value of plan assets at end of year | 258,028 | 259,372 | $ 271,821 |
Funded status at end of year | (140,972) | (161,363) | |
Amounts recognized in the balance sheets | |||
Noncurrent assets (Other assets) | 0 | 0 | |
Current accrued benefit liability (Accrued expenses) | (1,280) | (1,477) | |
Noncurrent accrued benefit liability (Other long-term liabilities) | (139,692) | (159,886) | |
Net amount recognized | (140,972) | (161,363) | |
Accumulated other comprehensive loss (income) | |||
Prior service cost | 2,679 | 114 | |
Actuarial losses (gains) | (26,106) | (35,935) | |
Total | (23,427) | (35,821) | |
Accumulated benefit obligations/aggregate benefit obligation in excess of fair value of plan assets | |||
Pension Benefits, Accumulated benefit obligation/aggregate benefit obligation | 392,457 | 413,552 | |
Pension Benefits, Fair value of plan assets at end of year | 258,028 | 259,372 | |
Supplemental executive retirement plan | |||
Change in plan assets: | |||
Long-term defined benefit pension liabilities | $ 440,500 | $ 463,200 |
COMPANY-SPONSORED EMPLOYEE BE72
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - COMPONENTS OF NET BENEFIT COSTS AND OTHER COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of actuarial loss | $ (52,511) | $ (97,283) | $ 419,517 |
Prior service cost arising in current year | (6,905) | (7,004) | (6,992) |
Actuarial (loss) gain arising in current year | (25,110) | (25,965) | (13,352) |
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | 8,173 | ||
Amortization of actuarial losses (gains) | 34,280 | ||
Total | 42,453 | ||
Pension Benefits | United States | |||
Net benefit costs | |||
Service cost | 14,514 | 14,287 | 11,815 |
Interest cost | 173,827 | 171,282 | 174,602 |
Expected return on plan assets | (233,987) | (222,699) | (216,888) |
Amortization of prior service cost | 9,460 | 11,202 | 11,201 |
Amortization of actuarial loss | 35,696 | 41,511 | 22,186 |
Curtailment loss | 0 | 0 | 0 |
Settlement (gain) / Loss recognized | 0 | 0 | 0 |
Net pension (benefits) costs | (490) | 15,583 | 2,916 |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of prior service cost | 9,460 | 11,202 | 11,202 |
Amortization of actuarial loss | 35,696 | 41,511 | 22,186 |
Prior service cost arising in current year | 0 | (925) | 0 |
Effect of exchange rates on amounts in AOCI | 0 | 0 | 0 |
Actuarial (loss) gain arising in current year | 51,318 | 197,871 | (681,691) |
Net pension costs | 96,474 | 249,659 | $ (648,303) |
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | 8,380 | ||
Amortization of actuarial losses (gains) | 34,393 | ||
Total | 42,773 | ||
Pension Benefits | International Plan | |||
Net benefit costs | |||
Service cost | 3,219 | 2,880 | |
Interest cost | 10,667 | 9,951 | |
Expected return on plan assets | (11,653) | (10,033) | |
Amortization of prior service cost | (2,003) | (1) | |
Amortization of actuarial loss | (67) | (38) | |
Curtailment loss | 0 | (611) | |
Settlement (gain) / Loss recognized | 16 | 0 | |
Net pension (benefits) costs | 179 | 2,148 | |
Other changes in plan assets and benefit obligations recognized in other comprehensive income (loss) | |||
Amortization of prior service cost | (2,003) | (1) | |
Amortization of actuarial loss | (51) | (38) | |
Prior service cost arising in current year | 4,624 | 110 | |
Effect of exchange rates on amounts in AOCI | (583) | (1,269) | |
Actuarial (loss) gain arising in current year | 10,406 | (34,623) | |
Net pension costs | 12,393 | $ (35,821) | |
Accumulated other comprehensive loss (income) expected to be recognized as components of net benefit cost | |||
Amortization of prior service cost | (207) | ||
Amortization of actuarial losses (gains) | (113) | ||
Total | $ (320) |
COMPANY-SPONSORED EMPLOYEE BE73
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - EMPLOYER CONTRIBUTIONS (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Jun. 30, 2018 | Jul. 01, 2017 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Employer contribution | $ 380 | ||
Pension Benefits | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Employer contribution | $ 415 | $ 57.6 | |
Voluntary employer contribution | 380 | ||
Pension Benefits | International Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Estimated contributions to defined benefit plans in next fiscal year | 7.3 | ||
Supplemental executive retirement plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Estimated contributions to defined benefit plans in next fiscal year | $ 31.3 |
COMPANY-SPONSORED EMPLOYEE BE74
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - ESTIMATED FUTURE BENEFIT PAYMENTS (Details) - Pension Benefits $ in Thousands | Jun. 30, 2018USD ($) |
United States | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,019 | $ 138,963 |
2,020 | 148,968 |
2,021 | 159,879 |
2,022 | 170,508 |
2,023 | 180,863 |
Subsequent five years | 1,041,354 |
International Plan | |
Defined Benefit Plan, Expected Future Benefit Payment [Abstract] | |
2,019 | 10,279 |
2,020 | 10,359 |
2,021 | 12,305 |
2,022 | 12,373 |
2,023 | 13,887 |
Subsequent five years | $ 89,281 |
COMPANY-SPONSORED EMPLOYEE BE75
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - ASSUMPTIONS (Details) | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Pension Benefits | United States | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 4.28% | 4.19% | |
Rate of compensation increase | 2.62% | 2.62% | |
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate | 4.19% | 4.07% | 4.84% |
Expected rate of return | 7.00% | 7.25% | 7.25% |
Rate of compensation increase | 2.62% | 2.62% | 3.89% |
Discount rate used to calculate next year benefit costs | 4.28% | ||
Expected rate of return on plan assets used in calculating net periodic benefit cost for next fiscal year | 5.00% | ||
Pension Benefits | United Kingdom | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 2.85% | 2.60% | |
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate | 2.60% | 2.80% | |
Expected rate of return | 4.55% | 4.15% | |
Discount rate used to calculate next year benefit costs | 2.85% | ||
Expected rate of return on plan assets used in calculating net periodic benefit cost for next fiscal year | 4.55% | ||
Supplemental executive retirement plan | |||
Weighted-average assumptions used to determine benefit obligations | |||
Discount rate | 4.41% | 4.08% | |
Weighted-average assumptions used in calculating net periodic benefit cost | |||
Discount rate | 4.08% | 3.91% | 4.63% |
Discount rate used to calculate next year benefit costs | 4.41% |
COMPANY-SPONSORED EMPLOYEE BE76
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - INVESTMENTS STRATEGY (Details) - Pension Benefits | 12 Months Ended |
Jun. 30, 2018 | |
United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Actual investment allocation | 100.00% |
United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation | 2.90% |
Actual investment allocation | 100.00% |
Maximum allowable portfolio annual risk | 12.00% |
Growth assets | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation | 30.00% |
Actual investment allocation | 29.00% |
Liability hedging assets | United States | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation | 70.00% |
Actual investment allocation | 71.00% |
Liability hedging assets | United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation | 25.00% |
Actual investment allocation | 25.00% |
Common contractual fund | United Kingdom | |
Defined Benefit Plan Disclosure [Line Items] | |
Target investment allocation | 75.00% |
Actual investment allocation | 75.00% |
COMPANY-SPONSORED EMPLOYEE BE77
COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS - FAIR VALUE MEASUREMENTS (Details) - Pension Benefits - USD ($) | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 |
Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 0 | ||
Level 1 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
Level 2 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
Level 3 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
United States | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 3,666,408,000 | 3,341,662,000 | |
United States | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 60,240,000 | 40,335,000 | |
United States | Equity Securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Unfunded commitments related to investments | 0 | 0 | |
United States | U.S. equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 224,420,000 | 909,572,000 | |
United States | International equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 167,145,000 | 722,819,000 | |
United States | Alternative investment funds - Hedge fund of funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 388,281,000 | 336,812,000 | |
Unfunded commitments related to investments | 0 | 0 | |
United States | Alternative investment funds - Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 146,389,000 | 145,208,000 | |
Unfunded commitments related to investments | 10,000,000 | ||
Nonredeemable portion of investment, percent | 15.00% | ||
United States | Alternative investment funds - Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 84,003,000 | 75,365,000 | |
Unfunded commitments related to investments | 22,600,000 | 30,700,000 | |
United States | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,775,324,000 | 628,033,000 | |
United States | U.S. government and agency securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 747,854,000 | 250,940,000 | |
United States | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 27,324,000 | 6,220,000 | |
United States | High yield and emerging markets fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 45,428,000 | 226,358,000 | |
Unfunded commitments related to investments | 0 | 0 | |
Maximum withdrawal limitation | $ 2,000,000 | $ 2,000,000 | |
Maximum withdrawal limitation, percent of asset value | 5.00% | 5.00% | |
United States | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 164,488,000 | $ 520,437,000 | |
United States | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 25,810,000 | 2,989,000 | |
United States | Level 1 | U.S. equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 80,719,000 | 331,946,000 | |
United States | Level 1 | International equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 57,959,000 | 185,502,000 | |
United States | Level 1 | Alternative investment funds - Hedge fund of funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | Alternative investment funds - Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | Alternative investment funds - Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | U.S. government and agency securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 1 | High yield and emerging markets fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 2,115,064,000 | 922,539,000 | |
United States | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 34,430,000 | 37,346,000 | |
United States | Level 2 | U.S. equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | International equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | Alternative investment funds - Hedge fund of funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | Alternative investment funds - Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | Alternative investment funds - Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 2 | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,775,324,000 | 628,033,000 | |
United States | Level 2 | U.S. government and agency securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 277,986,000 | 250,940,000 | |
United States | Level 2 | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 27,324,000 | 6,220,000 | |
United States | Level 2 | High yield and emerging markets fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | U.S. equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | International equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Alternative investment funds - Hedge fund of funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Alternative investment funds - Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Alternative investment funds - Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | U.S. government and agency securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Level 3 | High yield and emerging markets fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Fair Value Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 1,386,856,000 | 1,898,686,000 | |
United States | Fair Value Measured at NAV | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Fair Value Measured at NAV | U.S. equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 143,701,000 | 577,626,000 | |
United States | Fair Value Measured at NAV | International equity | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 109,186,000 | 537,317,000 | |
United States | Fair Value Measured at NAV | Alternative investment funds - Hedge fund of funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 388,281,000 | 336,812,000 | |
United States | Fair Value Measured at NAV | Alternative investment funds - Real estate funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 146,389,000 | 145,208,000 | |
United States | Fair Value Measured at NAV | Alternative investment funds - Private equity funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 84,003,000 | 75,365,000 | |
United States | Fair Value Measured at NAV | Corporate bonds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Fair Value Measured at NAV | U.S. government and agency securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 469,868,000 | 0 | |
United States | Fair Value Measured at NAV | Other | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United States | Fair Value Measured at NAV | High yield and emerging markets fixed income | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 45,428,000 | 226,358,000 | |
United States | Fair Value Measured at NAV | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | ||
International Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 258,028,000 | 259,372,000 | $ 271,821,000 |
United Kingdom | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 258,028,000 | 259,023,000 | |
United Kingdom | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 30,987,000 | 26,992,000 | |
United Kingdom | U.K. government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 9,336,000 | 9,327,000 | |
United Kingdom | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17,658,000 | 20,900,000 | |
Fair value of derivative assets | 45,200,000 | 47,400,000 | |
Fair value of derivative liabilities | 27,500,000 | 26,500,000 | |
United Kingdom | Pooled funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 5,387,000 | 10,296,000 | |
United Kingdom | Common contractual fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 194,660,000 | 191,508,000 | |
Unfunded commitments related to investments | 20,800,000 | 9,300,000 | |
United Kingdom | Level 1 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 30,987,000 | 26,992,000 | |
United Kingdom | Level 1 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 30,987,000 | 26,992,000 | |
United Kingdom | Level 1 | U.K. government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 1 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 1 | Pooled funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 1 | Common contractual fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 2 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 32,381,000 | 40,523,000 | |
United Kingdom | Level 2 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 2 | U.K. government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 9,336,000 | 9,327,000 | |
United Kingdom | Level 2 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 17,658,000 | 20,900,000 | |
United Kingdom | Level 2 | Pooled funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 5,387,000 | 10,296,000 | |
United Kingdom | Level 2 | Common contractual fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | U.K. government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | Pooled funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Level 3 | Common contractual fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Fair Value Measured at NAV | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 194,660,000 | 191,508,000 | |
United Kingdom | Fair Value Measured at NAV | Cash and cash equivalents | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Fair Value Measured at NAV | U.K. government securities | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Fair Value Measured at NAV | Derivatives, net | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Fair Value Measured at NAV | Pooled funds | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | 0 | 0 | |
United Kingdom | Fair Value Measured at NAV | Common contractual fund | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Fair value of plan assets | $ 194,660,000 | $ 191,508,000 |
MULTIEMPLOYER EMPLOYEE BENEFI78
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS (Details) - Multiemployer Defined Benefit Pension Plans $ in Millions | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Multiemployer Plans [Line Items] | |
Percentage of employees participating in multi-employer plans | 13.00% |
New York State Teamsters Conference Pension and Retirement Fund | |
Multiemployer Plans [Line Items] | |
Withdrawal liability accrued | $ 37.3 |
MULTIEMPLOYER EMPLOYEE BENEFI79
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - PLAN CONTRIBUTIONS (Details) - Multiemployer Defined Benefit Pension Plans - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 46,375 | $ 44,551 | $ 41,047 |
Individually significant plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | 39,121 | 36,653 | 33,787 |
All other plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 7,254 | $ 7,898 | $ 7,260 |
MULTIEMPLOYER EMPLOYEE BENEFI80
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - INDIVIDUALLY SIGNIFICANT PLANS (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018USD ($)agreement | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | |
Western Conference of Teamsters Pension Plan | |||
Multiemployer Plans [Line Items] | |||
Entity tax identification number | 916,145,047 | ||
Multiemployer plan number | 1 | ||
Pension Protection Act Zone Status | Green | Green | |
First expiration date | Sep. 1, 2018 | ||
Last expiration date | Jan. 6, 2024 | ||
Multiemployer plan number of collective bargaining agreements | agreement | 22 | ||
Multiemployer plan contributions | $ 30,460 | $ 28,145 | $ 24,684 |
Western Conference of Teamsters Pension Plan | Minimum | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan collective bargaining agreement average percentage of employer's contributions | 1.00% | ||
Western Conference of Teamsters Pension Plan | Maximum | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan collective bargaining agreement average percentage of employer's contributions | 11.00% | ||
Teamsters Pension Trust Fund of Philadelphia and Vicinity | |||
Multiemployer Plans [Line Items] | |||
Entity tax identification number | 231,511,735 | ||
Multiemployer plan number | 1 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
Expiration date | Jul. 20, 2020 | ||
Multiemployer plan contributions | $ 3,313 | $ 3,081 | 2,375 |
Truck Drivers and Helpers Local Union No. 355 Retirement Pension Fund | |||
Multiemployer Plans [Line Items] | |||
Entity tax identification number | 526,043,608 | ||
Multiemployer plan number | 1 | ||
Pension Protection Act Zone Status | Yellow | Yellow | |
Expiration date | Feb. 28, 2022 | ||
Multiemployer plan contributions | $ 2,245 | $ 2,430 | 2,237 |
Minneapolis Food Distributing Industry Pension Plan | |||
Multiemployer Plans [Line Items] | |||
Entity tax identification number | 416,047,047 | ||
Multiemployer plan number | 1 | ||
Pension Protection Act Zone Status | Green | Green | |
Expiration date | Aug. 1, 2021 | ||
Multiemployer plan contributions | $ 3,103 | $ 2,996 | $ 2,996 |
MULTIEMPLOYER EMPLOYEE BENEFI81
MULTIEMPLOYER EMPLOYEE BENEFIT PLANS - OTHER POSTRETIREMENT BENEFIT PLANS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Multiemployer Other Postretirement Benefit Plans | |||
Multiemployer Plans [Line Items] | |||
Multiemployer plan contributions | $ 27 | $ 25.8 | $ 25.9 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Numerator: | |||||||||||
Net earnings | $ 448,928 | $ 330,085 | $ 284,113 | $ 367,640 | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 1,430,766 | $ 1,142,503 | $ 949,622 |
Denominator: | |||||||||||
Weighted-average basic shares outstanding (in shares) | 522,926,914 | 543,496,816 | 573,057,406 | ||||||||
Dilutive effect of share-based awards (in shares) | 6,162,940 | 5,048,211 | 4,334,000 | ||||||||
Weighted-average diluted shares outstanding (in shares) | 529,089,854 | 548,545,027 | 577,391,406 | ||||||||
Basic earnings per share (in dollars per share) | $ 0.86 | $ 0.63 | $ 0.55 | $ 0.70 | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 2.74 | $ 2.10 | $ 1.66 |
Diluted earnings per share (in dollars per share) | $ 0.85 | $ 0.63 | $ 0.54 | $ 0.69 | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 2.70 | $ 2.08 | $ 1.64 |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Dividends declared | $ 735,266 | $ 700,886 | $ 695,469 | ||||||||
Dividends declared but not yet paid | $ 187,400 | $ 174,900 | $ 187,400 | $ 174,900 | $ 174,100 | ||||||
Stock options | |||||||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||||||
Anti-dilutive securities excluded (in shares) | 2,302,946 | 4,194,173 | 3,586,927 |
OTHER COMPREHENSIVE INCOME - CO
OTHER COMPREHENSIVE INCOME - COMPONENTS OF OTHER COMPREHENSIVE INCOME (LOSS) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Comprehensive income | $ 1,520,679 | $ 1,237,884 | $ 514,701 |
Before Tax Amount | |||
Total other comprehensive income (loss) | 124,097 | 176,786 | (681,677) |
Tax | |||
Total other comprehensive income (loss) | 34,184 | 81,405 | (246,756) |
Net of Tax Amount | |||
Total other comprehensive income (loss) | 89,913 | 95,381 | (434,921) |
Pension and other postretirement benefit plans | |||
Net of Tax Amount | |||
Before reclassifications, net of tax | 52,511 | 97,283 | (419,517) |
Reclassifications, net of tax | (32,015) | (32,969) | (20,344) |
Pension and other postretirement benefit plans | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 44,680 | 53,059 | 33,028 |
Tax | |||
Reclassifications tax | 12,665 | 20,090 | 12,684 |
Net of Tax Amount | |||
Reclassifications, net of tax | 32,015 | 32,969 | 20,344 |
Amortization of prior service cost | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 9,636 | 11,370 | 11,351 |
Tax | |||
Reclassifications tax | 2,731 | 4,366 | 4,359 |
Net of Tax Amount | |||
Reclassifications, net of tax | 6,905 | 7,004 | 6,992 |
Amortization of actuarial loss (gain), net | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | 69,476 | 168,498 | (681,034) |
Tax | |||
Before reclassifications tax | 16,965 | 71,215 | (261,517) |
Net of Tax Amount | |||
Before reclassifications, net of tax | 52,511 | 97,283 | (419,517) |
Amortization of actuarial loss (gain), net | Operating expenses | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 35,044 | 41,689 | 21,677 |
Tax | |||
Reclassifications tax | 9,934 | 15,724 | 8,325 |
Net of Tax Amount | |||
Reclassifications, net of tax | 25,110 | 25,965 | 13,352 |
Foreign currency translation | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (22,987) | (11,243) | (39,080) |
Tax | |||
Before reclassifications tax | 0 | 0 | 0 |
Net of Tax Amount | |||
Before reclassifications, net of tax | (22,987) | (11,243) | (39,080) |
Reclassifications, net of tax | 0 | 0 | 0 |
Interest rate swaps | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | 21,429 | (45,023) | (6,134) |
Tax | |||
Before reclassifications tax | 1,295 | (14,313) | (2,355) |
Net of Tax Amount | |||
Before reclassifications, net of tax | 20,134 | (30,710) | (3,779) |
Reclassifications, net of tax | (8,240) | (7,082) | (7,111) |
Interest rate swaps | Cash flow hedging | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | 23,872 | (10,871) | |
Tax | |||
Before reclassifications tax | 9,529 | (4,173) | |
Net of Tax Amount | |||
Before reclassifications, net of tax | 14,343 | (6,698) | |
Interest rate swaps | Net investment hedging | |||
Before Tax Amount | |||
Other comprehensive income before reclassifications, before tax | (2,443) | (34,152) | |
Tax | |||
Before reclassifications tax | (8,234) | (10,140) | |
Net of Tax Amount | |||
Before reclassifications, net of tax | 5,791 | (24,012) | |
Interest rate swaps | Interest expense | |||
Before Tax Amount | |||
Reclassification adjustments, before tax | 11,499 | 11,495 | 11,543 |
Tax | |||
Reclassifications tax | 3,259 | 4,413 | 4,432 |
Net of Tax Amount | |||
Reclassifications, net of tax | $ 8,240 | $ 7,082 | $ 7,111 |
OTHER COMPREHENSIVE INCOME - SU
OTHER COMPREHENSIVE INCOME - SUMMARY OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | $ 2,381,516 | $ 3,479,608 | $ 5,260,224 |
Ending balance, shareholders' equity | 2,506,957 | 2,381,516 | 3,479,608 |
Total | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (1,262,737) | (1,358,118) | (923,197) |
Other comprehensive income before reclassification adjustments | 49,658 | 55,330 | (462,376) |
Amounts reclassified from accumulated other comprehensive loss | 40,255 | 40,051 | 27,455 |
Amounts reclassified to retained earnings | (236,445) | ||
Ending balance, shareholders' equity | (1,409,269) | (1,262,737) | (1,358,118) |
Pension and Other Postretirement Benefit Plans, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (974,232) | (1,104,484) | (705,311) |
Other comprehensive income before reclassification adjustments | 52,511 | 97,283 | (419,517) |
Amounts reclassified from accumulated other comprehensive loss | 32,015 | 32,969 | 20,344 |
Amounts reclassified to retained earnings | (205,353) | ||
Ending balance, shareholders' equity | (1,095,059) | (974,232) | (1,104,484) |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (148,056) | (136,813) | (97,733) |
Other comprehensive income before reclassification adjustments | (22,987) | (11,243) | (39,080) |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 |
Amounts reclassified to retained earnings | 0 | ||
Ending balance, shareholders' equity | (171,043) | (148,056) | (136,813) |
Hedging, net of tax | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance, shareholders' equity | (140,449) | (116,821) | (120,153) |
Other comprehensive income before reclassification adjustments | 20,134 | (30,710) | (3,779) |
Amounts reclassified from accumulated other comprehensive loss | 8,240 | 7,082 | 7,111 |
Amounts reclassified to retained earnings | (31,092) | ||
Ending balance, shareholders' equity | $ (143,167) | $ (140,449) | $ (116,821) |
SHARE-BASED COMPENSATION - STOC
SHARE-BASED COMPENSATION - STOCK INCENTIVE PLANS (Details) - shares | 1 Months Ended | 12 Months Ended |
Nov. 30, 2013 | Jun. 30, 2018 | |
2013 Long-term Incentive Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of shares authorized (in shares) | 55,600,000 | |
Performance measurement period (in years) | 1 year | |
Total number of shares available for grant (in shares) | 27,297,349 | |
2013 Long-term Incentive Plan | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award expiration period (in years) | 10 years | |
2013 Long-term Incentive Plan | Restricted Stock, Restricted Stock Units Or Other Types Of Stock-Based Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of shares authorized (in shares) | 17,500,000 | |
Total number of shares available for grant (in shares) | 11,197,918 | |
2013 Long-term Incentive Plan | Options Or Stock Apppreciation Rights | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Total number of shares available for grant (in shares) | 27,297,349 | |
Long-term Incentive Plan prior to 2013 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award expiration period (in years) | 7 years |
SHARE-BASED COMPENSATION - PERF
SHARE-BASED COMPENSATION - PERFORMANCE SHARE UNITS (Details) - Performance Share Units (PSUs) - $ / shares | 12 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity instruments other than options granted (in shares) | 895,968 | 829,460 |
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 51.11 | $ 52.17 |
SHARE-BASED COMPENSATION - ST87
SHARE-BASED COMPENSATION - STOCK OPTIONS (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018USD ($)employeeofficer$ / sharesshares | Jul. 01, 2017USD ($)employee$ / sharesshares | Jul. 02, 2016USD ($)employeeofficer$ / sharesshares | |
Fair Value Assumptions and Methodology | |||
Dividend yield | 2.60% | 2.80% | 3.10% |
Expected volatility | 17.50% | 16.90% | 20.40% |
Risk-free interest rate | 2.00% | 1.40% | 2.00% |
Expected life (in years) | 7 years | 7 years 2 months 12 days | 7 years 2 months 12 days |
Shares Under Option | |||
Outstanding, beginning balance (in shares) | 21,070,836 | ||
Granted (in shares) | 4,042,415 | 4,990,396 | 4,367,764 |
Exercised (in shares) | 6,400,982 | ||
Forfeited (in shares) | 299,584 | ||
Expired (in shares) | 21,075 | ||
Outstanding, ending balance (in shares) | 18,391,610 | 21,070,836 | |
Vested or expected to vest (in shares) | 12,006,173 | ||
Exercisable (in shares) | 6,232,851 | ||
Weighted Average Exercise Price Per Share | |||
Outstanding, beginning balance (in dollars per share) | $ / shares | $ 39.16 | ||
Granted (in dollars per share) | $ / shares | 51.24 | ||
Exercised (in dollars per share) | $ / shares | 32.65 | ||
Forfeited (in dollars per share) | $ / shares | 48.48 | ||
Expired (in dollars per share) | $ / shares | 28.87 | ||
Outstanding, ending balance (in dollars per share) | $ / shares | 43.92 | $ 39.16 | |
Vested or expected to vest (in dollars per share) | $ / shares | 46.30 | ||
Exercisable (in dollars per share) | $ / shares | $ 39.23 | ||
Additional Disclosures | |||
Outstanding, ending balance, weighted average remaining contractual term (in years) | 7 years 2 months 22 days | ||
Vested or expected to vest, weighted average remaining contractual term (in years) | 7 years 10 months 13 days | ||
Exercisable, weighted average remaining contractual term (in years) | 5 years 11 months 16 days | ||
Outstanding, ending balance, aggregate intrinsic value | $ | $ 448,133 | ||
Vested or expected to vest, aggregate intrinsic value | $ | 263,972 | ||
Exercisable, aggregate intrinsic value | $ | $ 181,146 | ||
Weighted average fair value of options granted in period (in USD per share) | $ / shares | $ 7.08 | $ 6.05 | $ 5.99 |
Total intrinsic value of options exercised in period | $ | $ 17,700 | $ 22,100 | $ 36,100 |
Key Employees | |||
Shares Under Option | |||
Granted (in shares) | 3,087,071 | 3,460,399 | 2,872,413 |
Additional Disclosures | |||
Number of employees/officers receiving options in period | employee | 181 | 187 | 169 |
Executive Officer | |||
Shares Under Option | |||
Granted (in shares) | 955,344 | 1,529,997 | 1,495,351 |
Additional Disclosures | |||
Number of employees/officers receiving options in period | 10 | 9 | 8 |
SHARE-BASED COMPENSATION - REST
SHARE-BASED COMPENSATION - RESTRICTED STOCK UNITS (Details) - Restricted Stock Units - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options granted (in shares) | 660,923 | 631,281 | 1,257,889 |
Equity instruments other than options granted, award vesting period (in years) | 3 years | ||
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 55.81 | $ 50.04 | $ 42.78 |
Equity instruments other than options vested, total fair value | $ 40.4 | $ 46 | $ 43.4 |
Equity instruments other than options exercised, intrinsic value | $ 56.4 | $ 65.1 | $ 53.9 |
SHARE-BASED COMPENSATION - NON-
SHARE-BASED COMPENSATION - NON-EMPLOYEE DIRECTOR AWARDS (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options distributed, total fair value | $ 1.2 | $ 1.1 | $ 1 |
Equity instruments other than options vested (in shares) | 21,478 | 22,094 | 25,185 |
Equity instruments other than options vested, weighted average grant date fair value per share (in dollars per share) | $ 54.69 | $ 51.46 | $ 39.31 |
Director Restricted Award And Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options vested but not distributed ending balance (in shares) | 70,691 | ||
Director Restricted Award | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Equity instruments other than options granted (in shares) | 35,672 | 40,498 | 43,362 |
Equity instruments other than options granted, award vesting period (in years) | 1 year | ||
Equity instruments other than options granted, weighted average grant date fair value per share (in dollars per share) | $ 54.10 | $ 53.49 | $ 40.59 |
Equity instruments other than options distributed, total fair value | $ 2.9 | $ 2 | $ 1.6 |
2009 Non-Employee Directors Stock Plan | Elected Shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum percentage of annual director fees that can be received in common stock | 100.00% | ||
Matching percentage of shares received in the stock election | 50.00% |
SHARE-BASED COMPENSATION - SUMM
SHARE-BASED COMPENSATION - SUMMARY OF NONVESTED AWARDS (Details) - Nonvested Awards | 12 Months Ended |
Jun. 30, 2018$ / sharesshares | |
Shares | |
Nonvested beginning balance (in shares) | shares | 2,643,599 |
Granted (in shares) | shares | 1,592,564 |
Vested (in shares) | shares | (975,994) |
Forfeited (in shares) | shares | (173,285) |
Nonvested ending balance (in shares) | shares | 3,086,884 |
Weighted Average Grant Date Fair Value Per Share | |
Nonvested, beginning balance (in dollars per share) | $ / shares | $ 46.24 |
Granted (in dollars per share) | $ / shares | 53.13 |
Vested (in dollars per share) | $ / shares | 41.44 |
Forfeited (in dollars per share) | $ / shares | 50.35 |
Nonvested, ending balance (in dollars per share) | $ / shares | $ 51.08 |
SHARE-BASED COMPENSATION - EMPL
SHARE-BASED COMPENSATION - EMPLOYEES' STOCK PURCHASE PLAN (Details) - Employees' Stock Purchase Plan - $ / shares | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share-based payment award, discount from market price | 15.00% | ||
Total number of shares authorized (in shares) | 79,000,000 | ||
Total number of shares available for grant (in shares) | 7,225,186 | ||
Equity instruments other than options vested (in shares) | 1,078,597 | 1,103,995 | 1,275,765 |
Equity instruments other than options vested, weighted average grant date fair value per share (in dollars per share) | $ 8.38 | $ 7.73 | $ 6.04 |
SHARE-BASED COMPENSATION - ALL
SHARE-BASED COMPENSATION - ALL SHARE-BASED PAYMENT ARRANGEMENTS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Share-based Compensation [Abstract] | |||
Share-based compensation expense | $ 93,841 | $ 83,883 | $ 79,466 |
Total income tax benefit for share-based compensation arrangements | 19,400 | 30,000 | 30,700 |
Total unrecognized compensation cost related to share-based compensation arrangements | $ 121,300 | ||
Weighted average period of time for unrecognized compensation cost to be recognized (in years) | 1 year 9 months | ||
Cash received from options exercises and purchase of shares under the employees' stock purchase plan | $ 268,800 | 204,800 | 282,400 |
Share-based compensation | $ 38,400 | $ 38,900 | $ 42,500 |
INCOME TAXES - INCOME TAX PROVI
INCOME TAXES - INCOME TAX PROVISIONS (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||||||||||
United States pretax income | $ 1,765,793 | $ 1,569,073 | $ 1,225,142 | ||||||||
Foreign pretax income | 190,431 | 197,157 | 207,865 | ||||||||
Earnings before income taxes | $ 593,156 | $ 364,884 | $ 451,728 | $ 546,456 | $ 483,525 | $ 359,773 | $ 422,506 | $ 500,426 | 1,956,224 | 1,766,230 | 1,433,007 |
U.S. federal income taxes | 399,254 | 534,266 | 429,658 | ||||||||
State and local income taxes | 62,670 | 69,913 | 34,032 | ||||||||
Foreign income taxes | 63,534 | 19,548 | 19,695 | ||||||||
Current income tax expense | 337,550 | 675,573 | 389,514 | ||||||||
Deferred income tax expense (benefit) | 187,908 | (51,846) | 93,871 | ||||||||
Total income tax expense | $ 144,228 | $ 34,799 | $ 167,615 | $ 178,816 | $ 178,354 | $ 121,495 | $ 147,339 | $ 176,539 | $ 525,458 | $ 623,727 | $ 483,385 |
INCOME TAXES - DEFERRED TAX ASS
INCOME TAXES - DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 226,274 | $ 194,287 |
Pension | 115,361 | 360,864 |
Share-based compensation | 34,486 | 48,077 |
Deferred compensation | 29,512 | 39,830 |
Self-insured liabilities | 0 | 84,401 |
Receivables | 13,001 | 30,842 |
Inventory | 14,728 | 21,332 |
Foreign currency remeasurement losses and currency hedge | 15,796 | 13,221 |
Other | 33,386 | 54,619 |
Deferred tax assets before valuation allowances | 482,544 | 847,473 |
Valuation allowances | (123,237) | (114,151) |
Total deferred tax assets | 359,307 | 733,322 |
Deferred tax liabilities: | ||
Excess tax depreciation and basis differences of assets | 180,950 | 247,510 |
Goodwill and intangible assets | 373,041 | 455,340 |
Other | 40,774 | 49,654 |
Total deferred tax liabilities | 594,765 | 752,504 |
Total net deferred tax (liability) | $ (235,458) | $ (19,182) |
INCOME TAXES - OTHER (Details)
INCOME TAXES - OTHER (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Operating Loss Carryforwards [Line Items] | ||
Valuation allowances | $ 123,237 | $ 114,151 |
Foreign Tax Authority | Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Net operating loss carryforward period | 17 years |
INCOME TAXES - TAX CUTS AND JOB
INCOME TAXES - TAX CUTS AND JOBS ACT (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2018 | Dec. 30, 2017 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||||
U.S. statutory federal income tax rate | 28.00% | 35.00% | 35.00% | |||
Provisional income tax expense (benefit) | $ 74.1 | |||||
Discrete tax expense attributable to provisional impact of transition tax | $ 115 | 80 | ||||
Discrete tax expense attributable to provisional impact of transition tax noncurrent | $ 73.6 | |||||
Undistributed income of foreign subsidiaries | $ 1,400 | 1,400 | ||||
Foreign earnings repatriated | $ 1,000 | |||||
Foreign income and non-income based taxes accrued | $ 50.2 |
INCOME TAXES - EFFECTIVE TAX RA
INCOME TAXES - EFFECTIVE TAX RATES (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Income Tax Disclosure [Abstract] | |||
U.S. statutory federal income tax rate | 28.00% | 35.00% | 35.00% |
State and local income taxes, net of any applicable federal income tax benefit | 2.48% | 2.61% | 1.79% |
Foreign income taxes | 0.07% | (2.81%) | (2.40%) |
Foreign income taxes | (0.22%) | 0.01% | (1.96%) |
Tax benefit of equity-based compensation | (2.66%) | 0.00% | 0.00% |
Impact of US Tax Reform | 0.13% | 0.00% | 0.00% |
Other | (0.95%) | 0.50% | 1.30% |
Effective income tax rate | 26.85% | 35.31% | 33.73% |
Interest and penalty expense related to unrecognized tax benefits | $ 29.6 | ||
Penalty expense related to unrecognized tax benefits | 10.6 | ||
Interest expense related to unrecognized tax benefits | $ 19 |
INCOME TAXES - UNCERTAIN TAX PO
INCOME TAXES - UNCERTAIN TAX POSITIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Gross Unrecognized Tax Benefits, Excluding Interest and Penalties | ||
Unrecognized tax benefits at beginning of year | $ 16,278 | $ 24,614 |
Additions for tax positions related to prior years | 652 | 648 |
Reductions for tax positions related to prior years | (4,033) | (2,147) |
Reductions due to settlements with taxing authorities | (702) | (6,837) |
Unrecognized tax benefits at end of year | 12,195 | 16,278 |
Liability recorded for interest and penalties related to unrecognized tax benefits | 8,500 | 10,700 |
Amount of unrecognized tax benefits at balance sheet date that, if recognized, would impact effective tax rate | $ 9,600 | $ 10,800 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - FUEL COMMITMENTS (Details) $ in Billions | Jun. 30, 2018USD ($) |
Product Purchases for Resale Commitments | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | |
Unrecorded unconditional purchase obligation as of balance sheet date | $ 2.1 |
COMMITMENTS AND CONTINGENCIE100
COMMITMENTS AND CONTINGENCIES - OTHER COMMITMENTS (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2018USD ($) | |
Product Purchases for Resale Commitments | |
Product purchases for resale commitments: | |
2,019 | $ 1,762,782 |
2,020 | 339,016 |
2,021 | 1,459 |
Information Technology Services Commitments | |
Product purchases for resale commitments: | |
Remaining amount of long-term purchase commitment | 325,000 |
Termination fee associated with long-term purchase commitment if terminated in next fiscal year | $ 76,700 |
BUSINESS SEGMENT INFORMATION (D
BUSINESS SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 30, 2017USD ($) | Sep. 30, 2017USD ($) | Jul. 01, 2017USD ($) | Apr. 01, 2017USD ($) | Dec. 31, 2016USD ($) | Oct. 01, 2016USD ($) | Jun. 30, 2018USD ($)segment | Jul. 01, 2017USD ($) | Jul. 02, 2016USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of reportable segments | segment | 3 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 |
Operating income | 687,667 | 485,933 | 532,282 | 623,092 | 557,959 | 435,962 | 492,417 | 566,833 | 2,328,974 | 2,053,171 | 1,850,500 |
Interest expense | 92,468 | 136,145 | 85,986 | 80,884 | 76,020 | 81,004 | 72,231 | 73,623 | 395,483 | 302,878 | 306,146 |
Other expense (income), net | 2,043 | (15,096) | (5,432) | (4,248) | (1,586) | (4,815) | (2,320) | (7,216) | (22,733) | (15,937) | 111,347 |
Earnings before income taxes | 593,156 | $ 364,884 | $ 451,728 | $ 546,456 | 483,525 | $ 359,773 | $ 422,506 | $ 500,426 | 1,956,224 | 1,766,230 | 1,433,007 |
Depreciation and amortization | 765,498 | 901,992 | 662,710 | ||||||||
Capital expenditures | 687,815 | 686,378 | 527,346 | ||||||||
Assets | 18,070,404 | 17,756,655 | 18,070,404 | 17,756,655 | 16,721,804 | ||||||
Operating | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 58,727,324 | 55,371,139 | 50,366,919 | ||||||||
Operating income | 3,309,034 | 3,188,245 | 3,009,146 | ||||||||
Depreciation and amortization | 652,163 | 555,220 | 366,818 | ||||||||
Capital expenditures | 476,564 | 487,237 | 262,730 | ||||||||
Assets | 14,266,736 | 14,183,896 | 14,266,736 | 14,183,896 | 9,771,886 | ||||||
Operating | U.S. Foodservice Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 39,642,263 | 37,604,698 | 37,776,443 | ||||||||
Operating income | 3,051,991 | 2,891,612 | 2,771,932 | ||||||||
Depreciation and amortization | 348,041 | 266,024 | 252,392 | ||||||||
Capital expenditures | 262,887 | 194,714 | 153,528 | ||||||||
Assets | 7,039,354 | 6,675,543 | 7,039,354 | 6,675,543 | 6,753,056 | ||||||
Operating | International Foodservice Operations | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 11,518,565 | 10,613,059 | 5,436,209 | ||||||||
Operating income | 193,240 | 243,116 | 177,159 | ||||||||
Depreciation and amortization | 258,156 | 243,628 | 70,184 | ||||||||
Capital expenditures | 157,139 | 228,564 | 56,689 | ||||||||
Assets | 6,112,666 | 6,433,815 | 6,112,666 | 6,433,815 | 2,019,406 | ||||||
Operating | SYGMA | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 6,557,033 | 6,178,909 | 6,102,328 | ||||||||
Operating income | 24,318 | 23,299 | 27,469 | ||||||||
Depreciation and amortization | 36,367 | 34,890 | 31,792 | ||||||||
Capital expenditures | 45,132 | 50,722 | 31,811 | ||||||||
Assets | 662,290 | 625,653 | 662,290 | 625,653 | 539,639 | ||||||
Operating | Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 1,009,463 | 974,473 | 1,051,939 | ||||||||
Operating income | 39,485 | 30,218 | 32,586 | ||||||||
Depreciation and amortization | 9,599 | 10,678 | 12,450 | ||||||||
Capital expenditures | 11,406 | 13,237 | 20,702 | ||||||||
Assets | 452,426 | 448,885 | 452,426 | 448,885 | 459,785 | ||||||
Corporate | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Operating income | (980,060) | (1,135,074) | (1,158,646) | ||||||||
Depreciation and amortization | 113,335 | 346,772 | 295,892 | ||||||||
Capital expenditures | 211,251 | 199,141 | 264,616 | ||||||||
Assets | $ 3,803,668 | $ 3,572,759 | $ 3,803,668 | $ 3,572,759 | $ 6,949,918 |
BUSINESS SEGMENT INFORMATION -
BUSINESS SEGMENT INFORMATION - PRODUCT MIX (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 |
Fresh and frozen meats | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 11,312,969 | 10,605,678 | 10,273,247 | ||||||||
Canned and dry products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 9,768,206 | 8,695,829 | 8,402,230 | ||||||||
Frozen fruits, vegetables, bakery and other | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 9,025,762 | 8,444,260 | 6,719,648 | ||||||||
Dairy products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 6,037,409 | 5,610,101 | 5,276,991 | ||||||||
Poultry | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 5,979,399 | 5,873,944 | 5,392,933 | ||||||||
Fresh produce | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 4,929,366 | 4,701,440 | 4,156,978 | ||||||||
Paper and disposables | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 3,837,943 | 3,596,470 | 3,557,514 | ||||||||
Seafood | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 3,280,308 | 3,089,350 | 2,541,239 | ||||||||
Beverage products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 1,965,251 | 2,059,453 | 1,849,780 | ||||||||
Janitorial products | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 1,395,100 | 1,331,019 | 1,251,821 | ||||||||
Equipment and smallwares | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | 795,406 | 794,087 | 593,595 | ||||||||
Medical supplies | |||||||||||
Segment Reporting, Revenue Reconciling Item [Line Items] | |||||||||||
Sales | $ 400,205 | $ 569,508 | $ 350,943 |
BUSINESS SEGMENT INFORMATION103
BUSINESS SEGMENT INFORMATION - GEOGRAPHIC AREA (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 |
Long-lived assets | 4,521,660 | 4,377,302 | 4,521,660 | 4,377,302 | 3,880,442 | ||||||
United States | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 46,812,297 | 44,395,765 | 44,922,937 | ||||||||
Long-lived assets | 3,448,164 | 3,252,980 | 3,448,164 | 3,252,980 | 3,461,505 | ||||||
Canada | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 4,661,615 | 4,346,894 | 4,486,282 | ||||||||
Long-lived assets | 318,410 | 329,090 | 318,410 | 329,090 | 309,027 | ||||||
United Kingdom | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 3,176,069 | 2,974,133 | 0 | ||||||||
Long-lived assets | 319,664 | 303,178 | 319,664 | 303,178 | 0 | ||||||
France | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 1,625,407 | 1,426,973 | 0 | ||||||||
Long-lived assets | 240,507 | 284,611 | 240,507 | 284,611 | 0 | ||||||
Other | |||||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||||||||
Sales | 2,451,936 | 2,227,374 | 957,700 | ||||||||
Long-lived assets | $ 194,915 | $ 207,443 | $ 194,915 | $ 207,443 | $ 109,910 |
SUPPLEMENTAL GUARANTOR INFOR104
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - NARRATIVE (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2018 | Jul. 01, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Carrying value of total debt | $ 8,327,270 | $ 8,194,890 |
Percentage ownership of subsidiary guarantors by parent | 100.00% |
SUPPLEMENTAL GUARANTOR INFOR105
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - BALANCE SHEET (Details) - USD ($) $ in Thousands | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | Jun. 27, 2015 |
Supplemental Guarantor Information [Line Items] | ||||
Current assets | $ 8,003,453 | $ 8,033,438 | ||
Intercompany receivables | 0 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Plant and equipment, net | 4,521,660 | 4,377,302 | $ 3,880,442 | |
Other assets | 5,545,291 | 5,345,915 | ||
Total assets | 18,070,404 | 17,756,655 | 16,721,804 | |
Current liabilities | 6,588,746 | 6,095,886 | ||
Intercompany payables | 0 | 0 | ||
Long-term debt | 7,540,765 | 7,660,877 | ||
Other liabilities | 1,396,287 | 1,535,537 | ||
Noncontrolling interest | 37,649 | 82,839 | ||
Shareholders’ equity | 2,506,957 | 2,381,516 | $ 3,479,608 | $ 5,260,224 |
Total liabilities and shareholders' equity | 18,070,404 | 17,756,655 | ||
Reportable Legal Entities | Sysco | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 157,994 | 177,495 | ||
Intercompany receivables | 6,621,438 | 4,444,035 | ||
Investment in subsidiaries | 4,896,004 | 6,451,994 | ||
Plant and equipment, net | 278,855 | 258,527 | ||
Other assets | 788,473 | 151,743 | ||
Total assets | 12,742,764 | 11,483,794 | ||
Current liabilities | 1,233,541 | 650,899 | ||
Intercompany payables | 882,487 | 0 | ||
Long-term debt | 7,470,334 | 7,588,041 | ||
Other liabilities | 649,445 | 863,338 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | 2,506,957 | 2,381,516 | ||
Total liabilities and shareholders' equity | 12,742,764 | 11,483,794 | ||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 4,018,444 | 3,786,055 | ||
Intercompany receivables | 270,748 | 0 | ||
Investment in subsidiaries | 0 | 0 | ||
Plant and equipment, net | 2,181,576 | 2,039,761 | ||
Other assets | 611,004 | 516,126 | ||
Total assets | 7,081,772 | 6,341,942 | ||
Current liabilities | 886,305 | 3,521,661 | ||
Intercompany payables | 3,798,134 | 366,802 | ||
Long-term debt | 8,285 | 7,776 | ||
Other liabilities | 508,387 | 103,784 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | 1,880,661 | 2,341,919 | ||
Total liabilities and shareholders' equity | 7,081,772 | 6,341,942 | ||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 3,827,015 | 4,069,888 | ||
Intercompany receivables | 5,793,352 | 0 | ||
Investment in subsidiaries | 983,625 | 0 | ||
Plant and equipment, net | 2,061,229 | 2,079,014 | ||
Other assets | 4,593,537 | 4,678,046 | ||
Total assets | 17,258,758 | 10,826,948 | ||
Current liabilities | 4,468,900 | 1,923,326 | ||
Intercompany payables | 8,004,917 | 4,077,233 | ||
Long-term debt | 62,146 | 65,060 | ||
Other liabilities | 686,178 | 568,415 | ||
Noncontrolling interest | 37,649 | 82,839 | ||
Shareholders’ equity | 3,998,968 | 4,110,075 | ||
Total liabilities and shareholders' equity | 17,258,758 | 10,826,948 | ||
Eliminations | ||||
Supplemental Guarantor Information [Line Items] | ||||
Current assets | 0 | 0 | ||
Intercompany receivables | (12,685,538) | (4,444,035) | ||
Investment in subsidiaries | (5,879,629) | (6,451,994) | ||
Plant and equipment, net | 0 | 0 | ||
Other assets | (447,723) | 0 | ||
Total assets | (19,012,890) | (10,896,029) | ||
Current liabilities | 0 | 0 | ||
Intercompany payables | (12,685,538) | (4,444,035) | ||
Long-term debt | 0 | 0 | ||
Other liabilities | (447,723) | 0 | ||
Noncontrolling interest | 0 | 0 | ||
Shareholders’ equity | (5,879,629) | (6,451,994) | ||
Total liabilities and shareholders' equity | $ (19,012,890) | $ (10,896,029) |
SUPPLEMENTAL GUARANTOR INFOR106
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - COMPREHENSIVE INCOME (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 |
Cost of sales | 12,399,197 | 11,673,876 | 11,712,104 | 11,856,756 | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 47,641,933 | 44,813,632 | 41,326,447 |
Gross profit | 2,916,709 | 2,675,628 | 2,699,386 | 2,793,668 | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 11,085,391 | 10,557,507 | 9,040,472 |
Operating expenses | 2,229,042 | 2,189,695 | 2,167,104 | 2,170,576 | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 8,756,417 | 8,504,336 | 7,189,972 |
Operating income | 687,667 | 485,933 | 532,282 | 623,092 | 557,959 | 435,962 | 492,417 | 566,833 | 2,328,974 | 2,053,171 | 1,850,500 |
Interest expense (income) | 92,468 | 136,145 | 85,986 | 80,884 | 76,020 | 81,004 | 72,231 | 73,623 | 395,483 | 302,878 | 306,146 |
Other expense (income), net | 2,043 | (15,096) | (5,432) | (4,248) | (1,586) | (4,815) | (2,320) | (7,216) | (22,733) | (15,937) | 111,347 |
Earnings before income taxes | 593,156 | 364,884 | 451,728 | 546,456 | 483,525 | 359,773 | 422,506 | 500,426 | 1,956,224 | 1,766,230 | 1,433,007 |
Income tax (benefit) provision | 144,228 | 34,799 | 167,615 | 178,816 | 178,354 | 121,495 | 147,339 | 176,539 | 525,458 | 623,727 | 483,385 |
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | $ 448,928 | $ 330,085 | $ 284,113 | $ 367,640 | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | 1,430,766 | 1,142,503 | 949,622 |
Other comprehensive income (loss) | 89,913 | 95,381 | (434,921) | ||||||||
Comprehensive income | 1,520,679 | 1,237,884 | 514,701 | ||||||||
Reportable Legal Entities | Sysco | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 0 | 0 | 0 | ||||||||
Cost of sales | 0 | 0 | 0 | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating expenses | 783,834 | 931,498 | 944,457 | ||||||||
Operating income | (783,834) | (931,498) | (944,457) | ||||||||
Interest expense (income) | 294,401 | 405,030 | 381,122 | ||||||||
Other expense (income), net | (19,135) | (23,740) | 128,777 | ||||||||
Earnings before income taxes | (1,059,100) | (1,312,788) | (1,454,356) | ||||||||
Income tax (benefit) provision | (135,385) | (463,598) | (490,579) | ||||||||
Equity in earnings of subsidiaries | 2,354,481 | 1,991,693 | 1,913,399 | ||||||||
Net earnings | 1,430,766 | 1,142,503 | 949,622 | ||||||||
Other comprehensive income (loss) | 89,913 | 95,381 | (434,921) | ||||||||
Comprehensive income | 1,520,679 | 1,237,884 | 514,701 | ||||||||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 35,963,053 | 34,325,884 | 33,932,334 | ||||||||
Cost of sales | 29,102,278 | 27,690,469 | 27,485,111 | ||||||||
Gross profit | 6,860,775 | 6,635,415 | 6,447,223 | ||||||||
Operating expenses | 4,012,391 | 3,907,829 | 3,857,415 | ||||||||
Operating income | 2,848,384 | 2,727,586 | 2,589,808 | ||||||||
Interest expense (income) | (110,715) | (122,012) | (145,852) | ||||||||
Other expense (income), net | (2,556) | (1,116) | (1,876) | ||||||||
Earnings before income taxes | 2,961,655 | 2,850,714 | 2,737,536 | ||||||||
Income tax (benefit) provision | 655,824 | 1,006,703 | 923,416 | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | 2,305,831 | 1,844,011 | 1,814,120 | ||||||||
Other comprehensive income (loss) | 0 | 0 | 0 | ||||||||
Comprehensive income | 2,305,831 | 1,844,011 | 1,814,120 | ||||||||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | 24,784,842 | 22,862,131 | 18,112,973 | ||||||||
Cost of sales | 20,560,226 | 18,940,039 | 15,519,724 | ||||||||
Gross profit | 4,224,616 | 3,922,092 | 2,593,249 | ||||||||
Operating expenses | 3,960,192 | 3,665,009 | 2,388,100 | ||||||||
Operating income | 264,424 | 257,083 | 205,149 | ||||||||
Interest expense (income) | 211,797 | 19,860 | 70,876 | ||||||||
Other expense (income), net | (1,042) | 8,919 | (15,554) | ||||||||
Earnings before income taxes | 53,669 | 228,304 | 149,827 | ||||||||
Income tax (benefit) provision | 5,019 | 80,622 | 50,548 | ||||||||
Equity in earnings of subsidiaries | 0 | 0 | 0 | ||||||||
Net earnings | 48,650 | 147,682 | 99,279 | ||||||||
Other comprehensive income (loss) | (22,987) | (9,317) | (52,306) | ||||||||
Comprehensive income | 25,663 | 138,365 | 46,973 | ||||||||
Eliminations | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Sales | (2,020,571) | (1,816,876) | (1,678,388) | ||||||||
Cost of sales | (2,020,571) | (1,816,876) | (1,678,388) | ||||||||
Gross profit | 0 | 0 | 0 | ||||||||
Operating expenses | 0 | 0 | 0 | ||||||||
Operating income | 0 | 0 | 0 | ||||||||
Interest expense (income) | 0 | 0 | 0 | ||||||||
Other expense (income), net | 0 | 0 | 0 | ||||||||
Earnings before income taxes | 0 | 0 | 0 | ||||||||
Income tax (benefit) provision | 0 | 0 | 0 | ||||||||
Equity in earnings of subsidiaries | (2,354,481) | (1,991,693) | (1,913,399) | ||||||||
Net earnings | (2,354,481) | (1,991,693) | (1,913,399) | ||||||||
Other comprehensive income (loss) | 22,987 | 9,317 | 52,306 | ||||||||
Comprehensive income | (2,331,494) | (1,982,376) | (1,861,093) | ||||||||
Eliminations | Certain U.S. Broadline Subsidiaries | |||||||||||
Supplemental Guarantor Information [Line Items] | |||||||||||
Interest expense (income) | $ (110,700) | $ (122,000) | $ (145,900) |
SUPPLEMENTAL GUARANTOR INFOR107
SUPPLEMENTAL GUARANTOR INFORMATION - SUBSIDIARY GUARANTEES - CASH FLOWS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Supplemental Guarantor Information [Line Items] | |||
Operating activities | $ 2,158,632 | $ 2,239,354 | $ 1,988,347 |
Investing activities | (913,665) | (3,584,461) | (769,102) |
Financing activities | (1,410,469) | (1,682,587) | (2,459,936) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 11,844 | (22,104) | (138,327) |
Intercompany activity | 0 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Net decrease in cash, cash equivalents and restricted cash | (153,658) | (3,049,798) | (1,379,018) |
Cash, cash equivalents and restricted cash at beginning of period | 869,502 | 3,919,300 | 5,298,318 |
Cash, cash equivalents and restricted cash at end of period | 715,844 | 869,502 | 3,919,300 |
Net (decrease) in cash, cash equivalents and restricted cash | (3,049,798) | (1,379,018) | |
Cash, cash equivalents and restricted cash at beginning of period | 869,502 | 3,919,300 | 5,298,318 |
Cash, cash equivalents and restricted cash at end of period | 552,325 | 869,502 | 3,919,300 |
Scenario, Previously Reported | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Cash, cash equivalents and restricted cash at beginning of period | 869,502 | ||
Cash, cash equivalents and restricted cash at end of period | 869,502 | ||
Sysco | |||
Supplemental Guarantor Information [Line Items] | |||
Intercompany activity | 0 | ||
Certain U.S. Broadline Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Intercompany activity | 0 | ||
Other Non-Guarantor Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Intercompany activity | 0 | ||
Reportable Legal Entities | Sysco | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 1,055,228 | 1,535,725 | 1,045,900 |
Investing activities | 55,612 | (3,274,566) | (145,444) |
Financing activities | (1,193,272) | (1,525,995) | (2,540,649) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Net decrease in cash, cash equivalents and restricted cash | (82,432) | ||
Cash, cash equivalents and restricted cash at beginning of period | 111,576 | ||
Cash, cash equivalents and restricted cash at end of period | 29,144 | 111,576 | |
Net (decrease) in cash, cash equivalents and restricted cash | (3,264,836) | (1,640,193) | |
Cash, cash equivalents and restricted cash at beginning of period | 3,376,412 | 5,016,605 | |
Cash, cash equivalents and restricted cash at end of period | 3,376,412 | ||
Reportable Legal Entities | Sysco | Scenario, Previously Reported | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Cash, cash equivalents and restricted cash at beginning of period | 111,576 | ||
Cash, cash equivalents and restricted cash at end of period | 111,576 | ||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 2,548,139 | 3,023,400 | 4,101,840 |
Investing activities | (439,178) | (261,330) | (212,270) |
Financing activities | (2,015,906) | (2,777,661) | (3,881,879) |
Effect of exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Net decrease in cash, cash equivalents and restricted cash | 93,055 | ||
Cash, cash equivalents and restricted cash at beginning of period | 18,788 | ||
Cash, cash equivalents and restricted cash at end of period | 111,843 | 18,788 | |
Net (decrease) in cash, cash equivalents and restricted cash | (15,591) | 7,691 | |
Cash, cash equivalents and restricted cash at beginning of period | 34,379 | 26,688 | |
Cash, cash equivalents and restricted cash at end of period | 34,379 | ||
Reportable Legal Entities | Certain U.S. Broadline Subsidiaries | Scenario, Previously Reported | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Cash, cash equivalents and restricted cash at beginning of period | 18,788 | ||
Cash, cash equivalents and restricted cash at end of period | 18,788 | ||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | 799,062 | 658,229 | 767,607 |
Investing activities | (503,745) | (175,565) | (411,388) |
Financing activities | (471,442) | (229,931) | 35,592 |
Effect of exchange rates on cash, cash equivalents and restricted cash | 11,844 | (22,104) | (138,327) |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Net decrease in cash, cash equivalents and restricted cash | (164,281) | ||
Cash, cash equivalents and restricted cash at beginning of period | 739,138 | ||
Cash, cash equivalents and restricted cash at end of period | 574,857 | 739,138 | |
Net (decrease) in cash, cash equivalents and restricted cash | 230,629 | 253,484 | |
Cash, cash equivalents and restricted cash at beginning of period | 508,509 | 255,025 | |
Cash, cash equivalents and restricted cash at end of period | 508,509 | ||
Reportable Legal Entities | Other Non-Guarantor Subsidiaries | Scenario, Previously Reported | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Cash, cash equivalents and restricted cash at beginning of period | 739,138 | ||
Cash, cash equivalents and restricted cash at end of period | 739,138 | ||
Eliminations | |||
Supplemental Guarantor Information [Line Items] | |||
Operating activities | (2,243,797) | (2,978,000) | (3,927,000) |
Investing activities | (26,354) | 127,000 | 0 |
Financing activities | 2,270,151 | 2,851,000 | 3,927,000 |
Effect of exchange rates on cash, cash equivalents and restricted cash | 0 | 0 | 0 |
Intercompany activity | 0 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Net decrease in cash, cash equivalents and restricted cash | 0 | ||
Cash, cash equivalents and restricted cash at beginning of period | 0 | ||
Cash, cash equivalents and restricted cash at end of period | 0 | 0 | |
Net (decrease) in cash, cash equivalents and restricted cash | 0 | 0 | |
Cash, cash equivalents and restricted cash at beginning of period | 0 | 0 | |
Cash, cash equivalents and restricted cash at end of period | $ 0 | ||
Eliminations | Scenario, Previously Reported | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Including Disposal Group and Discontinued Operations [Abstract] | |||
Cash, cash equivalents and restricted cash at beginning of period | $ 0 | ||
Cash, cash equivalents and restricted cash at end of period | $ 0 |
QUARTERLY RESULTS (UNAUDITED108
QUARTERLY RESULTS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2018 | Mar. 31, 2018 | Dec. 30, 2017 | Sep. 30, 2017 | Jul. 01, 2017 | Apr. 01, 2017 | Dec. 31, 2016 | Oct. 01, 2016 | Mar. 31, 2018 | Jun. 30, 2018 | Jul. 01, 2017 | Jul. 02, 2016 | |
Quarterly Financial Data [Abstract] | ||||||||||||
Sales | $ 15,315,906 | $ 14,349,504 | $ 14,411,490 | $ 14,650,424 | $ 14,421,045 | $ 13,524,172 | $ 13,457,268 | $ 13,968,654 | $ 58,727,324 | $ 55,371,139 | $ 50,366,919 | |
Cost of sales | 12,399,197 | 11,673,876 | 11,712,104 | 11,856,756 | 11,661,455 | 10,990,037 | 10,885,405 | 11,276,735 | 47,641,933 | 44,813,632 | 41,326,447 | |
Gross profit | 2,916,709 | 2,675,628 | 2,699,386 | 2,793,668 | 2,759,590 | 2,534,135 | 2,571,863 | 2,691,919 | 11,085,391 | 10,557,507 | 9,040,472 | |
Operating expenses | 2,229,042 | 2,189,695 | 2,167,104 | 2,170,576 | 2,201,631 | 2,098,173 | 2,079,446 | 2,125,086 | 8,756,417 | 8,504,336 | 7,189,972 | |
Operating income | 687,667 | 485,933 | 532,282 | 623,092 | 557,959 | 435,962 | 492,417 | 566,833 | 2,328,974 | 2,053,171 | 1,850,500 | |
Interest expense | 92,468 | 136,145 | 85,986 | 80,884 | 76,020 | 81,004 | 72,231 | 73,623 | 395,483 | 302,878 | 306,146 | |
Other expense (income), net | 2,043 | (15,096) | (5,432) | (4,248) | (1,586) | (4,815) | (2,320) | (7,216) | (22,733) | (15,937) | 111,347 | |
Earnings before income taxes | 593,156 | 364,884 | 451,728 | 546,456 | 483,525 | 359,773 | 422,506 | 500,426 | 1,956,224 | 1,766,230 | 1,433,007 | |
Income taxes | 144,228 | 34,799 | 167,615 | 178,816 | 178,354 | 121,495 | 147,339 | 176,539 | 525,458 | 623,727 | 483,385 | |
Net earnings | $ 448,928 | $ 330,085 | $ 284,113 | $ 367,640 | $ 305,171 | $ 238,278 | $ 275,167 | $ 323,887 | $ 1,430,766 | $ 1,142,503 | $ 949,622 | |
Per Share: | ||||||||||||
Basic net earnings (in dollars per share) | $ 0.86 | $ 0.63 | $ 0.55 | $ 0.70 | $ 0.57 | $ 0.44 | $ 0.50 | $ 0.58 | $ 2.74 | $ 2.10 | $ 1.66 | |
Diluted net earnings (in dollars per share) | 0.85 | 0.63 | 0.54 | 0.69 | 0.57 | 0.44 | 0.50 | 0.58 | 2.70 | 2.08 | 1.64 | |
Dividends declared (in dollars per share) | $ 0.36 | $ 0.36 | $ 0.36 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.33 | $ 0.31 | $ 1.41 | $ 1.3 | $ 1.23 | |
Loss on extinguishment of debt | $ (53,100) | $ 53,100 | $ 53,104 | $ 0 | $ 86,460 | |||||||
Employer contribution | $ 380,000 |