Sysco (SYY) 10-K risk factor changes: FY2020 vs FY2019

In addition, periods of rapidly increasing inflation may adversely affect our business due to the impact of such inflation on discretionary spending by consumers and our limited ability to increase prices in the current, highly competitive [removed: environment.]

The foodservice industry is characterized by relatively low profit [removed: margins with modest demand growth expected in the near-term, and,] [added: margins,] consequently, our results of operations are susceptible to regional, national and international economic trends and uncertainties.

[removed: | • |] [added: -] Unfavorable conditions can depress sales and/or gross margins in a given market. [removed: |]

[removed: | • |] [added: -] Food cost and fuel cost inflation experienced by the consumer can lead to reductions in the frequency of dining out and the amount spent by consumers for food-away-from-home purchases, which could negatively impact our business by reducing demand for our products. [removed: |]

[removed: | • |] [added: -] Heightened uncertainty in the financial markets negatively affects consumer confidence and discretionary spending, which can cause disruptions with our customers and suppliers. [removed: |]

[removed: | • |] [added: -] Liquidity issues and the inability of our customers to consistently access credit markets to obtain cash to support their operations can cause temporary interruptions in our ability to conduct day-to-day transactions involving the collection of funds from such customers. [removed: |]

[removed: | • |] [added: -] Liquidity issues and the inability of our suppliers to consistently access credit markets to obtain cash to support their operations can cause temporary interruptions in our ability to obtain the foodservice products and supplies that we need in the quantities and at the prices that we request. [removed: |]

Historically, North America and Europe have experienced, from time to time, [added: including during the COVID-19 pandemic,] deteriorating economic conditions and heightened uncertainty in their financial markets, which have adversely impacted business and consumer confidence and spending and depressed capital investment and economic activity in the affected regions.

For example, the U.K.’s [removed: anticipated] exit from the [removed: EU] [added: EU, which occurred on January 31, 2020] (commonly referred to as [removed: “Brexit”)] [added: “Brexit”),] and the resulting significant change to the U.K.’s relationship with the EU and with countries outside the EU (and the laws, regulations and trade deals impacting business conducted between them) could disrupt the overall economic growth or stability of the U.K. and the EU and otherwise negatively impact our European operations.

It is possible that Brexit will result in our U.K. and EU operations becoming subject to materially different, and potentially conflicting, laws, regulations or [removed: tariffs] [added: tariffs,] which could require costly new compliance initiatives or changes to legal entity structures or operating practices.

Furthermore, if the [removed: U.K.] [added: transition period] were to [removed: leave the EU] [added: expire] without an agreement (a [removed: “hard] [added: “no-deal] Brexit”), there may be additional adverse impacts on immigration and trade between the U.K. and the EU or countries outside the EU.

Uncertainty surrounding Brexit has contributed to recent fluctuations in the U.K. [removed: economy, which contracted in the second quarter of 2019] [added: economy] and could experience future disruptions.

[removed: In addition, Brexit could cause financial and capital markets] within and outside the U.K. or the EU to constrict, thereby negatively impacting our ability to finance our business, and could cause a substantial dip in consumer confidence and spending that could negatively impact the foodservice distribution industry.

[removed: Additionally,] [added: As an example of political instability, in fiscal 2020,] the “yellow vest” protests in France against a fuel tax [removed: increase] [added: increase, pension reform] and the French government [removed: have] negatively impacted our sales in [removed: France and may continue to do so.][added: France.]

New and increasing competitive sources may result in increased focus on pricing and on limiting price [removed: increases,] [added: increases] or may require increased discounting or other concessions.

Conditions beyond our control can interrupt our [removed: supplies and] [added: supplies,] increase our product [removed: costs.][added: costs and impair our ability to deliver products and services to our customers.]

These conditions include shortages of qualified labor for our suppliers, work slowdowns, work interruptions, strikes or other job actions by employees of suppliers, short-term weather conditions or more prolonged climate change, crop and other agricultural conditions, water shortages, [removed: animal disease outbreaks,] transportation interruptions, unavailability of fuel or increases in fuel costs, product recalls, competitive demands, [added: civil insurrection or social unrest (such as the recent protests and social movements across several North American cities),] terrorist attacks or international hostilities and natural [removed: disasters] [added: disasters, epidemics, pandemics (such as the COVID-19 pandemic)] or other [added: human or animal disease outbreaks or other] catastrophic events (including, but not limited to, [removed: food-borne] [added: foodborne] illnesses).

Additionally, we procure products from suppliers outside of the U.S., and we are subject to the risks associated with political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, [added: including health and safety restrictions related to epidemics and pandemics such as the COVID-19 pandemic,] any or all of which could delay our receipt of products or increase our input costs.

Our inability to obtain adequate supplies of foodservice and related products [added: and/or to timely provide our products and services and fulfill our other obligations to our customers, whether] as a result of any of the foregoing factors or otherwise could mean that we could not fulfill our obligations to customers, [added: could have an adverse effect on our business, results of operations] and [added: financial condition, as our] customers may turn to other distributors.

Reports, whether true or not, of [removed: food-borne] [added: foodborne] illnesses (such as e-coli, avian flu, bovine spongiform encephalopathy, hepatitis A, trichinosis, salmonella, listeria or swine flu) or injuries caused by food tampering could also severely injure our reputation or reduce public confidence in our products.

If patrons of our restaurant customers were to become ill from [removed: food-borne] [added: foodborne] illnesses, our customers could be forced to temporarily close restaurant locations, which would have an adverse effect on our sales and profitability.

[added: In addition, instances of foodborne illnesses or food tampering or other health concerns (even those unrelated to the] use of Sysco products) or public concern regarding the safety of our products, can result in negative publicity about the food service distribution industry and materially adversely affect our results of operations.

Adverse publicity about regulatory or legal action against us could damage our reputation and image, undermine our customers’ confidence in us and reduce short-term or long-term demand for [removed: our products and services, even if the regulatory or legal action is unfounded or not material to our operations.]

[removed: Unfavorable changes] [added: Our anticipated change] to the mix of locally managed customers versus multi-unit customers could [removed: have a material adverse effect on] [added: reduce] our [removed: results of operations] [added: gross] and [removed: financial condition.][added: operating margins.]

If sales to our locally managed customers do not grow at the same [removed: or] [added: (or] a [removed: greater] [added: greater)] rate as sales to our multi-unit customers, our operating margins [removed: may] [added: will likely] decline.

Moreover, [removed: if] [added: as our] sales to [removed: our] multi-unit customers increase at a faster pace of growth than sales to our locally managed customers, we will become more dependent on multi-unit [removed: customers] [added: customers,] as they begin to represent a greater proportion of our total [removed: sales.][added: sales, and therefore, a future loss of sales to the larger of these multi-unit customers could have a material negative impact on our results of operations and financial condition.]

Additionally, as a result of our greater dependence on these customers, [removed: we] [added: they] could [removed: be pressured by them] [added: pressure us] to lower our prices and/or offer expanded or additional services at the same prices.

Additionally, changes in consumer eating habits may result in the enactment or amendment of laws and regulations that impact the ingredients and nutritional content of our food products, or laws and regulations requiring us to disclose [added: the nutritional content of our food products.]

Our ability to successfully operate in international markets may be adversely affected by political, economic and social conditions beyond our control, [added: public health crises, epidemics and pandemics, such as the COVID-19 pandemic,] local laws and customs, and legal and regulatory constraints, including compliance with applicable anti-corruption and currency laws and regulations, of the countries or regions in which we currently operate or intend to operate in the future.

We also face the risk of exposure to product liability claims [removed: in the event that] [added: if] the use of products sold by Sysco is alleged to have caused injury or illness.

We cannot be sure that consumption of our products will not cause a health-related illness in the future [removed: or that we will not be subject to claims or lawsuits relating to such matters.]

For a detailed discussion of the laws and regulations to which our business is subject, please refer to “Business [removed: -] [added: –] Government Regulation” in Part I, Item 1 of this Annual Report on Form 10-K.

[removed: | • |] [added: -] the discharge of pollutants into the air, soil, and water; [removed: |]

[removed: | • |] [added: -] the management and disposal of solid and hazardous materials and wastes; [removed: |]

[removed: | • |] [added: -] employee exposure to hazards in the workplace; and [removed: |]

[removed: | • |] [added: -] the investigation and remediation of contamination resulting from releases of petroleum products and other regulated materials. [removed: |]

Certain of these laws and regulations in the EU may impose liability for costs of investigation or remediation of contamination (which could be material), regardless of fault or the legality of the original disposal, and even if such contamination was present [removed: prior to the commencement of our operations at the site and was not caused by our activities.]

As described in Note 13, “Debt and Other Financing Arrangements,” in the Notes to Consolidated Financial Statements in Item 8, as of June [removed: 29, 2019,] [added: 27, 2020,] we had approximately [removed: $8.2] [added: $14.4] billion of total indebtedness.

This amount included senior notes and [added: borrowings under our revolving credit facility, which supports our U.S. commercial paper program allowing us to issue short-term notes in an aggregate amount not to exceed $2.0 billion scheduled to expire on June 28, 2024, and] issuances under a [added: new unrelated] commercial paper program [added: in the U.K.] allowing [removed: us] [added: the company] to issue short-term unsecured notes in an aggregate amount not to exceed [removed: $2.0 billion.][added: £600 million.]

We also have [added: available] a [removed: revolving] [added: 364-day] credit [removed: facility supporting our U.S. commercial paper program] [added: facility,] in the amount of [removed: $2.0 billion] [added: $750.0 million,] scheduled to expire on [removed: June 28, 2024,] [added: May 19, 2021,] and various other smaller bank facilities.

Global health developments and economic uncertainty resulting from the COVID-19 pandemic have adversely affected, and are expected to continue to adversely affect, our business, financial condition and results of operations.

Public health crises, pandemics and epidemics, such as the recent outbreak of COVID-19, have impacted our operations directly and are expected to continue to impact us directly, or may continue to disrupt the operations of our business partners, suppliers and customers in ways that could have an adverse effect on our business, results of operations and financial condition.

Fear of such events may further alter consumer confidence, behavior and spending patterns, and could adversely affect the economies and financial markets of many countries (or globally), resulting in an economic downturn that could affect customers’ demand for our products.

In response to the recent outbreak of COVID-19 and its development into a pandemic, governmental authorities in many countries in which we operate, and in which our customers are present and suppliers operate, have imposed mandatory closures, sought voluntary closures and imposed restrictions on, or advisories with respect to, travel, business operations and public gatherings or interactions.

Among other matters, these actions have required or strongly urged various venues where foodservice products are served, including restaurants, schools, hotels and cruise liners, to reduce or discontinue operations,

which have adversely affected and will continue to adversely affect demand in the foodservice industry, including demand for our products and services.

In addition, some consumers are choosing to stay home due to the perceived risk of infection and health risk associated with COVID-19, which is adversely affecting demand in the foodservice industry, including demand for our products and services.

These events have had, and could continue to have, an adverse impact on numerous aspects of our business, financial condition and results of operations including, but not limited to, our growth, product costs, supply chain disruptions and the potential for inventory spoilage, labor shortages, logistics constraints, customer demand for our products and industry demand generally, difficulties in collecting our accounts receivables and corresponding increases in our bad debt exposure, 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.

A prolonged or deeper economic downturn that adversely affects our business, financial condition or results of operations could affect our ability to access the credit markets for additional liquidity.

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.

As a result, we may be unable to continue to comply with the debt covenants that are specific to our revolving credit facility, which could result in an event of default.

We may see an increase in bankruptcies of customers, which could contribute to an increase in bad debt expense recorded in fiscal 2021.

We experienced an increase in past due receivables and recognized additional bad debt charges of $323.4 million specific to the COVID-19 pandemic during fiscal 2020.

Total bad debt expense for fiscal 2020 was $404.2 million.

Additionally, these events caused us to incur $70.3 million in severance expenses during the second half of fiscal 2020 related to actions to reduce our workforce through the implementation of hiring freezes, furloughs and other headcount reductions, as well as goodwill impairment charges of $203.2 million.

We have implemented employee safety measures, based on guidance from the Centers for Disease Control and Prevention and World Health Organization, across all our supply chain facilities, including proper hygiene, social distancing, mask use, and temperature screenings.

These measures may not be sufficient to prevent the spread of COVID-19 among our employees.

Illness, travel restrictions, absenteeism, or other workforce disruptions could negatively affect our supply chain, distribution, or other business processes.

We may face additional production disruptions in the future, which may place constraints on our ability to distribute products in a timely manner or may increase our costs.

The ultimate extent of the impact of COVID-19 on our business, financial condition and results of operations will depend largely on future developments, including the duration and spread of the outbreak within the U.S. and Europe and the related impact on consumer confidence and spending, all of which are highly uncertain and cannot be predicted with certainty at this time.

Even after the COVID-19 pandemic subsides, we could experience a longer-term impact on our business, such as costs associated with enhanced health, safety and hygiene requirements in one or more regions in attempts to counteract future outbreaks or the possibility that venues where foodservice products are served are slow to reopen and/or experience reduced customer traffic after reopening.

The impact of the COVID-19 pandemic may change our mix of earnings by jurisdiction and has increased the risk that operating losses may occur within certain of our jurisdictions that could lead to the recognition of valuation allowances against certain deferred tax assets in the future, if these losses are prolonged beyond our current expectations.

This would negatively impact our income tax expense, net earnings, and balance sheet.

Sustained adverse impacts to our company, certain suppliers, and customers may also affect our future valuation of certain assets, and therefore, may increase the likelihood of an impairment charge, write-off, or reserve associated with such assets, including goodwill, long-lived intangible assets, property and equipment, inventories, accounts receivable, tax assets and other assets.

To the extent the COVID-19 pandemic continues to adversely affect our business, results of operations and financial condition, it may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K, such as those relating to our level of indebtedness, and may have an adverse effect on the price of our common stock.

environment.

The Withdrawal Agreement between the U.K. and the EU that establishes the terms governing the U.K.’s departure provides that, among other things, there is an ongoing transition period under which the U.K. remains a part of the EU customs and regulatory area until December 31, 2020.

During this time, the U.K. and the EU are negotiating their future trading relationship, which under current U.K. Government policy is anticipated to take the form of a free trade agreement.

As a result, significant uncertainty remains as to the terms under which the U.K. will continue to trade with the EU after the end of the transition period.

In addition, Brexit could cause financial and capital markets

Many of these conditions outside of our control could also impair our ability to provide our products and services to our customers or increase the cost of doing so.

our products and services, even if the regulatory or legal action is unfounded or not material to our operations.

Meanwhile, the COVID-19 pandemic generally has negatively affected multi-unit customers less than locally managed customers.

This creates an opportunity for Sysco to grow sales to multi-unit customers, which represents a strategy that Sysco is actively pursuing to grow both sales and gross profit dollars in fiscal 2021.

In addition, in response to the COVID-19 pandemic and the related economic downturn, many consumers have preferred to eat at home rather than consume food away from home.

If these preferences continue and consumers continue to

avoid gathering in public places in large groups, the demand for our products and services could be adversely affected.

Moreover, once all governmental restrictions are lifted, it is unclear how quickly customers will return to their prior eating habits, which may be a function of continued concerns over safety or depressed consumer sentiment due to adverse economic conditions, including job losses.

or that we will not be subject to claims or lawsuits relating to such matters.

prior to the commencement of our operations at the site and was not caused by our activities.

| | |

| --- | --- |

The U.K. is currently negotiating the terms of Brexit, with the U.K. currently due to exit the EU on or before October 31, 2019.

In November 2018, the U.K. and the EU agreed upon a draft Withdrawal Agreement that set out the terms governing the U.K.’s departure, including, among other things, a transition period to allow for a future trade deal to be agreed upon.

After the U.K. Parliament rejected the draft Withdrawal Agreement multiple times during the third quarter of fiscal 2019, the EU agreed to an extension of the exit date to October 31, 2019.

As a result, there is significant uncertainty about the terms and timing under which the U.K. will leave the EU.

In addition, instances of food-borne illnesses or food tampering or other health concerns (even those unrelated to the

Increasing the volume of our sales to locally managed customers is very important for our business and our results of operations.

Additionally, the loss of sales to the larger of these multi-unit customers could have a material negative impact on our results of operations and financial condition.

the nutritional content of our food products.

We may not be able to achieve our three-year financial targets by the end of fiscal year 2020.

In fiscal 2018, we set new three-year financial targets to grow operating income, accelerate earnings per share growth faster than operating income growth and improve return on invested capital.

Our ability to meet these financial targets depends largely on our successful execution of our business plan including various related initiatives.

There are various risks related to these efforts, 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; and the risk of adverse effects to our business, results of operations and liquidity 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 cost savings and other benefits at the levels that we anticipate.

Our intentions and expectations with regard to the execution of our business plan, and the timing of any related initiatives, are subject to change at any time based on management’s subjective evaluation of our overall business needs.

In early fiscal 2020, we lowered our fiscal 2018 to fiscal 2020 adjusted operating income growth target to approximately $600 million.

See the discussion in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Strategy and Fiscal 2020 Three-Year Financial Targets.” If we are unable to successfully execute our business plan, whether due to our failure to realize the anticipated benefits from our various business initiatives in the anticipated time frame or otherwise, we may be unable to achieve our three-year financial targets.

We must finance and integrate acquired businesses effectively.

Any such disruption to these software and other technology systems, or the technology systems of third parties on which we rely, the failure of these systems to otherwise perform as anticipated, or the theft, destruction, loss, misappropriation, or release of sensitive and/or confidential information or intellectual property, could result in business disruption, negative publicity, brand damage, violation of privacy laws, loss of customers, potential liability, including litigation or other legal actions against us or the imposition of penalties, fines, fees or liabilities, which may not be covered by our insurance policies, and competitive disadvantage, any or all of which would potentially adversely affect our customer service, decrease the volume of our business and result in increased costs and lower profits.

Moreover, a significant cybersecurity breach could require us to devote significant additional management resources to address the problems associated with the breach and to expend significant additional resources to upgrade further the security measures we employ to protect personal information against cyber-attacks and other wrongful attempts to access such information, which could result in a disruption of our operations.

If our competitors implement new technologies more quickly or successfully than we do, such competitors may

individual operating company.

[removed: In addition, fiscal] [added: Fiscal] 2018 results of operations were [added: additionally] impacted [added: by multiemployer pension plan (MEPP) withdrawal charges.]

All acquisition-related costs in fiscal [added: 2020, fiscal] 2019 and [added: fiscal] 2018 that have been designated as Certain Items relate to the fiscal 2017 acquisition of Cucina Lux Investments Limited (the Brakes Acquisition).

[removed: The fiscal 2019 and fiscal 2018 items described above and excluded from our non-GAAP measures are collectively referred to as “Certain Items.”] Management believes that adjusting its operating expenses, operating income, [added: other (income) expense, net,] net earnings and diluted earnings per share to remove these Certain Items, provides an important perspective with respect to our underlying business trends and results and provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations, (2) facilitates comparisons on a year-over-year basis, and (3) removes those items that are difficult to predict and are often unanticipated and that, as a result, are difficult to include in analysts’ financial models and our investors’ expectations with any degree of specificity.

[removed: In the table below, individual] [added: | (4) | | | Individual] components of diluted earnings per share may not add [added: up] to the total presented due to rounding. [added: Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding. | | |]

The following discussion includes a comparison of our Results of Operations and Liquidity and Capital Resources for fiscal [removed: 2019] [added: 2020] and fiscal [removed: 2018.][added: 2019.]

[removed: A] [added: All other] discussion of changes in our results of operations from fiscal [removed: 2017] [added: 2018] to fiscal [removed: 2018] [added: 2019] has been omitted from this Form 10-K, but may be found in [removed: “Item 7.][added: Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended June 29, 2019, filed with the Securities and Exchange Commission on August 26, 2019.]

[removed: | • |] [added: -] U.S. Foodservice Operations [removed: -] [added: –] primarily includes U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, specialty produce, specialty imports and a wide variety of non-food products; [removed: |]

[removed: | • |] [added: -] International Foodservice Operations [removed: -] [added: –] includes operations in the Americas and Europe, which distribute a full line of food products and a wide variety of non-food products. [removed: The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden; |]

[removed: | • | SYGMA] - [added: SYGMA –] our U.S. customized distribution subsidiary; and [removed: |]

We estimate that we serve about 16% of an approximately [removed: $300] [added: $310] billion annual foodservice market in the U.S. based on industry data obtained from Technomic, Inc. From time to time, Technomic may revise the methodology used to calculate the size of the foodservice market and, as a result, our percentage can change not only from our sales results, but also from such revisions.

According to industry sources, the foodservice, or food-away-from-home, market represents approximately [removed: 52%] [added: 53%] of the total dollars spent on food purchases made at the consumer level in the U.S. as of the end of calendar year [removed: 2018.][added: 2019.]

Industry sources estimate the total foodservice market in the U.S. experienced a real sales increase of approximately [removed: 1.2%] [added: 0.9%] in calendar year [removed: 2018] [added: 2019] and [removed: 1.4%] [added: 1.2%] in calendar year [removed: 2017.][added: 2018.]

Below is a comparison of results from fiscal [removed: 2019] [added: 2020] to fiscal [removed: 2018:][added: 2019:]

[removed: | • |] [added: -] Sales: [removed: |]

[removed: | • |] [added: -] Operating income: [removed: |]

[removed: | • |] [added: -] Net earnings: [removed: |]

[removed: | • |] [added: -] Basic earnings per share: [removed: |]

[removed: | ◦ | increased 18.2%,] [added: ◦decreased 87.0%,] or [removed: $0.50,] [added: $2.82,] to [removed: $3.24] [added: $0.42] from the comparable prior year amount of [removed: $2.74] [added: $3.24] per share; [removed: |]

[removed: | • |] [added: -] Diluted earnings per share: [removed: |]

[removed: | ◦ | increased 18.3%,] [added: ◦decreased 86.9%,] or [removed: $0.50,] [added: $2.78,] to [removed: $3.20] [added: $0.42] from the comparable prior year amount of [removed: $2.70] [added: $3.20] per share; and [removed: |]

[removed: | ◦ | adjusted] [added: ◦adjusted] diluted earnings per share were [removed: $3.55] [added: $2.01] in fiscal [removed: 2019,] [added: 2020,] a [removed: 13.1% increase] [added: 43.4% decrease] from the comparable prior year amount of [removed: $3.14] [added: $3.55] per share. [removed: |]

Our sales and gross profit performance can be influenced by multiple factors, including price, [removed: volume and] [added: volume,] product [removed: mix.][added: mix and the impact of the COVID-19 pandemic.]

[removed: We offer] [added: Sysco offers] an assortment of Sysco-branded products that [removed: we] can [removed: differentiate] [added: be differentiated] from privately branded products, which enables us to achieve higher gross [removed: profits.][added: margin by administering and leveraging a consolidated product procurement program for quality food and non-food products.]

[removed: Inflation] [added: The estimated change in product costs, an internal measure of inflation or deflation,] for [added: fiscal 2020 for] our U.S. Broadline operations was [removed: 2.5% for the fourth quarter] [added: inflation] of [removed: fiscal 2019,][added: 1.8%.]

In fiscal [removed: 2020,] [added: 2021,] we expect our effective tax rate to be approximately 24%.

We [removed: have] completed [removed: several] [added: the following] acquisitions in fiscal [removed: 2019] [added: 2020] within our U.S. Foodservice Operations [removed: and our International Foodservice Operations] as follows:

[added: |] U.S. [removed: Foodservice Operations][added: FOODSERVICE OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: International Foodservice Operations][added: | INTERNATIONAL FOODSERVICE OPERATIONS | | | | | | | | | | | | | | | | | | | | | | | |]

[added: -] In the first quarter of fiscal 2020, we acquired J.

Kings Food Service Professionals, a New York broadline distributor with approximately $150 million in annual [removed: sales.][added: revenue.]

Fiscal [removed: 2019 is] [added: 2020 was] the [removed: second] [added: third] year in our [removed: current] three-year plan that was established in fiscal 2018 and [removed: includes] [added: included] our strategic and financial objectives through fiscal [removed: 2020, which will enable us to continue transforming our business, while improving the customer experience of doing business with Sysco.][added: 2020.]

[removed: | • | Growing earnings per share faster than operating income;] [added: Adjusted Operating Income, Adjusted Operating Income Leverage] and [removed: |][added: Adjusted Diluted Earnings per Share Growth]

[removed: | • | Achieving 16% in adjusted return] [added: Adjusted Return] on [removed: invested capital improvement for existing businesses. |][added: Invested Capital]

See “Non-GAAP Reconciliations” [added: below] for an explanation of [removed: these] [added: adjusted operating income and adjusted return on invested capital, which are] non-GAAP financial measures.

| | [added: | |] 2019 | | | [added: | | |] 2018 | | [added: | | | | Change in Dollars | | | | | | % Change | | | | | | | | | | | | | | | | | | | | |]

| Sales | [added: | |] 100.0 | [added: |] % | | [added: | |] 100.0 | [added: |] % |

| Cost of sales | [removed: 81.0] | | [added: 81.3] | [removed: 81.1] | | [added: | | | 81.0 | | |]

| Gross profit | [removed: 19.0] | | [added: 18.7] | [removed: 18.9] | | [added: | | | 19.0 | | |]

| Operating expenses | [removed: 15.1] | | [added: 17.3] | [removed: 15.0] | | [added: | | | 15.1 | | |]

| Operating income | [removed: 3.9] | | [added: 1.4] | [added: | | | | |] 3.9 | | [added: |]

These include acquisition-related intangible amortization expense.

Fiscal 2020 results of operations were also negatively impacted by costs arising from the COVID-19 pandemic, the most significant including (1) excess bad debt expense, (2) goodwill and intangibles impairment charges and (3) fixed asset impairment charges.

These are the only items that have been adjusted as Certain Items.

Our adjusted results have not been normalized in a manner that would exclude the full impact of the COVID-19 pandemic on our business.

As such, Sysco has not adjusted its results for lost sales, inventory write-offs or other costs associated with the COVID-19 pandemic.

Many of Sysco’s customers, including those in the restaurant, hospitality and education segments, are closed or operating at a substantially reduced volume due to governmental requirements for closures or other social-distancing measures.

Some of these customers have ceased paying their outstanding receivables, creating uncertainty as to their collectability.

We have experienced an increase in past due receivables and have recognized additional bad debt charges.

Prior to the COVID-19 pandemic, our allowance was primarily based on historical loss experience.

Since the crisis began, our write-off percentages have been based, not only on historical loss experience, but also on our experience with losses incurred during times of local and regional disasters.

Additionally, in the fourth quarter of fiscal 2020, we included the company’s current collection experience, which has been impacted by the COVID-19 pandemic.

We anticipate continuing this approach in fiscal 2021.

The COVID-19 pandemic is more widespread and longer in duration than historical disasters impacting our business, and it is possible that actual uncollectible amounts will differ and additional charges may be required in fiscal 2021.

While Sysco traditionally incurs bad debt expense, the magnitude of such expenses that we have experienced since March 2020 is not indicative of our normal operations.

In addition, fiscal 2019 results of operations were affected by acquisition-related integration costs specific to the Brakes Acquisition and the impact of recognizing a foreign tax credit.

These fiscal 2020, fiscal 2019 and fiscal 2018 items are collectively referred to as “Certain Items.” The results of our foreign operations can be impacted by changes in exchange rates applicable to converting from local currencies to U.S. dollars.

We measure our International Foodservice Operations results on a constant currency basis.

During the fourth quarter of fiscal 2020, Sysco revised the way performance is assessed for the U.S. Foodservice Operations segment.

As a result of this change, charges incurred by the company’s corporate office to provide direct support functions to the U.S. Foodservice Operations reportable segment have been reclassified from Corporate expenses into the U.S. Foodservice reportable segment.

The segment information disclosed for fiscal 2020 reflects this change in reporting structure and prior year amounts have been reclassified to conform with the current year presentation.

A discussion of changes in our results of operations from fiscal 2018 to fiscal 2019 have been included for our U.S. Foodservice Operations and Corporate expenses.

Disclosures around this change in segment reporting are described under “Overview” below and in Note 22, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8.

The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers.

Our European operations primarily consist of operations in the U.K., France, Ireland and Sweden;

- Other – primarily our hotel supply operations.

During the fourth quarter of fiscal 2020, Sysco revised the way performance is assessed for the U.S. Foodservice Operations segment.

As a result of the change, the company’s corporate expenses that were incurred to provide direct support functions to the U.S. Foodservice Operations reportable segment have been reclassified from Corporate expenses into the reportable segment.

The segment information disclosed for fiscal 2020 reflects this change in reporting structure, and the fiscal 2019 and fiscal 2018 results reflect $201.0 million and $197.0 million of corporate expense reclassifications, respectively, to conform with the current year presentation.

The COVID-19 pandemic has caused a significant reduction in consumption within the foodservice market and may create a long-term change in customer demand, as purchases have shifted more to the retail grocery channel.

The food-away-from-home market fell to a low of 32% of total dollars spent on food purchases as a result of the pandemic, but has since recovered to approximately 43% as of June 2020.

We expect real sales growth in the U.S. foodservice market to be negative for calendar year 2020.

Key Performance Indicators

Sysco seeks to meet its strategic goals by continually measuring its success in its key performance metrics that drive stakeholder value through sales growth and capital allocation and deployment.

We believe the following are our most significant performance metrics:

- Adjusted operating income growth and adjusted operating income leverage (non-GAAP);

- Case volume growth by customer type for U.S. Broadline operations;

- Sysco brand penetration for U.S. Broadline operations;

- Free cash flow (non-GAAP); and

We use these financial metrics and related computations, as well as sales and gross profit growth, to evaluate our business and to plan for near-and long-term operating and strategic decisions.

We believe it is useful to provide investors with the same financial information that we use internally to make comparisons of our historical operating results, identify trends in our underlying operating results and evaluate our business.

Our results of operations for fiscal 2019 and 2018 are also impacted by the following acquisition-related items: (1) intangible amortization expense and (2) integration costs.

by multiemployer pension plan (MEPP) withdrawal charges and debt extinguishment charges.

Sysco’s results of operations for fiscal 2019 and 2018 were also impacted by the changes to the United States (U.S.) tax code resulting from the Tax Cuts and Jobs Act of 2017 (Tax Act) enacted on December 22, 2017.

The impact for fiscal 2019 and 2018 includes a transition tax on certain unrepatriated earnings of foreign subsidiaries, and the impact for fiscal 2019 also includes the recognition of a foreign tax credit applicable to repatriated earnings.

Additionally, the impact for fiscal 2018 includes: (1) a net benefit from remeasuring Sysco’s accrued income taxes, deferred tax liabilities and deferred tax assets due to the changes in tax rates; and (2) a benefit from contributions made to fund the U.S. Retirement Plan (Pension Plan).

The company uses these non-GAAP measures when evaluating its financial results, as well as for internal planning and forecasting purposes.

These financial measures should not be used as a substitute for GAAP measures in assessing the company’s results of operations for periods presented.

An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP.

As a result, in the table below, each period presented is adjusted for the impact described above.

Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the fiscal year ended June 30, 2018, filed with the Securities and Exchange Commission on August 24, 2018.

| | |

| --- | --- |

| • | Other - primarily our hotel supply operations and Sysco Labs, which includes our suite of technology solutions that help support the business needs of our customers and provide support for some of our business technology needs. |

Our fiscal year 2019 financial performance improved year-over-year.

We continue to focus on our customers and furthering the progress of our transformative initiatives that we believe will position us well for long-term growth and create value for our shareholders in fiscal 2020 and beyond.

| ◦ | increased 2.4%, or $1.4 billion, to $60.1 billion; |

| ◦ | increased 0.7%, or $16.1 million, to $2.3 billion; |

| ◦ | adjusted operating income increased 7.9%, or $199.9 million, to $2.7 billion; |

| ◦ | increased 17.0%, or $243.5 million, to $1.7 billion; |

| ◦ | adjusted net earnings increased 11.9%, or $197.0 million, to $1.9 billion; |

The overall macroeconomic trends continue to be positive in the U.S., and the underlying economic picture remains relatively positive, including growth in gross domestic product of 2.1% for the second quarter of calendar year 2019 and continued low unemployment, which was 3.7% in July.

Consumer confidence has decreased slightly, but remains solid.

These factors are important macroeconomic indicators that describe the environment in which our customers are currently operating and speak to the relative health of the food-away-from-home market.

Restaurant industry trends reflect same store sales that were relatively flat in June, while customer traffic continues to be negative.

The economic outlook in the international geographies in which we operate is mostly positive; however, the U.K. is experiencing low consumer confidence due to the uncertain outcome of Brexit.

The modest level of growth in the foodservice market has created additional competitive pricing pressures, which can adversely affect our profitability.

We are maintaining our focus on growing our digital platform to continue the growth with our local customers.

We are taking a disciplined approach to increasing our sales with national customers to profitably grow our business.

As a result, we focus on sales growth for these products, comprising 47% of U.S. Broadline sales to locally managed customers in fiscal 2019.

Using customer insights, industry trends and innovative ideas, we launched new brands during fiscal 2019.

We are introducing our brand to additional geographies outside the U.S. We have experienced continued success in category management and we are introducing this process in our European operations.

A portion of the cost to obtain products includes inbound freight.

These costs have stabilized in fiscal 2019, but are still above pre-fiscal 2018 levels.

Inflation is a factor that contributes to the level of sales and gross profit growth and can be a factor that contributes to gross margin pressure.

We experienced a modest level of inflation in fiscal 2019, with our U.S. Broadline operations experiencing a rate of inflation of 1.5% primarily in the frozen category, principally for frozen potatoes, and the canned and dry, paper and disposables and produce categories.

Inflation has been higher in the fourth quarter of fiscal 2019, as compared to the beginning of the fiscal year.

principally in the poultry, meat, and produce categories.

Periods of high inflation, either overall or in certain product categories, can have an unfavorable effect on us and our customers, as high food costs can be difficult to pass on to our customers.

Changes in exchange rates can impact our foreign sales as we convert them to U.S. dollars.

Total debt as of June [removed: 30, 2018] [added: 27, 2020] was [removed: $8.3] [added: $14.4] billion, of which approximately [removed: 74%] [added: 79%] was at fixed rates of interest, including the impact of our interest rate swap agreements.

Details of our outstanding swap agreements as of June [removed: 29, 2019] [added: 27, 2020] are below:

| Maturity Date of Swap | | [added: | | | |] Notional Value | | | | [added: | |] Fixed Coupon Rate on Hedged Debt | | | [added: | | |] Floating Interest Rate on Swap | | [added: | | | |] Floating Rate Reset Terms | | [added: | | | |] Location of Fair Value on Balance Sheet | | [added: | | | |] Fair Value of Asset (Liability) (in thousands) | | |

| October 1, 2020 | | [added: | | | |] $ | 750,000,000 | | | [added: | |] 2.60 | [added: |] % | | [added: | |] Three-month LIBOR | | [added: | | | |] Every three months in advance | | [added: | | | |] Other [removed: long-term liabilities] [added: current assets] | | [added: | | | |] $ | [removed: (4,673] [added: 1,388] | [removed: )] |

| July 15, 2021 | | [added: | | | |] $ | 500,000,000 | | | [added: | |] 2.50 | | | [added: | | |] Three-month LIBOR | | [added: | | | |] Every three months in advance | | [added: | | | |] Other long-term [removed: liabilities] [added: assets] | | [removed: (4,612] | | [removed: )] | [added: | $ | 4,962 | |]

| June 23, 2023 | | [added: | | | |] € | 500,000,000 | | | [added: | |] 1.25 | | | [added: | | |] Three-month EURIBOR | | [added: | | | |] Every three months in advance | | [added: | | | |] Other long-term assets | | [removed: 11,428] | | | [added: | $ | 9,294 | |]

| March 15, 2025 | | [added: | | | |] $ | 500,000,000 | | | [added: | |] 3.55 | | | [added: | | |] Three-month LIBOR | | [added: | | | |] Every three months in advance | | [added: | | | |] Other long-term assets | | [removed: 25,968] | | | [added: | $ | 55,526 | |]

The following tables present our interest rate position as of June [removed: 29, 2019.][added: 27, 2020.]

| | [added: | |] Interest Rate Position as of June [removed: 29, 2019] [added: 27, 2020] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] Principal Amount by Expected Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] Average Interest Rate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [removed: 2020] | | [added: 2021] | | [removed: 2021] | | | | 2022 | | | | [added: | |] 2023 | | | | [added: | |] 2024 | | | | [added: | | 2025 | | | | | |] Thereafter | | | | [added: | |] Total | | | | [added: | |] Fair Value | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| U.S. [removed: $] [added: Dollar] Denominated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Interest Rate | [removed: 2.56] | | [removed: % | |] — | | % | | [added: | |] 2.60 | | % | | [added: | |] — | | % | | [added: | |] — | | % | | [removed: 4.13] | | [added: 5.65 | |] % | | [removed: 3.96] | | [added: 4.83 | |] % | | | | [added: 4.80] | [added: | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Floating Rate Debt (1) | [removed: $] | [removed: —] | [removed: | |] $ | 750,000 | | | [added: | |] $ | 500,000 | | | [added: | |] $ | — | | | [added: | |] $ | [removed: —] [added: 700,000] | | | [added: | |] $ | 500,000 | | | [added: | |] $ | [removed: 1,750,000] [added: —] | | | [added: | |] $ | [removed: 1,760,338] [added: 2,450,000] | | [added: | | | $ | 2,502,371 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Interest Rate | [removed: —] | | [removed: % | |] 2.60 | | % | | [added: | |] 2.50 | | % | | [added: | |] — | | % | | [removed: —] | | [added: 2.13 | |] % | | [added: | |] 3.55 | | % | | [removed: 2.84] | | [added: — | |] % | | | | [added: 2.64] | [added: | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Euro Denominated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Floating Rate Debt (1) | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: —] [added: 561,098] | | | [added: | |] $ | [removed: 568,500] [added: —] | | | [added: | |] $ | — | | | [added: | |] $ | — | | | [added: | |] $ | [removed: 568,500] [added: 561,098] | | | [added: | |] $ | [removed: 576,771] [added: 568,011] | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Interest Rate | [added: | |] — | | % | | [added: | |] — | | % | | [removed: —] | | [added: 1.25 | |] % | | [removed: 1.25] | | [added: — | |] % | | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] 1.25 | | % | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Canadian [removed: $] [added: Dollar] Denominated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Interest Rate | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] — | | % | | [added: | |] — | | % | | [removed: —] | | [added: 3.65 | |] % | | [removed: 3.65] | | [added: — | |] % | | [added: | |] 3.65 | | % | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

[removed: | (1) | Includes] [added: (1)Includes] fixed rate debt that has been converted to floating rate debt through an interest rate swap agreement. [removed: |]

| | [added: | |] Notional Amount by Expected Maturity | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] Average Interest Swap Rate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Interest Rate Swaps | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Related To Debt: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Pay Variable/Receive Fixed | [removed: $] | [removed: —] | [removed: | |] $ | 750,000 | | | [added: | |] $ | 500,000 | | | [added: | |] $ | [removed: 568,500] [added: 561,098] | | | [added: | |] $ | — | | | [added: | |] $ | 500,000 | | | [added: | |] $ | [removed: 2,318,500] [added: —] | | | [added: | |] $ | [removed: 28,112] [added: 2,311,098] | | [added: | | | $ | 71,170 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Variable Rate Paid: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Rate A Plus | [removed: —] | | [removed: % | |] 1.12 | | % | | [added: | |] 1.13 | | % | | [added: | |] 1.10 | | % | | [added: | |] — | | % | | [added: | |] 0.75 | | % | | [added: | | — | | % | | | |] 1.04 | | % | | [added: | |] — | | % | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Fixed Rate Received | [removed: —] | | [removed: % | |] 2.60 | | % | | [added: | |] 2.50 | | % | | [added: | |] 1.25 | | % | | [added: | |] — | | % | | [added: | |] 3.55 | | % | | [removed: 2.45] | | [added: — | |] % | | [added: | | 2.46 | | % | | | |] — | | % | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

The exchange [removed: rates] [added: rate] used to translate our foreign sales into U.S. dollars negatively affected sales by 0.8% in fiscal 2019 when compared to fiscal 2018.

The exchange [removed: rate] [added: rates] used to translate our foreign sales into U.S. dollars [removed: positively] [added: negatively] affected sales by [removed: 1.0%] [added: 0.3%] in fiscal [removed: 2018] [added: 2020] when compared to fiscal [removed: 2017.][added: 2019.]

The impact to our operating income, net earnings and earnings per share was not material in fiscal [removed: 2019] [added: 2020] or fiscal [removed: 2018.][added: 2019.]

A 10% unfavorable change in the fiscal [removed: 2019] [added: 2020] weighted year-to-date exchange rate and the resulting impact on our financial statements would have negatively affected fiscal [removed: 2019] [added: 2020] sales by [removed: 1.7%] [added: 1.4%] and would not have materially affected our operating income, net earnings and earnings per share.

In fiscal 2017, we designated €500 million of Euro notes issued in June 2016 [removed: and various cross currency swaps] as [removed: hedges] [added: a hedge] of a portion of our net investment in Euro-denominated [removed: and Sterling-denominated] foreign operations to reduce foreign currency risk associated with the investment in these operations.

[removed: In fiscal 2018, we] [added: We have also] entered into various cross currency swaps to mitigate the risk of exchange rate changes for [added: intercompany loans that are not in the functional currency of our subsidiaries.]

Fuel costs related to outbound deliveries represented approximately 0.5% of sales during fiscal [removed: 2019,] [added: 2020,] fiscal [removed: 2018] [added: 2019] and fiscal [removed: 2017.][added: 2018.]

As of June [removed: 29, 2019,] [added: 27, 2020,] we had diesel fuel swaps with a total notional amount of approximately [removed: 51] [added: 54] million gallons through [removed: June 2020.][added: December 2021.]

These swaps are expected to lock in the price of approximately 60% of our projected fuel purchase needs for fiscal [removed: 2020.][added: 2021.]

At June 27, 2020, there were no commercial paper issuances outstanding under our U.S. commercial paper program and we had £600.0 million outstanding under our U.K. commercial paper program.

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Fixed Rate Debt | | | $ | — | | | | | $ | 450,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 750,000 | | | | | $ | 9,044,500 | | | | | $ | 10,244,500 | | | | | $ | 10,153,608 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Pound Sterling Denominated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed Rate Debt | | | $ | 740,284 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 740,284 | | | | | $ | 740,226 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Average Interest Rate | | | 0.45 | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | 0.45 | | % | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Fixed Rate Debt | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 364,538 | | | | | $ | — | | | | | $ | 364,538 | | | | | $ | 362,785 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Interest Rate Position as of June 27, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2021 | | | | | | 2022 | | | | | | 2023 | | | | | | 2024 | | | | | | 2025 | | | | | | Thereafter | | | | | | Total | | | | | | Fair Value | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | (Dollars in thousands) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

At June 30, 2018, there were no commercial paper issuances outstanding.

| | | | | | | | | | | | | | | | | | |

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| Fixed Rate Debt | $ | 132,081 | | | $ | — | | | $ | 450,000 | | | $ | — | | | $ | — | | | $ | 4,794,500 | | | $ | 5,376,581 | | | $ | 5,362,742 | |

| Fixed Rate Debt | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 382,585 | | | $ | 382,585 | | | $ | 379,658 | |

| | |

| --- | --- |

intercompany loans that are not in the functional currency of our subsidiaries.

We [removed: provide] [added: provided] products and related services to over [removed: 650,000] [added: 625,000] customer locations, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice [removed: customers.][added: customers during fiscal 2020.]

Since our formation, we have grown from $115 million to [removed: $60.1] [added: $52.9] billion in annual sales, both through internal expansion of existing operations and through acquisitions.

This resulted in a [removed: 52\-week] [added: 52-week] year ending June [added: 27, 2020 for fiscal 2020, June] 29, 2019 for fiscal [removed: 2019,] [added: 2019 and] June 30, 2018 for fiscal [removed: 2018 and July 1, 2017 for fiscal 2017.][added: 2018.]

We will have a [removed: 52\-week] [added: 53-week] year ending June [removed: 27, 2020] [added: 26, 2021] for fiscal [removed: 2020.][added: 2021.]

This annual report on Form 10-K, as well as all other reports filed or furnished by Sysco pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (Exchange Act), are available free of charge on Sysco’s website at *www.sysco.com* as soon as reasonably practicable after they are electronically filed with or furnished to the Securities and Exchange [removed: Commission.][added: Commission (SEC).]

[removed: | • |] [added: -] U.S. Foodservice Operations [removed: -] [added: –] primarily includes U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, specialty produce, specialty imports and a wide variety of non-food products; [removed: |]

[removed: | • |] [added: -] International Foodservice Operations [removed: -] [added: –] includes operations in the Americas and Europe, which distribute a full line of food products and a wide variety of non-food products. [removed: The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers. Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden; |]

[removed: | • | SYGMA] - [added: SYGMA –] our U.S. customized distribution subsidiary; and [removed: |]

[removed: | • |] [added: -] a full line of frozen foods, such as meats, seafood, fully prepared entrées, fruits, vegetables and desserts; [removed: |]

[removed: | • |] [added: -] a full line of canned and dry foods; [removed: |]

[removed: | • |] [added: -] fresh meats and seafood; [removed: |]

[removed: | • |] [added: -] dairy products; [removed: |]

[removed: | • |] [added: -] beverage products; [removed: |]

[removed: | • |] [added: -] imported specialties; and [removed: |]

[removed: | • |] [added: -] fresh produce. [removed: |]

[removed: | • |] [added: -] paper products such as disposable napkins, plates and cups; [removed: |]

[removed: | • |] [added: -] tableware such as china and silverware; [removed: |]

[removed: | • |] [added: -] cookware such as pots, pans and utensils; [removed: |]

[removed: | • |] [added: -] restaurant and kitchen equipment and supplies; and [removed: |]

[removed: | • |] [added: -] cleaning supplies. [removed: |]

| Principal product categories | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | [removed: 2017] [added: 2018] | | [added: |]

| Fresh and frozen meats | [added: | |] 19 | [added: |] % | | [removed: 20] | [added: | 19 | |] % | | [removed: 19] | [added: | 20 | |] % |

| Canned and dry products | [removed: 17] | | [added: 16] | [added: | | | | |] 17 | | | [removed: 16] | | [added: | 17 | | |]

| Frozen fruits, vegetables, bakery and other | [added: | |] 15 | | | [added: | | |] 15 | | | [added: | | |] 15 | | [added: |]

| Poultry | [added: | |] 10 | | | [added: | | |] 10 | | | [removed: 11] | | [added: | 10 | | |]

| Dairy products | [added: | |] 10 | | | [added: | | |] 10 | | | [removed: 11] | | [added: | 10 | | |]

| Fresh produce | [removed: 8] | | [added: 9] | [added: | | | | |] 8 | | | [added: | | |] 8 | | [added: |]

| Paper and disposables | [added: | |] 7 | | | [added: | | |] 7 | | | [removed: 6] | | [added: | 7 | | |]

| Seafood | [removed: 6] | | [added: 5] | [added: | | | | |] 6 | | | [added: | | |] 6 | | [added: |]

| Beverage products | [added: | |] 4 | | | [removed: 3] | | | 4 | | [added: | | | | 3 | | |]

| Other (1) | [removed: 4] | | [added: 5] | [added: | | | | |] 4 | | | [added: | | |] 4 | | [added: |]

| Totals | [added: | |] 100 | [added: |] % | | [added: | |] 100 | [added: |] % | | [added: | |] 100 | [added: |] % |

[removed: | (1) | Other] [added: (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. [removed: |]

We believe that prompt and accurate delivery of orders, competitive pricing, [removed: close contact with customers] [added: customer service] and the ability to provide a full array of products and services to assist customers in their foodservice operations are of primary importance in the marketing and distribution of foodservice products to our customers.

[removed: Our operating companies also provide ancillary services relating to foodservice] distribution, such as providing customers with product usage reports and other data, menu-planning advice, food safety training [added: and assistance in inventory control, as well as access to various third-party services designed to add value to our customers’ businesses.]

No single customer accounted for 10% or more of Sysco’s total sales for the fiscal year ended June [removed: 29, 2019.][added: 27, 2020.]

| Type of Customer | [added: | | 2020 | | | | | |] 2019 | | | [removed: 2018] | | | [removed: 2017] [added: 2018] | | [added: |]

| Restaurants | [added: | |] 62 | [added: |] % | | [added: | |] 62 | [added: |] % | | [removed: 61] | [added: | 62 | |] % |

| Education, government | [removed: 9] | | [removed: |] 8 | | | [added: | | |] 9 | | [added: | | | | 8 | | |]

| [removed: Travel, leisure, retail] [added: Travel and leisure] | [removed: 9] | | [added: 7] | [removed: 8] | | | [added: | |] 9 | | [added: | | | | 8 | | |]

The Americas primarily consists of operations in Canada, Bahamas, Mexico, Costa Rica and Panama, as well as our operations that distribute to international customers.

Our European operations primarily consist of operations in the United Kingdom (U.K.), France, Ireland and Sweden;

- Other – primarily our hotel supply operations.

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

Our operating companies also provide ancillary services relating to foodservice

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| Totals | | | 100 | | % | | | | 100 | | % | | | | 100 | | % |

None of these types of customers, as a group, exceeded 5% of total sales in any of the years for which information is presented.

Impact of COVID-19 Pandemic

Beginning in the third quarter of fiscal 2020, our industry and business have been negatively impacted by the COVID-19 pandemic.

In response to the COVID-19 pandemic, governmental authorities in many countries in which we operate, and in which our customers are present and suppliers operate, have imposed mandatory closures, sought voluntary closures and imposed restrictions on, or advisories with respect to, travel, business operations and public gatherings or interactions.

Among other matters, these actions have required or strongly urged various venues where foodservice products are served, including restaurants, schools, hotels and cruise liners, to reduce or discontinue operations, which have negatively affected demand in the foodservice industry, including demand for our products and services.

Our industry is considered an essential service, so we have continued to operate.

Immediately after the onset of the crisis, Sysco took action to ensure liquidity, reduce variable and structural costs and pivot our business to maximize sales during a period of disruption.

During the last couple of weeks of the third quarter of fiscal 2020, our business declined significantly from the time that shelter in place orders were issued in response to the COVID-19 pandemic.

We experienced declines in sales to the majority of our customers, with the exception of certain customers in the healthcare segment.

During the fourth quarter of fiscal 2020, however, we experienced sequential weekly improvements with the reopening of in-restaurant dining.

The “exit rate” of our sales as of the end of fiscal 2020 was a decline of approximately 30% compared to the end of fiscal 2019.

In July 2020, as COVID-19 cases began increasing in certain locations, the business recovery flattened; however, we have experienced weekly improvements in sales again in August 2020.

through these consolidated programs.

We continue to be in a strong financial position based on our balance sheet and our operating cash flows; however, our liquidity and capital resources have been significantly and negatively impacted by the reduction in sales volume resulting from the COVID-19 pandemic.

Our working capital needs have been reduced and continue to decline due to decreased demand, and we are actively working with customers to receive payments on receivables, optimizing our inventory levels and maximizing our payment terms with vendors.

We believe these actions will help to partially offset the unfavorable impact of the COVID-19 pandemic on our cash flows from operations.

Corporate Headquarters

In order to preserve our liquidity in response to the COVID-19 crisis, we have reduced our expected capital expenditures by eliminating capital projects that are not urgently needed for our business and were not significantly underway.

The COVID-19 pandemic has caused a significant reduction in consumption within the foodservice market and may create a long-term change in customer demand, as purchases have shifted more to the retail grocery channel.

The food-away-from-home market fell to a low of 32% of total dollars spent on food purchases as a result of the pandemic, but has since recovered to approximately 43% as of June 2020.

We expect real sales growth in the U.S. foodservice market to be negative for calendar year 2020.

on facilities that manufacture, process, pack or hold food for human or animal consumption, as well as Food Defense, which is a responsibility of the Department of Homeland Security.

Our business is also subject to the U.K. Bribery Act 2010, an anti-corruption law that criminalizes the failure by a company to prevent persons

| | |

| --- | --- |

| • | Other - primarily our hotel supply operations and Sysco Labs, which includes our suite of technology solutions that help support the business needs of our customers and provide support for some of our business technology needs. |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

and assistance in inventory control, as well as access to various third-party services designed to add value to our customers’ businesses.

Corporate Headquarters and Shared Services Center

We estimate our capital expenditures, net of proceeds from sales of assets, in fiscal 2020 should be approximately 1.3% of sales.

In addition, we are subject to the

[removed: Form 10-K][added: Form 10-K]

| (Mark One) | | [added: | | | |]

| [removed: þ] [added: ☑] | [added: | |] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

For the fiscal year ended June [removed: 29, 2019][added: 27, 2020]

| [removed: ¨] [added: ☐] | [added: | |] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | [added: | |]

[removed: ][added: ]

| [removed: DELAWARE] [added: Delaware] *(State or other jurisdiction of incorporation or organization)* | | [added: | | | |] 74-1648137 *(I.R.S. Employer Identification No.)* | [added: | |]

| 1390 Enclave Parkway Houston, Texas *(Address of principal executive offices)* | | [added: | | | |] 77077-2099 *(Zip Code)* | [added: | |]

| Title of each class | | [added: | | | |] Trading symbols | | [added: | | | |] Name of each exchange on which registered | [added: | |]

| Common Stock, $1.00 Par Value | | [added: | | | |] SYY | | [added: | | | |] New York Stock Exchange | [added: | |]

| 1.25% Notes due June 2023 | | [added: | | | |] SYY 23 | | [added: | | | |] New York Stock Exchange | [added: | |]

| Large Accelerated Filer ☑ | | [added: | | | |] Accelerated Filer ☐ | [added: | |]

| Non-accelerated Filer ☐ | | [added: | | | |] Smaller Reporting Company ☐ | [added: | |]

| | | [added: | | | |] Emerging Growth Company ☐ | [added: | |]

The aggregate market value of the voting stock of the registrant held by stockholders who were not affiliates (as defined by regulations of the Securities and Exchange Commission) of the registrant was approximately [removed: $30,189,057,751] [added: $41,443,388,035] as of December [removed: 29, 2018] [added: 28, 2019] (based on the closing sales price on the New York Stock Exchange Composite Tape on December [removed: 28, 2018,] [added: 27, 2019,] as reported by The Wall Street Journal (Southwest Edition)).

As of August [removed: 9, 2019,] [added: 7, 2020,] the registrant had issued and outstanding an aggregate of [removed: 513,176,946] [added: 508,535,623] shares of its common stock.

Portions of the company’s [removed: 2019] [added: 2020] Proxy Statement to be filed with the Securities and Exchange Commission no later than 120 days after the end of the fiscal year covered by this Form 10-K are incorporated by reference into Part III.

| | [added: | |] PART I | [added: | |] Page No. | [added: | | | | |]

| [removed: [Item 1.](#s9978A5AA834558D2B5C7D76E0C224115)] [added: Item 1.] | [removed: [Business](#sEE9D88A228865680AD5CCA9A04D93FB0)] | [removed: [1](#sEE9D88A228865680AD5CCA9A04D93FB0)] | [added: [Business](#i2ee7b15834b5470594c4331a143946ef_13) | | | [1](#i2ee7b15834b5470594c4331a143946ef_13) | | | | | |]

| [removed: [Item 1A.](#sB451112DAC4D545F97E7318567A55692)] [added: Item 1A.] | [added: | |] [Risk [removed: Factors](#s0E3A4E32A6725E4B880E374D88193899)] [added: Factors](#i2ee7b15834b5470594c4331a143946ef_16)] | [removed: [7](#s0E3A4E32A6725E4B880E374D88193899)] | [added: | [7](#i2ee7b15834b5470594c4331a143946ef_16) | | | | | |]

| [removed: [Item 1B.](#sEE749742E22459BE8E869FA7310AB60F)] [added: Item 1B.] | [added: | |] [Unresolved Staff [removed: Comments](#sEEB38E7048B654BC91C221A78BA892E4)] [added: Comments](#i2ee7b15834b5470594c4331a143946ef_19)] | [removed: [16](#sEEB38E7048B654BC91C221A78BA892E4)] | [added: | [18](#i2ee7b15834b5470594c4331a143946ef_19) | | | | | |]

| [removed: [Item 2.](#s80EF133E874A5DEF851D53009DD7BF0C)] [added: Item 2.] | [removed: [Properties](#s960AF19E1D6854E3957C10D1AB6F2D40)] | [removed: [16](#s960AF19E1D6854E3957C10D1AB6F2D40)] | [added: [Properties](#i2ee7b15834b5470594c4331a143946ef_22) | | | [19](#i2ee7b15834b5470594c4331a143946ef_22) | | | | | |]

| [removed: [Item 3.](#sB7CD1BCD4B365DFC9A140CD610749522)] [added: Item 3.] | [added: | |] [Legal [removed: Proceedings](#s9FD821A0611D5921A80C7D36684D9D80)] [added: Proceedings](#i2ee7b15834b5470594c4331a143946ef_25)] | [removed: [17](#s9FD821A0611D5921A80C7D36684D9D80)] | [added: | [19](#i2ee7b15834b5470594c4331a143946ef_25) | | | | | |]

| [removed: [Item 4.](#sA5DA29A0B84B500989D32A48B8020171)] [added: Item 4.] | [added: | |] [Mine Safety [removed: Disclosures](#sB9F5B1ECFF665169AADDE12AD26D6C84)] [added: Disclosures](#i2ee7b15834b5470594c4331a143946ef_28)] | [removed: [17](#sB9F5B1ECFF665169AADDE12AD26D6C84)] | [added: | [19](#i2ee7b15834b5470594c4331a143946ef_28) | | | | | |]

| | [removed: [PART II](#s431A9EAB3A3457A2B51A89CA42BE6275)] | | [added: PART II | | | | | | | | |]

| [removed: [Item 5.](#sAEE4FCB6EBA25D978401131F9D76E445)] [added: Item 5.] | [added: | |] [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s76D3B23ADF2A5BB8BFCB9D3FF59A83C3)] [added: Securities](#i2ee7b15834b5470594c4331a143946ef_34)] | [removed: [18](#s76D3B23ADF2A5BB8BFCB9D3FF59A83C3)] | [added: | [20](#i2ee7b15834b5470594c4331a143946ef_34) | | | | | |]

| [removed: [Item 6.](#sC395127BE9A55364BC0DFAE4F926755E)] [added: Item 6.] | [added: | |] [Selected Financial [removed: Data](#s91EC8648106F5B988C68193D0D76286E)] [added: Data](#i2ee7b15834b5470594c4331a143946ef_37)] | [removed: [20](#s91EC8648106F5B988C68193D0D76286E)] | [added: | [22](#i2ee7b15834b5470594c4331a143946ef_37) | | | | | |]

| [removed: [Item 7.](#sA406654FF7F45CF3888515845093C5D2)] [added: Item 7.] | [added: | |] [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s9D2EBAA8437E55C283E8F7BF1B20C00C)] [added: Operations](#i2ee7b15834b5470594c4331a143946ef_40)] | [removed: [20](#s9D2EBAA8437E55C283E8F7BF1B20C00C)] | [added: | [22](#i2ee7b15834b5470594c4331a143946ef_40) | | | | | |]

| [removed: [Item 7A.](#s5F615CD8960F5A3A9F76A47E5109B82F)] [added: Item 7A.] | [added: | |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#sD1356319B03F54A7859C9C775A9B03B4)] [added: Risk](#i2ee7b15834b5470594c4331a143946ef_94)] | [removed: [44](#sD1356319B03F54A7859C9C775A9B03B4)] | [added: | [56](#i2ee7b15834b5470594c4331a143946ef_94) | | | | | |]

| [removed: [Item 8.](#s563C05C6CE545B2889433F7AA160A573)] [added: Item 8.] | [added: | |] [Financial Statements and Supplementary [removed: Data](#sA20117E5960056D8848D01FA9408FD31)] [added: Data](#i2ee7b15834b5470594c4331a143946ef_97)] | [removed: [47](#sA20117E5960056D8848D01FA9408FD31)] | [added: | [59](#i2ee7b15834b5470594c4331a143946ef_97) | | | | | |]

| [removed: [Item 9.](#s4D5974DE1455553BB7A13572860B793B)] [added: Item 9.] | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s046CEB291C2F5879B1D5E80EDB6BAF88)] [added: Disclosure](#i2ee7b15834b5470594c4331a143946ef_229)] | [removed: [105](#s046CEB291C2F5879B1D5E80EDB6BAF88)] | [added: | [118](#i2ee7b15834b5470594c4331a143946ef_229) | | | | | |]

| [removed: [Item 9A.](#s7BC996263D155C968FB3C2A0C54B5929)] [added: Item 9A.] | [added: | |] [Controls and [removed: Procedures](#s008D4FF9CCAA592F8F854C18DB3CD3B0)] [added: Procedures](#i2ee7b15834b5470594c4331a143946ef_232)] | [removed: [105](#s008D4FF9CCAA592F8F854C18DB3CD3B0)] | [added: | [118](#i2ee7b15834b5470594c4331a143946ef_232) | | | | | |]

| [removed: [Item 9B.](#s449A10AFE1225F3B9998138B035E9C34)] [added: Item 9B.] | [added: | |] [Other [removed: Information](#sECD6EF3A33B25B038B70E0BA175479D2)] [added: Information](#i2ee7b15834b5470594c4331a143946ef_235)] | [removed: [105](#sECD6EF3A33B25B038B70E0BA175479D2)] | [added: | [119](#i2ee7b15834b5470594c4331a143946ef_235) | | | | | |]

| | [removed: [PART III](#sD32637849AD258EDB6033314588F0E5A)] | | [added: PART III | | | | | | | | |]

| [removed: [Item 10.](#sF75EB553710F5B32B5D2A6B0850B111E)] [added: Item 10.] | [added: | |] [Directors, Executive Officers and Corporate [removed: Governance](#s433C6B7FECD553A18F3638BB7CF2B877)] [added: Governance](#i2ee7b15834b5470594c4331a143946ef_241)] | [removed: [106](#s433C6B7FECD553A18F3638BB7CF2B877)] | [added: | [120](#i2ee7b15834b5470594c4331a143946ef_241) | | | | | |]

| [removed: [Item 11.](#sEC1E103313FA570D9072CFD4828F8505)] [added: Item 11.] | [added: | |] [Executive [removed: Compensation](#sB3421BFB070A5727A4D5828E4EEFD151)] [added: Compensation](#i2ee7b15834b5470594c4331a143946ef_244)] | [removed: [106](#sB3421BFB070A5727A4D5828E4EEFD151)] | [added: | [120](#i2ee7b15834b5470594c4331a143946ef_244) | | | | | |]

| [removed: [Item 12.](#sF1405190E50952E69B8C3DAFBB94C26C)] [added: Item 12.] | [added: | |] [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#s25691806C0D85E4F8A28E2E05AD34920)] [added: Matters](#i2ee7b15834b5470594c4331a143946ef_247)] | [removed: [106](#s25691806C0D85E4F8A28E2E05AD34920)] | [added: | [120](#i2ee7b15834b5470594c4331a143946ef_247) | | | | | |]

| [removed: [Item 13.](#sCCE29A98532A5176A1D8F8555E28387C)] [added: Item 13.] | [added: | |] [Certain Relationships and Related Transactions, and Director [removed: Independence](#s9E5E370F068B5D3084B13C569A508728)] [added: Independence](#i2ee7b15834b5470594c4331a143946ef_250)] | [removed: [106](#s9E5E370F068B5D3084B13C569A508728)] | [added: | [120](#i2ee7b15834b5470594c4331a143946ef_250) | | | | | |]

| [removed: [Item 14.](#s68860FA0D8B9541A997BC6905EBAF51F)] [added: Item 14.] | [added: | |] [Principal Accounting Fees and [removed: Services](#s2F115AB6D82252BFA3CAE9759514CF93)] [added: Services](#i2ee7b15834b5470594c4331a143946ef_253)] | [removed: [106](#s2F115AB6D82252BFA3CAE9759514CF93)] | [added: | [120](#i2ee7b15834b5470594c4331a143946ef_253) | | | | | |]

| | [removed: [PART IV](#s576E3E0387A55FDDB536190D3754D55A)] | | [added: PART IV | | | | | | | | |]

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Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.

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| Item 15. | | | [Exhibits](#i2ee7b15834b5470594c4331a143946ef_259) | | | [120](#i2ee7b15834b5470594c4331a143946ef_259) | | | | | |

| [Signatures](#i2ee7b15834b5470594c4331a143946ef_268) | | | | | | | | | | | |

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| [Item 15.](#sEA326D804CA75D4B91729B140AD807D9) | [Exhibits](#sB5A7211344805B46A926F48CA97F8B82) | [106](#sB5A7211344805B46A926F48CA97F8B82) |

| [Signatures](#s062FB9E60A1F53AEA269217C358A3FD3) | | |

The table below shows the number of distribution facilities occupied by Sysco in each country and the aggregate square footage devoted to cold and dry storage as of June [removed: 29, 2019.][added: 27, 2020.]

| Location | [added: | |] Number of Facilities | | | [added: | | |] Square [removed: Feet (in] [added: Feet (in] thousands) | | | [added: | | |] Segment Served [removed: (1)] [added: (1)] | [added: | |]

| Bahamas | [added: | |] 2 | | | [added: | | |] 276 | | | [added: | | |] I | [added: | |]

| Belgium | [added: | |] 1 | | | [added: | | |] 200 | | | [added: | | |] I | [added: | |]

| Canada | [added: | |] 32 | | | [added: | | |] 4,256 | | | [added: | | |] I, O | [added: | |]

| Costa Rica (2) | [removed: 2] | | [added: 1] | [removed: 268] | | | [added: | | 495 | | | | | |] I | [added: | |]

| Ireland and Northern Ireland | [removed: 7] | | [added: 9] | [removed: 716] | | | [added: | | 851 | | | | | |] I | [added: | |]

| Mexico | [added: | |] 7 | | | [added: | | |] 299 | | | [added: | | |] I | [added: | |]

| Panama | [added: | |] 1 | | | [added: | | |] 44 | | | [added: | | |] I | [added: | |]

| Spain | [removed: 2] | | [added: 1] | [removed: 26] | | | [added: | | 5 | | | | | |] I | [added: | |]

| Sweden | [added: | |] 10 | | | [added: | | |] 1,026 | | | [added: | | |] I | [added: | |]

| United Kingdom | [removed: 64] | | [added: 65] | [removed: 3,019] | | | [added: | | 3,044 | | | | | |] I | [added: | |]

| United States and its territories (3) | [removed: 169] | | [added: 172] | [removed: 40,324] | | | [added: | | 40,254 | | | | | |] U, I, S, O | [added: | |]

[removed: | (1) | Segments] [added: (1)Segments] served include U.S. Foodservice (U), International Foodservice (I), SYGMA (S), and Other (O). [removed: |]

[removed: | (2) | Costa] [added: (2)Costa] Rica facility count does not include [added: 4 warehouse and storage facilities and] 16 cash and carry [removed: locations. |][added: facilities.]

[removed: | (3) | California,] [added: (3)California,] Florida, and Texas account for [removed: 20, 18,] [added: 19, 17,] and 14, respectively, of the facilities located in the U.S. [removed: |]

We own approximately [removed: 40,443,000] [added: 40,619,000] square feet of our distribution facilities (or [removed: 76.8%] [added: 76.4%] of the total square feet), and the remainder is occupied under leases expiring at various dates from fiscal [removed: 2020] [added: 2021] to fiscal 2063, exclusive of renewal options.

In addition, we own our approximately 654,000 square foot complex in Cypress, Texas that [removed: houses] [added: has housed] shared business services and other corporate services.

We are currently constructing expansions or build-outs for various distribution facilities in the United [removed: States, Canada and the Bahamas.][added: States.]

The various operating companies, in the aggregate, accounted for [removed: 28%] [added: 3%] of fiscal [removed: 2019] [added: 2020] sales.

As of June [removed: 29, 2019,] [added: 27, 2020,] our fleet of approximately 14,000 delivery vehicles consisted of tractor and trailer combinations, vans and panel trucks, most of which are either wholly or partially refrigerated for the transportation of frozen or perishable foods.

We own approximately [removed: 83%] [added: 87%] of these vehicles and lease the remainder.

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| France | | | 25 | | | | | | 2,420 | | | | | | I | | |

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| Totals | | | 326 | | | | | | 53,170 | | | | | | | | |

In fiscal 2021, we plan to perform all corporate and shared service operations from our headquarters in Houston, Texas and plan to sell the complex in Cypress, Texas.

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| France | 28 | | | 2,195 | | | I |

| Totals | 325 | | | 52,649 | | | |

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The number of record owners of Sysco’s common stock as of August [removed: 9, 2019] [added: 7, 2020] was [removed: 8,748.][added: 8,356.]

We purchased [removed: 14,963,189] [added: 11.1 million] shares during fiscal [removed: 2019,] [added: 2020,] resulting in a remaining authorization under our program of approximately [removed: $487.5 million] [added: $2.1 billion] as of June [removed: 29, 2019.][added: 27, 2020.]

There were [removed: 17,930,114] [added: 14,963,189] shares repurchased under our then outstanding plans in fiscal [removed: 2018.][added: 2019.]

*The following performance graph and related information shall not be deemed “soliciting material” or to be “filed” with the Securities and Exchange Commission, nor shall such information be incorporated by reference into any future filing under the Securities Act of [removed: 1933] [added: 1933, as amended,] or the Exchange Act, [removed: each as amended,] except to the extent that* *Sysco* *specifically incorporates such information by reference into such filing.*

The graph assumes that the value of the investment in our Common Stock, the S&P 500 Index, and the S&P 500 Food/Staple Retail Index was $100 on the last trading day of fiscal [removed: 2014,] [added: 2015,] and that all dividends were reinvested.

[added: Performance data for] Sysco, the S&P 500 Index and the S&P 500 Food/Staple Retail Index is provided as of the last trading day of each of our last five fiscal years.

[removed: ][added: ]

| | | [removed: 6/28/2014] | | [added: | |] 6/27/2015 | | [added: | | | |] 7/2/2016 | | [added: | | | |] 7/1/2017 | | [added: | | | |] 6/30/2018 | | [added: | | | |] 6/29/2019 | [added: | | | | | 6/27/2020 | | |]

| S&P 500 Food/Staple Retail Index | | [added: | | | |] 100 | | [removed: 119] | | [removed: 120] | | [removed: 117] [added: 101] | | [removed: 127] | | [removed: 150] | [added: | 99 | | | | | | 107 | | | | | | 126 | | | | | | 134 | | |]

During March 2020, we discontinued share repurchases under the program, and, due to certain restrictions imposed by the amendment to our credit agreement providing for Sysco’s $2 billion long-term revolving credit facility, we will not make any further repurchases during fiscal 2021.

See the discussion in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Debt Activity and Borrowing Availability” for additional information regarding the credit agreement amendment.

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| Sysco Corporation | | | | | | $100 | | | | | | $137 | | | | | | $139 | | | | | | $193 | | | | | | $204 | | | | | | $155 | | |

| S&P 500 | | | | | | 100 | | | | | | 102 | | | | | | 120 | | | | | | 138 | | | | | | 152 | | | | | | 159 | | |

We made the following share repurchases during the fourth quarter of fiscal 2019:

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| ISSUER PURCHASES OF EQUITY SECURITIES | | | | | | | | | | | | |

| Period | Total Number of Shares Purchased (1) | | | Average Price Paid per Share | | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |

| Month #1 | | | | | | | | | | | | |

| March 31 – April 27 | 397,058 | | | $ | 67.59 | | | 392,299 | | | — | |

| Month #2 | | | | | | | | | | | | |

| April 28 – May 25 | 1,079,961 | | | 73.94 | | | | 1,078,627 | | | — | |

| Month #3 | | | | | | | | | | | | |

| May 26 – June 29 | 671,621 | | | 73.24 | | | | 669,748 | | | — | |

| Totals | 2,148,640 | | | $ | 72.55 | | | 2,140,674 | | | — | |

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| (1) | The total number of shares purchased includes 4,759, 1,334, and 1,873 shares tendered by individuals in connection with stock option exercises in month #1, month #2, and month #3, respectively. All other shares were purchased pursuant to the publicly announced program described below. |

In February 2017, our Board of Directors approved a repurchase program authorizing the repurchase of shares of the company’s common stock not to exceed $1.0 billion through the end of fiscal 2019.

We executed all $1.0 billion under this authorization through August 2018.

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.

This repurchase program is intended to allow Sysco to continue offsetting dilution resulting from shares issued under the company’s benefit plans and to make opportunistic repurchases.

The share repurchase program was approved using a dollar value limit and, therefore, is not included in the table above for “Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs.” 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 purchased approximately 20,500 additional shares under our authorization through August 9, 2019.

The Board of Directors has authorized us to enter into agreements from time to time to extend our ongoing repurchase program to include repurchases during company announced “blackout periods” of such securities in compliance with Rule 10b5-1 promulgated under the Exchange Act.

Performance data for

| Sysco Corporation | | $100 | | $105 | | $143 | | $145 | | $202 | | $213 |

| S&P 500 | | 100 | | 109 | | 112 | | 132 | | 151 | | 166 |

| | [added: | |] Fiscal Year | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | | 2020 (1) | | | | | |] 2019 [removed: (1)] [added: (1)] | | | | [added: | |] 2018 [removed: (1)] [added: (1)] | | | | [added: | |] 2017 [removed: (1)] [added: (1)] | | | | [added: | |] 2016 [removed: (1)(2)] [added: (1)(2)] | | | | [removed: 2015 (1)] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] (In thousands except for per share data) | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Sales | [added: | |] $ | [added: 52,893,310 | | | | | $ |] 60,113,922 | | | [added: | |] $ | 58,727,324 | | | [added: | |] $ | 55,371,139 | | | [added: | |] $ | 50,366,919 | | | [removed: $] | [removed: 48,680,752] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Operating income (3) | [added: | | 749,505 | | | | | |] 2,330,150 | | | | [added: | |] 2,314,056 | | | | [added: | |] 2,054,616 | | | | [added: | |] 1,841,875 | | | | [removed: 1,203,164] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Earnings before income taxes | [added: | | 293,384 | | | | | |] 2,005,836 | | | | [added: | |] 1,956,224 | | | | [added: | |] 1,766,230 | | | | [added: | |] 1,433,007 | | | | [removed: 1,008,147] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Income taxes | [added: | | 77,909 | | | | | |] 331,565 | | | | [added: | |] 525,458 | | | | [added: | |] 623,727 | | | | [added: | |] 483,385 | | | | [removed: 321,374] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Net earnings | [added: | |] $ | [added: 215,475 | | | | | $ |] 1,674,271 | | | [added: | |] $ | 1,430,766 | | | [added: | |] $ | 1,142,503 | | | [added: | |] $ | 949,622 | | | [removed: $] | [removed: 686,773] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Net earnings: | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Basic earnings per share | [added: | |] $ | [added: 0.42 | | | | | $ |] 3.24 | | | [added: | |] $ | 2.74 | | | [added: | |] $ | 2.10 | | | [added: | |] $ | 1.66 | | | [removed: $] | [removed: 1.16] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Diluted earnings per share | [added: | | 0.42 | | | | | |] 3.20 | | | | [added: | |] 2.70 | | | | [added: | |] 2.08 | | | | [added: | |] 1.64 | | | | [removed: 1.15] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Dividends declared per share | [added: | |] $ | [added: 1.74 | | | | | $ |] 1.53 | | | [added: | |] $ | 1.41 | | | [added: | |] $ | 1.30 | | | [added: | |] $ | 1.23 | | | [removed: $] | [removed: 1.19] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Total assets | [added: | |] $ | [added: 22,628,266 | | | | | $ |] 17,966,522 | | | [added: | |] $ | 18,070,404 | | | [added: | |] $ | 17,756,655 | | | [added: | |] $ | 16,721,804 | | | [removed: $] | [removed: 17,989,281] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Capital expenditures | [added: | | 720,423 | | | | | |] 692,391 | | | | [added: | |] 687,815 | | | | [added: | |] 686,378 | | | | [added: | |] 527,346 | | | | [removed: 542,830] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Current maturities of long-term debt [removed: (4)] | [added: | |] $ | [added: 1,542,128 | | | | | $ |] 37,322 | | | [added: | |] $ | 782,329 | | | [added: | |] $ | 530,075 | | | [added: | |] $ | 8,909 | | | [removed: $] | [removed: 4,979,301] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Long-term debt | [added: | | 12,902,485 | | | | | |] 8,122,058 | | | | [added: | |] 7,540,765 | | | | [added: | |] 7,660,877 | | | | [added: | |] 7,336,930 | | | | [removed: 2,271,825] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Total long-term debt | [added: | | 14,444,613 | | | | | |] 8,159,380 | | | | [added: | |] 8,323,094 | | | | [added: | |] 8,190,952 | | | | [added: | |] 7,345,839 | | | | [removed: 7,251,126] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Shareholders’ equity | [added: | | 1,158,613 | | | | | |] 2,502,603 | | | | [added: | |] 2,506,957 | | | | [added: | |] 2,381,516 | | | | [added: | |] 3,479,608 | | | | [removed: 5,260,224] | | | [added: | | | | | | | | | | | | | | | | | | | |]

| Total capitalization | [added: | |] $ | [added: 15,603,226 | | | | | $ |] 10,661,983 | | | [added: | |] $ | 10,830,051 | | | [added: | |] $ | 10,572,468 | | | [added: | |] $ | 10,825,447 | | | [removed: $] | [removed: 12,511,350] | | [added: | | | | | | | | | | | | | | | | | | | |]

| Ratio of long-term debt to capitalization [removed: (4)] | [added: | | 92.6 | | % | | | |] 76.5 | | % | | [added: | |] 76.9 | | % | | [added: | |] 77.5 | | % | | [added: | |] 67.9 | | % | | [removed: 58.0] | | [removed: %] | [added: | | | | | | | | | | | | | | | | | | | |]

[removed: | (1) | Our results of operations are impacted by Certain Items that have resulted in reduced earnings on a GAAP basis.] See “Non-GAAP Reconciliations,” within Management’s Discussion and Analysis of Financial Condition and Results of Operations, for a description of these items and our results on an adjusted basis that exclude Certain Items. [removed: |]

[removed: | (2) | Sysco’s fiscal year ends on the Saturday nearest to June 30th.] This resulted in a 53-week year ended July 2, 2016 for fiscal 2016. [removed: |]

[removed: | (3) | In] [added: (3)In] fiscal 2019, Sysco adopted Accounting Standards Update 2017-07, which requires that an employer report all of the components, except the service cost component, of pension and postretirement benefits outside of operating income. [removed: This was applied retroactively, and as a result, the company has restated prior year amounts to include net periodic income (expense) in other income (expense) that were previously included in operating expense. |]

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(1)Our results of operations are impacted by Certain Items that have resulted in reduced earnings on a generally accepted accounting principles (GAAP) basis.

(2)Sysco’s fiscal year ends on the Saturday nearest to June 30th.

This was applied retroactively, and as a result, the company has restated prior year amounts to include net periodic income (expense) in other income (expense) that were previously included in operating expense.

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| --- | --- |

| (4) | Specific to fiscal 2015, our current maturities of long-term debt included senior notes issued for the proposed merger with US Foods that were required to be redeemed due to the termination of the merger agreement. We redeemed these notes in July 2015. |

| | [added: | |] Page | [added: | |]

| Consolidated Financial Statements: | | [added: | | | |]

| [Report of Management on Internal Control Over Financial [removed: Reporting](#s11897BE1741D5DAC946D3D0E86D14A31)] [added: Reporting](#i2ee7b15834b5470594c4331a143946ef_103)] | [removed: [48](#s11897BE1741D5DAC946D3D0E86D14A31)] | [added: | [60](#i2ee7b15834b5470594c4331a143946ef_103) | | |]

| [Report of Independent Registered Public Accounting Firm on Internal Control Over Financial [removed: Reporting](#s2749B3F0AFC65233B5CC276A084BF6AC)] [added: Reporting](#i2ee7b15834b5470594c4331a143946ef_106)] | [removed: [49](#s2749B3F0AFC65233B5CC276A084BF6AC)] | [added: | [61](#i2ee7b15834b5470594c4331a143946ef_106) | | |]

| [Report of Independent Registered Public Accounting Firm on Consolidated Financial [removed: Statements](#s73D0F56992CF5BFF8D026E8AAAB08239)] [added: Statements](#i2ee7b15834b5470594c4331a143946ef_109)] | [removed: [50](#s73D0F56992CF5BFF8D026E8AAAB08239)] | [added: | [61](#i2ee7b15834b5470594c4331a143946ef_109) | | |]

| [Consolidated Balance [removed: Sheets](#s79B9DA310B4158199D4A384A3DB79BB0)] [added: Sheets](#i2ee7b15834b5470594c4331a143946ef_112)] | [removed: [51](#s79B9DA310B4158199D4A384A3DB79BB0)] | [added: | [64](#i2ee7b15834b5470594c4331a143946ef_112) | | |]

| [Consolidated Results of [removed: Operations](#sA49694EA0EB45E4AB86BC11EEAFCA9EE)] [added: Operations](#i2ee7b15834b5470594c4331a143946ef_118)] | [removed: [52](#sA49694EA0EB45E4AB86BC11EEAFCA9EE)] | [added: | [65](#i2ee7b15834b5470594c4331a143946ef_118) | | |]

| [Consolidated Statements of Comprehensive [removed: Income](#sF74534317E2D5EC09E7CA3A12153CF1E)] [added: Income](#i2ee7b15834b5470594c4331a143946ef_121)] | [removed: [53](#sF74534317E2D5EC09E7CA3A12153CF1E)] | [added: | [66](#i2ee7b15834b5470594c4331a143946ef_121) | | |]

| [Changes in Consolidated Shareholders’ [removed: Equity](#s31037242A891505780C4988EE226647C)] [added: Equity](#i2ee7b15834b5470594c4331a143946ef_124)] | [removed: [54](#s31037242A891505780C4988EE226647C)] | [added: | [67](#i2ee7b15834b5470594c4331a143946ef_124) | | |]

| [Consolidated Cash [removed: Flows](#s6FA447611DD15A679CAE9CC755D61F07)] [added: Flows](#i2ee7b15834b5470594c4331a143946ef_130)] | [removed: [55](#s6FA447611DD15A679CAE9CC755D61F07)] | [added: | [68](#i2ee7b15834b5470594c4331a143946ef_130) | | |]

| [Notes to Consolidated Financial [removed: Statements](#s5D6600E37BC75E6DBF03373467EBAE8E)] [added: Statements](#i2ee7b15834b5470594c4331a143946ef_133)] | [removed: [56](#s5D6600E37BC75E6DBF03373467EBAE8E)] | [added: | [70](#i2ee7b15834b5470594c4331a143946ef_133) | | |]

Sysco’s management assessed the effectiveness of Sysco’s internal control over financial reporting as of June [removed: 29, 2019.][added: 27, 2020.]

In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in *Internal Control — Integrated Framework* *(2013).* Based on this assessment, management concluded that, as of June [removed: 29, 2019,] [added: 27, 2020,] Sysco’s internal control over financial reporting was effective based on those criteria.

Ernst & Young LLP, the independent registered public accounting firm that audited the company’s consolidated financial statements included in this report, has issued an audit report on the effectiveness of Sysco’s internal control over financial reporting as of June [removed: 29, 2019.][added: 27, 2020.]

We have audited Sysco Corporation and its Consolidated Subsidiaries’ (the “Company”) internal control over financial reporting as of June [removed: 29, 2019,] [added: 27, 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, Sysco Corporation and Consolidated Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of June [removed: 29, 2019,] [added: 27, 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the [removed: 2019] [added: 2020] consolidated financial statements of the Company and our report dated August [removed: 23, 2019,] [added: 25, 2020,] expressed an unqualified opinion thereon.

[removed: August 23, 2019][added: | | | | 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | |]

We have audited the accompanying consolidated balance sheets of Sysco Corporation and its Consolidated Subsidiaries (the “Company”) as of June [removed: 29, 2019] [added: 27, 2020] and June [removed: 30, 2018,] [added: 29, 2019,] the related consolidated results of operations, statements of comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended June [removed: 29, 2019] [added: 27, 2020] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at June [removed: 29, 2019] [added: 27, 2020] and June [removed: 30, 2018,] [added: 29, 2019,] and the results of its operations and its cash flows for each of the three years in the period ended June [removed: 29, 2019,] [added: 27, 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June [removed: 29, 2019,] [added: 27, 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated August [removed: 23, 2019] [added: 25, 2020] expressed an unqualified opinion thereon.

| | [added: | |] June [added: 27, 2020 | | | | | | June] 29, 2019 | | | | [removed: June 30, 2018] | | | [added: | |]