UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 28, 2009

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Sysco Corporation

Delaware (State or other jurisdiction of incorporation or organization) 1390 Enclave Parkway Houston, Texas (Address of principal executive offices)		74-1648137 (IRS employer identification number) 77077-2099 (Zip Code)

     Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

     589,895,400 shares of common stock were outstanding as of April 25, 2009.

 

 

TABLE OF CONTENTS

				Page No.
		PART I — FINANCIAL INFORMATION
Item 1.		Financial Statements			1
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations			20
Item 3.		Quantitative and Qualitative Disclosures About Market Risk			35
Item 4.		Controls and Procedures			36
		PART II — OTHER INFORMATION
Item 1.		Legal Proceedings			37
Item 1A.		Risk Factors			37
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds			37
Item 3.		Defaults Upon Senior Securities			37
Item 4.		Submission of Matters to a Vote of Security Holders			38
Item 5.		Other Information			38
Item 6.		Exhibits			38
Signatures					40
EX-10.1
EX-10.2
EX-10.3
EX-10.4
EX-10.5
EX-15.1
EX-15.2
EX-31.1
EX-32.1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Share Data)

		March 28, 2009				June 28, 2008				March 29, 2008
		(unaudited)								(unaudited)
ASSETS
Current assets
Cash and cash equivalents		$	899,117			$	551,552			$	243,919
Accounts and notes receivable, less allowances of $99,535, $31,730 and $65,755			2,549,769				2,723,189				2,737,464
Inventories			1,710,251				1,836,478				1,836,683
Prepaid expenses and other current assets			67,131				63,814				62,432
Total current assets			5,226,268				5,175,033				4,880,498
Plant and equipment at cost, less depreciation			2,891,893				2,889,790				2,857,230
Other assets
Goodwill			1,404,993				1,413,224				1,406,700
Intangibles, less amortization			87,011				87,528				90,242
Restricted cash			93,714				92,587				92,135
Prepaid pension cost			239,773				215,159				416,151
Other assets			193,400				208,972				218,029
Total other assets			2,018,891				2,017,470				2,223,257
Total assets		$	10,137,052			$	10,082,293			$	9,960,985
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,830,432			$	2,048,759			$	2,033,198
Accrued expenses			776,767				917,892				846,989
Accrued income taxes			98,179				11,665				159,628
Deferred taxes			404,185				516,131				385,878
Current maturities of long-term debt			6,529				4,896				4,504
Total current liabilities			3,116,092				3,499,343				3,430,197
Other liabilities
Long-term debt			2,463,243				1,975,435				2,040,546
Deferred taxes			530,100				540,330				554,137
Other long-term liabilities			696,440				658,199				655,158
Total other liabilities			3,689,783				3,173,964				3,249,841
Commitments and contingencies
Shareholders’ equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none			—				—				—
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares			765,175				765,175				765,175
Paid-in capital			755,408				712,208				697,970
Retained earnings			6,366,304				6,041,429				5,839,698
Accumulated other comprehensive (loss) income			(200,413	)			(68,768	)			47,422
Treasury stock, 175,857,763, 163,942,358 and 165,088,829 shares			(4,355,297	)			(4,041,058	)			(4,069,318	)
Total shareholders’ equity			3,331,177				3,408,986				3,280,947
Total liabilities and shareholders’ equity		$	10,137,052			$	10,082,293			$	9,960,985

Note: The June 28, 2008 balance sheet has been derived from the audited financial statements at that date.
See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands, Except for Share and Per Share Data)

		39-Week Period Ended								13-Week Period Ended
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Sales		$	27,766,582			$	27,791,906			$	8,739,350			$	9,146,557
Cost of sales			22,492,837				22,498,463				7,102,274				7,412,036
Gross margin			5,273,745				5,293,443				1,637,076				1,734,521
Operating expenses			3,941,806				3,972,154				1,231,753				1,316,877
Operating income			1,331,939				1,321,289				405,323				417,644
Interest expense			83,043				84,030				28,233				28,744
Other income, net			(11,550	)			(18,660	)			(3,514	)			(7,285	)
Earnings before income taxes			1,260,446				1,255,919				380,604				396,185
Income taxes			519,812				483,881				154,438				155,284
Net earnings		$	740,634			$	772,038			$	226,166			$	240,901
Net earnings:
Basic earnings per share		$	1.24			$	1.27			$	0.38			$	0.40
Diluted earnings per share			1.24				1.26				0.38				0.40
Average shares outstanding			596,653,289				607,380,306				590,152,592				603,170,150
Diluted shares outstanding			597,691,315				612,241,790				590,667,577				605,773,862
Dividends declared per common share		$	0.70			$	0.63			$	0.24			$	0.22

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In Thousands)

		39-Week Period Ended								13-Week Period Ended
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Net earnings		$	740,634			$	772,038			$	226,166			$	240,901
Other comprehensive income:
Foreign currency translation adjustment			(125,392	)			23,977				(6,691	)			(25,919	)
Items presented net of tax:
Amortization of cash flow hedge			321				320				107				107
Amortization of unrecognized prior service cost			1,690				2,835				729				946
Amortization of unrecognized actuarial losses (gains), net			8,117				1,502				2,706				500
Amortization of unrecognized transition obligation			69				69				23				23
Pension liability assumption			(16,450	)			—				—				—
Total other comprehensive (loss) income			(131,645	)			28,703				(3,126	)			(24,343	)
Comprehensive income		$	608,989			$	800,741			$	223,040			$	216,558

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)

		39-Week Period Ended
		March 28, 2009				March 29, 2008
Cash flows from operating activities:
Net earnings		$	740,634			$	772,038
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense			46,744				61,154
Depreciation and amortization			284,153				275,747
Deferred tax provision			495,732				450,569
Provision for losses on receivables			61,609				25,926
(Gain) on sale of assets			(741	)			(2,496	)
Additional investment in certain assets and liabilities, net of effect of businesses acquired:
Decrease (increase) in receivables			74,131				(138,425	)
Decrease (increase) in inventories			96,617				(112,867	)
(Increase) decrease in prepaid expenses and other current assets			(4,157	)			61,230
(Decrease) increase in accounts payable			(179,160	)			41,082
(Decrease) in accrued expenses			(125,637	)			(81,931	)
(Decrease) in accrued income taxes			(508,628	)			(362,878	)
Decrease in other assets			3,294				4,427
Increase in other long-term liabilities and prepaid pension cost, net			2,952				2,398
Excess tax benefits from share-based compensation arrangements			(2,818	)			(3,352	)
Net cash provided by operating activities			984,725				992,622
Cash flows from investing activities:
Additions to plant and equipment			(314,858	)			(392,706	)
Proceeds from sales of plant and equipment			3,224				11,428
Acquisition of businesses, net of cash acquired			(53,868	)			(50,464	)
(Increase) decrease in restricted cash			(1,127	)			2,794
Net cash used for investing activities			(366,629	)			(428,948	)
Cash flows from financing activities:
Bank and commercial paper borrowings (repayments), net			—				(486,122	)
Other debt borrowings			502,460				755,892
Other debt repayments			(7,778	)			(5,497	)
Debt issuance costs			(3,007	)			(4,192	)
Common stock reissued from treasury			98,452				102,438
Treasury stock purchases			(438,843	)			(529,179	)
Dividends paid			(406,689	)			(365,333	)
Excess tax benefits from share-based compensation arrangements			2,818				3,352
Net cash used for financing activities			(252,587	)			(528,641	)
Effect of exchange rates on cash			(17,944	)			1,014
Net increase in cash and cash equivalents			347,565				36,047
Cash and cash equivalents at beginning of period			551,552				207,872
Cash and cash equivalents at end of period		$	899,117			$	243,919
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest		$	100,469			$	88,514
Income taxes			510,147				386,570

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

     Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or “the company” as used in this Form 10-Q refer to Sysco Corporation together with its consolidated subsidiaries and divisions.

1. BASIS OF PRESENTATION

     The consolidated financial statements have been prepared by the company, without audit, with the exception of the June 28, 2008 consolidated balance sheet which was taken from the audited financial statements included in the company’s Fiscal 2008 Annual Report on Form 10-K. The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, necessary to present fairly the financial position, results of operations, comprehensive income and cash flows for all periods presented have been made.

     These financial statements should be read in conjunction with the audited financial statements and notes thereto included in the company’s Fiscal 2008 Annual Report on Form 10-K.

     A review of the financial information herein has been made by Ernst & Young LLP, independent auditors, in accordance with established professional standards and procedures for such a review. A report from Ernst & Young LLP concerning their review is included as Exhibit 15.1 to this Form 10-Q.

2. CHANGES IN ACCOUNTING

SFAS 161

     As of December 28, 2008, SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No. 133” (SFAS 161) became effective for Sysco. SFAS 161 requires enhanced disclosures about an entity’s derivative and hedging activities and thereby improves the transparency of financial reporting. The company has determined that no additional disclosures were necessary upon adoption but will continue to assess the need for additional disclosures in future periods.

SFAS 157 Adoption

     As of June 29, 2008, Sysco adopted the provisions of FASB Statement No. 157, “Fair Value Measurements” (SFAS 157), for financial assets and liabilities carried at fair value and non-financial assets and liabilities that are recognized or disclosed at fair value on a recurring basis. SFAS 157 establishes a common definition for fair value under generally accepted accounting principles, establishes a framework for measuring fair value and expands disclosure requirements about such fair value measurements. The adoption did not have a material impact on the company’s financial statements. Due to the issuance of FASB Staff Position 157-2, “Effective Date of FASB Statement No. 157,” SFAS 157 will be effective in fiscal 2010 for non-recurring, non-financial assets and liabilities that are recognized or disclosed at fair value. The company is continuing to evaluate the impact of adopting these provisions in fiscal 2010.

SFAS 158 Adoption

     As of June 30, 2007, Sysco early-adopted the measurement date provision of FASB Statement No. 158, “Employers’ Accounting for Defined Benefit and Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R)”. The measurement date provision requires employers to measure plan assets and benefit obligations as of the date of the employer’s fiscal year-end statement of financial position. As a result, beginning in fiscal 2008, the measurement date for Sysco’s company-sponsored defined benefit and other postretirement plans returned to correspond with fiscal year-end rather than the May 31st measurement date previously used. The company performed measurements as of May 31, 2007 and June 30, 2007 of plan assets and benefit obligations. Sysco recorded a charge to beginning retained earnings on July 1, 2007 of $3,572,000, net of tax, for the impact of the cumulative difference in company-sponsored pension expense between the two measurement dates. The company also recorded a benefit to beginning accumulated other comprehensive income (loss) on July 1, 2007 of $22,780,000, net of tax, for the impact of the difference in the recognition provision between the two measurement dates.

FIN 48 Adoption

     As of July 1, 2007, Sysco adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes — an Interpretation of FASB Statement No. 109” (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in accordance with FASB Statement No. 109 (SFAS 109). FIN 48 clarifies the application of SFAS 109 by defining criteria that an individual tax position must meet for any part of the benefit of that position to be recognized in the financial statements. Additionally, FIN 48 provides guidance on the measurement, derecognition, classification and disclosure of tax positions, along with accounting for the related interest and penalties. As a result of this adoption, Sysco recognized, as a cumulative effect of change in accounting principle, a $91,635,000 decrease in the company’s beginning retained earnings related to FIN 48.

3. NEW ACCOUNTING STANDARDS

FSP EITF 03-06-1

     In June 2008, the FASB issued FASB Staff Position No. EITF 03-06-1, “Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities” (FSP EITF 03-06-1). FSP EITF 03-06-1 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method described in FASB Statement No. 128, “Earnings per Share.” This standard will be effective for Sysco beginning in fiscal 2010 and interim periods within that year. All prior-period earnings per share data presented in filings subsequent to adoption must be adjusted retrospectively to conform with the provisions of this standard. Early application of FSP EITF 03-06-1 is not permitted. Sysco is currently evaluating the impact the adoption of FSP EITF 03-06-1 will have on its consolidated financial statements.

FSP FAS 132(R)-1

     In December 2008, the FASB issued FASB Staff Position No. FAS 132(R)-1, “Employers’ Disclosures about Postretirement Benefit Plan Assets” (FSP FAS 132(R)-1). FSP FAS 132(R)-1 amends SFAS No. 132(R), “Employers’ Disclosures about Pensions and Other Postretirement Benefits,” to require additional disclosures about assets held in an employer’s defined benefit pension or other postretirement plan. This standard will be effective for Sysco in fiscal 2010, although early application of the standard is permitted. Upon initial application, the information required by FSP FAS 132(R)-1 is not required for earlier periods that are presented for comparative purposes. The company plans to adopt this standard in fiscal 2010 and is currently evaluating the impact the adoption of FSP FAS 132(R)-1 will have on its financial statement disclosures.

FSP FAS 141(R)-1

     In April 2009, the FASB issued FASB Staff Position No. FAS 141(R)-1, “Accounting for Assets and Liabilities Assumed in a Business Combination That Arise From Contingencies” (FSP FAS 141(R)-1). FSP FAS 141(R)-1 amends and clarifies SFAS No. 141(R), “Business Combinations,” to address application issues raised by preparers, auditors, and members of the legal profession on initial recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. Sysco will apply this standard on a prospective basis for business combinations beginning in fiscal 2010.

FSP FAS 107-1 and APB 28-1

     In April 2009, the FASB issued FASB Staff Position No. FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments” (FSP FAS 107-1 and APB 28-1). FSP FAS 107-1 and APB 28-1 amends FASB Statement No. 107, “Disclosures about Fair Value of Financial Instruments,” and APB Opinion No. 28, “Interim Financial Reporting,” to require disclosures about the fair value of financial instruments for interim reporting periods of publicly traded companies. Prior disclosure requirements only applied to annual financial statements. This standard is effective for interim reporting periods ending after June 15, 2009, which is the first quarter of fiscal 2010 for Sysco. The company is currently evaluating the impact the adoption of FSP FAS 107-1 and APB 28-1 will have on its interim financial statement disclosures beginning in fiscal 2010.

4. FAIR VALUE MEASUREMENTS

     Cash equivalents primarily include time deposits, certificates of deposit, short-term investments and all highly liquid instruments with original maturities of three months or less. The fair values of cash equivalents reflected in the consolidated balance sheets were $713,267,000, $341,958,000 and $59,260,000 at March 28, 2009, June 28, 2008 and March 29, 2008, respectively. Pursuant to SFAS 157, the fair value of the company’s cash equivalents is determined based on “Level 1” inputs, which consist of quoted prices in active markets for identical assets. As of these dates, the company held no other assets or liabilities requiring fair value measurement or disclosure.

5. RESTRICTED CASH

     Sysco is required by its insurers to collateralize a part of the self-insured portion of its workers’ compensation and liability claims. Sysco has chosen to satisfy these collateral requirements by depositing funds in insurance trusts or by issuing letters of credit. All amounts in restricted cash at March 28, 2009, June 28, 2008 and March 29, 2008 represented funds deposited in insurance trusts.

6. DEBT

     As of March 28, 2009, Sysco had uncommitted bank lines of credit which provided for unsecured borrowings for working capital of up to $138,000,000, of which none was outstanding.

     As of March 28, 2009, there were no commercial paper issuances outstanding.

     During the 39-week period ended March 28, 2009 the aggregate of commercial paper issuances and short-term bank borrowings ranged from zero to approximately $164,998,000.

     In February 2009, Sysco deregistered the securities remaining unsold under its then existing shelf registration statement that was filed with the Securities and Exchange Commission (SEC) in February 2008 for the issuance of debt securities. In February 2009, Sysco filed with the SEC an automatically effective well-known seasoned issuer shelf registration statement for the issuance of an indeterminate amount of debt securities that may be issued from time to time.

     In March 2009, Sysco issued 5.375% senior notes totaling $250,000,000 due March 17, 2019 (the 2019 notes) and 6.625% senior notes totaling $250,000,000 due March 17, 2039 (the 2039 notes) under its February 2009 shelf registration. The 2019 and 2039 notes, which were priced at 99.321% and 98.061% of par, respectively, are unsecured, are not subject to any sinking fund requirement and include a redemption provision which allows Sysco to retire the notes at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the noteholders are not penalized by early redemption. Proceeds from the notes will be utilized over a period of time for general corporate purposes, which may include acquisitions, refinancing of debt, working capital, share repurchases and capital expenditures.

7. EMPLOYEE BENEFIT PLANS

     The components of net company-sponsored benefit cost for the 39-week periods presented are as follows:

		Pension Benefits								Other Postretirement Plans
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Service cost		$	60,643,000			$	67,927,000			$	367,000			$	363,000
Interest cost			85,161,000				75,913,000				468,000				427,000
Expected return on plan assets			(95,566,000	)			(101,509,000	)			—				—
Amortization of prior service cost			2,643,000				4,490,000				98,000				109,000
Recognized net actuarial loss (gain)			13,295,000				2,556,000				(118,000	)			(117,000	)
Amortization of transition obligation			—				—				114,000				114,000
Net periodic benefit cost		$	66,176,000			$	49,377,000			$	929,000			$	896,000

     The components of net company-sponsored benefit cost for the 13-week periods presented are as follows:

		Pension Benefits								Other Postretirement Plans
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Service cost		$	20,256,000			$	22,643,000			$	122,000			$	121,000
Interest cost			28,555,000				25,304,000				156,000				142,000
Expected return on plan assets			(31,855,000	)			(33,837,000	)			—				—
Amortization of prior service cost			1,149,000				1,498,000				33,000				37,000
Recognized net actuarial loss (gain)			4,432,000				851,000				(39,000	)			(39,000	)
Amortization of transition obligation			—				—				38,000				38,000
Net periodic benefit cost		$	22,537,000			$	16,459,000			$	310,000			$	299,000

     Sysco’s contributions to its company-sponsored defined benefit plans were $91,889,000 and $69,237,000 during the 39-week periods ended March 28, 2009 and March 29, 2008, respectively.

     Although contributions to its qualified pension plan (Retirement Plan) are not required to meet ERISA minimum funding requirements, the company made a voluntary contribution of $80,000,000 during the first quarter fiscal 2009 and does not currently expect to make any further contributions this fiscal year. The company’s contributions to the Supplemental Executive Retirement Plan (SERP) and other post-retirement plans are made in the amounts needed to fund current year benefit payments. The estimated fiscal 2009 contributions to fund benefit payments for the SERP and other post-retirement plans are $17,082,000 and $319,000, respectively.

     During the first quarter of fiscal 2009, the company merged active participants from an under-funded multi-employer pension plan into its Retirement Plan and assumed $26,704,000 of liabilities as part of its withdrawal agreement from this plan. These liabilities are due to the assumption of prior service costs related to the active participants and their accrued benefits which were previously included in this multi-employer plan. This resulted in a charge of $16,450,000 to other comprehensive loss, net of tax, in the first 39 weeks of fiscal 2009. See further discussion of this withdrawal under Multi-Employer Pension Plans in Note 13, Commitments and Contingencies.

8. EARNINGS PER SHARE

     The following table sets forth the computation of basic and diluted earnings per share:

		39-Week Period Ended								13-Week Period Ended
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Numerator:
Net earnings		$	740,634,000			$	772,038,000			$	226,166,000			$	240,901,000
Denominator:
Weighted-average basic shares outstanding			596,653,289				607,380,306				590,152,592				603,170,150
Dilutive effect of employee and director stock options			1,038,026				4,861,484				514,985				2,603,712
Weighted-average diluted shares outstanding			597,691,315				612,241,790				590,667,577				605,773,862
Basic earnings per share:		$	1.24			$	1.27			$	0.38			$	0.40
Diluted earnings per share:		$	1.24			$	1.26			$	0.38			$	0.40

     The number of options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately 62,600,000 and 32,700,000 for the first 39 weeks of fiscal 2009 and 2008, respectively. The number of options that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately 66,600,000 and 46,500,000 for the third quarter of fiscal 2009 and 2008, respectively.

9. COMPREHENSIVE INCOME

     Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity. Comprehensive income was $608,989,000 and $800,741,000 for the first 39 weeks of fiscal 2009 and fiscal 2008, respectively. Comprehensive income was $223,040,000 and $216,558,000 for the third quarter of fiscal 2009 and fiscal 2008, 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:

		39-Week Period Ended March 28, 2009
		Before-Tax								After-Tax
		Amount				Income Tax				Amount
Foreign currency translation adjustment		$	(125,392,000	)		$	—			$	(125,392,000	)
Amortization of cash flow hedge			521,000				200,000				321,000
Amortization of unrecognized prior service cost			2,741,000				1,051,000				1,690,000
Amortization of unrecognized actuarial losses			13,177,000				5,060,000				8,117,000
Amortization of unrecognized transition obligation			114,000				45,000				69,000
Pension liability assumption			(26,704,000	)			(10,254,000	)			(16,450,000	)
Other comprehensive loss		$	(135,543,000	)		$	(3,898,000	)		$	(131,645,000	)

		39-Week Period Ended March 29, 2008
		Before-Tax								After-Tax
		Amount				Income Tax				Amount
Foreign currency translation adjustment		$	23,977,000			$	—			$	23,977,000
Amortization of cash flow hedge			519,000				199,000				320,000
Amortization of unrecognized prior service cost			4,599,000				1,764,000				2,835,000
Amortization of unrecognized actuarial losses			2,439,000				937,000				1,502,000
Amortization of unrecognized transition obligation			114,000				45,000				69,000
Other comprehensive income		$	31,648,000			$	2,945,000			$	28,703,000

		13-Week Period Ended March 28, 2009
		Before-Tax								After-Tax
		Amount				Income Tax				Amount
Foreign currency translation adjustment		$	(6,691,000	)		$	—			$	(6,691,000	)
Amortization of cash flow hedge			174,000				67,000				107,000
Amortization of unrecognized prior service cost			1,182,000				453,000				729,000
Amortization of unrecognized actuarial losses			4,393,000				1,687,000				2,706,000
Amortization of unrecognized transition obligation			38,000				15,000				23,000
Other comprehensive loss		$	(904,000	)		$	2,222,000			$	(3,126,000	)

		13-Week Period Ended March 29, 2008
		Before-Tax								After-Tax
		Amount				Income Tax				Amount
Foreign currency translation adjustment		$	(25,919,000	)		$	—			$	(25,919,000	)
Amortization of cash flow hedge			173,000				66,000				107,000
Amortization of unrecognized prior service cost			1,535,000				589,000				946,000
Amortization of unrecognized actuarial losses			812,000				312,000				500,000
Amortization of unrecognized transition obligation			38,000				15,000				23,000
Other comprehensive loss		$	(23,361,000	)		$	982,000			$	(24,343,000	)

10. SHARE-BASED COMPENSATION

     Sysco provides compensation benefits to employees and non-employee directors under several share-based payment arrangements including various employee stock incentive plans, the Employees’ Stock Purchase Plan, and various non-employee director plans. Sysco also previously provided share-based compensation under its Management Incentive Plans.

Stock Incentive Plans

     In the first 39 weeks of fiscal 2009 and fiscal 2008, options to purchase 8,089,750 and 6,415,800 shares, respectively, were granted to employees from the 2007 Stock Incentive Plan.

     The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value per share of options granted during the first 39 weeks of fiscal 2009 and fiscal 2008 was $5.88 and $6.50, respectively.

     In the first 39 weeks of fiscal 2009, 75,822 shares of restricted stock were granted to an employee from the 2007 Stock Incentive Plan. There were no restricted stock grants from the 2007 Stock Incentive Plan in the first 39 weeks of fiscal 2008.

     In the first 39 weeks of fiscal 2009 and fiscal 2008, 65,631 and 52,430 shares, respectively, of restricted stock were granted to non-employee directors from the 2005 Non-Employee Directors Stock Plan.

Employees’ Stock Purchase Plan

     Shares of Sysco common stock purchased by plan participants under the Sysco Employees’ Stock Purchase Plan during the first 39 weeks of fiscal 2009 and 2008 were 1,486,396 and 1,287,844 respectively.

     The weighted average fair value per share of employee stock purchase rights issued pursuant to the Employees’ Stock Purchase Plan was $4.01 and $4.98 during the first 39 weeks of fiscal 2009 and 2008, respectively. The fair value of the stock purchase rights was calculated as the difference between the stock price and the employee purchase price.

Management Incentive Compensation

     A total of 672,087 shares and 588,143 shares at a fair value per share of $28.22 and $32.99, respectively, were issued pursuant to the Management Incentive Plan in the first quarter of fiscal 2009 and fiscal 2008, respectively, for bonuses earned in the preceding fiscal years.

All Share-Based Payment Arrangements

     The total share-based compensation cost that has been recognized in results of operations was $46,744,000 and $61,154,000 for the first 39 weeks of fiscal 2009 and fiscal 2008, respectively.

     The total share-based compensation cost that has been recognized in results of operations was $11,615,000 and $18,036,000 for the third quarter of fiscal 2009 and fiscal 2008, respectively.

     As of March 28, 2009, there was $72,512,000 of total unrecognized compensation cost related to share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 3.08 years.

11. INCOME TAXES

     The effective tax rate for the first 39 weeks of fiscal 2009 was 41.2%, an increase from the effective tax rate of 38.5% for the first 39 weeks of fiscal 2008. The effective tax rate for the first 39 weeks of fiscal 2009 was negatively impacted by two items. First, the carrying values of the company’s corporate-owned life insurance policies are adjusted to their cash surrender values. The loss of $63,284,000 recorded to adjust the carrying value of corporate-owned life insurance to their cash surrender values in the first 39 weeks of fiscal 2009 is non-deductible for income tax purposes and had the impact of increasing the effective tax rate for the period. Second, the company recorded a tax adjustment to accrue for a previously unidentified tax contingency arising from a recent tax audit and an additional provision for state tax contingencies. The effective tax rate for the first 39 weeks of fiscal 2009 was positively impacted by a decrease in a tax provision for a foreign tax liability resulting from changes in exchange rates.

     The effective tax rate for the first 39 weeks of fiscal 2008 was positively impacted by the recognition of a tax benefit of approximately $7,700,000 resulting from a net operating tax loss deferred tax asset which arose due to an enacted state tax law and $7,300,000 related to the reversal of valuation allowances previously recorded on certain Canadian net operating loss deferred tax assets. The effective tax rate for the first 39 weeks of fiscal 2008 was negatively impacted by the loss of $9,293,000 recorded to adjust the carrying value of corporate-owned life insurance policies to their cash surrender values in the first 39 weeks of fiscal 2008.

     The effective rate for the third quarter of fiscal 2009 was 40.6%, an increase from the effective tax rate of 39.2% for the third quarter of fiscal 2008. The effective tax rate for the third quarter of fiscal 2009 was negatively impacted by the recording of an additional provision for state tax contingencies and the loss of $8,680,000 recorded to adjust the carrying value of corporate-owned life insurance to their cash surrender values in the third quarter of fiscal 2009.

     The effective rate for the third quarter of fiscal 2008 was negatively impacted by the loss of $14,316,000 recorded to adjust the carrying value of corporate-owned life insurance policies to their cash surrender values in the third quarter of fiscal 2008. The effective rate for the third quarter of fiscal 2008 was favorably impacted by $7,300,000 related to the reversal of valuation allowances previously recorded on certain Canadian net operating loss deferred tax assets.

     As of March 28, 2009, the gross amount of unrecognized tax benefits was $103,298,000 and the gross amount of accrued interest liabilities was $146,683,000. 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 prevails on positions that were being challenged upon 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 states and the allocation of income and expense between tax jurisdictions. At this time, an estimate of the range of the reasonably possible change cannot be made.

     Reflected in the changes in the net deferred tax liability and accrued income tax balances from June 28, 2008 to March 28, 2009 is the reclassification of deferred tax liabilities to accrued income taxes related to supply chain distributions. This reclassification reflects the tax payments to be made during the next twelve months related to previously deferred supply chain distributions.

     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 reflects a combination of income earned and taxed in the various U.S. federal and state, as well as Canadian federal and provincial, 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.

12. ACQUISITIONS

     During the first 39 weeks of fiscal 2009, in the aggregate, the company paid cash of $53,868,000 for acquisitions made during fiscal 2009 and for contingent consideration related to operations acquired in previous fiscal years. The fiscal 2009 acquisitions were immaterial to the consolidated financial statements.

     Certain acquisitions involve contingent consideration typically payable only in the event that certain operating results are attained or certain outstanding contingencies are resolved. Aggregate contingent consideration amounts outstanding as of March 28, 2009 included $28,947,000 in cash which, if distributed, could result in the recording of additional goodwill.

     In the early part of the fourth quarter, Sysco announced the acquisition of Pallas Foods Limited (Pallas), a leading foodservice distributor in Ireland. This acquisition will not be material to Sysco’s consolidated financial statements. Pallas operates its broadline distribution business from its base in Newcastle West supplemented by eight operating depots throughout Ireland.

13. COMMITMENTS AND CONTINGENCIES

     Sysco is engaged in various legal proceedings which have arisen but have not been fully adjudicated. These proceedings, in the opinion of management, will not have a material adverse effect upon the consolidated financial position or results of operations of the company when ultimately concluded.

Product Liability Claim

     In October 2007, an arbitration judgment against the company was issued related to a product liability claim from one of Sysco’s former customers, which formalized a preliminary award by the arbitrator in July 2007. As of September 29, 2007, the company had recorded $50,296,000 on its consolidated balance sheet within accrued expenses related to the accrual of this loss and a corresponding receivable of $48,296,000 within prepaid expenses and other current assets, which represented the estimate of the loss less the $2,000,000 deductible on Sysco’s insurance policy, as the company anticipated recovery from various parties. In December 2007, the company paid its deductible on its insurance policy and made arrangements with its insurance carrier and other parties who paid the remaining amount of the judgment in excess of the company’s deductible. The company no longer has any remaining contingent liabilities related to this claim.

Multi-Employer Pension Plans

     Sysco contributes to several multi-employer defined benefit pension plans based on obligations arising under collective bargaining agreements covering union-represented employees. Sysco does not directly manage these multi-employer plans, which are generally managed by boards of trustees, half of whom are appointed by the unions and the other half by other employers contributing to the plan. Based upon the information available from plan administrators, management believes that several of these multi-employer plans are underfunded. In addition, the Pension Protection Act, enacted in August 2006, requires underfunded pension plans to improve their funding ratios within prescribed intervals based on the level of their underfunding. As a result, Sysco expects its contributions to these plans to increase in the future.

     Under current law regarding multi-employer defined benefit plans, a plan’s termination, Sysco’s voluntary withdrawal, or the mass withdrawal of all contributing employers from any underfunded multi-employer defined benefit plan would require Sysco to make payments to the plan for Sysco’s proportionate share of the multi-employer plan’s unfunded vested liabilities. Based on the most recent information available from plan administrators, Sysco’s share of withdrawal liability on most of the multi-employer plans it participates in, some of which appear to be under-funded, was estimated to be $80,000,000 as of March 28, 2009 based on a voluntary withdrawal. The current estimate of the withdrawal liability is lower than the $140,000,000 disclosed as of June 28, 2008, primarily due to the company’s withdrawal during the first 39 weeks of fiscal 2009 from two multi-employer pension plans as discussed below. Because the company is not provided the information by the plan administrators on a timely basis and the company expects that many multi-employer pension plans’ assets have declined due to recent stock market performance, Sysco believes its share of the withdrawal liability could be greater than the $80,000,000 estimate as of March 28, 2009. In addition, if a multi-employer defined benefit plan fails to satisfy certain minimum funding requirements, the IRS may impose a nondeductible excise tax of 5% on the amount of the accumulated funding deficiency for those employers contributing to the fund. As of March 28, 2009, Sysco had approximately $17,000,000 in liabilities recorded in total related to certain multi-employer defined benefit plans for which Sysco’s voluntary withdrawal has already occurred.

     During the second quarter of fiscal 2009, the union members of one of the company’s subsidiaries voted to withdraw from the union’s multi-employer pension plan and join Sysco’s company-sponsored Retirement Plan. This action triggered a partial withdrawal from the multi-employer pension plan. As a result, during the second quarter of fiscal 2009, Sysco recorded a withdrawal liability of approximately $9,600,000 related to this plan.

     During fiscal 2008, the company obtained information that a multi-employer pension plan it participated in failed to satisfy minimum funding requirements for certain periods and concluded that it was probable that additional funding would be required as well as the payment of excise tax. As a result, during fiscal 2008, Sysco recorded a liability of approximately $16,500,000 related to its share of the minimum funding requirements and related excise tax for these periods. During the first quarter of fiscal 2009, Sysco effectively withdrew from this multi-employer pension plan in an effort to secure benefits for Sysco’s employees that were participants in the plan and to manage the company’s exposure to this under-funded plan. Sysco agreed to pay $15,000,000 to the plan, which included the minimum funding requirements. In connection with this withdrawal agreement, Sysco merged participants from this plan into its company-sponsored Retirement Plan and assumed $26,704,000 in liabilities. The payment to the plan was made in the second quarter of fiscal 2009. If this plan were to undergo a mass withdrawal, as defined by the Pension Benefit Guaranty Corporation, prior to September 2010, the company could have additional liability. The company does not currently believe a mass withdrawal from this plan prior to September 2010 is probable.

     During the fourth quarter of fiscal 2008, the union members of one of the company’s subsidiaries voted to decertify from their union. This action triggered a partial withdrawal from the multi-employer pension plan that covered these union members. As a result, Sysco recorded a withdrawal liability of approximately $5,800,000 related to this plan.

BSCC Cooperative Structure

     Sysco’s affiliate, Baugh Supply Chain Cooperative (BSCC), is a cooperative taxed under subchapter T of the United States Internal Revenue Code. Sysco believes that the deferred tax liabilities resulting from the business operations and legal ownership of BSCC are appropriate under the tax laws. However, if the application of the tax laws to the cooperative structure of BSCC were to be successfully challenged by any federal, state or local tax authority, Sysco could be required to accelerate the payment of all or a portion of its income tax liabilities associated with BSCC that it otherwise has deferred until future periods. In that event, Sysco would be liable for interest on such amounts. As of March 28, 2009, Sysco has recorded deferred income tax liabilities of $953,578,000, net of federal benefit, related to the BSCC supply chain distributions. If the IRS and any other relevant taxing authorities determine that all amounts since the inception of BSCC were inappropriately deferred, and the determination is upheld, Sysco estimates that in addition to making a current payment for amounts previously deferred, as discussed above, the company may be required to pay interest on the cumulative deferred balances. These interest amounts could range from $350,000,000 to $390,000,000, prior to federal and state income tax benefit, as of March 28, 2009. Sysco calculated this amount based upon the amounts deferred since the inception of BSCC applying the applicable jurisdictions’ interest rates in effect in each period. The IRS, in connection with its audit of the company’s 2003 and 2004 federal income tax returns, proposed adjustments related to the taxability of the cooperative structure. The company is vigorously protesting these adjustments. The company has reviewed the merits of the issues raised by the IRS and, while management believes it is probable the company will prevail, the company concluded the measurement model of FIN 48 (adopted in fiscal 2008) required an accrual for a portion of the interest exposure.

Fuel Commitments

     From time to time, Sysco may enter into forward purchase commitments for a portion of its projected diesel fuel requirements. As of March 28, 2009, outstanding forward diesel fuel purchase commitments totaled approximately $101,000,000 at a fixed price through the end of December 2009. In April 2009, Sysco entered additional forward purchase commitments totaling approximately $13,000,000 at a fixed price through March 2010.

14. BUSINESS SEGMENT INFORMATION

     The company has aggregated its operating companies into a number of segments, of which only Broadline and SYGMA are reportable segments as defined in SFAS No. 131, “Disclosures about Segments of an Enterprise and Related Information.” Broadline operating companies distribute a full line of food products and a wide variety of non-food products to both traditional and chain restaurant customers. SYGMA operating companies distribute a full line of food products and a wide variety of non-food products to certain chain restaurant customer locations. “Other” financial information is attributable to the company’s other operating segments, including the company’s specialty produce, custom-cut meat and lodging industry segments and a company that distributes to international customers.

     The accounting policies for the segments are the same as those disclosed by Sysco. Intersegment sales represent specialty produce and meat company products distributed by the Broadline and SYGMA operating companies. The segment results include certain centrally incurred costs for shared services that are charged to our segments. These centrally incurred costs are charged based upon the relative level of service used by each operating company consistent with how Sysco’s management views the performance of its operating segments. Prior to fiscal 2008, Sysco’s management evaluated performance of each of its operating segments based on its respective earnings before income taxes. This measure included an allocation of certain corporate expenses to each operating segment in addition to the centrally incurred costs for shared services that were charged to its segments. During fiscal 2008, Sysco’s management increased its focus on the results of each of its operating segments based on its respective operating income performance, which excludes the allocation of additional corporate expenses. Beginning in the fourth quarter of 2008, the measure of profit/loss presented in segment reporting was changed to operating income to align with management’s focus. As a result, the segment reporting for fiscal 2008 in this document has been revised to conform to the current presentation.

     Included in corporate expenses and consolidated adjustments, among other items, are:

	•		Gains and losses recognized to adjust corporate-owned life insurance policies to their cash surrender values;
	•		Share-based compensation expense related to employee stock option and restricted stock grants, issuances of stock pursuant to the Employees’ Stock Purchase Plan and restricted stock grants to non-employee directors; and
	•		Corporate-level depreciation and amortization expense.

     The following table sets forth certain financial information for Sysco’s business segments:

		39-Week Period Ended								13-Week Period Ended
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Sales (in thousands):
Broadline		$	21,976,065			$	22,084,857			$	6,898,126			$	7,236,940
SYGMA			3,655,045				3,371,693				1,194,236				1,138,660
Other			2,478,273				2,682,015				751,476				882,075
Intersegment sales			(342,801	)			(346,659	)			(104,488	)			(111,118	)
Total		$	27,766,582			$	27,791,906			$	8,739,350			$	9,146,557

		39-Week Period Ended								13-Week Period Ended
		March 28, 2009				March 29, 2008				March 28, 2009				March 29, 2008
Operating income (in thousands):
Broadline		$	1,416,181			$	1,361,472			$	421,057			$	435,044
SYGMA			23,795				9,202				9,453				4,462
Other			86,936				98,572				26,481				32,817
Total segments			1,526,912				1,469,246				456,991				472,323
Corporate expenses and consolidated adjustments			(194,973	)			(147,957	)			(51,668	)			(54,679	)
Total operating income			1,331,939				1,321,289				405,323				417,644
Interest expense			83,043				84,030				28,233				28,744
Other income, net			(11,550	)			(18,660	)			(3,514	)			(7,285	)
Earnings before income taxes		$	1,260,446			$	1,255,919			$	380,604			$	396,185

		March 28, 2009				June 28, 2008				March 29, 2008
Assets (in thousands):
Broadline		$	5,738,289			$	5,880,738			$	5,910,697
SYGMA			384,014				414,044				400,399
Other			943,200				1,005,740				998,803
Total segments			7,065,503				7,300,522				7,309,899
Corporate			3,071,549				2,781,771				2,651,086
Total		$	10,137,052			$	10,082,293			$	9,960,985

15. SUPPLEMENTAL GUARANTOR INFORMATION

     Sysco International, Co. is an unlimited liability company organized under the laws of the Province of Nova Scotia, Canada and is a wholly-owned subsidiary of Sysco. In May 2002, Sysco International, Co. issued, in a private offering, $200,000,000 of 6.10% notes due in 2012. These notes are fully and unconditionally guaranteed by Sysco.

     The following condensed consolidating financial statements present separately the financial position, results of operations and cash flows of the parent guarantor (Sysco), the subsidiary issuer (Sysco International) and all other non-guarantor subsidiaries of Sysco (Other Non-Guarantor Subsidiaries) on a combined basis with eliminating entries.

		Condensed Consolidating Balance Sheet
		March 28, 2009
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Current assets		$	783,041			$	—			$	4,443,227			$	—			$	5,226,268
Investment in subsidiaries			12,845,626				374,307				183,853				(13,403,786	)			—
Plant and equipment, net			246,452				—				2,645,441				—				2,891,893
Other assets			591,333				839				1,426,719				—				2,018,891
Total assets		$	14,466,452			$	375,146			$	8,699,240			$	(13,403,786	)		$	10,137,052
Current liabilities		$	347,035			$	4,123			$	2,764,934			$	—			$	3,116,092
Intercompany payables (receivables)			8,119,268				37,514				(8,156,782	)			—				—
Long-term debt			2,220,064				199,800				43,379				—				2,463,243
Other liabilities			487,532				—				739,008				—				1,226,540
Shareholders’ equity			3,292,553				133,709				13,308,701				(13,403,786	)			3,331,177
Total liabilities and shareholders’ equity		$	14,466,452			$	375,146			$	8,699,240			$	(13,403,786	)		$	10,137,052

		Condensed Consolidating Balance Sheet
		June 28, 2008
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Current assets		$	526,109			$	—			$	4,648,924			$	—			$	5,175,033
Investment in subsidiaries			14,202,506				398,065				118,041				(14,718,612	)			—
Plant and equipment, net			202,778				—				2,687,012				—				2,889,790
Other assets			593,699				1,262				1,422,509				—				2,017,470
Total assets		$	15,525,092			$	399,327			$	8,876,486			$	(14,718,612	)		$	10,082,293
Current liabilities		$	412,042			$	986			$	3,086,315			$	—			$	3,499,343
Intercompany payables (receivables)			9,670,465				100,027				(9,770,492	)			—				—
Long-term debt			1,729,401				199,752				46,282				—				1,975,435
Other liabilities			468,213				—				730,316				—				1,198,529
Shareholders’ equity			3,244,971				98,562				14,784,065				(14,718,612	)			3,408,986
Total liabilities and shareholders’ equity		$	15,525,092			$	399,327			$	8,876,486			$	(14,718,612	)		$	10,082,293

		Condensed Consolidating Balance Sheet
		March 29, 2008
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Current assets		$	219,823			$	—			$	4,660,675			$	—			$	4,880,498
Investment in subsidiaries			13,756,751				381,547				114,990				(14,253,288	)		$	—
Plant and equipment, net			223,576				—				2,633,654				—			$	2,857,230
Other assets			700,782				1,328				1,521,147				—			$	2,223,257
Total assets		$	14,900,932			$	382,875			$	8,930,466			$	(14,253,288	)		$	9,960,985
Current liabilities		$	293,155			$	3,997			$	3,133,045			$	—			$	3,430,197
Intercompany payables (receivables)			9,144,719				83,461				(9,228,180	)			—			$	—
Long-term debt			1,779,350				214,426				46,770				—			$	2,040,546
Other liabilities			560,238				—				649,057				—			$	1,209,295
Shareholders’ equity			3,123,470				80,991				14,329,774				(14,253,288	)		$	3,280,947
Total liabilities and shareholders’ equity		$	14,900,932			$	382,875			$	8,930,466			$	(14,253,288	)		$	9,960,985

		Condensed Consolidating Results of Operations
		For the 39-Week Period Ended March 28, 2009
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Sales		$	—			$	—			$	27,766,582			$	—			$	27,766,582
Cost of sales			—				—				22,492,837				—				22,492,837
Gross margin			—				—				5,273,745				—				5,273,745
Operating expenses			194,992				81				3,746,733				—				3,941,806
Operating income			(194,992	)			(81	)			1,527,012				—				1,331,939
Interest expense (income)			359,549				8,897				(285,403	)			—				83,043
Other income, net			(2,416	)			—				(9,134	)			—				(11,550	)
Earnings (losses) before income taxes			(552,125	)			(8,978	)			1,821,549				—				1,260,446
Income tax (benefit) provision			(227,740	)			(3,799	)			751,351				—				519,812
Equity in earnings of subsidiaries			1,065,019				34,226				—				(1,099,245	)			—
Net earnings		$	740,634			$	29,047			$	1,070,198			$	(1,099,245	)		$	740,634

		Condensed Consolidating Results of Operations
		For the 39-Week Period Ended March 29, 2008
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Sales		$	—			$	—			$	27,791,906			$	—			$	27,791,906
Cost of sales			—				—				22,498,463				—				22,498,463
Gross margin			—				—				5,293,443				—				5,293,443
Operating expenses			157,668				108				3,814,378				—				3,972,154
Operating income			(157,668	)			(108	)			1,479,065				—				1,321,289
Interest expense (income)			341,523				8,871				(266,364	)			—				84,030
Other income, net			(6,372	)			—				(12,288	)			—				(18,660	)
Earnings (losses) before income taxes			(492,819	)			(8,979	)			1,757,717				—				1,255,919
Income tax (benefit) provision			(189,874	)			(3,459	)			677,214				—				483,881
Equity in earnings of subsidiaries			1,074,983				20,621				—				(1,095,604	)			—
Net earnings		$	772,038			$	15,101			$	1,080,503			$	(1,095,604	)		$	772,038

		Condensed Consolidating Results of Operations
		For the 13-Week Period Ended March 28, 2009
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Sales		$	—			$	—			$	8,739,350			$	—			$	8,739,350
Cost of sales			—				—				7,102,274				—				7,102,274
Gross margin			—				—				1,637,076				—				1,637,076
Operating expenses			54,387				22				1,177,344				—				1,231,753
Operating income			(54,387	)			(22	)			459,732				—				405,323
Interest expense (income)			109,425				3,083				(84,275	)			—				28,233
Other income, net			(324	)			—				(3,190	)			—				(3,514	)
Earnings (losses) before income taxes			(163,488	)			(3,105	)			547,197				—				380,604
Income tax (benefit) provision			(66,350	)			(1,360	)			222,148				—				154,438
Equity in earnings of subsidiaries			323,304				6,813				—				(330,117	)			—
Net earnings		$	226,166			$	5,068			$	325,049			$	(330,117	)		$	226,166

		Condensed Consolidating Results of Operations
		For the 13-Week Period Ended March 29, 2008
										Other
						Sysco				Non-Guarantor								Consolidated
		Sysco				International				Subsidiaries				Eliminations				Totals
		(In thousands)
Sales		$	—			$	—			$	9,146,557			$	—			$	9,146,557
Cost of sales			—				—				7,412,036				—				7,412,036
Gross margin			—				—				1,734,521				—				1,734,521
Operating expenses			59,709				34				1,257,134				—				1,316,877
Operating income			(59,709	)			(34	)			477,387				—				417,644
Interest expense (income)			117,441				2,913				(91,610	)			—				28,744
Other income, net			(939	)			—				(6,346	)			—				(7,285	)
Earnings (losses) before income taxes			(176,211	)			(2,947	)			575,343				—				396,185
Income tax (benefit) provision			(68,864	)			(1,154	)			225,302				—				155,284
Equity in earnings of subsidiaries			348,248				5,756				—				(354,004	)			—
Net earnings		$	240,901			$	3,963			$	350,041			$	(354,004	)		$	240,901