Accumulated
Other Comprehensive
Loss

Common Stock
Paid-in
Capital

Retained
Earnings
Treasury Stock
Shares Amount Shares Amounts Totals
Balance as of September 28, 2019 765,174,900
$ 765,175
$ 1,490,661
$ 11,486,833
$ (1,675,430 ) 254,310,626
$ (9,612,491 ) $ 2,454,748
Net earnings 383,410
383,410
Foreign currency translation adjustment 154,955
154,955
Amortization of cash flow hedges, net of tax 2,155
2,155
Change in cash flow hedges, net of tax (14,797 ) (14,797 )
Change in net investment hedges, net of tax (41,479 ) (41,479 )
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax 8,653
8,653
Change in marketable securities, net of tax (386 ) (386 )
Dividends declared ($0.45 per common share) (230,516 ) (230,516 )
Treasury stock purchases 3,501,930
(281,081 ) (281,081 )
Share-based compensation awards 35,471
(1,480,168 ) 56,393
91,864
Balance as of December 28, 2019 765,174,900
$ 765,175
$ 1,526,132
$ 11,639,727
$ (1,566,329 ) 256,332,388
$ (9,837,179 ) $ 2,527,526

Accumulated
Other Comprehensive
Loss

Common Stock
Paid-in
Capital

Retained
Earnings
Treasury Stock
Shares Amount Shares Amounts Totals
Balance as of September 29, 2018 765,174,900
$ 765,175
$ 1,438,097
$ 10,592,490
$ (1,450,843 ) 245,025,271
$ (8,706,345 ) $ 2,638,574
Net earnings 267,380
267,380
Foreign currency translation adjustment (101,533 ) (101,533 )
Amortization of cash flow hedges, net of tax 2,155
2,155
Change in cash flow hedges, net of tax (8,784 ) (8,784 )
Change in net investment hedges, net of tax 26,469
26,469
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax 8,129
8,129
Dividends declared ($0.39 per common share) (205,159 ) (205,159 )
Treasury stock purchases 8,103,590
(540,462 ) (540,462 )
Share-based compensation awards 27,364
(1,470,142 ) 53,503
80,867
Balance as of December 29, 2018 765,174,900
$ 765,175
$ 1,465,461
$ 10,654,711
$ (1,524,407 ) 251,658,719
$ (9,193,304 ) $ 2,167,636

Year to Date


								Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings				Treasury Stock
	Shares	Amount								Shares	Amounts		Totals
Balance as of June 27, 2020	765,174,900	$	765,175	$	1,506,901	$	10,563,008	$	(1,710,881)	256,915,825	$	(9,965,590)	$	1,158,613
Net earnings						284,189							284,189


Foreign currency translation adjustment								335,647					335,647
Amortization of cash flow hedges, net of tax								4,310					4,310
Change in cash flow hedges, net of tax								(632)					(632)
Change in net investment hedges, net of tax								(31,927)					(31,927)
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax								15,832					15,832

Change in marketable securities, net of tax								(518)					(518)
Adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), net of tax						(2,068)							(2,068)
Dividends declared ($0.90 per common share)						(461,636)							(461,636)


Share-based compensation awards				58,354						(1,739,356)	66,635		124,989
Balance as of December 26, 2020	765,174,900	$	765,175	$	1,565,255	$	10,383,493	$	(1,388,169)	255,176,469	$	(9,898,955)	$	1,426,799

								Accumulated Other Comprehensive Loss
	Common Stock			Paid-in Capital		Retained Earnings				Treasury Stock
	Shares	Amount								Shares	Amounts		Totals
Balance as of June 29, 2019	765,174,900	$	765,175	$	1,457,419	$	11,229,679	$	(1,599,729)	252,297,926	$	(9,349,941)	$	2,502,603
Net earnings						837,191							837,191
Foreign currency translation adjustment								28,796					28,796
Amortization of cash flow hedges, net of tax								4,310					4,310
Change in cash flow hedges, net of tax								(5,538)					(5,538)
Change in net investment hedge, net of tax								(11,479)					(11,479)
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax								16,764					16,764
Change in marketable securities, net of tax								547					547
Adoption of ASU 2016-02, Leases (Topic 842), net of tax						1,978							1,978
Dividends declared ($0.84 per common share)						(429,121)							(429,121)
Treasury stock purchases										8,089,327	(628,948)		(628,948)

Share-based compensation awards				68,713						(4,054,865)	141,710		210,423
Balance as of December 28, 2019	765,174,900	$	765,175	$	1,526,132	$	11,639,727	$	(1,566,329)	256,332,388	$	(9,837,179)	$	2,527,526

Accumulated
Other Comprehensive
Loss

Common Stock
Paid-in
Capital

Retained
Earnings
Treasury Stock
Shares Amount Shares Amounts Totals
Balance as of June 29, 2019 765,174,900
$ 765,175
$ 1,457,419
$ 11,229,679
$ (1,599,729 ) 252,297,926
$ (9,349,941 ) $ 2,502,603
Net earnings

837,191

837,191
Foreign currency translation adjustment

28,796

28,796
Amortization of cash flow hedges, net of tax

4,310

4,310
Change in cash flow hedges, net of tax (5,538 ) (5,538 )
Change in net investment hedges, net of tax (11,479 ) (11,479 )
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax

16,764

16,764
Change in marketable securities, net of tax 547
547
Adoption of ASU 2016-02, Leases (Topic 842), net of tax 1,978
1,978
Dividends declared ($0.84 per common share)

(429,121 )

(429,121 )
Treasury stock purchases 8,089,327
(628,948 ) (628,948 )
Share-based compensation awards

68,713

(4,054,865 ) 141,710
210,423
Balance as of December 28, 2019 765,174,900
$ 765,175
$ 1,526,132
$ 11,639,727
$ (1,566,329 ) 256,332,388
$ (9,837,179 ) $ 2,527,526

Accumulated
Other Comprehensive
Loss

Common Stock
Paid-in
Capital

Retained
Earnings
Treasury Stock
Shares Amount Shares Amounts Totals
Balance as of June 30, 2018 765,174,900
$ 765,175
$ 1,383,619
$ 10,348,628
$ (1,409,269 ) 244,533,248
$ (8,581,196 ) $ 2,506,957
Net earnings

698,422

698,422
Foreign currency translation adjustment

(126,460 )

(126,460 )
Amortization of cash flow hedges, net of tax

4,310

4,310
Change in cash flow hedges, net of tax

(11,792 )

(11,792 )
Change in net investment hedge, net of tax 35,057
35,057
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax

16,258

16,258
Dividends declared ($0.75 per common share)

(392,339 )

(392,339 )
Treasury stock purchases 11,015,267
(750,003 ) (750,003 )
Share-based compensation awards

81,842

(3,889,796 ) 137,895
219,737
Balance as of December 29, 2018 765,174,900
$ 765,175
$ 1,465,461
$ 10,654,711
$ (1,524,407 ) 251,658,719
$ (9,193,304 ) $ 2,167,636

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED CASH FLOWS (Unaudited)

(In thousands)


	26-Week Period Ended							26-Week Period Ended
	Dec. 28, 2019			Dec. 29, 2018				Dec. 26, 2020		Dec. 28, 2019
Cash flows from operating activities:							Cash flows from operating activities:
Net earnings	$	837,191		$	698,422		Net earnings	$	284,189	$	837,191
Adjustments to reconcile net earnings to cash provided by operating activities:							Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense	46,644			54,199			Share-based compensation expense	47,122		46,644
Depreciation and amortization	372,416			392,413			Depreciation and amortization	365,332		372,416
Operating lease asset amortization	53,444			—			Operating lease asset amortization	55,231		53,444
Amortization of debt issuance and other debt-related costs	9,889			10,814			Amortization of debt issuance and other debt-related costs	12,946		9,889

Deferred income taxes	(75,898		)	(89,098		)	Deferred income taxes	(107,821)		(75,898)
Provision for losses on receivables	38,418			27,647			Provision for losses on receivables	(94,242)		38,418
Loss on sale of business							Loss on sale of business	12,043		0
Other non-cash items	3,239			411			Other non-cash items	(9,312)		3,239
Additional changes in certain assets and liabilities, net of effect of businesses acquired:							Additional changes in certain assets and liabilities, net of effect of businesses acquired:
(Increase) in receivables	(161,158		)	(137,314		)
(Increase) in inventories	(279,403		)	(204,437		)
(Increase) in prepaid expenses and other current assets	(38,503		)	(31,465		)
(Decrease) increase in accounts payable	(191,280		)	131,715
(Decrease) increase in accrued expenses	(49,866		)	92,100
(Decrease) in operating lease liabilities	(62,101		)	—
Increase (decrease) in accrued income taxes	182,557			(11,117		)
Decrease (increase) in other assets	13,023			(21,138		)
Decrease (increase) in receivables							Decrease (increase) in receivables	192,121		(161,158)
Decrease (increase) in inventories							Decrease (increase) in inventories	37,345		(279,403)
Increase in prepaid expenses and other current assets							Increase in prepaid expenses and other current assets	(22,519)		(38,503)
Increase (decrease) in accounts payable							Increase (decrease) in accounts payable	84,708		(191,280)
Increase (decrease) in accrued expenses							Increase (decrease) in accrued expenses	20,108		(49,866)
Decrease in operating lease liabilities							Decrease in operating lease liabilities	(63,496)		(62,101)
Increase in accrued income taxes							Increase in accrued income taxes	63,385		182,557
Decrease in other assets							Decrease in other assets	20,576		13,023
Increase in other long-term liabilities	55,857			4,638			Increase in other long-term liabilities	38,962		55,857

Net cash provided by operating activities	754,469			917,790			Net cash provided by operating activities	936,678		754,469
Cash flows from investing activities:							Cash flows from investing activities:
Additions to plant and equipment	(393,379		)	(223,825		)	Additions to plant and equipment	(163,944)		(393,379)
Proceeds from sales of plant and equipment	10,293			6,901			Proceeds from sales of plant and equipment	15,510		10,293
Acquisition of businesses, net of cash acquired	(142,783		)	—			Acquisition of businesses, net of cash acquired	0		(142,783)
Purchase of marketable securities	(11,424		)	—			Purchase of marketable securities	(36,121)		(11,424)
Proceeds from sales of marketable securities	9,038			—			Proceeds from sales of marketable securities	20,797		9,038
Other investing activities	565			(88		)	Other investing activities	0		565

Net cash used for investing activities	(527,690		)	(217,012		)	Net cash used for investing activities	(163,758)		(527,690)
Cash flows from financing activities:							Cash flows from financing activities:
Bank and commercial paper borrowings, net	721,415			109,900			Bank and commercial paper borrowings, net	6,463		721,415
Other debt borrowings	18,966			383,163			Other debt borrowings	4,094		18,966
Other debt repayments	(23,234		)	(16,617		)	Other debt repayments	(773,663)		(23,234)

Proceeds from stock option exercises	141,709			137,896			Proceeds from stock option exercises	66,635		141,709
Treasury stock purchases	(630,395		)	(739,205		)

Stock repurchases							Stock repurchases	0		(630,395)
Dividends paid	(399,093		)	(379,216		)	Dividends paid	(458,717)		(399,093)

Other financing activities	(22,461		)	(6,653		)	Other financing activities	(873)		(22,461)
Net cash used for financing activities	(193,093		)	(510,732		)	Net cash used for financing activities	(1,156,061)		(193,093)
Effect of exchange rates on cash, cash equivalents and restricted cash	5,565			(8,904		)	Effect of exchange rates on cash, cash equivalents and restricted cash	77,056		5,565
Net increase in cash, cash equivalents and restricted cash	39,251			181,142
Net (decrease) increase in cash, cash equivalents and restricted cash							Net (decrease) increase in cash, cash equivalents and restricted cash	(306,085)		39,251
Cash, cash equivalents and restricted cash at beginning of period	532,245			715,844			Cash, cash equivalents and restricted cash at beginning of period	6,095,570		532,245
Cash, cash equivalents and restricted cash at end of period	$	571,496		$	896,986		Cash, cash equivalents and restricted cash at end of period	$	5,789,485	$	571,496
Supplemental disclosures of cash flow information:							Supplemental disclosures of cash flow information:
Cash paid during the period for:							Cash paid during the period for:
Interest	$	162,720		$	158,574		Interest	$	290,926	$	162,720
Income taxes	122,049			328,574			Income taxes	110,453		122,049

See Notes to Consolidated Financial Statements


(1)			Fiscal 2021 includes $22 million related to restructuring charges and $12 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2020 includes $34 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy and $23 million related to restructuring, facility closure and severance charges. Fiscal 2019 includes $53 million related to various transformation initiative costs, of which $17 million relates to accelerated depreciation related to software that was replaced, and $81 million relates to severance, restructuring and facility closure charges in Europe and Canada, of which $55 million relates to our integration of Brake France and Davigel into Sysco France.


⁽²⁾			~~Fiscal 2020 and fiscal 2019 each include $17 million related to~~Represents intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice.

(3)			Represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
⁽³⁾ (4)			The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.

(5)
⁽⁴⁾	Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
		NM represents that the percentage change is not meaningful.

~~NM represents that the percentage change is not meaningful.~~

26-Week Period Ended Dec. 28, 2019 26-Week Period Ended Dec. 29, 2018 Change in Dollars % Change
(Dollars in thousands, except for share and per share data)
Operating expenses (GAAP) $ 4,550,958
$ 4,595,462
$ (44,504 ) (1.0 )%
Impact of restructuring and transformational project costs ⁽¹⁾
(113,827 ) (175,339 ) 61,512
(35.1 )
Impact of acquisition-related costs ⁽²⁾
(34,222 ) (39,645 ) 5,423
(13.7 )
Operating expenses adjusted for Certain Items (Non-GAAP) $ 4,402,909
$ 4,380,478
$ 22,431
0.5 %

Operating income (GAAP) $ 1,220,811
$ 1,080,035
$ 140,776
13.0 %
Impact of restructuring and transformational project costs ⁽¹⁾
113,827
175,339
(61,512 ) (35.1 )
Impact of acquisition-related costs ⁽²⁾
34,222
39,645
(5,423 ) (13.7 )
Operating income adjusted for Certain Items (Non-GAAP) $ 1,368,860
$ 1,295,019
$ 73,841
5.7 %

Net earnings (GAAP) $ 837,191
$ 698,422
$ 138,769
19.9 %
Impact of restructuring and transformational project costs ⁽¹⁾
113,827
175,339
(61,512 ) (35.1 )
Impact of acquisition-related costs ⁽²⁾
34,222
39,645
(5,423 ) (13.7 )
Tax impact of restructuring and transformational project costs ⁽³⁾
(29,294 ) (45,560 ) 16,266
(35.7 )
Tax impact of acquisition-related costs ⁽³⁾
(8,807 ) (10,302 ) 1,495
(14.5 )
Impact of US transition tax —
15,154
(15,154 ) NM
Impact of French tax rate change 924
—
924
NM
Net earnings adjusted for Certain Items (Non-GAAP) $ 948,063
$ 872,698
$ 75,365
8.6 %

Diluted earnings per share (GAAP) $ 1.62
$ 1.33
$ 0.29
22.1 %
Impact of restructuring and transformational project costs ⁽¹⁾
0.22
0.33
(0.11 ) (33.3 )
Impact of acquisition-related costs ⁽²⁾
0.07
0.08
(0.01 ) (12.5 )
Tax impact of restructuring and transformational project costs ⁽³⁾
(0.06 ) (0.09 ) 0.03
(33.3 )
Tax impact of acquisition-related costs ⁽³⁾
(0.02 ) (0.02 ) —
NM
Impact of US transition tax —
0.03
(0.03 ) NM
Diluted EPS adjusted for Certain Items (Non-GAAP) ⁽⁴⁾
$ 1.83
$ 1.66
$ 0.17
10.7 %


	26-Week Period Ended Dec. 26, 2020		26-Week Period Ended Dec. 28, 2019		Change in Dollars		% Change
	(Dollars in thousands, except for share and per share data)






Operating expenses (GAAP)	$	3,686,662	$	4,550,958	$	(864,296)	(19.0)	%
Impact of restructuring and transformational project costs (1)	(60,124)		(113,827)		53,703		(47.2)
Impact of acquisition-related intangible amortization (2)	(35,880)		(34,222)		(1,658)		4.8
Impact of bad debt reserve adjustments (3)	128,899		—		128,899		NM

Operating expenses adjusted for Certain Items (Non-GAAP)	$	3,719,557	$	4,402,909	$	(683,352)	(15.5)	%

Operating income (GAAP)	$	631,641	$	1,220,811	$	(589,170)	(48.3)	%
Impact of restructuring and transformational project costs (1)	60,124		113,827		(53,703)		(47.2)
Impact of acquisition-related intangible amortization (2)	35,880		34,222		1,658		4.8

Impact of bad debt reserve adjustments (3)	(128,899)		—		(128,899)		NM
Operating income adjusted for Certain Items (Non-GAAP)	$	598,746	$	1,368,860	$	(770,114)	(56.3)	%

Other (income) expense (GAAP)	$	(1,432)	$	2,305	$	(3,737)	(162.1)	%
Impact of loss on sale of a business	(12,043)		—		(12,043)		NM

Other (income) expense (Non-GAAP)	$	(13,475)	$	2,305	$	(15,780)	NM










Net earnings (GAAP)	$	284,189	$	837,191	$	(553,002)	(66.1)	%
Impact of restructuring and transformational project costs (1)	60,124		113,827		(53,703)		(47.2)
Impact of acquisition-related intangible amortization (2)	35,880		34,222		1,658		4.8
Impact of bad debt reserve adjustments (3)	(128,899)		—		(128,899)		NM
Impact of loss on sale of a business	12,043		—		12,043		NM



Tax impact of restructuring and transformational project costs (4)	(16,586)		(29,294)		12,708		(43.4)
Tax impact of acquisition-related intangible amortization (4)	(9,898)		(8,807)		(1,091)		12.4

Tax impact of bad debt reserve adjustments (4)	35,559		—		35,559		NM
Tax impact of loss on sale of a business	(7,553)		—		(7,553)		NM
Impact of foreign tax rate change	(5,548)		924		(6,472)		NM
Net earnings adjusted for Certain Items (Non-GAAP)	$	259,311	$	948,063	$	(688,752)	(72.6)	%



Diluted earnings per share (GAAP)	$	0.56	$	1.62	$	(1.06)	(65.4)	%
Impact of restructuring and transformational project costs (1)	0.12		0.22		(0.10)		(45.5)
Impact of acquisition-related intangible amortization (2)	0.07		0.07		—		0.0
Impact of bad debt reserve adjustments (3)	(0.25)		—		(0.25)		NM
Impact of loss on sale of a business	0.02		—		0.02		NM
Tax impact of restructuring and transformational project costs (4)	(0.03)		(0.06)		0.03		(50.0)
Tax impact of acquisition-related intangible amortization (4)	(0.02)		(0.02)		—		0.0
Tax impact of bad debt reserve adjustments (4)	0.07		—		0.07		NM
Tax impact loss on sale of a business	(0.01)		—		(0.01)		NM
Tax impact of foreign tax rate change	(0.01)		—		(0.01)		NM
Diluted EPS adjusted for Certain Items (Non-GAAP) (5)	$	0.51	$	1.83	$	(1.32)	(72.1)	%


⁽¹⁾			Fiscal 2021 includes $34 million related to restructuring, severance and facility closure charges, and $26 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2020 includes $62 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy, and $52 million related to severance, restructuring and facility closure charges. Fiscal 2019 includes $79 million related to various transformation initiative costs, of which $17 million relates to accelerated depreciation related to software that was replaced, and $96 million related to severance, restructuring and facility closure charges in Europe and Canada, of which $56 million relates to our integration of Brake France and Davigel into Sysco France.


⁽²⁾			~~Fiscal 2020 and fiscal 2019 include $34 million and $39 million, respectively, related to~~Represents intangible amortization expense from the Brakes Acquisition, which is included in the results of International ~~Foodservice and integration costs~~Foodservice.
(3)			Represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal ~~2019.~~

	2020.
⁽³⁾ (4)			The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.

(5)
⁽⁴⁾	Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.
		NM represents that the percentage change is not meaningful.

~~NM represents that the percentage change is not meaningful.~~

Set forth below is a reconciliation by segment of actual operating expenses and operating income to adjusted results for these measures for applicable segments and corporate for the periods presented (dollars in thousands):


	13-Week Period Ended Dec. 26, 2020			13-Week Period Ended Dec. 28, 2019			Change in Dollars		% Change
U.S. FOODSERVICE OPERATIONS




Operating expenses (GAAP)	$	1,074,071		$	1,344,103		$	(270,032)	(20.1)	%
Impact of restructuring and transformational project costs (1)	(1,784)			(3,679)			1,895		(51.5)
Impact of bad debt reserve adjustments (2)	15,239			—			15,239		NM

Operating expenses adjusted for Certain Items (Non-GAAP)	$	1,087,526		$	1,340,424		$	(252,898)	(18.9)	%

Operating income (GAAP)	$	485,251		$	704,801		$	(219,550)	(31.2)	%
Impact of restructuring and transformational project costs (1)	1,784			3,679			(1,895)		(51.5)
Impact of bad debt reserve adjustments (2)	(15,239)			—			(15,239)		NM

Operating income adjusted for Certain Items (Non-GAAP)	$	471,796		$	708,480		$	(236,684)	(33.4)	%

INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)	$	1,967,789		$	2,890,053		$	(922,264)	(31.9)	%
Impact of currency fluctuations (3)	(53,402)			—			(53,402)		1.8
Comparable sales using a constant currency basis (Non-GAAP)	$	1,914,387		$	2,890,053		$	(975,666)	(33.8)	%

Gross Profit (GAAP)	$	373,840		$	586,039		$	(212,199)	(36.2)	%
Impact of currency fluctuations (3)	(11,458)			—			(11,458)		2.0
Comparable gross profit using a constant currency basis (Non-GAAP)	$	362,382		$	586,039		$	(223,657)	(38.2)	%

Gross Margin (GAAP)	19.00		%	20.28		%			-128 bps
Impact of currency fluctuations (3)	0.07			—					7 bps
Comparable gross margin using a constant currency basis (Non-GAAP)	18.93		%	20.28		%			-135 bps

Operating expenses (GAAP)	$	453,789		$	551,158		$	(97,369)	(17.7)	%
Impact of restructuring and transformational project costs (4)	(20,405)			(21,850)			1,445		(6.6)
Impact of acquisition-related intangible amortization (5)	(18,125)			(17,312)			(813)		4.7
Impact of bad debt reserve adjustments (2)	13,797			—			13,797		NM
Operating expenses adjusted for Certain Items (Non-GAAP)	429,056			511,996			(82,940)		(16.2)
Impact of currency fluctuations (3)	(15,123)			—			(15,123)		3.0
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	413,933		$	511,996		$	(98,063)	(19.2)	%

Operating (loss) income (GAAP)	$	(79,949)		$	34,881		$	(114,830)	NM
Impact of restructuring and transformational project costs (4)	20,405			21,850			(1,445)		(6.6)
Impact of acquisition-related intangible amortization (5)	18,125			17,312			813		4.7
Impact of bad debt reserve adjustments (2)	(13,797)			—			(13,797)		NM
Operating (loss) income adjusted for Certain Items (Non-GAAP)	(55,216)			74,043			(129,259)		(174.6)
Impact of currency fluctuations (3)	3,665			—			3,665		(4.9)
Comparable operating (loss) income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	(51,551)		$	74,043		$	(125,594)	(169.6)	%

13-Week Period Ended Dec. 28, 2019 13-Week Period Ended Dec. 29, 2018 Change in Dollars % Change
U.S. FOODSERVICE OPERATIONS
Operating expenses (GAAP) $ 1,280,128
$ 1,264,342
$ 15,786
1.2 %
Impact of restructuring and transformational project costs ⁽¹⁾
(3,679 ) —
(3,679 ) NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 1,276,449
$ 1,264,342
$ 12,107
1.0 %

Operating income (GAAP) $ 768,777
$ 737,477
$ 31,300
4.2 %
Impact of restructuring and transformational project costs ⁽¹⁾
3,679
—
3,679
NM
Operating income adjusted for Certain Items (Non-GAAP) $ 772,456
$ 737,477
$ 34,979
4.7 %

INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP) $ 2,890,053
$ 2,890,598
$ (545 ) NM
Impact of currency fluctuations ⁽²⁾
25,289
—
25,289
0.9
Comparable sales using a constant currency basis (Non-GAAP) $ 2,915,342
$ 2,890,598
$ 24,744
0.9 %

Gross Profit (GAAP) $ 586,039
$ 589,922
$ (3,883 ) (0.7 )%
Impact of currency fluctuations ⁽²⁾
6,037
—
6,037
1.0
Comparable gross profit using a constant currency basis (Non-GAAP) $ 592,076
$ 589,922
$ 2,154
0.4 %

Gross Margin (GAAP) 20.28 % 20.41 % -13 bps
Impact of currency fluctuations ⁽²⁾
0.03
—
3 bps
Comparable gross margin using a constant currency basis (Non-GAAP) 20.31 % 20.41 % -10 bps

Operating expenses (GAAP) $ 551,158
$ 604,839
$ (53,681 ) (8.9 )%
Impact of restructuring and transformational project costs ⁽³⁾
(21,850 ) (81,020 ) 59,170
(73.0 )
Impact of acquisition-related costs ⁽⁴⁾
(17,312 ) (16,947 ) (365 ) 2.2
Operating expenses adjusted for Certain Items (Non-GAAP) $ 511,996
$ 506,872
$ 5,124
1.0 %
Impact of currency fluctuations ⁽²⁾
6,272
—
6,272
1.2
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 518,268
$ 506,872
$ 11,396
2.2 %

Operating income (GAAP) $ 34,881
$ (14,917 ) $ 49,798
NM
Impact of restructuring and transformational project costs ⁽³⁾
21,850
81,020
(59,170 ) (73.0 )
Impact of acquisition related costs ⁽⁴⁾
17,312
16,947
365
2.2
Operating income adjusted for Certain Items (Non-GAAP) $ 74,043
$ 83,050
$ (9,007 ) (10.8 )%
Impact of currency fluctuations ⁽²⁾
(235 ) —
(235 ) (0.3 )
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 73,808
$ 83,050
$ (9,242 ) (11.1 )%

SYGMA
Operating expenses (GAAP) $ 114,378
$ 118,423
$ (4,045 ) (3.4 )%
Impact of restructuring and transformational project costs ⁽⁵⁾
(956 ) —
(956 ) NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 113,422
$ 118,423
$ (5,001 ) (4.2 )%


SYGMA





Operating expenses (GAAP)	$	117,971	$	114,378	$	3,593	3.1	%
Impact of restructuring and transformational project costs (1)	6		(956)		962		(100.6)

Operating expenses adjusted for Certain Items (Non-GAAP)	$	117,977	$	113,422	$	4,555	4.0	%

Operating income (GAAP)	$	11,328	$	9,861	$	1,467	14.9	%
Impact of restructuring and transformational project costs (1)	(6)		956		(962)		(100.6)

Operating income adjusted for Certain Items (Non-GAAP)	$	11,322	$	10,817	$	505	4.7	%

OTHER




Operating expenses (GAAP)	$	36,785	$	57,104	$	(20,319)	(35.6)	%

Impact of bad debt reserve adjustments (2)	1,234		—		1,234		NM
Operating expenses adjusted for Certain Items (Non-GAAP)	$	38,019	$	57,104	$	(19,085)	(33.4)	%

Operating (loss) income (GAAP)	$	(1,018)	$	9,403	$	(10,421)	(110.8)	%

Impact of bad debt reserve adjustments (2)	(1,234)		—		(1,234)		NM
Operating (loss) income adjusted for Certain Items (Non-GAAP)	$	(2,252)	$	9,403	$	(11,655)	(123.9)	%

CORPORATE


Operating expenses (GAAP)	$	203,780	$	209,163	$	(5,383)	(2.6)	%
Impact of restructuring and transformational project costs (6)	(11,977)		(30,620)		18,643		(60.9)


Operating expenses adjusted for Certain Items (Non-GAAP)	$	191,803	$	178,543	$	13,260	7.4	%

Operating loss (GAAP)	$	(203,550)	$	(206,453)	$	2,903	(1.4)	%
Impact of restructuring and transformational project costs (6)	11,977		30,620		(18,643)		(60.9)


Operating loss adjusted for Certain Items (Non-GAAP)	$	(191,573)	$	(175,833)	$	(15,740)	9.0	%

Operating income (GAAP) $ 9,861
$ 3,114
$ 6,747
NM
Impact of restructuring and transformational project costs ⁽⁵⁾
956
—
956
NM
Operating income adjusted for Certain Items (Non-GAAP) $ 10,817
$ 3,114
$ 7,703
NM

CORPORATE
Operating expenses (GAAP) $ 273,139
$ 274,430
$ (1,291 ) (0.5 )%
Impact of restructuring and transformational project costs ⁽⁶⁾
(30,620 ) (53,416 ) 22,796
(42.7 )
Impact of acquisition-related costs ⁽⁷⁾
—
(61 ) 61
NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 242,519
$ 220,953
$ 21,566
9.8 %

Operating income (GAAP) $ (270,429 ) $ (279,497 ) $ 9,068
(3.2 )%
Impact of restructuring and transformational project costs ⁽⁶⁾
30,620
53,416
(22,796 ) (42.7 )
Impact of acquisition-related costs ⁽⁷⁾
—
61
(61 ) NM
Operating income adjusted for Certain Items (Non-GAAP) $ (239,809 ) $ (226,020 ) $ (13,789 ) 6.1 %

* Segment has no applicable Certain Items



⁽¹⁾			Includes charges related to restructuring and business transformation projects.

(2)			Represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
⁽²⁾ (3)			Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.


⁽³⁾ (4)	Includes restructuring, severance and facility closure ~~and severance~~ costs primarily in ~~Europe and Canada.~~

	Europe.
⁽⁴⁾ (5)			~~Fiscal 2020 and fiscal 2019 each include $17 million related to~~Represents intangible amortization expense from the Brakes Acquisition.


⁽⁵⁾ (6)			Includes ~~charges related to facility closures and other restructuring charges.~~


⁽⁶⁾	~~Fiscal 2020 and fiscal 2019 include~~ various transformation initiative costs, primarily consisting of changes to our business technology ~~strategy and severance charges related to restructuring.~~strategy.


⁽⁷⁾			~~Fiscal 2019 includes integration costs from~~
			NM represents that the ~~Brakes Acquisition.~~percentage change is not meaningful.

~~NM represents that the percentage change is not meaningful.~~

26-Week Period Ended Dec. 28, 2019 26-Week Period Ended Dec. 29, 2018 Change in Dollars % Change
U.S. FOODSERVICE OPERATIONS
Operating expenses (GAAP) $ 2,563,608
$ 2,538,811
$ 24,797
1.0 %
Impact of restructuring and transformational project costs ⁽¹⁾
(7,805 ) —
(7,805 ) NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 2,555,803
$ 2,538,811
$ 16,992
0.7 %

Operating income (GAAP) $ 1,630,183
$ 1,553,235
$ 76,948
5.0 %
Impact of restructuring and transformational project costs ⁽¹⁾
7,805
—
7,805
NM
Operating income adjusted for Certain Items (Non-GAAP) $ 1,637,988
$ 1,553,235
$ 84,753
5.5 %

INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP) $ 5,802,441
$ 5,811,548
$ (9,107 ) (0.2 )%
Impact of currency fluctuations ⁽²⁾
122,438
—
122,438
2.1
Comparable sales using a constant currency basis (Non-GAAP) $ 5,924,879
$ 5,811,548
$ 113,331
2.0 %

Gross Profit (GAAP) $ 1,191,224
$ 1,205,427
$ (14,203 ) (1.2 )%


	26-Week Period Ended Dec. 26, 2020			26-Week Period Ended Dec. 28, 2019			Change in Dollars		% Change
U.S. FOODSERVICE OPERATIONS




Operating expenses (GAAP)	$	2,085,369		$	2,695,371		$	(610,002)	(22.6)	%
Impact of restructuring and transformational project costs (1)	(2,724)			(7,805)			5,081		(65.1)
Impact of bad debt reserve adjustments (2)	101,556			—			101,556		NM
Operating expenses adjusted for Certain Items (Non-GAAP)	$	2,184,201		$	2,687,566		$	(503,365)	(18.7)	%

Operating income (GAAP)	$	1,073,660		$	1,498,420		$	(424,760)	(28.3)	%
Impact of restructuring and transformational project costs (1)	2,724			7,805			(5,081)		(65.1)
Impact of bad debt reserve adjustments (2)	(101,556)			—			(101,556)		NM
Operating income adjusted for Certain Items (Non-GAAP)	$	974,828		$	1,506,225		$	(531,397)	(35.3)	%

INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)	$	4,131,482		$	5,802,441		$	(1,670,959)	(28.8)	%
Impact of currency fluctuations (3)	(94,042)			—			(94,042)		1.6

Comparable sales using a constant currency basis (Non-GAAP)	$	4,037,440		$	5,802,441		$	(1,765,001)	(30.4)	%

Gross Profit (GAAP)	$	824,238		$	1,191,224		$	(366,986)	(30.8)	%
Impact of currency fluctuations (3)	(22,971)			—			(22,971)		1.9

Comparable gross profit using a constant currency basis (Non-GAAP)	$	801,267		$	1,191,224		$	(389,957)	(32.7)	%

Gross Margin (GAAP)	19.95		%	20.53		%			-58 bps
Impact of currency fluctuations (3)	0.10			—					10 bps

Comparable gross margin using a constant currency basis (Non-GAAP)	19.85		%	20.53		%			-68 bps

Operating expenses (GAAP)	$	904,724		$	1,101,543		$	(196,819)	(17.9)	%
Impact of restructuring and transformational project costs (4)	(33,398)			(49,122)			15,724		(32.0)
Impact of acquisition-related intangible amortization (5)	(35,880)			(34,222)			(1,658)		4.8
Impact of bad debt reserve adjustments (2)	25,227			—			25,227		NM

Operating expenses adjusted for Certain Items (Non-GAAP)	860,673			1,018,199			(157,526)		(15.5)
Impact of currency fluctuations (3)	(27,452)			—			(27,452)		2.7

Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	833,221		$	1,018,199		$	(184,978)	(18.2)	%

Operating (loss) income (GAAP)	$	(80,486)		$	89,681		$	(170,167)	(189.7)	%
Impact of restructuring and transformational project costs (4)	33,398			49,122			(15,724)		(32.0)
Impact of acquisition-related intangible amortization (5)	35,880			34,222			1,658		4.8
Impact of bad debt reserve adjustments (2)	(25,227)			—			(25,227)		NM

Operating (loss) income adjusted for Certain Items (Non-GAAP)	(36,435)			173,025			(209,460)		(121.1)
Impact of currency fluctuations (3)	4,481			—			4,481		(2.6)

Comparable operating (loss) income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	(31,954)		$	173,025		$	(204,979)	(118.5)	%

SYGMA



Operating expenses (GAAP)	$	237,820		$	232,726		$	5,094	2.2	%


Impact of restructuring and transformational project costs (1)												Impact of restructuring and transformational project costs (1)	(7)		(3,540)		3,533		(99.8)	%

Impact of currency fluctuations ⁽²⁾	29,054			—			29,054			2.4
Comparable gross profit using a constant currency basis (Non-GAAP)	$	1,220,278		$	1,205,427		$	14,851		1.2	%

Operating expenses (GAAP)	$	1,101,543		$	1,153,572		$	(52,029	)	(4.5	)%
Impact of restructuring and transformational project costs ⁽³⁾	(49,122		)	(87,746		)	38,624			(44.0	)
Impact of acquisition-related costs ⁽⁴⁾	(34,222		)	(38,846		)	4,624			(11.9	)
Operating expenses adjusted for Certain Items (Non-GAAP)	$	1,018,199		$	1,026,980		$	(8,781	)	(0.9	)%
Impact of currency fluctuations ⁽²⁾	26,959			—			26,959			2.6
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	1,045,158		$	1,026,980		$	18,178		1.8	%

Operating income (GAAP)	$	89,681		$	51,855		$	37,826		72.9	%
Impact of restructuring and transformational project costs ⁽³⁾	49,122			87,746			(38,624		)	(44.0	)
Impact of acquisition related costs ⁽⁴⁾	34,222			38,846			(4,624		)	(11.9	)
Operating income adjusted for Certain Items (Non-GAAP)	$	173,025		$	178,447		$	(5,422	)	(3.0	)%
Impact of currency fluctuations ⁽²⁾	2,095			—			2,095			1.2
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	175,120		$	178,447		$	(3,327	)	(1.9	)%

SYGMA
Operating expenses (GAAP)	$	232,726		$	245,318		$	(12,592	)	(5.1	)%
Impact of restructuring and transformational project costs ⁽⁵⁾	(3,540		)	—			(3,540		)	NM
Operating expenses adjusted for Certain Items (Non-GAAP)	$	229,186		$	245,318		$	(16,132	)	(6.6	)%	Operating expenses adjusted for Certain Items (Non-GAAP)	$	237,813	$	229,186	$	8,627	3.8	%

Operating income (GAAP)	$	17,431		$	5,545		$	11,886		NM		Operating income (GAAP)	$	23,020	$	17,431	$	5,589	32.1	%
Impact of restructuring and transformational project costs ⁽⁵⁾	3,540			—			3,540			NM
Impact of restructuring and transformational project costs (1)												Impact of restructuring and transformational project costs (1)	7		3,540		(3,533)		(99.8)	%

Operating income adjusted for Certain Items (Non-GAAP)	$	20,971		$	5,545		$	15,426		NM		Operating income adjusted for Certain Items (Non-GAAP)	$	23,027	$	20,971	$	2,056	9.8	%

OTHER												OTHER

Operating expenses (GAAP)												Operating expenses (GAAP)	$	77,220	$	118,711	$	(41,491)	(35.0)	%
Impact of bad debt reserve adjustments (2)												Impact of bad debt reserve adjustments (2)	2,116		—		2,116		NM
Operating expenses adjusted for Certain Items (Non-GAAP)												Operating expenses adjusted for Certain Items (Non-GAAP)	$	79,336	$	118,711	$	(39,375)	(33.2)	%

Operating (loss) income (GAAP)												Operating (loss) income (GAAP)	$	(1,023)	$	19,540	$	(20,563)	(105.2)	%
Impact of bad debt reserve adjustments (2)												Impact of bad debt reserve adjustments (2)	(2,116)		—		(2,116)		—
Operating (loss) income adjusted for Certain Items (Non-GAAP)												Operating (loss) income adjusted for Certain Items (Non-GAAP)	$	(3,139)	$	19,540	$	(22,679)	(116.1)	%

CORPORATE												CORPORATE

Operating expenses (GAAP)	$	534,371		$	538,778		$	(4,407	)	(0.8	)%	Operating expenses (GAAP)	$	381,529	$	402,607	$	(21,078)	(5.2)	%
Impact of restructuring and transformational project costs ⁽⁶⁾	(53,360		)	(87,593		)	34,233			(39.1	)	Impact of restructuring and transformational project costs (6)	(23,995)		(53,360)		29,365		(55.0)
Impact of acquisition-related costs ⁽⁷⁾	—			(799		)	799			NM

Operating expenses adjusted for Certain Items (Non-GAAP)	$	481,011		$	450,386		$	30,625		6.8	%	Operating expenses adjusted for Certain Items (Non-GAAP)	$	357,534	$	349,247	$	8,287	2.4	%

Operating income (GAAP)	$	(536,024	)	$	(546,653	)	$	10,629		(1.9	)%
Operating loss (GAAP)												Operating loss (GAAP)	$	(383,530)	$	(404,261)	$	20,731	(5.1)	%
Impact of restructuring and transformational project costs ⁽⁶⁾	53,360			87,593			(34,233		)	(39.1	)	Impact of restructuring and transformational project costs (6)	23,995		53,360		(29,365)		(55.0)
Impact of acquisition-related costs ⁽⁷⁾	—			799			(799		)	NM
Operating income adjusted for Certain Items (Non-GAAP)	$	(482,664	)	$	(458,261	)	$	(24,403	)	5.3	%

Operating loss adjusted for Certain Items (Non-GAAP)												Operating loss adjusted for Certain Items (Non-GAAP)	$	(359,535)	$	(350,901)	$	(8,634)	2.5	%

* Segment has no applicable Certain Items


⁽¹⁾			Includes charges related to restructuring and business transformation projects.

(2)			Represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
⁽²⁾ (3)			Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.


⁽³⁾ (4)	Includes restructuring, severance and facility closure costs primarily in ~~Europe and Canada.~~

	Europe.
⁽⁴⁾ (5)			~~Fiscal 2020 and fiscal 2019 include $34 million and $39 million, respectively, related to~~Represents intangible amortization expense from the Brakes Acquisition.


⁽⁵⁾ (6)			Includes ~~charges related to facility closures and other restructuring charges.~~


⁽⁶⁾	~~Fiscal 2020 and fiscal 2019 include~~ various transformation initiative costs, primarily consisting of changes to our business technology strategy. ~~Fiscal 2019 includes $17 million of accelerated depreciation on software that is being replaced and severance charges related to restructuring.~~


⁽⁷⁾			~~Fiscal 2019 includes integration costs from the Brakes Acquisition.~~

~~NM represents that the percentage change is not meaningful.~~

~~Three-Year Financial Targets~~

Sysco management considers adjusted return on invested capital (ROIC) to be a measure that provides useful information to management and investors in evaluating the efficiency and effectiveness of the company’s long-term capital investments. In addition, we have targets and expectations that are based on adjusted results, including an adjusted ROIC target of 16% under our three-year plan. We cannot predict with certainty whether or when we will achieve these results or whether the calculation of our ROIC in such future periods will be on an adjusted basis due to the effect of Certain Items, which would be excluded from such calculation. Due to these uncertainties, to the extent our future calculation of ROIC is on an adjusted basis excluding Certain Items, we cannot provide a quantitative reconciliation of this non-GAAP measure to the most directly comparable GAAP measure without unreasonable effort. However, we would expect to calculate adjusted ROIC, if applicable, in the same manner as we have historically calculated this measure. All components of our adjusted ROIC calculation would be impacted by Certain Items. We calculate adjusted ROIC as adjusted net earnings divided by (i) stockholders’ equity, computed as the average of adjusted stockholders’ equity at the beginning of the year and at the end of each fiscal quarter during the year; and (ii) long-term debt, computed as the average of the long-term debt at the beginning of the year and at the end of each fiscal quarter during the year.



~~Form of calculation:~~
~~Net earnings (GAAP)~~
~~Impact of Certain Items on net earnings~~
~~Adjusted net earnings (Non-GAAP)~~

~~Invested Capital (GAAP)~~
~~Adjustments to invested capital~~
~~Adjusted Invested capital (Non-GAAP)~~

~~Return on invested capital (GAAP)~~
~~Return on invested capital (Non-GAAP)~~NM represents that the percentage change is not meaningful.

Additional targets and expectations include our adjusted operating income and adjusted diluted earnings per share targets that we expect to achieve by the end of fiscal 2020 under our three-year plan. We have revised the expected growth rates for these targets within our three-year plan, and, although there are uncertainties in projecting Certain Items for the remainder of fiscal 2020, we have modeled a reconciliation of these non-GAAP measures to the most directly comparable GAAP measures based on our forecasted full year results. We have calculated these adjusted forecasted results in the same manner as the reconciliations provided for historical periods presented herein. Nevertheless, the impact of future Certain Items could cause projected non-GAAP amounts to differ significantly from our GAAP results. Future results may differ from our expectations set forth in the table below as expressed in the forward-looking statements identified within Part I, Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements.”

~~Fiscal 2018 - Fiscal 2020 Three-Year Plan Projection~~

Year Ended
June 27, 2020 July 1, 2017 3-year Plan Change $ Results CAGR

Operating income (GAAP) $ 2,539,614
$ 2,054,616
$ 484,998
7.3 %
Impact of restructuring and transformational project costs 257,340
161,011
96,329

Impact of acquisition-related costs 68,822
102,049
(33,227 )
Impact of MEPP charge —
35,600
(35,600 )
Operating income adjusted for Certain Items (Non-GAAP) ⁽¹⁾
$ 2,865,776
$ 2,353,276
$ 512,500
6.8 %

Diluted earnings per share (GAAP) $ 3.31
$ 2.08
$ 1.23
16.7 %
Impact of restructuring and transformational project costs, net of tax 0.39
0.20
0.19

Impact of acquisition-related costs, net of tax 0.10
0.16
(0.06 )
Impact of MEPP charge, net of tax —
0.04
(0.04 )
Diluted EPS adjusted for Certain Items (Non-GAAP) ⁽¹⁾⁽²⁾
$ 3.81
$ 2.48
$ 1.32
15.4 %

⁽¹⁾The forecasted adjusted operating income and adjusted diluted EPS targets for fiscal 2020 represents the expected result required to achieve the mid-point of the fiscal 2018 to fiscal 2020 adjusted operating income growth target range of approximately $500 million to $525 million.

⁽²⁾ Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.

Liquidity and Capital Resources

Highlights

Below are comparisons of the cash flows from the first 26 weeks of fiscal ~~2020~~2021 to the first 26 weeks of fiscal ~~2019:~~2020:

•Cash flows from operations were $936.7 million in fiscal 2021, compared to $754.5 million in fiscal ~~2020, compared to $917.8 million in fiscal 2019;~~2020;

•Net capital expenditures totaled $148.4 million in fiscal 2021, compared to $383.1 million in fiscal ~~2020, compared to $216.9 million in fiscal 2019;~~2020;

•Free cash flow was ~~$371.4~~$788.2 million in fiscal ~~2020,~~2021, compared to free cash flow of ~~$700.9~~$371.4 million in fiscal ~~2019~~2020 (see below under the heading “Free Cash Flow” for an explanation of this non-GAAP financial measure);

•There were $6.5 million of net bank borrowings in fiscal 2021, compared to $721.4 million of commercial paper issuances and net bank borrowings in fiscal ~~2020, compared to $109.9 million commercial paper issuances and net bank borrowings in fiscal 2019;~~2020;

•Dividends paid were $458.7 million in fiscal 2021, compared to $399.1 million in fiscal ~~2020, compared to $379.2 million~~2020; and

•There were no stock repurchases in fiscal ~~2019; and~~

2021. Cash paid for ~~treasury~~ stock repurchases was $630.4 million in fiscal ~~2020, compared to $739.2~~2020.

We redeemed senior notes in the amount of $750.0 million in fiscal ~~2019.~~2021 using cash flow from operations.

In response to the COVID-19 pandemic and its impact on our working capital, as well as the uncertainty regarding our ability to generate cash flow in the near term, we took steps to increase our liquidity in the second half of fiscal 2020 including the issuance of senior notes, borrowings under our long-term revolving credit facility and borrowings under our U.K. commercial paper program. As of December 26, 2020, there were $700.0 million and £600.0 million in borrowings outstanding under our long-term revolving credit facility and the U.K. commercial paper program, respectively. In the fourth quarter of fiscal 2020, we entered into an amendment to our long-term revolving credit facility, which requires us to suspend share repurchases and dividend increases through fiscal 2021. As of January 23, 2021, the company had approximately $7.8 billion in cash and available liquidity.

Sources and Uses of Cash

Sysco’s strategic objectives include continuous investment in our business; these investments are funded by a combination of cash from operations and access to capital from financial markets. Our operations historically have produced significant cash flow. Cash generated from operations is generally allocated to:

•working capital requirements;

•investments in facilities, systems, fleet, other equipment and technology;

•cash dividends;

•acquisitions compatible with our overall growth strategy;

•contributions to our various retirement plans;

•debt repayments; and

•share repurchases, which are currently suspended.

~~debt repayments and share repurchases.~~

Any remaining cash generated from operations ~~may be~~or excess borrowings are invested in high-quality, short-term instruments. As a part of our ongoing strategic analysis, we regularly evaluate business opportunities, including potential acquisitions and sales of assets and businesses, and our overall capital structure. Any transactions resulting from these evaluations may materially impact our liquidity, borrowing capacity, leverage ratios and capital availability.

We continue to ~~generate substantial cash flows from operations and remain~~be in a strong financial ~~position;~~position based on our balance sheet and operating cash flows; however, our liquidity and capital resources can be influenced by economic trends and conditions that impact our results of operations. We believe our mechanisms to manage working capital, such as ~~credit monitoring,~~actively working with customers to receive payments on receivables, optimizing inventory levels and maximizing payment terms with vendors, ~~and our mechanisms to manage the items impacting our gross profits~~ have been sufficient to limit a significant unfavorable impact on our cash flows from operations. We believe these mechanisms will continue to prevent a significant unfavorable impact on our cash flows from operations. Seasonal trends also impact our cash flows from operations and free cash flow, as we use more cash earlier in the fiscal year and then see larger, sequential quarterly increases throughout the remainder of the year.

As of December ~~28, 2019,~~26, 2020, we had ~~$524.6 million~~$5.8 billion in cash and cash equivalents, approximately ~~59%~~20% of which was held by our international subsidiaries and generated from our earnings offrom international operations. If ~~these~~the cash and cash equivalents attributable to our earnings were to be transferred among countries or repatriated to the U.S., such amounts may become subject to withholding and additional foreign tax obligations. Additionally, Sysco Corporation has provided intercompany loans to certain of its international subsidiaries, and when interest and principal payments are made, some of this cash will ~~move~~be transferred to the U.S.

Our wholly owned captive insurance subsidiary (the Captive), must maintain a sufficient level of liquidity to fund future reserve payments. As of December ~~28, 2019,~~26, 2020, the Captive held ~~$122.9~~$131.0 million of fixed income marketable securities and ~~$46.9~~$22.5 million of restricted cash and restricted cash equivalents in a restricted investment portfolio in order to meet solvency requirements. We purchased ~~$11.4~~$36.1 million in marketable securities in the first 26 weeks of fiscal ~~2020~~2021 and received ~~$9.0~~$20.8 million in proceeds from the sale of marketable securities in ~~fiscal 2020.~~that period.

We believe the following sources will be sufficient to meet our anticipated cash requirements for more than the next twelve months, while maintaining sufficient liquidity for normal operating purposes:

•our cash flows from operations;

•the availability of additional capital under our existing commercial paper programs, supported by our revolving credit facility and bank line of credit; and

•our ability to access capital from financial markets, including issuances of debt securities, either privately or under our shelf registration statement filed with the Securities and Exchange Commission.

Due to our strong financial position, we believe that we will continue to be able to effectively access the commercial paper market and long-term capital markets, if necessary.

Cash Flows

Operating Activities

We generated ~~$754.5~~$936.7 million in cash flows from operations in the first 26 weeks of fiscal ~~2020,~~2021, compared to cash flows of ~~$917.8~~$754.5 million in the first 26 weeks of fiscal ~~2019.~~2020. These amounts include year-over-year ~~unfavorable~~favorable comparisons on working capital, partially offset by ~~a favorable~~lower operating results and an unfavorable comparison on accrued income taxes.

Changes in working capital had a ~~negative~~positive impact of ~~$421.8~~$946.0 million on cash flow from operations period-over-period. There ~~was an unfavorable comparison~~were favorable comparisons on accounts payable, inventories, and accounts receivable. Accounts payable has increased, primarily due to supplier term extensions. Both accounts receivable and inventory balances have increased during the first 26 weeks of fiscal 2021 as our business recovery continues. The ~~impact to~~favorable comparison in cash flows from accounts ~~payable~~receivables is primarily due to ~~more timely payments~~faster than anticipated collections on our pre-pandemic accounts receivables and adhering to ~~suppliers~~tighter terms on new sales to certain customers. In the first 26 weeks of fiscal 2021, we recorded a net credit to the provision for losses on receivables totaling $94.2 million, which reflects a benefit on the reduction of our allowance for pre-pandemic receivable balances, as collection rates have exceeded the company’s expectations. We continue to work with our customers to collect past due balances, including through the use of payment plans. We have also discontinued charging interest on past due balances. We are beginning to ~~improved processes achieved through our Finance Transformation Project. Inventories increased primarily due~~make investments in inventory to ~~replenishment immediately after a holiday time period and~~position the impact of inflation. Accounts receivables increased primarily due to challenges in our collection efforts due to process changes that have occurred in our Finance Transformation Project and an increase in uncollectible accounts.

~~Seasonal trends also impact our cash flows from operating activities, as we typically use more cash earlier~~right products, in the ~~fiscal year and then see larger, sequential quarterly increases throughout~~right locations, in preparation for the ~~remainder of the year. Normally, our U.S. tax~~expected business recovery.

Income taxes negatively impacted cash flow from operations, as estimate payments ~~are greater~~were made in the second quarter of ~~each~~ fiscal ~~year. In~~2021. Tax payments in the first 26 weeks of fiscal 2021 were higher than in the first 26 weeks of fiscal 2020 due to relief provided in connection with the impact of Tropical

Storm Imelda ~~our tax payments were not made until our third quarter~~in prior year.

Other long-term liabilities include benefits provided in the provisions of ~~fiscal 2020, resulting in a one-quarter deferral~~the Coronavirus Aid, Relief, and ~~therefore, lower tax payments~~Economic Security Act (CARES Act) in the first 26 weeks of fiscal ~~2020.~~2021, as we have deferred U.S. social security tax to future fiscal years, which has favorably impacted our cash flows from operations.

Investing Activities

Our capital expenditures in the first 26 weeks of fiscal ~~2020~~2021 primarily consisted of ~~facility replacements and expansions, fleet,~~ technology equipment, warehouse equipment, and ~~warehouse equipment.~~fleet. Our capital expenditures in the first 26 weeks of fiscal ~~2020~~2021 were ~~higher~~lower by ~~$169.6~~$229.4 million, as compared to

the first 26 weeks of fiscal ~~2019,~~2020, primarily ~~due~~because we eliminated capital projects not urgently needed for our business and targeted investments in order to ~~timing of capital spend~~preserve our liquidity in response to the ~~first 26 weeks of fiscal 2019.~~COVID-19 crisis.

During the first 26 weeks of fiscal 2020, we paid $142.8 million, net of cash acquired, for acquisitions. ~~There were no such acquisitions made in the first 26 weeks of fiscal 2019.~~

Free Cash Flow

Free cash flow represents net cash provided from operating activities, less purchases of plant and equipment, plus proceeds from sales of plant and equipment. Sysco considers free cash flow to be a non-GAAP liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash, including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Our free cash flow for the first 26 weeks of fiscal ~~2020 decreased~~2021 increased by ~~$329.5~~$416.9 million, to ~~$371.4~~$788.2 million, as compared to the first 26 weeks of fiscal ~~2019,~~2020, principally as a result of year-over-year ~~increased~~decreased capital expenditures and ~~a decrease~~an increase in cash flows from operations.

Free cash flow should not be used as a substitute for the most comparable GAAP measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal 2020 Form 10-K for discussions around this non-GAAP performance metric. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities.


	26-Week Period Ended Dec. 26, 2020		26-Week Period Ended Dec. 28, 2019
	(In thousands)
Net cash provided by operating activities (GAAP)	$	936,678	$	754,469
Additions to plant and equipment	(163,944)		(393,379)
Proceeds from sales of plant and equipment	15,510		10,293
Free Cash Flow (Non-GAAP)	$	788,244	$	371,383

26-Week Period Ended Dec. 28, 2019 26-Week Period Ended Dec. 29, 2018
(In thousands)
Net cash provided by operating activities (GAAP) $ 754,469
$ 917,790
Additions to plant and equipment (393,379 ) (223,825 )
Proceeds from sales of plant and equipment 10,293
6,901
Free Cash Flow (Non-GAAP) $ 371,383
$ 700,866

Financing Activities

Equity Transactions

Proceeds from exercises of share-based compensation awards were $66.6 million in the first 26 weeks of fiscal 2021, as compared to $141.7 million in the first 26 weeks of fiscal ~~2020, as compared to $137.9 million in the first 26 weeks of fiscal 2019.~~2020. The level of option exercises, and thus proceeds, will vary from period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.

We have routinely ~~engage~~engaged in share repurchase programs to allow Sysco to continue offsetting dilution resulting from shares issued under the company’s benefit plans and to make opportunistic repurchases. In ~~November 2017, our Board of Directors approved a repurchase program to authorize the repurchase of the company’s common stock not to exceed $1.5 billion through the end of fiscal 2020. In~~ August 2019, our Board of Directors approved a ~~separate~~ repurchase program to authorize the repurchase of the company’s common stock not to exceed $2.5 billion through the end of fiscal 2021. ~~We repurchased 8.1 million shares~~During March 2020, however, we discontinued share repurchases under this program, and pursuant to the amendment to our long-term revolving credit facility, we do not anticipate making any repurchases for ~~$630.4 million during~~ the ~~first 26 weeks~~remainder of fiscal 2021. As of December 26, 2020, compared to 10.8 million shares repurchased in the first 26 weeks of fiscal 2019 for $739.2 million. We repurchased approximately 569.6 thousand additional shares for $48.0 million through January 17, 2020, resulting inwe had a remaining authorization of approximately ~~$2.3~~$2.1 billion. The number of shares we repurchase during the remainder of fiscal 2020 will be dependent on many factors, including the level of future stock option exercises, as well as competing uses for available cash.

Dividends paid in the first 26 weeks of fiscal ~~2020~~2021 were ~~$399.1~~$458.7 million, or ~~$0.78~~$0.90 per share, as compared to ~~$379.2~~$399.1 million, or ~~$0.72~~$0.78 per share, in the first 26 weeks of fiscal ~~2019.~~2020. In November ~~2019,~~2020, we declared our regular quarterly dividend for the second quarter of fiscal ~~2020~~2021 of $0.45 per share, which was paid in January ~~2020.~~2021. Although we expect to continue making quarterly dividend payments, we do not expect to continue to grow our dividend in fiscal 2021.

Debt Activity and Borrowing Availability

Our debt activity, including issuances and repayments, and our borrowing availability is described in Note 8,7, “Debt,” in the Notes to Consolidated Financial Statements in Item 1 of Part I.I of this Form 10-Q. Our outstanding borrowings at December ~~28, 2019,~~26, 2020, and repayment activity since the close of the second quarter of fiscal ~~2020,~~2021, are disclosed within that note. Updated amounts through January ~~17, 2020,~~15, 2021, include:

•$~~924.3~~700.0 million ~~outstanding from our commercial paper program; and~~

~~No amounts~~ outstanding from the credit facility supporting our commercial paper ~~program.~~program;

•No outstanding borrowings from our U.S. commercial paper program; and

•£600.0 million outstanding from our U.K. commercial paper programs.

During the first 26 weeks of fiscal ~~2020~~2021 and ~~2019,~~fiscal 2020, our aggregate commercial paper issuances and short-term bank borrowings had weighted average interest rates of ~~2.09%~~0.51% and ~~2.23%~~2.09%, respectively.

In the next 12 months, our £600.0 million U.K. commercial paper program and $500.0 million of long-term debt will mature. We expect to fund these repayments with a combination of cash flow from operations and cash on hand.

~~Contractual Obligations~~

The availability of financing in the form of debt is influenced by many factors, including our profitability, free cash flows, debt levels, credit ratings, debt covenants and economic and market conditions. For example, a significant downgrade in our credit ratings or adverse conditions in the capital markets may increase the cost of borrowing for us or limit our access to capital. To date, we have not experienced difficulty accessing the credit markets. As of January 23, 2021, the company had approximately $7.8 billion in cash and available liquidity; and we believe this amount would be sufficient to sustain our operations for an extended period, including through an impact much worse than we are currently experiencing or expecting.

Guarantor Summarized Financial Information

On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation, which distribute a full line of food products and a wide variety of non-food products, at that time entered into full and unconditional guarantees of all outstanding senior notes and debentures of Sysco Corporation. All subsequent issuances of senior notes and debentures in the U.S. and borrowings under the company’s $2.0 billion long-term revolving credit facility have also been guaranteed by these subsidiaries. As of December 26, 2020, Sysco had a total of $12.5 billion in senior notes, debentures and borrowings under the long-term revolving credit facility that were guaranteed by these subsidiary guarantors. Our ~~2019~~remaining consolidated subsidiaries (non-guarantor subsidiaries) are not obligated under the senior notes indenture, debentures indenture or our long-term revolving credit facility.

All subsidiary guarantors are 100% owned by the parent company, all guarantees are full and unconditional, and all guarantees are joint and several. The guarantees rank equally and ratably in right of payment with all other existing and future unsecured and unsubordinated indebtedness of the respective guarantors. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” contained in our fiscal 2020 Form 10-K ~~contains~~for additional information regarding the terms of the guarantees.

Basis of Preparation of the Summarized Financial Information

The following tables include summarized financial information of Sysco Corporation (issuer), and certain wholly owned U.S. Broadline subsidiaries (guarantors) (together, the obligor group). The summarized financial information of the obligor group is presented on a ~~table that summarizes~~combined basis with intercompany balances and transactions between entities in the obligor group eliminated. Investments in and equity in the earnings of our ~~obligations and commitments to make specified contractual future cash payments as~~non-guarantor subsidiaries, which are not members of ~~June 29, 2019. Since June 29, 2019, there~~the obligor group, have been noexcluded from the summarized financial information.

The obligor group’s amounts due to, amounts due from and transactions with non-guarantor subsidiaries have been presented in separate line items, if they are material ~~changes~~ to ~~our specified contractual obligations.~~the obligor financials.


Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet	Dec. 26, 2020		Jun. 27, 2020
	(In thousands)
ASSETS
Receivables due from non-obligor subsidiaries	$	96,596	$	133,195
Current assets	8,004,804		8,644,084
Total current assets	$	8,101,400	$	8,777,279
Notes receivable from non-obligor subsidiaries	$	83,482	$	671,500
Other noncurrent assets	3,867,458		4,036,312
Total noncurrent assets	$	3,950,940	$	4,707,812

LIABILITIES
Payables due to non-obligor subsidiaries	$	36,212	$	48,923
Other current liabilities	1,946,408		2,200,422
Total current liabilities	$	1,982,620	$	2,249,345
Notes payable to non-obligor subsidiaries	$	196,097	$	233,158
Long-term debt	12,021,840		12,478,453
Other noncurrent liabilities	1,278,574		1,356,781
Total noncurrent liabilities	$	13,496,511	$	14,068,392


Combined Parent and Guarantor Subsidiaries Summarized Results of Operations		26-Week Period Ended Dec. 26, 2020
	(In thousands)
Sales		$	14,616,325
Gross profit		2,786,667
Operating income		754,571
Interest expense from non-obligor subsidiaries		26,671
Net earnings		403,186

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that are most important to the portrayal of our financial position and results of operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. We have reviewed with the Audit Committee of the Board of Directors the development and selection of the critical accounting policies and estimates and this related disclosure. Our most critical accounting policies and estimates pertain to goodwill and intangible assets, allowance for doubtful accounts, income taxes, share-based compensation and the company-sponsored pension plans, ~~income taxes and share-based compensation,~~ which are described in Item 7 of our ~~2019~~fiscal 2020 Form 10-K.

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. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” “projected,” “continues,” “continuously,” variations of such terms, and similar terms and phrases denoting anticipated or expected occurrences or results. Examples of forward-looking statements include, but are not limited to, statements about:

•the effect, impact, potential duration or other implications of the COVID-19 pandemic and any expectations we may have with respect thereto, including our ability to withstand the crisis;

•the expected extent and duration of lockdowns in Europe during fiscal 2021;

•expectations regarding the impact of cost-saving measures undertaken in response to the COVID-19 pandemic;

•expectations regarding our business and the economic recovery generally as the COVID-19 pandemic subsides, including beliefs regarding future customer activity and the timing of the recovery;

•our expectations regarding ~~improved operating income performance;~~

~~our expectations regarding multiple transformation initiatives, including (i)~~ the Finance Transformation Roadmap and our expectation that we will receive financial benefits from this initiative, (ii) Smart Spending and our expectation that this initiative will provide unprecedented visibility, ownership and performance management in all areas of our business, (iii) Canadian Regionalization and our expectation that this initiative will contribute to increased cost savings and (iv) Administrative Expenses and our expectation that this initiative will drive costs outimpact of the COVID-19 pandemic on our mix of earnings by jurisdiction;

•our anticipated hiring of new employees in preparation for the expected business ~~to drive growth,~~recovery, and ~~our expectation that we will receive financial benefits from these initiatives through~~ the ~~end~~expected impact on operating expenses in the third quarter of fiscal ~~2020;~~2021;

•our expectations regarding our ~~ability~~results for the third quarter of fiscal 2021;

•our belief that the tightening or loosening of restrictions on customers will continue to ~~effectively centralize and standardize~~ be the primary driver of the pace of business recovery until vaccines are available;

•our ~~business, including leveraging technology and strengthening Sysco overall;~~

~~our expectations~~belief that our ~~four strategic priorities, which include the~~new customer ~~experience, delivering operational excellence, optimizing the business and activating the power of our people,~~additions will ~~accelerate our current growth and guide us into the future;~~

~~projections of future performance under our three-year strategic financial plan, including, but not limited~~enable Sysco to ~~our expectation that we will reach approximately $500 million to $525 million of adjusted operating income growth as compared to fiscal 2017, our goal of growing earnings per share~~recover faster than ~~operating income, and achieving 16% in adjusted return on invested capital improvement for existing businesses;~~the market as economic conditions improve;

~~our forecasted results for our current three-year plan ending fiscal 2020;~~

•our expectations regarding the ~~accelerated investments~~ability of our supply chain and facilities to remain in place and operational;

•our plans regarding our transformation initiatives, including acceleration of our work across our customer-facing tools and technology, sales transformation and the regionalization of our operations in the U.S., and the expected effects, returns and benefits from such initiatives;

•our belief that we ~~are making related~~will continue to experience risk in fiscal 2021 relating to uncollectible accounts, our ~~long-term strategic growth plans in Europe,~~expectations regarding the level of uncollectible accounts and bad debt reserves, and our expectations regarding the timing of our collection of the unreserved balance of accounts receivable held prior to the onset of the COVID-19 crisis;

•our belief that ~~such investments~~our actions undertaken to receive payments on receivables will ~~enrich~~help to partially affect the ~~customer experience and position us well in~~unfavorable impact of the ~~European market;~~COVID-19 pandemic;

•our belief that our available liquidity would be sufficient to sustain our operations for an extended period, including through an impact much worse than we are currently experiencing or expecting;

•estimates regarding the outcome of legal proceedings;

•the impact of seasonal trends on our free cash flow;

•our expectations regarding the use of remaining cash generated from operations;

~~estimates regarding our capital expenditures;~~

•our expectations regarding the impact of potential acquisitions and sales of assets on our liquidity, borrowing capacity, leverage ratios and capital availability;

•our expectations ~~regarding~~that our divestitures in the ~~impact~~first and third quarters of fiscal 2021 will facilitate our efforts to prioritize our focus and investments on our ~~performance~~core business;

•our belief that the increase in customer orders through Sysco Shop is a direct result of the ~~operational challenges facing~~ improvements we are making to the platform;

•our ~~business~~intent to implement our new pricing software across the U.S. in ~~France;~~calendar year 2021;

•our ~~expectations regarding GDP growth~~belief in ~~France;~~our strong financial position;

~~our plans to focus on accelerating our business;~~

~~our expectations regarding the impact of costs associated with the senior leadership change;~~

~~our expectations regarding future accelerated growth and performance, and expectations regarding the impact on adjusted operating income of investment spending to achieve those goals;~~

~~our expectations regarding trends in produce markets;~~

•our expectations regarding the calculation of adjusted return on invested capital, adjusted operating income, adjusted net earnings and adjusted diluted earnings per share;

•our expectations regarding the impact of future Certain Items on our projected future non-GAAP and GAAP results;

•our expectations regarding our effective tax rate for the remainder of fiscal 2021;

•our expectations regarding the amount of the unrecognized tax benefit with respect to certain of the company’s unrecognized tax positions;

•our expectations regarding the recognition of compensation costs related to share-based compensation arrangements;

•the sufficiency of our mechanisms for managing working capital and competitive pressures, and our beliefs regarding the impact of these ~~mechanisms;~~mechanisms and their effectiveness in preventing a significant unfavorable impact on our cash flows from operations;

•our ability to meet future cash requirements, including the ability to access financial markets effectively, including issuances of debt securities, and maintain sufficient liquidity;

•our expectations regarding the payment of dividends, and the growth of our dividend, in the future;

•our expectations regarding future activity under our share repurchase program;

•future compliance with the covenants under our revolving credit facility;

•our ability to effectively access the commercial paper market and long-term capital markets; and

•our intention to repay our U.K. commercial paper program and long-term debt with ~~cash on hand,~~a combination of cash flow from operations ~~issuances of commercial paper, issuances of senior notes, or a combination thereof;~~ and cash on hand.

~~our expectations regarding share repurchases.~~

These statements are based on management’s current expectations and estimates; actual results may differ materially due in part to the risk factors set forth below, those within Part II, Item 1A of this document and those discussed in Item 1A of our ~~2019~~fiscal 2020 Form 10-K:

•the impact and effects of public health crises, pandemics and epidemics, such as the recent outbreak of COVID-19, and the adverse impact thereof on our business, financial condition and results of operations, including, but not limited to, our growth, product costs, supply chain, labor availability, logistical capabilities, customer demand for our products and industry demand generally, consumer spending, our liquidity, the price of our securities and trading markets with respect thereto, our ability to access capital markets, and the global economy and financial markets generally;

•the risk that if sales from our locally managed customers do not grow at the same rate as sales from regional and national customers, or if we are unable to continue to accelerate local case growth, our gross margins may decline;

•the risk that we are unlikely to be able to predict inflation over the long term, and lower inflation is likely to produce lower gross profit;

•periods of significant or prolonged inflation or deflation and their impact on our product costs and profitability generally;

~~the risk that our efforts to modify truck routing, including our small truck initiative, in order to reduce outbound transportation costs may be unsuccessful;~~

•the risk that we may not be able to accelerate and/or identify additional administrative cost savings in order to compensate for any gross profit or supply chain cost leverage challenges;

•risks related to unfavorable conditions in North America and Europe and the impact on our results of operations and financial condition;

•the risks related to our efforts to meet our long-term strategic objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; the risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to us if past and future undertakings and the associated changes to our business do not prove to be cost effective or do not result in the level of cost savings and other benefits that we anticipated;

•the impact of unexpected future changes to our business initiatives based on management’s subjective evaluation of our overall business needs;

•the risk that the actual costs of any business initiatives may be greater or less than currently expected;

•the risk that competition in our industry and the impact of GPOs may adversely impact our margins and our ability to retain customers and make it difficult for us to maintain our market share, growth rate and profitability;

•the risk that our relationships with long-term customers may be materially diminished or terminated;

•the risk that changes in consumer eating habits could materially and adversely affect our business, financial condition, or results of operations;

•the risk that changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results;

•the risk that we may not be able to fully compensate for increases in fuel costs, and forward purchase commitments intended to contain fuel costs could result in above market fuel costs;

•the risk of interruption of supplies and increase in product costs as a result of conditions beyond our control;

•the potential impact on our reputation and earnings of adverse publicity or lack of confidence in our products;

•risks related to unfavorable changes to the mix of locally managed customers versus corporate-managed customers;

•the risk that we may not realize anticipated benefits from our operating cost reduction efforts;

•difficulties in successfully expanding into international markets and complimentary lines of business;

•the potential impact of product liability claims;

•the risk that we fail to comply with requirements imposed by applicable law or government regulations;

•risks related to our ability to effectively finance and integrate acquired businesses;

•risks related to our access to borrowed funds in order to grow and any default by us under our indebtedness that could have a material adverse impact on cash flow and liquidity;

•our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position;

•the risk that the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending;

•the risk that divestiture of one or more of our businesses may not provide the anticipated effects on our operations;

•the risk that the U.K.’s exit from the European Union (EU) on January 31, 2020, commonly referred to as Brexit, may adversely impact our operations in the U.K., including those of the Brakes Group;

•the risk that future labor disruptions or disputes could disrupt the integration of Brake France and Davigel into Sysco France and our operations in France and the EU generally;

•the risk that factors beyond management’s control, including fluctuations in the stock market, as well as management’s future subjective evaluation of the company’s needs, would impact the timing of share repurchases;

•due to our reliance on technology, any technology disruption or delay in implementing new technology could have a material negative impact on our business;

•the risk that a cybersecurity incident and other technology disruptions could negatively impact our business and our relationships with customers;

•the potential requirement to pay material amounts under our multiemployer defined benefit pension plans;

•our funding requirements for our company-sponsored qualified pension plan may increase should financial markets experience future declines;

•labor issues, including the renegotiation of union contracts and shortage of qualified labor;

•capital expenditures may vary based on changes in business plans and other factors, including risks related to the implementation of various initiatives, the timing and successful completion of acquisitions, construction schedules and the possibility that other cash requirements could result in delays or cancellations of capital spending; and

•the risk that the anti-takeover benefits provided by our preferred stock may not be viewed as beneficial to stockholders.

For a more detailed discussion of factors that could cause actual results to differ from those contained in the forward-looking statements, see the risk factors discussion contained in Item 1A of our ~~2019~~fiscal 2020 Form ~~10-K and the risk factor discussion contained in Part II, Item 1A of this document.~~10-K.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risks consist of interest rate risk, foreign currency exchange rate risk, fuel price risk and investment risk. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in our ~~2019~~fiscal 2020 Form ~~10-K.~~10-K and the risk factor discussion contained in Part II, Item 1A of this report. There have been no significant changes to our market risks since June ~~29, 2019,~~27, 2020, except as noted below.

Interest Rate Risk

At December ~~28, 2019,~~26, 2020, there ~~was $853.3 million in aggregate~~were no commercial paper issuances ~~outstanding.~~outstanding under our U.S. commercial paper program, and we had £600.0 million outstanding under our U.K. commercial paper program. Total debt as of December ~~28, 2019~~26, 2020 was ~~$8.9~~$13.8 billion, of which approximately ~~64%~~83% was at fixed rates of interest, including the impact of our interest rate swap agreements.

Fuel Price Risk

Due to the nature of our distribution business, we are exposed to potential volatility in fuel prices. The price and availability of diesel fuel fluctuates due to changes in production, seasonality and other market factors generally outside of our control. Increased fuel costs may have a negative impact on our results of operations in three areas. First, the high cost of fuel can negatively impact consumer confidence and discretionary spending and thus reduce the frequency and amount spent by consumers for food-away-from-home purchases. Second, the high cost of fuel can increase the price we pay for product purchases and we may not be able to pass these costs fully to our customers. Third, increased fuel costs impact the costs we incur to deliver product to our customers. Fuel costs related to outbound deliveries represented approximately 0.5% of sales during the first 26 weeks of fiscal ~~2020~~2021 and fiscal ~~2019.~~2020.

Our activities to mitigate fuel costs include routing optimization with the goal of reducing miles driven, improving fleet utilization by adjusting idling time and maximum speeds and using fuel surcharges that primarily track with the change in market prices of fuel. We use diesel fuel swap contracts to fix the price of a portion of our projected monthly diesel fuel requirements. As

of December ~~28, 2019,~~26, 2020, we had diesel fuel swaps with a total notional amount of approximately 5433 million gallons through December ~~2020.~~2021. These swaps are expected to lock in the price of approximately 65% of our projected fuel purchase needs for fiscal ~~2020.~~2021. Additional swaps have been entered into for hedging activity in fiscal ~~2021.~~2022. As of December ~~28, 2019,~~26, 2020, we had diesel fuel swaps with a total notional amount of approximately 2911 million gallons specific to fiscal ~~2021.~~2022. Our remaining fuel purchase needs will occur at market rates unless contracted for a fixed price or hedged at a later date.

Item 4. Controls and Procedures

Sysco’s management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December ~~28, 2019.~~26, 2020. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding the required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Sysco’s disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as

of December ~~28, 2019,~~26, 2020, our chief executive officer and chief financial officer concluded that, as of such date, Sysco’s disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended December ~~28, 2019,~~26, 2020, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



Delaware						74-1648137
(State or other jurisdiction of incorporation or organization)						(IRS employer identification number)



Large Accelerated Filer	☑	Accelerated Filer	☐
Non-accelerated Filer	☐	Smaller Reporting Company	☐
(Do not check if a smaller reporting company)		Emerging growth company	☐



	PART I – FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3128
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	5556
Item 4.	Controls and Procedures	56
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	57
Item 1A.	Risk Factors	57
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5859
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	59
Item 5.	Other Information	5960
Item 6.	Exhibits	5960

Signatures		62



	Dec. 28, 2019			Jun. 29, 2019
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	524,578		$	513,460
Accounts and notes receivable, less allowances of $71,612 and $28,176	4,375,583			4,181,696
Inventories	3,508,260			3,216,034
Prepaid expenses and other current assets	245,480			210,582
Income tax receivable	7,709			19,733
Total current assets	8,661,610			8,141,505
Plant and equipment at cost, less accumulated depreciation	4,593,890			4,501,705
Other long-term assets
Goodwill	4,023,639			3,896,226
Intangibles, less amortization	855,489			857,301
Deferred income taxes	117,885			80,760
Operating lease right-of-use assets, net	631,035			—
Other assets	488,486			489,025
Total other long-term assets	6,116,534			5,323,312
Total assets	$	19,372,034		$	17,966,522

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes payable	$	3,507		$	3,957
Accounts payable	4,159,607			4,314,620
Accrued expenses	1,686,866			1,729,941
Accrued income taxes	187,876			17,343
Current operating lease liabilities	103,963			—
Current maturities of long-term debt	790,149			37,322
Total current liabilities	6,931,968			6,103,183
Long-term liabilities
Long-term debt	8,092,914			8,122,058
Deferred income taxes	142,301			172,232
Long-term operating lease liabilities	561,610			—
Other long-term liabilities	1,081,645			1,031,020
Total long-term liabilities	9,878,470			9,325,310
Noncontrolling interest	34,070			35,426
Shareholders’ equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none	—			—
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares	765,175			765,175
Paid-in capital	1,526,132			1,457,419
Retained earnings	11,639,727			11,229,679
Accumulated other comprehensive loss	(1,566,329		)	(1,599,729		)
Treasury stock at cost, 256,332,388 and 252,297,926 shares	(9,837,179		)	(9,349,941		)
Total shareholders’ equity	2,527,526			2,502,603
Total liabilities and shareholders’ equity	$	19,372,034		$	17,966,522


	Dec. 26, 2020		Jun. 27, 2020
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	5,767,034	$	6,059,427
Accounts receivable, less allowances of $254,347 and $334,810	2,855,424		2,893,551
Inventories	3,100,478		3,095,085

Prepaid expenses and other current assets	223,872		192,163

Income tax receivable	44,621		108,006
Total current assets	11,991,429		12,348,232
Plant and equipment at cost, less accumulated depreciation	4,382,737		4,458,567
Other long-term assets
Goodwill	3,929,636		3,732,469
Intangibles, less amortization	798,649		780,172

Deferred income taxes	280,511		194,115
Operating lease right-of-use assets, net	635,664		603,616
Other assets	471,225		511,095
Total other long-term assets	6,115,685		5,821,467
Total assets	$	22,489,851	$	22,628,266

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Notes payable	$	8,754	$	2,266
Accounts payable	3,554,624		3,447,065
Accrued expenses	1,679,429		1,616,289
Accrued income taxes	0		2,938
Current operating lease liabilities	107,633		107,167
Current maturities of long-term debt	1,366,103		1,542,128
Total current liabilities	6,716,543		6,717,853
Long-term liabilities
Long-term debt	12,463,284		12,902,485
Deferred income taxes	47,780		86,601
Long-term operating lease liabilities	563,548		523,496
Other long-term liabilities	1,235,939		1,204,953
Total long-term liabilities	14,310,551		14,717,535

Noncontrolling interest	35,958		34,265
Shareholders’ equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none	0		0
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares	765,175		765,175
Paid-in capital	1,565,255		1,506,901
Retained earnings	10,383,493		10,563,008
Accumulated other comprehensive loss	(1,388,169)		(1,710,881)
Treasury stock at cost, 255,176,469 and 256,915,825 shares	(9,898,955)		(9,965,590)
Total shareholders’ equity	1,426,799		1,158,613
Total liabilities and shareholders’ equity	$	22,489,851	$	22,628,266



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



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


	13-Week Period Ended				26-Week Period Ended
	Dec. 26, 2020		Dec. 28, 2019		Dec. 26, 2020		Dec. 28, 2019
Sales	$	11,558,982	$	15,025,042	$	23,336,361	$	30,328,047
Cost of sales	9,460,524		12,196,643		19,018,058		24,556,278
Gross profit	2,098,458		2,828,399		4,318,303		5,771,769
Operating expenses	1,886,396		2,275,906		3,686,662		4,550,958
Operating income	212,062		552,493		631,641		1,220,811
Interest expense	146,498		76,762		293,215		160,097
Other (income) expense, net	(15,556)		(807)		(1,432)		2,305
Earnings before income taxes	81,120		476,538		339,858		1,058,409
Income taxes	13,831		93,128		55,669		221,218
Net earnings	$	67,289	$	383,410	$	284,189	$	837,191

Net earnings:
Basic earnings per share	$	0.13	$	0.75	$	0.56	$	1.64
Diluted earnings per share	0.13		0.74		0.56		1.62

Average shares outstanding	510,006,754		509,984,743		509,567,080		511,721,290
Diluted shares outstanding	512,742,792		515,517,792		511,740,778		517,120,395


⁽¹⁾(1)Restricted cash primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in each consolidated balance sheet.	Restricted cash primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within Other assets in each consolidated balance sheet.


	13-Week Period Ended Dec. 26, 2020
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	1,500,064	$	267,817	$	402,133	$	0	$	2,170,014
Canned and dry products	1,406,053		383,170		32,867		0		1,822,090
Frozen fruits, vegetables, bakery and other	1,070,227		394,706		275,422		0		1,740,355
Poultry	844,377		174,717		217,621		0		1,236,715
Dairy products	818,810		208,208		142,966		0		1,169,984
Paper and disposables	715,775		92,954		182,094		8,675		999,498
Fresh produce	696,879		145,565		66,528		0		908,972
Seafood	407,955		69,680		26,387		0		504,022
Beverage products	168,902		73,422		142,208		10,728		395,260



Other (1)	295,101		157,550		32,175		127,246		612,072
Total Sales	$	7,924,143	$	1,967,789	$	1,520,401	$	146,649	$	11,558,982


⁽¹⁾	Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription sales for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.


	13-Week Period Ended Dec. 29, 2018											26-Week Period Ended Dec. 28, 2019
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total			US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)											(In thousands)
Principal Product Categories											Principal Product Categories
Fresh and frozen meats	$	2,084,648	$	409,086	$	374,069	$	—	$	2,867,803	Fresh and frozen meats	$	4,146,747	$	821,638	$	773,962	$	0	$	5,742,347
Canned and dry products	1,799,535		611,609		66,719		—		2,477,863		Canned and dry products	3,760,632		1,165,622		75,842		0		5,002,096
Frozen fruits, vegetables, bakery and other	1,417,063		354,178		315,129		—		2,086,370		Frozen fruits, vegetables, bakery and other	2,908,688		1,125,005		520,995		0		4,554,688
Dairy products	1,041,436		306,364		148,103		—		1,495,903		Dairy products	2,288,201		612,008		288,888		0		3,189,097
Poultry	1,001,579		209,542		208,674		—		1,419,795		Poultry	2,154,785		433,381		404,749		0		2,992,915
Fresh produce	927,997		322,020		57,048		—		1,307,065		Fresh produce	1,951,020		513,941		120,252		0		2,585,213
Paper and disposables	681,890		87,376		181,896		14,175		965,337		Paper and disposables	1,409,431		189,120		334,748		32,663		1,965,962
Seafood	581,655		196,413		23,451		—		801,519		Seafood	1,287,119		278,656		48,238		0		1,614,013
Beverage products	271,182		161,317		136,244		20,422		589,165		Beverage products	567,412		263,618		282,785		45,240		1,159,055

Other ⁽¹⁾	280,120		232,693		25,274		216,800		754,887		Other (1)	598,173		399,452		52,428		472,608		1,522,661
Total Sales	$	10,087,105	$	2,890,598	$	1,536,607	$	251,397	$	14,765,707	Total Sales	$	21,072,208	$	5,802,441	$	2,902,887	$	550,511	$	30,328,047


⁽¹⁾ (1)Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription sales for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.	Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription sales for our Sysco Labs business, and other janitorial products, medical supplies and smallwares.



	26-Week Period Ended Dec. 29, 2018
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	4,206,167	$	829,542	$	746,401	$	—	$	5,782,110
Canned and dry products	3,651,702		1,223,079		144,341		—		5,019,122
Frozen fruits, vegetables, bakery and other	2,840,449		982,735		606,995		—		4,430,179
Poultry	2,028,515		425,124		480,735		—		2,934,374
Dairy products	2,127,840		624,711		302,909		—		3,055,460
Fresh produce	1,865,577		579,564		121,897		—		2,567,038
Paper and disposables	1,392,649		191,915		370,512		30,584		1,985,660
Seafood	1,243,342		384,850		48,835		—		1,677,027
Beverage products	561,752		213,388		283,538		43,601		1,102,279
Other ⁽¹⁾	568,523		356,640		51,901		450,673		1,427,737
Total Sales	$	20,486,516	$	5,811,548	$	3,158,064	$	524,858	$	29,980,986


	Assets Measured at Fair Value as of Dec. 26, 2020
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash equivalents
Cash and cash equivalents	$	4,738,442	$	489,977	$	0	$	5,228,419

Other assets (1)	22,451		0		0		22,451







Total assets at fair value	$	4,760,893	$	489,977	$	0	$	5,250,870



	Dec. 28, 2019
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
	(In thousands)
Fixed income securities:
Corporate bonds	$	89,872	$	2,122	$	(3	)	$	91,991	$	15,047	$	76,944
Government bonds	28,768		2,152		—			30,920		—		30,920
Total marketable securities	$	118,640	$	4,274	$	(3	)	$	122,911	$	15,047	$	107,864

	Jun. 29, 2019
	Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
	(In thousands)
Corporate bonds	$	87,540	$	1,734	$	—		$	89,274	$	12,006	$	77,268
Government bonds	28,900		1,845		—			30,745		—		30,745
Total marketable securities	$	116,440	$	3,579	$	—		$	120,019	$	12,006	$	108,013


⁽¹⁾(1)Represents restricted cash balance recorded within other assets in the consolidated balance sheet.	~~Represents restricted cash balance recorded within other assets in the consolidated balance sheet.~~



	Assets Measured at Fair Value as of Jun. 29, 2019
	Level 1		Level 2		Level 3		Total
	(In thousands)
Assets:
Cash equivalents
Cash and cash equivalents	$	72,824	$	200	$	—	$	73,024
Other assets ⁽¹⁾	18,785		—		—		18,785
Total assets at fair value	$	91,609	$	200	$	—	$	91,809


⁽¹⁾ (1)Represents restricted cash balance recorded within other assets in the consolidated balance sheet.	~~Represents restricted cash balance recorded within other assets in the consolidated balance sheet.~~


	Dec. 26, 2020
	(In thousands)
Due in one year or less	$	17,777
Due after one year through five years	60,399
Due after five years through ten years	52,823

Total	$	130,999


		Derivative Fair Value
	Balance Sheet location	Dec. 26, 2020		Jun. 27, 2020
		(In thousands)
Fair Value Hedges:
Interest rate swaps	Other current assets	$	2,678	$	1,388
Interest rate swaps	Other assets	58,053		69,782



Cash Flow Hedges:
Fuel swaps	Other current assets	$	3,428	$	233
Foreign currency forwards	Other current assets	34		1,063

Fuel swaps	Other assets	0		1,173
Cross currency swaps	Other assets	0		19,614
Fuel swaps	Other current liabilities	6,973		28,242
Foreign currency forwards	Other current liabilities	163		222


	13-Week Period Ended Dec. 28, 2019								13-Week Period Ended Dec. 26, 2020
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income				Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In thousands)				(In thousands)				(In thousands)			(In thousands)
Derivatives in cash flow hedging relationships:								Derivatives in cash flow hedging relationships:
Fuel swaps	$	10,345		Operating expense	$	(3,213	)	Fuel swaps	$	16,939	Operating expense	$	(7,613)
Foreign currency contracts	(29,658		)	Cost of sales / Other income	3,624			Foreign currency contracts	(587)		Cost of sales / Other income	0

Total	$	(19,313	)		$	411		Total	$	16,352		$	(7,613)

Derivatives in net investment hedging relationships:								Derivatives in net investment hedging relationships:
Foreign currency contracts	$	(34,639	)	N/A	$	—

Foreign denominated debt	(11,650		)	N/A	—			Foreign denominated debt	(27,554)		N/A	0
Total	$	(46,289	)		$	—		Total	$	(27,554)		$	0

	13-Week Period Ended Dec. 29, 2018								13-Week Period Ended Dec. 28, 2019
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives			Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income				Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In thousands)				(In thousands)				(In thousands)			(In thousands)
Derivatives in cash flow hedging relationships:								Derivatives in cash flow hedging relationships:
Fuel swaps	$	(36,843	)	Operating expense	$	5,040		Fuel swaps	$	10,345	Operating expense	$	(3,213)
Foreign currency contracts	25,463			Cost of sales / Other income	8			Foreign currency contracts	(29,658)		Cost of sales / Other income	3,624

Total	$	(11,380	)		$	5,048		Total	$	(19,313)		$	411

Derivatives in net investment hedging relationships:								Derivatives in net investment hedging relationships:
Foreign currency contracts	$	27,143		N/A	$	—		Foreign currency contracts	$	(34,639)	N/A	$	0
Foreign denominated debt	8,150			N/A	—			Foreign denominated debt	(11,650)		N/A	0
Total	$	35,293			$	—		Total	$	(46,289)		$	0


	Dec. 26, 2020
	Carrying Amount of Hedged Assets (Liabilities)		Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
	(In thousands)
Balance sheet location:
Current maturities of long-term debt	$	(499,778)	$	(2,797)
Long-term debt	(1,064,694)		(58,053)



	Consolidated Balance Sheet Location	Dec. 28, 2019
		(In thousands)
Finance lease right-of-use assets	Plant and equipment at cost, less accumulated depreciation	$	98,006
Current finance lease liabilities	Current maturities of long-term debt	30,280
Long-term finance lease liabilities	Long-term debt	72,176



	Consolidated Results of Operations Location	13-Week Period Ended Dec. 28, 2019		26-Week Period Ended Dec. 28, 2019
		(In thousands)
Operating lease cost	Operating expenses	$	31,917	$	62,342
Financing lease cost:
Amortization of right-of-use assets	Operating expenses	10,343		18,956
Interest on lease obligations	Interest expense	1,227		2,409
Variable lease cost	Operating expenses	5,979		6,447
Short-term lease cost	Operating expenses	3,274		6,170
Net lease cost		$	52,740	$	96,324



	Operating Leases			Finance Leases
	(In thousands)
Remainder of fiscal 2020	$	60,961		$	18,004
2021	114,626			32,199
2022	88,350			23,470
2023	72,233			16,784
2024	50,433			10,398
2025	44,622			5,977
Thereafter	314,928			5,828
Total undiscounted lease obligations	746,153			112,660
Less imputed interest	(80,580		)	(10,204		)
Present value of lease obligations	$	665,573		$	102,456



	26-Week Period Ended Dec. 28, 2019
Cash Paid For Amounts Included In Measurement of Liabilities:	(Dollars in thousands)
Operating cash flows for operating leases	$	62,101
Operating cash flows for financing leases	2,409
Financing cash flows for financing leases	16,634

Supplemental Non-cash Information on Lease Liabilities:
Assets obtained in exchange for operating lease obligations	$	29,249
Assets obtained in exchange for finance lease obligations	9,700

Lease Term and Discount Rate:
Weighted-average remaining lease term (years):
Operating leases	11.49 years
Financing leases	4.11 years
Weighted-average discount rate:
Operating leases	2.44		%
Financing leases	4.67		%


		13-Week Period Ended Dec. 28, 2019											13-Week Period Ended Dec. 26, 2020
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount			Tax			Net of Tax Amount				Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In thousands)											(In thousands)
Pension and other postretirement benefit plans:											Pension and other postretirement benefit plans:

Reclassification adjustments:											Reclassification adjustments:

Amortization of prior service cost	Other expense, net	$	1,905		$	477		$	1,428		Amortization of prior service cost	Other expense, net	$	183	$	46	$	137
Amortization of actuarial loss, net	Other expense, net	9,630			2,405			7,225			Amortization of actuarial loss, net	Other expense, net	10,387		2,594		7,793
Total reclassification adjustments		11,535			2,882			8,653			Total reclassification adjustments		10,570		2,640		7,930
Foreign currency translation:											Foreign currency translation:

Foreign currency translation adjustment	N/A	154,955			—			154,955			Foreign currency translation adjustment	N/A	222,507		0		222,507
Marketable securities:											Marketable securities:
Change in marketable securities ⁽¹⁾	N/A	(489		)	(103		)	(386		)	Change in marketable securities (1)	N/A	(55)		(11)		(44)
Hedging instruments:											Hedging instruments:
Other comprehensive income (loss) before reclassification adjustments:											Other comprehensive income (loss) before reclassification adjustments:
Change in cash flow hedges	Operating expenses ⁽²⁾	(19,313		)	(4,516		)	(14,797		)
Change in net investment hedges	N/A	(46,289		)	(4,810		)	(41,479		)
Total other comprehensive income (loss) before reclassification adjustments		(65,602		)	(9,326		)	(56,276		)
Change in cash flow hedge											Change in cash flow hedge	Operating expenses (2)	16,352		4,017		12,335
Change in net investment hedge											Change in net investment hedge	N/A	(27,554)		(6,888)		(20,666)

Total other comprehensive income before reclassification adjustments											Total other comprehensive income before reclassification adjustments		(11,202)		(2,871)		(8,331)
Reclassification adjustments:											Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	2,874			719			2,155			Amortization of cash flow hedges	Interest expense	2,874		719		2,155
Total other comprehensive (loss) income		$	103,273		$	(5,828	)	$	109,101

Total other comprehensive income											Total other comprehensive income		$	224,694	$	477	$	224,217


⁽¹⁾	Realized gains or losses on marketable securities are presented within Other (income) expense, net in the Consolidated Results of Operations; however, there were no significant gains or losses realized in the second quarter of fiscal 2020.


⁽²⁾	~~Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.~~


⁽¹⁾ (1)Realized gains or losses on marketable securities are presented within Other (income) expense, net in the Consolidated Results of Operations; however, there were no significant gains or losses realized in the first 26 weeks of fiscal 2020. (2)Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.	~~Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.~~


	26-Week Period Ended Dec. 26, 2020
	Pension and Other Postretirement Benefit Plans, net of tax		Foreign Currency Translation		Hedging, net of tax		Marketable Securities, net of tax		Total
	(In thousands)
Balance as of June 27, 2020	$	(1,265,714)	$	(402,384)	$	(49,878)	$	7,095	$	(1,710,881)
Equity adjustment from foreign currency translation	—		335,647		—		—		335,647

Amortization of cash flow hedges	—		—		4,310		—		4,310

Change in net investment hedges	—		—		(31,927)		—		(31,927)
Change in cash flow hedge	—		—		(632)		—		(632)


Amortization of unrecognized prior service cost	274		—		—		—		274
Amortization of unrecognized net actuarial losses	15,558		—		—		—		15,558
Change in marketable securities	—		—		—		(518)		(518)
Balance as of Dec. 26, 2020	$	(1,249,882)	$	(66,737)	$	(78,127)	$	6,577	$	(1,388,169)



	Condensed Consolidated Balance Sheet
	Dec. 28, 2019
	Sysco		Certain U.S. Broadline Subsidiaries		Other Non-Guarantor Subsidiaries		Eliminations			Consolidated Totals
	(In thousands)
Current assets	$	123,848	$	4,414,664	$	4,123,098	$	—		$	8,661,610
Intercompany receivables	6,545,764		102,177		3,675,995		(10,323,936		)	—
Investment in subsidiaries	5,877,563		—		1,244,417		(7,121,980		)	—
Plant and equipment, net	235,093		2,220,719		2,138,078		—			4,593,890
Other assets	820,636		728,806		5,134,269		(567,177		)	6,116,534
Total assets	$	13,602,904	$	7,466,366	$	16,315,857	$	(18,013,093	)	$	19,372,034
Current liabilities	$	1,371,102	$	923,600	$	4,637,266	$	—		$	6,931,968
Intercompany payables	1,364,060		3,284,353		5,675,523		(10,323,936		)	—
Long-term debt	7,636,689		9,557		446,668		—			8,092,914
Other liabilities	703,527		550,395		1,098,811		(567,177		)	1,785,556
Noncontrolling interest	—		—		34,070		—			34,070
Shareholders’ equity	2,527,526		2,698,461		4,423,519		(7,121,980		)	2,527,526
Total liabilities and shareholders’ equity	$	13,602,904	$	7,466,366	$	16,315,857	$	(18,013,093	)	$	19,372,034



	Condensed Consolidated Statement of Comprehensive Income
	For the 13-Week Period Ended Dec. 28, 2019
	Sysco			Certain U.S. Broadline Subsidiaries			Other Non-Guarantor Subsidiaries				Eliminations			Consolidated Totals
	(In thousands)
Sales	$	—		$	9,489,129		$	6,135,069		��	$	(599,156	)	$	15,025,042
Cost of sales	—			7,712,606			5,083,193				(599,156		)	12,196,643
Gross profit	—			1,776,523			1,051,876				—			2,828,399
Operating expenses	206,921			1,053,004			1,015,981				—			2,275,906
Operating income (loss)	(206,921		)	723,519			35,895				—			552,493
Interest expense (income) ⁽¹⁾	110,821			(23,993		)	(10,066		)		—			76,762
Other expense (income), net	(612		)	(183		)	(12		)		—			(807		)
Earnings (losses) before income taxes	(317,130		)	747,695			45,973				—			476,538
Income tax (benefit) provision	(106,906		)	188,909			11,125				—			93,128
Equity in earnings of subsidiaries	593,634			—			113,153				(706,787		)	—
Net earnings	383,410			558,786			148,001				(706,787		)	383,410
Other comprehensive income (loss)	109,101			—			154,955				(154,955		)	109,101
Comprehensive income	$	492,511		$	558,786		$	302,956			$	(861,742	)	$	492,511


⁽¹⁾	Interest expense (income) includes $24.0 million of intercompany interest income, net, for certain of the U.S. Broadline subsidiaries, which is intercompany interest expense for Sysco Corporation for the second quarter ended December 28, 2019. There is an immaterial amount of intercompany interest expense related to Sysco Corporation for the Other Non-Guarantor Subsidiaries.



	Condensed Consolidated Statement of Comprehensive Income
	For the 13-Week Period Ended Dec. 29, 2018
	Sysco			Certain U.S. Broadline Subsidiaries			Other Non-Guarantor Subsidiaries			Eliminations			Consolidated Totals
	(In thousands)
Sales	$	—		$	9,101,114		$	6,329,665		$	(665,072	)	$	14,765,707
Cost of sales	—			7,381,785			5,277,282			(665,072		)	11,993,995
Gross profit	—			1,719,329			1,052,383			—			2,771,712
Operating expenses	232,621			1,035,676			1,051,520			—			2,319,817
Operating income (loss)	(232,621		)	683,653			863			—			451,895
Interest expense (income) ⁽¹⁾	63,491			(8,920		)	32,542			—			87,113
Other expense (income), net	3,772			(86		)	6,511			—			10,197
Earnings (losses) before income taxes	(299,884		)	692,659			(38,190		)	—			354,585
Income tax (benefit) provision	(73,057		)	170,960			(10,698		)	—			87,205
Equity in earnings of subsidiaries	494,207			—			128,030			(622,237		)	—
Net earnings	267,380			521,699			100,538			(622,237		)	267,380
Other comprehensive income (loss)	(73,564		)	—			(101,533		)	101,533			(73,564		)
Comprehensive income	$	193,816		$	521,699		$	(995	)	$	(520,704	)	$	193,816