Sysco (SYY) 10-K risk factor changes: FY2021 vs FY2020

Public health crises, pandemics and epidemics, such as the [removed: recent outbreak of COVID-19,] [added: COVID-19 pandemic,] have impacted our operations directly and [removed: are expected to] [added: may] 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.

In response to the [removed: 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, [added: which have adversely affected and will continue to adversely affect demand in the foodservice industry, including demand for our products and services.]

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

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 [removed: within the U.S.] and [removed: 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.

The impact of the COVID-19 pandemic may change our mix of earnings by [added: customer type and 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.

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 [removed: 10-K, such as those relating to our level of indebtedness,] [added: 10-K] and [removed: may have an adverse effect on the price of our common stock.]

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 [added: environment.]

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

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

Uncertainty surrounding Brexit has contributed to recent fluctuations in the U.K. economy and could [removed: experience] [added: result in] future [removed: disruptions.][added: disruptions in economic activity in the U.K., Europe or globally, which could adversely affect our operating results and growth prospects.]

[added: 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.

Similarly, future labor disruptions or disputes could disrupt the integration of [removed: Brake] [added: Brakes] France [removed: and Davigel] into Sysco France and our operations in France and the EU generally.

Additionally, increased competition from non-traditional sources (such as club stores and commercial wholesale outlets with lower cost structures), online direct food wholesalers and cash and carry [removed: operations have served to further increase pressure on the industry’s profit margins, and continued margin pressure within the industry may have a material adverse effect on our results of operations.]

Although we have been able to pass along a portion of increased fuel costs to our customers in the past through, among other things, our fuel surcharge program, [removed: there is no guarantee that] we [removed: will] [added: may not] be able to do so in the future.

Although our purchasing volume can provide benefits when dealing with suppliers, suppliers may not be able to provide the foodservice products and supplies that we need in the quantities and at the prices that we [removed: request.][added: request due to conditions outside of their control.]

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, transportation [removed: interruptions,] [added: interruptions (such as shortages of ocean cargo containers),] unavailability of fuel or increases in fuel costs, product recalls, competitive demands, civil insurrection or social [removed: unrest (such as the recent protests and social movements across several North American cities),] [added: unrest,] terrorist attacks or international hostilities and natural disasters, epidemics, pandemics (such as the COVID-19 pandemic) or other human or animal disease outbreaks or other catastrophic events (including, but not limited to, foodborne illnesses).

Further, increased frequency or duration of extreme weather [removed: conditions] [added: conditions, whether due to global climate change or otherwise,] could also impair production capabilities, disrupt our supply chain or adversely affect demand for our products.

[removed: At] any time, input costs could increase for a prolonged period for a large portion of the products that we sell.

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, including health and safety restrictions related to epidemics and pandemics [removed: such] [added: (such] as the COVID-19 [removed: pandemic,] [added: pandemic),] any or all of which could delay our receipt of products or increase our input costs.

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

[removed: Our] [added: Some of our] customer agreements are [removed: generally] terminable upon written notice by either us or the customer, which provides [removed: our] [added: some] customers with the opportunity to renegotiate their contracts with us on less favorable terms or to award more business to our competitors.

[removed: Moreover, as our sales to 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 customers, as they begin to represent a greater proportion of our total sales, and therefore,] [added: 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.

[added: 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.

Our ability to successfully operate in international markets may be adversely affected by political, economic and social conditions beyond our control, public health crises, epidemics and [removed: pandemics, such] [added: pandemics (such] as the COVID-19 [removed: pandemic,] [added: 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.

For example, the U.S. and many countries [removed: in the EU] where we do business are actively considering or have recently enacted changes in relevant tax, accounting and other laws, regulations and interpretations, including changes to tax laws applicable to corporate multinationals.

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

We are subject to regulation by various federal, state, provincial, regional and local governments in the countries in which we operate with respect to many aspects of our business, such as food safety and sanitation, ethical business practices, transportation, minimum wage, overtime, wage payment, wage and hour and employment discrimination, immigration, human [removed: health and safety, and due to the services we provide in connection with governmentally funded entitlement programs.]

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

For example, we encountered operational challenges in fiscal 2019 [removed: in connection with] [added: related to] our efforts to integrate two businesses in France acquired in connection with the Brakes Group acquisition, which integration efforts have adversely affected our ability to drive growth in sales.

As described in Note [removed: 13,] [added: 12,] “Debt and Other Financing Arrangements,” in the Notes to Consolidated Financial Statements in Item 8, as of [removed: June 27, 2020,] [added: July 3, 2021,] we had approximately [removed: $14.4] [added: $11.1] billion of total indebtedness.

This amount included senior notes and 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, [removed: 2024, and issuances under a new unrelated commercial paper program in the U.K. allowing the company to issue short-term unsecured notes in an aggregate amount not to exceed £600 million.][added: 2024.]

[removed: In May 2020 we entered into an amendment to our] [added: Our] revolving credit [removed: agreement that, among other things, added] [added: agreement, as amended in May 2020 and May 2021, includes] a [removed: new] covenant that restricts (1) increases to Sysco’s regular quarterly dividend and (2) repurchases of equity interests of Sysco, in each case, until the earlier of September 2022 or the date on which Sysco has achieved a certain ratio of consolidated earnings before interest, tax, depreciation and amortization (EBITDA) to consolidated interest expense.

Our increased level of indebtedness and the ultimate cost of such indebtedness could have a negative impact on our liquidity, cost of [added: future debt financing and financial results, and our credit ratings may be adversely affected as a result of the incurrence of additional indebtedness.]

The U.S. Federal [removed: Reserve] [added: Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee consisting of large U.S. financial institutions,] is considering replacing U.S. dollar LIBOR with [removed: a newly created index called] the [removed: Broad Treasury] [added: Secured Overnight] Financing [removed: Rate,] [added: Rate (SOFR), a new index] calculated with a broad set of short-term repurchase agreements backed by treasury securities.

These technology systems and [removed: our uses] [added: the operation] thereof are vulnerable to disruption from circumstances beyond our control, including fire, natural disasters, power outages, systems failures, security breaches, espionage, cyber-attacks, viruses, theft and inadvertent release of information.

[removed: Due to] [added: As] the [removed: increased remote workforce,] [added: ongoing COVID-19 pandemic has resulted in many of our employees, contractors and other corporate partners working remotely,] we must increasingly rely on information technology systems that are outside our direct control.

[removed: However, the potential] [added: Potential] consequences of a future material cybersecurity [removed: attack] [added: incident] include business disruption; disruption to systems; theft, destruction, loss, corruption, misappropriation or unauthorized release of sensitive and/or confidential information or intellectual property (including personal information in violation of one or more privacy laws); reputational and brand damage; and potential liability, including litigation or other legal actions against us or the imposition by governmental authorities of penalties, fines, fees or liabilities, which, in turn, could cause us to incur significantly increased cybersecurity protection and remediation costs and the loss of customers.

The actions and controls we have implemented and are implementing to date, or which we seek to cause or have caused [removed: third party service] [added: third-party] providers to implement, may be insufficient to protect our systems, information or other intellectual property.

[removed: Due to the evolving nature of] [added: To date,] these [removed: cybersecurity threats, the potential impact of any future incident cannot be predicted with certainty, but such an incident could] have [added: not had] a material [removed: adverse effect] [added: impact] on our [added: financial condition,] results of operations [removed: and financial condition,] [added: or liquidity; however, there can be no assurance that there will not be a material adverse effect in the future,] especially if the amount of insurance coverage we maintain is not sufficient to cover claims or liabilities relating to [removed: the] [added: an] incident.

Recently, mutations of the virus have arisen, some of which are proving to be particularly aggressive variants.

As these variants spread, some governmental authorities have reintroduced certain restrictions and others may decide to do so in the future, which could adversely affect the timing of business reopenings and demand in the foodservice industry.

In the third and fourth quarters of fiscal 2020, the company experienced an increase in past due receivables and recognized additional bad debt charges on its trade receivables that were outstanding at the time the pandemic caused closures among our customers in mid-March 2020.

These receivables were all created in fiscal 2020 and are referred to as pre-pandemic receivables.

As of July 3, 2021, our pre-pandemic receivable balance outstanding is no longer significant and a majority of the amount outstanding is reserved within our allowance for doubtful accounts.

If further significant governmental restrictions are imposed in response to the spread of COVID-19 (including any variants thereof), Sysco could experience additional increases in past due receivables, which would have an adverse effect on the company’s financial condition and results of operations.

subsequent filings with the SEC, such as those risks relating to our level of indebtedness, and may have an adverse effect on the price of our common stock.

We experienced an elevated inflation rate of 9.6% combined for the U.S. and Canada during the fourth quarter of fiscal 2021, primarily in the paper and disposables, poultry and meat categories.

The rate accelerated towards the end of the quarter and has continued into the first quarter of fiscal 2022.

As a result, any shortage of qualified labor could significantly adversely affect our business.

In the current operating environment, we are experiencing a shortage of qualified labor in certain geographies, particularly with warehouse workers and drivers, resulting in increased costs from certain temporary wage actions, such as hiring and referral and retention bonus programs.

See the discussion under “Human Capital Resources” in Item 1, “Business” for additional information regarding our talent acquisition and talent management efforts in the context of these labor shortages.

A continuation of such shortages for a prolonged period of time could have a material adverse effect on the company’s financial condition and results of operations.

- Liquidity issues and an inability to consistently access credit markets would impair our ability to market and distribute food products, support our operations and meet our customers’ needs.

impacted business and consumer confidence and spending and depressed capital investment and economic activity in the affected regions.

On January 1, 2021, the U.K. left the EU Single Market and Customs Union, as well as all EU policies and international agreements.

As a result, the free movement of persons, goods, services and capital between the U.K. and the EU ended, and the EU and the U.K. formed two separate markets and two distinct regulatory and legal spaces.

On December 24, 2020, the European Commission reached a trade agreement with the U.K. on the terms of its future cooperation with the EU (the “Trade Agreement”).

The Trade Agreement offers U.K. and EU companies preferential access to each other’s markets, ensuring imported goods will be free of tariffs and quotas; however, economic relations between the U.K. and the EU will now be on more restricted terms than existed previously.

At this time, we cannot predict the impact that the Trade Agreement and any future agreements contemplated under the terms of the Trade Agreement will have on our business and our customers, and it is possible that new terms may adversely affect our operations and financial results.

We are currently in the process of evaluating our own risks and uncertainties to ascertain what financial, trade, regulatory and legal implications the Trade Agreement could have on our U.K. and European business operations.

This uncertainty also includes the impact on our customers’ business operations and capital planning, as well as the overall impact on restaurants or other customers in the foodservice distribution industry.

operations have served to further increase pressure on the industry’s profit margins, and continued margin pressure within the industry may have a material adverse effect on our results of operations.

Our current operating environment is constantly shifting in response to COVID-19, placing significant pressure on the food-away-from-home supply chain.

Customer demand is currently outpacing available supply in certain categories.

Certain suppliers are struggling to meet demand for our orders.

Future supply shortages could have an adverse effect on the company’s financial condition and results of operations.

At

If our sales to multi-unit customers were to continue to increase at a faster pace of growth than sales to our locally managed customers, we will become more dependent on multi-unit customers, as they begin to represent a greater proportion of our total sales.

Recently, the Biden Administration committed to increasing the corporate income tax rate, and to increasing the tax rate applied to profits earned outside the United States.

If enacted, the impact of these potential new rules could be material to our tax provision and value of deferred tax assets and liabilities.

health and safety, and due to the services we provide in connection with governmentally funded entitlement programs.

This sensitive and/or confidential information and intellectual property are stored on information technology systems controlled by us, as well as systems controlled by third parties, such as our service providers.

We and our third-party providers experience cyber-incidents of varying degrees from time-to-time, including ransomware and phishing attacks, as well as distributed denial of service attacks and the theft of data.

However, for U.S. dollar LIBOR, the relevant date was deferred to June 30, 2023 for certain tenors (including overnight and one, three, six and 12 months), at which time the LIBOR administrator will cease publication of U.S. dollar LIBOR.

Despite this deferral, the LIBOR administrator has advised that no new contracts using

U.S. dollar LIBOR should be entered into after December 31, 2021.

These actions indicate that the continuation of U.S. LIBOR on the current basis cannot be guaranteed after June 30, 2023.

Moreover, it is possible that U.S. LIBOR will be discontinued or modified prior to June 30, 2023.

An alternative reference rate could be higher or more volatile than LIBOR prior to its discontinuance, which could result in an increase in the cost of our indebtedness, impacting our financial condition and results of operations.

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

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.

environment.

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.

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 tariffs, which could require costly new compliance initiatives or changes to legal entity structures or operating practices.

Furthermore, if the transition period were to expire without an agreement (a “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.

Such impacts may directly increase our costs or could decrease demand for our goods and services by adversely impacting the business of restaurants or other customers in the foodservice distribution industry.

In addition, Brexit could cause financial and capital markets

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

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.

If these preferences continue and consumers continue to

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.

We also have available a 364-day credit facility, in the amount of $750.0 million, scheduled to expire on May 19, 2021, and various other smaller bank facilities.

future debt financing and financial results, and our credit ratings may be adversely affected as a result of the incurrence of additional indebtedness.

In particular, we have experienced and continue to experience cybersecurity threats and vulnerabilities in our systems and those of our third party providers, including viruses and attacks targeting our information technology systems and networks.

The ongoing COVID-19 pandemic is introducing additional cybersecurity risk as a result of our employees, contractors and other corporate partners working remotely.

To date, these cybersecurity threats have not had a material impact on our financial condition, results of operations or liquidity.

Based upon the information available to us from plan administrators, we believe that several of these multiemployer plans are underfunded.

Underfunded multiemployer pension plans may impose a surcharge requiring additional pension contributions.

Our discussion [removed: below] of our results includes certain non-GAAP financial [removed: measures] [added: measures, including EBITDA and adjusted EBITDA,] that we believe provide important perspective with respect to underlying business trends.

Other than free cash flow, any non-GAAP financial measures will be denoted as adjusted measures [removed: and are impacted by] [added: to remove the impact of] restructuring and transformational project costs consisting of: (1) [added: restructuring charges, (2)] expenses associated with our various transformation [removed: initiatives; (2) severance] [added: initiatives] and [added: (3)] facility closure [added: and severance] charges; and [removed: (3) restructuring charges.][added: by acquisition-related costs consisting of: (1) intangible amortization expense related to the fiscal 2017 acquisition of Cucina Lux Investments Limited (the Brakes Acquisition) and (2) due diligence and integration costs incurred in fiscal 2021 associated with the acquisition of Greco and Sons, which closed in August 2021.]

Fiscal 2020 results of operations were also negatively impacted by costs arising from the COVID-19 [removed: pandemic,] [added: pandemic and are also adjusted to remove] the [removed: most significant including] [added: impact of] (1) excess bad debt expense, [added: as we experienced an increase in past due receivables and recognized additional bad debt charges,] (2) goodwill and intangibles impairment charges and (3) fixed asset impairment charges.

As such, Sysco has not adjusted its results for lost sales, inventory write-offs or other costs associated with the COVID-19 [removed: pandemic.][added: pandemic not previously stated.]

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

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

The COVID-19 pandemic is more widespread and longer in duration than historical disasters [removed: impacting] [added: that have impacted] our business, and it is possible that actual uncollectible amounts will differ and additional charges may be [removed: required] [added: required; however, if collections continue to improve, it is also possible that additional reductions] in [removed: fiscal 2021.][added: our bad debt reserve could occur.]

While Sysco traditionally incurs bad debt expense, the magnitude of such expenses [added: and benefits] that we have experienced since [removed: March 2020] [added: the onset of the COVID-19 pandemic] is not indicative of our normal operations.

[removed: These fiscal 2020,] [added: The] fiscal [removed: 2019] [added: 2021] and fiscal [removed: 2018] [added: 2020] items [added: discussed above] 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 [added: total Sysco and our] International Foodservice Operations results on a constant currency basis.

Management believes that adjusting its operating expenses, operating income, [added: interest expense,] 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 [removed: basis,] [added: 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: | (8) | | | 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. | | |]

All [removed: other] discussion of changes in our results of operations from fiscal [removed: 2018] [added: 2019] to fiscal [removed: 2019] [added: 2020] has been omitted from this Form 10-K, but may be found in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Form 10-K for the [removed: fiscal] year ended June [removed: 29, 2019,] [added: 27, 2020,] filed with the Securities and Exchange Commission on August [removed: 26, 2019.][added: 25, 2020.]

[removed: The company has] [added: Under the accounting provisions related to disclosures about segments of an enterprise, we have] aggregated certain operating segments into three reportable segments.

- [removed: U.S.] [added: *U.S.] Foodservice [removed: Operations] [added: Operations*] – 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: International] [added: *International] Foodservice [removed: Operations] [added: Operations*] – includes operations in the Americas [added: (primarily outside of the United States (U.S.))] and Europe, which distribute a full line of food products and a wide variety of non-food products.

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

- [removed: SYGMA] [added: *SYGMA*] – our U.S. customized distribution [removed: subsidiary;] [added: operations serving quick-service chain restaurant customer locations;] and

- [removed: Other] [added: *Other*] – primarily our hotel supply [removed: operations.][added: operations, Guest Worldwide.]

[removed: We estimate that we serve about 16% of an approximately $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: 53%] [added: 45%] 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: 2019.][added: 2020.]

We believe the following are our most significant performance [removed: metrics:][added: metrics in our current business environment:]

- Adjusted operating income growth [removed: and adjusted operating income leverage] (non-GAAP);

- Sysco brand penetration for U.S. Broadline operations; [added: and]

- Free cash flow [removed: (non-GAAP); and][added: (non-GAAP).]

- Adjusted [removed: return on invested capital (non-GAAP).][added: EBITDA (non-GAAP);]

Adjusted Operating [removed: Income, Adjusted Operating] Income [removed: Leverage] and Adjusted Diluted Earnings per Share Growth

[added: However, free cash flow may] not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments.

- *Supporting employees* – We [removed: have] defined and implemented procedures to protect the health and safety of our [removed: employees,] [added: employees] while also ensuring business continuity and our ability to service our customers.

- *Serving customers* – We have [removed: implemented] procedures [added: available] to limit the contact between our drivers and customers’ [removed: employees and have developed an] [added: employees, including] alternative [removed: process to avoid] [added: delivery methods, not] collecting signatures for customer [removed: invoices] [added: invoices,] and guidelines for safely accepting customer returns.

- *Assisting our communities* – We have donated [removed: 30] [added: over 27] million meals [added: in fiscal 2021] across [removed: eight countries since mid-March] [added: our global operations] as part of our community response strategy to the pandemic.

Additionally, we [removed: have supported over 900] [added: continue to support] community organizations in their efforts to address hunger and food insecurity by providing direct delivery to food banks and other hunger relief organizations by loaning refrigerated trucks and facility storage space to increase capacity for local food distribution and by providing volunteer and staffing support for mobile distribution efforts.

As [removed: a result] of [removed: these measures, as of] August [removed: 7, 2020,] [added: 10, 2021,] the company had [removed: more than $8.0] [added: approximately $4.7] billion in cash and available liquidity.

Below is a comparison of results from fiscal [removed: 2020] [added: 2021] to fiscal [removed: 2019:][added: 2020:]

◦adjusted operating income decreased [removed: 37.4%,] [added: 14.7%,] or [removed: $1.0 billion,] [added: $251.8 million,] to [removed: $1.7] [added: $1.5] billion;

◦adjusted net earnings decreased [removed: 44.4%,] [added: 28.3%,] or [removed: $824.8] [added: $291.6] million, to [removed: $1.0 billion;][added: $740.4 million;]

[removed: ◦decreased 87.0%,] [added: ◦increased 145.2%,] or [removed: $2.82,] [added: $0.61,] to [removed: $0.42] [added: $1.03] from the comparable prior year amount of [removed: $3.24] [added: $0.42] per share;

[removed: ◦decreased 86.9%,] [added: ◦increased 142.9%,] or [removed: $2.78,] [added: $0.60,] to [removed: $0.42] [added: $1.02] from the comparable prior year amount of [removed: $3.20] [added: $0.42] per share; [removed: and]

◦adjusted diluted earnings per share were [removed: $2.01] [added: $1.44] in fiscal [removed: 2020,] [added: 2021,] a [removed: 43.4%] [added: $0.57] decrease from the comparable prior year amount of [removed: $3.55] [added: $2.01] per share.

[removed: *Trends*][added: Trends]

The following discussion and analysis of Sysco’s financial condition, results of operations and liquidity and capital resources for the fiscal years ended July 3, 2021 and June 27, 2020 should be read as a supplement to our Consolidated Financial Statements and the accompanying notes contained in Item 8 of this report, and in conjunction with the “Forward-looking Statements” section set forth in Part II and the “Risk Factors” section set forth in Item 1A of Part I.

Sysco sold its interests in Cake Corporation in the first quarter of fiscal 2021.

We estimate that we serve about 17% of an approximately $230 billion annual foodservice market in the U.S. based on industry data obtained from Technomic, Inc as of the end of calendar 2020.

Technomic projects the market size to increase to approximately $285 billion by the end of calendar 2021.

*COVID-19 Response*

Per our protocols, all employees at our offices or warehouses take part in daily temperature checks upon entry.

Our policies for wearing face coverings at all Sysco and customer locations are aligned with the guidance provided by the Centers for Disease Control and Prevention (CDC), unless local or state regulations differ.

These contact-less procedures are available to all customers by request.

These donations were valued at over $55 million.

Highlights

Our fiscal 2021 results were strong due to improved sales and disciplined expense management.

Our business recovery is stronger than anticipated in the U.S., and the recovery is beginning to present itself in our international markets.

Our increased profitability drove an improved cash flow performance and allowed us to pay down a large amount of debt.

We are also making meaningful progress in advancing our Recipe for Growth strategy, which we expect will allow us to better serve our customers and differentiate Sysco from our competition.

See below for a comparison of our fiscal 2021 results to our fiscal 2020 results, both including and excluding Certain Items (as defined below).

◦decreased 3.0%, or $1.6 billion, to $51.3 billion;

◦increased 91.8%, or $687.7 million, to $1.4 billion;

◦increased 143.3%, or $308.7 million, to $524.2 million;

- EBITDA:

◦increased 46.1%, or $695.4 million, to $2.2 billion; and

◦adjusted EBITDA decreased 9.1%, or $216.2 million, to $2.2 billion.

Our results for fiscal 2021 were also impacted by the reduction of bad debt expense previously recognized in fiscal 2020 due to the impact of the COVID-19 pandemic on the collectability of our pre-pandemic trade receivable balances, as well as non-operating gains and losses including (1) losses on the extinguishment of debt, (2) losses on the sale of businesses and (3) gains on the sale of property.

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

This resulted in a 53-week year ended July 3, 2021 for fiscal 2021, a 52-week year ended June 27, 2020 for fiscal 2020 and a 52-week year ended June 29, 2019 for fiscal 2019.

We will have a 52-week year ending July 2, 2022 for fiscal 2022.

Because fiscal 2021 contained an additional week as compared to fiscal 2020, our Consolidated Results of Operations for fiscal 2021 are not directly comparable to the prior year.

Management

believes that adjusting the fiscal 2021 Consolidated Results of Operations for the estimated impact of the additional week provides more comparable financial results on a year-over-year basis.

This is calculated by taking one-fourteenth of the total metric for the fourth quarter of fiscal 2021.

The COVID-19 pandemic has significantly impacted the financial metrics used by management to evaluate the business, and certain metrics continue to be a near- and long-term focus, while other metrics do not provide meaningful comparable information in the near-term.

Adjusted EBITDA

EBITDA represents net earnings (loss) plus (1) interest expense, (2) income tax expense and benefit, (3) depreciation and (4) amortization.

The net earnings (loss) component of our EBITDA calculation is impacted by Certain Items that we do not consider representative of our underlying performance.

As a result, in the non-GAAP reconciliations below for each period presented, adjusted EBITDA is computed as EBITDA plus the impact of Certain Items, excluding Certain Items related to interest expense, income taxes, depreciation and amortization.

Sysco’s management considers growth in this metric to be a measure of overall financial performance that provides useful information to management and investors about the profitability of the business, as it facilitates comparison of performance on a consistent basis from period to period by providing a

measurement of recurring factors and trends affecting our business.

Additionally, it is a commonly used component metric used to inform on capital structure decisions.

In response to the COVID-19 pandemic, national and local governments have imposed substantial restrictions upon the customers we serve in the food-away-from-home sector; however, we saw demand in the restaurant industry increase throughout the fourth quarter of fiscal 2021 as restrictions continued to ease.

The U.S. foodservice industry is now within 5% of calendar year 2019 levels, as foot traffic has increased since March 2021 and continues to increase more than foot traffic in grocery stores.

Consumer spending power is robust, signaling that the food-away-from-home sector is not permanently impaired, but rather is vibrant and healthy.

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

These include acquisition-related intangible amortization expense.

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

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.

Fiscal 2019 results of operations were impacted by a gain on the sale of Iowa Premium, LLC (Iowa Premium) in the fourth quarter of fiscal 2019.

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.

Fiscal 2018 results of operations were additionally impacted by multiemployer pension plan (MEPP) withdrawal charges.

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.

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.

The following discussion includes a comparison of our Results of Operations and Liquidity and Capital Resources for fiscal 2020 and fiscal 2019.

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.

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.

Industry sources estimate the total foodservice market in the U.S. experienced a real sales increase of approximately 0.9% in calendar year 2019 and 1.2% in calendar year 2018.

Real sales changes do not include the impact of inflation or deflation.

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.

Adjusted operating income leverage represents the variance between our gross profit growth financial measure, on a percentage basis, and our adjusted operating expense growth, on a percentage basis, where management expects gross profit growth to exceed adjusted operating expense growth.

However, free cash flow may

Adjusted Return on Invested Capital

Although adjusted return on invested capital (ROIC) is considered a non-GAAP financial measure, Sysco management considers adjusted ROIC to be a measure that provides useful information to management and investors in evaluating the efficiency and effectiveness of the company’s long-term capital investments and has been a component of long-term incentive compensation.

We calculate adjusted ROIC as adjusted net earnings divided by (1) stockholders’ equity, computed as the average of adjusted stockholders’ equity at the beginning of the year and at the end of each fiscal quarter during the year; and (2) long-term debt, computed as the average of the long-term debt at the beginning of the year and at the end of each fiscal quarter during the year.

Trends in ROIC can fluctuate over time as management balances long-term strategic initiatives with possible short-term impacts.

Business Update on the COVID-19 Pandemic

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.

We have allowed employees to work remotely, whenever possible, and have installed protocols for daily temperature checks and health screenings for our employees not working remotely.

We have also provided guidelines for performing deep cleaning and proper social distancing in our offices and warehouses and have implemented requirements for employees to wear face coverings when not working remotely.

Total debt as of [removed: June 29, 2019] [added: July 3, 2021] was [removed: $7.8] [added: $11.1] billion, of which approximately [removed: 70%] [added: 90%] was at fixed rates of interest, including the impact of our interest rate swap agreements.

Details of our outstanding swap agreements as of [removed: June 27, 2020] [added: July 3, 2021] are below:

| [removed: October 1, 2020] [added: March 15, 2025] | | | | | | $ | [removed: 750,000,000] [added: 500,000,000] | | | | | [removed: 2.60] [added: 3.55] | | [removed: %] | | | | Three-month LIBOR | | | | | | Every three months in advance | | | | | | Other [removed: current] [added: long-term] assets | | | | | | $ | [removed: 1,388] [added: 36,685] | |

| [removed: July 15, 2021] [added: June 23, 2023] | | | | | | [removed: $] [added: €] | 500,000,000 | | | | | [removed: 2.50] [added: 1.25] | | | | | | Three-month [removed: LIBOR] [added: EURIBOR] | | | | | | Every three months in advance | | | | | | Other long-term assets | | | | | | $ | [removed: 4,962] [added: 6,532] | |

The following tables present our interest rate position as of [removed: June 27, 2020.][added: July 3, 2021.]

| | | | Interest Rate Position as of [removed: June 27, 2020 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: July 3, 2021] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

| | | | Average Interest Rate | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| | | | [removed: 2021 | | | | | |] 2022 | | | | | | 2023 | | | | | | 2024 | | | | | | 2025 | | | | | | [removed: Thereafter | | | | | | Total | | | | | | Fair Value | | | | | | | | | | | | | | | | | | | | | | | |] [added: 2026] | | | | | | [added: Thereafter] | | | | | | [added: Total] | | | | | | [added: Fair Value] | | |

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

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

| Average Interest Rate | | | [removed: — | | % | | | |] 2.60 | | % | | | | — | | % | | | | — | | % | | | | 5.65 | | % | | | | [removed: 4.83] [added: 3.75] | | % | | | | 4.80 | | % | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 4.68] | | [added: %] | | | | | | |

| Floating Rate Debt (1) | | | $ | [removed: 750,000 | | | | | $ | 500,000] [added: —] | | | | | $ | — | | | | | $ | [removed: 700,000] [added: —] | | | | | $ | 500,000 | | | | | $ | — | | | | | $ | [removed: 2,450,000] [added: —] | | | | | $ | [removed: 2,502,371 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 500,000] | | | | | [added: $] | [added: 533,681] | |

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

| Average Interest Rate | | | [removed: 0.45] [added: —] | | % | | | | [removed: —] [added: 1.25] | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | [removed: 0.45] [added: 1.25] | | % | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Euro Denominated: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Average Interest Rate | | | — | | % | | | | — | | % | | | | [removed: 1.25] [added: —] | | % | | | | [removed: —] [added: 3.65] | | % | | | | — | | % | | | | — | | % | | | | [removed: 1.25] [added: 3.65] | | % | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

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

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

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

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

| Related To Debt: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |]

| Pay Variable/Receive Fixed | | | $ | [removed: 750,000 | | | | | $ | 500,000] [added: —] | | | | | $ | [removed: 561,098] [added: 593,303] | | | | | $ | — | | | | | $ | 500,000 | | | | | $ | — | | | | | $ | [removed: 2,311,098] [added: —] | | | | | $ | [removed: 71,170 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 1,093,303] | | | | | [added: $] | [added: 43,217] | |

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

| Rate A Plus | | | [removed: 1.12 | | % | | | | 1.13] [added: —] | | % | | | | 1.10 | | % | | | | — | | % | | | | 0.75 | | % | | | | — | | % | | | | [removed: 1.04 | | % | | | |] — | | % | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 0.94] | | [added: %] | | | | | | |

| Fixed Rate Received | | | [removed: 2.60 | | % | | | | 2.50] [added: —] | | % | | | | 1.25 | | % | | | | — | | % | | | | 3.55 | | % | | | | — | | % | | | | [removed: 2.46 | | % | | | |] — | | % | | | | [removed: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |] [added: 2.30] | | [added: %] | | | | | | |

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

The exchange [removed: rate] [added: rates] used to translate our foreign sales into U.S. dollars [removed: negatively] [added: positively] affected sales by [removed: 0.8%] [added: 0.9%] in fiscal [removed: 2019] [added: 2021] when compared to fiscal [removed: 2018.][added: 2020.]

The impact to our operating income, net earnings and earnings per share was not material in fiscal [removed: 2020] [added: 2021] or fiscal [removed: 2019.][added: 2020.]

A 10% unfavorable change in the fiscal [removed: 2020] [added: 2021] weighted year-to-date exchange rate and the resulting impact on our financial statements would have negatively affected fiscal [removed: 2020] [added: 2021] sales by [removed: 1.4%] [added: 1.3%] and would not have materially affected our operating income, net earnings and earnings per share.

Fuel costs related to outbound deliveries represented approximately 0.5% of sales during fiscal [removed: 2020,] [added: 2021,] fiscal [removed: 2019] [added: 2020] and fiscal [removed: 2018.][added: 2019.]

As of [removed: June 27, 2020,] [added: July 3, 2021,] we had diesel fuel swaps with a total notional amount of approximately [removed: 54] [added: 32] million gallons through [removed: December 2021.][added: June 2022.]

These swaps are expected to lock in the price of approximately [removed: 60%] [added: 50%] of our projected fuel purchase needs for fiscal [removed: 2021.][added: 2022.]

Using current, published quarterly market price projections for diesel and estimates of fuel consumption, a 10% unfavorable change in diesel prices from the market price would result in a potential increase of approximately [removed: $3.4] [added: $7.1] million in our fuel costs on our non-contracted volumes.

A 10% unfavorable change in the value of the investments held by our company-sponsored retirement plans at the plans’ fiscal year end (December 31, [removed: 2019)] [added: 2020)] would not have a material impact on our anticipated future contributions for fiscal [removed: 2021;] [added: 2022;] however, such an unfavorable change would increase our pension expense for fiscal [removed: 2021] [added: 2022] by [removed: $36.3] [added: $35.8] million and would reduce our shareholders’ equity on our balance sheet as of [removed: June 27, 2020] [added: July 3, 2021] by [removed: $440.9] [added: $465.5] million.

At July 3, 2021, there were no commercial paper issuances outstanding under our U.S. commercial paper program.

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

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

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

| Fixed Rate Debt | | | $ | 450,000 | | | | | $ | — | | | | | $ | — | | | | | $ | 750,000 | | | | | $ | 750,000 | | | | | $ | 7,582,055 | | | | | $ | 9,532,055 | | | | | $ | 9,454,290 | |

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

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

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

| Floating Rate Debt (1) | | | $ | — | | | | | $ | 593,303 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 593,303 | | | | | $ | 598,253 | |

| Fixed Rate Debt | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 404,138 | | | | | $ | — | | | | | $ | — | | | | | $ | 404,138 | | | | | $ | 402,589 | |

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

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

| | | | Interest Rate Position as of July 3, 2021 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2022 | | | | | | 2023 | | | | | | 2024 | | | | | | 2025 | | | | | | 2026 | | | | | | Thereafter | | | | | | Total | | | | | | Fair Value | | |

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

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

At June 29, 2019, there was $132.1 million in commercial paper issuances outstanding.

| June 23, 2023 | | | | | | € | 500,000,000 | | | | | 1.25 | | | | | | Three-month EURIBOR | | | | | | Every three months in advance | | | | | | Other long-term assets | | | | | | $ | 9,294 | |

| March 15, 2025 | | | | | | $ | 500,000,000 | | | | | 3.55 | | | | | | Three-month LIBOR | | | | | | Every three months in advance | | | | | | Other long-term assets | | | | | | $ | 55,526 | |

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

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

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

| Floating Rate Debt (1) | | | $ | — | | | | | $ | — | | | | | $ | 561,098 | | | | | $ | — | | | | | $ | — | | | | | $ | — | | | | | $ | 561,098 | | | | | $ | 568,011 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

| Interest Rate Swaps | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

We have also entered into various cross currency swaps to mitigate the risk of exchange rate changes for intercompany loans that are not in the functional currency of our subsidiaries.

These have been designated as cash flow hedges with changes recorded within foreign currency translation adjustments within Accumulated other comprehensive income (loss).

[added: Our purpose is “Connecting the World to Share Food and Care for One Another.”] We provided products and related services to over [removed: 625,000] [added: 650,000] customer locations, including restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers during fiscal [removed: 2020.][added: 2021.]

Since our formation, we have grown from $115 million to [removed: $52.9] [added: as high as $60.1] billion in annual [removed: sales,] [added: sales in fiscal 2019,] both through internal expansion of existing operations and through acquisitions.

This resulted in a [added: 53-week year ended July 3, 2021 for fiscal 2021, a] 52-week year [removed: ending] [added: ended] June 27, 2020 for fiscal [removed: 2020,] [added: 2020 and a 52-week year ended] June 29, 2019 for fiscal [removed: 2019 and June 30, 2018 for fiscal 2018.][added: 2019.]

We will have a [removed: 53-week] [added: 52-week] year ending [removed: June 26, 2021] [added: July 2, 2022] for fiscal [removed: 2021.][added: 2022.]

- [removed: U.S.] [added: *U.S.] Foodservice [removed: Operations] [added: Operations*] – 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: International] [added: *International] Foodservice [removed: Operations] [added: Operations*] – includes operations in the Americas [added: (primarily outside of the United States (U.S.))] and Europe, which distribute a full line of food products and a wide variety of non-food products.

- [removed: SYGMA] [added: *SYGMA*] – our U.S. customized distribution [removed: subsidiary;] [added: operations serving quick-service chain restaurant customer locations;] and

- [removed: Other] [added: *Other*] – primarily our hotel supply [removed: operations.][added: operations, Guest Worldwide.]

Broadline operating [removed: companies] [added: sites] distribute a full line of food products and a wide variety of non-food products to both traditional and chain restaurant customers, hospitals, schools, hotels, industrial caterers and other venues where foodservice products are served.

SYGMA operating [removed: companies] [added: sites] distribute a full line of food products and a wide variety of non-food products to certain chain restaurant customer locations.

Selected financial data for each of our reportable segments, as well as financial information concerning geographic areas, can be found in Note [removed: 22,] [added: 21,] “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 8.

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

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

| Principal product categories | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

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

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

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

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

| Paper and disposables | | | [removed: 7] [added: 8] | | | | | | 7 | | | | | | 7 | | |

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

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

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

(1)Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment and subscription sales for our [removed: Sysco Labs] [added: previously-owned Cake] business, and other janitorial products, medical supplies and smallwares.

Our distribution centers, which we refer to as operating [removed: companies,] [added: sites,] distribute branded merchandise, as well as products packaged under our private brands.

Our operating [removed: companies] [added: sites] offer daily delivery to certain customer locations and have the capability of delivering special orders on short notice.

Through the sales and marketing representatives and support [removed: staff of Sysco and our operating companies,] [added: staff,] we stay informed of the needs of our customers and acquaint them with new products and services.

[added: We 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 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 [removed: June 27, 2020.][added: July 3, 2021.]

| Type of Customer | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Restaurants | | | [removed: 62] [added: 66] | | % | | | | 62 | | % | | | | 62 | | % |

| Healthcare | | | 9 | | | | | | [removed: 8] [added: 9] | | | | | | [removed: 9] [added: 8] | | |

| Education, government | | | [removed: 8] [added: 6] | | | | | | [removed: 9] [added: 8] | | | | | | [removed: 8] [added: 9] | | |

| Travel and leisure | | | [removed: 7] [added: 5] | | | | | | [removed: 9] [added: 7] | | | | | | [removed: 8] [added: 9] | | |

| Other (1) | | | 14 | | | | | | [removed: 12] [added: 14] | | | | | | [removed: 13] [added: 12] | | |

Purchasing is generally carried out through both centrally developed purchasing programs, domestically and internationally, and direct purchasing programs established by our various operating [removed: companies.][added: sites.]

We also focus on increasing profitability by lowering operating costs and by lowering aggregate inventory levels, which reduces future facility expansion needs at our [removed: Broadline] operating [removed: companies,] [added: sites,] while providing greater value to our suppliers and customers.

Our growth is funded through a combination of [added: significant] cash [added: on hand, incremental cash] flow from operations, commercial paper issuances and long-term borrowings.

We extend credit terms to [added: some of] our customers [removed: that can vary from cash on delivery to 30 days or more] based on our assessment of each customer’s [removed: credit worthiness.][added: creditworthiness.]

We take advantage of suppliers’ cash discounts where [removed: appropriate and] [added: appropriate,] otherwise [removed: generally receive payment terms from our] [added: we pay out] suppliers [removed: ranging from weekly up] [added: according] to [removed: 65 days.][added: our payment terms.]

Our corporate staff makes available a number of services to our operating [removed: companies] [added: sites] and [added: our shared services staff] performs support activities for employees, suppliers and customers.

Sysco’s annual sales in fiscal 2021 were $51.3 billion.

Sysco sold its interests in Cake Corporation in the first quarter of fiscal 2021.

We sold our interests in Cake Corporation in the first quarter of fiscal 2021.

We estimate that sales to our customers in the food service management (FSM) sector, which include large customers that service cafeterias in institutions such as universities, hospitals, and sporting venues, accounted for just over 5% of sales in fiscal 2021.

These sales are reflected within the respective customer types listed in the table above, depending on the type of customer the FSM operator serves.

We estimate our capital expenditures, net of proceeds from sales of assets, in fiscal 2022 will be approximately 1.3% of fiscal 2022 sales, as we continue to invest in our business for the long-term.

Human Capital Resources

Sysco believes engaged and empowered associates drive business success and that attracting, developing and retaining the best talent globally to drive our business success is a key driver of the company’s long-term value.

Our diverse associates and inclusive culture create an environment where associates can develop their skills and contribute to our success by driving strong financial performance.

Sysco’s Board of Directors, through its Compensation and Leadership Development Committee, together with Sysco’s chief executive officer and chief human resources officer, are tasked with providing oversight of our human capital strategy, which consists of (1) talent acquisition, (2) talent management, (3) total rewards, (4) diversity, equity and inclusion and (5) health, well-being and safety.

As of July 3, 2021, we had approximately 58,000 employees, including approximately 40,000 U.S. employees and approximately 18,000 employees outside the United States, as compared to approximately 57,000 employees as of June 27, 2020.

As of July 3, 2021, approximately 99% of our U.S.-based associates are classified as full-time associates, defined as employees who work 30 or more hours per week.

*COVID-19 Response* — We have been actively responding to the COVID-19 pandemic and its impact globally.

Our highest priorities continue to be the safety of our employees and working with our employees and network of suppliers and customers to help maintain the global food supply chain.

We have defined and implemented procedures to protect the health and safety of our employees, while also ensuring business continuity and our ability to service our customers.

We have allowed employees to work remotely whenever possible and have installed protocols for daily temperature checks and health screenings for our employees not working remotely.

We have also provided guidelines for performing deep cleaning and proper social distancing in our offices and warehouses and have implemented requirements for employees to wear face coverings when not working remotely.

Given the unprecedented challenges brought on by COVID-19, in April 2020 we launched a global mental health and well-being campaign that continues to be a primary focus for Sysco.

In response to the COVID-19 pandemic in fiscal 2020, we made a reduction to our staffing levels through both temporary workforce furloughs and permanent reductions in force.

As business conditions improved in the second half of fiscal 2021, we hired over 6,000 additional sales consultants, new business developers, culinary experts and operations associates in preparation for the incremental volume associated with the expected business recovery.

Sysco is monitoring the spread of variants of COVID-19, and while the future impact of the disease on our business is uncertain, we will respond appropriately to

maintain the health and safety of our associates.

For more information on our COVID-19 workplace and community response, see our COVID-19 disclosures in “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

*Talent Acquisition and Talent Management* — Maintaining a pipeline of talent is critical to Sysco’s ongoing success and is essential to our succession planning efforts and to growing leaders throughout the organization.

Our leadership and teams are responsible for attracting and retaining top talent by facilitating an environment where employees feel supported and encouraged in their professional and personal development.

Specifically, we promote employee development by cultivating a high-impact learning culture for Sysco associates through a variety of enterprise development programs and learning resources, growing associates through goal-setting and career development processes, and reviewing strategic positions regularly and identifying potential internal candidates to fill those roles.

We commit to investing in our employees through on the job experiences and coaching, as well as tuition reimbursement for a majority of our employees in the U.S. to promote continued professional growth.

Additionally, we understand the importance of providing competitive compensation and benefits, as well as appropriate training that cultivates growth, developmental opportunities and multiple career paths within the company.

A key focus of Sysco’s Talent Acquisition in fiscal 2021 has been achieving hiring targets for our transportation associates.

Throughout our industry, drivers are in short supply and hiring is a challenge.

Sysco has developed partnerships with driving school organizations, on a national and local level, to support hiring across our U.S. sites.

We encourage our business locations to partner with high schools to recruit non-college bound future graduates to consider a career path that will take them from a warehouse selector to a driver position and beyond.

Our current national partner helps to identify a diverse slate of unemployed or underemployed individuals who aspire to be commercially qualified drivers and present them to Sysco as candidates for tuition sponsorship and subsequent hire; and our partner provides training to existing Sysco associates who choose to pursue a driving career.

Sysco also has an in-house network of Supply Chain Instructors who ensure that we successfully onboard and train new drivers and support them as they learn how to deliver product to our customers safely and efficiently.

In fiscal 2022, Sysco is investing in its first Sysco Driver Academy that will enable us to train our own drivers.

For example, this program will give our warehouse associate population an opportunity to become drivers.

Trainees will be paid to attend the academy, and Sysco will pay the licensing and certification fees.

In return, associates will sign a contract to work for Sysco for an agreed upon period of time.

If successful, we may expand the program nationally within the U.S.

Furthermore, through a program entitled Sysco Speaks, we conduct annual, confidential engagement surveys of our global workforce that are administered and analyzed by an independent third party.

Services to our customers are supported by similar physical facilities, vehicles, material handling equipment and techniques, and administrative and operating staffs.

Our operating companies also provide ancillary services relating to foodservice

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.

Sysco’s operating companies purchase product from the suppliers participating in these consolidated programs and from other suppliers, although Sysco Brand products are only available to the operating companies

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.

Employees

Product needs, service requirements and price are just a few of the factors they evaluate when deciding where to purchase.

We estimate that we serve about 16% of an approximately $310 billion annual foodservice market in the United States (U.S.) based on a measurement as of the end of calendar 2019, based on industry data obtained from Technomic, Inc. We also serve certain international geographies that vary in size and amount of market share.

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.

We believe our liquidity and access to capital provides us the ability to continuously invest in business improvements.

There are a small number of companies competing in the food-away-from-home industry in the U.S. with publicly traded equity.

While our public company status provides us with some advantages over many of our competitors, including access to capital, we believe it also puts us at a disadvantage, in that most of our competitors do not face the obligations and additional costs related to complying with regulatory requirements applicable to public companies.

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.

associated with that company from offering or paying bribes to government officials or non-government persons in order to obtain or retain business or a business advantage for the company, as well as restricting the offer, payment or receipt of bribes to or from governmental officials and non-governmental persons.

Environmental Matters

Item 103 of SEC Regulation S-K requires disclosure of certain environmental matters in which a governmental authority is a party to the proceedings and when such proceedings involve the potential for monetary sanctions that Sysco’s management reasonably believes will exceed a specified threshold.

Pursuant to recent SEC amendments to this item, Sysco has chosen a reporting threshold for such proceedings of $1 million.

Applying this threshold, there are no environmental matters to disclose for this period.

For the fiscal year ended [removed: June 27, 2020][added: July 3, 2021]

[removed: ][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: $41,443,388,035] [added: $35,407,391,982] as of December [removed: 28, 2019] [added: 24, 2020] (based on the closing sales price on the New York Stock Exchange Composite Tape on December [removed: 27, 2019,] [added: 24, 2020,] as reported by The Wall Street Journal (Southwest Edition)).

As of August [removed: 7, 2020,] [added: 10, 2021,] the registrant had issued and outstanding an aggregate of [removed: 508,535,623] [added: 512,081,796] shares of its common stock.

Portions of the company’s [removed: 2020] [added: 2021] 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.

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

| Item 1. | | | [removed: [Business](#i2ee7b15834b5470594c4331a143946ef_13) | | | [1](#i2ee7b15834b5470594c4331a143946ef_13)] [added: [Business](#i447607067c24424b84f49ea56613d1f0_13)] | | | [added: [1](#i447607067c24424b84f49ea56613d1f0_13)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i2ee7b15834b5470594c4331a143946ef_16) | | | [7](#i2ee7b15834b5470594c4331a143946ef_16)] [added: Factors](#i447607067c24424b84f49ea56613d1f0_16)] | | | [added: [8](#i447607067c24424b84f49ea56613d1f0_16)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i2ee7b15834b5470594c4331a143946ef_19) | | | [18](#i2ee7b15834b5470594c4331a143946ef_19)] [added: Comments](#i447607067c24424b84f49ea56613d1f0_19)] | | | [added: [20](#i447607067c24424b84f49ea56613d1f0_19)] | | |

| Item 2. | | | [removed: [Properties](#i2ee7b15834b5470594c4331a143946ef_22) | | | [19](#i2ee7b15834b5470594c4331a143946ef_22)] [added: [Properties](#i447607067c24424b84f49ea56613d1f0_22)] | | | [added: [21](#i447607067c24424b84f49ea56613d1f0_22)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i2ee7b15834b5470594c4331a143946ef_25) | | | [19](#i2ee7b15834b5470594c4331a143946ef_25)] [added: Proceedings](#i447607067c24424b84f49ea56613d1f0_25)] | | | [added: [21](#i447607067c24424b84f49ea56613d1f0_25)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i2ee7b15834b5470594c4331a143946ef_28) | | | [19](#i2ee7b15834b5470594c4331a143946ef_28)] [added: Disclosures](#i447607067c24424b84f49ea56613d1f0_28)] | | | [added: [21](#i447607067c24424b84f49ea56613d1f0_28)] | | |

| | | | PART II | | | | | | [removed: | | |]

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i2ee7b15834b5470594c4331a143946ef_34) | | | [20](#i2ee7b15834b5470594c4331a143946ef_34)] [added: Securities](#i447607067c24424b84f49ea56613d1f0_34)] | | | [added: [22](#i447607067c24424b84f49ea56613d1f0_34)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i2ee7b15834b5470594c4331a143946ef_40) | | | [22](#i2ee7b15834b5470594c4331a143946ef_40)] [added: Operations](#i447607067c24424b84f49ea56613d1f0_40)] | | | [added: [23](#i447607067c24424b84f49ea56613d1f0_40)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i2ee7b15834b5470594c4331a143946ef_94) | | | [56](#i2ee7b15834b5470594c4331a143946ef_94)] [added: Risk](#i447607067c24424b84f49ea56613d1f0_100)] | | | [added: [57](#i447607067c24424b84f49ea56613d1f0_100)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i2ee7b15834b5470594c4331a143946ef_97) | | | [59](#i2ee7b15834b5470594c4331a143946ef_97)] [added: Data](#i447607067c24424b84f49ea56613d1f0_103)] | | | [added: [60](#i447607067c24424b84f49ea56613d1f0_103)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i2ee7b15834b5470594c4331a143946ef_229) | | | [118](#i2ee7b15834b5470594c4331a143946ef_229)] [added: Disclosure](#i447607067c24424b84f49ea56613d1f0_235)] | | | [added: [115](#i447607067c24424b84f49ea56613d1f0_235)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i2ee7b15834b5470594c4331a143946ef_232) | | | [118](#i2ee7b15834b5470594c4331a143946ef_232)] [added: Procedures](#i447607067c24424b84f49ea56613d1f0_238)] | | | [added: [115](#i447607067c24424b84f49ea56613d1f0_238)] | | |

| Item 9B. | | | [Other [removed: Information](#i2ee7b15834b5470594c4331a143946ef_235) | | | [119](#i2ee7b15834b5470594c4331a143946ef_235)] [added: Information](#i447607067c24424b84f49ea56613d1f0_241)] | | | [added: [116](#i447607067c24424b84f49ea56613d1f0_241)] | | |

| | | | PART III | | | | | | [removed: | | |]

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i2ee7b15834b5470594c4331a143946ef_241) | | | [120](#i2ee7b15834b5470594c4331a143946ef_241)] [added: Governance](#i447607067c24424b84f49ea56613d1f0_247)] | | | [added: [117](#i447607067c24424b84f49ea56613d1f0_247)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i2ee7b15834b5470594c4331a143946ef_244) | | | [120](#i2ee7b15834b5470594c4331a143946ef_244)] [added: Compensation](#i447607067c24424b84f49ea56613d1f0_250)] | | | [added: [117](#i447607067c24424b84f49ea56613d1f0_250)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i2ee7b15834b5470594c4331a143946ef_247) | | | [120](#i2ee7b15834b5470594c4331a143946ef_247)] [added: Matters](#i447607067c24424b84f49ea56613d1f0_253)] | | | [added: [117](#i447607067c24424b84f49ea56613d1f0_253)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i2ee7b15834b5470594c4331a143946ef_250) | | | [120](#i2ee7b15834b5470594c4331a143946ef_250)] [added: Independence](#i447607067c24424b84f49ea56613d1f0_256)] | | | [added: [117](#i447607067c24424b84f49ea56613d1f0_256)] | | |

| Item 14. | | | [Principal [removed: Accounting Fees] [added: Account](#i447607067c24424b84f49ea56613d1f0_259)[ant](#i447607067c24424b84f49ea56613d1f0_259) [Fees] and [removed: Services](#i2ee7b15834b5470594c4331a143946ef_253) | | | [120](#i2ee7b15834b5470594c4331a143946ef_253)] [added: Services](#i447607067c24424b84f49ea56613d1f0_259)] | | | [added: [117](#i447607067c24424b84f49ea56613d1f0_259)] | | |

| | | | PART IV | | | | | | [removed: | | |]

| Item 16. | | | [Form 10-K [removed: Summary](#i2ee7b15834b5470594c4331a143946ef_265) | | | [126](#i2ee7b15834b5470594c4331a143946ef_265)] [added: Summary](#i447607067c24424b84f49ea56613d1f0_271)] | | | [added: [123](#i447607067c24424b84f49ea56613d1f0_271)] | | |

| | | | | | | | | |

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

| | | | | | | | | |

| Item 6. | | | [\[Reserved\]](#i447607067c24424b84f49ea56613d1f0_37) | | | [23](#i447607067c24424b84f49ea56613d1f0_37) | | |

| Item 9C. | | | [Disclosure Reporting Regarding Foreign Jurisdictions that Prevent Inspections](#i447607067c24424b84f49ea56613d1f0_2631) | | | [116](#i447607067c24424b84f49ea56613d1f0_2631) | | |

| Item 15. | | | [Exhibit](#i447607067c24424b84f49ea56613d1f0_265) [and Financial Statement Schedules](#i447607067c24424b84f49ea56613d1f0_265) | | | [117](#i447607067c24424b84f49ea56613d1f0_265) | | |

| | | | [Signatures](#i447607067c24424b84f49ea56613d1f0_274) | | | | | |

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

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

| Item 6. | | | [Selected Financial Data](#i2ee7b15834b5470594c4331a143946ef_37) | | | [22](#i2ee7b15834b5470594c4331a143946ef_37) | | | | | |

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

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

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 [removed: June 27, 2020.][added: July 3, 2021.]

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

| Costa Rica [removed: (2)] | | | 1 | | | | | | [removed: 495] [added: 188] | | | | | | I | | |

| Ireland and Northern Ireland | | | [removed: 9] [added: 6] | | | | | | [removed: 851] [added: 657] | | | | | | I | | |

| United Kingdom | | | [removed: 65] [added: 49] | | | | | | [removed: 3,044] [added: 2,610] | | | | | | I | | |

| United States and its territories [removed: (3)] [added: (2)] | | | 172 | | | | | | [removed: 40,254] [added: 39,623] | | | | | | U, I, S, O | | |

[removed: (3)California,] [added: (2) California,] Florida, and Texas account for [removed: 19, 17,] [added: 20, 16,] and 14, respectively, of the facilities located in the U.S.

We own approximately [removed: 40,619,000] [added: 40,600,000] square feet of our distribution facilities (or [removed: 76.4%] [added: 78.1%] of the total square feet), and the remainder is occupied under leases expiring at various dates from fiscal [removed: 2021] [added: 2022] to fiscal 2063, exclusive of renewal options.

We own our approximately [removed: 639,000] [added: 634,000] square foot headquarters office complex in Houston, Texas.

In fiscal 2021, we [removed: plan to perform] [added: sold our complex in Cypress, TX which previously housed our shared business services and other services, and began performing] all corporate and shared service operations from our [removed: headquarters in Houston, Texas and plan to sell the complex in Cypress, Texas.][added: headquarters.]

The various operating [removed: companies,] [added: sites,] in the aggregate, accounted for 3% of fiscal [removed: 2020] [added: 2021] sales.

As of [removed: June 27, 2020,] [added: July 3, 2021,] 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: 87%] [added: 86%] of these vehicles and lease the remainder.

| Bahamas | | | 2 | | | | | | 220 | | | | | | I | | |

| Canada | | | 32 | | | | | | 4,181 | | | | | | I, O | | |

| France | | | 65 | | | | | | 3,005 | | | | | | I | | |

| Sweden | | | 7 | | | | | | 948 | | | | | | I | | |

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

| Totals | | | 343 | | | | | | 51,975 | | | | | | | | |

Within our Latin American operations, we operate 16 cash and carry facilities and 4 warehouse and storage facilities in Costa Rica and 3 cash and carry facilities in Panama.

| Bahamas | | | 2 | | | | | | 276 | | | | | | I | | |

| Canada | | | 32 | | | | | | 4,256 | | | | | | I, O | | |

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

| Spain | | | 1 | | | | | | 5 | | | | | | I | | |

| Sweden | | | 10 | | | | | | 1,026 | | | | | | I | | |

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

(2)Costa Rica facility count does not include 4 warehouse and storage facilities and 16 cash and carry facilities.

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

The number of record owners of Sysco’s common stock as of August [removed: 7, 2020] [added: 10, 2021] was [removed: 8,356.][added: 8,016.]

During March 2020, we discontinued share repurchases under the [removed: program, and,] [added: August 2019 program] due to [added: business conditions and] certain restrictions imposed by the amendment to our credit agreement providing for Sysco’s $2 billion long-term revolving credit facility, [added: and] we [removed: will not make any] [added: made no] further repurchases during fiscal 2021.

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: 2015,] [added: 2016,] and that all dividends were reinvested.

[removed: ][added: ]

| | | | | | | [removed: 6/27/2015] [added: 7/2/2016] | | | | | | [removed: 7/2/2016] [added: 7/1/2017] | | | | | | [removed: 7/1/2017] [added: 6/30/2018] | | | | | | [removed: 6/30/2018] [added: 6/29/2019] | | | | | | [removed: 6/29/2019] [added: 6/27/2020] | | | | | | [removed: 6/27/2020] [added: 7/3/2021] | | |

| S&P 500 Food/Staple Retail Index | | | | | | 100 | | | | | | [removed: 101] [added: 97] | | | | | | [removed: 99] [added: 105] | | | | | | [removed: 107] [added: 125] | | | | | | [removed: 126] [added: 132] | | | | | | [removed: 134] [added: 170] | | |

In May 2021, our Board of Directors approved a separate repurchase program to authorize the repurchase of up to $5.0 billion of the company’s common stock, which will remain available until fully utilized.

| Sysco Corporation | | | | | | $100 | | | | | | $101 | | | | | | $141 | | | | | | $149 | | | | | | $113 | | | | | | $171 | | |

| S&P 500 | | | | | | 100 | | | | | | 118 | | | | | | 135 | | | | | | 149 | | | | | | 155 | | | | | | 228 | | |

We purchased 11.1 million shares during fiscal 2020, resulting in a remaining authorization under our program of approximately $2.1 billion as of June 27, 2020.

There were 14,963,189 shares repurchased under our then outstanding plans in fiscal 2019.

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

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

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

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

| | | | Fiscal Year | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | 2020 (1) | | | | | | 2019 (1) | | | | | | 2018 (1) | | | | | | 2017 (1) | | | | | | 2016 (1)(2) | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | (In thousands except for per share data) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Sales | | | $ | 52,893,310 | | | | | $ | 60,113,922 | | | | | $ | 58,727,324 | | | | | $ | 55,371,139 | | | | | $ | 50,366,919 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Operating income (3) | | | 749,505 | | | | | | 2,330,150 | | | | | | 2,314,056 | | | | | | 2,054,616 | | | | | | 1,841,875 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Earnings before income taxes | | | 293,384 | | | | | | 2,005,836 | | | | | | 1,956,224 | | | | | | 1,766,230 | | | | | | 1,433,007 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Income taxes | | | 77,909 | | | | | | 331,565 | | | | | | 525,458 | | | | | | 623,727 | | | | | | 483,385 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net earnings | | | $ | 215,475 | | | | | $ | 1,674,271 | | | | | $ | 1,430,766 | | | | | $ | 1,142,503 | | | | | $ | 949,622 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net earnings: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Basic earnings per share | | | $ | 0.42 | | | | | $ | 3.24 | | | | | $ | 2.74 | | | | | $ | 2.10 | | | | | $ | 1.66 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Diluted earnings per share | | | 0.42 | | | | | | 3.20 | | | | | | 2.70 | | | | | | 2.08 | | | | | | 1.64 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Dividends declared per share | | | $ | 1.74 | | | | | $ | 1.53 | | | | | $ | 1.41 | | | | | $ | 1.30 | | | | | $ | 1.23 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total assets | | | $ | 22,628,266 | | | | | $ | 17,966,522 | | | | | $ | 18,070,404 | | | | | $ | 17,756,655 | | | | | $ | 16,721,804 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Capital expenditures | | | 720,423 | | | | | | 692,391 | | | | | | 687,815 | | | | | | 686,378 | | | | | | 527,346 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Current maturities of long-term debt | | | $ | 1,542,128 | | | | | $ | 37,322 | | | | | $ | 782,329 | | | | | $ | 530,075 | | | | | $ | 8,909 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Long-term debt | | | 12,902,485 | | | | | | 8,122,058 | | | | | | 7,540,765 | | | | | | 7,660,877 | | | | | | 7,336,930 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total long-term debt | | | 14,444,613 | | | | | | 8,159,380 | | | | | | 8,323,094 | | | | | | 8,190,952 | | | | | | 7,345,839 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Shareholders’ equity | | | 1,158,613 | | | | | | 2,502,603 | | | | | | 2,506,957 | | | | | | 2,381,516 | | | | | | 3,479,608 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Total capitalization | | | $ | 15,603,226 | | | | | $ | 10,661,983 | | | | | $ | 10,830,051 | | | | | $ | 10,572,468 | | | | | $ | 10,825,447 | | | | | | | | | | | | | | | | | | | | | | | | | |

| Ratio of long-term debt to capitalization | | | 92.6 | | % | | | | 76.5 | | % | | | | 76.9 | | % | | | | 77.5 | | % | | | | 67.9 | | % | | | | | | | | | | | | | | | | | | | | | | | | |

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

(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.

(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.

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.

| [Report of Management on Internal Control Over Financial [removed: Reporting](#i2ee7b15834b5470594c4331a143946ef_103)] [added: Reporting](#i447607067c24424b84f49ea56613d1f0_109)] | | | [removed: [60](#i2ee7b15834b5470594c4331a143946ef_103)] [added: [61](#i447607067c24424b84f49ea56613d1f0_109)] | | |

| [Report of Independent Registered Public Accounting Firm on Internal Control Over Financial [removed: Reporting](#i2ee7b15834b5470594c4331a143946ef_106)] [added: Reporting](#i447607067c24424b84f49ea56613d1f0_112)] | | | [removed: [61](#i2ee7b15834b5470594c4331a143946ef_106)] [added: [62](#i447607067c24424b84f49ea56613d1f0_112)] | | |

| [Report of Independent Registered Public Accounting Firm on Consolidated Financial [removed: Statements](#i2ee7b15834b5470594c4331a143946ef_109)] [added: Statements](#i447607067c24424b84f49ea56613d1f0_115)] | | | [removed: [61](#i2ee7b15834b5470594c4331a143946ef_109)] [added: [63](#i447607067c24424b84f49ea56613d1f0_115)] | | |

| [Consolidated Balance [removed: Sheets](#i2ee7b15834b5470594c4331a143946ef_112)] [added: Sheets](#i447607067c24424b84f49ea56613d1f0_118)] | | | [removed: [64](#i2ee7b15834b5470594c4331a143946ef_112)] [added: [65](#i447607067c24424b84f49ea56613d1f0_118)] | | |

| [Consolidated Results of [removed: Operations](#i2ee7b15834b5470594c4331a143946ef_118)] [added: Operations](#i447607067c24424b84f49ea56613d1f0_124)] | | | [removed: [65](#i2ee7b15834b5470594c4331a143946ef_118)] [added: [66](#i447607067c24424b84f49ea56613d1f0_124)] | | |

| [Consolidated Statements of Comprehensive [removed: Income](#i2ee7b15834b5470594c4331a143946ef_121)] [added: Income](#i447607067c24424b84f49ea56613d1f0_127)] | | | [removed: [66](#i2ee7b15834b5470594c4331a143946ef_121)] [added: [67](#i447607067c24424b84f49ea56613d1f0_127)] | | |

| [Changes in Consolidated Shareholders’ [removed: Equity](#i2ee7b15834b5470594c4331a143946ef_124)] [added: Equity](#i447607067c24424b84f49ea56613d1f0_130)] | | | [removed: [67](#i2ee7b15834b5470594c4331a143946ef_124)] [added: [68](#i447607067c24424b84f49ea56613d1f0_130)] | | |

| [Consolidated Cash [removed: Flows](#i2ee7b15834b5470594c4331a143946ef_130)] [added: Flows](#i447607067c24424b84f49ea56613d1f0_136)] | | | [removed: [68](#i2ee7b15834b5470594c4331a143946ef_130)] [added: [69](#i447607067c24424b84f49ea56613d1f0_136)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i2ee7b15834b5470594c4331a143946ef_133)] [added: Statements](#i447607067c24424b84f49ea56613d1f0_139)] | | | [removed: [70](#i2ee7b15834b5470594c4331a143946ef_133)] [added: [70](#i447607067c24424b84f49ea56613d1f0_139)] | | |

Sysco’s management assessed the effectiveness of Sysco’s internal control over financial reporting as of [removed: June 27, 2020.][added: July 3, 2021.]

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 [removed: June 27, 2020,] [added: July 3, 2021,] 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 [removed: June 27, 2020.][added: July 3, 2021.]

We have audited Sysco Corporation and its Consolidated Subsidiaries’ (the “Company”) internal control over financial reporting as of [removed: June 27, 2020,] [added: July 3, 2021,] 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 [removed: June 27, 2020,] [added: July 3, 2021,] 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: 2020] [added: 2021] consolidated financial statements of the Company and our report dated August [removed: 25, 2020,] [added: 27, 2021,] expressed an unqualified opinion thereon.

[removed: August 25, 2020][added: | | | | 2020 | | | | | | | | | | | | | | |]

We have audited the accompanying consolidated balance sheets of Sysco Corporation and its Consolidated Subsidiaries (the “Company”) as of [removed: June 27, 2020] [added: July 3, 2021] and June [removed: 29, 2019,] [added: 27, 2020,] 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 [removed: June 27, 2020] [added: July 3, 2021] 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 [removed: June 27, 2020] [added: July 3, 2021] and June [removed: 29, 2019,] [added: 27, 2020,] and the results of its operations and its cash flows for each of the three years in the period ended [removed: June 27, 2020,] [added: July 3, 2021,] 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 [removed: June 27, 2020,] [added: July 3, 2021,] 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: 25, 2020] [added: 27, 2021] expressed an unqualified opinion thereon.

Critical Audit [removed: Matters][added: Matter]

The critical audit [removed: matters] [added: matter] communicated below [removed: are matters] [added: is a matter] arising from the current period audit of the financial statements that [removed: were] [added: was] communicated or required to be communicated to the audit committee and that: (1) [removed: relate] [added: relates] to accounts or disclosures that are material to the [added: consolidated] financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of [added: the] critical audit [removed: matters do] [added: matter does] not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matters] [added: matter] below, providing [added: a] separate [removed: opinions] [added: opinion] on the critical audit [removed: matters] [added: matter] or on the [removed: accounts] [added: account] or disclosures to which [removed: they relate.][added: it relates.]

| *Description of the Matter* | | | | | | At [removed: June 27, 2020,] [added: July 3, 2021,] the Company’s goodwill was [removed: $3.7] [added: $3.9] billion. As discussed in Note 1 of the financial statements, goodwill is tested by the Company’s management for impairment at least annually, in the fourth quarter, unless there are indications of impairment at other points throughout the fiscal year. [removed: Goodwill is tested for impairment at the reporting unit level. During the fiscal year ended June 27, 2020, the Company recorded $203 million of impairment charges to goodwill.] Auditing management’s impairment tests for goodwill is complex and highly judgmental [removed: and required the involvement of a valuation specialist] due to the significant estimation required to determine the fair value of the reporting units. In particular, the fair value estimates of reporting units with fair values that do not significantly exceed their carrying values are sensitive to assumptions such as changes in projected cash flows, weighted average cost of capital, and terminal growth rates. All of these assumptions are sensitive to and affected by expected future market or economic conditions and company-specific qualitative factors. | | |

| | | | [removed: June 27, 2020] [added: 2021] | | | | | | [removed: June 29, 2019] [added: 2020] | | | | | | [added: 2019] | | |

| Cash and cash equivalents | | | $ | [removed: 6,059,427] [added: 3,007,123] | | | | | $ | [removed: 513,460] [added: 6,059,427] | | | | | [added: $] | [added: 513,460] | |

| Accounts receivable, less allowances of [removed: $334,810] [added: $117,695] and [removed: $28,176] [added: $334,810] | | | [removed: 2,893,551] [added: 3,781,510] | | | | | | [removed: 4,181,696] [added: 2,893,551] | | | | | | | | |

| Inventories | | | [removed: 3,095,085] [added: 3,695,219] | | | | | | [removed: 3,216,034] [added: 3,095,085] | | | | | | | | |

| Prepaid expenses and other current assets | | | [removed: 192,163] [added: 240,956] | | | | | | [removed: 210,582] [added: 192,163] | | | | | | | | |

| Income tax receivable | | | [removed: 108,006] [added: 8,759] | | | | | | [removed: 19,733] [added: 108,006] | | | | | | | | |

| Total current assets | | | [removed: 12,348,232] [added: 10,733,567] | | | | | | [removed: 8,141,505] [added: 12,348,232] | | | | | | | | |

| Plant and equipment at cost, less accumulated depreciation | | | [removed: 4,458,567] [added: 4,326,063] | | | | | | [removed: 4,501,705] [added: 4,458,567] | | | | | | | | |

| Goodwill | | | [removed: 3,732,469] [added: 3,944,139] | | | | | | [removed: 3,896,226] [added: 3,732,469] | | | | | | | | |

| Intangibles, less amortization | | | [removed: 780,172] [added: 746,073] | | | | | | [removed: 857,301] [added: 780,172] | | | | | | | | |

| Deferred income taxes | | | [removed: 194,115] [added: 352,523] | | | | | | [removed: 80,760] [added: 194,115] | | | | | | | | |

| Operating lease right-of-use assets, net | | | [removed: 603,616] [added: 709,163] | | | | | | [removed: —] [added: 603,616] | | | | | | | | |

| Other assets | | | [removed: 511,095] [added: 602,011] | | | | | | [removed: 489,025] [added: 511,095] | | | | | | | | |

| Total other long-term assets | | | [removed: 5,821,467] [added: 6,353,909] | | | | | | [removed: 5,323,312] [added: 5,821,467] | | | | | | | | |

| Total [removed: assets] | | | $ | [removed: 22,628,266] [added: 21,413,539] | | | | | $ | [removed: 17,966,522] [added: 22,628,266] | | | | | [added: $] | [added: 17,966,522] | |

| Notes payable | | | $ | [removed: 2,266] [added: 8,782] | | | | | $ | [removed: 3,957] [added: 2,266] | | | | | | | |

| Accounts payable | | | [removed: 3,447,065] [added: 4,884,781] | | | | | | [removed: 4,314,620] [added: 3,447,065] | | | | | | | | |

August 27, 2021

August 27, 2021

| Total assets | | | $ | 21,413,539 | | | | | $ | 22,628,266 | | | | | | | |

| | | | Year Ended | | | | | | | | | | | | | | |

| Net earnings | | | $ | 524,209 | | | | | $ | 215,475 | | | | | $ | 1,674,271 | |

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

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

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

| Net earnings | | | | | | | | | | | | | | | | | | | | | 524,209 | | | | | | | | | | | | | | | | | | | | | | | | 524,209 | | |

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

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

| Amortization of cash flow hedges, net of tax | | | | | | | | | | | | | | | | | | | | | | | | | | | 8,812 | | | | | | | | | | | | | | | | | | 8,812 | | |

| Change in marketable securities, net of tax | | | | | | | | | | | | | | | | | | | | | | | | | | | (2,680) | | | | | | | | | | | | | | | | | | (2,680) | | |

| Adoption of ASU 2016-13, Financial Instruments - Credit Losses (Topic 326), net of tax | | | | | | | | | | | | | | | | | | | | | (2,068) | | | | | | | | | | | | | | | | | | | | | | | | (2,068) | | |

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

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

| Share-based compensation awards | | | | | | | | | | | | | | | 113,094 | | | | | | | | | | | | | | | | | | (3,573,230) | | | | | | 130,374 | | | | | | 243,468 | | |

| Balance as of July 3, 2021 | | | 765,174,900 | | | | | | $ | 765,175 | | | | | $ | 1,619,995 | | | | | $ | 10,151,706 | | | | | $ | (1,148,764) | | | | | 253,342,595 | | | | | | $ | (9,835,216) | | | | | $ | 1,552,896 | |

| | | | Year Ended | | | | | | | | | | | | | | |

| Net earnings | | | $ | 524,209 | | | | | $ | 215,475 | | | | | $ | 1,674,271 | |

We will have a 52-week year ending July 2, 2022 for fiscal 2022.

In the annual fiscal 2021 assessment, certain reporting units did not have a fair value substantially in excess of their book value.

For two reporting units, with goodwill of $181.4 million in the aggregate as of July 3, 2021, headroom was considered low at 18% and 27%.

All other reporting units were concluded to have a fair value that exceeded book value by at least 30%.

We extend credit terms to some of our customers based on our assessment of each customer’s creditworthiness.

Jurisdictional tax law changes, increases or decreases in permanent differences between book and tax items, accruals or adjustments of accruals for

*Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information*

In November 2020, the SEC issued a final rule, *Management’s Discussion and Analysis, Selected Financial Data, and Supplementary Financial Information*, that amended certain SEC disclosure requirements to primarily modernize, enhance and simplify financial statement disclosures required by Regulation S-K.

Sysco has adopted provisions in the rule in the fourth quarter of fiscal 2021, which primarily resulted in the removal of the selected financial data previously required by Item 301.

The rule allows for the removal of the quarterly financial data previously required by Item 302; however, we have retained

quarterly financial data for fiscal 2021 due to the significant interest expense charges incurred by Sysco in the fourth quarter.

The disclosure of fiscal 2021 quarterly financial data is presented in Note 22, "Quarterly Results (Unaudited)."

Sysco adopted this ASU as of June 28, 2020, the first day of fiscal 2021, with no significant impact to the company’s financial statements.

Sysco adopted this ASU on June 28, 2020 on a prospective basis with no effect on the company’s financial statements.

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

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

| Fresh and frozen meats | | | | | | $ | 7,002,257 | | | | | $ | 1,147,809 | | | | | $ | 1,782,229 | | | | | $ | — | | | | | $ | 9,932,295 | |

| Canned and dry products | | | | | | 6,354,670 | | | | | | 1,625,573 | | | | | | 166,870 | | | | | | 116 | | | | | | 8,147,229 | | |

| | | | | | | | | |

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

| | | | | | | Allowance for Doubtful Accounts | | |

| *Description of the Matter* | | | | | | The Company’s accounts receivable totaled $2.9 billion, net of allowance of doubtful accounts for $335 million, as of June 27, 2020. As discussed in Note 1 of the financial statements, the Company evaluates the collectability of accounts receivable and determines the appropriate allowance for doubtful accounts based on a combination of factors, including, among others, historical write-off experience, customer bankruptcies and accounts referred to outside collection agencies. Due to the COVID-19 pandemic, in addition to those factors, the allowance also incorporates the Company’s historical write-off percentages experienced during local and regional disasters and the Company’s current collection trends experienced during the pandemic. Auditing management’s estimates of allowance for doubtful accounts involved subjectivity because the estimates rely on industry and economic factors. In particular, the COVID-19 pandemic has had a significant and adverse impact on the credit worthiness of Sysco’s customers in the foodservice industry, and there is a high degree of subjectivity around estimating the write-off percentages utilized in the allowance for doubtful accounts calculation. | | |

| *How We Addressed the Matter in Our Audit* | | | | | | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s allowance for doubtful accounts review process, including controls over management’s review of historical write-off percentages experienced during local and regional disasters and current collection trends experienced during the pandemic. We also tested controls over management’s review of the data used in their calculation. To test the estimated allowance for doubtful accounts, we performed audit procedures that included, among others, testing the Company’s write-off percentages and the data used by the Company in its calculation. We compared the write-off percentages utilized in the calculation to the Company’s historical write-off percentages experienced during local and regional disasters. We performed analyses on the Company’s current collection trends experienced during the pandemic and obtained evidence for select accounts referred to outside collection agencies or customers that have filed for bankruptcy. Additionally, we evaluated events subsequent to the balance sheet date in assessing the reasonableness of management’s estimates. | | |

| Commitments and contingencies | | | | | | | | | | | | | | | | | |

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

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

| Balance as of July 1, 2017 | | | 765,174,900 | | | | | | $ | 765,175 | | | | | $ | 1,327,366 | | | | | $ | 9,447,755 | | | | | $ | (1,262,737) | | | | | 235,135,699 | | | | | | $ | (7,896,043) | | | | | $ | 2,381,516 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Net earnings | | | | | | | | | | | | | | | | | | | | | 1,430,766 | | | | | | | | | | | | | | | | | | | | | | | | 1,430,766 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Reclass of accumulated other comprehensive loss to retained earnings (1) | | | | | | | | | | | | | | | | | | | | | 236,445 | | | | | | (236,445) | | | | | | | | | | | | | | | | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Treasury stock purchases | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 17,473,973 | | | | | | (956,502) | | | | | | (956,502) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Share-based compensation awards | | | | | | | | | | | | | | | 56,253 | | | | | | | | | | | | | | | | | | (8,076,424) | | | | | | 271,349 | | | | | | 327,602 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Increase in ownership interest in subsidiaries | | | | | | | | | | | | | | | (54,877) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | (54,877) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

(1)Deferred taxes stranded in accumulated other comprehensive income (AOCI) as a result of the Tax Cuts and Jobs Act of 2017 (the Tax Act) were reclassified to retained earnings as a result of early adopting Accounting Standards Update (ASU) 2018-02.

Sysco evaluates the collectability of accounts receivable and determines the appropriate reserve for doubtful accounts based on a combination of factors.

The company utilizes specific criteria to determine uncollectible receivables to be written off including whether a customer has filed for or been placed in bankruptcy, has had accounts referred to outside parties for collection or has had accounts past due over specified periods.

In these instances, a specific allowance for doubtful accounts is recorded to reduce the receivable to the net amount reasonably expected to be collected.

In the third quarter of fiscal 2020, the company recorded impairments to goodwill for the Pacific Star and Cake reporting units of $34.9 million and $34.2 million, respectively, which represented the full balance of goodwill for those reporting units.

During the fourth quarter of fiscal 2020, the company recorded partial impairments to goodwill for the France Group and Fresh Direct reporting units of $108.7 million and $25.4 million respectively, for total fiscal 2020 impairment charges of $203.2 million, which are included within operating expenses in the consolidated results of operations.

In the fourth quarter fiscal 2020 annual assessment, impairment charges would have been applicable for two reporting units if our estimates of fair value were decreased by ranges of 17% to 29%, with goodwill of $369.5 million in the aggregate as of June 27, 2020, recorded for these reporting units.

On July 1, 2018, Sysco adopted Accounting Standards Codification (ASC) Topic 606 with no significant impact to its financial position or results of operations, using the modified retrospective method.

There were no contracts which were not completed as of July 1, 2018.

Results for reporting periods beginning after July 1, 2018 are presented under ASC Topic 606, while prior period amounts have not been restated and continue to be reported in accordance with our historic accounting under ASC Topic 605, Revenue Recognition.

Sysco had no adjustment to opening retained earnings as of July 1, 2018 as a result of adopting ASC Topic 606.

There was no material impact on revenues for fiscal 2020 or fiscal 2019 as a result of applying ASC Topic 606.

Sysco’s customer receivables will generally be collected in less than 30 days in accordance with the underlying payment terms.

Reclassifications

Prior year amounts have been reclassified to conform with the current year presentation.

*Guarantor Reporting*

In March 2020, the SEC issued a final rule, *Financial Disclosures About Guarantors and Issuers of Guaranteed Securities and Affiliates Whose Securities Collateralize a Registrant’s Securities*, that simplifies the disclosure requirements related to registered securities under Rule 3-10 of Regulation S-X.

The rule replaces the requirement to provide condensed consolidating financial information with a requirement to present summarized financial information of the issuers and guarantors.

It also requires qualitative disclosures with respect to information about guarantors, the terms and conditions of guarantees and the factors that may affect payment.

These disclosures may be provided outside the footnotes to the company’s consolidated financial statements.

Sysco early adopted the reporting requirements of the rule in the fourth quarter of fiscal 2020 and elected to provide these disclosures in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

*Leases*

In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-02, *Leases (Topic 842)*, specifying the accounting for leases, which supersedes the leases requirements in Topic 840, Leases.

The objective of Topic 842 is to establish the principles that lessees and lessors shall apply to report useful information to users of financial statements about the amount and timing of cash flows arising from a lease.

Sysco’s management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of [removed: June 27, 2020.][added: July 3, 2021.]

Based on the evaluation of our disclosure controls and procedures as of [removed: June 27, 2020,] [added: July 3, 2021,] our chief executive officer and chief financial officer concluded that, as of such date, Sysco’s disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fourth quarter ended [removed: June 27, 2020,] [added: July 3, 2021,] that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

On and effective August 27, 2021, the Company’s Board of Directors (the “Board”), upon the recommendation of the Corporate Governance and Nominating Committee of the Board, approved and adopted an amendment (the “Amendment”) to Article IX – “Exclusive Forum” of the amended and restated the By-Laws of the Company (the “By-Laws”) to provide that, unless the Company consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or the federal district court for the District of Delaware, if the Court of Chancery lacks jurisdiction) will, to the fullest extent permitted by law, be the sole and exclusive forum for:

- any derivative action or proceeding brought on behalf of the Company;

- any action asserting a claim of breach of a fiduciary duty owed by any director or officer or other employee of the Company to the Company (or the stockholders thereof);

- any action asserting a claim against the Company or any director or officer or other employee of the Company arising pursuant to any provision of the General Corporation Law or the Company’s certificate of incorporation or bylaws (as either may be amended from time to time); or

- any action asserting a claim against the Company (or any director or officer or other employee thereof) governed by the internal affairs doctrine.

This exclusive forum provision, as amended by the Amendment, does not apply to any claim (A) as to which such court determines that there is an indispensable party not subject to the jurisdiction of such court (and the indispensable party does not consent to the personal jurisdiction of such court within ten days following such determination), (B) which is vested in the exclusive jurisdiction of a court or forum other than such court, or (C) for which such court does not have subject matter jurisdiction.

The foregoing summary of the Amendment is qualified in its entirety by reference to the full text of the By-Laws, as amended and restated and filed as Exhibit 3.4 to this Annual Report on Form 10-K and incorporated by reference herein.

None.

PART III

Not applicable.

PART III

The information required by this item will be included in our proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the following captions, and is incorporated herein by reference thereto: “Corporate Governance,” “Executive Officers,” “Delinquent Section 16(a) Reports,” “Report of the Audit Committee” and “Board of Directors Matters.”

The information required by this item will be included in our proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the following captions, and is incorporated herein by reference thereto: “Compensation Discussion and Analysis,” “Report of the Compensation and Leadership Development Committee,” “Director Compensation” and “Executive Compensation.”

The information required by this item will be included in our proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the following captions, and is incorporated herein by reference thereto: “Stock Ownership” and “Equity Compensation Plan Information.”

The information required by this item will be included in our proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the following caption, and is incorporated herein by reference thereto: “Corporate Governance – Certain Relationships and Related Person Transactions” and “Corporate Governance – Director Independence.”

The information required by this item will be included in our proxy statement for the [removed: 2020] [added: 2021] Annual Meeting of Stockholders under the following caption, and is incorporated herein by reference thereto: “Fees Paid to Independent Registered Public Accounting Firm.”

| [removed: 3.4] [added: 10.61†] | | | [removed: —] | | | [removed: [Amended and Restated Bylaws] [added: [Letter Agreement, dated as] of [added: January 10, 2020, by and between Kevin P. Hourican and] Sysco [removed: Corporation dated August 26, 2016,] [added: Corporation,] incorporated by reference to Exhibit [removed: 3.2] [added: 10.1] to the Form 8-K filed on [removed: August 31, 2016] [added: January 16, 2020] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312516698456/d249013dex32.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000119312520009092/d873182dex101.htm)] | | |

| 4.5# | | | — | | | [Description of Sysco Corporation [removed: Securities.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit45descriptionof.htm)] [added: Securities.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit45descriptionofsysc.htm)] | | |

| 10.3 | | | — | | | [removed: [Credit Agreement] [added: [Amendment No. 2] dated as of May 20, [removed: 2020,] [added: 2021 to Credit Agreement dated as of June 28, 2019,] among Sysco Corporation, [added: Sysco Canada, Inc., Sysco EU II S.à r.l.,] the subsidiary guarantors party thereto, [removed: Bank of America,] [added: JP Morgan Chase Bank,] N.A., as administrative agent, [removed: Deutsche Bank Securities, Inc., Goldman Sachs Bank (USA), The Toronto-Dominion Bank, New York Branch,] and [removed: Wells Fargo Bank, National Association, as syndication agents, and BofA Securities, Inc., Deutsche Bank Securities, Inc., Goldman Sachs Bank (USA), TD Securities (USA) LLC, and Wells Fargo Bank, National Association, as joint bookrunners and lead arrangers, and] the lenders party thereto, incorporated by reference to Exhibit 10.1 to the Form 8-K filed on May 22, [removed: 2020] [added: 2021] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312520150235/d932803dex101.htm)] [added: 1-6544).](http://www.sec.gov/ix?doc=/Archives/edgar/data/0000096021/000119312521167888/d186537d8k.htm)] | | |

| 10.38† | | | — | | | [Form of Stock Option Grant Agreement (Fiscal Year 2019) for executive officers under the Sysco Corporation 2013 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.3 to the Form 10-Q for the quarter ended September 29, 2018 filed on November 6, 2018 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602118000178/exhibit103stockoptionagree.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602118000178/exhibit103stockoptionagree.htm)] | | |

| 10.39† | | | — | | | [Form of Performance Share Unit Grant Agreement (Fiscal Year [removed: 2018)] [added: 2019)] for executive officers under the Sysco Corporation 2013 Long-Term Incentive Plan, incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended September [removed: 30, 2017] [added: 29, 2018] filed on November [removed: 9, 2017] [added: 6, 2018] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602117000170/exhibit102psuagreement-q12.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602118000178/exhibit102psuawardagreemen.htm)] | | |

| [removed: 10.40†] [added: 10.45†] | | | — | | | [Form of Performance Share Unit Grant Agreement (Fiscal Year [removed: 2019)] [added: 2021)] for executive officers under the Sysco Corporation [removed: 2013 Long-Term] [added: 2018 Omnibus] Incentive [removed: Plan,] [added: Plan ,] incorporated by reference to Exhibit [removed: 10.2] [added: 10.4] to the Form 10-Q for the quarter ended September [removed: 29, 2018] [added: 26, 2020] filed on November [removed: 6, 2018] [added: 4, 2020] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602118000178/exhibit102psuawardagreemen.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit104-psuawardagr.htm)] | | |

| [removed: 10.41†] [added: 10.47†] | | | — | | | [Form of [removed: Sysco Protective Covenants Agreement, adopted August 25, 2016, issued to executive officers in connection with a Performance Share] [added: Restricted Stock] Unit Grant Agreement [added: (Fiscal Year 2021) for executive officers] under the [removed: 2013 Long-Term] [added: Sysco Corporation 2018 Omnibus] Incentive Plan, incorporated by [removed: reference to] [added: reference](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit103-rsuagreemen.htm) [](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit103-rsuagreemen.htm)[to] Exhibit [removed: 10.4] [added: 10.3] to the Form 10-Q for the quarter ended [removed: October 1, 2016] [added: September 26, 2020] filed on November [removed: 7, 2016] [added: 4, 2020] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602116000318/exhibit104-protectivecoven.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit103-rsuagreemen.htm)] | | |

| [removed: 10.42†] [added: 10.41†] | | | — | | | [Sysco Corporation [removed: Fiscal 2020 Management] [added: Short-Term] Incentive Program [removed: (MIP)] For Corporate [removed: MIP Bonus-eligible Positions] [added: SIP Bonus-Eligible Participants (Fiscal 2021)] adopted effective [removed: August 19, 2019,] [added: July 31, 2020,] incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended September [removed: 28, 2019] [added: 26, 2020] filed on November [removed: 5, 2019] [added: 4, 2020] (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602119000126/exhibit101mipprogram-q.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit101-fy2021incen.htm)] | | |

| [removed: 10.43†] [added: 10.40†] | | | — | | | [Sysco Corporation 2018 Omnibus Incentive Plan, incorporated by reference to Appendix II to the Sysco Corporation Proxy Statement filed October 5, 2018 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000130817918000271/lsyy2018_def14a.htm#lsyya065) | | |

| [removed: 10.45†] [added: 10.42†] | | | — | | | [Form of [removed: Performance Share Unit] [added: Stock Option] Grant Agreement (Fiscal Year 2020) for executive officers under the Sysco Corporation 2018 Omnibus Incentive [removed: Plan ,] [added: Plan,] incorporated by reference to Exhibit [removed: 10.42] [added: 10.41] to the Form 10-K for the fiscal year ended June 29, 2019 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602119000093/exhibit1042psuawardagr.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602119000093/exhibit1041stockoption.htm)] | | |

| [removed: 10.46†] [added: 10.49†] | | | — | | | [Form of Restricted Stock Award Agreement for Directors pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended December [removed: 29, 2018] [added: 26, 2020] filed on February [removed: 5, 2019.](http://www.sec.gov/Archives/edgar/data/96021/000009602119000008/exhibit102rsagrmtnondeferr.htm)] [added: 3, 2021.](http://www.sec.gov/Archives/edgar/data/0000096021/000009602121000018/exhibit102-rsagrmtnondefer.htm)] | | |

| [removed: 10.47†] [added: 10.50†] | | | — | | | [Form of Restricted Stock Award Agreement for Directors pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan (for directors who elect to defer receipt of shares under the 2009 Board of Directors Stock Deferral Plan), incorporated by reference to Exhibit 10.3 to the Form 10-Q for the quarter ended December [removed: 29, 2018] [added: 26, 2020] filed on February [removed: 5, 2019.](http://www.sec.gov/Archives/edgar/data/96021/000009602119000008/exhibit103rsagrmtdeferral-.htm)] [added: 3, 2021.](http://www.sec.gov/Archives/edgar/data/0000096021/000009602121000018/exhibit103rsagmt-deferralq.htm)] | | |

| [removed: 10.48†] [added: 10.51†] | | | — | | | [Description of Sysco Corporation’s Executive Relocation Expense Reimbursement Policy, incorporated by reference to Exhibit 10.3 to the Form 10-Q for the quarter ended January 1, 2011 filed on February 8, 2011 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012311010023/h79397exv10w3.htm) | | |

| [removed: 10.49†] [added: 10.52†] | | | — | | | [Sysco Corporation Non-Employee Directors Stock Election Policy, incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended March 30, 2019 filed on May 7, 2019 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000009602119000041/exhibit101nedirstockel.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602119000041/exhibit101nedirstockel.htm)] | | |

| [removed: 10.50†] [added: 10.53†] | | | — | | | [2009 Non-Employee Directors Stock Plan, incorporated by reference to Annex A to the Sysco Corporation Proxy Statement filed October 8, 2009 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012309049106/h67946ddef14a.htm#120) | | |

| [removed: 10.51†] [added: 10.54†] | | | — | | | [Form of Restricted Stock Grant Agreement under the 2009 Non-Employee Directors Stock Plan for those individuals who elected to defer receipt of shares under the 2009 Board of Directors Stock Deferral Plan, incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended April 2, 2011 filed on May 10, 2011(File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012311047995/h81971exv10w2.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000095012311047995/h81971exv10w2.htm)] | | |

| [removed: 10.52†] [added: 10.55†] | | | — | | | [Second Amended and Restated Sysco Corporation 2005 Board of Directors Deferred Compensation Plan, incorporated by reference to Exhibit 10.59 to the Form 10-K for the year ended June 28, 2008 filed on August 26, 2008 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012908004642/h59840exv10w59.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000095012908004642/h59840exv10w59.htm)] | | |

| [removed: 10.53†] [added: 10.56†] | | | — | | | [First Amendment to the Second Amended and Restated Sysco Corporation 2005 Board of Directors Deferred Compensation Plan, incorporated by reference to Exhibit 10.3 to the Form 10-Q for the quarter ended March 31, 2012 filed on May 8, 2012 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312512216752/d342468dex103.htm) | | |

| [removed: 10.54†] [added: 10.57†] | | | — | | | [2009 Board of Directors Stock Deferral Plan, incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended December 26, 2009 filed on February 2, 2010 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012310007509/h69464exv10w1.htm) | | |

| [removed: 10.56†] [added: 10.59†] | | | [removed: —] | | | [Form of Indemnification Agreement with Non-Employee Directors, incorporated by reference to Exhibit 10.61 to the Form 10-K for the year ended July 28, 2008 filed on August 26, 2008 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000095012908004642/h59840exv10w61.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000095012908004642/h59840exv10w61.htm)] | | |

| [removed: 10.57] [added: 10.60†] | | | [removed: —] | | | [Form of Severance Letter Agreement for Executive Vice Presidents, incorporated by reference to Exhibit 10.1 to the Form 8-K filed on July 17, 2020 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312520194789/d947771dex101.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000119312520194789/d947771dex101.htm)] | | |

| [removed: 10.58] [added: 10.48†] | | | — | | | [Form of Sysco Protective Covenants Agreement, incorporated by reference to Exhibit 10.2 to the Form 8-K filed on July 17, 2020 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312520194789/d947771dex102.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000119312520194789/d947771dex102.htm)] | | |

| 10.62† | | | — | | | [removed: [Letter] [added: [Separation] Agreement, dated as of January [removed: 10,] [added: 12,] 2020, by and between [removed: Kevin P. Hourican] [added: Thomas L. Bené] and Sysco Corporation, incorporated by reference to Exhibit [removed: 10.1] [added: 10.2] to the Form 8-K filed on January 16, 2020 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312520009092/d873182dex101.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000119312520009092/d873182dex102.htm)] | | |

| 10.63† | | | — | | | [removed: [Separation] [added: [Letter] Agreement, dated as of [removed: January 12,] [added: February 28,] 2020, by and between [removed: Thomas L. Bené] [added: Cathy Marie Robinson] and Sysco Corporation, incorporated by reference to Exhibit [removed: 10.2] [added: 10.7] to the Form [removed: 8-K] [added: 10-Q for the quarter ended September 26, 2020] filed on [removed: January 16,] [added: November 4,] 2020 (File No. [removed: 1-6544).](http://www.sec.gov/Archives/edgar/data/96021/000119312520009092/d873182dex102.htm)] [added: 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit107-robinsonoff.htm)] | | |

| 21.1# | | | — | | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit211subsidiaries.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit211subsidiariesofth.htm)] | | |

| 22.1# | | | — | | | [Subsidiary Guarantors and Issuers of Guaranteed [removed: Securitie](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit221subsidiaries.htm)[s.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit221subsidiaries.htm)] [added: Securities.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit221subsidiariesguar.htm)] | | |

| 23.1# | | | — | | | [Consent of Independent Registered Public Accounting [removed: Firm.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit231eyconsent-q4.htm)] [added: Firm.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit231eyconsent-q42021.htm)] | | |

| 31.1# | | | — | | | [CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit311ceocertsec30.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit311ceocertsec302-q4.htm)] | | |

| 31.2# | | | — | | | [CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit312cfocertsec30.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit312cfocertsec302-q4.htm)] | | |

| 32.1# | | | — | | | [CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit321ceocertsec90.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit321ceocertsec906-q4.htm)] | | |

| 32.2# | | | — | | | [CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit322cfocertsec90.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit322cfocertsec906-q4.htm)] | | |

| 3.4# | | | — | | | [Amended and Restated Bylaws of Sysco Corporation dated August 27, 2021.](https://www.sec.gov/Archives/edgar/data/96021/000009602121000093/exhibit34amendedandrestate.htm) | | |

| 10.43† | | | — | | | [Form of Stock Option Grant Agreement (Fiscal Year 2021) for executive officers under the Sysco Corporation 2018 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.2 to the Form 10-Q for the quarter ended September 26, 2020 filed on November 4, 2020 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit102-stockoption.htm) | | |

| 10.46† | | | — | | | [Performance Share Unit Grant Agreement for Kevin P. Hourican (Replacement PSU Award) dated June 23, 2021.](http://www.sec.gov/ix?doc=/Archives/edgar/data/0000096021/000119312521203381/d194967d8k.htm) | | |

| 10.58† | | | — | | | [Description of Compensation Arrangements with Non-Employee Directors, incorporated by reference to Exhibit 10.4 to the Form 10-Q for the quarter ended December 26, 2020 filed on February 3, 2021 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602121000018/exhibit104summaryofcomparr.htm) | | |

| 10.64† | | | | | | [Letter Agreement, dated as of October 21, 2019, by and between Michael P. Foster and Sysco Corporation, incorporated by reference to Exhibit 10.6 to the Form 10-Q for the quarter ended September 26, 2020 filed on November 4, 2020 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602120000122/exhibit106-michaelfost.htm) | | |

| 10.65† | | | | | | [Letter Agreement, dated as of November 12, 2020, by and between Aaron E. Alt and Sysco Corporation, incorporated by reference to Exhibit 10.1 to the Form 10-Q for the quarter ended December 26, 2020 filed on February 3, 2021 (File No. 1-6544).](http://www.sec.gov/Archives/edgar/data/0000096021/000009602121000018/exhibit101-altofferletter.htm) | | |

| | | | | | | | | |

| 10.55†# | | | — | | | [Description of Compensation Arrangements with Non-Employee Directors.](https://www.sec.gov/Archives/edgar/data/96021/000009602120000100/exhibit1055-summaryofc.htm) | | |

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Sysco Corporation has duly caused this Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, on this [removed: 25th] [added: 27th] day of August [removed: 2020.][added: 2021.]

| /s/ [removed: JOEL T. GRADE] [added: AARON E. ALT] | | | Executive Vice President and Chief Financial Officer | | |

| [removed: Joel T. Grade] [added: Aaron E. Alt] | | | (principal financial officer) | | |

| /s/ [removed: DANIEL J. BRUTTO] [added: JOHN M. CASSADAY] | | | /s/ HANS-JOACHIM KOERBER | | |

| [removed: Daniel J. Brutto] [added: John M. Cassaday] | | | Hans-Joachim Koerber | | |

| /s/ [removed: KEVIN P. HOURICAN] [added: DANIEL J. BRUTTO] | | | [added: /s/ KEVIN P. HOURICAN] | | |

| [removed: Kevin P. Hourican] [added: Daniel J. Brutto] | | | [added: Kevin P. Hourican] | | |

| /s/ LARRY C. GLASSCOCK | | | /s/ STEPHANIE A. LUNDQUIST | | |

| Larry C. Glasscock | | | Stephanie A. Lundquist | | |

| | | | | | |

| /s/ JOHN M. CASSADAY | | | /s/ STEPHANIE A. LUNDQUIST | | |

| John M. Cassaday | | | Stephanie A. Lundquist | | |

| /s/ JOSHUA D. FRANK | | | /s/ NANCY S. NEWCOMB | | |

| Joshua D. Frank | | | Nancy S. Newcomb | | |

| /s/ LARRY C. GLASSCOCK | | | /s/ NELSON PELTZ | | |

| Larry C. Glasscock | | | Nelson Peltz | | |