S Y S C O ®
S Y S C O
S
Y
S
C
O
C
O
R
P
O
R
A
T
I
O
N
2
0
0
0
A
N
N
U
A
L
R
E
P
O
R
T
S Y S C O Corporation
1390 Enclave Parkway
Houston, Texas
77077-2099
(281) 584-1390
www.sysco.com
B R A N D W I D T H A N D S E R V I C E D E P T H
B R A N D W I D T H A N D S E R V I C E D E P T H
SYSCO - AR - 00
2 0 0 0 A N N U A L R E P O R T
F
iscal 2000 marked SYSCO Corporation’s 30th anniversary as a public
company -- 30 years of shaping our future with employees, customers, suppliers and
shareholders to create growth, prosperity and value. During this relatively short time
period, SYSCO has grown from a fledgling company with $115 million in sales to its
current leading position in the industry with $19.3 billion in sales. Through a network of
distribution centers across North America, SYSCO supplies
food and related products to about 356,000 customers in the
contiguous United States, Alaska, the District of Columbia,
Hawaii and portions of Canada.
The foundation of SYSCO’s success is based upon common
principles that often are overlooked in business today -- superior
customer service, extensive product knowledge, consistent quality
product offerings and business-building support services.
A distinctive mix of ever-evolving branded products, coupled
with a unique blend of dedicated employees, has thrust SYSCO
into a new dimension, from a broadline distributor to a broad
brand provider, supported by a depth of service unparalleled in
the foodservice distribution industry. Brand width and service
depth have made SYSCO the distributor of choice for the
meals-prepared-away-from-home market, and will fuel its
growth in the future. SYSCO’s broad line of fresh and frozen
meats, seafood, poultry, fruits and vegetables, canned and dry
foods, equipment and supplies, beverages, bakery items, dairy products, disposables,
medical and surgical products, chemical and sanitation items are now joined by a wide
array of segment brand products as well as custom-cut steaks and specialty produce items.
SYSCO’s product menu is ever-evolving; the commitment to customers is unchanging –
a steadfast dedication to unsurpassed customer service.
*as of July 1, 2000
Web address....................................................www.sysco.com
Exchange and Ticker Symbol .............................NYSE: SYY
Employees ....................................................................40,400*
Customers..................................................................356,000*
Products.....................................................................275,000*
Delivery Vehicles............................................................7,290*
Marketing Associates .....................................................6,981*
Quarterly Cash Dividend per Share.............................$0.12
101 Distribution Locations
63 Broadline Facilities
22 Specialty Produce Locations
13 SYGMA Facilities
3 Custom-Cutting Meat Operations
Calendar 1999 Foodservice
Distribution Industry Market......................Approximately
$175 Billion
TABLE OF CONTENTS
Letter to Shareholders
2
5
Review of Operations
20 Community Activities
21 Financial Section
49 Glossary
50 Directors
52 Directors’ Council
53 Corporate Officers
Employees pictured on cover, left to right:
Bobby Delgado, Driver; Sandra Carson,
Director of Safety and Health Services; Sonia
Avalon, Credit Administrator; James Blake,
Marketing Associate; Mike Howdeshell,
Manager, Beverage (kneeling); Rohani
Clawson, Merchandiser; Dana Barba,
Customer Service Supervisor; and Joe Clark,
44 Location of Principal Operations
56 General Information
Network Administrator.
FINANCIAL HIGHLIGHTS
July 1, 2000
$19,303,268
737,608
Year Ended
July 3, 1999
(53 Weeks)
$ 17,422,815
593,887
Percent Change
June 27, 1998
$ 15,327,536
532,493
2000-99
11%
24
1999-98
14%
12
453,629
445,588
362,271
362,271
324,821
296,768
1.36
1.08
0.95
1.33
0.44
5.31
266,413
$
1.08
0.38
4.33
286,687
$
0.86
0.33
4.05
259,353
$
25
23
26
23
16
23
(7)
(In thousands, except for share
data, employees and shareholders)
Sales
Earnings before income taxes
Net earnings before
accounting change
Net earnings(1)
Diluted earnings per share before
accounting change
Diluted earnings per share after
accounting change(1)
Cash dividends per share
Shareholders’ equity per share
Capital expenditures
Return on average shareholders’
equity before accounting change
29%
26%
23%
Diluted average shares outstanding
334,777,928
336,796,669
343,440,181
(1)
Number of employees
Number of shareholders of record
40,400
15,207
35,100
15,485
33,400
16,142
15
(2)
(1) Fiscal 2000 and 1998 net earnings reflect one-time accounting charges of $8,041,000 and $28,053,000, respectively.
All share information has been adjusted for the 2-for-1 stock split of March 20, 1998.
SYSCO HISTORICAL WEEKLY STOCK PRICE SUMMARY
Fiscal Years 1998-2000*
30.75
25.50
18.50
FISCAL 1998
FISCAL 1999
FISCAL 2000
*Adjusted for the 2-for-1 stock split of March 20, 1998.
12
22
14
26
15
7
11
(2)
5
(4)
42.13
40
30
20
10
TO OUR SHAREHOLDERS
Left to right:
RICHARD J. SCHNIEDERS
President and
Chief Operating Officer
CHARLES H. COTROS
Chairman and
Chief Executive Officer
2
SYSCO’s multi-dimensional objectives include strategic vision and
prudent fiscal planning supported by brand width and service depth. In
our 30th year as a public company, this combination produced record
sales of $19.3 billion for the 52-week period ended July 1, 2000
compared to $17.4 billion generated in fiscal 1999 (53 weeks), an 11
percent increase.
Fueled by a thriving U.S. economy and mild winter weather conditions,
the foodservice industry during our most recent fiscal year enjoyed real
growth at the higher end of its historical two to four percent rate, as
reported by industry sources. SYSCO was favorably impacted not only by
these external factors, but also by numerous internal initiatives.
Historically, SYSCO’s real growth has expanded two to three times faster
than the real growth rate of the industry. FY 2000 was no exception, as
real growth for the year reached 9.2 percent after
adjusting for the extra week in fiscal 1999, acquisitions
of 3.5 percent and food cost inflation of 0.4 percent.
Diluted earnings per share before a first quarter
accounting change that required start-up costs to be
expensed as incurred, rose significantly to $1.36, a 26
percent increase above the $1.08 per share earned in last
year’s 53-week period. Net earnings before the accounting
change were $453.6 million, 25 percent above the
$362.3 million achieved in the 53 weeks of fiscal 1999.
Key internal drivers that enhanced results were a
sharpened focus on increasing sales to marketing
associate-served customers – our core business – and
continuing growth in SYSCO Brand sales. Marketing associate-served
sales grew to 55.4 percent of traditional foodservice sales versus 54.1
percent last year, while the SYSCO Brand gained increasing recognition
and acceptance, rising to 50.4 percent of marketing-associate served
sales, compared to 48.1 percent in fiscal 1999.
The SYGMA Network, Inc., our chain restaurant distribution
specialist, generated record sales of $2.2 billion, an 8 percent increase
compared to fiscal 1999. In May SYGMA began servicing 362
additional Burger King restaurants located in Pennsylvania and Northern
California, as well as Arby’s units in Arkansas, Kansas, Missouri and
Oklahoma. These customer additions represent approximately $200
million in annualized sales and we continue to selectively seek additional
chain restaurant business.
Six strategic acquisitions completed during the year strengthened both
geographical presence and product offerings. They include three
custom-cutting meat operations, two broadline distributors, and a
specialty produce company. Through our Buckhead Beef Company
DILUTED EARNINGS
PER SHARE
IN DOLLARS*
1.36
1.08
.95
.85
.75
96
97
98
99
00
*Before accounting change
ANNUAL DIVIDENDS
PER SHARE
IN DOLLARS
0.44
0.38
0.33
0.28
0.24
96
97
98
99
00
WORKING CAPITAL
IN MILLIONS OF DOLLARS
981
950
879
848
856
96
97
98
99
00
(Atlanta, GA), Malcolm Meats (Toledo, OH) and Newport Meat
Company (Irvine, CA) operations, SYSCO now offers precision custom-
cut steaks and other protein products to customers in certain areas.
Broadline distributors Doughtie’s Foods Inc. (Portsmouth, VA) and
Watson Foodservice (Lubbock, TX) enhanced customer service in the
mid-Atlantic and southwestern United States. Annualized sales of these
five companies totaled approximately $500 million in the aggregate.
The combination of FreshPoint, Inc. (approximately $750 million in
annualized sales) with SYSCO’s $1 billion produce operation created
the largest foodservice produce purchaser and supplier in the world.
SYSCO now offers a full spectrum of produce in numerous varieties,
from everyday staples to the exotic. Opportunities also exist for strategic
product cross selling through both customer bases.
Internal geographic expansion remains a priority and “fold-out”
operations under construction in the Hampton Roads area of Virginia
and in Sacramento, California should be operational in the spring and
fall of 2001, respectively. The Hampton Roads facility will replace
Doughtie’s existing complex and supply their customers in Virginia and
eastern North Carolina, as well as certain customers in those areas who
are now being serviced from Pocomoke City, Maryland. The Sacramento
operation will serve Sacramento and surrounding communities, as
well as western Nevada and northern California markets now being
accommodated from San Francisco.
These activities plus ongoing maintenance programs resulted
in investments of $266 million in facilities, fleet and equipment,
with facilities and fleet accounting for 72 percent. This compared
to capital expenditures of $287 million in FY 1999. Capital
expenditures for FY 2001 are expected to range from $325 million
to $375 million. SYSCO continues to generate sufficient cash from
operations to fund internal growth opportunities.
Since 1996 SYSCO has been repurchasing shares in excess of those
issued and at fiscal year-end 58 million shares had been repurchased,
including 5.7 million during FY 2000, with 3.8 million remaining out
of the 8-million-share 1999 authorization. After funding working
capital needs, capital investments, dividends, acquisitions and share
repurchases, total debt was $1.07 billion, including $1.02 billion long-
term debt, resulting in a long-term debt to total capitalization ratio of
37 percent. Before the accounting change, return on shareholders’ equity
was 29 percent and return on average total capital was 17 percent.
SYSCO Uniform System (SUS) installations were completed last
December as planned in scheduled broadline companies, providing
operational efficiencies through valuable managerial and reporting
tools. SYSCO also has joined McDonald's Corporation, Cargill Inc.
3
and Tyson Foods Inc. to form electronic Foodservice Network (eFS
Network), an Internet-based, business-to-business (B2B) network. Open
to suppliers, distributors and chain restaurant operators, eFS Network is
aimed at cutting costs in the foodservice supply chain by more efficiently
managing the flow of information and products to the marketplace.
More than 40,000 employees dedicated to outstanding customer
service were instrumental in SYSCO’s stellar FY 2000 performance and
several members of management were recognized for their part in
SYSCO’s success. In January, in accordance with SYSCO’s long-term
management succession plan, Charles H. Cotros was elected the fourth
chief executive officer in SYSCO’s 30-year history. Mr. Cotros also
assumed the role of chairman on July 2, 2000 following the retirement
of Bill M. Lindig after a distinguished 30-year career. Also, Richard J.
Schnieders advanced to President and Chief Operating Officer; Larry J.
Accardi was promoted to Executive Vice President, Merchandising
Services and Multi-Unit Sales; Thomas E. Lankford became Executive
Vice President, Foodservice Operations and, upon Mr. Lindig’s retire-
ment, was elected to serve the remaining portion of his Board term; and
John K. Stubblefield, Jr. was named Executive Vice President, Finance
and Administration.
In November 1999 the Board of Directors increased the quarterly cash
dividend 20 percent to $0.12 per share from $0.10 per share, the 31st
increase in 30 years.
We are optimistic about SYSCO’s future prospects, anticipating an
ongoing positive economic outlook and continued demand for meals
prepared away from home. We believe our long-term objectives are
achievable – high single-digit real sales growth with earnings per share
growing four to six percentage points higher than the real sales growth
rate, a 30 percent return on equity and a long-term debt to total capital-
ization ratio of 35 to 40 percent. We intend to seek growth opportunities
through acquisitions and continue our internal expansion strategies as
well. As we move forward, our commitment to providing our customers
a breadth of products for nearly every foodservice need, as well as
unsurpassed service excellence, will continue to drive our future success.
CHARLES H. COTROS
RICHARD J. SCHNIEDERS
Chairman and
President and
Chief Executive Officer
Chief Operating Officer
CAPITAL EXPENDITURES
IN MILLIONS OF DOLLARS
287
259
266
236
211
96
97
98
99
00
SHAREHOLDERS' EQUITY
IN MILLIONS OF DOLLARS
1762
1475
1400
1357
1427
96
97
98
99
00
RETURN ON AVERAGE
NET ASSETS
IN PERCENTS
16.9
14.9
14.6
14.3
13.5
96
97
98
99
00
4
S YSCOCorporation 2000 Annual Report
circa 1970
As consumers’ appetites for meals-prepared-away-from-home
have grown, so has the family of SYSCO Brand products. From
humble beginnings in the early 1970’s with products such as the
cut green beans pictured above, today the cornerstone brand, including
four quality levels – Supreme, Imperial, Classic and Reliance –
accounts for more than 29,000 various items. Whether it’s a meal
served at a restaurant, college cafeteria, resort hotel or sports stadium,
chances are you have enjoyed and routinely encountered the quality
and palate-pleasing tastes of SYSCO Brand products.
The SYSCO Brand family has grown to include brands designed
for specific market segments, Brandables total menu concepts,
specialty meat and produce brands and even SYSCO’s own branded
technology that drives every facet of the organization. SYSCO has
truly evolved from a broadline company to a broad brand supplier with
a depth of service unique within the industry.
Brand Width & Service Depth
Narr 4 PDF 9/22/00 4:21 PM Page 6
Kin Chan, like all Sysco
marketing associates,
is trained to focus
on each of his
customer’s specific
needs and to offer a
range of products
and services tailored
to fulfill those needs.
REAL SALES GROWTH
BY FISCAL QUARTERS*
IN PERCENTS
10
8.9
8.1
7.2
7.3
7.3
7.7
6.1
6.4
6.3
5.0
5.2
1998
1999
2000
1Q
2Q
3Q
4Q
*Adjusted for sales to
a significant new customer
through 1st quarter of
FY 2000.
NUMBER OF
MARKETING ASSOCIATES
6981
6312
6444
5991
5646
96
97
98
99
00
MARKETING ASSOCIATE-
SERVED SALES AS A % OF
BROADLINE FOODSERVICE
52.0
53.0
54.1
55.4
97
98
99
00
6
Characterized by its quality, dependability, consistent yield and
the ability to enhance customers’ profits, the cornerstone
SYSCO brand with four quality levels – Supreme, Imperial,
Classic and Reliance – is immediately recognizable and has
played a starring role in the foodservice marketplace. SYSCO
Brand products are designed to appeal to a variety of menus,
are characterized by a strong, well-developed brand identity
and are produced to exact specifications, supported by quality
assurance standards unsurpassed in the industry.
The first link in moving products from field to plate is
product development. During this stage, SYSCO
Merchandising Services monitors dining trends and shares
ideas from customers with manufacturers to develop products
that meet customers’ menu requirements. This group also
interacts with thousands of suppliers worldwide to source
product and structure purchasing programs for the SYSCO
Brand and other national brand products.
By offering SYSCO Brand products, Marketing Associates
(MAs) gain a competitive edge in the marketplace. The training
and product knowledge these sales professionals bring to their
customers is equally important to the equation. SYSCO’s army
of MAs is almost 7,000 strong, and each MA is, in essence, a
relationship manager, providing a variety of items and services
that allow customers to prosper. MAs routinely evaluate and
compare products to determine what best fits a customer’s
menu profile, assist with menu planning and design, identify
dining trends that can boost customer profitability and assess
inventory levels to enable customers to satisfy any dining need.
This is just a sampling of the service depth and customer
commitment that has distinguished SYSCO in the meals-
prepared-away-from-home market and, in turn, has earned
customer loyalty.
Last year SYSCO formalized this philosophy by implementing
the C.A.R.E.S. initiative (Customers Are Really Everything to
SYSCO). Embraced by employees in all areas, this commitment
reaffirms customer service as SYSCO’s top priority.
Narr 4 PDF 9/22/00 4:21 PM Page 8
Sysco Newport Meat Company, one of the
largest purveyors of fine meats, poultry and seafood in
southern California, offers products, services and training
to SYSCO broadline companies in California, Arizona,
New Mexico and Utah.
Buckhead Beef, the #1 distributor of
CERTIFIED ANGUS BEEFTM products in the world in 1999,
also provides customers access to the largest inventory of
wet- and dry-aged USDA Prime.
Malcolm Meats Company distributes custom-cut meats and
other protein products to customers and SYSCO broadline
companies throughout Illinois, Michigan and Ohio.
CERTIFIED ANGUS
BEEFTM SALES BY ALL CAB
PROGRAM LICENSEES
IN MILLIONS OF POUNDS
480.0
411.0
331.8
259.8
226.5
95
96
97
98
99*
*Projected
Source: Certified Angus Beef TM, LLC
8
Meeting customer needs is more than simply delivering
products listed on an invoice. In fiscal 2000 SYSCO
recognized the need to expand not only geographically, but also
by adding product breadth. This transition to acquiring product
niche companies as well as broadline distribution operations
originated as a desire to offer the highest quality, most
consistent, fresh, custom-cut steaks and specialty produce items
available in the marketplace. As a result, SYSCO acquired
three custom-cutting meat operations, Newport Meat
Company; Buckhead Beef Company; and Malcolm Meats; and
a specialty produce company, FreshPoint, Inc., which has 22
North American locations.
SYSCO continues to offer boxed beef products packaged in
bulk quantities to be cut by customers at their locations.
However, as beef consumption has grown, the demand for
high-quality aged beef, cut to precise specifications, also has
increased. Many independent customers do not have sufficient
space, equipment or expertise to age beef properly or cut steaks
consistently. In addition, the short supply of qualified meat
cutters and the risk of employee accidents, with the correspond-
ing increased cost for workers’ compensation insurance
premiums, often makes it safer and more economical to rely on
SYSCO’s expertise for portion-cut steaks and chops.
These three meat-cutting operations have taken customer
service to a deeper level, offering an assortment of wet- and
dry-aged beef cut to exact customer requirements. Each
operation is a leader in its market area and a licensed
distributor of CERTIFIED ANGUS BEEF TM brand, a
renowned high quality distinction within the beef industry.
They also supply other customized and portion-controlled
meat and protein products, complementing SYSCO’s existing
broad brand capabilities. Strategically located across the United
States, they offer SYSCO operating companies in certain
areas the opportunity to benefit from their product range and
expertise while expanding their own market reach.
Narr 4 PDF 9/22/00 4:22 PM Page 10
FreshPoint, Inc. distributes specialty produce through 22
locations across the U.S. and Canada. Customers may
choose from a variety of produce items, from the everyday
conventional to the exotic. The company also specializes in
value-added services including ripening and repacking.
SYSCO is the largest purchaser of produce in the
foodservice distribution industry, and SYSCO Natural
produce represents the top 5% of produce harvested from
California’s Salinas Valley.
SYSCO AND FRESHPOINT ESTIMATED
ANNUALIZED PRODUCE PURCHASES
IN MILLIONS OF CASES
Tomatoes
Potatoes
Precut Lettuce
Onions
Iceberg Lettuce
Mushrooms
Strawberries
Romaine Lettuce
Peppers
Cantaloupe
Specialty Lettuce
12.0
5.9
3.9
3.7
3.5
2.8
2.8
2.7
2.0
1.8
1.6
10
Prior to the March 2000 acquisition of FreshPoint, Inc., a
specialty produce distributor, SYSCO’s annual produce sales,
including those of the highly successful SYSCO Natural line,
eclipsed the $1 billion mark. The addition of FreshPoint,
with 22 locations and approximately $750 million in
annualized sales, positions SYSCO for significant future
growth as broadline customers may now access a wider
spectrum of unique specialty produce items. In addition, the
minimal overlap between the two customer bases creates many
opportunities to sell SYSCO’s breadth of products to
FreshPoint customers who may be purchasing elsewhere.
The SYSCO Natural produce family continues to be a
mainstay for broadline operators who feature consistent
quality produce staples in their daily menus, while FreshPoint
offers more highly specialized products that may appeal to
chefs who require exotic choices to complement their gourmet
menus. FreshPoint distribution centers also operate smaller
trucks concentrated in heavily populated areas and are
structured to accept smaller orders and provide more frequent
deliveries. SYSCO and FreshPoint also supply pre-washed and
pre-cut produce items, chopped, diced and sliced to
customer specifications.
Along with increased produce sales and enhanced product
offerings, the FreshPoint acquisition also allows SYSCO
customers to enjoy the benefits of FreshPoint’s in-house
ripening and repacking procedures. Tomato ripening
capabilities provide complete control of the ripening process
and eventually these functions will be expanded to include
other products, like bananas, where supply is currently dictated
by seasonal weather patterns.
Through repacking operations customers are able to receive
items in customized, packed-to-order cases, a process which
should generate future cost benefits, since the repacking
programs are concentrated at specific locations to serve several
operating companies.
Narr 4 PDF 9/22/00 4:22 PM Page 12
12
In calendar 1999, 50 percent of all food dollars were spent on
food-prepared-away-from-home, a substantial increase from
37 percent in 1972. As consumers continue to eat more meals
prepared by others, they demand new tastes and more varieties
of foods. In response, SYSCO has developed an assortment of
brands tailored to specific market segments, including ethnic
foods, delicatessen items, tabletop condiments and others.
The Arrezzio line was designed for the operator who aspires
to provide customers the finest, authentic Old World Italian
cuisine. Capturing the essence of Italian cooking with specialty
tomatoes and sauces, pizza toppings and cheeses, specialty
meats, Italian breads, oils and desserts, this collection of Italian
brands, known as La Famiglia Sysco, includes Ottimo,
Suprema, and Pasta LaBella.
Other segment brands include Casa Solana, a family of
south-of-the-border-style foods, and Jade Mountain, a line of
fine Asian cuisine. Casa Solana includes items essential in
making savory Mexican dishes, while Jade Mountain includes
seasoned oils and vinegars, water chestnuts, oyster sauces and
numerous Asian staples such as rice and egg roll wrappers.
House Recipe includes tabletop items ranging from
condiments to crackers. Its distinctive flavorings and attractive
high-profile packaging complement any menu offering.
Customers often elect to customize House Recipe steak sauces,
ketchup and hot sauce by adding a personalized neckband
displaying their establishment’s name. The Block and Barrel
brand was designed to address the specific requirements of the
delicatessen market segment. It includes an assortment of
delicatessen products like bulk and pre-sliced meats and
cheeses, sandwich condiments and a variety of breads and rolls,
as well as snacks, chips and cookies.
New segment brands include Roasters Blend, a variety of
upscale coffees, and Butcher’s Block boxed beef available
in four categories – Reserve, Angus, Choice and Select –
for customers who prefer to cut steaks at their own locations.
S YSCOCorporation 2000 Annual Report
SEGMENT BRANDS
These products are designed for specific market segments and
include ethnic foods, delicatessen items, tabletop condiments and
other products to satisfy a variety of preferences.
ITALIAN
The Arrezzio brand of authentic, Old World
products like the Extra Virgin Olive Oil with
Garlic and Tomato Basil Fettuccine are
specifically created for foodservice
operations featuring
Italian cuisine.
MEXICAN
Casa Solana is
a complete line of
south-of-the-border
products for
Mexican restaurant
meal solutions.
PIZZA
Hailed for its
authentic flavor,
Arrezzio pizza is
one of SYSCO’s
many popular
segment brand
products.
COFFEE
In fiscal 2000 SYSCO introduced
Roasters Blend, a variety of coffee flavors
that compete with other renowned
national brands.
BEEF
Butcher’s Block boxed beef was
introduced this year for customers
who opt to purchase in bulk and cut
steaks themselves on site.
HOUSE RECIPE
The House Recipe brand, a
family of premium quality
tabletop condiments,
signature teas and gourmet
cocoas, features high-profile
graphics, consistent quality
and exceptional value.
Brand Width & Service Depth
Narr 4 PDF 9/22/00 4:22 PM Page 14
BP All American Food Store, Inc. in
Athens, Georgia was one of the first
operators to unveil the Sunday Skillet
Fried Chicken concept, a contemporary,
colorful, high profile cafeteria line with
delicious southern fried chicken and
companion items.
Michael’s Café III in Atlanta features
SYSCO’s Block & Barrel Deli concept, the
most complete deli branding
program available.
SYSCO BRAND SALES AS
A % OF MARKETING
ASSOCIATE-SERVED SALES
50.4
48.1
45.4
42.2
97
98
99
00
14
The foodservice solutions called Brandables by SYSCO are
easy-to-use “menu concepts” that incorporate not only the
segment brands discussed on the preceding pages but also include
all the tools necessary to create a complete segment menu theme.
Featuring high-profile signage for kiosk or in-line serving
systems, comprehensive operator manuals and associated
uniforms and utensils, the Brandables concepts allow operators
great flexibility without paying licensing or franchise fees. Each
program’s fully developed menu profiles include SYSCO’s
easy-to-prepare segment brand foods that are pre-sliced,
pre-seasoned and pre-cooked to ensure consistency of
product and taste.
For example, the Arrezzio Brand Italian segment products
are integral to two Brandables concepts – Arrezzio Pizza, an
authentic, pizzeria-style program and Arrezzio Italian Café,
which features nutritional pastas and savory sauces for operators
to create Italian-style selections.
Block & Barrel Deli, the most complete delicatessen branding
program available, utilizes a complete assortment of Block &
Barrel segment brand products that include bulk and pre-sliced
meats and cheeses teamed with breads, rolls and condiments for
sandwich making – a total deli package.
The Casa Solana Mexican Cantina features Mexican-style
favorites, while Mein Street Wok, an Asian concept, uses
Jade Mountain products to create popular Asian menu selections.
Potato Gourmet appeals to health-conscious individuals as well
as anyone with a hearty appetite. This program features generously-
sized, tasty baked potatoes, which can be customized with various
hot or cold toppings. Another concept, Sunday Skillet, brings to
mind the good old days of Sunday dinners at grandmother’s house
– crispy fried chicken, biscuits and all the trimmings.
To assure that the entire family of SYSCO Brand products
meets or exceeds customers’ expectations, a quality assurance
staff of more than 180 professionals establishes specifications,
evaluates manufacturing and processing plants and monitors
products throughout the production process.
Narr 4 PDF 9/22/00 4:22 PM Page 16
SYSCO’s team of
dependable delivery
associates, including Matt
Greif, serves as one of the
primary contacts with
customers each day.
FLEET SIZE*
NUMBER OF VEHICLES
7290
6352
5772
5256
5379
96
97
98
99
00
SYSCO SALES BY
PRODUCT CATEGORY
AS PERCENT OF TOTAL SALES
Medical supplies
Dairy products
Fresh and frozen meats
Seafoods
Poultry
Frozen fruits, vegtables,
bakery and other
Canned and dry products
Paper and disposables
Janitorial products
Equipment and smallwares
Fresh produce
Beverage products
1%
9%
17%
6%
10%
14%
21%
8%
2%
2%
7%
3%
16
In any foodservice operation, from the front of the house to
the back, many auxiliary items are essential to producing a
complete meal. SYSCO’s non-food brands encompass all of
the equipment and supplies a foodservice operator conceivably
would require. From cookware to cutlery, cleaning chemicals
to carry-out cartons, dishwashers to disposable towels, this
category continues to be vital to an operation’s success and
foodservice supplies accounted for 13 percent of overall sales
in fiscal 2000. Food safety is a primary concern to customers
and SYSCO is committed to maintaining the safety of prod-
ucts throughout every facet of distribution. Cookware and
tableware, as well as food preparation and eating surfaces, must
be pristine, so cleaning and sanitizing is of utmost importance.
SYSCO also offers customers special training programs
regarding proper food storage temperatures, safe cutting and
handling techniques and recommended hygiene practices.
Typically, equipment and supplies are ordered less frequently
than food products and one method SYSCO employs to
optimize the use of warehouse space is the designation of a
central warehouse for storage of such products. This warehouse
inventories nearly 6,000 items, including cookware, dinner-
ware, flatware, glassware, chef apparel, large kitchen equipment
and much more. Another 5,000 items are available for
shipment to customers directly from manufacturers. As orders
are received, products are selected from inventory and shipped
to the customer, usually arriving within a one- to two-day
delivery window, much more quickly than the typical industry
practice of six- to eight-week shipping periods often associated
with shipping special orders.
To assure that customers order the correct central warehouse
item, in 1999 SYSCO developed SYSQuotes, an online
catalog that provides product images for customer inspection
and selection, product availability and pricing via the MAs
laptop computer. MAs at 39 SYSCO operating companies
were utilizing the program at fiscal year-end.
S YSCOCorporation 2000 Annual Report
FOODSERVICE SUPPLIES
Foodservice supplies — from soup kettles to soup spoons, dishwashers to
dinnerware, cleaning solutions to carry-out cartons —
are essential to any well-stocked kitchen or dining room.
FLATWARE
SYSCO’s exclusive
flatware is produced
in numerous patterns,
including Satin Bead, and is suitable
for many types of
foodservice locations.
CHEMICALS/ DISPOSABLES
Items like chefs’ hats, disposable
gloves and sanitary products allow food
preparers to maintain a crisp,
clean look and observe safe food
handling practices.
CUTLERY
SYSCO’s Black Diamond
cutlery allows chefs to display their skill
and creativity with a broad assortment of tools.
SERENEWARE
The comprehensive, easily identifiable
SYSCO Sereneware products provide
appealing packaging solutions for
take-out meals.
GLASSWARE
Nothing could be finer to a diner with a
sweet tooth than a scrumptious sundae
served in SYSCO’s elegant
Illusion glassware.
DINNERWARE
SYSCO’s exclusive dinnerware patterns
KITCHENWARE
SYSCO provides a
like Arial are designed to coordinate
with various customer themes and
complete collection of kitchen
equipment, tools and
complement the atmosphere of any
foodservice operation.
accessories, including the Black Diamond
cookware and utensils pictured above.
Brand Width & Service Depth
Narr 4 PDF 9/22/00 4:23 PM Page 18
Laura Terrell, at the Houstonian Hotel in Houston,
is a SYSCO customer who enjoys ordering
products through eSYSCO, a user-friendly
Internet-based ordering system.
The SYSCO Warehouse Management System
(SWMS) directs vital labor management
functions. Pictured above is Sherri Edwards,
Checker/Loader.
18
SYSCO’s commitment to continued technological develop-
ment has been a key factor in building lasting customer and
supplier relationships. SYSCO’s proprietary systems, primarily
developed internally, are also considered SYSCO Brands.
One project, the SYSCO Uniform System (SUS), is an
enterprise-wide information technology system that
encompasses all business aspects on a real-time basis. SUS
reporting measures and appraisal tools provide instant access to
service levels and other productivity data, allowing internal
benchmarking among SYSCO companies.
The SYSCO Warehouse Management System (SWMS)
monitors products through every stage of the distribution cycle,
and manages all facets of employee productivity. These
tools reduce inventory and improve workplace safety and
productivity, thereby increasing order accuracy and decreasing
working capital needs and expenses.
SYSCO long has maintained a leading role in direct order
entry systems and its Internet-based order entry system,
eSYSCO, has replaced previous, more complex applications.
An estimated $700 million in annualized sales is being
channeled through eSYSCO and customers may place and
confirm orders, review purchasing history and perform many
other functions at their convenience.
Modifications are being added to the core SUS system to
move toward error-free service through accurate order selection
and timely delivery. The SYSCO Order Selector (SOS), a
finger-mounted bar code scanner, verifies proper item
selection, reducing errors from about one in less than 1,000 to
about one in 5,000, significantly improving efficiency and
reducing restocking costs. The SYSCO Load Selector (SLS)
confirms the accuracy of products selected, then generates a
map detailing the placement of orders on the delivery trucks,
while the RoadNet system assigns delivery stops to minimize
time yet meet customers’ preferred delivery windows.
Whether it is improving technology, expanding brand
offerings or assisting customers with value-added services,
SYSCO’s primary objective is exceeding customer expectations.
COMMUNITY ACTIVITIES
SYSCO has received numerous awards and recognition
for donations to food banks and other programs
including the Second Harvest National Food Bank. In
addition, each of SYSCO Corporation’s operating
companies serves its community independently, assisting
charities and volunteer organizations, including homeless
shelters, donating products to food banks and providing
meals to volunteers. At the corporate office, the company
also has enjoyed longstanding relationships with
organizations such as the United Way and the March of
Dimes. SYSCO’s commitment to higher education is
evidenced by its annual funding of scholarships through
The Educational Foundation of the National Restaurant
Association and other foundations. SYSCO also has
joined with its premier suppliers in Johnson & Wales
University’s Vision 2001 campaign, which has a goal of
providing $5 million in scholarships to qualified students
dedicated to a foodservice career. In addition, The John F.
and Eula Mae Baugh SYSCO Scholarship Program
grants academic scholarships to employee dependents
under age 24 who attend accredited four-year
institutions. More than $700,000 in John F. and Eula
Mae Baugh SYSCO scholarships has been awarded since
the program’s inception in 1996.
For the 2000-01 academic year, 25 returning
scholarship winners qualified for renewed funding.
In addition, $60,000 in new grants was awarded to
the following scholarship winners.
Recipient Name
Paige L. Asbrock
Kathleen R. Fein
Luke C. Gelinas
Nicholas J. Hagglund
Natalie C. Lesly
Naomi M. Massave
Timothy C. Pilgrim
Joyce A. Somerset
Melissa J. Spagnuolo
Elliott S. Thomson
College or University
College of Mount St. Joseph
University of Michigan
Calvin College
Youngstown State University
University of California
Yale University
University of Washington
Johnson & Wales University
Cal State-San Bernardino
University of Florida
Hometown
Harrison, OH
Jenison, MI
South Dartmouth, MA
Jamestown, NY
Merced, CA
Riviera Beach, FL
Kent, WA
Lithonia, GA
Apple Valley, CA
Richfield, OH
Major
Chemistry/Dentistry
Pre-Medicine/Chemistry
Religion/Theology
Chemical Engineering
Communications
Undetermined
Business Administration
Marketing
Business Administration
Engineering/Computer Science
CHAIRMAN LINDIG RETIRES AFTER 30-YEAR CAREER
As SYSCO reflects on its
30th anniversary as a public
company, it also celebrates the
career of retiring Chairman
Bill M. Lindig. Mr. Lindig
began his career with SYSCO
at its formation in 1970 when
he was named Executive Vice
President of Zero Foods
Company, one of the original
nine founding companies. He was elected a Director of
SYSCO in 1983 and became President of the Foodservice
Division in 1984. In early 1985, he was elected SYSCO’s
Executive Vice President and Chief Operating Officer and
later that year added to his responsibilities when he became
President of the corporation. Mr. Lindig was elected Chief
Executive Officer in January 1995 and assumed the
position of Chairman of the Board on January 1, 1999.
From the time he assumed the role of Chief Executive
Officer until his retirement, SYSCO’s sales grew from $10
20
billion to over $19 billion, and the price of SYSCO’s stock
increased more than 225 percent. Reflecting on his lengthy
career with SYSCO when his retirement was announced in
April, Mr. Lindig said, “My long and enjoyable association
with both SYSCO and the foodservice distribution industry
has been one of the highlights of my life. Having been
actively involved in the success of SYSCO and helping
our customers create memorable dining experiences for
consumers has been most rewarding.”
In addition to the tireless efforts he put forth at SYSCO
during his three-decade career, Mr. Lindig also has been
extremely active in community affairs. In 1999 he and his
wife Bobetta established the Lindig Men’s Health Center
and Resource Library at Memorial Hermann Healthcare
System in Houston, Texas, and he currently serves on
Memorial Hermann Healthcare System’s Board of
Directors. Mr. Lindig also is a director of Burlington
Northern Santa Fe Corporation and a trustee of Johnson &
Wales University.
FINANCIAL SECTION
22 Eleven-Year Summary of Operations and Related Information
24 Consolidated Results of Operations
25 Consolidated Financial Position
26 Consolidated Shareholders’ Equity
27 Consolidated Cash Flows
28
Summary of Accounting Policies
29 Additional Financial Information
37
Report of Management on Internal Accounting Controls
38
Report of Independent Public Accountants
39
Selected Financial Data
40 Management’s Discussion and Analysis
S YSCOCorporation
2000 Annual Report
ELEVEN - YEAR SUMMARY OF OPERATIONS AND RELATED INFORMATION
(Dollars in thousands except for per share and shareholder data)
Results of Operations
2000
1999
1998
1997
1996
Sales
Costs and expenses
Cost of sales
Operating expenses
Interest expense
Other, net
Total costs and expenses
Earnings before income taxes
Income taxes
Earnings before cumulative
effect of accounting changes
Cumulative effect of accounting change
Net earnings
Cash dividends paid
Earnings reinvested
Effective income tax rate
Per Common Share Data (1)
Diluted earnings per share:
Earnings before accounting change
Cumulative effect of accounting change
Net earnings
Cash dividends
Shareholders’ equity
Diluted average shares outstanding
Performance Measurements
Pretax return on sales
Return on average shareholders’ equity
before accounting change
Return on average total capital before accounting
change (equity plus long-term debt)
Financial Position
Current ratio
Working capital
Capital expenditures
Other assets
Plant and equipment (net)
Total assets
Long-term debt
Other liabilities
Shareholders’ equity
Shareholder Data
Closing price of common share at year end (1)
Price/earnings ratio at year end - diluted (1), (2)
Market price per common share - high/low (1)
Number of employees at year end
Number of shareholders of record at year end
$ 19,303,268
$ 17,422,815
$ 15,327,536
$ 14,454,589
$ 13,395,130
15,649,551
2,843,755
70,832
1,522
18,565,660
737,608
283,979
14,207,860
2,547,266
72,839
963
16,828,928
593,887
231,616
12,499,636
2,236,932
58,422
53
14,795,043
532,493
207,672
11,835,959
2,076,335
46,502
(162)
13,958,634
495,955
193,422
10,983,796
1,917,376
41,019
(1,004)
12,941,187
453,943
177,038
453,629
(8,041)
445,588
145,418
300,170
$
362,271
—
362,271
126,691
235,580
$
324,821
(28,053)
296,768
110,928
185,840
38.5%
39%
39%
1.36
(0.02)
1.33
0.44
5.31
334,777,928
$
1.08
—
1.08
0.38
$
4.33
336,796,669
$
$
0.95
(0.08)
0.86
0.33
4.05
343,440,181
302,533
—
302,533
99,574
202,959
39%
0.85
—
0.85
0.28
4.06
356,083,594
$
$
$
276,905
—
276,905
87,721
189,184
39%
0.75
—
0.75
0.24
4.09
369,715,296
$
$
$
3.82%
3.41%
3.47%
3.43%
3.39%
29%
17%
26%
16%
23%
15%
21%
15%
19%
14%
1.53
950,280
266,413
736,047
1,344,693
4,813,955
1,023,642
245,810
1,761,568
42.13
31
43-26
40,400
15,207
$
$
$
1.69
981,227
286,687
460,146
1,227,669
4,096,582
997,717
244,129
1,427,196
30.75
28
32-20
35,100
15,485
$
$
$
1.65
855,877
259,353
449,068
1,151,054
3,780,189
867,017
232,193
1,356,789
25.50
27
27-17
33,400
16,142
$
$
$
1.76
847,815
210,868
413,762
1,058,432
3,433,823
685,620
233,917
1,400,472
18.50
22
19-14
32,000
17,890
$
$
$
1.85
879,341
235,891
412,436
990,642
3,319,943
581,734
226,007
1,474,678
17.13
23
18-14
30,600
19,160
$
$
$
$
$
$
(1) The data presented reflects the 2-for-1 stock splits of March 20, 1998, June 19, 1992 and October 17, 1989.
(2) Ratios for 2000 and 1998 are before the effects of accounting changes.
22
S YSCOCorporation
2000 Annual Report
1995
1994
1993
1992
1991
1990
5-Year
10-Year
20-Year
1-Year Compound Compound Compound
Growth Growth
Rates
Rates
2000 1996-2000 1991-2000 1981-2000
Growth
Rates
Growth
Rates
$ 12,118,047
$ 10,942,499
$ 10,021,513
$ 8,892,785
$ 8,149,700
$ 7,590,568
10.8% 9.8%
9.8% 14.9%
9,927,448
1,736,625
38,579
(2,223)
11,700,429
417,618
165,794
8,971,628
1,568,773
36,272
(1,756)
10,574,917
367,582
150,830
8,225,275
1,427,394
39,004
(2,137)
9,689,536
331,977
130,170
7,303,886
1,270,397
43,275
(6,429)
8,611,129
281,656
109,427
6,693,822
1,161,375
49,082
(5,443)
7,898,836
250,864
97,034
251,824
—
251,824
73,154
178,670
216,752
—
216,752
59,074
157,678
$
201,807
—
201,807
48,815
152,992
172,229
—
172,229
31,637
140,592
$
153,830
—
153,830
22,150
131,680
$
$
$
40%
41%
39%
39%
39%
$
0.68
—
0.68
0.20
$
3.84
374,762,596
$
0.58
—
0.58
0.16
$
3.39
378,927,962
$
0.53
—
0.53
0.13
$
3.09
387,534,852
$
0.46
—
0.46
0.09
$
2.85
392,455,236
$
0.41
—
0.41
0.06
$
2.48
389,180,124
6,246,372
1,076,804
56,548
(5,242)
7,374,482
216,086 24.2
83,625
132,461 25.2
—
132,461 23.0
17,829
114,632
39%
12.0
13.1
16.0
12.5
13.1
17.6
12.1
12.9
17.5
0.36 25.9
14.9
14.2
16.0
$
$
—
0.36 23.1
0.05 15.8
2.10 22.6
$
380,640,932
14.4
17.1
6.7
14.0
24.3
9.7
15.9
21.5
13.5
3.45%
3.36%
3.31%
3.17%
3.08%
2.85%
19%
14%
18%
13%
18%
13%
17%
11%
18%
11%
19%
10%
$
$
$
1.92
856,734
201,577
411,712
896,079
3,097,161
541,556
219,366
1,403,603
14.75
22
15-11
28,100
21,112
$
$
$
1.89
753,087
161,485
394,860
817,221
2,811,729
538,711
185,548
1,240,909
11.63
20
16-12
26,200
19,860
$
$
$
1.90
673,263
127,879
350,450
759,857
2,530,043
494,062
152,292
1,137,216
12.31
23
14-11
24,200
17,798
$
$
$
1.96
618,244
134,290
326,737
734,423
2,325,206
488,828
133,730
1,056,846
11.94
26
13-10
22,500
14,864
$
$
$
1.92
557,760
134,921
317,117
699,101
2,177,695
543,176
112,176
918,626
10.25
25
11-7
21,000
13,343
$
$
$
1.88
494,682
182,387
308,858
635,897
2,001,020
583,496
85,112
770,829 23.4
8.56
24
9-6
19,600
12,023
4.6
8.6
14.1
23
S YSCOCorporation
2000 Annual Report
CONSOLIDATED RESULTS OF OPERATIONS
(In thousands except for share data)
Sales
Costs and expenses
Cost of sales
Operating expenses
Interest expense
Other, net
Total costs and expenses
Earnings before income taxes
Income taxes
Earnings before cumulative effect of accounting change
Cumulative effect of accounting change
Net earnings
Earnings before accounting change:
Basic earnings per share
Diluted earnings per share
Cumulative effect of accounting change:
Basic earnings per share
Diluted earnings per share
Net earnings:
Basic earnings per share
Diluted earnings per share
See Summary of Accounting Policies and Additional Financial Information.
Year Ended
July 3, 1999
July 1, 2000
$19,303,268
(53Weeks)
$17,422,815
June 27, 1998
$15,327,536
15,649,551
2,843,755
70,832
1,522
18,565,660
737,608
283,979
453,629
(8,041)
445,588
$
14,207,860
2,547,266
72,839
963
16,828,928
593,887
231,616
362,271
—
362,271
$
12,499,636
2,236,932
58,422
53
14,795,043
532,493
207,672
324,821
(28,053)
296,768
$
$
$
1.38
1.36
(0.02)
(0.02)
1.35
1.33
$
1.09
1.08
—
—
1.09
1.08
0.95
0.95
(0.08)
(0.08)
0.87
0.86
24
S YSCOCorporation
2000 Annual Report
CONSOLIDATED FINANCIAL POSITION
(In thousands except for share data)
Current assets
Cash
Receivables
Inventories
Deferred taxes
Prepaid expenses
Less current liabilities
Notes payable
Accounts payable
Accrued expenses
Income taxes
Current maturities of long-term debt
Working capital
Plant and equipment at cost, less depreciation
Other assets
Goodwill and intangibles, less amortization
Other
Total assets less current liabilities
Less other liabilities
Long-term debt
Deferred taxes
Net assets
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 1,000,000,000 shares, issued 382,587,450 shares
Paid-in capital
Retained earnings
Less cost of treasury stock, 51,102,663 and 52,915,065 shares
Total shareholders’ equity
See Summary of Accounting Policies and Additional Financial Information.
July 1, 2000
July 3, 1999
$ 159,128
1,519,038
937,899
72,041
45,109
2,733,215
31,109
1,186,721
527,233
17,914
19,958
1,782,935
950,280
$ 149,303
1,334,371
851,965
43,353
29,775
2,408,767
13,377
1,013,302
374,271
6,103
20,487
1,427,540
981,227
1,344,693
1,227,669
503,039
233,008
736,047
3,031,020
1,023,642
245,810
1,269,452
$1,761,568
302,100
158,046
460,146
2,669,042
997,717
244,129
1,241,846
$1,427,196
$
—
$
—
382,587
76,967
2,332,238
2,791,792
1,030,224
$1,761,568
382,587
872
2,032,068
2,415,527
988,331
$1,427,196
25
S YSCOCorporation
2000 Annual Report
CONSOLIDATED SHAREHOLDERS’ EQUITY
(In thousands except for share data)
Balance at June 28, 1997
Net earnings for year ended
June 27, 1998
Cash dividends paid,
$0.33 per share
Treasury stock purchases
Stock options exercised
Employees’ Stock Purchase Plan
Management Incentive Plan
2-for-1 stock split
Balance at June 27, 1998
Net earnings for year ended
July 3, 1999
Cash dividends paid,
$0.38 per share
Treasury stock purchases
Stock options exercised
Employees’ Stock Purchase Plan
Management Incentive Plan
Balance at July 3, 1999
Net earnings for year ended
July 1, 2000
Cash dividends paid,
$0.44 per share
Treasury stock purchases
Treasury stock issued for acquisitions
Stock options exercised
Employees’ Stock Purchase Plan
Management Incentive Plan
Common Stock
Shares
Amount
Paid-in
Capital
Retained
Earnings
Treasury Stock
Shares
Amount
191,293,725 $191,294 $ 32,258 $1,771,548 18,855,458 $ 594,628
296,768
(110,928)
(4,308)
1,359
1,084
(30,393)
6,064,850
(491,795)
(433,419)
(205,950)
(160,900) 23,789,144
263,416
(15,174)
(14,048)
(6,536)
191,293,725
191,293
382,587,450 $382,587 $
— $1,796,488 47,578,288 $ 822,286
362,271
(126,691)
(5,621)
3,679
2,814
7,567,300
(988,679)
(894,094)
(347,750)
203,958
(15,954)
(15,906)
(6,053)
382,587,450 $382,587 $
872 $2,032,068 52,915,065 $ 988,331
445,588
(145,418)
69,794
(7,526)
9,446
4,381
5,660,400
(4,984,497)
(1,163,222)
(943,530)
(381,553)
186,296
(98,362)
(20,104)
(18,585)
(7,352)
Balance at July 1, 2000
382,587,450 $382,587 $ 76,967 $2,332,238 51,102,663 $1,030,224
See Summary of Accounting Policies and Additional Financial Information.
26
S YSCOCorporation
2000 Annual Report
CONSOLIDATED CASH FLOWS
(In thousands)
Cash flows from operating activities:
Net earnings
Add non-cash items:
Cumulative effect of accounting change
Depreciation and amortization
Deferred tax (benefit) provision
Provision for losses on receivables
Additional investment in certain assets and liabilities,
net of effect of businesses acquired:
(Increase) in receivables
(Increase) in inventories
Decrease (increase) in prepaid expenses
Increase in accounts payable
Increase in accrued expenses
Increase (decrease) in income taxes
(Increase) in other assets
Net cash provided by operating activities
Cash flows from investing activities:
Additions to plant and equipment
Proceeds from sales of plant and equipment
Acquisition of businesses, net of cash acquired
Net cash used for investing activities
Cash flows from financing activities:
Bank and commercial paper borrowings (repayments)
Other debt (repayments) borrowings
Common stock reissued from treasury
Treasury stock purchases
Dividends paid
Net cash used for financing activities
Net increase (decrease) in cash
Cash at beginning of year
Cash at end of year
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest
Income taxes
See Summary of Accounting Policies and Additional Financial Information.
Year Ended
July 3, 1999
(53 Weeks)
June 27, 1998
July 1, 2000
$ 445,588
$ 362,271
$ 296,768
8,041
220,661
(25,528)
27,082
(118,578)
(56,943)
3,378
105,790
128,174
16,254
(45,193)
708,726
(266,413)
18,922
(211,901)
(459,392)
51,810
(11,947)
52,342
(186,296)
(145,418)
(239,509)
9,825
149,303
$ 159,128
—
205,005
5,656
26,208
(144,969)
(61,464)
(3,180)
164,143
82,016
(19,420)
(30,963)
585,303
(286,687)
24,952
—
(261,735)
(109,962)
117,273
38,785
(203,958)
(126,691)
(284,553)
39,015
110,288
$ 149,303
28,053
181,234
(15,077)
22,959
(162,276)
(48,483)
(4,871)
14,114
50,875
7,782
(13,314)
357,764
(259,353)
8,296
(84,473)
(335,530)
303,996
6,813
33,893
(263,416)
(110,928)
(29,642)
(7,408)
117,696
$ 110,288
$ 70,977
272,022
$ 66,706
237,990
$ 58,306
195,133
27
S YSCOCorporation
2000 Annual Report
SUMMARY OF ACCOUNTING POLICIES
BUSINESS AND CONSOLIDATION
SYSCO Corporation (SYSCO or the company) is engaged in the marketing and distribution of a wide range of food and
related products to the foodservice or “food-prepared-away-from-home” industry. These services are performed from 95
distribution facilities for approximately 356,000 customers located in the 39 states where facilities are situated, in nine
adjacent states, Alaska and the District of Columbia. The company also has four facilities in Vancouver, British Columbia,
one in Peterborough, Ontario and one in Edmonton, Alberta which service customers in those surrounding areas.
The accompanying financial statements include the accounts of SYSCO and its subsidiaries. All significant intercompany
transactions and account balances have been eliminated. Certain amounts in the prior years have been reclassified to conform
to the 2000 presentation.
The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates that affect the reported amounts of assets, liabilities, sales and expenses. Actual results could differ from the
estimates used.
Earnings of acquisitions recorded as purchases are included in SYSCO’s results of operations from the date of acquisition.
INVENTORIES
Inventories consist of food and related products held for resale and are valued at the lower of cost (first-in, first-out method)
or market.
PLANT AND EQUIPMENT
Capital additions, improvements and major renewals 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. Maintenance, repairs and minor renewals 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.
Applicable interest charges incurred during the construction of new facilities are capitalized as one of the elements of cost
and are amortized over the assets’ estimated useful lives. Interest capitalized during the past three years was $964,000 in
2000, $1,812,000 in 1999 and $2,095,000 in 1998.
GOODWILL AND INTANGIBLES
Goodwill and intangibles represent the excess of cost over the fair value of tangible net assets acquired and are amortized over
40 years using the straight-line method. Accumulated amortization at July 1, 2000, July 3, 1999 and June 27, 1998 was
$96,862,000, $84,160,000 and $74,554,000, respectively.
COMPUTER SYSTEMS DEVELOPMENT PROJECT
In the second quarter of fiscal 1998, SYSCO recorded a one-time, after-tax, non-cash charge of $28,053,000 to comply
with a new consensus ruling by the Emerging Issues Task Force of the Financial Accounting Standards Board (EITF Issue No.
97-13), requiring reengineering costs associated with computer systems development to be expensed as they are incurred. Prior
to this ruling, SYSCO had capitalized business process reengineering costs incurred in connection with its SYSCO Uniform
Systems information systems redevelopment project in accordance with generally accepted accounting principles.
No costs were capitalized in fiscal 2000, fiscal 1999 and fiscal 1998. Amounts capitalized are being amortized as
completed portions are put into use. Accumulated amortization, including the one-time charge, at July 1, 2000, July 3, 1999
and June 27, 1998 was $42,001,000, $38,929,000 and $36,532,000, respectively.
COSTS OF START-UP ACTIVITIES
In the first quarter of fiscal 2000, SYSCO recorded a one-time, after-tax, non-cash charge of $8,041,000 to comply with
the required adoption of AICPA Statement of Position 98-5 (SOP 98-5), “Reporting on the Costs of Start-up Activities.”
SOP 98-5 requires the write-off of any unamortized costs of start-up activities and organization costs. Going forward such
costs are being expensed as incurred.
INSURANCE PROGRAM
SYSCO maintains a self-insurance program covering portions of workers’ compensation and general and automobile liability
costs. The amounts in excess of the self-insured levels are fully insured. Self-insurance accruals are based on claims filed and
an estimate for significant claims incurred but not reported.
INCOME TAXES
SYSCO follows the liability method of accounting for income taxes as required by the provisions of Statement of Financial
Accounting Standards (SFAS) No. 109, “Accounting for Income Taxes.”
28
S YSCOCorporation
2000 Annual Report
CASH FLOW INFORMATION
For cash flow purposes, cash includes cash equivalents such as time deposits, certificates of deposit and all highly liquid
instruments with original maturities of three months or less.
ACQUISITIONS
During fiscal 2000, SYSCO acquired for cash and stock, three custom-meat operations, two broadline foodservice companies
and one specialty produce company. In the aggregate, SYSCO paid cash of $211,901,000 and issued 4,984,497
unregistered, restricted shares to the former owners of the acquired companies. The transactions were accounted for using the
purchase method of accounting and the financial statements for fiscal 2000 include the results of the acquired companies
from the respective dates they joined SYSCO. There was no material effect, individually or in the aggregate on SYSCO’s
operating results or financial position from these transactions.
The purchase price was allocated to the net assets acquired based on the estimated fair value at the date of acquisition. The
balances included in the Consolidated Financial Position related to the current year acquisitions are based upon preliminary
information and are subject to change when final asset and liability valuations are obtained. Material changes to the
preliminary allocations are not anticipated by management.
NEW ACCOUNTING STANDARDS
In fiscal 1998, SYSCO adopted SFAS No. 130, “Reporting Comprehensive Income.” The adoption of this standard did
not have an effect on SYSCO’s reported net earnings as SYSCO has no components of other comprehensive income under
the statement.
In fiscal 1999, SYSCO adopted SFAS No. 132, “Employers’ Disclosures about Pensions and Other Postretirement
Benefits.” This statement does not change the measurement or recognition of those plans, but revises the disclosure
requirements for pensions and other postretirement plans.
In fiscal 2000, SYSCO adopted the AICPA issued Statement of Position (SOP) 98-1, “Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use.” The SOP provides guidance with respect to accounting for the
various types of costs incurred for computer software developed or obtained for SYSCO’s use. The adoption of this SOP did
not have a significant effect on SYSCO’s consolidated results of operations or financial position.
In June 1998, June 1999 and June 2000, the Financial Accounting Standards Board issued SFAS No. 133,
“Accounting for Derivative Instruments and Hedging Activities,” SFAS No. 137, “Accounting for Derivative Instruments
and Hedging Activities - Deferral of the Effective Date of SFAS No. 133,” and SFAS No. 138, “Accounting for Certain
Derivative Instruments and Certain Hedging Activities - an amendment of SFAS No. 133.” These statements outline the
accounting treatment for all derivative activity. SYSCO is required to and will adopt SFAS No. 133 in the first quarter of
fiscal 2001 and does not expect adoption to have a significant effect on its consolidated results of operations or financial
position.
In December 1999, the Securities and Exchange Commission staff released Staff Accounting Bulletin (SAB) No. 101,
“Revenue Recognition.” The SAB provides guidance on the recognition, presentation and disclosure of revenue in financial
statements. SYSCO is required to and will adopt SAB 101 in the fourth quarter of fiscal 2001 and believes that adoption will
not have a significant effect on its consolidated results of operations or financial position.
ADDITIONAL FINANCIAL INFORMATION
INCOME TAXES
The income tax provisions consist of the following:
Federal income taxes
State, local and other income taxes
Total
2000
$ 250,309,000
33,670,000
$283,979,000
1999
$200,537,000
31,079,000
$231,616,000
1998
$178,226,000
29,446,000
$ 207,672,000
Included in the income taxes charged to earnings are net deferred tax benefits of $25,528,000 in 2000, and deferred tax
provisions of $5,656,000 in 1999 and deferred tax benefits of $15,077,000 in 1998. The deferred tax benefit or deferred
tax provision results 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.
29
S YSCOCorporation
2000 Annual Report
Significant components of SYSCO’s deferred tax assets and liabilities are as follows:
Deferred tax liabilities:
Excess tax depreciation and basis differences of assets
Computer systems development project
Inventory
Other
Total deferred tax liabilities
Deferred tax assets:
Accrued pension expenses
Accrued medical and casualty insurance expenses
Other
Total deferred tax assets
Net deferred tax liabilities
July 1, 2000
July 3, 1999
$ 219,786,000
9,838,000
7,961,000
8,225,000
245,810,000
20,008,000
16,387,000
35,646,000
72,041,000
$173,769,000
$ 203,524,000
10,991,000
12,858,000
16,756,000
244,129,000
24,179,000
6,647,000
12,527,000
43,353,000
$200,776,000
The company has enjoyed taxable earnings during each year of its thirty-one year existence and knows of no reason such
profitability should not continue. Consequently, SYSCO believes that it is more likely than not that the entire benefit
of existing temporary differences will be realized and therefore no valuation allowance has been established for deferred
tax assets.
Reconciliations of the statutory Federal income tax rate to the effective income tax rates are as follows:
Statutory Federal income tax rate
State and local income taxes, net of Federal income tax benefit
Other
2000
35.0%
3.0
0.5
38.5%
1999
35.0%
3.8
0.2
39.0%
1998
35.0%
3.8
0.2
39.0%
ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE
The allowance for doubtful accounts receivable was $27,628,000 as of July 1, 2000, $21,095,000 as of July 3, 1999 and
$20,081,000 as of June 27, 1998. Customer accounts written off, net of recoveries, were $24,881,000 or 0.13% of sales,
$25,914,000 or 0.15% of sales and $21,218,000 or 0.14% of sales for fiscal years 2000, 1999 and 1998, respectively.
SHAREHOLDERS’ EQUITY
On February 11, 1998, the Board of Directors declared a 2-for-1 stock split effected by a 100% stock dividend paid on
March 20, 1998 to shareholders of record on February 27, 1998. All share and per share data in these financial statements
have been restated to reflect the stock split.
In fiscal 1998, SYSCO adopted the provisions of SFAS No. 128, “Earnings Per Share,” which replaced primary and
fully-diluted earnings per share with a presentation of basic and diluted earnings per share. Basic earnings per share have been
computed by dividing net earnings by 329,582,474 in 2000, 332,913,546 in 1999 and 340,380,477 in 1998, which
represents the weighted average number of shares of common stock outstanding during those respective years. Diluted earnings
per share have been computed by dividing net earnings by 334,777,928 in 2000, 336,796,669 in 1999 and
343,440,181 in 1998, which represents the weighted average number of shares of common stock outstanding during those
respective years adjusted for the diluted effect of stock options outstanding under the treasury stock method.
In May 1986, the Board of Directors adopted a Warrant Dividend Plan designed to protect against those unsolicited
attempts to acquire control of SYSCO that the Board believes are not in the best interest of the shareholders. In May 1996,
the Board of Directors adopted an amended and restated plan which, among other things, extends the expiration of the plan
through May 2006, and amended it again in May 1999. As amended, the plan provides for a dividend distribution of one-
half of one Preferred Stock Purchase Right (Right) for each outstanding share of SYSCO common stock. Each Right may be
exercised to purchase one two-thousandth of a share of Series A Junior Participating Preferred Stock at an exercise price of
$175, subject to adjustment. The Rights will not be exercisable until a party either acquires 10% of the company’s common
stock or makes a tender offer for 10% or more of its common stock. In the event of a merger or other business combination
transaction, each Right effectively entitles the holder to purchase $350 worth of stock of the surviving company for a purchase
price of $175.
30
S YSCOCorporation
2000 Annual Report
The Rights expire on May 21, 2006, and may be redeemed before expiration by the company at a price of $0.01 per Right
until a party acquires 10% of the company’s common stock or thereafter under certain circumstances. As a result of the Rights
distribution, 450,000 of the 1,500,000 authorized preferred shares have been reserved for issuance as Series A Junior
Participating Preferred Stock.
PLANT AND EQUIPMENT
A summary of plant and equipment, including the related accumulated depreciation, appears below:
Plant and equipment, at cost
Land
Buildings and improvements
Equipment
Accumulated depreciation
Net plant and equipment
July 1, 2000
July 3, 1999
$
110,546,000
1,050,417,000
1,398,555,000
2,559,518,000
(1,214,825,000)
$ 1,344,693,000
$
93,107,000
957,389,000
1,266,548,000
2,317,044,000
(1,089,375,000)
$ 1,227,669,000
Estimated
Useful Lives
10-40 years
3-20 years
DEBT
SYSCO has uncommitted bank lines of credit, which provide for unsecured borrowings for working capital of up to
$246,481,000 of which $31,109,000 and $13,377,000 were outstanding at July 1, 2000 and July 3, 1999, respectively.
SYSCO’s long-term debt consists of the following:
Commercial paper, interest averaging 6.9% in 2000
and 5.2% in 1999
Senior notes, interest at 6.5%, maturing in 2005
Senior notes, interest at 7.0%, maturing in 2006
Senior notes, interest at 7.25%, maturing in 2007
Debentures, interest at 7.16%, maturing in 2027
Debentures, interest at 6.50%, maturing in 2029
Industrial Revenue Bonds, mortgages and other debt, interest averaging
5.8% in 2000 and 5.9% in 1999, maturing at various dates to 2026
Total long-term debt
Less current maturities
Net long-term debt
July 1, 2000
July 3, 1999
$ 247,870,000
149,553,000
200,000,000
99,735,000
50,000,000
224,336,000
$ 213,792,000
149,463,000
200,000,000
99,696,000
50,000,000
224,313,000
72,106,000
1,043,600,000
(19,958,000)
$1,023,642,000
80,940,000
1,018,204,000
(20,487,000)
$ 997,717,000
The principal payments required to be made on long-term debt during the next five years are shown below:
Fiscal Year
2001
2002
2003
2004
2005
Amount
$ 19,958,000
17,861,000
7,306,000
257,525,000
149,809,000
SYSCO has a $300,000,000 revolving loan agreement maturing in fiscal 2004 which currently supports the company’s
commercial paper program. The commercial paper borrowings at July 1, 2000 were $247,870,000.
In June 1995, SYSCO issued 6.5% senior notes totaling $150,000,000 due June 12, 2005, under a $500,000,000
shelf registration filed with the Securities and Exchange Commission. These notes, which were priced at 99.4% of par, are
unsecured, not redeemable prior to maturity and are not subject to any sinking fund requirement. In May 1996, SYSCO
issued 7.0% senior notes totaling $200,000,000 due May 1, 2006, under this shelf registration. These notes, which were
priced at par, are unsecured, not redeemable prior to maturity and are not subject to any sinking fund requirement. On April 22,
1997, in two separate offerings, SYSCO drew down the remaining $150,000,000 of the $500,000,000 shelf registration.
31
S YSCOCorporation
2000 Annual Report
SYSCO issued 7.16% debentures totaling $50,000,000 due April 15, 2027. These debentures were priced at par, are
unsecured, are not subject to any sinking fund requirement and are redeemable at the option of the holder on April 15, 2007,
but otherwise are not redeemable prior to maturity. At that time SYSCO also issued 7.25% senior notes totaling
$100,000,000 due April 15, 2007. These notes were priced at 99.611% of par and are unsecured, not redeemable prior to
maturity and not subject to any sinking fund requirement.
On June 3, 1998 SYSCO filed with the Securities and Exchange Commission a $500,000,000 shelf registration of debt
securities. On July 22, 1998 SYSCO issued 6.5% debentures totaling $225,000,000 under the shelf registration, due on
August 1, 2028. These debentures were priced at 99.685% of par, are unsecured, are not subject to any sinking fund
requirement and include a redemption provision which allows SYSCO the right to retire the debentures at any time prior to
maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture holders are not penalized
by the early redemption. Proceeds from the debentures were used to pay down outstanding commercial paper.
The Industrial Revenue Bonds have varying structures. Final maturities range from one to twenty-six years and certain of
the bonds provide SYSCO the right to redeem (call) at various dates. These call provisions generally provide the bondholder a
premium in the early call years, declining to par value as the bonds approach maturity.
Net long-term debt at July 1, 2000 was $1,023,642,000, of which 75% is at fixed rates averaging 6.73% with an
average life of fourteen years, while the remainder is financed at floating rates averaging 6.77%. Certain loan agreements
contain typical debt covenants to protect noteholders including provisions to maintain tangible net worth in excess of a
specified level. SYSCO is in compliance with all debt covenants at July 1, 2000.
The fair value of SYSCO’s total long-term debt is estimated based on the quoted market prices for the same or similar
issues or on the current rates offered to the company for debt of the same remaining maturities. The fair value of total long-
term debt approximated $986,966,000 at July 1, 2000 and $994,275,000 at July 3, 1999.
As part of normal business activities, SYSCO issues letters of credit through major banking institutions as required by
certain vendor and insurance agreements. As of July 1, 2000 and July 3, 1999, letters of credit outstanding were
$37,319,000 and $21,460,000, respectively. As of July 1, 2000 SYSCO has not entered into any significant derivative or
other off-balance-sheet financing arrangements.
LEASES
Although SYSCO normally purchases assets, it has obligations under capital and operating leases for certain distribution
facilities, vehicles and computers. Total rental expense under operating leases was $44,015,000, $36,904,000 and
$31,324,000 in fiscal 2000, 1999 and 1998, respectively. Contingent rentals, subleases and assets and obligations under
capital leases are not significant.
Aggregate minimum lease payments under existing non-capitalized long-term leases are as follows:
Fiscal Year
2001
2002
2003
2004
2005
Later years
Amount
$ 29,934,000
24,123,000
18,750,000
15,056,000
12,000,000
19,997,000
STOCK COMPENSATION PLANS
Employee Incentive Stock Option Plan
The Employee Incentive Stock Option Plan adopted in fiscal 1982 provided for the issuance of options to purchase SYSCO
common stock to officers and key personnel of the company and its subsidiaries at the market price at date of grant, as adjusted
for stock splits. No further grants will be made under this plan which expired in November 1991 and was replaced by the 1991
Stock Option Plan.
32
S YSCOCorporation
2000 Annual Report
The following summary presents information with regard to incentive options under this plan:
Balance at June 28, 1997
Exercised
Balance at June 27, 1998
Exercised
Balance at July 3, 1999
Exercised
Balance at July 1, 2000
Options Exercisable
Options Outstanding
Maximum
Shares
Exercisable
822,518
519,267
357,528
Weighted
Average Price
Per Share
$ 9.70
9.72
9.94
196,789
$10.08
Shares
Under
Option
822,518
(303,251)
519,267
(161,739)
357,528
(160,739)
196,789
Weighted
Average Price
Per Share
$ 9.70
9.65
9.72
9.22
9.94
9.78
$ 10.08
The options outstanding at July 1, 2000 under this plan have exercise prices ranging from $7.66 to $11.13 and have a
weighted average remaining contractual life of less than one year.
1991 Stock Option Plan
The 1991 Stock Option Plan was adopted in fiscal 1992 and originally reserved 6,000,000 shares of SYSCO common
stock for options to directors, officers and key personnel of the company and its subsidiaries at the market price at date of
grant. This plan provides for the issuance of options which are qualified as incentive stock options under the Internal Revenue
Code of 1986, options which are not so qualified and stock appreciation rights. During fiscal 1996, the shareholders
approved an amendment to the plan for an additional 16,000,000 shares to be made available for future grants of options. To
date, the company has issued stock options but no stock appreciation rights under this plan.
The following summary presents information with regard to incentive options under the 1991 plan:
Options Exercisable
Options Outstanding
Maximum
Shares
Exercisable
3,446,628
Weighted
Average Price
Per Share
$13.53
Balance at June 28, 1997
Granted
Cancelled
Exercised
Balance at June 27, 1998
4,886,528
13.98
Granted
Cancelled
Exercised
Balance at July 3, 1999
5,341,504
14.66
Granted
Cancelled
Exercised
Balance at July 1, 2000
5,661,846
$15.80
Shares
Under
Option
7,765,260
1,901,416
(315,422)
(841,462)
8,509,792
1,550,605
(307,879)
(982,769)
8,769,749
2,475,392
(473,344)
(1,156,063)
9,615,734
Weighted
Average Price
Per Share
$ 14.35
17.50
14.97
13.50
15.11
21.88
15.89
14.11
16.39
32.66
17.55
14.71
$20.72
The options outstanding at July 1, 2000 under this plan have exercise prices ranging from $12.63 to $40.06 and have a
weighted average remaining contractual life of 6.8 years.
33
S YSCOCorporation
2000 Annual Report
Non-Employee Directors Stock Option Plan
The Non-Employee Directors Stock Option Plan adopted in fiscal 1996 permits the issuance of up to 400,000 shares of
common stock to directors who are not employees of SYSCO. Under this plan options to purchase 4,000 shares of common
stock at the fair market value on the date of the grant are granted to each non-employee director annually, provided certain
earnings goals are met. As of July 1, 2000, options for 136,000 shares had been granted to nine non-employee directors
under this plan, of which options for 128,000 shares are available for exercise. No further grants will be made under this plan,
which was replaced by the Non-Employee Directors Stock Plan.
Non-Employee Directors Stock Plan
The Non-Employee Directors Stock Option Plan adopted in fiscal 1999 permits the issuance of up to 400,000 shares of
common stock to directors who are not employees of SYSCO. Under this plan non-employee directors will receive a one time
retainer stock award of 2,000 shares when first elected as a non-employee director and an annual automatic grant of options
to purchase 4,000 shares of common stock provided certain earnings goals are met. As of July 1, 2000, options for 80,000
shares had been granted to ten non-employee directors under this plan, of which 39,990 shares are available for exercise.
Employees’ Stock Purchase Plan
SYSCO has an Employees’ Stock Purchase Plan which permits employees (other than directors) to invest by means of periodic
payroll deductions in SYSCO common stock at 85% of the closing price on the last business day of each calendar quarter.
During fiscal 2000, 910,376 shares of SYSCO common stock were purchased by the participants as compared to 945,711
purchased in fiscal 1999 and 825,129 purchased in fiscal 1998. The total number of shares which may be sold pursuant to
the plan may not exceed 34,000,000 shares, of which 7,463,826 remained available at July 1, 2000.
Accounting Issues Relating to all Plans
SYSCO accounts for these plans under APB Opinion No. 25 and related interpretations under which no compensation cost
has been recognized. Had compensation cost for these plans been determined using the fair value method of SFAS No. 123,
SYSCO’s pro forma net earnings and diluted earnings per share would have been $437,773,000 and $1.31 in fiscal 2000,
$357,148,000 and $1.06 in fiscal 1999 and $292,824,000 and $0.86 in fiscal 1998. The disclosure requirements of
SFAS No. 123 are applicable to options granted after 1995. The pro forma effects for fiscal 2000, 1999 and 1998 are not
necessarily indicative of the pro forma effects in future years.
The weighted average fair value of options granted was $12.27 and $7.05 during fiscal 2000 and 1999, respectively. The
fair value was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average
assumptions used for grants in fiscal 2000 and 1999, respectively; dividend yield of 1.20% and 1.65%; expected volatility
of 23% in both years; risk-free interest rates of 6.1% and 5.1%; and expected lives of 8 years.
The weighted average fair value of employee stock purchase rights issued was $5.24 and $3.86 during fiscal 2000 and
1999, 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.
EMPLOYEE BENEFIT PLANS
SYSCO has defined benefit and defined contribution retirement plans for its employees. Also, the company contributes to
various multi-employer plans under collective bargaining agreements.
The defined contribution 401(k) 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. SYSCO’s contribution to this plan was
$15,899,000 in 2000, $5,813,000 in 1999 and $5,660,000 in 1998. The defined benefit pension plan pays benefits to
employees at retirement using formulas based on a participant’s years of service and compensation.
SYSCO also has a Management Incentive Plan that compensates key management personnel for specific performance
achievements. The awards under this plan were $40,977,000 in 2000, $27,197,000 in 1999 and $20,478,000 in 1998
and were paid in both cash and stock. In addition to receiving benefits upon retirement under the company’s defined benefit
plan, participants in the Management Incentive Plan will receive benefits under a Supplemental Executive Retirement Plan
(SERP). This plan is a nonqualified, unfunded defined benefit supplementary retirement plan. In order to meet its obligations
under this plan, SYSCO maintains life insurance policies on the lives of the participants with carrying values of
$76,480,000 at July 1, 2000 and $55,975,000 at July 3, 1999. SYSCO is the sole owner and beneficiary of such policies.
In addition to providing pension benefits, SYSCO provides certain health care benefits to eligible retirees and their
dependents in the United States.
34
S YSCOCorporation
2000 Annual Report
The funded status of the defined benefit plan is as follows:
Change in benefit obligation:
Benefit obligation at beginning of year
Service cost
Interest cost
Amendments
Actuarial (gain) loss
Actual expenses
Settlements
Total disbursements
Benefit obligation at end of year
Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contribution
Actual expenses
Total disbursements
Fair value of plan assets at end of year
Funded status
Unrecognized net actuarial (gain) loss
Unrecognized net (asset) obligation due to
initial application of SFAS 87
Unrecognized prior service cost
Accrued benefit cost
Pension Benefits
Other Postretirement Plans
July 1, 2000
July 3, 1999
July 1, 2000
July 3, 1999
$ 393,119,000
35,451,000
29,109,000
13,568,000
(22,883,000)
(3,041,000)
(2,830,000)
(9,170,000)
433,323,000
$354,646,000
31,058,000
27,138,000
197,000
(8,749,000)
(2,418,000)
—
(8,753,000)
393,119,000
330,441,000
32,838,000
40,563,000
(3,041,000)
(9,170,000)
391,631,000
(41,692,000)
(12,042,000)
287,482,000
38,871,000
15,259,000
(2,418,000)
(8,753,000)
330,441,000
(62,678,000)
10,866,000
$ 2,072,000
145,000
150,000
1,486,000
(152,000)
—
—
(86,000)
3,615,000
—
—
86,000
—
(86,000)
—
(3,615,000)
(3,346,000)
$ 1,781,000
125,000
135,000
—
18,000
—
—
13,000
2,072,000
—
—
(13,000)
—
13,000
—
(2,072,000)
(3,388,000)
(1,967,000)
12,581,000
$ (43,120,000)
(2,813,000)
(1,612,000)
$ (56,237,000)
1,994,000
2,003,000
$(2,964,000)
2,147,000
589,000
$(2,724,000)
The assumptions used to value obligations at year end were:
Pension Benefits
Other Postretirement Plans
July 1, 2000
July 3, 1999
July 1, 2000
July 3, 1999
Weighted-average assumptions as of year end:
Discount rate
Expected rate of return
Rate of compensation increase
8.00%
10.50%
4.50%
7.50%
10.50%
4.50%
8.00%
—
—
7.50%
—
—
A health care cost trend rate is not used in the calculations because SYSCO subsidizes the cost of postretirement medical
coverage by a fixed dollar amount with the retiree responsible for the cost of coverage in excess of the subsidy, including all
future cost increases.
The components of net pension and other postretirement benefit costs are as follows:
Components of net periodic benefit cost:
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Recognized net actuarial loss (gain)
Amortization of net transition obligation
Net pension costs
Pension Benefits
Other Postretirement Plans
July 1, 2000
July 3, 1999
July 1, 2000
July 3, 1999
$ 35,451,000
29,109,000
(34,168,000)
(625,000)
628,000
(847,000)
$ 29,548,000
$ 31,058,000
27,138,000
(29,723,000)
(640,000)
652,000
(847,000)
$ 27,638,000
$ 145,000
150,000
—
72,000
(194,000)
153,000
$ 326,000
$ 125,000
135,000
—
72,000
(216,000)
153,000
$ 269,000
Multi-employer pension costs were $23,540,000 and $22,375,000 in 2000 and 1999, respectively.
The projected benefit obligation and accumulated benefit obligation for the defined benefit pension plan were
$365,934,000 and $319,067,000, respectively, as of July 1, 2000 and $340,398,000 and $294,366,000, respectively,
as of July 3, 1999. The projected benefit obligation and accumulated benefit obligation for the SERP were $67,389,000
and $50,232,000, respectively, as of July 1, 2000 and $52,721,000 and $38,860,000, respectively, as of July 3, 1999.
35
S YSCOCorporation
2000 Annual Report
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 oper-
ations of the company when ultimately concluded.
QUARTERLY RESULTS (unaudited)
Financial information for each quarter in the years ended July 1, 2000 and July 3, 1999:
2000
(In thousands except for share data)
Sales
Cost of sales
Operating expenses
Interest expense
Other, net
Earnings before income taxes
Income taxes
Earnings before accounting change
Accounting change
Net earnings
Per share:
Diluted net earnings before
accounting change
Diluted earnings accounting
change effect
Diluted net earnings
Cash dividends
Market price - high/low
Quarter Ended
July 1
April 1
January 1
October 2
Fiscal Year
$4,657,034 $4,651,535 $4,722,935 $5,271,764 $19,303,268
15,649,551
3,829,148
3,793,200
2,843,755
709,499
674,244
70,832
18,354
17,944
1,522
(189)
88
737,608
165,846
171,835
283,979
63,851
66,156
453,629
101,995
105,679
(8,041)
(8,041)
—
445,588
97,638 $ 101,896 $ 101,995 $ 144,059 $
4,255,205
764,594
17,854
(131)
234,242
90,183
144,059
—
3,771,998
695,418
16,680
1,754
165,685
63,789
101,896
—
$
$
0.32 $
0.31 $
0.31 $
0.43
$
1.36
(0.02)
0.29
0.10
36-30
—
0.31
0.10
41-32
—
0.31
0.12
41-26
—
0.43
0.12
43-34
(0.02)
1.33
0.44
43-26
1999
Quarter Ended
(In thousands except for share data)
Sales
Cost of sales
Operating expenses
Interest expense
Other, net
Earnings before income taxes
Income taxes
Net earnings
Per share:
Diluted net earnings
Cash dividends
Market price - high/low
Percentage increases - 2000 vs. 1999:
Sales
Earnings before income taxes
Earnings before accounting change
Net earnings
Diluted earnings per share before
accounting change
Diluted net earnings per share
36
December 26
July 3
(14 Weeks)
Fiscal Year
September 26
(53 Weeks)
March 27
$4,192,630 $4,246,675 $ 4,164,877 $ 4,818,633 $ 17,422,815
14,207,860
3,402,463
2,547,266
625,111
72,839
18,414
963
(93)
593,887
118,982
231,616
46,403
362,271
72,579 $ 116,873 $
3,426,045
607,812
16,931
170
141,672
55,252
86,420 $
3,469,496
616,899
18,397
245
141,638
55,239
86,399 $
3,909,856
697,444
19,097
641
191,595
74,722
$
$
0.26 $
0.09
26-20
0.26 $
0.09
29-23
0.22 $
0.10
30-25
0.35 $
0.10
32-25
1.08
0.38
32-20
11%
21
22
13
23
12
10%
17
18
18
19
19
13%
39
41
41
41
41
9%
22
23
23
23
23
11%
24
25
23
26
23
S YSCOCorporation
2000 Annual Report
REPORT OF MANAGEMENT ON INTERNAL ACCOUNTING CONTROLS
The management of SYSCO is responsible for the preparation and integrity of the consolidated financial statements of the
company. The accompanying consolidated financial statements have been prepared by the management of the company, in
accordance with generally accepted accounting principles, using management’s best estimates and judgment where necessary.
Financial information appearing throughout this Annual Report is consistent with that in the consolidated financial
statements.
To help fulfill its responsibility, management maintains a system of internal controls designed to provide reasonable
assurance that assets are safeguarded against loss or unauthorized use and that transactions are executed in accordance with
management’s authorizations and are reflected accurately in the company’s records. The concept of reasonable assurance is
based on the recognition that the cost of maintaining a system of internal accounting controls should not exceed benefits
expected to be derived from the system. SYSCO believes that its long-standing emphasis on the highest standards of conduct
and ethics, embodied in comprehensive written policies, serves to reinforce its system of internal controls.
The company’s operations review function monitors the operation of the internal control system and reports findings and
recommendations to management and the Board of Directors. It also oversees actions taken to address control deficiencies
and seeks opportunities for improving the effectiveness of the system.
Arthur Andersen LLP, independent public accountants, has been engaged to express an opinion regarding the fair
presentation of the company’s financial condition and operating results. As part of their audit of the company’s financial
statements, Arthur Andersen LLP considered the company’s system of internal controls to the extent they deemed necessary to
determine the nature, timing and extent of their audit tests.
The Board of Directors oversees the company’s financial reporting through its Audit Committee which consists entirely of
outside directors. The Board, after a recommendation from the Audit Committee, selects and engages the independent public
accountants annually. The Audit Committee reviews both the scope of the accountants’ audit and recommendations from both
the independent public accountants and the internal operations review function for improvements in internal controls. The
independent public accountants have free access to the Audit Committee and from time to time confer with them without
management representation.
SYSCO recognizes its responsibility to conduct business in accordance with high ethical standards. This responsibility is
reflected in a comprehensive code of business conduct that, among other things, addresses potentially conflicting outside
business interests of company employees and provides guidance as to the proper conduct of business activities. Ongoing
communications and review programs are designed to help ensure compliance with this code.
The company believes that its system of internal controls is effective and adequate to accomplish the objectives
discussed above.
Charles H. Cotros
Chairman and
Chief Executive Officer
John K. Stubblefield, Jr.
Executive Vice-President,
Finance and Administration
37
S YSCOCorporation
2000 Annual Report
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
Board of Directors and Shareholders
SYSCO Corporation
We have audited the accompanying statements of consolidated financial position of SYSCO Corporation (a Delaware
corporation) and subsidiaries as of July 1, 2000 and July 3, 1999, and the related statements of consolidated results of
operations, shareholders’ equity and cash flows for each of the three years in the period ended July 1, 2000. These financial
statements are the responsibility of the company’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of SYSCO Corporation and subsidiaries as of July 1, 2000 and July 3, 1999, and the results of their operations and
their cash flows for each of the three years in the period ended July 1, 2000 in conformity with accounting principles generally
accepted in the United States.
Arthur Andersen LLP
Houston, Texas
August 2, 2000
38
S YSCOCorporation
2000 Annual Report
SELECTED FINANCIAL DATA
(In thousands except for per share data)
2000
Fiscal Year Ended
1999
(53 Weeks)
1998
1997
1996
Sales
$19,303,268 $17,422,815 $15,327,536 $14,454,589 $13,395,130
737,608
283,979
593,887
231,616
532,493
207,672
495,955
193,422
453,943
177,038
Earnings before income taxes
Income taxes
Earnings before cumulative effect of
accounting change
Cumulative effect of accounting change
(8,041)
—
453,629
362,271
324,821
(28,053)
302,533
276,905
—
—
Net earnings
$
445,588 $
362,271 $ 296,768 $
302,533 $
276,905
Earnings before accounting change:
Basic earnings per share
Diluted earnings per share
Cumulative effect of accounting change:
Basic earnings per share
Diluted earnings per share
Net earnings:
Basic earnings per share
Diluted earnings per share
Cash dividends per share
Total assets
Capital expenditures
Long-term debt
Shareholders’ equity
Total capitalization
$
1.38 $
1.09 $
0.95 $
0.85 $
1.36
1.08
0.95
0.85
(0.02)
(0.02)
1.35
1.33
0.44
—
—
1.09
1.08
0.38
(0.08)
(0.08)
0.87
0.86
0.33
—
—
0.85
0.85
0.28
0.76
0.75
—
—
0.76
0.75
0.24
4,813,955
4,096,582
3,780,189
3,433,823
3,319,943
266,413
286,687
259,353
210,868
235,891
1,023,642
1,761,568
997,717
1,427,196
867,017
1,356,789
685,620
1,400,472
581,734
1,474,678
$ 2,785,210 $ 2,424,913 $ 2,223,806 $ 2,086,092 $ 2,056,412
Ratio of long-term debt to capitalization
36.8%
41.1%
39.0%
32.9%
28.3%
39
S YSCOCorporation
2000 Annual Report
MANAGEMENT’S DISCUSSION AND ANALYSIS
LIQUIDITY AND CAPITAL RESOURCES
SYSCO provides marketing and distribution services to foodservice customers and suppliers throughout the contiguous
United States, Alaska, the District of Columbia and western and central Canada. The company intends to continue to expand
its market share through profitable sales growth and constant emphasis on the development of its consolidated buying
programs. The company also strives to increase the effectiveness of its marketing associates and the productivity of its
warehousing and distribution activities. These objectives require continuing investment. SYSCO’s resources include cash
provided by operations and access to capital from financial markets.
SYSCO’s operations historically have produced significant cash flow. Cash generated from operations is first allocated to
working capital requirements; investments in facilities, fleet and other equipment required to meet customers’ needs; cash
dividends; and acquisitions fitting within the company’s overall growth strategy. Any remaining cash generated from operations
is applied toward a portion of the cost of shares repurchased in the share repurchase program, while the remainder of the cost
may be financed with additional long-term debt. SYSCO’s initial share repurchase program was used primarily to offset shares
issued under various employee benefit and compensation plans. The company significantly accelerated the repurchase program
beginning in February 1996. The share repurchase program reduces outstanding shares and increases earnings per share. The
long-term debt to total capitalization target ratio was increased from a range of 30% to 40% to a range of 35% to 40% due
to prior and anticipated accelerated share repurchases, additional debt associated with those repurchases and acquisitions. This
ratio was 36.8% and 41.1% at July 1, 2000 and July 3, 1999, respectively.
In November 1996, the Board authorized an additional 12,000,000 share buyback to be completed in calendar 1997
and in July 1997, authorized an additional 12,000,000 share buyback to be completed in fiscal 1998; and in September
1998 the Board authorized an additional 8,000,000 share buyback to be completed in calendar 1999; and in July 1999 the
Board authorized a new 8,000,000 share buyback. The number of shares acquired and their cost for the past three years was
5,660,400 shares for $186,296,000 in fiscal 2000, 7,567,300 shares for $203,958,000 in fiscal 1999, 12,129,700
shares for $263,416,000 in fiscal 1998.
In February 2000, the company filed with the Securities and Exchange commission a shelf registration covering
2,850,000 shares of common stock to be offered from time to time in connection with acquisitions. As of July 1, 2000 all of
these shares are available for issuance.
Net cash generated from operating activities was $708,726,000 in 2000, $585,303,000 in 1999 and $357,764,000
in 1998. Expenditures for facilities, fleet and other equipment were $266,413,000 in 2000, $286,687,000 in 1999 and
$259,353,000 in 1998. Expenditures in fiscal 2001 should be in the range of $325,000,000 to $375,000,000.
On June 3, 1998 SYSCO filed with the Securities and Exchange Commission a $500,000,000 shelf registration of debt
securities. On July 22, 1998 SYSCO issued 6.5% debentures totaling $225,000,000 under the shelf registration, due
August 1, 2028. These debentures were priced at 99.685% of par, are unsecured, are not subject to any sinking fund
requirement and include a redemption provision which allows SYSCO the right to retire the debentures at any time prior to
maturity at the greater of par plus accrued interest or an amount designed to insure that the debenture holders are not
penalized by the early redemption. Proceeds from the debentures were used to pay down outstanding commercial paper.
The net cash provided by operations less cash utilized for capital expenditures, the share repurchase program, cash dividends
and other uses resulted in net long-term debt of $1,023,642,000 at July 1, 2000. About 75% of the long-term debt is at
fixed rates averaging 6.73% and the remainder is at floating rates averaging 6.77%. Long-term debt to capitalization was
36.8% at July 1, 2000, down 4.3% from the 41.1% at July 3, 1999 and down 2.2% from the 39.0% at June 27, 1998.
SYSCO continues to have borrowing capacity available and alternative financing arrangements are evaluated as appropriate.
SYSCO has uncommitted bank lines of credit, which provide for unsecured borrowings for working capital of up to
$246,481,000 of which $31,109,000 and $13,377,000 were outstanding at July 1, 2000 and July 3, 1999, respectively.
SYSCO has a commercial paper program which is currently supported by a $300,000,000 bank credit facility. During
fiscal 2000, 1999 and 1998, commercial paper and short-term bank borrowings ranged from approximately
$199,028,000 to $469,094,000, from approximately $67,769,000 to $358,637,000, and from approximately
$29,581,000 to $417,924,000, respectively.
In summary, SYSCO believes that through continual monitoring and management of assets together with the availability
of additional capital in the financial markets, it will meet its cash requirements while maintaining proper liquidity for normal
operating purposes.
40
S YSCOCorporation
2000 Annual Report
MARKET RISK
SYSCO does not utilize financial instruments for trading purposes and holds no derivative financial instruments which could
expose the company to significant market risk. SYSCO’s exposure to market risk for changes in interest rates relates primarily
to its long-term obligations discussed above. At July 1, 2000 the company had outstanding commercial paper of
$247,870,000 with maturities through September 22, 2000. The company’s remaining long-term debt obligations of
$775,772,000 were primarily at fixed rates of interest. SYSCO has no significant cash flow exposure due to interest rate
changes for long-term debt obligations.
SALES
The annual increases in sales of 11% in 2000 and 14% in 1999 (53 weeks) resulted from several factors. Sales in fiscal
2000 and 1999 were affected by the strong growth in the U.S. economy, as well as in the foodservice industry. After adjusting
for food price increases, acquisitions and adjusted for the extra week in fiscal 1999, real sales growth was about 9% in 2000
and 12% in 1999. Acquisitions represented 3.5% of total sales for fiscal 2000. Food costs, which experienced minimal
inflation during the first two quarters of 2000 and a slight deflation during the third quarter, returned to about 2% inflation
during the final quarter, resulting in approximately 0.4% inflation for fiscal 2000. This compares to an increase of
approximately 1% in fiscal 1999. Industry sources estimate the total foodservice market experienced real growth of
approximately 3.1% in calendar year 1999 and 2.8% in calendar year 1998.
Sales for fiscal 1998 through 2000 were as follows:
Fiscal Year
2000
1999 (53 Weeks)
1998
Sales
$19,303,268,000
17,422,815,000
15,327,536,000
% Increase
11%
14
6
A comparison of the sales mix in the principal product categories during the last three years is presented below:
2000
1999
1998
Medical supplies
Dairy products
Fresh and frozen meats
Seafoods
Poultry
Frozen fruits, vegetables, bakery and other
Canned and dry products
Paper and disposables
Janitorial products
Equipment and smallwares
Fresh produce
Beverage products
1%
9
17
6
10
14
21
8
2
2
7
3
100%
A comparison of sales by type of customer during the last three years is presented below:
Restaurants
Hospitals and nursing homes
Schools and colleges
Hotels and motels
All other
2000
65%
10
6
5
14
100%
1%
10
15
6
11
14
22
7
2
3
6
3
100%
1999
64%
10
7
5
14
100%
1%
9
15
6
10
15
23
7
2
3
6
3
100%
1998
62%
11
7
5
15
100%
41
S YSCOCorporation
2000 Annual Report
COST OF SALES
Cost of sales increased about 10% in 2000 and 14% in 1999. These increases were generally in line with the increases in
sales. The rate of increase is influenced by SYSCO’s overall customer and product mix as well as economies realized in
product acquisition and higher sales of SYSCO Brand products.
OPERATING EXPENSES
Operating expenses include the costs of warehousing and delivering products as well as selling and administrative expenses.
These expenses as a percent of sales were 14.7% for fiscal 2000 and 14.6% for fiscal 1999 and for fiscal 1998. Part of
the increase over 1999 was due to expenses related to the closing of a facility and one-time non-recurring costs associated
with the completion of the SYSCO Uniform Systems implementation. There was also a charge to non-operating expenses
in connection with the facility closing. The costs described above were approximately $13,000,000. Otherwise, changes in
the percentage relationship of operating expenses to sales result from an interplay of several economic influences, including
customer mix. Inflationary increases in operating costs generally have been offset through improved productivity.
INTEREST EXPENSE
Interest expense decreased $2,007,000 or approximately 3% in fiscal 2000 as compared to an increase of $14,417,000
or approximately 25% in fiscal 1999. The decrease in fiscal 2000 was due primarily to interest income received in the
amount of $3,000,000 related to a Federal income tax refund on an amended tax return. Without this income, interest
expense would have been approximately 1% above last year due to increased borrowings. The increase in fiscal 1999 was
due primarily to increased borrowings, principally to fund the share repurchase program, and the replacement of floating
rate debt at higher fixed rates. Interest capitalized during the past three years was $964,000 in fiscal 2000, $1,812,000
in fiscal 1999 and $2,095,000 in fiscal 1998.
OTHER, NET
Other decreased $559,000 or about 58% in fiscal 2000 and decreased $910,000 or about 1,717% in fiscal 1999.
Changes between the years result from fluctuations in miscellaneous activities, primarily gains and losses on the sale of
surplus facilities as well as the expenses related to the facility closing discussed under “operating expenses” above.
EARNINGS BEFORE INCOME TAXES
Earnings before income taxes rose $143,721,000, or approximately 24%, above fiscal 1999 which had increased
$61,394,000, or approximately 12%, over the prior year. Additional sales and realization of operating efficiencies
contributed to the increases as well as the company’s success in its continued efforts to increase sales to the company’s higher
margin marketing associate-served customers and increasingly higher sales of SYSCO Brand products.
PROVISION FOR INCOME TAXES
The effective tax rate for 2000 was 38.5% and for 1999 was approximately 39%.
EARNINGS BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE
Fiscal 2000 represents the twenty-fourth consecutive year of increased earnings before the cumulative effect of an
accounting change. Earnings before cumulative effect of accounting change rose $91,358,000, or approximately 25%,
above fiscal 1999 which had increased $37,450,000, or approximately 12%, over the prior year.
CUMULATIVE EFFECT OF ACCOUNTING CHANGE
In the first quarter of fiscal 2000, SYSCO recorded a one-time, after-tax, non-cash charge of $8,041,000 to comply with
the required adoption of AICPA Statement of Position 98-5 (SOP 98-5), “Reporting on the Costs of Start-up Activities.”
SOP 98-5 requires the write-off of any unamortized costs of start-up activities and organization costs. Going forward such
costs are being expensed as incurred.
NET EARNINGS
Net earnings for the year increased $83,317,000 or approximately 23% above fiscal 1999, which had increased
$65,503,000 or approximately 22% over the prior year. The increase was caused by additional sales, operating efficiencies
and other factors discussed above.
42
S YSCOCorporation
2000 Annual Report
DIVIDENDS
SYSCO began paying the quarterly dividend rate of twelve cents per share in February 2000, an increase from the ten cents
per share that became effective in February 1999. The summary on pages 22 and 23 shows the rate in effect for each of the
past eleven years.
RETURN ON SHAREHOLDERS’ EQUITY
The return on average shareholders’ equity before the cumulative effect of the accounting change for 2000 was approximately
29% compared to 26% in 1999 and 23% in 1998. Since inception SYSCO has averaged in excess of a 17% return on
shareholders’ equity before the cumulative effect of the accounting change.
43
S YSCOCorporation
2000 Annual Report
Broadline Facilities
Specialty Meat-Cutting
Operations
Specialty Produce
Locations
Systems Distribution Facilities
Fold-Outs in Progress
LOCATION OF PRINCIPAL OPERATIONS
BROADLINE FACILITIES
BARABOO-SYSCO FOOD SERVICES
Baraboo, Wisconsin
Gene M. Bohlmeyer, President
Robert A. Jauch,
Executive Vice President
DOUGHTIE’S SYSCO
FOOD SERVICES, INC.
Portsmouth, Virginia
C. Frederick Lankford, Chairman
John A. Hall, President
(New facility in Suffolk, Virginia
opening Spring 2001)
HALLSMITH-SYSCO FOOD SERVICES
Norton (Boston), Massachusetts
William Holden, President
Thaire B. Bryant,
Executive Vice President
HARDIN’S-SYSCO
FOOD SERVICES, LLC
Memphis, Tennessee
Bill R. Bowden, President
I & S FOODSERVICES, INC.
Edmonton, Alberta, Canada
Richard D. Pidwerbeski, President
LANKFORD-SYSCO
FOOD SERVICES, LLC
Pocomoke, Maryland
C. Frederick Lankford, President
Joseph R. Barton,
Executive Vice President
NOBEL/SYSCO
FOOD SERVICES COMPANY
Albuquerque, New Mexico
W. Keith Miller, President
NOBEL/SYSCO
FOOD SERVICES COMPANY
Denver, Colorado
Christopher S. DeWitt, President
ROBERT ORR-SYSCO
FOOD SERVICES, LLC
Nashville, Tennessee
Nick K. Taras, President
David L. Snyder,
Executive Vice President
PEGLER-SYSCO
FOOD SERVICES COMPANY
Lincoln, Nebraska
Gary L. Rezac, President
RITTER SYSCO
FOOD SERVICES, LLC
Jersey City, New Jersey
Martin L. Ritter, Chairman
Thomas H. Russell, President
STRANO SYSCO
FOODSERVICE LIMITED
Peterborough, Ontario, Canada
Paul V. Strano, President
SYSCO FOOD SERVICES - ALBANY
Albany, New York
Gail E. Allen, President
SYSCO FOOD SERVICES
OF ARIZONA, INC.
Phoenix, Arizona
J. Michael Dickson, President
David B. DeVane,
Executive Vice President
44
S YSCOCorporation
2000 Annual Report
SYSCO FOOD SERVICES
OF ARKANSAS, LLC
Little Rock, Arkansas
Walter S. Nunnelly III, President
SYSCO FOOD SERVICES
OF ATLANTA, LLC
College Park, Georgia
Gordon L. Graham, President
SYSCO FOOD SERVICES
OF AUSTIN, LP
Round Rock, Texas
Gary L. Ross, President
SYSCO FOOD SERVICES
OF BALTIMORE
Jessup, Maryland
G. Kent Humphries, President
Keith D. Shapiro,
Executive Vice President
SYSCO FOOD SERVICES
OF CENTRAL ALABAMA, INC.
Calera (Birmingham), Alabama
David R. Dickson, President
SYSCO FOOD SERVICES
OF CENTRAL FLORIDA, INC.
Ocoee (Orlando), Florida
Stephen F. Smith, President
Henry D. Varnell III,
Executive Vice President
SYSCO FOOD SERVICES
OF CENTRAL PENNSYLVANIA, LLC
Harrisburg, Pennsylvania
Donald K. Hunt, President
SYSCO FOOD SERVICES
OF CHARLOTTE, LLC
Concord, North Carolina
Robert J. Davis, President
Bruce H. Matthews,
Executive Vice President
SYSCO FOOD SERVICES-
CHICAGO, INC.
Des Plaines, Illinois
Charles W. Staes, President
Greg D. Bertrand,
Executive Vice President
SYSCO FOOD SERVICES/CINCINNATI
Cincinnati, Ohio
Joseph P. Calabrese, President
Michael D. Wiedower,
Executive Vice President
SYSCO FOOD SERVICES
OF CLEVELAND, INC.
Bedford Heights, Ohio
Richard J. Rose, Chairman
Chris J. Reasoner, President
SYSCO FOOD SERVICES
OF CONNECTICUT
Rocky Hill (Hartford), Connecticut
James M. Danahy, President
SYSCO FOOD SERVICES
OF DALLAS, LP
Dallas, Texas
Ivan R. Moore, Jr., President
Brett Lindig,
Executive Vice President
SYSCO FOOD SERVICES
OF DETROIT, LLC
Canton, Michigan
Michael W. Green, President
Thomas C. Barnes,
Executive Vice President
SYSCO FOOD SERVICES
OF EASTERN WISCONSIN
Jackson (Milwaukee), Wisconsin
Joseph J. Marone, President
Randall J. Plekker,
Executive Vice President
SYSCO FOOD SERVICES
OF GRAND RAPIDS, LLC
Grand Rapids, Michigan
David L. DeKock, President
Richard A. Johnston,
Executive Vice President
SYSCO FOOD SERVICES
OF HOUSTON, LP
Houston, Texas
Larry G. Pulliam, President
SYSCO FOOD SERVICES
OF IDAHO, INC.
Boise, Idaho
Thomas J. Morgan, Chairman
Reneé A. Lovejoy, President
SYSCO FOOD SERVICES
OF INDIANAPOLIS, LLC
Indianapolis, Indiana
Walter C. Mills, President
Jay I. Milligan,
Executive Vice President
SYSCO FOOD SERVICES OF IOWA, INC.
West Des Moines, Iowa
Steven R. Gress, President
SYSCO FOOD SERVICES OF JACKSON
Jackson, Mississippi
James H. Harper, President
Michael S. Headrick,
Executive Vice President
SYSCO FOOD SERVICES -
JACKSONVILLE, INC.
Jacksonville, Florida
Walter R. Rudisiler, President
Roy S. Hockenbrocht,
Executive Vice President
45
S YSCOCorporation
2000 Annual Report
SYSCO FOOD SERVICES
OF PHILADELPHIA, LLC
Philadelphia, Pennsylvania
Edward C. Merry, President
SYSCO FOOD SERVICES
OF PITTSBURGH, INC.
Harmony, Pennsylvania
Joel R. TePastte, President
SYSCO FOOD SERVICES
OF PORTLAND, INC.
Wilsonville, Oregon
Michael J. McLoughlin, President
Scott A. Sonnemaker,
Executive Vice President
SYSCO FOOD SERVICES
OF SACRAMENTO, INC.
Pleasant Grove, California
Paul A. Winterhalder, President
(Opening Fall 2001)
SYSCO FOOD SERVICES
OF ST. LOUIS, LLC
St. Charles, Missouri
Jerry L. Barash, President
SYSCO FOOD SERVICES
OF SAN ANTONIO, LP
San Antonio, Texas
William D. Fisher, President
SYSCO FOOD SERVICES
OF SAN DIEGO, INC.
Poway, California
Richard L. Friedlen, President
SYSCO FOOD SERVICES
OF SAN FRANCISCO, INC.
Fremont, California
Daniel S. Haag, President
Paul A. Winterhalder,
Executive Vice President
SYSCO FOOD SERVICES - JAMESTOWN
Jamestown, New York
Vernon E. Wetmore, Jr., President
SYSCO FOOD SERVICES
OF KANSAS CITY, INC.
Olathe, Kansas
James D. Hope, President
SYSCO FOOD SERVICES
OF LOS ANGELES, INC.
Walnut, California
Bruce J. Schwartz, President
SYSCO FOOD SERVICES
OF MINNESOTA, INC.
Mounds View (St. Paul), Minnesota
Philip J. Seipp, President
Timothy K. Hogan,
Executive Vice President
SYSCO FOOD SERVICES
OF MODESTO, INC.
Modesto, California
John A. Torza, President
SYSCO FOOD SERVICES
OF MONTANA, INC.
Billings, Montana
Patrick H. Burton, President
SYSCO FOOD SERVICES
OF NEW ORLEANS, LLC
Harahan, Louisiana
Bruce L. Soltis, President
SYSCO FOOD SERVICES
OF NORTHERN NEW ENGLAND, INC.
Westbrook (Portland), Maine
Richard A. Giles, President
Gregory E. Otterbein,
Executive Vice President
SYSCO FOOD SERVICES
OF OKLAHOMA, INC.
Norman, Oklahoma
Thomas D. Huffhines, President
46
SYSCO FOOD SERVICES
OF SEATTLE, INC.
Kent, Washington
Robert M. Jenson, President
Michael L. Kauffman,
Executive Vice President
ALASKA DIVISION
Anchorage, Alaska
King Jenks,
Vice President and
General Manager
SYSCO FOOD SERVICES
OF SOUTH FLORIDA, INC.
Miami, Florida
Tim K. Brown, President
SYSCO FOOD SERVICES
OF SOUTHEAST FLORIDA, LLC
Riviera Beach, Florida
Walter S. Deck, President
Peter G. Carantza,
Executive Vice President
SYSCO FOOD SERVICES - SYRACUSE
Warners, New York
William L. Loftin, President
Joseph H. Wood,
Executive Vice President
SYSCO FOOD SERVICES
OF VIRGINIA, LLC
Harrisonburg, Virginia
Alan E. Hasty, President
SYSCO FOOD SERVICES -
WEST COAST FLORIDA, INC.
Bradenton (Tampa), Florida
Carl S. Cannova, President
Edwin W. Solomon,
Executive Vice President
SYSCO INTERMOUNTAIN
FOOD SERVICES, INC.
Salt Lake City, Utah
Thomas M. Kesteloot, President
SYSCO/KONINGS WHOLESALE
Port Coquitlam (Vancouver),
B.C., Canada
Hans P. Konings, Chairman
Terry J. Early, President
SYSCO/LOUISVILLE
FOOD SERVICES CO.
Louisville, Kentucky
Jimmie D. Clark, Chairman
Peter J. Scatamacchia, President
Steven D. Hocker,
Executive Vice President
WATSON SYSCO FOOD SERVICES, INC.
Lubbock, Texas
Michael A. Davis, President
SPECIALTY MEAT-CUTTING
OPERATIONS
BUCKHEAD BEEF COMPANY
Atlanta, Georgia
Howard I. Halpern, Chairman
Kirk W. Halpern,
Executive Vice President
MALCOLM MEATS COMPANY
Northwood (Toledo), Ohio
Andrew L. Malcolm, President
Jeffrey J. Savage,
Executive Vice President
SYSCO NEWPORT MEAT COMPANY
Irvine, California
Richard A. Nicholas, Chairman
Timothy K. Hussman, President
S YSCOCorporation
2000 Annual Report
SPECIALTY PRODUCE
LOCATIONS
FRESHPOINT, INC.
Mitt Parker, President and
Chief Executive Officer
Brian M. Sturgeon,
Executive Vice President,
West Coast Region
AMERICAN PRODUCE &
VEGETABLE CO.
Dallas, Texas
Lucian M. La Barba, President
FRESHPOINT OF DENVER, INC.
Denver, Colorado
Joseph F. Hengemuhle, President
FRESHPOINT OF LAS VEGAS, INC.
Las Vegas, Nevada
Gregory L. Bird, General Manager
G & G PRODUCE, COMPANY
Los Angeles, California
Max Nisson, President
GOLDEN STATE PRODUCE
San Francisco, California
Kevin M. Alves, President
LEE RAY TARANTINO CO., INC.
San Francisco, California
Joseph R. Tarantino, Chairman
Paul G. Tarantino, President
PACIFIC ALLIED
Vancouver, B.C., Canada
Leigh S. Seto, General Manager
PACIFIC NANAIMO
Nanaimo, B.C., Canada
Bruce A. Ashcraft,
General Manager
PACIFIC PRODUCE CO., LTD.
Vancouver, B.C., Canada
Randolph M. Sung, President
ROYAL FOODS COMPANY, INC.
San Jose, California
George W. Gummow, President
Robert K. Shoemaker, Jr.,
Executive Vice President,
East Coast Region
AAA PACKAGING, INC.
Forest Park, Georgia
Matthew R. Houmes,
President
ATLANTA’S FINEST FOODSERVICE
Forest Park, Georgia
Richard J. Dachman, President
CARNIVAL FRUIT COMPANY, INC.
North Miami, Florida
Alan H. Spritz, President
FRESHPOINT
OF PALM BEACH, INC.
Riviera Beach, Florida
Robert A. Massave, President
IMPERIAL PRODUCE CO., INC.
Washington, D. C.
Dennis A. Clifford, President
MITT PARKER COMPANY, INC.
Forest Park, Georgia
Randolph S. Gill, President
MOVSOVITZ & SONS
OF FLORIDA, INC.
Jacksonville, Florida
Lawrence M. Movsovitz, Chairman
Steven W. Haugen, President
MOVSOVITZ OF GEORGIA
Savannah, Georgia
Aubrey V. Sutton,
Vice President and
General Manager
47
S YSCOCorporation
2000 Annual Report
P. TAVILLA CO., INC.
Miami, Florida
Walter R. Vazquez, Sr., President
RED’S MARKET, INC.
Melbourne, Florida
Kenric A. Jameison,
Vice President and
General Manager
Orlando, Florida
Robert J. Gordon, President
Tampa, Florida
Brett L. Gardner, President
SYSTEMS DISTRIBUTION
FACILITIES
THE SYGMA NETWORK, INC.
Gregory K. Marshall, Chairman
and Chief Executive Officer
Stephen M. Deasey, President
and Chief Operating Officer
Jerry J. Eggebrecht, President
Denver Division
ARLINGTON (DALLAS), TEXAS
David A. Hanson,
Vice President and
General Manager
CLACKAMAS (PORTLAND), OREGON
Stephen F. Bohrer,
Vice President and
General Manager
ORLANDO, FLORIDA
Gregory A. Ross,
Vice President and
General Manager
PRYOR, OKLAHOMA
Joseph Vanderhoof,
Vice President and
General Manager
RANCHO CUCAMONGA
(LOS ANGELES), CALIFORNIA
Robert E. Cagle,
Vice President and
General Manager
STOCKTON, CALIFORNIA
John M. Rivers, Jr.,
Vice President and
General Manager
David M. Cleck, Senior Vice President
CHARLOTTE, NORTH CAROLINA
John W. Jarosz,
Vice President and
General Manager
WESTBOROUGH (BOSTON),
MASSACHUSETTS
Raymond R. Leveille,
Vice President and
General Manager
Chet L. Miner, Senior Vice President
COLUMBUS, OHIO
Kirk Krajewski
Vice President and
General Manager
DANVILLE, ILLINOIS
David E. Myers,
Vice President and
General Manager
MONROE (DETROIT), MICHIGAN
Robert G. Johnson,
Vice President and
General Manager
HARRISBURG, PENNSYLVANIA
Jeffrey A. Coppenger,
Vice President and
General Manager
SAN ANTONIO, TEXAS
James E. Donelson,
Vice President and
General Manager
48
FOLD-OUT STRATEGY
SYSCO’s internal growth strategy
involves building distribution centers
in established markets that previously
were being served by another SYSCO
company from a distance. When a
“fold-out” company is formed, domiciled
sales and delivery personnel become
employees of the new company, a core
management team is transferred from
the original or other SYSCO companies
and additional employees are hired
locally. Supported by a state-of-the-art
facility and the SYSCO Uniform
System, the new company is better able
to serve its customers and SYSCO grows
more rapidly in both the original and
the “fold-out” markets.
FOODSERVICE DISTRIBUTION
MARKET
The total dollar purchasing volume of
food and related nonfood products by
every type of operation preparing food in
the “away from home” market, including
restaurants, delis, hospitals, retirement
homes, schools, colleges, hotels, cruise
lines, entertainment facilities and other
locations. This market is served by three
distributor categories, as defined below:
• Broadline Distributors supply a wide
array of food and related items to all
types of foodservice operators. These
operators generally require a broad
spectrum of products and their menu
offerings may change frequently.
SYSCO’s 63 “traditional” operating
facilities are broadline distributors.
• Customized or Systems Distributors,
also known as chain restaurant or
quick-service restaurant distributors,
supply chain restaurant operations.
This customer segment generally
serves a relatively fixed menu and
requires a more limited product line.
The SYGMA Network, Inc. (SYGMA)
is a systems distributor.
• Specialty or Niche Distributors
specialize in supplying a specific product
category or a specific customer segment
GLOSSARY
such as ethnic foodservice restaurants.
FreshPoint and SYSCO’s custom-cutting
meat companies are specialty distributors.
MARKETING ASSOCIATE
This is SYSCO’s term for its team of
nearly 7,000 commissioned sales profes-
sionals, or relationship managers, who
provide customers with services tailored
to undergird their operations and profit-
ability. Their responsibilities include
assuring that orders are submitted timely
and completely, presenting new products
that will enhance the customer’s menu or
reduce the labor required for preparation,
and assisting with inventory control and
menu costing and pricing.
SYSCO’S BROADLINE
CUSTOMER SEGMENTS
• Marketing Associate-Served
Customers include independently-
operated foodservice locations serviced
by a SYSCO Marketing Associate. In
FY 2000 sales to these customers
represented approximately 55.4 percent
of total sales at SYSCO’s 63 broadline,
or traditional, locations.
• Multi-Unit Customers include local,
regional or national foodservice
operations that have multiple locations
and, due to their more centralized
purchasing operations, generally do not
require the same degree of personalized,
value-added services that Marketing
Associates offer, but are supported by
other sales personnel within the SYSCO
companies. Multi-unit customers
contributed approximately 44.6 percent
of total sales in SYSCO’s 63 broadline,
or traditional, locations in FY 2000.
SYSCO BRAND PRODUCTS
More than 29,000 products
distinctively identified as being
available only from SYSCO carry the
SYSCO Brand. Supported by stringent
quality control specifications, these
products are designed and developed to
meet or exceed customer requirements,
then are monitored throughout the
manufacturing and production process
by a staff of more than 180 SYSCO
Quality Assurance professionals.
• The Cornerstone Brand has four
quality designations — Supreme,
Imperial, Classic and Reliance —
that were developed for products
across all of SYSCO’s broad
categories of product offerings.
• Segment Brands are designed for
specific customer or market segments
and generally include various products
in one category such as ethnic foods,
delicatessen items, tabletop condiments
or specially formulated healthcare prod-
ucts. Examples are the Arrezzio line of
Italian foods and the Casa Solana line of
Mexican items.
• Brandables by SYSCO is the term
SYSCO uses to describe a complete
foodservice package created for
customers that incorporates a SYSCO
segment food product that may be
served in either a service line or a
kiosk/cart set-up. The total concept
includes signage describing the menu
offering, such as the Mein Street
Wok, which features items from the
Jade Mountain brand line. It also
includes uniforms, utensils, promo-
tional materials and comprehensive
operator manuals that specify easy
set-up, heat-and-serve procedures and
plating techniques. It provides customers
a quick, easy and high profile brand-like
theme to create interest and variety in
their foodservice offerings without
incurring licensing or franchise fees.
REAL SALES GROWTH
Real sales growth is the total SYSCO
sales growth less the effect of acquisi-
tions, plus or minus internally calculat-
ed year-over-year product cost deflation
or inflation.
49
DIRECTORS
Left to right: Thomas B. Walker, Jr., Richard J. Schnieders, Colin G. Campbell, John F. Woodhouse, Phyllis S. Sewell,
Thomas E. Lankford, Jonathan Golden, John W. Anderson.
Left to right: Judith B. Craven, Frank A. Godchaux III, Bill M. Lindig, Frank H. Richardson, Charles H. Cotros,
Richard G. Merrill, Gordon M. Bethune, Arthur J. Swenka.
50
JOHN W. ANDERSON (68) 1, 2
Elected: 1981
Retired Vice President,
Southwestern Bell Telephone Co.
GORDON M. BETHUNE (59) 1, 2, 5, 6
Elected: 1998
Chairman of the Board
and Chief Executive Officer,
Continental Airlines, Inc.
COLIN G. CAMPBELL (64) 1*, 2, 4, 6
Elected: 1989
President and Chief Executive Officer,
Colonial Williamsburg Foundation
CHARLES H. COTROS (63) 3*, 4*, 5
Elected: 1985
Chairman and Chief Executive Officer,
SYSCO Corporation
JUDITH B. CRAVEN, M.D., M.P.H. (54) 1, 2, 5
Elected: 1996
Retired President, United Way
of theTexas Gulf Coast
(Health and Human Services
Organization)
FRANK A. GODCHAUX III (73) 1, 5, 6
Elected: 1987
Chairman, Riviana Foods, Inc.
(Food Manufacturer)
DIRECTORS
JONATHAN GOLDEN (63) 4, 5, 6*
Elected: 1984
Managing Partner,
Arnall Golden & Gregory, LLP
(Law Firm)
THOMAS E. LANKFORD (53) 3
Elected: 2000
Executive Vice President,
Foodservice Operations,
SYSCO Corporation
RICHARD G. MERRILL (69) 1, 2*, 4, 6
Elected: 1983
Retired Executive Vice President,
The Prudential Insurance
Company of America
FRANK H. RICHARDSON (67) 1, 2, 5*, 6
Elected: 1993
Retired President and
Chief Executive Officer,
Shell Oil Company
RICHARD J. SCHNIEDERS (52) 3, 4, 5
Elected: 1997
President and Chief Operating Officer,
SYSCO Corporation
PHYLLIS S. SEWELL (69) 1, 2, 6
Elected: 1991
Retired Senior Vice President,
Federated Department Stores, Inc.
(Retail)
ARTHUR J. SWENKA (63) 3
Elected: 1994
Senior Vice President, Operations,
SYSCO Corporation
THOMAS B. WALKER, JR. (76) 1, 4, 5, 6
Elected: 1970
Limited Partner,
The Goldman Sachs Group, Inc.
(Investment Bankers)
JOHN F. WOODHOUSE (69) 4, 5
Elected: 1969
Senior Chairman,
SYSCO Corporation
Board Committees
1 Audit
2 Compensation and Stock Option
3 Employee Benefits
4 Executive
5 Finance
6 Nominating
* Denotes Committee Chairman
DISTINGUISHED TENURE DIRECTORS
JOHN F. BAUGH
Founder and Retired Senior Chairman,
SYSCO Corporation
HERBERT IRVING
Retired Vice Chairman
of the Board,
SYSCO Corporation
FRANK M. ELLIS, JR.
Retired Chairman, Sysco/Louisville
Food Services Co.
JABIE S. HARDIN
Retired Chairman, Hardin's-Sysco
Food Services, Inc.
PAUL F. KALAT
Retired Chairman,
Hallsmith-Sysco Food Services
FRITZ C. KNOEBEL
Retired Chairman, Nobel/Sysco
Food Services Company
BILL M. LINDIG
Retired Chairman,
SYSCO Corporation
E. JAMES LOWREY
Retired Executive Vice President-
Finance & Administration,
SYSCO Corporation
DONALD H. PEGLER, JR.
Retired Chairman, Pegler-Sysco
Food Services Company
JAMES A. SCHLINDWEIN
Retired Executive Vice President-
Merchandising Services,
SYSCO Corporation
51
DIRECTORS(cid:213) COUNCIL
The Directors’ Council was established in 1981 to assist the Board of Directors in determining
management strategies and policies to anticipate industry trends and respond capably to customers’
requirements. Composed of six operating company presidents who represent some of SYSCO’s most
effective operations, the council meets quarterly and reports formally to the Board semiannually.
Left to right, seated:
GAIL E. ALLEN, President,
Sysco Food Services - Albany
JAMES C. GRAHAM, Senior Vice President,
Operations (Southwest Region)
(Term expires November 2000)
Left to right, standing:
TIM K. BROWN, President
Sysco Food Services of South Florida, Inc.
BRUCE J. SCHWARTZ, President,
Sysco Food Services of Los Angeles, Inc.
(Term expires November 2000)
C. FREDERICK LANKFORD, President,
Lankford–Sysco Food Services, LLC
(Term expires November 2000)
MICHAEL W. GREEN, President,
Sysco Food Services of Detroit, LLC
52
CORPORATE OFFICERS
Left to right: Thomas E. Lankford, Larry J. Accardi, John K. Stubblefield, Jr.
Left to right: Gregory K. Marshall, Mitt Parker, Kenneth J. Carrig, James E. Lankford, James D. Wickus, James C. Graham,
Kenneth F. Spitler, O. Wayne Duncan, Arthur J. Swenka.
53
CORPORATE OFFICERS
Left to right: Dale K. Robertson, G. Mitchell Elmer, Diane Day Sanders,
Mary Beth Moehring, Robert C. Thurber, Alan W. Kelso.
Left to right: Robert G. Culak, Imelda M. DiVizio, Twila M. Day,
Kent R. Berke, Kirk G. Drummond, John S. Carlson.
LARRY J. ACCARDI
Executive Vice President,
Merchandising Services &
Multi-Unit Sales
KENT R. BERKE
Assistant Vice President and
Associate General Counsel
JACK D. CARLSON
Vice President, Distribution Services
JOHN S. CARLSON
Vice President, Marketing
KENNETH J. CARRIG
Senior Vice President, Administration
CHARLES H. COTROS
Chairman and
Chief Executive Officer
ROBERT G. CULAK
Vice President,
Financial Reporting and Compliance
TWILA M. DAY
Assistant Vice President,
Technology & Applications
WILLIAM B. DAY
Assistant Controller
IMELDA M. DIVIZIO
Vice President of Merchandising-
Logistics and National Brands
KIRK G. DRUMMOND
Vice President and
Chief Information Officer
O. WAYNE DUNCAN
Senior Vice President,
Operations
(Southeast Region)
G. MITCHELL ELMER
Vice President and Controller
ALBERT L. GAYLOR
Assistant Vice President,
Marketing Services
JAMES C. GRAHAM
Senior Vice President,
Operations
(Southwest Region)
ALAN W. KELSO
Assistant Vice President,
Safety and Employee Relations
JAMES E. LANKFORD
Senior Vice President,
Operations
(Western Region)
THOMAS E. LANKFORD
Executive Vice President,
Foodservice Operations
JOHN LOCKE
Vice President, Merchandising
GREGORY K. MARSHALL
Senior Vice President,
SYSCO Corporation
and Chairman and
Chief Executive Officer,
The SYGMA Network, Inc.
54
CORPORATE OFFICERS
Left to right: Carolyn S. Mitchell, David B. Smallwood,
Left to right: William B. Day, Michael C. Nichols, Toni R. Spigelmyer,
Thomas G. Wason, Kathy Oates, George A. Weber,
Jack D. Carlson.
Albert L. Gaylor, Craig G. Watson, Steven A. Nordlander,
John Locke.
CAROLYN S. MITCHELL
Corporate Secretary
MARY BETH MOEHRING
Vice President,
Training and
Organizational Development
MICHAEL C. NICHOLS
Vice President and General Counsel
STEVEN A. NORDLANDER
Assistant Vice President,
Operations Development
KATHY OATES
Assistant Treasurer
MITT PARKER
Senior Vice President,
SYSCO Corporation
and President and
Chief Executive Officer,
FreshPoint, Inc.
DALE K. ROBERTSON
Vice President, Multi-Unit Sales-
Customer Development
DIANE DAY SANDERS
Vice President and Treasurer
RICHARD J. SCHNIEDERS
President and Chief Operating Officer
DAVID B. SMALLWOOD
Vice President, Multi-Unit Sales
TONI R. SPIGELMYER
Assistant Vice President,
Investor and Media Relations
KENNETH F. SPITLER
Senior Vice President,
Operations
(Northeast Region)
JOHN K. STUBBLEFIELD, JR.
Executive Vice President,
Finance and Administration
ARTHUR J. SWENKA
Senior Vice President,
Operations
(Western Region)
ROBERT C. THURBER
Vice President, Merchandising
THOMAS G. WASON
Vice President, Perishables
CRAIG G. WATSON
Assistant Vice President,
Quality Assurance
GEORGE A. WEBER
Assistant Controller
JAMES D. WICKUS
Senior Vice President,
Operations
(Midwest Region)
55
CORPORATE OFFICES
SYSCO Corporation
1390 Enclave Parkway
Houston, Texas 77077-2099
(281) 584-1390
Internet: http://www.sysco.com
ANNUAL SHAREHOLDERS’ MEETING
SYSCO Corporation
1390 Enclave Parkway,
Houston, Texas 77077-2099
November 3, 2000 at 10:00 a.m.
INDEPENDENT ACCOUNTANTS
Arthur Andersen LLP
Houston, Texas
COUNSEL
Arnall Golden & Gregory, LLP
Atlanta, Georgia
COMMON STOCK
AND DIVIDEND INFORMATION
SYSCO’s common stock is traded
on the New York Stock Exchange
under the symbol “SYY.”
The company consistently has paid
quarterly cash dividends on its
common stock and has increased the
dividend 31 times in its 30 years as a
public company. The current quarterly
cash dividend is $0.12 per share.
GENERAL INFORMATION
DIVIDEND REINVESTMENT
PLAN WITH OPTIONAL CASH
PURCHASE FEATURE
SYSCO’s Dividend Reinvestment
Plan provides a convenient way for
shareholders of record to reinvest
quarterly cash dividends in SYSCO
shares automatically, with no service
charge or brokerage commissions.
The Plan also permits registered
shareholders to invest additional
money to purchase shares. In addition,
certificates may be deposited directly
into a Plan account for safekeeping
and may be sold directly through the
Plan for a modest fee.
Shareholders desiring information
about the Dividend Reinvestment
Plan with Optional Cash Purchase
Feature may obtain a brochure and
enrollment form by contacting the
Transfer Agent, Fleet National Bank,
at 1-800-730-4001.
INVESTOR CONTACT
Investor inquiries should be
directed to:
Ms. Toni R. Spigelmyer
Assistant Vice President,
Investor and Media Relations
(281) 584-1458
SHAREHOLDER INFORMATION
For information or assistance
regarding individual stock records,
Dividend Reinvestment Plan with
Optional Cash Purchase Feature,
dividend or tax information,
replacement of stock certificates and
transfer instructions, please contact
the following:
TRANSFER AGENT AND REGISTRAR
Fleet National Bank
c/o EquiServe
150 Royall Street
Canton, Massachusetts 02021
1-800-730-4001
Internet: http://www.equiserve.com
FORM 10-K AND FINANCIAL
INFORMATION
A copy of the fiscal 2000 Form
10-K Annual Report filed with
the Securities and Exchange
Commission, as well as copies of
financial reports and other company
literature, may be found on our
web site at http://www.sysco.com or
may be obtained without charge
upon written request to the Investor
Relations Department, SYSCO
Corporation, at the corporate offices,
or by calling 1-800-337-9726.
FORWARD-LOOKING STATEMENTS
Certain statements made herein that look forward in time or express management’s expectations or beliefs with respect to the
occurrence of future events are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They
include statements about anticipated industry growth, SYSCO’s long-term objectives with respect to real sales growth, earnings
per share, return on equity and debt-to-capitalization ratios, the potential for significant future growth, anticipated capital
expenditures and implementation and timing of “fold-outs” and acquisitions.
These statements are based on current expectations and management’s estimates; actual results may differ materially.
Decisions to pursue “fold-outs” and acquisitions and expenditures for such could vary depending upon construction schedules
and the timing of other purchases, such as fleet and equipment, while “fold-out” and acquisition timing and results could be
impacted by competitive conditions, labor issues and other matters. The ability to pursue acquisitions also depends on the
availability and suitability of potential candidates and management’s allocation of capital. Industry growth may be affected by
conditions in the economy. SYSCO’s long-term objectives with respect to real sales growth, earnings per share, return on equity
and debt-to-capitalization ratios and the potential for significant future growth could be affected by the company’s competitive
price pressures, availability of supplies, work stoppages, successful integration of acquired companies, conditions in the economy,
the industry and internal factors that may alter planned results. For a discussion of certain risks and uncertainties that could
cause actual results to differ from those contained in the forward-looking statements, see the Company’s Annual Report on
form 10-K for the fiscal year ended July 1, 2000.
56
F
iscal 2000 marked SYSCO Corporation’s 30th anniversary as a public
company -- 30 years of shaping our future with employees, customers, suppliers and
shareholders to create growth, prosperity and value. During this relatively short time
period, SYSCO has grown from a fledgling company with $115 million in sales to its
current leading position in the industry with $19.3 billion in sales. Through a network of
distribution centers across North America, SYSCO supplies
food and related products to about 356,000 customers in the
contiguous United States, Alaska, the District of Columbia,
Hawaii and portions of Canada.
The foundation of SYSCO’s success is based upon common
principles that often are overlooked in business today -- superior
customer service, extensive product knowledge, consistent quality
product offerings and business-building support services.
A distinctive mix of ever-evolving branded products, coupled
with a unique blend of dedicated employees, has thrust SYSCO
into a new dimension, from a broadline distributor to a broad
brand provider, supported by a depth of service unparalleled in
the foodservice distribution industry. Brand width and service
depth have made SYSCO the distributor of choice for the
meals-prepared-away-from-home market, and will fuel its
growth in the future. SYSCO’s broad line of fresh and frozen
meats, seafood, poultry, fruits and vegetables, canned and dry
foods, equipment and supplies, beverages, bakery items, dairy products, disposables,
medical and surgical products, chemical and sanitation items are now joined by a wide
array of segment brand products as well as custom-cut steaks and specialty produce items.
SYSCO’s product menu is ever-evolving; the commitment to customers is unchanging –
a steadfast dedication to unsurpassed customer service.
*as of July 1, 2000
Web address....................................................www.sysco.com
Exchange and Ticker Symbol .............................NYSE: SYY
Employees ....................................................................40,400*
Customers..................................................................356,000*
Products.....................................................................275,000*
Delivery Vehicles............................................................7,290*
Marketing Associates .....................................................6,981*
Quarterly Cash Dividend per Share.............................$0.12
101 Distribution Locations
63 Broadline Facilities
22 Specialty Produce Locations
13 SYGMA Facilities
3 Custom-Cutting Meat Operations
Calendar 1999 Foodservice
Distribution Industry Market......................Approximately
$175 Billion
TABLE OF CONTENTS
Letter to Shareholders
2
5
Review of Operations
20 Community Activities
21 Financial Section
49 Glossary
50 Directors
52 Directors’ Council
53 Corporate Officers
Employees pictured on cover, left to right:
Bobby Delgado, Driver; Sandra Carson,
Director of Safety and Health Services; Sonia
Avalon, Credit Administrator; James Blake,
Marketing Associate; Mike Howdeshell,
Manager, Beverage (kneeling); Rohani
Clawson, Merchandiser; Dana Barba,
Customer Service Supervisor; and Joe Clark,
44 Location of Principal Operations
56 General Information
Network Administrator.
.
m
o
c
n
g
i
s
e
d
s
u
s
a
g
e
p
.
w
w
w
.
c
n
I
,
n
g
i
s
e
D
s
u
s
a
g
e
P
S Y S C O ®
S Y S C O
S
Y
S
C
O
C
O
R
P
O
R
A
T
I
O
N
2
0
0
0
A
N
N
U
A
L
R
E
P
O
R
T
S Y S C O Corporation
1390 Enclave Parkway
Houston, Texas
77077-2099
(281) 584-1390
www.sysco.com
B R A N D W I D T H A N D S E R V I C E D E P T H
B R A N D W I D T H A N D S E R V I C E D E P T H
SYSCO - AR - 00
2 0 0 0 A N N U A L R E P O R T