Sysco SYY · USD

BUSINESS SEGMENT INFORMATIONWe have combined certain of our operations in three reportable segments. “Other” financial information is attributable to the company’s other operating segments that do not meet the quantitative disclosure thresholds.•U.S. Foodservice Operations – primarily includes (a) our U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, produce, specialty Italian, specialty imports and a wide variety of non-food products and (b) our U.S. Specialty operations, which include our FreshPoint fresh produce distribution business, our Buckhead | Newport Meat & Seafood specialty protein operations, our growing Italian Specialty platform anchored by Greco & Sons, Inc., our Edward Don restaurant equipment and supplies distribution business, our Asian specialty distribution company and a number of other small specialty businesses that are not material to the operations of Sysco; •International Foodservice Operations – includes operations outside of the United States (U.S.), which distribute a full line of food products and a wide variety of non-food products. The Americas primarily consists of operations in Canada, Bahamas, Costa Rica and Panama, as well as our export operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden;•SYGMA – our U.S. customized distribution operations serving quick-service chain restaurant customer locations; and•Other – primarily our hotel supply operations, Guest Worldwide.The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Our Global Support Center expenses generally include all expenses of the corporate office and Sysco’s shared service operations. Collectively, our Global Support Center provides numerous centralized services to our operating sites and performs support activities for employees, suppliers and customers. These services include customer and vendor contract administration, finance, legal, information technology, risk management and insurance, sales and marketing, merchandising, inbound logistics, human resources, and strategy. Expenses for the Global Support Center primarily consist of payroll costs for employees assigned to these operations, including severance, if any, all U.S.

REVENUEDisaggregation of SalesThe following tables present our sales disaggregated by reportable segment and sales mix for our principal product categories for the periods presented:Year Ended Jun. 28, 2025US Foodservice OperationsInternational Foodservice OperationsSYGMAOtherTotal(In millions)Principal Product CategoriesFresh and frozen meats$10,674 $2,221 $2,291 $— $15,186 Canned and dry products10,586 3,043 1,016 — 14,645 Frozen fruits, vegetables, bakery and other8,130 2,811 1,346 — 12,287 Dairy products6,421 1,695 570 — 8,686 Poultry5,842 1,135 1,159 — 8,136 Fresh produce5,229 1,103 300 — 6,632 Paper and disposables4,109 533 802 51 5,495 Beverage products1,535 750 620 81 2,986 Seafood2,175 434 170 — 2,779 Equipment and smallwares 1,138 204 49 498 1,889 Other (1)1,126 976 87 460 2,649 Total Sales$56,965 $14,905 $8,410 $1,090 $81,370 (1)Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.Year Ended Jun. 29, 2024US Foodservice OperationsInternational Foodservice OperationsSYGMAOtherTotal(In millions)Principal Product CategoriesCanned and dry products$10,677 $3,294 $931 $— $14,902 Fresh and frozen meats10,243 2,019 2,033 — 14,295 Frozen fruits, vegetables, bakery and other8,083 2,718 1,260 — 12,061 Dairy products5,856 1,610 565 — 8,031 Poultry5,502 1,115 1,069 — 7,686 Fresh produce5,451 1,092 282 — 6,825 Paper and disposables4,035 537 756 58 5,386 Seafood2,196 442 183 — 2,821 Beverage products1,436 685 583 88 2,792 Equipment and smallwares826 197 25 497 1,545 Other (1)1,034 852 81 533 2,500 Total Sales$55,339 $14,561 $7,768 $1,176 $78,844 (1)Other sales relate to certain non-food products, including textiles and amenities for our hotel supply business, other janitorial products, and medical supplies.Year Ended Jul.

COMMITMENTS AND CONTINGENCIESLegal ProceedingsSysco is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Although the final results of legal proceedings cannot be predicted with certainty, based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the company.We have been pursuing claims against a variety of vendors from which the company purchased products. To mitigate the risk of incurring significant legal fees on these claims without any ultimate gain, in calendar 2019 and 2020, we entered into agreements with a third party whereby Sysco secured a minimum amount of cash proceeds from the third party in exchange for assigning to the third party the rights to a portion of the future litigation proceeds. At the time of receipt of these cash proceeds, the amounts were deferred in “Other long-term liabilities.”In June 2023, an agreement was reached in which we assigned all remaining claims against these vendors to the third party. As a result, Sysco is no longer obligated to pursue litigation against these vendors and therefore previous deferred proceeds were recognized within “Other expense (income), net.” In total, this agreement resulted in $122 million being recognized in “Other expense (income), net” in June 2023.Other CommitmentsSysco has committed to aggregate product purchases for resale in order to benefit from a centralized approach to purchasing. A majority of these agreements expire within one year; however, certain agreements have terms through fiscal 2030. These agreements commit the company to a minimum volume at various pricing terms, including fixed pricing, variable pricing or a combination thereof. Minimum amounts committed to as of June 28, 2025 totaled approximately $22.4 billion.

DEBT AND OTHER FINANCING ARRANGEMENTS Jun. 28, 2025Jun. 29, 2024 (In millions)Euro Commercial paper, interest at 2.22%, maturing in fiscal 2026$205 $— U.S. Commercial paper, interest at 5.45%, matured in fiscal 2025— 200 Senior notes, interest at 3.65%, matured in fiscal 2025 (1)— 365 Senior notes, interest at 3.75%, maturing in fiscal 2026 (1)(2)750 749 Senior notes, interest at 3.30%, maturing in fiscal 2027 (1)(2)999 998 Debentures, interest at 7.16%, maturing in fiscal 2027 (2)(3)43 43 Senior notes, interest at 3.25%, maturing in fiscal 2028 (1)(2)748 747 Debentures, interest at 6.50%, maturing in fiscal 2029 (2)155 155 Senior notes, interest at 5.75%, maturing in fiscal 2029 (1)(2)497 496 Senior notes, interest at 2.40%, maturing in fiscal 2030 (1)(2)498497Senior notes, interest at 5.95%, maturing in fiscal 2030 (1)(2)995994Senior notes, interest at 5.10%, maturing in fiscal 2031 (1)(2)695— Senior notes, interest at 2.45%, maturing in fiscal 2032 (1)(2)447446Senior notes, interest at 6.00%, maturing in fiscal 2034 (1)(2)507 498 Senior notes, interest at 5.40%, maturing in fiscal 2035 (1)(2)562— Senior notes, interest at 5.375%, maturing in fiscal 2036 (1)(2)383383 Senior notes, interest at 6.625%, maturing in fiscal 2039 (1)(2)200200 Senior notes, interest at 6.60%, maturing in fiscal 2040 (1)(2)350350 Senior notes, interest at 4.85%, maturing in fiscal 2046 (1)(2)497497 Senior notes, interest at 4.50%, maturing in fiscal 2046 (1)(2)495495 Senior notes, interest at 4.45%, maturing in fiscal 2048 (1)(2)493493 Senior notes, interest at 3.30%, maturing in fiscal 2050 (1)(2)495495 Senior notes, interest at 6.60%, maturing in fiscal 2050 (1)(2)1,177 1,177 Senior notes, interest at 3.15%, maturing in fiscal 2052 (1)(2)788788 Plant and equipment financing programs, finance leases, notes payable, and other debt, interest averaging 5.14% and maturing at various dates to fiscal 2052 as of June 28, 2025, and 5.13% and maturing at various dates to fiscal 2052 as of June 29, 20241,330 916 Total debt13,309 11,982 Less current maturities of long-term debt(949)(469)Net long-term debt$12,360 $11,513 (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.

INCOME TAXESIncome Tax ProvisionsFor financial reporting purposes, earnings before income taxes consists of the following: 202520242023 (In millions)U.S.$2,066 $2,260 $1,941 Foreign349 305 344 Total$2,415 $2,565 $2,285 The income tax provision for each fiscal year consists of the following: 202520242023 (In millions)U.S. federal income taxes$432 $447 $388 State and local income taxes104 125 79 Foreign income taxes51 38 48 Total$587 $610 $515 The current and deferred components of the income tax provisions for each fiscal year are as follows: 202520242023 (In millions)Current$602 $584 $531 Deferred(15)26 (16)Total$587 $610 $515 The deferred tax provisions result from the effects of net changes during the year in deferred tax assets and liabilities arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.Effective Tax RatesReconciliations of the statutory federal income tax rate to the effective income tax rates for each fiscal year are as follows: 202520242023U.S. statutory federal income tax rate21.0 %21.0 %21.0 %State and local income taxes, net of any applicable federal income tax benefit3.4 3.9 2.6 Foreign income taxes(1.1)(1.0)(1.1)Uncertain tax positions0.6 0.1 0.1 Tax benefit of equity-based compensation0.2 0.1 (0.1)Other0.2 (0.3)0.1 Effective income tax rate24.3 %23.8 %22.6 %The effective tax rate of 24.3% for fiscal 2025 was impacted by (1) state income tax expense of $82 million and (2) the mix of earnings from our foreign operations which are taxed at rates different than our domestic tax rate, as well as credits, local permanent differences and other minimum taxes, which resulted in a net increase in the effective tax rate. The effective tax rate of 23.8% for fiscal 2024 was impacted by (1) state income tax expense of $99 million and (2) the mix of earnings from our foreign operations which are taxed at rates different than our domestic tax rate, as well as credits, local permanent differences and other minimum taxes, which resulted in a net increase in the effective tax rate.Deferred Tax Assets and LiabilitiesSignificant components of Sysco’s deferred tax assets and liabilities are as follows: Jun. 28, 2025Jun.

SHARE-BASED COMPENSATIONWe provide compensation benefits to employees under several share-based payment arrangements including various long-term employee stock incentive plans and the 2025 Employee Stock Purchase Plan (ESPP).Stock Incentive PlansIn November 2018, Sysco’s Omnibus Incentive Plan (2018 Plan) was adopted and reserved up to 51,500,000 shares of Sysco common stock for share-based awards to employees, non-employee directors and key advisors. Of the 51,500,000 authorized shares, the full 51,500,000 shares may be issued as options or stock appreciation rights and up to 17,500,000 shares may be issued as restricted stock, restricted stock units or other types of stock-based awards. To date, we have issued options, restricted stock units and performance share units under the 2018 Plan. Vesting requirements for awards under the 2018 Plan vary by individual grant and may include either time-based vesting or time-based vesting subject to acceleration based on performance criteria for fiscal periods of at least one year. The contractual life of all options granted under the 2018 Plan are and will be no greater than ten years. As of June 28, 2025, there were 37,130,115 remaining shares authorized and available for grant in total under the 2018 Plan, of which the full 37,130,115 shares may be issued as options or stock appreciation rights, or as a combination of up to 10,184,738 shares that may be issued as restricted stock, restricted stock units or other types of stock-based awards, with the remainder available for issuance as options or stock appreciation rights.We have also granted employee options under several previous employee stock option plans for which previously granted options remain outstanding as of June 28, 2025. No new options will be issued under any of the prior plans. Future grants to employees will be made through the 2018 Plan or subsequently adopted plans. Awards under these plans are subject to time-based vesting with vesting periods that vary by individual grant. The contractual life of all options granted under these plans is ten years. Our policy is to utilize treasury stock for issuing shares upon share option exercise or share unit conversion.Performance Share UnitsDuring fiscal 2025 and 2024, 499,859 and 527,081 performance share units (PSUs), respectively, were granted to employees. Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents.

LEASESSysco leases certain of its distribution and warehouse facilities, office facilities, fleet vehicles, and office and warehouse equipment. We determine if an arrangement is a lease at inception and recognize a finance or operating lease liability and right-of-use (ROU) asset in the consolidated balance sheets if a lease exists. Lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. If the borrowing rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments. The lease term is defined as the noncancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the company will exercise one of these options. Leases with an initial term of twelve months or less are not recorded in Sysco’s consolidated balance sheets, and we recognize expense for these leases on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as insurance and property taxes, are excluded from the measurement of the lease liability and are recognized as variable lease cost when the obligation for that payment is incurred. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities, and repairs and maintenance. Sysco’s leases do not contain significant residual value guarantees and do not impose significant restrictions or covenants.The following table presents the location of the finance lease ROU assets and lease liabilities in our consolidated balance sheets at June 28, 2025 and June 29, 2024:Consolidated Balance Sheet LocationJun. 28, 2025Jun. 29, 2024(In millions)Finance lease right-of-use assetsPlant and equipment at cost, less accumulated depreciation$476 $339 Current finance lease liabilitiesCurrent maturities of long-term debt65 54 Long-term finance lease liabilitiesLong-term debt387 307 The following table presents lease costs for each of the presented periods ended June 28, 2025 and June 29, 2024:Consolidated Results of Operations LocationJun. 28, 2025Jun.

ACQUISITIONSDuring fiscal 2025, the company paid $40 million, net of cash, for acquisitions. Edward Don & CompanyOn November 27, 2023, Sysco consummated its acquisition of Edward Don & Company (Edward Don), a leading distributor of foodservice equipment, supplies and disposables in the United States. The acquisition has allowed Sysco to add strategic capabilities to complement its existing business and create a specialty equipment and supplies platform that provides better selection and service to customers. During the second quarter of fiscal 2025, we completed the determination of the fair value of the assets acquired and liabilities assumed. We recorded certain measurement period adjustments during fiscal 2024 and 2025, none of which were individually or in aggregate material to our financial statements.