DEBT AND OTHER FINANCING ARRANGEMENTS

Sysco’s debt consists of the following:



	July 2, 2016			Jun. 27, 2015
	(In thousands)
Senior notes, interest at 5.25%, maturing in fiscal 2018 ⁽¹⁾	$	506,456		$	502,608
Senior notes, interest at 5.375%, maturing in fiscal 2019 ⁽¹⁾	249,141			248,824
Senior notes, interest at 2.60%, maturing in fiscal 2022 ⁽¹⁾	445,026			444,212
Debentures, interest at 7.16%, maturing in fiscal 2027 ⁽²⁾	50,000			50,000
Debentures, interest at 6.50%, maturing in fiscal 2029 ⁽¹⁾	223,716			223,610
Senior notes, interest at 5.375%, maturing in fiscal 2036 ⁽¹⁾	496,932			496,775
Senior notes, interest at 6.625%, maturing in fiscal 2039 ⁽¹⁾	244,655			244,415
Senior notes, interest at 2.60%, maturing in fiscal 2021 ⁽¹⁾	762,227			—
Senior notes, interest at 3.75%, maturing in fiscal 2026 ⁽¹⁾	746,023			—
Senior notes, interest at 4.85%, maturing in fiscal 2046 ⁽¹⁾	495,395			—
Senior notes, interest at 1.90%, maturing in fiscal 2019 ⁽¹⁾	502,151			—
Senior notes, interest at 2.50%, maturing in fiscal 2022 ⁽¹⁾	506,484			—
Senior notes, interest at 3.30%, maturing in fiscal 2027 ⁽¹⁾	990,603			—
Senior notes, interest at 4.50%, maturing in fiscal 2046 ⁽¹⁾	493,897			—
Senior notes, interest at 1.25%, maturing in fiscal 2023 ⁽¹⁾	552,391			—
Senior notes, interest at 1.45%, maturing in fiscal 2018 ^{(1), (3)}	—			500,801
Senior notes, interest at 2.35%, maturing in fiscal 2020 ^{(1), (3)}	—			752,070
Senior notes, interest at 3.00%, maturing in fiscal 2022 ^{(1), (3)}	—			745,136
Senior notes, interest at 3.50%, maturing in fiscal 2025 ^{(1), (3)}	—			1,239,116
Senior notes, interest at 4.35%, maturing in fiscal 2035 ^{(1), (3)}	—			742,664
Senior notes, interest at 4.50%, maturing in fiscal 2045 ^{(1), (3)}	—			981,813
Notes payable, capital leases, and other debt, interest averaging 3.12% and maturing at various dates to fiscal 2025 as of July 2, 2016 and 2.81% and maturing at various dates to fiscal 2026 as of June 27, 2015	170,305			149,833
Total debt	7,435,402			7,321,877
Less current maturities of long-term debt	(8,909		)	(4,979,301		)
Less notes payable	(89,563		)	(70,751		)
Net long-term debt	$	7,336,930		$	2,271,825

⁽¹⁾ Represents senior notes that are unsecured, are not subject to any sinking fund requirement and include a redemption provision that allows Sysco to retire the debentures and notes at any time prior to maturity at the greater of par plus accrued interest or an amount designed to ensure that the debenture and note holders are not penalized by the early redemption.

⁽²⁾ This debenture is not subject to any sinking fund requirement and is no longer redeemable prior to maturity.

⁽³⁾ Represents senior notes that were redeemed in July 2015 under a mandatory redemption feature.

As of July 2, 2016, the principal payments required to be made during the next five fiscal years on long-term debt, excluding notes payable and commercial paper, are shown below:



	Amount
	(In thousands)
2017	$	8,909
2018	536,145
2019	770,404
2020	754,785
2021	503,961

Sysco has a commercial paper program allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed $1.5 billion. As of July 2, 2016, there were no commercial paper issuances outstanding. Any outstanding amounts are classified within long-term debt, as the program is supported by a long-term revolving credit facility. During the first 53 weeks of 2016, aggregate outstanding commercial paper issuances and short-term bank borrowings ranged from zero to approximately $1.0 billion.

Senior notes redemption related to US Foods Merger

On June 26, 2015, Sysco terminated the US Foods merger agreement triggering the redemption of the senior notes that had been issued in contemplation of the proposed merger at a redemption price equal to 101% of the principal of the senior notes. Sysco redeemed the senior notes in July 2015 using cash on hand and proceeds from our commercial paper program in the amount of $5.1 billion. The repayment of these senior notes triggered a redemption loss of $86.5 million included in interest expense for the first quarter of fiscal 2016. Additionally, as discussed in Note 6, "Derivative Financial Instruments," the company terminated fair value hedges associated with these senior notes.

Interest expense for fiscal 2016 includes the following amounts from these transactions:



	53-Week Period Ended July 2, 2016
	(In thousands)
Redemption premium payment	$	50,000
Debt issuance cost write-off	28,642
Bond discount write-off	17,869
Gain on swap termination	(10,051		)
Loss on extinguishment of debt	86,460
Interest expense on senior notes	8,375
Total	$	94,835

Senior notes offering related to accelerated share repurchase

On September 28, 2015, Sysco issued senior notes totaling $2.0 billion. Details of the senior notes are as follows:



Maturity Date	Par Value (in thousands)		Coupon Rate		Pricing (percentage of par)
October 1, 2020	$	750,000	2.60	%	99.809	%
October 1, 2025	750,000		3.75		100.000
October 1, 2045	500,000		4.85		99.921

Sysco used the net proceeds from the offering to fund repurchases of outstanding shares of its common stock pursuant to Sysco’s $1.5 billion accelerated share repurchase program, to repay approximately $500 million of its outstanding commercial paper and for general corporate purposes. The notes are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes. Interest on the senior notes is paid semi-annually in arrears on April 1 and October 1, beginning April 1, 2016. At Sysco’s option, any or all of the senior notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem (i) the senior notes maturing in 2020 before the date that is one month prior to the maturity date, (ii) the senior notes maturing in 2025 before the date that is three months prior to the maturity date or (iii) the senior notes maturing in 2045 before the date that is six months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the senior notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the senior notes to be redeemed that would be due if such senior notes matured on the applicable date described above. If Sysco elects to redeem a series of senior notes on or after the applicable date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the senior notes to be redeemed. Sysco will pay accrued and unpaid interest on the notes redeemed to the redemption date.

Bridge Term Loan Agreement

On March 14, 2016, Sysco entered into a £1,725 million bridge term loan agreement (the Bridge Term Loan Agreement) (approximately $2,440 million based on the applicable exchange rate as of July 2, 2016) to fund the proposed Brakes Group Acquisition. Subject to certain terms and conditions, Sysco would have been allowed to borrow up to £1,725 million as a term loan upon, or substantially contemporaneously with, the closing of the Brakes Acquisition to fund the Brakes Acquisition, refinance certain indebtedness of the Brakes Group and pay related fees and expenses.

The Bridge Term Loan Agreement was terminated by Sysco effective April 6, 2016 following the closing of the offering of $2.5 billion in aggregate principal amount of new senior notes.

Senior notes offering related to Brakes Group Acquisition

On April 1, 2016, Sysco issued senior notes totaling $2.5 billion in aggregate principal amount. Details of the senior notes are as follows:



Maturity Date	Par Value (in thousands)		Coupon Rate		Pricing (percentage of par)
April 1, 2019	$	500,000	1.90	%	99.945	%
July 15, 2021	500,000		2.50		99.948
July 15, 2026	1,000,000		3.30		99.623
April 1, 2046	500,000		4.50		99.657

Sysco used the net proceeds from the offering to fund the Brakes Acquisition. The notes initially are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes. Interest on the senior notes maturing in 2019 and 2046 will be paid semi-annually in arrears on April 1 and October 1, beginning October 1, 2016. Interest on the senior notes maturing in 2021 and 2026 is paid semi-annually in arrears on January 15 and July 15, beginning July 1, 2016. At Sysco’s option, any or all of the senior notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem (i) the senior notes maturing in 2019 before the maturity date, (ii) the senior notes maturing in 2021 before the date that is one month prior to the maturity date, (iii) the senior notes maturing in 2026 before the date that is three months prior to the maturity date or (iv) the senior notes maturing in 2046 before the date that is six months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the senior notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the senior notes to be redeemed that would be due if such senior notes matured on the applicable date described above. If Sysco elects to redeem a series of senior notes on or after the applicable date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the senior notes to be redeemed. Sysco will pay accrued and unpaid interest on the notes redeemed to the redemption date.

On June 23, 2016, Sysco issued €500 million aggregate principal amount of its 1.250% Senior Notes due 2023 (the Euro Notes). The Euro Notes were sold in an underwritten public offering pursuant to an Underwriting Agreement, dated June 14, 2016, among Sysco, the Guarantors and representatives of the several underwriters. Sysco used the net proceeds from the Euro Note offering to pay a portion of the Brakes Acquisition purchase price. At Sysco’s option, any or all of the Euro Notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem the Euro Notes before the date that is two months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the Euro Notes to be redeemed or the sum of the present values of the remaining scheduled payments of principal and interest on the Euro Notes to be redeemed. If Sysco elects to redeem the Euro Notes on or after the date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the Euro Notes to be redeemed. Sysco will pay accrued and unpaid interest on the Euro Notes redeemed to the redemption date.