UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

________________

FORM 10-Q


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

For the quarterly period ended December ~~31, 2022~~30, 2023


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

Commission File Number: 1-6544

________________

Sysco Corporation

(Exact name of registrant as specified in its charter)


Delaware						74-1648137
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

1390 Enclave Parkway, Houston, Texas 77077-2099

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code:

(281) 584-1390

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, $1.00 Par Value

SYY

~~New York Stock Exchange~~

~~1.25% Notes due June 2023~~

~~SYY 23~~

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes þ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ

~~507,604,019~~497,829,748 shares of common stock were outstanding as of January ~~13, 2023.~~12, 2024.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED BALANCE SHEETS

(In thousands, except for share data)

Dec. 31, 2022

Jul. 2, 2022

(unaudited)

ASSETS

Current assets

Cash and cash equivalents

500,340

867,086

Accounts receivable, less allowances of $84,646 and $70,790

4,907,836

4,838,912

Cash and cash equivalents

Accounts receivable, less allowances of $79,179 and $45,599

Inventories

4,661,516

4,437,498

Prepaid expenses and other current assets

300,513

303,789

Prepaid expenses and other current assets

Income tax receivable

25,801

35,934

Total current assets

10,396,006

10,483,219

Total current assets

Plant and equipment at cost, less accumulated depreciation

4,562,435

4,456,420

Other long-term assets

Goodwill

4,576,898

4,542,315

Goodwill

Intangibles, less amortization

911,196

952,683

Deferred income taxes

435,183

377,604

Deferred income taxes

Operating lease right-of-use assets, net

708,535

723,297

Other assets

496,978

550,150

Other assets

Total other long-term assets

7,128,790

7,146,049

Total assets

22,087,231

22,085,688

Total assets

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities

Accounts payable

5,420,422

5,752,958

Accounts payable

Accrued expenses

2,128,945

2,270,753

Accrued income taxes

33,017

40,042

Accrued income taxes

Current operating lease liabilities

104,070

105,690

Current maturities of long-term debt

702,067

580,611

Current maturities of long-term debt

Total current liabilities

8,388,521

8,750,054

Long-term liabilities

Long-term debt

10,349,913

10,066,931

Deferred income taxes

232,444

250,171

Deferred income taxes

Long-term operating lease liabilities

633,824

636,417

Other long-term liabilities

1,012,634

967,907

Other long-term liabilities

Total long-term liabilities

12,228,815

11,921,426

Noncontrolling interest

33,306

31,948

Noncontrolling interest

Shareholders’ equity

Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none

—

Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none

Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares

765,175

Paid-in capital

1,774,141

1,766,305

Paid-in capital

Retained earnings

10,649,338

10,539,722

Accumulated other comprehensive loss

(1,324,788)

(1,482,054)

Treasury stock at cost, 257,846,972 and 256,531,543 shares

(10,427,277)

(10,206,888)

Accumulated other comprehensive loss

Treasury stock at cost, 261,472,819 and 260,062,834 shares

Total shareholders’ equity

1,436,589

1,382,260

Total liabilities and shareholders’ equity

22,087,231

22,085,688

Total liabilities and shareholders’ equity

Note: The July ~~2, 2022~~1, 2023 balance sheet has been derived from the audited financial statements at that date.

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)

(In thousands, except for share and per share data)


		13-Week Period Ended				26-Week Period Ended				13-Week Period Ended		26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022		Dec. 30, 2023	Dec. 31, 2022		Dec. 30, 2023	Dec. 31, 2022
Sales	Sales	$	18,593,953	$	16,320,203	$	37,720,783	$	32,776,749
Cost of sales	Cost of sales	15,244,337		13,429,053		30,882,312		26,913,891
Gross profit	Gross profit	3,349,616		2,891,150		6,838,471		5,862,858
Operating expenses	Operating expenses	2,708,974		2,446,241		5,463,496		4,786,267
Operating income	Operating income	640,642		444,909		1,374,975		1,076,591
Interest expense	Interest expense	132,042		242,899		256,192		371,113
Other expense (income), net (1)		330,124		(10,676)		345,405		(13,928)
Other expense (income), net (1) (2)
Earnings before income taxes	Earnings before income taxes	178,476		212,686		773,378		719,406
Income taxes	Income taxes	37,260		45,245		166,594		173,952
Net earnings	Net earnings	$	141,216	$	167,441	$	606,784	$	545,454

Net earnings:	Net earnings:
Net earnings:
Net earnings:
Basic earnings per share
Basic earnings per share
Basic earnings per share	Basic earnings per share	$	0.28	$	0.33	$	1.20	$	1.07
Diluted earnings per share	Diluted earnings per share	0.28		0.33		1.19		1.06

Average shares outstanding	Average shares outstanding	507,609,696		511,044,400		507,594,137		511,780,234
Average shares outstanding
Average shares outstanding
Diluted shares outstanding	Diluted shares outstanding	510,145,794		514,574,889		510,264,473		515,178,910


(1)		Gains and losses related to the disposition of fixed assets have been recognized within operating expenses. Prior year amounts have been reclassified to conform to this presentation.
~~(1)~~(2)	Sysco’s second quarter of fiscal 2023 included a charge ~~for~~of $315.4 million in other expense related to pension settlement charges. See Note 9, “Company-Sponsored Employee Benefit Plans.”

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In thousands)






		13-Week Period Ended				26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022
Net earnings	Net earnings	$	141,216	$	167,441	$	606,784	$	545,454
Net earnings
Net earnings
Other comprehensive income (loss):
Other comprehensive income (loss):
Other comprehensive income (loss):	Other comprehensive income (loss):
Foreign currency translation adjustment	Foreign currency translation adjustment	241,814		(26,870)		9,632		(114,064)
Foreign currency translation adjustment
Foreign currency translation adjustment
Items presented net of tax:
Items presented net of tax:
Items presented net of tax:	Items presented net of tax:
Amortization of cash flow hedges	Amortization of cash flow hedges	2,170		2,155		4,325		4,310
Amortization of cash flow hedges
Amortization of cash flow hedges
Change in net investment hedges
Change in net investment hedges
Change in net investment hedges	Change in net investment hedges	(33,749)		8,362		(10,240)		18,527
Change in cash flow hedges	Change in cash flow hedges	203		(6,101)		(26,187)		(6,530)
Change in cash flow hedges
Change in cash flow hedges
Changes in excluded components of fair value hedge
Changes in excluded components of fair value hedge
Changes in excluded components of fair value hedge

Reclassification adjustment for loss included in net income		22		—		22		—
Amortization of prior service cost	Amortization of prior service cost	74		74		148		148

Amortization of prior service cost

Amortization of prior service cost
Amortization of actuarial loss
Amortization of actuarial loss
Amortization of actuarial loss	Amortization of actuarial loss	5,628		5,488		12,519		11,855

Pension settlement charge	Pension settlement charge	236,591		—		236,591		—
Net actuarial loss arising in current year		(67,388)		—		(67,388)		—

Pension settlement charge

Pension settlement charge
Net actuarial (loss) gain arising in current year
Net actuarial (loss) gain arising in current year
Net actuarial (loss) gain arising in current year
Change in marketable securities	Change in marketable securities	1,172		(1,429)		(2,156)		(1,740)
Total other comprehensive income (loss)		386,537		(18,321)		157,266		(87,494)
Change in marketable securities
Change in marketable securities
Total other comprehensive income
Total other comprehensive income
Total other comprehensive income
Comprehensive income	Comprehensive income	$	527,753	$	149,120	$	764,050	$	457,960

Comprehensive income
Comprehensive income

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited)

(In thousands, except for share data)

Quarter to Date


												Accumulated Other Comprehensive Loss


																													Common Stock						Paid-in Capital		Retained Earnings			Treasury Stock
																													Shares				Amount					Shares			Amounts	Totals
Balance as of September 30, 2023
Net earnings

Foreign currency translation adjustment

Foreign currency translation adjustment

Foreign currency translation adjustment
Amortization of cash flow hedges, net of tax
Change in cash flow hedges, net of tax
Changes in excluded components of fair value hedge, net of tax
Change in net investment hedges, net of tax
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax

Change in marketable securities, net of tax

Change in marketable securities, net of tax

Change in marketable securities, net of tax

Dividends declared ($0.50 per common share)
Dividends declared ($0.50 per common share)
Dividends declared ($0.50 per common share)
Treasury stock purchases

Share-based compensation awards
Share-based compensation awards
Share-based compensation awards
Balance as of December 30, 2023

														Accumulated Other Comprehensive Loss
																Accumulated Other Comprehensive Loss
													Accumulated Other Comprehensive Loss

															Accumulated Other Comprehensive Loss
		Common Stock			Paid-in Capital				Retained Earnings									Treasury Stock										Common Stock						Paid-in Capital		Retained Earnings			Treasury Stock
		Shares	Amount								Shares							Accumulated Other Comprehensive Loss			Amounts				Totals				Shares				Amount					Shares			Amounts	Totals
Balance as of October 1, 2022	Balance as of October 1, 2022	765,174,900	$	765,175			$	1,754,409			$		10,757,136				$		(1,711,325)					$	(10,450,054)				$	1,115,341
Net earnings	Net earnings								141,216														141,216

Foreign currency translation adjustment	Foreign currency translation adjustment												241,814												241,814
Amortization of cash flow hedges, net of tax	Amortization of cash flow hedges, net of tax												2,170												2,170
Change in cash flow hedges, net of tax	Change in cash flow hedges, net of tax												203												203
Change in net investment hedges, net of tax	Change in net investment hedges, net of tax												(33,749)												(33,749)
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax	Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax												5,702												5,702
Pension settlement charge, net of tax	Pension settlement charge, net of tax												236,591												236,591
Net actuarial loss arising in current year													(67,388)												(67,388)
Net actuarial loss arising in current year, net of tax
Change in marketable securities, net of tax	Change in marketable securities, net of tax												1,194												1,194
Dividends declared ($0.49 per common share)
Increase in ownership interest in subsidiaries

Dividends declared ($0.49 per common share)									(249,014)																(249,014)

Increase in ownership interest in subsidiaries					(2,077)																				(2,077)
Share-based compensation awards
Share-based compensation awards
Share-based compensation awards	Share-based compensation awards				21,809														(568,017)				22,777					44,586
Balance as of December 31, 2022	Balance as of December 31, 2022	765,174,900	$	765,175	$	1,774,141			$	10,649,338			$	(1,324,788)				257,846,972			$	(10,427,277)			$	1,436,589

													Accumulated Other Comprehensive Loss
		Common Stock			Paid-in Capital				Retained Earnings						Treasury Stock
		Shares	Amount								Shares				Accumulated Other Comprehensive Loss				Amounts				Totals
Balance as of October 2, 2021		765,174,900	$	765,175			$	1,655,110			$							10,288,291		$	(1,217,937)						$	(9,817,347)			$	1,673,292
Net earnings									167,441																167,441
Foreign currency translation adjustment													(26,870)												(26,870)
Amortization of cash flow hedges, net of tax													2,155												2,155
Change in cash flow hedges, net of tax													(6,101)												(6,101)
Change in net investment hedges, net of tax													8,362												8,362
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax													5,562												5,562
Change in marketable securities, net of tax													(1,429)												(1,429)

Dividends declared ($0.47 per common share)									(239,107)																(239,107)
Treasury stock purchases																		5,679,298			(415,824)				(415,824)
Increase in ownership interest in subsidiaries					(304)																				(304)
Share-based compensation awards					35,681													(470,522)			18,214				53,895
Balance as of January 1, 2022		765,174,900	$	765,175	$	1,690,487			$	10,216,625			$	(1,236,258)				258,033,856			$	(10,214,957)			$	1,221,072

See Notes to Consolidated Financial Statements

Year to Date


												Accumulated Other Comprehensive Loss

														Accumulated Other Comprehensive Loss
		Common Stock			Paid-in Capital				Retained Earnings							Treasury Stock								Common Stock										Paid-in Capital		Retained Earnings		Treasury Stock
		Shares	Amount								Shares					Accumulated Other Comprehensive Loss		Amounts				Totals				Shares					Amount						Shares			Amounts		Totals
Balance as of July 2, 2022		765,174,900	$	765,175			$	1,766,305			$		10,539,722					$	(1,482,054)					$	(10,206,888)			$	1,382,260
Balance as of July 1, 2023
Net earnings	Net earnings								606,784															606,784

Foreign currency translation adjustment

Foreign currency translation adjustment

Foreign currency translation adjustment	Foreign currency translation adjustment												9,632										9,632
Amortization of cash flow hedges, net of tax	Amortization of cash flow hedges, net of tax												4,325										4,325
Change in cash flow hedges, net of tax	Change in cash flow hedges, net of tax												(26,187)										(26,187)
Change in net investment hedges, net of tax	Change in net investment hedges, net of tax												(10,240)										(10,240)
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax	Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax												12,667										12,667
Pension settlement charge, net of tax													236,591										236,591
Net actuarial loss arising in current year													(67,388)										(67,388)

Net actuarial gain arising in current year, net of tax
Net actuarial gain arising in current year, net of tax
Net actuarial gain arising in current year, net of tax
Change in marketable securities, net of tax	Change in marketable securities, net of tax												(2,134)										(2,134)
Changes in excluded components of fair value hedge, net of tax
Dividends declared ($1.00 per common share)
Treasury stock purchases

Dividends declared ($0.98 per common share)									(497,168)														(497,168)
Treasury stock purchases																	3,099,268			(267,727)			(267,727)
Increase in ownership interest in subsidiaries					(2,077)																		(2,077)
Share-based compensation awards	Share-based compensation awards				9,913												(1,783,839)			47,338			57,251
Balance as of December 31, 2022		765,174,900	$	765,175	$	1,774,141			$	10,649,338			$	(1,324,788)			257,846,972			$	(10,427,277)		$	1,436,589
Share-based compensation awards
Share-based compensation awards
Balance as of December 30, 2023

													Accumulated Other Comprehensive Loss
															Accumulated Other Comprehensive Loss
																	Accumulated Other Comprehensive Loss

													Accumulated Other Comprehensive Loss
		Common Stock			Paid-in Capital				Retained Earnings						Treasury Stock								Common Stock										Paid-in Capital		Retained Earnings		Treasury Stock
		Shares	Amount								Shares				Accumulated Other Comprehensive Loss					Amounts			Totals				Shares					Amount							Shares		Amounts		Totals
Balance as of July 3, 2021		765,174,900	$	765,175			$	1,619,995			$						10,151,706		$	(1,148,764)					$	(9,835,216)			$	1,552,896
Balance as of July 2, 2022
Net earnings	Net earnings								545,454																	545,454
Foreign currency translation adjustment	Foreign currency translation adjustment												(114,064)										(114,064)
Amortization of cash flow hedges, net of tax	Amortization of cash flow hedges, net of tax												4,310										4,310
Change in cash flow hedges, net of tax	Change in cash flow hedges, net of tax												(6,530)										(6,530)
Change in net investment hedges, net of tax	Change in net investment hedges, net of tax												18,527										18,527
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax	Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax												12,003										12,003
Pension settlement charge, net of tax
Net actuarial loss arising in current year, net of tax
Change in marketable securities, net of tax	Change in marketable securities, net of tax												(1,740)										(1,740)

Dividends declared ($0.94 per common share)									(480,535)														(480,535)
Dividends declared ($0.98 per common share)
Dividends declared ($0.98 per common share)
Dividends declared ($0.98 per common share)
Treasury stock purchases	Treasury stock purchases																5,679,298			(415,824)			(415,824)
Increase in ownership interest in subsidiaries	Increase in ownership interest in subsidiaries				(304)																		(304)
Share-based compensation awards	Share-based compensation awards				70,796												(988,037)			36,083			106,879
Balance as of January 1, 2022		765,174,900	$	765,175	$	1,690,487			$	10,216,625			$	(1,236,258)			258,033,856			$	(10,214,957)		$	1,221,072
Balance as of December 31, 2022

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

CONSOLIDATED CASH FLOWS (Unaudited)

(In thousands)


		26-Week Period Ended				26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 30, 2023	Dec. 31, 2022
Cash flows from operating activities:	Cash flows from operating activities:
Net earnings	Net earnings	$	606,784	$	545,454
Net earnings
Net earnings
Adjustments to reconcile net earnings to cash provided by operating activities:	Adjustments to reconcile net earnings to cash provided by operating activities:
Pension settlement charge
Pension settlement charge
Pension settlement charge	Pension settlement charge	315,354		—
Share-based compensation expense	Share-based compensation expense	52,679		60,254
Depreciation and amortization	Depreciation and amortization	378,949		377,763
Operating lease asset amortization	Operating lease asset amortization	55,884		54,856
Amortization of debt issuance and other debt-related costs	Amortization of debt issuance and other debt-related costs	10,315		11,014

Deferred income taxes	Deferred income taxes	(123,187)		(72,892)
Deferred income taxes
Deferred income taxes
Provision for losses on receivables	Provision for losses on receivables	9,732		1,508
Loss on extinguishment of debt		—		115,603

Other non-cash items

Other non-cash items

Other non-cash items	Other non-cash items	11,525		1,103
Additional changes in certain assets and liabilities, net of effect of businesses acquired:	Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables	Increase in receivables	(87,190)		(385,179)
Increase in receivables
Increase in receivables
Increase in inventories	Increase in inventories	(222,650)		(357,908)
Increase in prepaid expenses and other current assets		(8,915)		(12,560)
(Decrease) increase in accounts payable		(390,124)		83,214
(Decrease) increase in accrued expenses		(62,779)		95,388
Decrease (increase) in prepaid expenses and other current assets
Decrease in accounts payable
Increase (decrease) in accrued expenses
Decrease in operating lease liabilities	Decrease in operating lease liabilities	(57,234)		(65,123)
Increase (decrease) in accrued income taxes		3,108		(111,227)
Decrease (increase) in other assets		22,156		(4,255)
(Decrease) increase in other long-term liabilities		(10,941)		40,034
(Decrease) increase in accrued income taxes
Decrease in other assets
Decrease in other long-term liabilities

Net cash provided by operating activities	Net cash provided by operating activities	503,466		377,047
Net cash provided by operating activities
Net cash provided by operating activities
Cash flows from investing activities:	Cash flows from investing activities:
Additions to plant and equipment
Additions to plant and equipment
Additions to plant and equipment	Additions to plant and equipment	(309,664)		(181,374)
Proceeds from sales of plant and equipment	Proceeds from sales of plant and equipment	25,493		5,450
Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	(37,699)		(769,658)
Purchase of marketable securities	Purchase of marketable securities	(14,019)		(18,539)
Proceeds from sales of marketable securities	Proceeds from sales of marketable securities	11,641		16,648
Other investing activities	Other investing activities	4,840		6,651

Net cash used for investing activities	Net cash used for investing activities	(319,408)		(940,822)
Net cash used for investing activities
Net cash used for investing activities
Cash flows from financing activities:	Cash flows from financing activities:
Bank and commercial paper borrowings, net
Bank and commercial paper borrowings, net
Bank and commercial paper borrowings, net	Bank and commercial paper borrowings, net	155,000		—
Other debt borrowings including senior notes	Other debt borrowings including senior notes	140,024		1,249,995
Other debt repayments including senior notes	Other debt repayments including senior notes	(57,270)		(23,050)
Redemption premiums and repayments for senior notes		—		(1,395,668)

Debt issuance costs

Debt issuance costs

Debt issuance costs	Debt issuance costs	—		(15,547)

Cash received from termination of interest rate swap agreements		—		23,127

Proceeds from stock option exercises	Proceeds from stock option exercises	47,339		36,083

Proceeds from stock option exercises

Proceeds from stock option exercises

Stock repurchases
Stock repurchases
Stock repurchases	Stock repurchases	(267,727)		(415,824)
Dividends paid	Dividends paid	(498,323)		(481,386)

Other financing activities	Other financing activities	(46,517)		(5,297)
Net cash used for financing activities		(527,474)		(1,027,567)
Other financing activities
Other financing activities
Net cash provided by (used for) financing activities
Effect of exchange rates on cash, cash equivalents and restricted cash	Effect of exchange rates on cash, cash equivalents and restricted cash	(2,314)		(10,868)
Net decrease in cash, cash equivalents and restricted cash		(345,730)		(1,602,210)
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	931,376		3,037,100
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	585,646	$	1,434,890
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:
Cash paid during the period for:	Cash paid during the period for:
Cash paid during the period for:
Cash paid during the period for:
Interest
Interest
Interest	Interest	$	244,530	$	258,436
Income taxes, net of refunds	Income taxes, net of refunds	289,413		342,628

See Notes to Consolidated Financial Statements

Sysco Corporation and its Consolidated Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or ~~“the company”~~the “company” as used in this Form 10-Q refer to Sysco Corporation together with its consolidated subsidiaries and divisions.

1. BASIS OF PRESENTATION

The consolidated financial statements have been prepared by the company, without an audit. The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income, changes in consolidated shareholders’ equity and consolidated cash flows. In the opinion of management, all adjustments, which consist of normal recurring adjustments, except as otherwise disclosed, necessary to present fairly the financial position, results of operations, comprehensive income, cash flows and changes in shareholders’ equity for all periods presented have been made.

These financial statements should be read in conjunction with the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended July ~~2, 2022.~~1, 2023. Certain footnote disclosures included in annual financial statements prepared in accordance with generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to applicable rules and regulations for interim financial statements.

Supplemental Cash Flow Information

The following table sets forth ~~the company’s~~our reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets that sum to the total of the amounts shown in the consolidated statement of cash flows:


		Dec. 31, 2022		Jan. 1, 2022
		(In thousands)
	Dec. 30, 2023					Dec. 30, 2023		Dec. 31, 2022
	(In thousands)						(In thousands)
Cash and cash equivalents	Cash and cash equivalents	$	500,340	$	1,374,276
Restricted cash (1)	Restricted cash (1)	85,306		60,614
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows	$	585,646	$	1,434,890


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

The following table sets forth our non-cash investing and financing activities:


	Dec. 30, 2023		Dec. 31, 2022
	(In thousands)
Non-cash investing and financing activities:
Plant and equipment acquired through financing programs	$	158,454	$	52,360
Assets obtained in exchange for finance lease obligations	52,367		81,799

2. NEW ACCOUNTING STANDARDS

Recently Adopted Accounting Guidance

Liabilities – Supplier Financing Programs

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2022-04, Liabilities—Supplier Finance Programs, Subtopic 405-50, that requires entities to disclose in the annual financial statements the key terms of the supplier finance ~~programs~~program they use in connection with the purchase of goods and services, along with information about their obligations under ~~these~~such programs, including a ~~rollforward~~roll forward of those obligations. Additionally, the guidance requires disclosure of the outstanding amount of the obligations as of the end of each interim period. The guidance does not affect the recognition, measurement, or financial statement presentation of supplier finance program obligations.

The guidance is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2022, which is the first quarter of fiscal 2024 for Sysco, except for the ~~rollforward~~roll forward requirement, which is effective annually for fiscal years beginning after December 15, 2023, which is fiscal year 2025 for Sysco. Early adoption is permitted.

The guidance requires retrospective application to all periods in which a balance sheet is presented, except for the ~~rollforward~~roll forward requirement, which will be applied prospectively.

Sysco completed its assessment of the disclosures required under ASU 2022-04 and adopted the standard, with the exception of the roll forward requirement, in the first quarter of fiscal 2024 on a retrospective basis. The company ~~is currently reviewing~~has agreements with third parties to provide supplier finance programs which facilitate participating suppliers’ ability to finance payment obligations from the ~~provisions~~company with designated third-party financial institutions. Participating suppliers may, at their sole discretion, make offers to finance one or more payment obligations of the ~~new standard.~~company prior to their scheduled due dates at a discounted price to participating financial institutions. Obligations of the company that have been confirmed as valid require payment by Sysco upon the due date of the obligation.

The company’s outstanding payment obligations that suppliers financed to participating financial institutions, which are included in accounts payable on the consolidated balance sheets, are as follows:


	Dec. 30, 2023		Jul. 1, 2023		Dec. 31, 2022		Jul. 2, 2022
	(In thousands)
Financed payment obligations	$	83,528	$	99,606	$	81,018	$	90,267

Recent Accounting Guidance Not Yet Adopted

Segment Reporting

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures to improve reportable segment disclosure requirements through enhanced disclosures about significant segment expenses. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items and interim disclosures of a reportable segment’s profit or loss and assets. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, which is fiscal 2025 for Sysco, and interim periods for our fiscal years beginning after December 15, 2024, which is the first quarter of fiscal 2026 for Sysco, and should be applied on a retrospective basis to all periods presented. Early adoption is permitted. We are currently evaluating the effect of adopting ASU 2023-07 on our disclosures.

Income Taxes

In December 2023, the FASB issued 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures to enhance income tax information primarily through changes in the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, which is fiscal 2026 for Sysco, on a prospective basis. Early adoption is permitted. We are currently evaluating the effect of adopting ASU 2023-09 on our disclosures.

3. REVENUE

~~The company recognizes~~We recognize revenues when ~~its~~our performance obligations are satisfied in an amount that reflects the consideration Sysco expects to be entitled to receive in exchange for those goods and services. Customer receivables, which are included in accounts receivable, less allowances in the consolidated balance sheet, ~~was $4.6~~were $5.0 billion and $4.7 billion as of ~~both~~ December ~~31, 2022~~30, 2023 and July ~~2, 2022.~~1, 2023, respectively.

Sysco has certain customer contracts in which upfront monies are paid to its customers. These payments have become industry practice and are not related to financing of the customer’s business. They are not associated with any distinct good or service to be received from the customer and, therefore, are treated as a reduction of transaction prices. All upfront payments are capitalized in other assets and amortized over the life of the contract or the expected life of the relationship with the ~~customer.~~customer on a straight-line basis. As of December ~~31, 2022, Sysco’s~~30, 2023, our contract assets were not significant. ~~Sysco has~~We have no significant commissions paid that are directly attributable to obtaining a particular contract.

The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:


			13-Week Period Ended Dec. 31, 2022
			US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
			(In thousands)
		13-Week Period Ended Dec. 30, 2023														13-Week Period Ended Dec. 30, 2023
		US Foodservice Operations											US Foodservice Operations	International Foodservice Operations	SYGMA		Other	Total
		(In thousands)														(In thousands)
Principal Product Categories	Principal Product Categories
Canned and dry products
Canned and dry products
Canned and dry products	Canned and dry products		$	2,502,665	$	700,622	$	236,726	$	—	$	3,440,013
Fresh and frozen meats	Fresh and frozen meats		2,390,929		445,018		452,370		—		3,288,317
Frozen fruits, vegetables, bakery and other	Frozen fruits, vegetables, bakery and other		1,851,344		596,100		338,379		—		2,785,823
Dairy products	Dairy products		1,498,039		358,639		160,753		—		2,017,431
Poultry	Poultry		1,329,071		285,343		265,269		—		1,879,683
Fresh produce	Fresh produce		1,385,083		257,641		66,099		—		1,708,823
Paper and disposables	Paper and disposables		976,231		134,507		210,691		13,484		1,334,913
Seafood	Seafood		547,760		109,290		37,810		—		694,860
Beverage products	Beverage products		303,789		133,515		136,668		21,318		595,290

Other (1)	Other (1)		292,143		261,736		28,771		266,150		848,800

Other (1)

Other (1)
Total Sales	Total Sales		$	13,077,054	$	3,282,411	$	1,933,536	$	300,952	$	18,593,953


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

13-Week Period Ended Jan. 1, 2022
US Foodservice Operations International Foodservice Operations SYGMA Other Total
(In thousands)
Principal Product Categories
Fresh and frozen meats $ 2,403,763 $ 396,232 $ 513,138 $ — $ 3,313,133
Canned and dry products 2,087,808 560,623 155,615 30 2,804,076
Frozen fruits, vegetables, bakery and other 1,508,462 518,271 292,185 — 2,318,918
Poultry 1,351,188 240,755 223,348 — 1,815,291
Dairy products 1,114,145 289,380 139,735 — 1,543,260
Fresh produce 1,037,683 214,823 64,048 — 1,316,554
Paper and disposables 894,553 114,634 193,010 12,792 1,214,989
Seafood 585,713 110,337 33,980 — 730,030
Beverage products 246,365 107,156 131,517 18,827 503,865
Other (1)
268,475 254,061 24,747 212,804 760,087
Total Sales $ 11,498,155 $ 2,806,272 $ 1,771,323 $ 244,453 $ 16,320,203


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

26-Week Period Ended Dec. 31, 2022
US Foodservice Operations International Foodservice Operations SYGMA Other Total
(In thousands)
Principal Product Categories
Canned and dry products $ 5,079,917 $ 1,391,996 $ 472,894 $ 1,931 $ 6,946,738
Fresh and frozen meats 4,856,379 898,382 915,810 — 6,670,571
Frozen fruits, vegetables, bakery and other 3,694,811 1,176,132 647,576 149 5,518,668
Dairy products 3,023,521 725,486 325,401 — 4,074,408
Poultry 2,903,321 578,193 542,733 — 4,024,247
Fresh produce 2,723,003 512,378 131,343 — 3,366,724
Paper and disposables 1,999,135 278,574 420,049 28,541 2,726,299
Seafood 1,186,165 230,491 77,934 — 1,494,590
Beverage products 619,407 269,991 274,835 45,974 1,210,207
Other (1)
593,877 504,523 58,418 531,513 1,688,331
Total Sales $ 26,679,536 $ 6,566,146 $ 3,866,993 $ 608,108 $ 37,720,783


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


		13-Week Period Ended Dec. 31, 2022														13-Week Period Ended Dec. 31, 2022
		US Foodservice Operations											US Foodservice Operations	International Foodservice Operations	SYGMA		Other	Total
		(In thousands)														(In thousands)
Principal Product Categories
Canned and dry products
Canned and dry products
Canned and dry products
Fresh and frozen meats
Frozen fruits, vegetables, bakery and other
Dairy products
Poultry

Fresh produce
Fresh produce
Fresh produce
Paper and disposables

			26-Week Period Ended Jan. 1, 2022
Seafood
			US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
Seafood
			(In thousands)
Principal Product Categories
Fresh and frozen meats			$	4,848,224	$	813,403	$	987,794	$	—	$	6,649,421
Canned and dry products			4,164,582		1,142,518		293,212		30		5,600,342
Frozen fruits, vegetables, bakery and other			3,009,755		1,036,526		565,332		—		4,611,613
Poultry			2,702,388		481,956		452,706		—		3,637,050
Dairy products			2,215,569		594,492		279,959		—		3,090,020
Fresh produce			2,024,685		433,786		130,611		—		2,589,082
Paper and disposables			1,805,903		234,374		381,253		28,291		2,449,821
Seafood	Seafood		1,278,726		231,802		67,204		—		1,577,732
Beverage products	Beverage products		502,750		224,377		269,032		40,916		1,037,075

Other (1)	Other (1)		548,536		508,285		48,253		429,519		1,534,593

Other (1)

Other (1)
Total Sales	Total Sales		$	23,101,118	$	5,701,519	$	3,475,356	$	498,756	$	32,776,749


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


	26-Week Period Ended Dec. 30, 2023
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Canned and dry products	$	5,285,985	$	1,632,713	$	461,617	$	—	$	7,380,315
Fresh and frozen meats	5,143,634		1,023,128		984,691		—		7,151,453
Frozen fruits, vegetables, bakery and other	4,024,601		1,355,575		621,077		—		6,001,253
Dairy products	2,902,553		802,572		282,568		—		3,987,693
Poultry	2,701,790		576,635		535,008		—		3,813,433

Fresh produce	2,669,938		540,135		136,209		—		3,346,282
Paper and disposables	1,965,326		304,206		374,618		30,380		2,674,530
Seafood	1,085,593		235,145		87,572		—		1,408,310

Beverage products	698,413		334,921		285,359		45,196		1,363,889
Other (1)	740,409		474,638		51,010		515,181		1,781,238

Total Sales	$	27,218,242	$	7,279,668	$	3,819,729	$	590,757	$	38,908,396


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


	26-Week Period Ended Dec. 31, 2022
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Canned and dry products	$	5,079,917	$	1,391,996	$	472,894	$	1,931	$	6,946,738
Fresh and frozen meats	4,856,379		898,382		915,810		—		6,670,571
Frozen fruits, vegetables, bakery and other	3,694,811		1,176,132		647,576		149		5,518,668
Dairy products	3,023,521		725,486		325,401		—		4,074,408
Poultry	2,903,321		578,193		542,733		—		4,024,247

Fresh produce	2,723,003		512,378		131,343		—		3,366,724
Paper and disposables	1,999,135		278,574		420,049		28,541		2,726,299
Seafood	1,186,165		230,491		77,934		—		1,494,590
Beverage products	619,407		269,991		274,835		45,974		1,210,207



Other (1)	593,877		504,523		58,418		531,513		1,688,331
Total Sales	$	26,679,536	$	6,566,146	$	3,866,993	$	608,108	$	37,720,783


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

4. ACQUISITIONS

During the first 26 weeks of fiscal ~~2023, the company~~2024, we paid cash of ~~$37.7 million~~$1.2 billion for several acquisitions. Certain acquisitions involve contingent consideration that may include earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of December 31, 2022, aggregate contingent consideration outstanding was $62.7 million, of which $59.2 million was recorded as earnout liabilities. Earnout liabilities are all measured using unobservable inputs that are considered a Level 3 fair value measurement.

~~Greco and Sons~~Edward Don & Company

On ~~August 12, 2021,~~November 27, 2023, Sysco consummated its acquisition of ~~Greco~~Edward Don & Company (Edward Don or the acquiree) through a merger between Edward Don and ~~Sons (Greco),~~a wholly owned subsidiary of Sysco Corporation, in which Sysco acquired 100% of the members’ equity of the acquiree for cash consideration of $969.4 million. Edward Don is a leading ~~independent Italian specialty~~ distributor inof foodservice equipment, supplies and disposables and has a robust supply chain that is expected to enable cost effective distribution of restaurant equipment and supplies across the ~~United States, operating out of 10 distribution centers. Greco imports and distributes a full line of food and non-food products and manufactures specialty meat products.~~Sysco network. The acquisition ~~also includes Bellissimo Foods Company, which distributes~~allows Sysco to add strategic capabilities and diversified offerings to complement its existing business and create a ~~broad~~specialty equipment and supplies platform that will provide better selection ~~of Italian~~ and Mediterranean ingredients, including a proprietary branded line of products that are sold exclusively through the Bellissimo Foods Company distribution network, serving independent pizza and Italian restaurants. The purpose of the acquisition wasservice to ~~strengthen Sysco’s business within the Italian foodservice sector.~~customers.

~~During~~The assets, liabilities and operating results of Edward Don are reflected in our consolidated financial statements in accordance with ASC Topic No. 805, Business Combinations, commencing from the ~~first quarter of fiscal 2023,~~acquisition date. The purchase price was allocated based on the ~~company completed the determination of~~company’s preliminary estimated fair value of the assets acquired and liabilities assumed, ~~for the Greco acquisition. The company recorded certain measurement period adjustments during each quarter of fiscal 2022~~ and the ~~first quarter~~excess was assigned to goodwill and intangibles. Goodwill of ~~fiscal 2023, none of which were individually or in aggregate material~~$447.6 million is assigned to the ~~company’s financial statements.~~U.S. Foodservice Operations reportable segment and represents synergies and disposable, supply and foodservice equipment capabilities and offerings expected to benefit Sysco’s existing business.

10In certain circumstances, purchase price allocations may be based upon preliminary estimates and assumptions. Accordingly, allocations are subject to revision until Sysco receives final information and completes its analysis during the measurement period. This includes finalizing the valuation of acquired tangible and intangible assets and related tax attributes.

5. FAIR VALUE MEASUREMENTS

Sysco’s policy is to invest in only high-quality investments. The fair ~~value~~values of ~~the company’s~~our cash deposits and money market funds included in cash equivalents are valued using inputs that are considered a Level 1 measurement. Other cash equivalents, such as time deposits and highly liquid instruments with original maturities of three months or less, are valued using inputs that are considered a Level 2 measurement. The fair value of ~~the company’s~~our marketable securities ~~are all~~is measured using inputs that are considered a Level 2 measurement, as they rely on quoted prices in markets that are not actively traded or observable inputs over the full term of the asset. The location and the fair value of the company’s marketable securities in the consolidated balance sheet are disclosed in Note 6, “Marketable Securities.” The fair value of ~~the company’s~~our derivative instruments ~~are all~~is measured using inputs that are considered a Level 2 measurement, as they are not actively traded and are valued using pricing models that use observable market quotations. The location and the fair ~~value~~values of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 7, “Derivative Financial Instruments.”

The following tables present the company’s assets measured at fair value on a recurring basis as of December ~~31, 2022~~30, 2023 and July ~~2, 2022:~~1, 2023:


		Assets Measured at Fair Value as of Dec. 31, 2022								Assets Measured at Fair Value as of Dec. 30, 2023
		Level 1		Level 2		Level 3		Total		Level 1	Level 2	Level 3	Total
		(In thousands)								(In thousands)
Assets:	Assets:
Cash equivalents	Cash equivalents
Cash equivalents
Cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	204,815	$	5,011	$	—	$	209,826

Other assets (1)	Other assets (1)	85,306		—		—		85,306
Other assets (1)
Other assets (1)

Total assets at fair value

Total assets at fair value

Total assets at fair value	Total assets at fair value	$	290,121	$	5,011	$	—	$	295,132


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


		Assets Measured at Fair Value as of Jul. 2, 2022								Assets Measured at Fair Value as of Jul. 1, 2023
		Level 1		Level 2		Level 3		Total		Level 1	Level 2	Level 3	Total
		(In thousands)								(In thousands)
Assets:	Assets:
Cash equivalents	Cash equivalents
Cash equivalents
Cash equivalents
Cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents	Cash and cash equivalents	$	625,281	$	10,007	$	—	$	635,288

Other assets (1)	Other assets (1)	64,290		—		—		64,290

Other assets (1)

Other assets (1)

Total assets at fair value
Total assets at fair value
Total assets at fair value	Total assets at fair value	$	689,571	$	10,007	$	—	$	699,578


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

The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of ~~Sysco’s~~our total debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the company for new debt with the same maturities as existing debt, and is considered a Level 2 measurement. The fair value of total debt was approximately ~~$10.4~~$11.9 billion as of December ~~31, 2022~~30, 2023 and ~~$10.5~~$9.8 billion as of July ~~2, 2022,~~1, 2023, while the carrying value was ~~$11.1~~$12.1 billion as of December ~~31, 2022~~30, 2023 and ~~$10.6~~$10.4 billion as of July ~~2, 2022.~~1, 2023.

1113

6. MARKETABLE SECURITIES

Sysco invests a portion of the assets held by its wholly owned captive insurance subsidiary in a restricted investment portfolio of marketable fixed income securities, which have been classified and accounted for as available-for-sale. ~~The company includes~~We include fixed income securities maturing in less than 12 months within prepaid expenses and other current ~~assets and includes fixed~~assets. Fixed income securities maturing in more than 12 months are included within other assets in the accompanying consolidated balance sheets. ~~The company records~~We record the amounts at fair market value, which is determined using quoted market prices at the end of the reporting period.

Unrealized gains and any portion of a security’s unrealized loss attributable to non-credit losses are recorded in accumulated other comprehensive loss. There were no significant credit losses recognized inin the first 26 weeks of fiscal ~~2023.~~ 2024.

The following table presents ~~the company’s~~our available-for-sale marketable securities as of December ~~31, 2022~~30, 2023 and July ~~2, 2022:~~1, 2023:


		December 31, 2022
		Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
		(In thousands)
	Dec. 30, 2023																	Dec. 30, 2023
	Amortized Cost Basis													Amortized Cost Basis	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value		Short-Term Marketable Securities	Long-Term Marketable Securities
	(In thousands)																	(In thousands)
Fixed income securities:	Fixed income securities:
Corporate bonds
Corporate bonds
Corporate bonds	Corporate bonds	$	97,844	$	106	$	(7,363)	$	90,587	$	—	$	90,587
Government bonds	Government bonds	29,925		—		(1,732)		28,193		—		28,193
Total marketable securities	Total marketable securities	$	127,769	$	106	$	(9,095)	$	118,780	$	—	$	118,780

		Jul. 2, 2022
		Amortized Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Short-Term Marketable Securities		Long-Term Marketable Securities
		(In thousands)
		Jul. 1, 2023
		Jul. 1, 2023
		Jul. 1, 2023
	Amortized Cost Basis													Amortized Cost Basis	Gross Unrealized Gains	Gross Unrealized Losses	Fair Value		Short-Term Marketable Securities	Long-Term Marketable Securities
	(In thousands)																	(In thousands)
Fixed income securities:	Fixed income securities:
Corporate bonds
Corporate bonds
Corporate bonds	Corporate bonds	$	96,167	$	8	$	(5,995)	$	90,180	$	5,983	$	84,197
Government bonds	Government bonds	30,070		—		(302)		29,768		—		29,768
Total marketable securities	Total marketable securities	$	126,237	$	8	$	(6,297)	$	119,948	$	5,983	$	113,965

As of December ~~31, 2022,~~30, 2023, the balance of available-for-sale securities by contractual maturity is shown in the following table. Within the table, maturities of fixed income securities have been allocated based upon timing of estimated cash flows. Actual maturities may differ from contractual maturities because the issuers of the securities may have the right to prepay obligations without prepayment penalties.


	~~December 31, 2022~~Dec. 30, 2023
	(In thousands)
Due in one year or less	$	23,032
Due after one year through five years	$62,334		~~70,553~~
Due after five years ~~through ten years~~	~~48,227~~39,697

Total	$	~~118,780~~125,063

There ~~were~~were no significant realized gains or losses in marketable securities in the first 26 weeks of fiscal ~~2023.~~2024.

7. DERIVATIVE FINANCIAL INSTRUMENTS

Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, the company does not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate risk, foreign currency risk and fuel price risk.

1214

Hedging of interest rate risk

Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates. In the second quarter of fiscal 2024, we entered into forward swap agreements to trade the fixed interest rate on $500 million of 6.00% senior notes with variable rates, starting in November 2024. The interest rate swap agreements are designated as fair value hedges and valued based on an income approach using observable market inputs including Secured Overnight Financing Rate (SOFR) yield curves. The company has incorporated credit valuation adjustments to appropriately reflect the risk of default in the fair value measurements. Changes in the fair value of the hedge and the carrying value of the hedged item attributable to changes in the benchmark interest rates being hedged are recognized in interest expense.

Hedging of foreign currency risk

~~The company uses euro-bond denominated debt to hedge the foreign currency exposure of our net investment in certain foreign operations. Additionally,~~ Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the euro, U.S. dollar, British pound sterling, Polish zloty and Danish krone. These inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. The company enters into foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases.

Sysco has cross-currency swaps designated as fair value hedges for the purpose of hedging foreign currency risk associated with changes in spot rates on foreign denominated intercompany loans. Sysco has elected to exclude the changes in fair value of the forward points from the assessments of hedge effectiveness. Gains or losses from fair value hedges impact the same category on the consolidated statements of income as the item being hedged, including the earnings impact of the excluded components. Unrealized gains or losses on components excluded from hedge effectiveness are recorded as a component of accumulated other comprehensive income (loss) and recognized into earnings over the life of the hedged instrument. Except for the excluded components, changes in the fair value of the hedge are offset against changes in the fair value of the hedged assets or liabilities through earnings.

In the second quarter of fiscal 2024, Sysco entered into a cross-currency swap to hedge the foreign currency exposure of our net investment in certain foreign operations. This cross-currency swap is designated as a net investment hedge with gains and losses recognized within accumulated other comprehensive income (loss).

Cross-currency swaps are valued based on an income approach using observable market inputs including foreign currency rates and interest rates in both countries subject to the swap.

Hedging of fuel price risk

Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel fuel on anticipated future purchases. These swaps have been designated as cash flow hedges.

None of ~~the company’s~~our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of December ~~31, 2022~~30, 2023 are presented below:

Maturity Date of the Hedging Instrument

Currency / Unit of Measure

Notional Value

(In millions)

Hedging of interest rate risk

~~June 2023~~January 2034

~~Euro~~U.S. Dollar

500

Hedging of foreign currency risk

Various (January ~~2023 to April 2023)~~2024)

Swedish Krona

~~266~~101

Various (January ~~2023~~2024 to ~~March 2023)~~April 2024)

British Pound Sterling

917

May 2024

Mexican Peso

439

~~June 2023~~April 2025

Canadian Dollar

180

January 2029

Euro

~~500~~470

Hedging of fuel risk

Various (January ~~2023~~2024 to March ~~2025)~~2026)

Gallons

7457

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of December ~~31, 2022~~30, 2023 and July ~~2, 2022~~1, 2023 are as follows:

Derivative Fair Value

Balance Sheet location

Dec. 31, 2022

Jul. 2, 2022

Balance Sheet location

Dec. 30, 2023

Jul. 1, 2023

(In thousands)

Fair Value Hedges:

Cross currency swaps

Interest rate swaps

Other current liabilities

6,391

2,820

Cross currency swaps

Cash Flow Hedges:

Fuel swaps

Other current assets

13,490

47,170

Foreign currency forwards

Other current assets

1,014

633

Fuel swaps

Other assets

1,331

—

Fuel swaps

Other current liabilities

1,303

—

Foreign currency forwards

Other current liabilities

—

Fuel swaps

Other long-term liabilities

1,638

209

Net Investment Hedges:

Cross currency swaps

Gains or losses recognized in the consolidated results of operations for cash flow hedging relationships are not significant for each of the periods presented. The location and amount of gains or losses recognized in the consolidated results of operations for fair value hedging relationships for each of the periods, presented on a pretax basis, are as follows:

13-Week Period Ended 26-Week Period Ended
Dec. 31, 2022 Jan. 1, 2022 Dec. 31, 2022 Jan. 1, 2022
(In thousands)
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded $ 132,042 $ 242,899 $ 256,192 $ 371,113
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items $ (2,685) $ 29,787 $ (309) $ 27,355
Derivatives designated as hedging instruments 742 (39,473) (5,501) (47,862)


	13-Week Period Ended				26-Week Period Ended
	Dec. 30, 2023		Dec. 31, 2022		Dec. 30, 2023		Dec. 31, 2022
	(In thousands)
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded	$	154,925	$	132,042	$	295,899	$	256,192
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items	$	(30,298)	$	(2,685)	$	(30,298)	$	(309)
Derivatives designated as hedging instruments	22,066		742		22,066		(5,501)
Cross currency swaps:
Hedged items	$	(2,711)	$	—	$	285	$	—
Derivatives designated as hedging instruments	2,711		—		(285)		—

The gains and losses on the fair value hedging relationships associated with the hedged items as disclosed in the table above consist of the following components for each of the periods presented:


			13-Week Period Ended				26-Week Period Ended
			Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022
			(In thousands)
		13-Week Period Ended										13-Week Period Ended			26-Week Period Ended
		Dec. 30, 2023									Dec. 30, 2023		Dec. 31, 2022	Dec. 30, 2023		Dec. 31, 2022
		(In thousands)												(In thousands)
Interest expense	Interest expense		$	(1,940)	$	(5,367)	$	(3,879)	$	(11,892)
Decrease in fair value of debt	Decrease in fair value of debt		745		(35,154)		(3,570)		(39,247)
Foreign currency gain (loss)
Hedged items	Hedged items		$	(2,685)	$	29,787	$	(309)	$	27,355

The location and effect of cash flow, ~~and~~ net investment, ~~hedge accounting~~and excluded components of fair value hedges on the consolidated statements of comprehensive income for the 13-week periods ended December ~~31, 2022~~30, 2023 and ~~January 1,~~December 31, 2022, presented on a pretax basis, are as follows:

1417

13-Week Period Ended Dec. 30, 2023

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

Foreign currency contracts

Total

Derivatives in net investment hedging relationships:

Cross currency contracts

13-Week Period Ended Dec. 31, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in fair value hedging relationships:

Change in excluded component of fair value hedge

13-Week Period Ended Dec. 31, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

1,140

Operating expense

12,377

Foreign currency contracts

Cost of sales / Other income

—

Total

1,189

12,377

Total

Derivatives in net investment hedging relationships:

Foreign denominated debt

(44,999)

N/A

—

13-Week Period Ended Jan. 1, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

(7,588)

Operating expense

9,608

Foreign currency contracts

(356)

Cost of sales / Other income

—

Total

(7,944)

9,608

Derivatives in net investment hedging relationships:

Foreign denominated debt

11,149

N/A

—

The location and effect of cash flow, ~~and~~ net investment, ~~hedge accounting~~and excluded components of fair value hedges on the consolidated statements of comprehensive income for the 26-week periods ended December ~~31, 2022~~30, 2023 and ~~January 1,~~December 31, 2022, presented on a pretax basis, are as follows:

26-Week Period Ended Dec. 30, 2023

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

Foreign currency contracts

Total

Derivatives in net investment hedging relationships:

Cross currency contracts

26-Week Period Ended Dec. 31, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in fair value hedging relationships:

Change in excluded component of fair value hedge

26-Week Period Ended Dec. 31, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

(35,155)

Operating expense

25,362

Foreign currency contracts

335

Cost of sales / Other income

—

Total

(34,820)

25,362

Total

Derivatives in net investment hedging relationships:

Foreign denominated debt

(13,653)

N/A

—

26-Week Period Ended Jan. 1, 2022

Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives

Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income

(In thousands)

Derivatives in cash flow hedging relationships:

Fuel swaps

(8,073)

Operating expense

17,580

Foreign currency contracts

(434)

Cost of sales / Other income

—

Total

(8,507)

17,580

Derivatives in net investment hedging relationships:

Foreign denominated debt

24,702

N/A

—

1619

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of December ~~31, 2022~~30, 2023 are as follows:

Dec. 30, 2023

Carrying Amount of Hedged Assets (Liabilities)

Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)

(In thousands)

Balance sheet location:

Dec. 31, 2022

Long-term debt

Carrying Amount of Hedged Assets (Liabilities)

Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)

Long-term debt

(In thousands)

Balance sheet location:

Current maturities of long-term debt

(568,932)

6,391

Long-term debt

The ~~location and~~ carrying amount of hedged liabilities in the consolidated balance sheet as of July ~~2, 2022 are as follows:~~

Jul. 2, 2022
Carrying Amount of Hedged Assets (Liabilities) Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
(In thousands)
Balance sheet location:
Current maturities of long-term debt $ (568,601) $ 2,820
1, 2023 is zero.

8. DEBT

Sysco has a long-term revolving credit facility that includes aggregate commitments of the lenders thereunder of $3.0 billion, with an option to increase such commitments to $4.0 billion. As of December ~~31, 2022,~~30, 2023, there were no borrowings outstanding under this facility.

~~Sysco has~~We have a U.S commercial paper program allowing the company to issue short-term unsecured ~~notes. On September 2, 2022, Sysco entered into an amended and restated commercial paper dealer agreement increasing the issuance allowance from an aggregate amount not to exceed $2.0 billion to~~notes in an aggregate amount not to exceed $3.0 billion. Any outstanding amounts are classified within long-term debt, as the program is supported by the long-term revolving credit facility. As of December ~~31, 2022,~~30, 2023, there were ~~$155.0~~$500.0 million in commercial paper issuances outstanding under this program.

On November 17, 2023, Sysco issued senior notes (the Notes) totaling $1.0 billion. Details of the Notes are as follows:


Maturity Date	Par Value (in millions)		Coupon Rate		Pricing (percentage of par)
January 17, 2029 (the 2029 Notes)	$	500	5.75	%	99.784	%
January 17, 2034 (the 2034 Notes)	500		6.00		99.037

The Notes initially are fully and unconditionally guaranteed by Sysco’s direct and indirect wholly owned subsidiaries that guarantee Sysco’s other senior notes issued under the indenture governing the Notes or any of Sysco’s other indebtedness. Interest on the Notes will be paid semi-annually in arrears on July 17 and January 17, beginning July 17, 2024. At Sysco’s option, any or all of the Notes may be redeemed, in whole or in part, at any time prior to maturity. If Sysco elects to redeem (i) the 2029 Notes before the date that is one month prior to the maturity date, or (ii) the 2034 Notes before the date that is three months prior to the maturity date, Sysco will pay an amount equal to the greater of 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest or the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would be due if such senior notes matured on the applicable date described above. If Sysco elects to redeem a series of Notes on or after the applicable date described in the preceding sentence, Sysco will pay an amount equal to 100% of the principal amount of the Notes to be redeemed. Sysco will pay accrued and unpaid interest on the Notes redeemed to the redemption date.

The total carrying value of our debt was $12.1 billion as of December 30, 2023 and $10.4 billion as of July 1, 2023. The increase in the carrying value of our debt from the prior year was due to the issuance of senior notes, new borrowings under our commercial paper program and new financing leases in support of equipment.

On October 17, 2023, we entered into a new commercial paper dealer agreement in Europe for a commercial paper program with borrowings not to exceed €250 million. As of December 30, 2023, there were no commercial paper issuances outstanding under this program.

Information regarding the guarantors of our registered debt securities is contained in the section captioned Guarantor Summarized Financial Information in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Item 2 of Part I of this Form 10-Q.

9. COMPANY-SPONSORED EMPLOYEE BENEFIT PLANS

Sysco has company-sponsored defined benefit and defined contribution retirement plans for its employees. ~~Also, the company provides~~We also provide certain health care benefits to eligible retirees and their dependents.

On October 25, 2022, the Sysco Corporation Retirement Plan (the Plan) executed an agreement with Massachusetts Mutual Life Insurance Company (the Insurer). Under this agreement, the Plan purchased a nonparticipating single premium group annuity contract using Plan assets that transferred to the Insurer $695.0 million of the Plan’s defined benefit pension obligations related to certain pension benefits. The contract covers approximately 10,000 Sysco participants and beneficiaries (the Transferred Participants) in the U.S. pension plan (the U.S. Retirement Plan). Under the group annuity contract, the Insurer ~~has~~ made an unconditional and irrevocable commitment to pay the pension benefits of each Transferred Participant that ~~are~~were due on or after January 1, 2023. The transaction resulted in no changes to the amount of benefits payable to the Transferred Participants.

As a result of the transaction, ~~the company~~we recognized a one-time, non-cash pre-tax pension settlement charge of $315.4 million in the second quarter of fiscal 2023 primarily related to the accelerated recognition of actuarial losses included within accumulated other comprehensive loss in the statement of changes in consolidated shareholders’ equity. The transaction also required ~~the company~~us to remeasure the benefit obligations and plan assets of the U.S. Retirement Plan. The remeasurement

~~reflects~~ reflected the use of an updated discount rate and an expected rate of return on plan assets as of October 31, 2022, applying the practical expedient to remeasure plan assets and obligations as of the nearest calendar month-end date.

~~Funded Status~~

The following table presents the changes in benefit obligations and plan assets of the U.S. Retirement Plan affected by the interim remeasurements described above for the 26-week period ended December 31, 2022:


	~~U.S. Retirement Plan~~
	~~(In thousands)~~
~~Change in benefit obligation:~~
~~Benefit obligation at July 2, 2022~~	$	~~3,538,232~~
~~Service cost~~	~~4,357~~
~~Interest cost~~	~~80,604~~




~~Actuarial gain, net~~	~~(440,311)~~
~~Benefit payments~~	~~(71,839)~~
~~Settlements~~	~~(694,998)~~
~~Benefit obligation at December 31, 2022~~	~~2,416,045~~
~~Change in plan assets:~~
~~Fair value of plan assets at July 2, 2022~~	~~3,633,167~~
~~Actual return on plan assets~~	~~(456,202)~~
~~Benefit payments~~	~~(71,839)~~
~~Settlements~~	~~(694,998)~~
~~Fair value of plan assets at December 31, 2022~~	~~2,410,128~~
~~Funded status at December 31, 2022~~	$	~~(5,917)~~

Components of Net Benefit Costs

The components of net company-sponsored benefit cost for the U.S. Retirement Plan ~~for the second quarter and first 26 weeks of fiscal 2023 and fiscal 2022~~ are as follows:


		13-Week Period Ended					26-Week Period Ended
		Dec. 31, 2022			Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022
		(In thousands)					(In thousands)				13-Week Period				26-Week Period
				Ended (1)										Ended (1)				Ended (1)
												Dec. 31, 2022				Dec. 31, 2022
			(In thousands)										(In thousands)				(In thousands)
Service cost	Service cost	$	2,034		$	3,382	$	4,357	$	6,764
Interest cost	Interest cost	38,103			34,792		80,604		69,584
Expected return on plan assets	Expected return on plan assets	(36,957)			(51,580)		(76,977)		(103,160)
Amortization of prior service cost	Amortization of prior service cost	98			99		197		198
Amortization of actuarial loss	Amortization of actuarial loss	7,661			7,304		16,609		14,608
Settlement loss recognized	Settlement loss recognized	315,354			—		315,354		—
Net pension (benefits) costs		$	326,293		$	(6,003)	$	340,144	$	(12,006)
Net pension costs



(1)			Net pension costs were not material for the second quarter and first 26 weeks of fiscal 2024.

The components of net company-sponsored benefit costs other than the service cost component are reported in ~~Other~~other expense (income), net within the consolidated results of operations.

~~Assumptions~~

The remeasurement of the benefit obligations and plan assets of the U.S. Retirement Plan that took place on October 31, 2022 reflects an updated discount rate and an updated expected rate of return on plan assets. The discount rate used to determine benefit obligations as of the remeasurement date was 6.07%, as compared to the discount rate of 4.91% that was used to determine benefit obligations as of July 2, 2022. The expected rate of return used to determine net company-sponsored benefit costs for the remainder of fiscal 2023 was updated to 6.00% as of the remeasurement date, as compared to the expected rate of return of 4.50% that was calculated as of July 2, 2022 to determine net company-sponsored benefit costs for fiscal 2023.

1821

10. EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:


		13-Week Period Ended				26-Week Period Ended				13-Week Period Ended		26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022		Dec. 30, 2023	Dec. 31, 2022		Dec. 30, 2023	Dec. 31, 2022
		(In thousands, except for share and per share data)				(In thousands, except for share and per share data)				(In thousands, except for share and per share data)		(In thousands, except for share and per share data)
Numerator:	Numerator:
Net earnings	Net earnings	$	141,216	$	167,441	$	606,784	$	545,454
Net earnings
Net earnings
Denominator:	Denominator:
Weighted-average basic shares outstanding
Weighted-average basic shares outstanding
Weighted-average basic shares outstanding	Weighted-average basic shares outstanding	507,609,696		511,044,400		507,594,137		511,780,234
Dilutive effect of share-based awards	Dilutive effect of share-based awards	2,536,098		3,530,489		2,670,336		3,398,676
Weighted-average diluted shares outstanding	Weighted-average diluted shares outstanding	510,145,794		514,574,889		510,264,473		515,178,910
Basic earnings per share	Basic earnings per share	$	0.28	$	0.33	$	1.20	$	1.07
Diluted earnings per share	Diluted earnings per share	$	0.28	$	0.33	$	1.19	$	1.06

~~The number of securities that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximatel~~y ~~1,848,000 and 2,124,000 for the second quarter of fiscal 2023 and fiscal 2022, respectively.~~ The number of securities that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximately ~~1,620,000~~6,451,000 and ~~2,044,000~~1,848,000 for the second quarter of fiscal 2024 and 2023, respectively, and approximately 6,219,000 and 1,620,000 for the first 26 weeks of fiscal 2024 and 2023, ~~and fiscal 2022,~~ respectively.

Accelerated Share Repurchase Program

On December 15, 2023, we entered into a Master Confirmation and Supplemental Confirmation (collectively, the ASR Agreement) with Goldman, Sachs & Co. (Goldman) relating to an accelerated share repurchase program (the ASR Program). Pursuant to the terms of the ASR Agreement, effective January 3, 2024, we agreed to repurchase $500 million of our common stock from Goldman under the share repurchase program authorized by our Board of Directors in May 2021.

In connection with the ASR Program, we paid $500 million to Goldman on January 11, 2024, in exchange for 6,026,110 shares of Sysco’s outstanding common stock, which represents a substantial majority of the shares owed to Sysco by Goldman; however, the number of shares ultimately delivered to us by Goldman is subject to adjustment based on the volume-weighted average share price of Sysco’s common stock during the term of the ASR Agreement, less an agreed discount. We expect all purchases under the ASR Program to be completed by the end of March 2024, although the exact date of completion will depend on whether or when Goldman exercises an acceleration option that it has under the ASR Agreement. At settlement, we may be entitled to receive additional shares of common stock from Goldman or, under certain circumstances, may be required to issue additional shares or make a payment to Goldman at our option. In the third quarter of fiscal 2024, the shares received will be recognized in treasury stock and reduce the number of weighted average shares outstanding. The incremental consideration to be received or issued upon settlement of the ASR Program was evaluated as an unsettled forward contract indexed to our common stock and will be classified within stockholders’ equity in the third quarter of fiscal 2024, if the ASR Program has not concluded by the end of the third quarter of fiscal 2024.

The ASR Agreement contains the principal terms and provisions governing the ASR Program, including, but not limited to, the mechanism used to determine the number of shares that will be delivered, the required timing of delivery of the shares, the specific circumstances under which Goldman may delay any date of valuation or settlement under the ASR Program (such as upon the occurrence of certain market disruptions), the specific circumstances under which Goldman is permitted to make adjustments to the terms of the ASR Program or to terminate the ASR Program (such as upon the announcement of certain fundamental transactions affecting Sysco), and various acknowledgments, representations and warranties made by Sysco and Goldman to one another.

11. OTHER COMPREHENSIVE INCOME

Comprehensive income is net earnings plus certain other items that are recorded directly to shareholders’ equity, such as foreign currency translation adjustment, changes in marketable securities, amounts related to certain hedging arrangements and amounts related to pension and other postretirement plans. Comprehensive income was ~~$527.8~~$552.3 million and ~~$149.1~~$527.8 million for the second quarter of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively. Comprehensive income was ~~$764.1~~$981.5 million and ~~$458.0~~$764.1 million for the first 26 weeks of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.

A summary of the components of other comprehensive income (loss) and the related tax effects for each of the periods presented is as follows:

13-Week Period Ended Dec. 31, 2022

13-Week Period Ended Dec. 30, 2023

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

(In thousands)

Pension and other postretirement benefit plans:

Other comprehensive income before reclassification adjustments:

Net actuarial loss, arising in the current year

Other expense, net

(89,851)

(22,463)

(67,388)

Settlements

Other expense, net

315,455

78,864

236,591

Total other comprehensive income before reclassification adjustments

225,604

56,401

169,203

Reclassification adjustments:

Amortization of prior service cost

Other expense, net

Amortization of actuarial loss, net

Other expense, net

7,500

1,872

5,628

Total reclassification adjustments

7,599

1,897

5,702

Foreign currency translation:

Other comprehensive income before reclassification adjustments:

Foreign currency translation adjustment

N/A

241,814

—

241,814

Marketable securities:

Change in marketable securities (1)

N/A

1,511

317

1,194

Change in marketable securities (1)

Hedging instruments:

Other comprehensive income (loss) before reclassification adjustments:

Change in cash flow hedge

Operating expenses (2)

1,189

986

203

Change in net investment hedge

N/A

(44,999)

(11,250)

(33,749)

Other comprehensive income (loss) before reclassification adjustments:

Change in excluded component of fair value
hedge

Change in cash flow hedges

Change in net investment hedges

Total other comprehensive income (loss) before reclassification adjustments

(43,810)

(10,264)

(33,546)

Total other comprehensive (loss) before reclassification adjustments

Reclassification adjustments:

Amortization of cash flow hedges

Interest expense

2,893

723

2,170

Total other comprehensive income

435,611

49,074

386,537

Total other comprehensive income (loss)


(1)			Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the second quarter of fiscal ~~2023.~~2024.
(2)			Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.

2023

13-Week Period Ended Jan. 1, 2022

13-Week Period Ended Dec. 31, 2022

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

(In thousands)

Pension and other postretirement benefit plans:

Other comprehensive income before reclassification adjustments:

Net actuarial gain, arising in the current year

Settlements

Total other comprehensive income before reclassification adjustments

Reclassification adjustments:

Amortization of prior service cost

Other expense, net

Amortization of actuarial loss, net

Other expense, net

7,401

1,913

5,488

Total reclassification adjustments

7,500

1,938

5,562

Total reclassification adjustments

Foreign currency translation:

Foreign currency translation adjustment

N/A

(26,870)

—

(26,870)

Marketable securities:

Change in marketable securities (1)

N/A

(1,808)

(379)

(1,429)

Change in marketable securities (1)

Hedging instruments:

Other comprehensive income (loss) before reclassification adjustments:

Change in cash flow hedges

Operating expenses (2)

(7,944)

(1,843)

(6,101)

Change in net investment hedges

N/A

11,149

2,787

8,362

Total other comprehensive income before reclassification adjustments

3,205

944

2,261

Total other comprehensive (loss) before reclassification adjustments

Reclassification adjustments:

Amortization of cash flow hedges

Interest expense

2,874

719

2,155

Total other comprehensive income (loss)

(15,099)

3,222

(18,321)

Amortization of cash flow hedges

Total other comprehensive income


(1)			Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the second quarter of fiscal ~~2022~~2023.
(2)			Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.

2124


		26-Week Period Ended Dec. 30, 2023
	Location of Expense (Income) Recognized in Net Earnings	Before Tax Amount		Tax		Net of Tax Amount
		(In thousands)
Pension and other postretirement benefit plans:
Other comprehensive income before reclassification adjustments:
Net actuarial loss, arising in the current year	Other expense, net	$	672	$	169	$	503


Reclassification adjustments:
Amortization of prior service cost	Other expense, net	390		98		292
Amortization of actuarial loss, net	Other expense, net	13,317		3,324		9,993
Total reclassification adjustments		13,707		3,422		10,285




Foreign currency translation:

Foreign currency translation adjustment	N/A	54,890		—		54,890
Marketable securities:
Change in marketable securities (1)	N/A	3,163		664		2,499
Hedging instruments:
Other comprehensive income (loss) before reclassification adjustments:
Change in excluded component of fair value hedge	Other expense, net	184		46		138
Change in cash flow hedges	Operating expenses (2)	9,184		2,261		6,923
Change in net investment hedges	N/A	(22,361)		(5,620)		(16,741)
Total other comprehensive (loss) before reclassification adjustments		(12,993)		(3,313)		(9,680)

Reclassification adjustments:
Amortization of cash flow hedges	Interest expense	5,786		1,446		4,340
Total other comprehensive income		$	65,225	$	2,388	$	62,837


(1)			Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the first 26 weeks of fiscal 2024.
(2)			Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.

26-Week Period Ended Dec. 31, 2022

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

Location of
Expense (Income) Recognized in
Net Earnings

Before Tax
Amount

Tax

Net of Tax
Amount

(In thousands)

Pension and other postretirement benefit plans:

Other comprehensive income before reclassification adjustments:

Net actuarial loss, arising in the current year

Other expense, net

(89,851)

(22,463)

(67,388)

Settlements

Other expense, net

315,455

78,864

236,591

Total other comprehensive income before reclassification adjustments

225,604

56,401

169,203

Reclassification adjustments:

Amortization of prior service cost

Other expense, net

198

148

Amortization of actuarial loss, net

Other expense, net

16,686

4,167

12,519

Total reclassification adjustments

16,884

4,217

12,667

Foreign currency translation:

Foreign currency translation adjustment

N/A

9,632

—

9,632

Marketable securities:

Change in marketable securities (1)

N/A

(2,701)

(567)

(2,134)

Change in marketable securities (1)

Hedging instruments:

Other comprehensive income (loss) before reclassification adjustments:

Other comprehensive (loss) before reclassification adjustments:

Change in cash flow hedges

Operating expenses (2)

(34,820)

(8,633)

(26,187)

Change in net investment hedges

N/A

(13,653)

(3,413)

(10,240)

Total other comprehensive income (loss) before reclassification adjustments

(48,473)

(12,046)

(36,427)

Total other comprehensive (loss) before reclassification adjustments

Reclassification adjustments:

Amortization of cash flow hedges

Interest expense

5,767

1,442

4,325

Total other comprehensive income

206,713

49,447

157,266


(1)			Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the first 26 weeks of fiscal 2023.
(2)			Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.

26-Week Period Ended Jan. 1, 2022
Location of
Expense (Income) Recognized in
Net Earnings Before Tax
Amount Tax Net of Tax
Amount
(In thousands)
Pension and other postretirement benefit plans:
Reclassification adjustments:
Amortization of prior service cost Other expense, net $ 198 $ 50 $ 148
Amortization of actuarial loss, net Other expense, net 15,887 4,032 11,855
Total reclassification adjustments 16,085 4,082 12,003
Foreign currency translation:
Foreign currency translation adjustment N/A (114,064) — (114,064)
Marketable securities:
Change in marketable securities (1)
N/A (2,201) (461) (1,740)
Hedging instruments:
Other comprehensive income (loss) before reclassification adjustments:
Change in cash flow hedges
Operating expenses (2)
(8,507) (1,977) (6,530)
Change in net investment hedges N/A 24,702 6,175 18,527
Total other comprehensive income before reclassification adjustments 16,195 4,198 11,997
Reclassification adjustments:
Amortization of cash flow hedges Interest expense 5,748 1,438 4,310
Total other comprehensive income (loss) $ (78,237) $ 9,257 $ (87,494)


~~(1)~~			Realized gains or losses on marketable securities are presented within other (income) expense, net in the consolidated results of operations; however, there were no significant gains or losses realized in the first 26 ~~weeks of fiscal 2022.~~
~~(2)~~			~~Amount partially impacts operating expense for fuel swaps accounted for as cash flow hedges.~~

The following tables provide a summary of the changes in accumulated other comprehensive (loss) income for the periods presented:


		26-Week Period Ended Dec. 31, 2022										26-Week Period Ended Dec. 30, 2023
		Pension and Other Postretirement Benefit Plans, net of tax		Foreign Currency Translation		Hedging, net of tax		Marketable Securities, net of tax		Total		Pension and Other Postretirement Benefit Plans, net of tax	Foreign Currency Translation	Hedging, net of tax	Marketable Securities, net of tax	Total
		(In thousands)										(In thousands)
Balance as of Jul. 2, 2022		$	(1,011,335)	$	(501,517)	$	35,770	$	(4,972)	$	(1,482,054)
Balance as of Jul. 1, 2023

Net actuarial loss arising in the current year	Net actuarial loss arising in the current year	(67,388)		—		—		—		(67,388)
Settlements		236,591		—		—		—		236,591
Net actuarial loss arising in the current year
Net actuarial loss arising in the current year

Equity adjustment from foreign currency translation
Equity adjustment from foreign currency translation
Equity adjustment from foreign currency translation	Equity adjustment from foreign currency translation	—		9,632		—		—		9,632
Amortization of cash flow hedges	Amortization of cash flow hedges	—		—		4,325		—		4,325

Change in net investment hedges	Change in net investment hedges	—		—		(10,240)		—		(10,240)
Change in net investment hedges
Change in net investment hedges
Change in excluded component of fair value hedge
Change in cash flow hedge	Change in cash flow hedge	—		—		(26,187)				(26,187)

Amortization of unrecognized prior service cost	Amortization of unrecognized prior service cost	148		—		—		—		148

Amortization of unrecognized prior service cost

Amortization of unrecognized prior service cost
Amortization of unrecognized net actuarial losses	Amortization of unrecognized net actuarial losses	12,519		—		—		—		12,519
Change in marketable securities	Change in marketable securities	—		—		—		(2,134)		(2,134)
Balance as of Dec. 31, 2022		$	(829,465)	$	(491,885)	$	3,668	$	(7,106)	$	(1,324,788)
Balance as of Dec. 30, 2023


		26-Week Period Ended Jan. 1, 2022										26-Week Period Ended Dec. 31, 2022
		Pension and Other Postretirement Benefit Plans, net of tax		Foreign Currency Translation		Hedging, net of tax		Marketable Securities		Total		Pension and Other Postretirement Benefit Plans, net of tax	Foreign Currency Translation	Hedging, net of tax	Marketable Securities	Total
		(In thousands)										(In thousands)
Balance as of Jul. 3, 2021		$	(1,061,991)	$	(40,092)	$	(51,096)	$	4,415	$	(1,148,764)

Balance as of Jul. 2, 2022
Net actuarial loss arising in the current year
Settlements
Equity adjustment from foreign currency translation	Equity adjustment from foreign currency translation	—		(114,064)		—		—		(114,064)
Amortization of cash flow hedges	Amortization of cash flow hedges	—		—		4,310		—		4,310
Change in net investment hedges	Change in net investment hedges	—		—		18,527		—		18,527

Change in cash flow hedge		—		—		(6,530)		—		(6,530)
Change in cash flow hedges
Change in cash flow hedges
Change in cash flow hedges

Amortization of unrecognized prior service cost
Amortization of unrecognized prior service cost
Amortization of unrecognized prior service cost	Amortization of unrecognized prior service cost	148		—		—		—		148
Amortization of unrecognized net actuarial losses	Amortization of unrecognized net actuarial losses	11,855		—		—		—		11,855
Change in marketable securities	Change in marketable securities	—		—		—		(1,740)		(1,740)
Balance as of Jan. 1, 2022		$	(1,049,988)	$	(154,156)	$	(34,789)	$	2,675	$	(1,236,258)
Balance as of Dec. 31, 2022

12. SHARE-BASED COMPENSATION

Sysco provides compensation benefits to employees under several share-based payment arrangements, including various long-term employee stock incentive plans and the 2015 Employee Stock Purchase Plan (ESPP).

Stock Incentive Plans

In the first 26 weeks of fiscal ~~2023,~~2024, options to purchase ~~916,673~~808,279 shares were granted to employees. The fair value of each option award is estimated as of the date of grant using a Black-Scholes option pricing model. The weighted average grant-date fair value per option granted during the first 26 weeks of fiscal ~~2023~~2024 was ~~$24.58.~~$19.27.

In the first 26 weeks of fiscal ~~2023,~~2024, employees were granted ~~438,644~~521,082 performance share units (PSUs). Based on the jurisdiction in which the employee resides, some of these PSUs were granted with forfeitable dividend equivalents. The fair value of each PSU award granted with a dividend equivalent is based on the company’s stock price as of the date of grant. For PSUs granted without dividend equivalents, the fair value was reduced by the present value of expected dividends during the vesting period. The weighted average grant-date fair value per PSU granted during the first 26 weeks of fiscal ~~2023~~2024 was ~~$85.31.~~$73.58. The PSUs will convert into shares of ~~Sysco~~Sysco’s common stock at the end of the three-year performance period based on actual performance targets achieved, as well as the market-based return of Sysco’s common stock relative to that of each company within the S&P 500 index.

In the first 26 weeks of fiscal ~~2023,~~2024, employees were granted ~~244,068~~366,883 restricted stock units. The weighted average grant-date fair value per restricted stock unit granted during the first 26 weeks of fiscal ~~2023~~2024 was ~~$84.12.~~$71.93.

Employee Stock Purchase Plan

Plan participants purchased ~~538,505~~594,056 shares of common stock under the ESPP during the first 26 weeks of fiscal ~~2023.~~2024. The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was ~~$10.95~~$10.33 during the first 26 weeks of fiscal ~~2023.~~2024. The fair value of each stock purchase right is estimated as the difference between the stock price at the date of issuance and the employee purchase price.

All Share-Based Payment Arrangements

The total share-based compensation cost that has been recognized in results of operations was ~~$52.7~~$52.8 million and ~~$60.3~~$52.7 million for the first 26 weeks of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.

As of December ~~31, 2022,~~30, 2023, there was ~~$136.3~~$143.6 million of total unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of ~~2.01~~1.95 years.

13. INCOME TAXES

Effective Tax Rate

The effective tax rates for the second quarter and first 26 weeks of fiscal 2024 were 23.83% and 23.94%, respectively. These rates are higher than the company’s 21.00% statutory tax rate primarily because of state income taxes. The rates are partially offset by a foreign income tax benefit and the equity-based compensation excess tax benefits.

The effective tax rates for the second quarter and first 26 weeks of fiscal 2023 were 20.88% and 21.54%, respectively. The second quarter was favorably impacted by the benefit of the pension buyout of $4.9 million and excess benefits of equity-based compensation, which totaled $1.4 million. The first 26 weeks of fiscal 2023 were favorably impacted by excess tax benefits of equity-based compensation, which totaled $10.3 million.

The effective tax rates for the second quarter and first 26 weeks of fiscal 2022 were 21.27% and 24.18%, respectively. The effective tax rate for the second quarter and first 26 weeks of fiscal 2022 was impacted by the increase in our reserve for uncertain tax positions of $12.0 million in the first quarter, partially offset by (1) the favorable impact of excess tax benefits of equity-based compensation that totaled $1.4 million and $2.9 million, respectively, and (2) the impact of corporate-owned life insurance policies that totaled an unfavorable $1.0 million in the second quarter and a favorable $1.0 million in the first 26 weeks of fiscal 2022.

Uncertain Tax Positions

As of December ~~31, 2022,~~30, 2023, the gross amount of unrecognized tax benefit and related accrued interest was $32.4 million and ~~$7.0~~$9.7 million, respectively. It is reasonably possible ~~that~~ the amount of the unrecognized tax benefit with respect to certain ~~of the company’s~~ unrecognized tax positions of the company will increase or decrease in the next 12 months. At this time, an estimate of the range of the reasonably possible change cannot be made.

~~Other~~

~~The Inflation Reduction~~During the third quarter of fiscal 2023, Sysco received a Statutory Notice of Deficiency from the Internal Revenue Service, mainly related to foreign tax credits generated in fiscal 2018 from repatriated earnings primarily from our Canadian operations. In the fourth quarter of fiscal 2023, the company filed suit in the U.S. Tax Court challenging the validity of certain tax regulations related to the one-time transition tax on unrepatriated foreign earnings, which were enacted as part of the Tax Cuts and Jobs Act of ~~2022 (Inflation Reduction Act) was enacted on August 16, 2022.~~2017 (TCJA). The ~~Inflation Reduction Act imposes~~lawsuit seeks to have the court invalidate these regulations, which would affirm the company’s position regarding its foreign tax credits. Sysco has previously recorded a ~~new 15% corporate alternative minimum tax (CAMT) on “applicable corporations” for taxable years beginning after December 31, 2022. The CAMT is imposed~~benefit of $131.0 million attributable to the extent the alternative minimum tax exceeds a corporation’s regular tax liability. A corporation that pays alternative minimum tax is eligible for a credit against income tax in future years. Subject to future regulatory guidance, the company does not currently believe the CAMT will have a material impact on its ~~2023 tax liability.~~

2528

interpretation of the TCJA and the Internal Revenue Code. If we are ultimately unsuccessful in defending our position, we may be required to reverse all, or some portion, of the benefit previously recorded.

Other

On October 8, 2021, the Organization for Economic Co-operation and Development (OECD) announced the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting, which provides for a two-pillar solution to address tax challenges arising from the digitalization of the economy. Pillar One expands a country’s authority to tax profits from companies that make sales into their country but do not have a physical location in the country. Pillar Two includes an agreement on international tax reform, including rules to ensure that large corporations pay a minimum rate of corporate income tax. On December 20, 2021, the OECD released Pillar Two Model Rules defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional guidance on the two-pillar framework, with widespread implementation anticipated by 2024. We are continuing to evaluate the potential impact on future periods of the Pillar Two Framework, pending legislation adoption and/or guidance by individual countries, with the rules being effective for tax years beginning on or after January 1, 2024. For Sysco, Pillar Two will be effective in fiscal 2025.

The determination of the company’s provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. The company’s provision for income taxes reflects income earned and taxed in the various ~~United States (U.S.)~~U.S. federal and state, as well as foreign jurisdictions. Tax law changes, increases or decreases in permanent book versus tax basis differences, accruals or adjustments of accruals for unrecognized tax benefits or valuation allowances, and the company’s change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

14. COMMITMENTS AND CONTINGENCIES

Legal Proceedings

Sysco is engaged in various legal proceedings that have arisen but have not been fully adjudicated. The likelihood of loss for these legal proceedings, based on definitions within contingency accounting literature, ranges from remote to reasonably possible to probable. When probable and reasonably estimable, the losses have been accrued. Although the final results of legal proceedings cannot be predicted with certainty, based on estimates of the range of potential losses associated with these matters, management does not believe the ultimate resolution of these proceedings, either individually or in the aggregate, will have a material adverse effect upon the consolidated financial position or results of operations of the company.

15. BUSINESS SEGMENT INFORMATION

Sysco distributes food and related products to restaurants, healthcare and educational facilities, lodging establishments and other foodservice customers. Our primary operations are located in North America and Europe. Under the accounting provisions related to disclosures about segments of an enterprise, we have aggregated certain operating segments into three reportable segments. “Other” financial information is attributable to our other operating segments that do not meet the quantitative disclosure thresholds.

•U.S. Foodservice Operations – primarily includes (a) our U.S. Broadline operations, which distribute a full line of food products, including custom-cut meat, seafood, produce, specialty Italian, specialty imports and a wide variety of non-food products and (b) our U.S. Specialty operations, which include our FreshPoint fresh produce distribution business, our Specialty Meats and Seafood Group specialty protein operations, our growing Italian Specialty platform anchored by Greco & Sons, Edward Don, acquired in the second quarter of fiscal 2024, which distributes restaurant equipment and supplies, our Asian specialty distribution company and a number of other small specialty businesses that are not material to our operations;

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

•SYGMA – our U.S. customized distribution operations serving quick-service chain restaurant customer locations; and

•Other – primarily our hotel supply operations, Guest Worldwide.

The accounting policies for the segments are the same as those disclosed by Sysco for its consolidated financial statements. Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These also include all U.S. share-based compensation costs.

The following tables set forth certain financial information for Sysco’s reportable business segments:


		13-Week Period Ended				26-Week Period Ended					13-Week Period Ended		26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022			Dec. 30, 2023	Dec. 31, 2022		Dec. 30, 2023	Dec. 31, 2022
Sales:	Sales:	(In thousands)				(In thousands)				Sales:	(In thousands)		(In thousands)
U.S. Foodservice Operations	U.S. Foodservice Operations	$	13,077,054	$	11,498,155	$	26,679,536	$	23,101,118
International Foodservice Operations	International Foodservice Operations	3,282,411		2,806,272		6,566,146		5,701,519
SYGMA	SYGMA	1,933,536		1,771,323		3,866,993		3,475,356
Other	Other	300,952		244,453		608,108		498,756
Total	Total	$	18,593,953	$	16,320,203	$	37,720,783	$	32,776,749

		13-Week Period Ended				26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022
											13-Week Period Ended		26-Week Period Ended
											Dec. 30, 2023	Dec. 31, 2022		Dec. 30, 2023	Dec. 31, 2022
Operating income (loss):	Operating income (loss):	(In thousands)				(In thousands)				Operating income (loss):	(In thousands)		(In thousands)
U.S. Foodservice Operations	U.S. Foodservice Operations	$	780,961	$	676,822	$	1,684,789	$	1,474,345
International Foodservice Operations	International Foodservice Operations	57,385		10,745		144,593		47,421
SYGMA	SYGMA	6,805		(6,729)		12,276		(9,176)
Other	Other	9,881		183		21,419		6,639
Total segments	Total segments	855,032		681,021		1,863,077		1,519,229
Global Support Center	Global Support Center	(214,390)		(236,112)		(488,102)		(442,638)
Total operating income	Total operating income	640,642		444,909		1,374,975		1,076,591
Interest expense	Interest expense	132,042		242,899		256,192		371,113
Other expense (income), net		330,124		(10,676)		345,405		(13,928)
Other expense, net
Earnings before income taxes	Earnings before income taxes	$	178,476	$	212,686	$	773,378	$	719,406

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This discussion should be read in conjunction with our consolidated financial statements as of July ~~2, 2022,~~1, 2023, and for the fiscal year then ended, and Management’s Discussion and Analysis of Financial Condition and Results of Operations, both contained in our Annual Report on Form 10-K for the fiscal year ended July ~~2, 2022~~1, 2023 (our fiscal ~~2022~~2023 Form 10-K), as well as the consolidated financial statements (unaudited) and notes to the consolidated financial statements (unaudited) contained in this report.

Highlights

Our improved second quarter of fiscal ~~2023~~2024 results were ~~primarily~~ attributable to sales growth that surpassed second quarter of fiscal ~~2022~~2023 levels by ~~13.9%~~3.7%. ~~This double-digit~~The increase in sales ~~growth resulted in operating income growth compared to the same period last year,~~was driven by ~~higher volumes, effective management~~a combination of ~~inflation~~positive case volume growth and ~~market share gains.~~product cost inflation. Our gross profit growth this quarter outpaced operating expense ~~as we continued~~due to ~~make~~effective management of product cost fluctuations, strategic sourcing, progress achieved in improving the performance of our supply chain, ~~productivity. We continued to advance~~and delivery of our Recipe For Growth strategy, with advancement in our digital tools, supply chain investments, and sales and merchandising initiatives, both domestically and internationally. Our second quarter net earnings also includes a pension liability transfer, which resulted in a non-cash charge of $315.4 million recorded within Other expense (income), net.cost-out measures. See below for a comparison of our fiscal ~~2023~~2024 results to our fiscal ~~2022~~2023 results, both including and excluding Certain Items (as defined below).

Comparisons of results from the second quarter of fiscal ~~2023~~2024 to the second quarter of fiscal ~~2022~~2023 are presented below:

•Sales:

◦increased ~~13.9%~~3.7%, or ~~$2.3 billion,~~$694.0 million, to ~~$18.6~~$19.3 billion;

•Operating income:

◦increased ~~44.0%~~9.2%, or ~~$195.7~~$59.2 million, to ~~$640.6~~$700.0 million;

◦adjusted operating income increased ~~37.6%~~9.2%, or ~~$186.4~~$62.6 million, to ~~$682.1~~$744.9 million;

•Net earnings:

◦~~decreased 15.7%~~increased 194.0%, or ~~$26.2~~$274.0 million, to ~~$141.2~~$415.2 million;

◦adjusted net earnings increased ~~39.7%~~10.1%, or ~~$116.0~~$41.1 million, to ~~$407.9~~$449.0 million;

•Basic earnings per share:

◦~~decreased 15.2%~~increased 192.9%, or ~~$0.05,~~$0.54, to ~~$0.28~~$0.82 per share;

•Diluted earnings per share:

◦~~decreased 15.2%~~increased 192.9%, or ~~$0.05,~~$0.54, to ~~$0.28~~$0.82 per share;

◦adjusted diluted earnings per share increased ~~40.4%~~11.3%, or ~~$0.23,~~$0.09, to ~~$0.80 in fiscal 2023;~~$0.89;

•EBITDA:

◦~~decreased 22.6%~~increased 82.7%, or ~~$146.3~~$413.7 million, to ~~$500.5~~$914.3 million; and

◦adjusted EBITDA increased ~~23.9%~~11.6%, or ~~$160.6~~$96.2 million, to ~~$831.3~~$927.5 million.

Comparisons of results from the first 26 weeks of fiscal ~~2023~~2024 to the first 26 weeks of fiscal ~~2022~~2023 are presented below:

•Sales:

◦increased ~~15.1%~~3.1%, or ~~$4.9~~$1.2 billion, to ~~$37.7~~$38.9 billion;

•Operating income:

◦increased ~~27.7%~~9.1%, or ~~$298.4~~$126.0 million, to ~~$1.4~~$1.5 billion;

◦adjusted operating income increased ~~23.0%~~9.9%, or ~~$271.6~~$144.2 million, to ~~$1.5~~$1.6 billion;

•Net earnings:

◦increased ~~11.2%~~51.4%, or ~~$61.3~~$311.9 million, to ~~$606.8~~$918.6 million;

◦adjusted net earnings increased ~~24.8%~~10.0%, or ~~$178.7~~$90.1 million, to ~~$900.5 million;~~$1.0 billion;

•Basic earnings per share:

◦increased ~~12.1%~~51.7%, or ~~$0.13,~~$0.62, to ~~$1.20~~$1.82 per share;

•Diluted earnings per share:

◦increased ~~12.3%~~52.1%, or ~~$0.13,~~$0.62, to ~~$1.19~~$1.81 per share; ~~and~~

◦adjusted diluted earnings per share increased ~~25.7%~~11.4%, or ~~$0.36,~~$0.20, to ~~$1.76 in fiscal 2023;~~$1.96;

•EBITDA:

◦~~decreased 4.1%~~increased 36.1%, or ~~$59.8~~$508.7 million, to ~~$1.4~~$1.9 billion; and

◦adjusted EBITDA increased ~~14.7%~~11.7%, or ~~$224.7~~$203.7 million, to ~~$1.7~~$2.0 billion.

The discussion of our results includes certain non-GAAP financial measures, including EBITDA and adjusted EBITDA, asthat we believe ~~these metrics~~ provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, any non-GAAP financial measures will be denoted as adjusted measures to remove ~~the impact of restructuring and transformational project costs consisting of:~~ (1) restructuring ~~charges,~~charges; (2) expenses associated with our various transformation ~~initiatives~~initiatives; (3) severance charges; and ~~(3) facility closure and severance charges;~~(4) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our ~~acquisitions;~~acquisitions. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to COVID-related personal protection equipment inventory, a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer and 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. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to COVID-related personal protection equipment inventory and a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer. Our results for fiscal 2022 were also impacted by debt extinguishment costs and an increase in reserves for uncertain tax positions.

The fiscal ~~2023~~2024 and fiscal ~~2022~~2023 items 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 ~~total Sysco and our International Foodservice Operations~~ results on a constant currency basis.

Trends

Economic and Industry Trends

Sysco continues to outperform the foodservice market. The food-away-from-home sector ~~experienced~~is a healthy, long-term growth market. Sysco is diversified and well positioned as a market leader in ~~the second quarter~~food service. We expect slightly positive rates of industry volume growth for fiscal 2023. Restaurants continued to be resilient; however, industry sources had projected higher industry growth and such growth has been lower than projected. Even with slower growth, the food-away-from-home sector is positioned well to manage through a softer macro-economic environment and to experience future growth. We experienced a strong start to the year in national sales, which has driven market share gains overall, as we grew 1.35 times the market during the first half of the year.2024.

Sales and Gross Profit Trends

Our sales and gross profit performance are influenced by multiple factors, including price, volume, inflation, customer mix and product mix. The most significant factor affecting performance in the second quarter and first 26 weeks of fiscal ~~2023~~2024 was volume ~~growth, as we~~growth. We experienced a ~~5.2%~~3.4% and 2.5% improvement in ~~total~~U.S. Foodservice case volume in the second quarter and ~~a 3.2% improvement in local~~first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal 2023. Local case volume within our U.S. Foodservice segment increased 2.9% and 1.3% in ~~each instance~~the second quarter and first 26 weeks of fiscal 2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022.~~2023. This volume reflects our broadline and specialty businesses, except for our specialty meats ~~business~~and equipment businesses which ~~measures its volume~~are measured in ~~pounds. This growth enabled us to gain market share during the second quarter of fiscal 2023 and we expect to continue seeing momentum on our rate of sales growth for the full year.~~different units.

~~Product cost inflation has also been a driver of our sales and gross profit performance.~~ We experienced inflation at a rate of ~~8.3% and 9.0%~~1.1% in the second quarter ~~and first 26 weeks~~ of fiscal ~~2023, respectively,~~2024, at the total enterprise level, primarily driven by inflation in the ~~dairy, fresh produce~~meat and frozen ~~food~~ categories. We ~~continue~~continued to be successful in managing our inflation, resulting in an increase in gross profit dollars. Gross margin increased 2921 and 2428 basis points in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the ~~same prior year periods,~~second quarter and first 26 weeks of fiscal 2023. This was primarily driven by higher volumes, the effective management of ~~inflation~~product cost fluctuations and progress ~~with~~from our ~~partnership growth management initiatives.~~strategic sourcing efforts. We expect total enterprise level inflation to be slightly positive in fiscal 2024.

Operating Expense Trends

Total operating expenses increased ~~10.7%~~3.9% and ~~14.1%~~3.6% during the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, driven by increased volumes, cost inflation, continued operational cost pressures from the operating environment and our planned investments to drive our transformation initiatives under our Recipe For Growth strategy. This quarter included: transformation investments of $55 million; new-colleague related productivity costs of $22 million; and expenditures related to the labor dispute we resolved in the second quarter of fiscal 2023.volumes. We continued to ~~invest~~improve the performance of our supply chain, while investing in ~~associate~~colleague retention and ~~best-in-class training, primarily for transportation and warehouse colleagues. Our Sysco Driver Academy is contributing~~training. These efficiency efforts are expected to ~~improved retention and productivity, and we expect~~continue to ~~see this trend~~ improve ~~as the percentage of drivers trained from within Sysco continues to grow.~~in fiscal 2024. We believe the advancements we are making in our physical capabilities, and the investments we are making in improved training, will provide ~~improved~~higher service levels to our customers and strengthen Sysco’s ability to profitably ~~win~~increase market share.

~~Pension Settlement Charge~~Interest Expense Trends

The Sysco Corporation Retirement Plan (the Plan) executed a commitment agreement to purchase a nonparticipating single premium group annuity contract that transferred $695.0 million of the Plan’s defined benefit pension obligations related to certain pension benefits. As a result of the transaction, we recognized a one-time, non-cash pre-tax pension settlement charge of $315.4 million in the second quarter of fiscal 2023. This charge has been treated as a Certain Item. The amount of on-goingInterest expense for ~~the Plan has been remeasured for the remainder of the~~ fiscal ~~year. Pension expense~~2024 is elevated over fiscal 2022 due to increased interest rates and lower asset returns; the majority of the increase is included within Other expense, income net in the consolidated results of operations. We expect pension expense within this line itemexpected to increase by approximately ~~$35~~$70 million, ~~for the last 26 weeks of fiscal 2023,~~ as compared to ~~the same time period in~~ fiscal ~~2022.~~2023, primarily due to higher debt associated with our acquisition of Edward Don.

Mergers and Acquisitions

We continue to focus on mergers and acquisitions as a part of our growth strategy, where we plan to reinforce our existing businesses, while cultivating new channels, new segments and new capabilities. In the first and second quarters of fiscal 2023, we acquired a total of three small U.S.-based independent Italian food distributors as part of our plan to meaningfully scale our growing Italian platform.

~~The~~

In the first quarter of fiscal 2024, we acquired BIX Produce Company, a leading produce specialty distributor based in Minnesota. This acquisition is expected to provide a strategic opportunity for specialty produce operations to expand its geographic footprint in an area of the country where it does not currently have operations. This company’s results ~~of these acquisitions~~are included within U.S. Foodservice Operations and were not material to our results for the ~~consolidated results~~second quarter and first 26 weeks of ~~the company for~~fiscal 2024.

In the second quarter of fiscal ~~2023.~~2024, we acquired Edward Don, one of the largest kitchen equipment and supplies distributors, based out of Chicago. Edward Don has a robust supply chain that is expected to enable cost effective distribution of restaurant equipment and supplies. This acquisition further demonstrates our Recipe for Growth strategy of focusing on building strategic specialty platforms that help us better support restaurant and hospitality customers. This company’s results are included within the U.S. Foodservice Operations segment and were not material to our results for the second quarter and first 26 weeks of fiscal 2024.

Strategy

Our purpose is “Connecting the World to Share Food and Care for One Another.” Purpose driven companies are believed to perform ~~better, and we~~better. We believe our purpose will assist us to grow substantially faster than the foodservice distribution industry and deliver profitable growth through our ~~“Recipe~~Recipe for ~~Growth”~~Growth transformation. This growth transformation is supported by strategic pillars that we believe will allow us to better serve our customers, including our digital, products and solutions, supply chain, customer teams, and future horizons strategies.

Our various business transformation initiatives remain on track, including promoting our specialty programs for produce, protein and Italian products and our customer growth initiatives. Our strategic initiative to enable omni-channel

inventory fulfillment is operating in our first test region, and we have made progress in expanding to deliveries six days a week. From these actions as a part of our Recipe for Growth, the benefits of our developing capabilities are apparent in the new customers we are winning and in the progress we are making ~~towards~~toward increasing market share. We expect that, as our Recipe for Growth matures, the impact on our top-line growth will ~~continue to accelerate. We are committed to profitably growing 1.5 times the market by the end of fiscal 2024, the third year of our three-year strategic plan.~~deliver profitable and consistent growth.

Results of Operations

The following table sets forth the components of our consolidated results of operations expressed as a percentage of sales for the periods indicated:


		13-Week Period Ended				26-Week Period Ended					13-Week Period Ended				26-Week Period Ended
		Dec. 31, 2022		Jan. 1, 2022		Dec. 31, 2022		Jan. 1, 2022			Dec. 30, 2023		Dec. 31, 2022			Dec. 30, 2023		Dec. 31, 2022
Sales	Sales	100.0	%	100.0	%	100.0	%	100.0	%	Sales	100.0	%	100.0	%		100.0	%	100.0	%
Cost of sales	Cost of sales	82.0		82.3		81.9		82.1
Gross profit	Gross profit	18.0		17.7		18.1		17.9
Operating expenses	Operating expenses	14.6		15.0		14.5		14.6
Operating income	Operating income	3.4		2.7		3.6		3.3
Interest expense	Interest expense	0.7		1.5		0.7		1.1
Other expense (income), net	Other expense (income), net	1.7		(0.1)		0.8		—
Earnings before income taxes	Earnings before income taxes	1.0		1.3		2.1		2.2
Income taxes	Income taxes	0.2		0.3		0.5		0.5
Net earnings	Net earnings	0.8	%	1.0	%	1.6	%	1.7	%	Net earnings	2.2	%	0.8	%		2.4	%	1.6	%

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The following table sets forth the change in the components of our consolidated results of operations expressed as a percentage increase or decrease over the comparable period in the prior year:


		13-Week Period Ended		26-Week Period Ended			13-Week Period Ended		26-Week Period Ended
		Dec. 31, 2022		Dec. 31, 2022
	Dec. 30, 2023									Dec. 30, 2023
Sales	Sales	13.9	%	15.1	%	Sales	3.7	%	3.1	%
Cost of sales	Cost of sales	13.5		14.7
Gross profit	Gross profit	15.9		16.6
Operating expenses	Operating expenses	10.7		14.1
Operating income	Operating income	44.0		27.7
Interest expense	Interest expense	(45.6)		(31.0)
Other expense (income), net (1) (2)	Other expense (income), net (1) (2)	(3,192.2)		(2,579.9)
Earnings before income taxes	Earnings before income taxes	(16.1)		7.5
Income taxes	Income taxes	(17.6)		(4.2)
Net earnings	Net earnings	(15.7)	%	11.2	%	Net earnings	194.0	%	51.4	%
Basic earnings per share	Basic earnings per share	(15.2)	%	12.1	%	Basic earnings per share	192.9	%	51.7	%
Diluted earnings per share	Diluted earnings per share	(15.2)		12.3
Average shares outstanding	Average shares outstanding	(0.7)		(0.8)
Diluted shares outstanding	Diluted shares outstanding	(0.9)		(1.0)


(1)			Other expense (income), net was expense of ~~$330.1~~$5.2 million and ~~income of $10.7~~$330.3 million in the second quarter of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.
(2)			Other expense (income), net was expense of ~~$345.4~~$11.9 million and ~~income of $13.9~~$348.1 million in the first 26 weeks of fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.

The following tables represent our results by reportable segments:


		13-Week Period Ended Dec. 31, 2022																			13-Week Period Ended Dec. 30, 2023
		U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center			Consolidated Totals				U.S. Foodservice Operations		International Foodservice Operations		SYGMA		Other		Global Support Center		Consolidated Totals
		(In thousands)																			(In thousands)
Sales	Sales	$	13,077,054		$	3,282,411		$	1,933,536		$	300,952		$	—		$	18,593,953
Sales increase		13.7		%	17.0		%	9.2		%	23.1		%				13.9		%
Sales increase (decrease)																				Sales increase (decrease)	3.2	%	9.6	%	(1.0)	%	(5.9)	%					3.7	%
Percentage of total	Percentage of total	70.3		%	17.7		%	10.4		%	1.6		%				100.0		%	Percentage of total	70.0	%	18.6	%	9.9	%	1.5	%					100.0	%

Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	$	780,961		$	57,385		$	6,805		$	9,881		$	(214,390)		$	640,642
Operating income (loss) increase (decrease)	Operating income (loss) increase (decrease)	15.4		%	NM			NM			NM			(9.2)		%	44.0		%	Operating income (loss) increase (decrease)	7.4	%	44.4	%	NM		(15.0)	%	15.1	%	9.2	%
Percentage of total segments	Percentage of total segments	91.3		%	6.7		%	0.8		%	1.2		%				100.0		%	Percentage of total segments	88.6	%	8.8	%	1.7	%	0.9	%					100.0	%
Operating income as a percentage of sales	Operating income as a percentage of sales	6.0		%	1.7		%	0.4		%	3.3		%				3.4		%	Operating income as a percentage of sales	6.2	%	2.3	%	0.9	%	3.0	%					3.6	%


		13-Week Period Ended Jan. 1, 2022																		13-Week Period Ended Dec. 31, 2022
		U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center		Consolidated Totals				U.S. Foodservice Operations		International Foodservice Operations		SYGMA		Other		Global Support Center	Consolidated Totals
		(In thousands)																		(In thousands)
Sales	Sales	$	11,498,155		$	2,806,272		$	1,771,323		$	244,453		$	—	$	16,320,203

Percentage of total	Percentage of total	70.5		%	17.2		%	10.9		%	1.4		%			100.0		%
Percentage of total
Percentage of total																				70.3	%	17.7	%	10.4	%	1.6	%			100.0	%

Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	$	676,822		$	10,745		$	(6,729)		$	183		$	(236,112)	$	444,909

Percentage of total segments	Percentage of total segments	99.4		%	1.6		%	(1.0)		%	—		%			100.0		%
Operating income (loss) as a percentage of sales		5.9		%	0.4		%	(0.4)		%	0.1		%			2.7		%
Percentage of total segments
Percentage of total segments																				91.3	%	6.7	%	0.8	%	1.2	%			100.0	%
Operating income as a percentage of sales																			Operating income as a percentage of sales	6.0	%	1.7	%	0.4	%	3.3	%			3.4	%

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		26-Week Period Ended Dec. 31, 2022																		26-Week Period Ended Dec. 30, 2023
		U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center		Consolidated Totals				U.S. Foodservice Operations		International Foodservice Operations		SYGMA		Other		Global Support Center		Consolidated Totals
		(In thousands)																		(In thousands)
Sales	Sales	$	26,679,536		$	6,566,146		$	3,866,993		$	608,108		$	—	$	37,720,783
Sales increase		15.5		%	15.2		%	11.3		%	21.9		%			15.1		%
Sales increase (decrease)																			Sales increase (decrease)	2.0	%	10.9	%	(1.2)	%	(2.9)	%					3.1	%
Percentage of total	Percentage of total	70.7		%	17.4		%	10.3		%	1.6		%			100.0		%	Percentage of total	70.0	%	18.7	%	9.8	%	1.5	%					100.0	%

Operating income (loss)	Operating income (loss)	$	1,684,789		$	144,593		$	12,276		$	21,419		$	(488,102)	$	1,374,975
Operating income increase		14.3		%	204.9		%	NM			222.6		%			27.7		%
Operating income (loss)
Operating income (loss)
Operating income (loss) increase (decrease)																			Operating income (loss) increase (decrease)	5.5	%	22.2	%	NM		(5.6)	%	3.0	%	9.1	%
Percentage of total segments	Percentage of total segments	90.4		%	7.8		%	0.7		%	1.1		%			100.0		%	Percentage of total segments	88.7	%	8.8	%	1.5	%	1.0	%					100.0	%
Operating income as a percentage of sales	Operating income as a percentage of sales	6.3		%	2.2		%	0.3		%	3.5		%			3.6		%	Operating income as a percentage of sales	6.5	%	2.4	%	0.8	%	3.4	%					3.9	%


		26-Week Period Ended Jan. 1, 2022																		26-Week Period Ended Dec. 31, 2022
		U.S. Foodservice Operations			International Foodservice Operations			SYGMA			Other			Global Support Center		Consolidated Totals				U.S. Foodservice Operations		International Foodservice Operations		SYGMA		Other		Global Support Center	Consolidated Totals
		(In thousands)																		(In thousands)
Sales	Sales	$	23,101,118		$	5,701,519		$	3,475,356		$	498,695		$	61	$	32,776,749

Percentage of total	Percentage of total	70.5		%	17.4		%	10.6		%	1.5		%			100.0		%
Percentage of total
Percentage of total																				70.7	%	17.4	%	10.3	%	1.6	%			100.0	%

Operating income (loss)
Operating income (loss)
Operating income (loss)	Operating income (loss)	$	1,474,345		$	47,421		$	(9,176)		$	6,639		$	(442,638)	$	1,076,591

Percentage of total segments	Percentage of total segments	97.0		%	3.1		%	(0.6)		%	0.5		%			100.0		%
Percentage of total segments
Percentage of total segments																				90.4	%	7.8	%	0.7	%	1.1	%			100.0	%
Operating income as a percentage of sales	Operating income as a percentage of sales	6.4		%	0.8		%	(0.3)		%	1.3		%			3.3		%	Operating income as a percentage of sales	6.3	%	2.2	%	0.3	%	3.5	%			3.7	%

Based on information in Note 15, “Business Segment Information,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q, in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, U.S. Foodservice Operations and International Foodservice Operations, collectively, represented approximately ~~88.0%~~88.6% and ~~88.1%~~88.7% of Sysco’s overall sales and ~~98.0%~~97.4% and ~~98.2%~~97.5% of total segment operating income, respectively. This illustrates that these segments represent a substantial majority of our total segment results when compared to other reportable segments.

Results of U.S. Foodservice Operations

The following tables set forth a summary of the components of operating income expressed as a percentage increase or decrease over the comparable period in the prior year:

3235


		13-Week Period Ended Dec. 31, 2022		13-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change			13-Week Period Ended Dec. 30, 2023				13-Week Period Ended Dec. 31, 2022				Change in Dollars				% Change
		(Dollars in thousands)									(Dollars in thousands)
Sales	Sales	$	13,077,054	$	11,498,155	$	1,578,899	13.7	%	Sales	$	13,494,443	$		$	13,077,054	$		$	417,389	3.2			3.2		%
Gross profit	Gross profit	2,493,089		2,139,278		353,811		16.5
Operating expenses	Operating expenses	1,712,128		1,462,456		249,672		17.1
Operating income	Operating income	$	780,961	$	676,822	$	104,139	15.4	%	Operating income	$	839,036	$		$	780,968	$		$	58,068	7.4			7.4		%

Gross profit	Gross profit	$	2,493,089	$	2,139,278	$	353,811	16.5	%
Gross profit
Gross profit											$	2,577,694			$	2,493,089			$	84,605			3.4		%
Adjusted operating expenses (Non-GAAP)	Adjusted operating expenses (Non-GAAP)	1,702,180		1,454,558		247,622		17.0
Adjusted operating income (Non-GAAP)	Adjusted operating income (Non-GAAP)	$	790,909	$	684,720	$	106,189	15.5	%	Adjusted operating income (Non-GAAP)	$	851,126	$		$	790,916	$		$	60,210	7.6			7.6		%



		26-Week Period Ended Dec. 31, 2022		26-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change		26-Week Period Ended Dec. 30, 2023				26-Week Period Ended Dec. 31, 2022				Change in Dollars				% Change
		(Dollars in thousands)									(Dollars in thousands)
Sales	Sales	$	26,679,536	$	23,101,118	$	3,578,418	15.5	%	Sales	$	27,218,242	$		$	26,679,536	$		$	538,706	2.0			2.0		%
Gross profit	Gross profit	5,105,432		4,324,432		781,000		18.1
Operating expenses	Operating expenses	3,420,643		2,850,087		570,556		20.0
Operating income	Operating income	$	1,684,789	$	1,474,345	$	210,444	14.3	%	Operating income	$	1,780,007	$		$	1,686,679	$		$	93,328	5.5			5.5		%

Gross profit	Gross profit	$	5,105,432	$	4,324,432	$	781,000	18.1	%
Gross profit
Gross profit											$	5,262,469			$	5,105,432			$	157,037			3.1		%
Adjusted operating expenses (Non-GAAP)	Adjusted operating expenses (Non-GAAP)	3,400,749		2,843,952		556,797		19.6
Adjusted operating income (Non-GAAP)	Adjusted operating income (Non-GAAP)	$	1,704,683	$	1,480,480	$	224,203	15.1	%	Adjusted operating income (Non-GAAP)	$	1,804,699	$		$	1,706,573	$		$	98,126	5.7			5.7		%

Sales

The following table sets forth the percentage and dollar value increase or decrease in the major factors impacting sales as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change:


		Increase (Decrease)				Increase (Decrease)
		13-Week Period				26-Week Period
		(Dollars in millions)				(Dollars in millions)
	Increase (Decrease)													Increase (Decrease)
	13-Week Period												13-Week Period			26-Week Period
	(Dollars in millions)													(Dollars in millions)
Cause of change	Cause of change	Percentage		Dollars		Percentage		Dollars		Cause of change	Percentage	Dollars			Percentage		Dollars
Case volume (1)	Case volume (1)	4.4	%	$	504.1	5.1	%	$	1,165.9
Inflation		8.7		1,004.0		9.3		2,145.8
Deflation

Other (2)
Other (2)
Other (2)	Other (2)	0.6		70.8		1.1		266.7
Total change in sales	Total change in sales	13.7	%	$	1,578.9	15.5	%	$	3,578.4




(1)			Case volumes increased ~~5.2%~~3.4% and ~~6.3%~~2.5% compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, respectively. This volume increase resulted in a ~~4.4%~~4.2% and ~~5.1%~~2.7% increase in the dollar value of sales compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, respectively.
(2)			Case volume reflects our broadline and specialty businesses, with the exception of our specialty meats business, which measures its volume in ~~pounds.~~pounds, and Edward Don. Any impact in volumes from these ~~specialty meats~~ operations isare included within “Other.”

The ~~primary drivers of the~~ sales ~~increase~~growth in our U.S. Foodservice Operations was fueled by volume growth. Case volumes from our U.S. Foodservice Operations increased 3.4% and 2.5% in the second quarter and first 26 weeks of fiscal 2023 were inflation, along with an improvement in case volume in our U.S. Foodservice Operations, which was largely the result of the impact of our Recipe for Growth initiatives. Case volumes from our U.S. Foodservice Operations increased 5.2% and 6.3% in the second quarter and first 26 weeks of fiscal 2023,2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022.~~2023. This included a ~~3.2%~~2.9% increase in local customer case volume in the second quarter of fiscal ~~2023.~~2024 and a 1.3% increase in the first 26 weeks of fiscal 2024.

3336

Operating Income

The increase in operating income for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was driven by gross profit dollar growth and case volume growth, partially offset by an increase in operating expenses.

Gross profit dollar growth in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was driven primarily by ~~the improvement~~case volume growth, improvements in ~~local cases stemming from: (1) the impact of~~supply chain productivity and our ~~Recipe for Growth initiatives, (2) management of higher inflation and (3) partnership growth management initiatives.~~strategic sourcing efforts. The estimated change in product costs, an internal measure of inflation or deflation, ~~increased~~decreased in ~~both~~ the second quarter and first 26 weeks of fiscal ~~2023. For the second quarter and first 26 weeks of fiscal 2023, this change in product costs was primarily driven by inflation in the dairy, fresh produce and frozen foods categories.~~2024. Gross margin, which is gross profit as a percentage of sales, was 19.1% and 19.3% in ~~each of~~ the second quarter and first 26 weeks of fiscal ~~2023~~2024, respectively, for our U.S. Foodservice Operations, which was an increase of 454 basis points compared to gross margin of ~~18.6%~~19.1% in the second quarter of fiscal ~~2022,~~2023, and an increase of 4219 basis points compared to gross margin of ~~18.7%~~19.1% in the first 26 weeks of fiscal ~~2022.~~2023.

The increase in operating expenses for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was primarily driven by increased ~~volumes, cost inflation, operational pressures from the operating environment and our planned investments to drive our transformation initiatives.~~volumes.

3437

Results of International Foodservice Operations

The following table sets forth a summary of the components of operating income and adjusted operating income expressed as a percentage increase or decrease over the comparable period in the prior year:


		13-Week Period Ended Dec. 31, 2022		13-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change			13-Week Period Ended Dec. 30, 2023				13-Week Period Ended Dec. 31, 2022				Change in Dollars				% Change
		(Dollars in thousands)									(Dollars in thousands)
Sales	Sales	$	3,282,411	$	2,806,272	$	476,139	17.0	%	Sales	$	3,596,458	$		$	3,282,411	$		$	314,047	9.6			9.6		%
Gross profit	Gross profit	624,460		565,931		58,529		10.3
Operating expenses	Operating expenses	567,075		555,186		11,889		2.1
Operating income	Operating income	$	57,385	$	10,745	$	46,640	434.1	%	Operating income	$	82,930	$		$	57,413	$		$	25,517	44.4			44.4		%

Gross profit	Gross profit	$	624,460	$	565,931	$	58,529	10.3	%
Gross profit
Gross profit											$	708,100			$	624,460			$	83,640			13.4		%
Adjusted operating expenses (Non-GAAP)	Adjusted operating expenses (Non-GAAP)	545,817		526,281		19,536		3.7
Adjusted operating income (Non-GAAP)	Adjusted operating income (Non-GAAP)	$	78,643	$	39,650	$	38,993	98.3	%	Adjusted operating income (Non-GAAP)	$	102,380	$		$	78,671	$		$	23,709	30.1			30.1		%

Sales on a constant currency basis (Non-GAAP)	Sales on a constant currency basis (Non-GAAP)	$	3,608,465	$	2,806,272	$	802,193	28.6	%
Sales on a constant currency basis (Non-GAAP)
Sales on a constant currency basis (Non-GAAP)											$	3,491,860			$	3,282,411			$	209,449			6.4		%
Gross profit on a constant currency basis (Non-GAAP)	Gross profit on a constant currency basis (Non-GAAP)	690,309		565,931		124,378		22.0
Adjusted operating expenses on a constant currency basis (Non-GAAP)	Adjusted operating expenses on a constant currency basis (Non-GAAP)	607,045		526,281		80,764		15.3
Adjusted operating income (Non-GAAP)		$	83,264	$	39,650	$	43,614	110.0	%
Adjusted operating income on a constant currency basis (Non-GAAP)										Adjusted operating income on a constant currency basis (Non-GAAP)	$	100,581			$	78,671			$	21,910			27.9		%



		26-Week Period Ended Dec. 31, 2022		26-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change		26-Week Period Ended Dec. 30, 2023				26-Week Period Ended Dec. 31, 2022				Change in Dollars				% Change
		(Dollars in thousands)									(Dollars in thousands)
Sales	Sales	$	6,566,146	$	5,701,519	$	864,627	15.2	%	Sales	$	7,279,668	$		$	6,566,146	$		$	713,522	10.9			10.9		%
Gross profit	Gross profit	1,273,725		1,155,065		118,660		10.3
Operating expenses	Operating expenses	1,129,132		1,107,644		21,488		1.9
Operating income	Operating income	$	144,593	$	47,421	$	97,172	204.9	%	Operating income	$	176,413	$		$	144,393	$		$	32,020	22.2			22.2		%

Gross profit	Gross profit	$	1,273,725	$	1,155,065	$	118,660	10.3	%
Gross profit
Gross profit											$	1,440,139			$	1,273,725			$	166,414			13.1		%
Adjusted operating expenses (Non-GAAP)	Adjusted operating expenses (Non-GAAP)	1,087,953		1,051,297		36,656		3.5
Adjusted operating income (Non-GAAP)	Adjusted operating income (Non-GAAP)	$	185,772	$	103,768	$	82,004	79.0	%	Adjusted operating income (Non-GAAP)	$	218,563	$		$	185,572	$		$	32,991	17.8			17.8		%

Sales on a constant currency basis (Non-GAAP)	Sales on a constant currency basis (Non-GAAP)	$	7,207,651	$	5,701,519	$	1,506,132	26.4	%
Sales on a constant currency basis (Non-GAAP)
Sales on a constant currency basis (Non-GAAP)											$	7,069,567			$	6,566,146			$	503,421			7.7		%
Gross profit on a constant currency basis (Non-GAAP)	Gross profit on a constant currency basis (Non-GAAP)	1,411,334		1,155,065		256,269		22.2
Adjusted operating expenses on a constant currency basis (Non-GAAP)	Adjusted operating expenses on a constant currency basis (Non-GAAP)	1,213,887		1,051,297		162,590		15.5
Adjusted operating income on a constant currency basis (Non-GAAP)	Adjusted operating income on a constant currency basis (Non-GAAP)	$	197,447	$	103,768	$	93,679	90.3	%	Adjusted operating income on a constant currency basis (Non-GAAP)	$	215,469	$		$	185,572	$		$	29,897	16.1			16.1		%

3538

Sales

The following tables set forth the percentage and dollar value increase or decrease in the major components impacting sales as compared to the corresponding prior year period in order to demonstrate the cause and magnitude of change.


		Increase (Decrease)				Increase (Decrease)
		13-Week Period				26-Week Period
		(Dollars in millions)				(Dollars in millions)
	Increase (Decrease)													Increase (Decrease)
	13-Week Period												13-Week Period			26-Week Period
	(Dollars in millions)													(Dollars in millions)
Cause of change	Cause of change	Percentage		Dollars		Percentage		Dollars		Cause of change	Percentage	Dollars			Percentage		Dollars
Inflation	Inflation	17.0	%	$	476.6	15.3	%	$	871.7

Foreign currency
Foreign currency
Foreign currency	Foreign currency	(11.6)		(326.1)		(11.3)		(641.5)
Other (1)	Other (1)	11.6		325.6		11.2		634.4
Total change in sales	Total change in sales	17.0	%	$	476.1	15.2	%	$	864.6


(1)			The impact of volumes as a component of sales growth from international operations are included within “Other.” Volume in our foreign operations includes volume metrics that differ from country to country and cannot be aggregated on a consistent, comparable basis.

Sales for the second quarter and first 26 weeks of fiscal ~~2023~~2024 were higher, as compared to the second quarter and first 26 weeks of fiscal ~~2022, primarily~~2023, due to inflation, ~~along with~~a positive impact of foreign currency translation, and an improvement in volume ~~some of which was~~primarily attributable to our Recipe for Growth initiatives. ~~Partially offsetting these increases was the negative impact of foreign currency translation.~~

Operating Income

The increase in operating income for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was due to the continuing increase in sales volumes, along with specific efforts to optimize our gross profit, ~~while addressing~~including the ability to effectively manage product cost fluctuations, incremental progress from our ~~increased operating expenses.~~strategic sourcing efforts and local case volume growth.

The increase in gross profit dollars in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was attributable to the increase in sales volume and the management of inflation, along with specific efforts to optimize our gross profit dollars.

The increase in operating expenses for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, was primarily due to increased ~~volume.~~volumes, colleague-related costs and the impact of foreign currency translation.

Results of SYGMA and Other Segment

For SYGMA, sales were ~~9.2%~~1.0% and ~~11.3% higher~~1.2% lower in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, primarily ~~from an increase in case volumes~~ driven by the ~~success~~planned exit of ~~national and regional quick service restaurants and inflation.~~customers that did not meet our disciplined profit thresholds. Operating income increased by ~~$13.5~~$9.5 million and ~~$21.5~~$16.6 million in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022, primarily~~2023, due to decreases in operating expenses driven by the ~~increase in case volumes and fee increases to~~planned exit of customers.

For the operations that are grouped within Other, operating income ~~increased $9.7~~decreased $1.5 million and ~~$14.8~~$1.2 million in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022, primarily due to the recovery~~2023. The operations of this group mainly consist of our hospitality business, Guest Worldwide. ~~Volume for this business has improved as hospitality occupancy rates have grown from prior year levels.~~

Global Support Center Expenses

Our Global Support Center generally includes all expenses of the corporate office and Sysco’s shared service operations. These expenses in the second quarter of fiscal ~~2023 decreased $11.6~~2024 increased $34.4 million, or ~~5.0%~~15.7%, as compared to the second quarter of fiscal ~~2022,~~2023, primarily due to ~~lower employee-related~~increases in self-insurance reserves and colleague-related costs. These expenses in the first 26 weeks of fiscal ~~2023~~2024 increased ~~$47.9~~$24.4 million, or ~~10.9%~~5.0%, as compared to the first 26 weeks of fiscal ~~2022,~~2023, primarily due to increases in self-insurance reserves, colleague-related costs, and depreciation expense, partially offset by decreases in fuel hedging program ~~expenses and expenses associated with business technology transformation initiatives.~~expenses.

Included in Global Support Center expenses are Certain Items that totaled $13.3 million and $28.7 million in the second quarter and first 26 weeks of fiscal 2024, as compared to $10.2 million and $16.3 million in the second quarter and first 26 weeks of fiscal 2023, ~~as compared to $14.0 million and $41.7 million in the second quarter and first 26 weeks of fiscal 2022,~~ respectively. Certain Items impacting the second quarter and first 26 weeks of fiscal ~~2023 were~~

~~primarily expenses associated with our business technology transformation initiatives. Certain Items impacting the second quarter and first 26 weeks of fiscal 2022~~2024 were primarily expenses associated with our business technology transformation initiatives and expenses associated with acquisitions. Certain Items impacting the second quarter and the first 26 weeks of fiscal 2023 were primarily expenses associated with our business technology transformation initiatives.

Interest Expense

Interest expense ~~decreased $110.9~~increased $17.6 million and ~~$114.9~~$27.8 million for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023. The increase was primarily ~~from a $115.6 million charge taken for debt extinguished~~due to new issuances of senior notes, an increase in ~~fiscal 2022.~~commercial paper borrowing activity and increased interest rates on borrowings.

Other income and expense

Other expense, ~~increased $340.8~~net decreased $325.1 million and ~~$359.3~~$336.2 million for the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022. The expense~~2023, primarily due to a one-time pension settlement charge that was incurred in the second quarter and first 26 weeks of fiscal 2023 ~~was primarily attributable to a pension settlement charge that resulted from~~and an increase in interest income earned in the ~~purchase~~second quarter and first 26 weeks of ~~a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer, as well as higher on-going pension expense.~~fiscal 2024.

Net Earnings

Net earnings ~~decreased 15.7%~~increased 194.0% and ~~increased 11.2%~~51.4% in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, as compared to the second quarter and first 26 weeks of fiscal ~~2022,~~2023, primarily due ~~primarily~~ to the items noted above for operating income and other expense, as well as items impacting our income taxes that are discussed in Note 13, “Income Taxes,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Adjusted net earnings, excluding Certain Items, increased ~~39.7%~~10.1% and ~~24.8%~~10.0% in the second quarter and first 26 weeks of fiscal ~~2023,~~2024, respectively, primarily due to an increase in sales volume.

Earnings Per Share

Basic earnings per share in the second quarter of fiscal ~~2023~~2024 were ~~$0.28,~~$0.82, a ~~15.2% decrease~~192.9% increase from the comparable prior year amount of ~~$0.33~~$0.28 per share. Diluted earnings per share in the second quarter of fiscal ~~2023~~2024 were ~~$0.28,~~$0.82, a ~~15.2% decrease~~192.9% increase from the comparable prior year period amount of ~~$0.33~~$0.28 per share. Adjusted diluted earnings per share, excluding Certain Items, in the second quarter of fiscal ~~2023~~2024 were ~~$0.80, a 40.4%~~$0.89, an 11.3% increase from the comparable prior year amount of ~~$0.57~~$0.80 per share.

Basic earnings per share in the first 26 weeks of fiscal ~~2023~~2024 were ~~$1.20,~~$1.82, a ~~12.1%~~51.7% increase from the comparable prior year amount of ~~$1.07~~$1.20 per share. Diluted earnings per share in the first 26 weeks of fiscal ~~2023~~2024 were ~~$1.19,~~$1.81, a ~~12.3%~~52.1% increase from the comparable prior year ~~period~~ amount of ~~$1.06~~$1.19 per share. Adjusted diluted earnings per share, excluding Certain Items, in the first 26 weeks of fiscal ~~2023~~2024 were ~~$1.76, a 25.7%~~$1.96, an 11.4% increase from the comparable prior year amount of ~~$1.40~~$1.76 per share.

3740

Non-GAAP Reconciliations


~~Our~~The discussion of our results includes certain non-GAAP financial measures, ~~such as~~including EBITDA and adjusted EBITDA, that we believe provide important perspective with respect to underlying business trends. Other than EBITDA and free cash flow, ~~and EBITDA,~~ any non-GAAP financial measures will be denoted as adjusted measures to remove ~~the impact of:~~ (1) restructuring ~~and transformational project costs consisting of: (a) restructuring charges, (b)~~charges; (2) expenses associated with our various transformation ~~initiatives and (c) facility closure and~~initiatives; (3) severance charges; ~~(2)~~and (4) acquisition-related costs consisting of: (a) intangible amortization expense and (b) acquisition costs and due diligence costs related to our ~~acquisitions;~~acquisitions. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance pertaining to COVID-related personal protection equipment inventory, a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer and ~~(3)~~ 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. Our results for fiscal 2023 were also impacted by adjustments to a product return allowance related to COVID-related personal protection equipment inventory and a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer. Our results for fiscal 2022 were also impacted by debt extinguishment costs and an increase in reserves for uncertain tax positions.

The results of our ~~foreign~~ operations can be impacted due to changes in exchange rates applicable in converting local currencies to U.S. dollars. We measure our ~~total Sysco and our International Foodservice Operations~~ results on a constant currency basis. Constant currency operating results are calculated by translating current-period local currency operating results with the currency exchange rates used to translate the financial statements in the comparable prior-year period to determine what the current-period U.S. dollar operating results would have been if the currency exchange rate had not changed from the comparable prior-year period.

Management believes that adjusting its operating expenses, operating income, net earnings and diluted earnings per share to remove these Certain Items and presenting its ~~International Foodservice Operations~~ results on a constant currency basis provides an important perspective with respect to our underlying business trends and ~~results and~~results. It provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the company’s underlying operations and (2) facilitates comparisons on a year-over-year basis.

Sysco has a history of growth through acquisitions and excludes from its non-GAAP financial measures the impact of acquisition-related intangible amortization, acquisition costs and due-diligence costs for those acquisitions. We believe this approach significantly enhances the comparability of Sysco’s results for fiscal ~~2023~~year 2024 and fiscal ~~2022.~~year 2023.

Set forth ~~below~~on the following page is a reconciliation of sales, operating expenses, operating income, other (income) expense, net earnings and diluted earnings per share to adjusted results for these measures for the periods presented. Individual components of diluted earnings per share may not ~~add up~~be equal to the total presented when added due to rounding. Adjusted diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.

3841


		13-Week Period Ended Dec. 31, 2022			13-Week Period Ended Jan. 1, 2022			Change in Dollars		% Change
	13-Week Period Ended Dec. 30, 2023																	13-Week Period Ended Dec. 30, 2023							13-Week Period Ended Dec. 31, 2022							Change in Dollars								%/bps Change
Sales (GAAP)	Sales (GAAP)	$	18,593,953		$	16,320,203		$	2,273,750	13.9	%	Sales (GAAP)		$	19,287,942		$				$	18,593,953		$				$	693,989		3.7					3.7		%
Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	332,426			—			332,426		2.1
Comparable sales using a constant currency basis (Non-GAAP)	Comparable sales using a constant currency basis (Non-GAAP)	$	18,926,379		$	16,320,203		$	2,606,176	16.0	%	Comparable sales using a constant currency basis (Non-GAAP)		$	19,183,184		$				$	18,593,953		$				$	589,231		3.2					3.2		%

Cost of sales (GAAP)

Cost of sales (GAAP)

Cost of sales (GAAP)	Cost of sales (GAAP)	$	15,244,337		$	13,429,053		$	1,815,284	13.5	%	$	15,774,309			$			$	15,244,337			$			$	529,972			3.5				3.5		%

Gross profit (GAAP)	Gross profit (GAAP)	$	3,349,616		$	2,891,150		$	458,466	15.9	%

Gross profit (GAAP)

Gross profit (GAAP)														$	3,513,633						$	3,349,616						$	164,017						4.9		%

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	67,898			—			67,898		2.3
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	3,417,514		$	2,891,150		$	526,364	18.2	%	Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	3,489,450		$				$	3,349,616		$				$	139,834		4.2					4.2		%

Gross margin (GAAP)	Gross margin (GAAP)	18.01		%	17.72		%			29 bps

Gross margin (GAAP)

Gross margin (GAAP)														18.22		%					18.01		%															21 bps

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	0.05			—					5 bps		(0.03)				—				—								-3 bps													-3 bps
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	18.06		%	17.72		%			34 bps		Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)		18.19		%					18.01		%															18 bps

Operating expenses (GAAP)	Operating expenses (GAAP)	$	2,708,974		$	2,446,241		$	262,733	10.7	%

Operating expenses (GAAP)

Operating expenses (GAAP)														$	2,813,590						$	2,708,793						$	104,797						3.9		%
Impact of restructuring and transformational project costs (2)	Impact of restructuring and transformational project costs (2)	(14,388)			(23,469)			9,081		38.7
Impact of acquisition-related costs (3)	Impact of acquisition-related costs (3)	(28,960)			(33,732)			4,772		14.1
Impact of bad debt reserve adjustments (4)	Impact of bad debt reserve adjustments (4)	1,923			6,438			(4,515)		(70.1)		Impact of bad debt reserve adjustments (4)		—			1,923					1,923			(1,923)					(1,923)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	2,667,549			2,395,478			272,071		11.4
Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	66,976			—			66,976		2.8
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	2,734,525		$	2,395,478		$	339,047	14.2	%	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	2,745,647		$				$	2,667,368		$				$	78,279		2.9					2.9		%

Operating expense as a percentage of sales (GAAP)	Operating expense as a percentage of sales (GAAP)	14.57		%	14.99		%			-42 bps

Operating expense as a percentage of sales (GAAP)

Operating expense as a percentage of sales (GAAP)														14.59		%					14.57		%															2 bps
Impact of certain item adjustments	Impact of certain item adjustments	(0.22)		%	(0.31)		%			9 bps		Impact of certain item adjustments		(0.24)			(0.22)					(0.22)								-2 bps												-2 bps
Adjusted operating expense as a percentage of sales (Non-GAAP)	Adjusted operating expense as a percentage of sales (Non-GAAP)	14.35		%	14.68		%			-33 bps		Adjusted operating expense as a percentage of sales (Non-GAAP)		14.35		%					14.35		%															0 bps

Operating income (GAAP)	Operating income (GAAP)	$	640,642		$	444,909		$	195,733	44.0	%
Operating income (GAAP)
Operating income (GAAP)														$	700,043						$	640,823						$	59,220						9.2		%

Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)	Impact of restructuring and transformational project costs (2)	14,388			23,469			(9,081)		(38.7)
Impact of acquisition-related costs (3)	Impact of acquisition-related costs (3)	28,960			33,732			(4,772)		(14.1)
Impact of bad debt reserve adjustments (4)	Impact of bad debt reserve adjustments (4)	(1,923)			(6,438)			4,515		70.1		Impact of bad debt reserve adjustments (4)		—			(1,923)					(1,923)			1,923					1,923			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	682,067			495,672			186,395		37.6
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)
Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	922			—			922		0.2
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	682,989		$	495,672		$	187,317	37.8	%	Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	743,803		$				$	682,248		$				$	61,555		9.0					9.0		%

Operating margin (GAAP)

Operating margin (GAAP)

Operating margin (GAAP)	Operating margin (GAAP)	3.45		%	2.73		%			72 bps		3.63		%					3.45		%															18 bps
Operating margin adjusted for Certain Items (Non-GAAP)	Operating margin adjusted for Certain Items (Non-GAAP)	3.67		%	3.04		%			63 bps		Operating margin adjusted for Certain Items (Non-GAAP)		3.86		%					3.67		%															19 bps
Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	3.61		%	3.04		%			57 bps		Operating margin adjusted for Certain Items using a constant currency basis (Non-GAAP)		3.88		%					3.67		%															21 bps

Interest expense (GAAP)		$	132,042		$	242,899		$	(110,857)	(45.6)	%
Impact of loss on extinguishment of debt		—			(115,603)			115,603		NM
Interest expense adjusted for Certain Items (Non-GAAP)		$	132,042		$	127,296		$	4,746	3.7	%

Other expense (GAAP)

Other expense (GAAP)

Other expense (income) (GAAP)		$	330,124		$	(10,676)		$	340,800	NM

Other expense (GAAP)														$	5,245						$	330,305						$	(325,060)						(98.4)		%
Impact of other non-routine gains and losses (5)												Impact of other non-routine gains and losses (5)		—							(314,878)							314,878							NM
Other expense adjusted for Certain Items (Non-GAAP)												Other expense adjusted for Certain Items (Non-GAAP)		$	5,245						$	15,427						$	(10,182)						(66.0)		%

3942


		13-Week Period Ended Dec. 31, 2022		13-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change
Impact of other non-routine gains and losses (5)		(314,878)		—		(314,878)		NM
Other expense (income) adjusted for Certain Items (Non-GAAP)		$	15,246	$	(10,676)	$	25,922	NM

	13-Week Period Ended Dec. 30, 2023															13-Week Period Ended Dec. 30, 2023								13-Week Period Ended Dec. 31, 2022							Change in Dollars							%/bps Change
Net earnings (GAAP)	Net earnings (GAAP)	$	141,216	$	167,441	$	(26,225)	(15.7)	%	Net earnings (GAAP)		$	415,242		$				$	141,216			$				$	274,026		NM						NM

Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)	Impact of restructuring and transformational project costs (2)	14,388		23,469		(9,081)		(38.7)
Impact of acquisition-related costs (3)	Impact of acquisition-related costs (3)	28,960		33,732		(4,772)		(14.1)
Impact of bad debt reserve adjustments (4)	Impact of bad debt reserve adjustments (4)	(1,923)		(6,438)		4,515		70.1		Impact of bad debt reserve adjustments (4)		—			(1,923)					(1,923)				1,923					1,923			NM					NM

Impact of loss on extinguishment of debt		—		115,603		(115,603)		NM

Impact of other non-routine gains and losses (5)

Impact of other non-routine gains and losses (5)

Impact of other non-routine gains and losses (5)	Impact of other non-routine gains and losses (5)	314,878		—		314,878		NM		—				314,878				314,878				(314,878)					(314,878)			NM						NM

Tax impact of restructuring and transformational project costs (6)	Tax impact of restructuring and transformational project costs (6)	(3,618)		(5,897)		2,279		38.6
Tax impact of restructuring and transformational project costs (6)
Tax impact of restructuring and transformational project costs (6)
Tax impact of acquisition-related costs (6)	Tax impact of acquisition-related costs (6)	(7,283)		(8,475)		1,192		14.1
Tax impact of bad debt reserves adjustments (6)	Tax impact of bad debt reserves adjustments (6)	484		1,617		(1,133)		(70.1)		Tax impact of bad debt reserves adjustments (6)		—			484					484				(484)					(484)			NM					NM
Tax impact of loss on extinguishment of debt (6)		—		(29,111)		29,111		NM
Tax impact of other non-routine gains and losses (6)										Tax impact of other non-routine gains and losses (6)		—							(79,185)								79,185							NM

Tax impact of other non-routine gains and losses (6)		(79,185)		—		(79,185)		NM

Net earnings adjusted for Certain Items (Non-GAAP)

Net earnings adjusted for Certain Items (Non-GAAP)

Net earnings adjusted for Certain Items (Non-GAAP)	Net earnings adjusted for Certain Items (Non-GAAP)	$	407,917	$	291,941	$	115,976	39.7	%	$	449,004			$			$	407,917			$				$	41,087			10.1				10.1		%

Diluted earnings per share (GAAP)	Diluted earnings per share (GAAP)	$	0.28	$	0.33	$	(0.05)	(15.2)	%

Diluted earnings per share (GAAP)

Diluted earnings per share (GAAP)												$	0.82						$	0.28							$	0.54						NM

Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)
Impact of restructuring and transformational project costs (2)	Impact of restructuring and transformational project costs (2)	0.03		0.05		(0.02)		(40.0)
Impact of acquisition-related costs (3)	Impact of acquisition-related costs (3)	0.06		0.07		(0.01)		(14.3)
Impact of bad debt reserve adjustments (4)		—		(0.01)		0.01		NM

Impact of loss on extinguishment of debt		—		0.22		(0.22)		NM

Impact of other non-routine gains and losses (5)	Impact of other non-routine gains and losses (5)	0.62		—		0.62		NM

Impact of other non-routine gains and losses (5)

Impact of other non-routine gains and losses (5)												—							0.62								(0.62)							NM

Tax impact of restructuring and transformational project costs (6)
Tax impact of restructuring and transformational project costs (6)
Tax impact of restructuring and transformational project costs (6)	Tax impact of restructuring and transformational project costs (6)	(0.01)		(0.01)		—		—
Tax impact of acquisition-related costs (6)	Tax impact of acquisition-related costs (6)	(0.01)		(0.02)		0.01		50.0

Tax impact of loss on extinguishment of debt (6)		—		(0.06)		0.06		NM
Tax impact of other non-routine gains and losses (6)
Tax impact of other non-routine gains and losses (6)
Tax impact of other non-routine gains and losses (6)												—							(0.16)								0.16							NM

Tax impact of other non-routine gains and losses (6)		(0.16)		—		(0.16)		NM

Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7)

Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7)

Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7)	Diluted earnings per share adjusted for Certain Items (Non-GAAP) (7)	$	0.80	$	0.57	$	0.23	40.4	%	$	0.89			$			$	0.80			$				$	0.09			11.3				11.3		%

4043



(1)			Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on the current year results.


(2)			Fiscal 2024 includes $2 million related to restructuring and severance charges and $11 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $5 million related to restructuring ~~severance,~~ and ~~facility closure~~severance charges and $9 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2022 includes $12 million related to restructuring, severance, and facility closure charges and $12 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy
(3)			Fiscal 2024 includes $29 million of intangible amortization expense and $2 million in acquisition and due diligence costs. Fiscal 2023 includes $26 million of intangible amortization expense and $3 million in acquisition and due diligence costs. ~~Fiscal 2022 includes $27 million of intangible amortization expense and $7 million in acquisition and due diligence costs.~~
(4)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)			Fiscal 2023 primarily represents a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(6)			The tax impact of adjustments for Certain Items are calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
(7)			Individual components of diluted earnings per share may not ~~add up to~~equal the total presented when added due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.


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

4144


		26-Week Period Ended Dec. 31, 2022			26-Week Period Ended Jan. 1, 2022			Change in Dollars		% Change
	26-Week Period Ended Dec. 30, 2023																	26-Week Period Ended Dec. 30, 2023							26-Week Period Ended Dec. 31, 2022							Change in Dollars								%/bps Change
Sales (GAAP)	Sales (GAAP)	$	37,720,783		$	32,776,749		$	4,944,034	15.1	%	Sales (GAAP)		$	38,908,396		$				$	37,720,783		$				$	1,187,613		3.1					3.1		%

Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	651,588			—			651,588		2.0

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)
Comparable sales using a constant currency basis (Non-GAAP)	Comparable sales using a constant currency basis (Non-GAAP)	$	38,372,371		$	32,776,749		$	5,595,622	17.1	%	Comparable sales using a constant currency basis (Non-GAAP)		$	38,699,572		$				$	37,720,783		$				$	978,789		2.6					2.6		%

Cost of sales (GAAP)

Cost of sales (GAAP)

Cost of sales (GAAP)	Cost of sales (GAAP)	$	30,882,312		$	26,913,891		$	3,968,421	14.7	%	$	31,746,991			$			$	30,882,312			$			$	864,679			2.8				2.8		%
Impact of inventory valuation adjustment (2)	Impact of inventory valuation adjustment (2)	2,571			—			2,571		0.1
Cost of sales adjusted for Certain Items (Non-GAAP)	Cost of sales adjusted for Certain Items (Non-GAAP)	$	30,884,883		$	26,913,891		$	3,970,992	14.8	%	Cost of sales adjusted for Certain Items (Non-GAAP)		$	31,746,991		$				$	30,884,883		$				$	862,108		2.8					2.8		%

Gross profit (GAAP)	Gross profit (GAAP)	$	6,838,471		$	5,862,858		$	975,613	16.6	%

Gross profit (GAAP)

Gross profit (GAAP)														$	7,161,405						$	6,838,471						$	322,934						4.7		%
Impact of inventory valuation adjustment (2)	Impact of inventory valuation adjustment (2)	(2,571)			—			(2,571)		—
Comparable gross profit adjusted for Certain Items (Non-GAAP)		6,835,900			5,862,858			973,042		16.6
Gross profit adjusted for Certain Items (Non-GAAP)
Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	140,932			—			140,932		2.4
Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	6,976,832		$	5,862,858		$	1,113,974	19.0	%	Comparable gross profit adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	7,111,038		$				$	6,835,900		$				$	275,138		4.0					4.0		%

Gross margin (GAAP)	Gross margin (GAAP)	18.13		%	17.89		%			24 bps

Gross margin (GAAP)

Gross margin (GAAP)														18.41		%					18.13		%															28 bps
Impact of inventory valuation adjustment (2)	Impact of inventory valuation adjustment (2)	(0.01)			—					-1 bps		Impact of inventory valuation adjustment (2)		—			(0.01)					(0.01)								1 bps											1 bps
Comparable gross margin adjusted for Certain Items (Non-GAAP)		18.12		%	17.89		%			23 bps

Comparable gross margin adjusted for Certain Items (Non-GAAP)		18.12		%	17.89		%			23 bps

Gross margin adjusted for Certain Items (Non-GAAP)

Gross margin adjusted for Certain Items (Non-GAAP)

Gross margin adjusted for Certain Items (Non-GAAP)														18.41							18.12																	29 bps
Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	0.06			—					6 bps		Impact of currency fluctuations (1)		(0.04)			—					—								-4 bps											-4 bps
Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)	18.18		%	17.89		%			29 bps		Comparable gross margin adjusted for Certain Items using a constant currency basis (Non-GAAP)		18.37		%					18.12		%															25 bps

Operating expenses (GAAP)

Operating expenses (GAAP)

Operating expenses (GAAP)	Operating expenses (GAAP)	$	5,463,496		$	4,786,267		$	677,229	14.1	%	$	5,657,780			$			$	5,460,847			$			$	196,933			3.6				3.6		%
Impact of restructuring and transformational project costs (3)	Impact of restructuring and transformational project costs (3)	(26,034)			(47,980)			21,946		45.7
Impact of acquisition-related costs (4)	Impact of acquisition-related costs (4)	(58,415)			(69,658)			11,243		16.1
Impact of bad debt reserve adjustments (5)	Impact of bad debt reserve adjustments (5)	4,515			13,499			(8,984)		(66.6)		Impact of bad debt reserve adjustments (5)		—			4,515					4,515			(4,515)					(4,515)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	5,383,562			4,682,128			701,434		15.0
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)	Impact of currency fluctuations (1)	137,670			—			137,670		2.9
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	5,521,232		$	4,682,128		$	839,104	17.9	%	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	5,513,286		$				$	5,380,913		$				$	132,373		2.5					2.5		%

Operating expense as a percentage of sales (GAAP)	Operating expense as a percentage of sales (GAAP)	14.48		%	14.60		%			-12 bps

Operating expense as a percentage of sales (GAAP)

Operating expense as a percentage of sales (GAAP)														14.54		%					14.48		%															6 bps
Impact of certain item adjustments	Impact of certain item adjustments	(0.21)			(0.32)					11 bps		Impact of certain item adjustments		(0.24)			(0.21)					(0.21)								-3 bps											-3 bps
Adjusted operating expense as a percentage of sales (Non-GAAP)	Adjusted operating expense as a percentage of sales (Non-GAAP)	14.27		%	14.28		%			-1 bps		Adjusted operating expense as a percentage of sales (Non-GAAP)		14.30		%					14.27		%															3 bps

Operating income (GAAP)
Operating income (GAAP)
Operating income (GAAP)	Operating income (GAAP)	$	1,374,975		$	1,076,591		$	298,384	27.7	%	$	1,503,625			$			$	1,377,624			$			$	126,001			9.1				9.1		%
Impact of inventory valuation adjustment (2)	Impact of inventory valuation adjustment (2)	(2,571)			—			(2,571)		NM		Impact of inventory valuation adjustment (2)		—			(2,571)					(2,571)			2,571					2,571			NM						NM
Impact of restructuring and transformational project costs (3)	Impact of restructuring and transformational project costs (3)	26,034			47,980			(21,946)		(45.7)
Impact of acquisition-related costs (4)	Impact of acquisition-related costs (4)	58,415			69,658			(11,243)		(16.1)
Impact of bad debt reserve adjustments (5)	Impact of bad debt reserve adjustments (5)	(4,515)			(13,499)			8,984		66.6		Impact of bad debt reserve adjustments (5)		—			(4,515)					(4,515)			4,515					4,515			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	1,452,338			1,180,730			271,608		23.0
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)

Impact of currency fluctuations (1)
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)												Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	1,597,752						$	1,454,987						$	142,765						9.8		%

4245

26-Week Period Ended Dec. 31, 2022 26-Week Period Ended Jan. 1, 2022 Change in Dollars % Change
Impact of currency fluctuations (1)
3,262 — 3,262 0.3
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP) $ 1,455,600 $ 1,180,730 $ 274,870 23.3 %
Interest expense (GAAP) $ 256,192 $ 371,113 $ (114,921) (31.0) %
Impact of loss on extinguishment of debt — (115,603) 115,603 NM
Interest expense adjusted for Certain Items (Non-GAAP) $ 256,192 $ 255,510 $ 682 0.3 %
Other expense (income) (GAAP) $ 345,405 $ (13,928) $ 359,333 NM
Impact of other non-routine gains and losses (6)
(314,878) — (314,878) NM
Other expense (income) adjusted for Certain Items (Non-GAAP) $ 30,527 $ (13,928) $ 44,455 NM
Net earnings (GAAP) $ 606,784 $ 545,454 $ 61,330 11.2 %
Impact of inventory valuation adjustment (2)
(2,571) — (2,571) NM
Impact of restructuring and transformational project costs (3)
26,034 47,980 (21,946) (45.7)
Impact of acquisition-related costs (4)
58,415 69,658 (11,243) (16.1)
Impact of bad debt reserve adjustments (5)
(4,515) (13,499) 8,984 66.6
Impact of loss on extinguishment of debt — 115,603 (115,603) NM
Impact of other non-routine gains and losses (6)
314,878 — 314,878 NM
Tax impact of inventory valuation adjustment (7)
646 — 646 NM
Tax impact of restructuring and transformational project costs (7)
(6,538) (12,082) 5,544 45.9
Tax impact of acquisition-related costs (7)
(14,670) (17,541) 2,871 16.4
Tax impact of bad debt reserves adjustments (7)
1,134 3,399 (2,265) (66.6)
Tax impact of loss on extinguishment of debt (7)
— (29,111) 29,111 NM
Tax impact of other non-routine gains and losses (7)
(79,075) — (79,075) NM
Impact of adjustments to uncertain tax positions — 12,000 (12,000) NM
Net earnings adjusted for Certain Items (Non-GAAP) $ 900,522 $ 721,861 $ 178,661 24.8 %
Diluted earnings per share (GAAP) $ 1.19 $ 1.06 $ 0.13 12.3 %
Impact of inventory valuation adjustment (2)
(0.01) — (0.01) NM
Impact of restructuring and transformational project costs (3)
0.05 0.09 (0.04) (44.4)
Impact of acquisition-related costs (4)
0.11 0.14 (0.03) (21.4)
Impact of bad debt reserve adjustments (5)
(0.01) (0.03) 0.02 66.7
Impact of loss on extinguishment of debt — 0.22 (0.22) NM
Impact of other non-routine gains and losses (6)
0.62 — 0.62 NM
Tax impact of restructuring and transformational project costs (7)
(0.01) (0.02) 0.01 50.0
Tax impact of acquisition-related costs (7)
(0.03) (0.03) — —
Tax impact of bad debt reserves adjustments (7)
— 0.01 (0.01) NM
Tax impact of loss on extinguishment of debt (7)
— (0.06) 0.06 NM
Tax impact of other non-routine gains and losses (7)
(0.15) — (0.15) NM
Impact of adjustments to uncertain tax positions — 0.02 (0.02) NM
Diluted earnings per share adjusted for Certain Items (Non-GAAP) (8)
$ 1.76 $ 1.40 $ 0.36 25.7 %


	26-Week Period Ended Dec. 30, 2023		26-Week Period Ended Dec. 31, 2022		Change in Dollars		%/bps Change

Other expense (GAAP)	$	11,885	$	348,054	$	(336,169)	(96.6)	%
Impact of other non-routine gains and losses (6)	—		(314,878)		314,878		NM
Other expense adjusted for Certain Items (Non-GAAP)	$	11,885	$	33,176	$	(21,291)	(64.2)	%



Net earnings (GAAP)	$	918,634	$	606,784	$	311,850	51.4	%
Impact of inventory valuation adjustment (2)	—		(2,571)		2,571		NM
Impact of restructuring and transformational project costs (3)	33,175		26,034		7,141		27.4
Impact of acquisition-related costs (4)	62,379		58,415		3,964		6.8
Impact of bad debt reserve adjustments (5)	—		(4,515)		4,515		NM



Impact of other non-routine gains and losses (6)	—		314,878		(314,878)		NM
Tax impact of inventory valuation adjustment (7)	—		646		(646)		NM
Tax impact of restructuring and transformational project costs (7)	(8,184)		(6,538)		(1,646)		(25.2)
Tax impact of acquisition-related costs (7)	(15,388)		(14,670)		(718)		(4.9)
Tax impact of bad debt reserves adjustments (7)	—		1,134		(1,134)		NM

Tax impact of other non-routine gains and losses (7)	—		(79,075)		79,075		NM


Net earnings adjusted for Certain Items (Non-GAAP)	$	990,616	$	900,522	$	90,094	10.0	%



Diluted earnings per share (GAAP)	$	1.81	$	1.19	$	0.62	52.1	%
Impact of inventory valuation adjustment (2)	—		(0.01)		0.01		NM
Impact of restructuring and transformational project costs (3)	0.07		0.05		0.02		40.0
Impact of acquisition-related costs (4)	0.12		0.11		0.01		9.1
Impact of bad debt reserve adjustments (5)	—		(0.01)		0.01		NM


Impact of other non-routine gains and losses (6)	—		0.62		(0.62)		NM

Tax impact of restructuring and transformational project costs (7)	(0.02)		(0.01)		(0.01)		(100.0)
Tax impact of acquisition-related costs (7)	(0.03)		(0.03)		—		—


Tax impact of other non-routine gains and losses (7)	—		(0.15)		0.15		NM


Diluted earnings per share adjusted for Certain Items (Non-GAAP) (8)	$	1.96	$	1.76	$	0.20	11.4	%



(1)			Represents a constant currency adjustment which eliminates the impact of foreign currency fluctuations on the current year results.
(2)			Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(3)			Fiscal 2024 includes $8 million related to restructuring and severance charges and $25 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2023 includes $10 million related to restructuring ~~severance,~~ and ~~facility closure~~severance charges and $16 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy. Fiscal 2022 includes $28 million related to various transformation initiative costs, primarily consisting of changes to our business technology strategy and $20 million related to restructuring charges, severance and facility closure charges.
(4)			Fiscal 2024 includes $57 million of intangible amortization expense and $5 million in acquisition and due diligence costs. Fiscal 2023 includes $52 million of intangible amortization expense and $6 million in acquisition and due diligence costs. ~~Fiscal 2022 includes $48 million of intangible amortization expense and $21 million in acquisition and due diligence costs.~~
(5)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(6)			Fiscal 2023 primarily ~~represents~~includes a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(7)			The tax impact of adjustments for Certain Items is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred.
(8)			Individual components of diluted earnings per share may not add up to the total presented due to rounding. Total diluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.



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

4446


	13-Week Period Ended Dec. 30, 2023																	13-Week Period Ended Dec. 30, 2023							13-Week Period Ended Dec. 31, 2022							Change in Dollars								%/bps Change
U.S. FOODSERVICE OPERATIONS

		13-Week Period Ended Dec. 31, 2022			13-Week Period Ended Jan. 1, 2022			Change in Dollars		%/bps Change
U.S. FOODSERVICE OPERATIONS

Operating expenses (GAAP)

Operating expenses (GAAP)

Operating expenses (GAAP)	Operating expenses (GAAP)	$	1,712,128		$	1,462,456		$	249,672	17.1	%	$	1,738,658			$			$	1,712,121			$			$	26,537			1.5				1.5		%
Impact of restructuring and transformational project costs	Impact of restructuring and transformational project costs	(92)			(16)			(76)		NM
Impact of acquisition-related costs (1)	Impact of acquisition-related costs (1)	(11,514)			(13,131)			1,617		12.3
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	1,658			5,249			(3,591)		(68.4)		Impact of bad debt reserve adjustments (2)		—			1,658					1,658			(1,658)					(1,658)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	$	1,702,180		$	1,454,558		$	247,622	17.0	%
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)														$	1,726,568						$	1,702,173						$	24,395						1.4		%

Operating income (GAAP)

Operating income (GAAP)

Operating income (GAAP)	Operating income (GAAP)	$	780,961		$	676,822		$	104,139	15.4	%	$	839,036			$			$	780,968			$			$	58,068			7.4				7.4		%
Impact of restructuring and transformational project costs	Impact of restructuring and transformational project costs	92			16			76		NM
Impact of acquisition-related costs (1)	Impact of acquisition-related costs (1)	11,514			13,131			(1,617)		(12.3)
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	(1,658)			(5,249)			3,591		68.4		Impact of bad debt reserve adjustments (2)		—			(1,658)					(1,658)			1,658					1,658			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	$	790,909		$	684,720		$	106,189	15.5	%
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)														$	851,126						$	790,916						$	60,210						7.6		%

INTERNATIONAL FOODSERVICE OPERATIONS

INTERNATIONAL FOODSERVICE OPERATIONS

INTERNATIONAL FOODSERVICE OPERATIONS	INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)	Sales (GAAP)	$	3,282,411		$	2,806,272		$	476,139	17.0	%
Sales (GAAP)
Sales (GAAP)														$	3,596,458						$	3,282,411						$	314,047						9.6		%

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	326,054			—			326,054		11.6
Comparable sales using a constant currency basis (Non-GAAP)	Comparable sales using a constant currency basis (Non-GAAP)	$	3,608,465		$	2,806,272		$	802,193	28.6	%	Comparable sales using a constant currency basis (Non-GAAP)		$	3,491,860		$				$	3,282,411		$				$	209,449		6.4					6.4		%

Gross profit (GAAP)
Gross profit (GAAP)
Gross profit (GAAP)	Gross profit (GAAP)	$	624,460		$	565,931		$	58,529	10.3	%	$	708,100			$			$	624,460			$			$	83,640			13.4				13.4		%
Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	65,849			—			65,849		11.7
Comparable gross profit using a constant currency basis (Non-GAAP)	Comparable gross profit using a constant currency basis (Non-GAAP)	$	690,309		$	565,931		$	124,378	22.0	%	Comparable gross profit using a constant currency basis (Non-GAAP)		$	683,974		$				$	624,460		$				$	59,514		9.5					9.5		%

Gross margin (GAAP)	Gross margin (GAAP)	19.02		%	20.17		%			-115 bps

Gross margin (GAAP)

Gross margin (GAAP)														19.69		%					19.02		%															67 bps
Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	0.11			—					11 bps		Impact of currency fluctuations (3)		(0.10)			—					—								-10 bps											-10 bps
Comparable gross margin using a constant currency basis (Non-GAAP)	Comparable gross margin using a constant currency basis (Non-GAAP)	19.13		%	20.17		%			-104 bps		Comparable gross margin using a constant currency basis (Non-GAAP)		19.59		%					19.02		%															57 bps

Operating expenses (GAAP)
Operating expenses (GAAP)
Operating expenses (GAAP)	Operating expenses (GAAP)	$	567,075		$	555,186		$	11,889	2.1	%	$	625,170			$			$	567,047			$			$	58,123			10.3				10.3		%
Impact of restructuring and transformational project costs (4)	Impact of restructuring and transformational project costs (4)	(5,588)			(11,621)			6,033		51.9
Impact of acquisition-related costs (5)	Impact of acquisition-related costs (5)	(15,935)			(18,475)			2,540		13.7
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	265			1,191			(926)		(77.7)		Impact of bad debt reserve adjustments (2)		—			265					265			(265)					(265)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	545,817			526,281			19,536		3.7
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	61,228			—			61,228		11.6
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	607,045		$	526,281		$	80,764	15.3	%	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	583,393		$				$	545,789		$				$	37,604		6.9					6.9		%

Operating income (GAAP)
Operating income (GAAP)
Operating income (GAAP)	Operating income (GAAP)	$	57,385		$	10,745		$	46,640	NM		$	82,930			$			$	57,413			$			$	25,517			44.4				44.4		%
Impact of restructuring and transformational project costs (4)	Impact of restructuring and transformational project costs (4)	5,588			11,621			(6,033)		(51.9)
Impact of acquisition-related costs (5)	Impact of acquisition-related costs (5)	15,935			18,475			(2,540)		(13.7)
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	(265)			(1,191)			926		77.7		Impact of bad debt reserve adjustments (2)		—			(265)					(265)			265					265			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	78,643			39,650			38,993		98.3
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	4,622			—			4,622		NM
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	83,265		$	39,650		$	43,615	NM		Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	100,581		$				$	78,671		$				$	21,910		27.9					27.9		%

SYGMA
SYGMA
SYGMA	SYGMA

Operating expenses (GAAP)	Operating expenses (GAAP)	$	143,656		$	143,681		$	(25)	—	%

Operating income (loss) (GAAP)		6,805			(6,729)			13,534		NM

Operating expenses (GAAP)

Operating expenses (GAAP)														$	132,161						$	143,614						$	(11,453)						(8.0)		%

Operating income (GAAP)

Operating income (GAAP)

Operating income (GAAP)														16,346							6,847							9,499							NM

OTHER

OTHER

OTHER	OTHER

Operating expenses (GAAP)	Operating expenses (GAAP)	$	67,430		$	54,626		$	12,804	23.4	%

Operating expenses (GAAP)

Operating expenses (GAAP)														$	64,620						$	67,441						$	(2,821)						(4.2)		%

Operating income (GAAP)

Operating income (GAAP)

Operating income (GAAP)

4547


	13-Week Period Ended Dec. 30, 2023														13-Week Period Ended Dec. 30, 2023						13-Week Period Ended Dec. 31, 2022						Change in Dollars					%/bps Change
		13-Week Period Ended Dec. 31, 2022		13-Week Period Ended Jan. 1, 2022		Change in Dollars		%/bps Change
Impact of bad debt reserve adjustments (2)		—		(2)		2		NM

Operating expenses adjusted for Certain Items (Non-GAAP)		$	67,430	$	54,624	$	12,806	23.4	%

Operating income (GAAP)		$	9,881	$	183	$	9,698	NM

Impact of bad debt reserve adjustments (2)		—		2		(2)		NM

Operating income adjusted for Certain Items (Non-GAAP)		$	9,881	$	185	$	9,696	NM

GLOBAL SUPPORT CENTER
GLOBAL SUPPORT CENTER
GLOBAL SUPPORT CENTER	GLOBAL SUPPORT CENTER

Gross profit (loss) (GAAP)		$	4,295	$	(5,820)	$	10,115	NM
Gross profit (GAAP)

Gross profit (GAAP)

Gross profit (GAAP)												$	6,325					$	4,295					$	2,030				47.3		%

Operating expenses (GAAP)

Operating expenses (GAAP)

Operating expenses (GAAP)	Operating expenses (GAAP)	$	218,685	$	230,292	$	(11,607)	(5.0)	%	$	252,981			$		$	218,570			$		$	34,411			15.7		15.7		%
Impact of restructuring and transformational project costs (6)	Impact of restructuring and transformational project costs (6)	(8,708)		(11,832)		3,124		26.4
Impact of acquisition-related costs (7)	Impact of acquisition-related costs (7)	(1,511)		(2,126)		615		28.9

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	$	208,466	$	216,334	$	(7,868)	(3.6)	%

Operating expenses adjusted for Certain Items (Non-GAAP)

Operating expenses adjusted for Certain Items (Non-GAAP)												$	239,680					$	208,351					$	31,329				15.0		%

Operating loss (GAAP)

Operating loss (GAAP)

Operating loss (GAAP)	Operating loss (GAAP)	$	(214,390)	$	(236,112)	$	21,722	9.2	%	$	(246,656)			$		$	(214,275)			$		$	(32,381)			(15.1)		(15.1)		%

Impact of restructuring and transformational project costs (6)	Impact of restructuring and transformational project costs (6)	8,708		11,832		(3,124)		(26.4)
Impact of restructuring and transformational project costs (6)
Impact of restructuring and transformational project costs (6)
Impact of acquisition-related costs (7)	Impact of acquisition-related costs (7)	1,511		2,126		(615)		(28.9)

Operating loss adjusted for Certain Items (Non-GAAP)

Operating loss adjusted for Certain Items (Non-GAAP)

Operating loss adjusted for Certain Items (Non-GAAP)	Operating loss adjusted for Certain Items (Non-GAAP)	$	(204,171)	$	(222,154)	$	17,983	8.1	%	$	(233,355)			$		$	(204,056)			$		$	(29,299)			(14.4)		(14.4)		%


(1)			Fiscal ~~2023~~2024 and fiscal ~~2022~~2023 include intangible amortization expense and acquisition costs.
(2)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)			Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)			Includes restructuring ~~and facility closure~~ costs primarily in Europe.
(5)			Represents intangible amortization expense.


(6)			Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(7)			Represents due diligence costs.


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

4648


	26-Week Period Ended Dec. 30, 2023																	26-Week Period Ended Dec. 30, 2023							26-Week Period Ended Dec. 31, 2022							Change in Dollars								%/bps Change
U.S. FOODSERVICE OPERATIONS

		26-Week Period Ended Dec. 31, 2022			26-Week Period Ended Jan. 1, 2022			Change in Dollars		% Change
U.S. FOODSERVICE OPERATIONS

Operating expenses (GAAP)

Operating expenses (GAAP)

Operating expenses (GAAP)	Operating expenses (GAAP)	$	3,420,643		$	2,850,087		$	570,556	20.0	%	$	3,482,462			$			$	3,418,753			$			$	63,709			1.9				1.9		%
Impact of restructuring and transformational project costs	Impact of restructuring and transformational project costs	(44)			(19)			(25)		NM		Impact of restructuring and transformational project costs		(120)			(44)					(44)			(76)					(76)			NM						NM
Impact of acquisition-related costs (1)	Impact of acquisition-related costs (1)	(24,100)			(17,785)			(6,315)		(35.5)
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	4,250			11,669			(7,419)		(63.6)		Impact of bad debt reserve adjustments (2)		—			4,250					4,250			(4,250)					(4,250)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	$	3,400,749		$	2,843,952		$	556,797	19.6	%
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)														$	3,457,770						$	3,398,859						$	58,911						1.7		%

Operating income (GAAP)

Operating income (GAAP)

Operating income (GAAP)	Operating income (GAAP)	$	1,684,789		$	1,474,345		$	210,444	14.3	%	$	1,780,007			$			$	1,686,679			$			$	93,328			5.5				5.5		%
Impact of restructuring and transformational project costs	Impact of restructuring and transformational project costs	44			19			25		NM		Impact of restructuring and transformational project costs		120			44					44			76					76			NM						NM
Impact of acquisition-related costs (1)	Impact of acquisition-related costs (1)	24,100			17,785			6,315		35.5
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	(4,250)			(11,669)			7,419		63.6		Impact of bad debt reserve adjustments (2)		—			(4,250)					(4,250)			4,250					4,250			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	$	1,704,683		$	1,480,480		$	224,203	15.1	%
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)														$	1,804,699						$	1,706,573						$	98,126						5.7		%

INTERNATIONAL FOODSERVICE OPERATIONS

INTERNATIONAL FOODSERVICE OPERATIONS

INTERNATIONAL FOODSERVICE OPERATIONS	INTERNATIONAL FOODSERVICE OPERATIONS
Sales (GAAP)	Sales (GAAP)	$	6,566,146		$	5,701,519		$	864,627	15.2	%
Sales (GAAP)
Sales (GAAP)														$	7,279,668						$	6,566,146						$	713,522						10.9		%

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	641,505			—			641,505		11.2
Comparable sales using a constant currency basis (Non-GAAP)	Comparable sales using a constant currency basis (Non-GAAP)	$	7,207,651		$	5,701,519		$	1,506,132	26.4	%	Comparable sales using a constant currency basis (Non-GAAP)		$	7,069,567		$				$	6,566,146		$				$	503,421		7.7					7.7		%

Gross profit (GAAP)	Gross profit (GAAP)	$	1,273,725		$	1,155,065		$	118,660	10.3	%
Gross profit (GAAP)
Gross profit (GAAP)														$	1,440,139						$	1,273,725						$	166,414						13.1		%

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	137,609			—			137,609		11.9
Comparable gross profit using a constant currency basis (Non-GAAP)	Comparable gross profit using a constant currency basis (Non-GAAP)	$	1,411,334		$	1,155,065		$	256,269	22.2	%	Comparable gross profit using a constant currency basis (Non-GAAP)		$	1,389,302		$				$	1,273,725		$				$	115,577		9.1					9.1		%

Gross margin (GAAP)	Gross margin (GAAP)	19.40		%	20.26		%			-86 bps

Gross margin (GAAP)

Gross margin (GAAP)														19.78		%					19.40		%															38 bps
Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	0.18			—					18 bps		Impact of currency fluctuations (3)		(0.13)			—					—								-13 bps											-13 bps
Comparable gross margin using a constant currency basis (Non-GAAP)	Comparable gross margin using a constant currency basis (Non-GAAP)	19.58		%	20.26		%			-68 bps		Comparable gross margin using a constant currency basis (Non-GAAP)		19.65		%					19.40		%															25 bps

Operating expenses (GAAP)
Operating expenses (GAAP)
Operating expenses (GAAP)	Operating expenses (GAAP)	$	1,129,132		$	1,107,644		$	21,488	1.9	%	$	1,263,726			$			$	1,129,332			$			$	134,394			11.9				11.9		%
Impact of restructuring and transformational project costs (4)	Impact of restructuring and transformational project costs (4)	(9,495)			(21,047)			11,552		54.9
Impact of acquisition-related costs (5)	Impact of acquisition-related costs (5)	(31,949)			(37,131)			5,182		14.0
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	265			1,831			(1,566)		(85.5)		Impact of bad debt reserve adjustments (2)		—			265					265			(265)					(265)			NM						NM

Operating expenses adjusted for Certain Items (Non-GAAP)	Operating expenses adjusted for Certain Items (Non-GAAP)	1,087,953			1,051,297			36,656		3.5
Operating expenses adjusted for Certain Items (Non-GAAP)
Operating expenses adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	125,934			—			125,934		12.0
Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	1,213,887		$	1,051,297		$	162,590	15.5	%	Comparable operating expenses adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	1,173,833		$				$	1,088,153		$				$	85,680		7.9					7.9		%

Operating income (GAAP)
Operating income (GAAP)
Operating income (GAAP)	Operating income (GAAP)	$	144,593		$	47,421		$	97,172	NM		$	176,413			$			$	144,393			$			$	32,020			22.2				22.2		%
Impact of restructuring and transformational project costs (4)	Impact of restructuring and transformational project costs (4)	9,495			21,047			(11,552)		(54.9)
Impact of acquisition-related costs (5)	Impact of acquisition-related costs (5)	31,949			37,131			(5,182)		(14.0)
Impact of bad debt reserve adjustments (2)	Impact of bad debt reserve adjustments (2)	(265)			(1,831)			1,566		85.5		Impact of bad debt reserve adjustments (2)		—			(265)					(265)			265					265			NM						NM

Operating income adjusted for Certain Items (Non-GAAP)	Operating income adjusted for Certain Items (Non-GAAP)	185,772			103,768			82,004		79.0
Operating income adjusted for Certain Items (Non-GAAP)
Operating income adjusted for Certain Items (Non-GAAP)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)

Impact of currency fluctuations (3)	Impact of currency fluctuations (3)	11,675			—			11,675		11.3
Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)	$	197,447		$	103,768		$	93,679	90.3	%	Comparable operating income adjusted for Certain Items using a constant currency basis (Non-GAAP)		$	215,469		$				$	185,572		$				$	29,897		16.1					16.1		%

4749

26-Week Period Ended Dec. 31, 2022 26-Week Period Ended Jan. 1, 2022 Change in Dollars % Change
SYGMA
Sales (GAAP) $ 3,866,993 $ 3,475,356 $ 391,637 11.3 %
Gross profit (GAAP) 304,354 275,109 29,245 10.6
Gross margin (GAAP) 7.87 % 7.92 % -5 bps
Operating expenses (GAAP) $ 292,078 $ 284,285 $ 7,793 2.7 %
Operating income (loss) (GAAP) 12,276 (9,176) 21,452 NM
OTHER
Operating expenses (GAAP) $ 136,730 $ 107,191 $ 29,539 27.6 %
Impact of bad debt reserve adjustments (2)
— (1) 1 NM
Operating expenses adjusted for Certain Items (Non-GAAP) $ 136,730 $ 107,190 $ 29,540 27.6 %
Operating income (GAAP) $ 21,419 $ 6,639 $ 14,780 NM
Impact of bad debt reserve adjustments (2)
— 1 (1) NM
Operating income adjusted for Certain Items (Non-GAAP) $ 21,419 $ 6,640 $ 14,779 NM
GLOBAL SUPPORT CENTER
Gross loss (GAAP) $ (3,189) $ (5,578) $ 2,389 42.8 %
Impact of inventory valuation adjustment (6)
(2,571) — (2,571) NM
Comparable gross loss adjusted for Certain Items (Non-GAAP) $ (5,760) $ (5,578) $ (182) (3.3) %
Operating expenses (GAAP) $ 484,913 $ 437,060 $ 47,853 10.9 %
Impact of restructuring and transformational project costs (7)
(16,495) (26,914) 10,419 38.7
Impact of acquisition-related costs (8)
(2,365) (14,742) 12,377 84.0
Operating expenses adjusted for Certain Items (Non-GAAP) $ 466,053 $ 395,404 $ 70,649 17.9 %
Operating loss (GAAP) $ (488,102) $ (442,638) $ (45,464) (10.3) %
Impact of inventory valuation adjustment (6)
(2,571) — (2,571) NM
Impact of restructuring and transformational project costs (7)
16,495 26,914 (10,419) (38.7)
Impact of acquisition-related costs (8)
2,365 14,742 (12,377) (84.0) %
Operating loss adjusted for Certain Items (Non-GAAP) $ (471,813) $ (400,982) $ (70,831) (17.7) %


	26-Week Period Ended Dec. 30, 2023			26-Week Period Ended Dec. 31, 2022			Change in Dollars		%/bps Change
SYGMA
Sales (GAAP)	$	3,819,729		$	3,866,993		$	(47,264)	(1.2)	%



Gross profit (GAAP)	301,317			304,354			(3,037)		(1.0)



Gross margin (GAAP)	7.89		%	7.87		%			2 bps



Operating expenses (GAAP)	$	272,204		$	291,810		$	(19,606)	(6.7)	%








Operating income (GAAP)	29,113			12,544			16,569		NM








OTHER


















Operating expenses (GAAP)	$	130,772		$	136,741		$	(5,969)	(4.4)	%










Operating income (GAAP)	20,210			21,408			(1,198)		(5.6)










GLOBAL SUPPORT CENTER




Gross profit (loss) (GAAP)	$	6,498		$	(3,189)		$	9,687	NM
Impact of inventory valuation adjustment (6)	—			(2,571)			2,571		NM
Comparable gross profit (loss) adjusted for Certain Items (Non-GAAP)	$	6,498		$	(5,760)		$	12,258	NM



Operating expenses (GAAP)	$	508,616		$	484,211		$	24,405	5.0	%
Impact of restructuring and transformational project costs (7)	(24,649)			(16,495)			(8,154)		(49.4)
Impact of acquisition-related costs (8)	(4,063)			(2,365)			(1,698)		(71.8)


Operating expenses adjusted for Certain Items (Non-GAAP)	$	479,904		$	465,351		$	14,553	3.1	%





Operating loss (GAAP)	$	(502,118)		$	(487,400)		$	(14,718)	(3.0)	%
Impact of inventory valuation adjustment (6)	—			(2,571)			2,571		NM
Impact of restructuring and transformational project costs (7)	24,649			16,495			8,154		49.4
Impact of acquisition-related costs (8)	4,063			2,365			1,698		71.8


Operating loss adjusted for Certain Items (Non-GAAP)	$	(473,406)		$	(471,111)		$	(2,295)	(0.5)	%


(1)			Fiscal ~~2023~~2024 and fiscal ~~2022~~2023 include intangible amortization expense and acquisition costs.
(2)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(3)			Represents a constant currency adjustment, which eliminates the impact of foreign currency fluctuations on current year results.
(4)			Includes restructuring ~~severance~~ and ~~facility closure~~severance costs, primarily in Europe.
(5)			Represents intangible amortization expense.
(6)			Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(7)			Includes various transformation initiative costs, primarily consisting of changes to our business technology strategy.
(8)			Represents due diligence costs.


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

EBITDA and Adjusted EBITDA

EBITDA and adjusted EBITDA should not be used as a substitute for the most comparable GAAP measure in assessing Sysco’s overall financial performance for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal ~~2022~~2023 Form 10-K for discussions regarding this non-GAAP performance metric. Set forth below is a reconciliation of actual net earnings to EBITDA and to adjusted EBITDA results for the periods presented (dollars in thousands):


		13-Week Period Ended Dec. 31, 2022		13-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change
	13-Week Period Ended Dec. 30, 2023														13-Week Period Ended Dec. 30, 2023						13-Week Period Ended Dec. 31, 2022					Change in Dollars							% Change
Net earnings (GAAP)	Net earnings (GAAP)	$	141,216	$	167,441	$	(26,225)	(15.7)	%	Net earnings (GAAP)	$	415,242		$			$	141,216		$		$	274,026		NM					NM
Interest (GAAP)	Interest (GAAP)	132,042		242,899		(110,857)		(45.6)
Income taxes (GAAP)	Income taxes (GAAP)	37,260		45,245		(7,985)		(17.6)		Income taxes (GAAP)	129,876			37,260				37,260			92,616			92,616			NM					NM
Depreciation and amortization (GAAP)	Depreciation and amortization (GAAP)	190,025		191,297		(1,272)		(0.7)
EBITDA (Non-GAAP)	EBITDA (Non-GAAP)	$	500,543	$	646,882	$	(146,339)	(22.6)	%	EBITDA (Non-GAAP)	$	914,256		$			$	500,543		$		$	413,713		82.7				82.7		%
Certain Item adjustments:	Certain Item adjustments:

Impact of restructuring and transformational project costs (1)	Impact of restructuring and transformational project costs (1)	14,793		23,193		(8,400)		(36.2)

Impact of restructuring and transformational project costs (1)

Impact of restructuring and transformational project costs (1)
Impact of acquisition-related costs (2)	Impact of acquisition-related costs (2)	3,049		7,085		(4,036)		(57.0)
Impact of bad debt reserve adjustments (3)	Impact of bad debt reserve adjustments (3)	(1,923)		(6,438)		4,515		70.1		Impact of bad debt reserve adjustments (3)	—			(1,923)				(1,923)			1,923			1,923			NM					NM

Impact of other non-routine gains and losses (4)
Impact of other non-routine gains and losses (4)
Impact of other non-routine gains and losses (4)	Impact of other non-routine gains and losses (4)	314,878		—		314,878		NM		—			314,878			314,878			(314,878)			(314,878)			NM					NM
EBITDA adjusted for Certain Items (Non-GAAP) (5)	EBITDA adjusted for Certain Items (Non-GAAP) (5)	$	831,340	$	670,722	$	160,618	23.9	%	EBITDA adjusted for Certain Items (Non-GAAP) (5)	$	927,498		$			$	831,340		$		$	96,158		11.6				11.6		%
Other expense (income), net, as adjusted (Non-GAAP) (6)
Depreciation and amortization, as adjusted (Non-GAAP) (7)
Operating income adjusted for Certain Items (Non-GAAP)										Operating income adjusted for Certain Items (Non-GAAP)	$	744,884					$	682,248				$	62,636					9.2		%



(1)			Fiscal ~~2023~~2024 and fiscal ~~2022~~2023 include charges related to restructuring ~~severance,~~ and ~~facility closures,~~severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology strategy, excluding charges related to accelerated depreciation.
(2)			Fiscal ~~2023~~2024 and fiscal ~~2022~~2023 include acquisition and due diligence costs.
(3)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(4)			Fiscal 2023 primarily represents a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(5)			In arriving at adjusted EBITDA, Sysco does not adjust out interest income of $5$9 million and $1$5 million or non-cash stock compensation expense of ~~$24~~$29 million and ~~$31~~$24 million in fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.
(6)			Fiscal 2024 represents $5 million in GAAP other expense (income), net. Fiscal 2023 represents $330 million in GAAP other expense (income), net less $315 million due to the certain items impact of a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(7)			Fiscal 2024 includes $219 million in GAAP depreciation and amortization expense, less $32 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $190 million in GAAP depreciation and amortization expense, less $26 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
NM ~~represents~~			Represents that the percentage change is not meaningful.


		26-Week Period Ended Dec. 31, 2022		26-Week Period Ended Jan. 1, 2022		Change in Dollars		% Change
	26-Week Period Ended Dec. 30, 2023													26-Week Period Ended Dec. 30, 2023				26-Week Period Ended Dec. 31, 2022					Change in Dollars							% Change
Net earnings (GAAP)	Net earnings (GAAP)	$	606,784	$	545,454	$	61,330	11.2	%	Net earnings (GAAP)	$	918,634	$		$	606,784	$		$	311,850		51.4				51.4		%
Interest (GAAP)	Interest (GAAP)	256,192		371,113		(114,921)		(31.0)
Income taxes (GAAP)	Income taxes (GAAP)	166,594		173,952		(7,358)		(4.2)
Depreciation and amortization (GAAP)	Depreciation and amortization (GAAP)	378,949		377,763		1,186		0.3
EBITDA (Non-GAAP)	EBITDA (Non-GAAP)	$	1,408,519	$	1,468,282	$	(59,763)	(4.1)	%	EBITDA (Non-GAAP)	$	1,917,205	$		$	1,408,519	$		$	508,686		36.1				36.1		%
Certain Item adjustments:	Certain Item adjustments:
Impact of inventory valuation adjustment (1)	Impact of inventory valuation adjustment (1)	$	(2,571)	$	—	$	(2,571)	NM
Impact of inventory valuation adjustment (1)
Impact of inventory valuation adjustment (1)											$	—			$	(2,571)			$	2,571					NM
Impact of restructuring and transformational project costs (2)	Impact of restructuring and transformational project costs (2)	25,302		47,440		(22,138)		(46.7)
Impact of acquisition-related costs (3)	Impact of acquisition-related costs (3)	6,595		21,306		(14,711)		(69.0)
Impact of bad debt reserve adjustments (4)	Impact of bad debt reserve adjustments (4)	(4,515)		(13,499)		8,984		66.6		Impact of bad debt reserve adjustments (4)	—		(4,515)			(4,515)		4,515			4,515			NM					NM

Impact of other non-routine gains and losses (5)	Impact of other non-routine gains and losses (5)	314,878		—		314,878		NM
Impact of other non-routine gains and losses (5)
Impact of other non-routine gains and losses (5)											—				314,878				(314,878)						NM
EBITDA adjusted for Certain Items (Non-GAAP) (6)	EBITDA adjusted for Certain Items (Non-GAAP) (6)	$	1,748,208	$	1,523,529	$	224,679	14.7	%	EBITDA adjusted for Certain Items (Non-GAAP) (6)	$	1,951,909	$		$	1,748,208	$		$	203,701		11.7				11.7		%
Other expense (income), net, as adjusted (Non-GAAP) (7)
Depreciation and amortization, as adjusted (Non-GAAP) (8)
Operating income adjusted for Certain Items (Non-GAAP)										Operating income adjusted for Certain Items (Non-GAAP)	$	1,599,179			$	1,454,987			$	144,192					9.9		%


(1)			Fiscal 2023 represents an adjustment to a product return allowance related to COVID-related personal protection equipment inventory.
(2)			Fiscal ~~2023~~2024 and ~~fiscal 2022~~2023 include charges related to restructuring ~~severance,~~ and ~~facility closures,~~severance, as well as various transformation initiative costs, primarily consisting of changes to our business technology strategy ~~excluding~~and exclude charges related to accelerated depreciation.
(3)			Fiscal ~~2023~~2024 and ~~fiscal 2022~~2023 include acquisition and due diligence costs.
(4)			Fiscal 2023 ~~and fiscal 2022 represent~~represents the reduction of bad debt charges previously taken on pre-pandemic trade receivable balances in fiscal 2020.
(5)			Fiscal 2023 primarily represents a pension settlement charge of $315 million that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(6)			In arriving at adjusted EBITDA, Sysco does not ~~adjust out~~exclude interest income of $8$20 million and $3$8 million or non-cash stock compensation expense of ~~$52~~$53 million and ~~$60~~$52 million for fiscal ~~2023~~2024 and fiscal ~~2022,~~2023, respectively.
(7)			Fiscal 2024 represents $12 million in GAAP other expense (income), net. Fiscal 2023 represents $348 million in GAAP other expense (income), net less $315 million due to the certain items impact of a pension settlement charge that resulted from the purchase of a nonparticipating single premium group annuity contract that transferred defined benefit plan obligations to an insurer.
(8)			Fiscal 2024 includes $425 million in GAAP depreciation and amortization expense, less $61 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions. Fiscal 2023 includes $379 million in GAAP depreciation and amortization expense, less $53 million of Non-GAAP depreciation and amortization expense primarily related to acquisitions.
NM ~~represents~~			Represents that the percentage change is not meaningful.

Liquidity and Capital Resources

Highlights

~~As of December 31, 2022, we had $500.3 million in cash and cash equivalents.~~ We produced positive free cash flow, ~~in a period of~~impacted by higher ~~working capital investments,~~ capital expenditures, timing and historical seasonality, and investments ~~towards~~toward our Recipe for Growth strategy. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities and comparisons of the significant cash flows from the first 26 weeks of fiscal ~~2023~~2024 to the first 26 weeks of fiscal ~~2022~~2023 are provided.

~~On September 2, 2022, we upsized our commercial paper program to $3.0 billion. The commercial paper program allows the company to issue short-term, senior unsecured notes. The notes are~~ ~~pari passu~~ with the company’s other senior unsecured debt, including its senior notes and revolving credit facility. We intend to use any proceeds from the commercial paper program for general corporate purposes.

5052


		26-Week Period Ended Dec. 31, 2022		26-Week Period Ended Jan. 1, 2022			26-Week Period Ended Dec. 30, 2023	26-Week Period Ended Dec. 31, 2022
Source of cash (use of cash)	Source of cash (use of cash)	(In thousands)				Source of cash (use of cash)	(In thousands)
Net cash provided by operating activities (GAAP)	Net cash provided by operating activities (GAAP)	$	503,466	$	377,047
Additions to plant and equipment	Additions to plant and equipment	(309,664)		(181,374)
Proceeds from sales of plant and equipment	Proceeds from sales of plant and equipment	25,493		5,450
Free Cash Flow (Non-GAAP) (1)	Free Cash Flow (Non-GAAP) (1)	$	219,295	$	201,123

Acquisition of businesses, net of cash acquired	Acquisition of businesses, net of cash acquired	$	(37,699)	$	(769,658)
Acquisition of businesses, net of cash acquired
Acquisition of businesses, net of cash acquired

Debt borrowings (repayments), net	Debt borrowings (repayments), net	237,754		1,226,945
Redemption premiums and repayments for senior notes		—		(1,395,668)
Debt borrowings (repayments), net
Debt borrowings (repayments), net

Stock repurchases
Stock repurchases
Stock repurchases	Stock repurchases	(267,727)		(415,824)
Dividends paid	Dividends paid	(498,323)		(481,386)


(1)			Free cash flow should not be used as a substitute for the most comparable GAAP measure in assessing the company’s liquidity for the periods presented. An analysis of any non-GAAP financial measure should be used in conjunction with results presented in accordance with GAAP. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Key Performance Indicators” contained in our fiscal ~~2022~~2023 Form 10-K for discussions regarding this non-GAAP performance metric.

We are increasing our share repurchase expectations from the prior guidance of $750.0 million to $1.25 billion for fiscal 2024. Including both share repurchases and dividends, Sysco is expected to return $2.25 billion to its shareholders in fiscal 2024.

Sources and Uses of Cash

Sysco generates cash in the ~~U.S~~U.S. and internationally. As of December ~~31, 2022,~~30, 2023, we had ~~$500.3~~$962.2 million in cash and cash equivalents, approximately ~~98%~~57% of which was held by our international subsidiaries. Sysco’s strategic objectives are funded primarily by cash from operations and external borrowings. Traditionally, our operations have produced significant cash ~~flow and, due~~flow. Due to our strong financial position, we believe ~~that~~ we will continue to be able to effectively access capital markets, as needed. Cash is generally allocated to working capital requirements, investments compatible with our overall growth strategy (organic and inorganic), debt management, and shareholder return. ~~Remaining~~The remaining cash balances are invested in high-quality, short-term instruments.

We believe our cash flow from operations, the availability of liquidity under our commercial paper ~~program~~programs and our revolving credit facility, and our ability to access capital from financial markets will be sufficient to meet our anticipated cash requirements for more than the next 12 months, while maintaining sufficient liquidity for normal operating purposes.

Cash Flows

Operating Activities

We generated ~~$503.5~~$855.9 million in cash flows from operations in the first 26 weeks of fiscal ~~2023,~~2024, compared to cash flows from operations of ~~$377.0~~$503.5 million in the first 26 weeks of fiscal ~~2022.~~2023. In the first 26 weeks of fiscal ~~2023,~~2024, these amounts included year-over-year ~~unfavorable~~favorable comparisons on working capital of ~~$40.1~~$172.1 million due to a ~~decrease in accounts payable, offset by a~~ favorable comparison on inventory and accounts ~~receivables and inventory.~~receivable, partially offset by an unfavorable comparison on accounts payable. Accrued expenses also had ~~negative comparisons,~~a favorable comparison, primarily from ~~accrued incentives and~~ accrued payroll in the first 26 weeks of fiscal ~~2023~~2024 in comparison to the first 26 weeks of fiscal ~~2022.~~2023. Income taxes ~~positively~~negatively impacted cash flows from operations, as estimated payments made in the first 26 weeks of fiscal ~~2023 were lower than in~~2024 increased compared to the first 26 weeks of fiscal ~~2022 due to overpayments in the prior year.~~2023.

Investing Activities

Our capital expenditures in the first 26 weeks of fiscal ~~2023~~2024 consisted primarily of investments in buildings and building improvements, technology equipment, warehouse equipment, and fleet. Our capital expenditures in the first 26 weeks of fiscal ~~2023~~2024 were ~~$128.3~~$37.1 million higher than in the first 26 weeks of fiscal ~~2022,~~2023, as we made investments to advance our Recipe for Growth strategy.

During the first 26 weeks of fiscal ~~2023,~~2024, we paid ~~$37.7 million,~~$1.2 billion, net of cash acquired, for acquisitions compared to ~~$769.7~~$37.7 million in acquisitions made in the first 26 weeks of fiscal ~~2022.~~

2023. These payments increased in the first 26 weeks of fiscal 2024 compared to the first 26 weeks of fiscal 2023 primarily due to the acquisition of Edward Don.

Financing Activities

Equity Transactions

Proceeds from exercises of share-based compensation awards were $57.3 million in the first 26 weeks of fiscal 2024, as compared to $47.3 million in the first 26 weeks of fiscal ~~2023, as compared to $36.1 million in the first 26 weeks of fiscal 2022.~~2023. The level of option exercises, and thus proceeds, will vary from period to period and is largely dependent on movements in our stock price and the time remaining before option grants expire.

In May 2021, our Board of Directors approved a share 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. We ~~commenced our share repurchase program during the second quarter of fiscal 2022. We~~ repurchased ~~3.1 million~~2,862,667 shares for ~~$267.7~~$199.9 million during the first 26 weeks of fiscal ~~2023.~~2024, and intend to repurchase $1.25 billion in fiscal 2024. As of December ~~31, 2022,~~30, 2023, we had a remaining authorization of approximately ~~$4.2~~$3.8 billion. We repurchased 6,026,110 additional shares for $500.0 million under our authorization through January 12, 2024.

Dividends paid in the first 26 weeks of fiscal ~~2023~~2024 were ~~$498.3~~$505.6 million, or ~~$0.98~~$1.00 per share, as compared to ~~$481.4~~$498.3 million, or ~~$0.94~~$0.98 per share, in the first 26 weeks of fiscal ~~2022.~~2023. In November ~~2022,~~2023, we declared our regular quarterly dividend for the second quarter of fiscal ~~2023~~2024 of ~~$0.49~~$0.50 per share, which was paid in January ~~2023.~~2024.

Debt Activity and Borrowing Availability

Our debt activity, including issuances and repayments, if any, and our borrowing availability are described in Note 8, “Debt,” in the Notes to Consolidated Financial Statements in Item 1 of Part I of this Form 10-Q. Our outstanding borrowings atas of December ~~31, 2022~~30, 2023 are disclosed within that note.

Guarantor Summarized Financial Information

On January 19, 2011, the wholly owned U.S. Broadline subsidiaries of Sysco Corporation, which distribute a full line of food products and a wide variety of non-food products, ~~at that time~~ entered into full and unconditional guarantees of all outstanding senior notes and debentures of Sysco Corporation. All subsequent issuances of senior notes and debentures in the U.S. and borrowings under the company’s ~~now~~ $3.0 billion long-term revolving credit facility have also been guaranteed by these subsidiaries. As of December ~~31, 2022,~~30, 2023, Sysco had a total of ~~$10.0~~$10.5 billion in senior notes, debentures and borrowings under the long-term revolving credit facility that were guaranteed by these subsidiary guarantors. Our remaining consolidated subsidiaries (non-guarantor subsidiaries) are not obligated under the senior notes indenture, debentures indenture or our long-term revolving credit facility. See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” contained in our fiscal ~~2022~~2023 Form 10-K for additional information regarding the terms of the guarantees.

Basis of Preparation of the Summarized Financial Information

The summarized financial information of Sysco Corporation (issuer), and certain wholly owned U.S. Broadline subsidiaries (guarantors) (together, the obligor group) is presented on a combined basis with intercompany balances and transactions between entities in the obligor group eliminated. Investments in and equity in the earnings of our non-guarantor subsidiaries, which are not members of the obligor group, have been excluded from the summarized financial information. The obligor group’s amounts due to, amounts due from and transactions with non-guarantor subsidiaries have been presented in separate line items, if they are material to the obligor financials. The following tables include summarized financial information of the obligor group for the periods presented.

5254


Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet	Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet		Dec. 31, 2022		Jul. 2, 2022		Combined Parent and Guarantor Subsidiaries Summarized Balance Sheet	Dec. 30, 2023	Jul. 1, 2023
			(In thousands)
		(In thousands)								(In thousands)
ASSETS	ASSETS
Receivables due from non-obligor subsidiaries
Receivables due from non-obligor subsidiaries
Receivables due from non-obligor subsidiaries	Receivables due from non-obligor subsidiaries		$	161,094	$	264,378
Current assets	Current assets		5,263,848		5,658,972
Total current assets	Total current assets		$	5,424,942	$	5,923,350
Notes receivable from non-obligor subsidiaries	Notes receivable from non-obligor subsidiaries		$	91,204	$	91,067
Other noncurrent assets	Other noncurrent assets		3,972,333		3,910,951
Total noncurrent assets	Total noncurrent assets		$	4,063,537	$	4,002,018

LIABILITIES	LIABILITIES
LIABILITIES
LIABILITIES
Payables due to non-obligor subsidiaries
Payables due to non-obligor subsidiaries
Payables due to non-obligor subsidiaries	Payables due to non-obligor subsidiaries		$	88,307	$	62,441
Other current liabilities	Other current liabilities		2,383,167		2,765,756
Total current liabilities	Total current liabilities		$	2,471,474	$	2,828,197
Notes payable to non-obligor subsidiaries	Notes payable to non-obligor subsidiaries		$	222,611	$	315,753
Long-term debt	Long-term debt		9,804,557		9,501,842
Other noncurrent liabilities	Other noncurrent liabilities		1,231,795		1,190,177
Total noncurrent liabilities	Total noncurrent liabilities		$	11,258,963	$	11,007,772

Combined Parent and Guarantor Subsidiaries Summarized Results of Operations

26-Week Period Ended Dec. ~~31, 2022~~30, 2023

(In thousands)

Sales

~~23,774,313~~24,197,326

Gross profit

~~4,298,963~~4,380,114

Operating income

~~2,420,612~~1,235,310

Interest expense from non-obligor subsidiaries

~~9,952~~11,781

Net earnings

~~1,464,216~~699,757

Critical Accounting Policies and Estimates

Critical accounting policies and estimates are those that are most important to the portrayal of our financial position and results of operations. These policies require our most subjective or complex judgments, often employing the use of estimates about the effect of matters that are inherently uncertain. We have reviewed with the Audit Committee of the Board of Directors the development and selection of the critical accounting policies and estimates and this related disclosure. Our most critical accounting policies and estimates pertain to goodwill and intangible assets, income taxes, company-sponsored pension plans ~~allowance for doubtful accounts~~ and inventory valuation, which are described in Item 7 of our fiscal ~~2022~~2023 Form ~~10-K and updated below.~~

~~Company-Sponsored Pension Plans~~

Amounts related to defined benefit plans recognized in the financial statements are determined on an actuarial basis. Two of the more critical assumptions in the actuarial calculations are the discount rate for determining the current value of plan benefits and the expected rate of return on plan assets. Our U.S. Retirement Plan is largely frozen and is only open to a small number of employees. Our SERP is frozen and is not open to any employees. None of these plans have a significant sensitivity to changes in discount rates specific to our results of operations, but such changes could impact our balance sheet due to a change in our funded status. Due to the low level of active employees in our retirement plans, our assumption for the rate of increase in future compensation is n~~ot a critical assumption.~~

In the second quarter of fiscal 2023, The Sysco Corporation Retirement Plan (the Plan), executed a commitment agreement to purchase a nonparticipating single premium group annuity contract that transferred $695.0 million of the Plan’s defined benefit pension obligations related to certain pension benefits. As a result of the transaction, we recognized a one-time, non-cash pre-tax pension settlement charge of $315.4 million in the second quarter of fiscal 2023.

As a result of this transaction occurring, the expected long-term rate of return used in the calculation of on-going company-sponsored benefit costs for the U.S. Retirement Plan for the remainder of fiscal 2023 was reassessed and updated to 6.00% in the second quarter of fiscal 2023, as compared to the expected long-term rate of return of 4.50% that was determined for fiscal 2023 in our fiscal 2022 Form 10-K. This update is primarily due to increases in interest rates, given that 70% of the Plan’s assets are invested in fixed income. The expectations of future returns are derived from a mathematical asset model that incorporates assumptions as to the various asset class returns, reflecting a combination of historical performance analysis and the forward-looking views of the financial markets regarding the yield on bonds, historical returns of the major stock markets and returns on alternative investments. The rate of return assumption is reviewed annually and revised as deemed appropriate.

Pension accounting standards require the recognition of the funded status of our defined benefit plans in the statement of financial position, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The amount reflected in accumulated other comprehensive loss related to the recognition of the funded status of our defined benefit plans as of December 31, 2022 was a charge, net of tax, of $829.5 million, as compared to a charge, net of tax, of $1.0 billion as of July 2, 2022. The decrease in the amount reflected in accumulated other comprehensive loss is due to a portion of it being recognized in earnings as a result of the settlement that took place in the second quarter of fiscal 2023.

Forward-Looking Statements

Certain statements made herein that look forward in time or express management’s expectations or beliefs with respect to the occurrence of future events are forward-looking statements under the Private Securities Litigation Reform Act of 1995. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Forward-looking statements can also be identified by words such as “future,” “anticipates,” “believes,” “estimates,” “expects,” “intends,” “plans,” “predicts,” “will,” “would,” “could,” “can,” “may,” “projected,” “continues,” “continuously,” variations of such terms, and similar terms and phrases denoting anticipated or expected occurrences or results. Examples of forward-looking statements include, but are not limited to, statements about:

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

•our expectations of an improving market over the course of fiscal ~~2023;~~2024;

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

•our plans regarding our transformation initiatives and the expected effects from such initiatives, including the Sysco Driver Academy;

•statements regarding uncollectible accounts, including that if collections continue to improve, additional reductions in bad debt expense could occur;

•our expectations that our Recipe for Growth strategy will allow us to better serve our customers and differentiate Sysco from our competition;

•our expectations regarding our fiscal ~~2023~~2024 sales and our rate of sales growth in fiscal ~~2023~~2024 and the three years of our long-range plan;

•our expectations regarding the impact of inflation on sales, gross margin rates and gross profit dollars;

•our expectations regarding gross margins in fiscal ~~2023;~~2024;

•our plans regarding cost savings, including our target for cost savings through fiscal 2024 and the impact of costs savings on the company;

•our belief that our purpose will allow us to grow substantially faster than the foodservice distribution industry and deliver profitable growth through our Recipe for Growth transformation, and statements regarding our plans with respect to our strategic pillars that support this growth transformation;

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

•the implications of the COVID-19 pandemic and any expectations we may have with respect thereto, including our ability to withstand and recover from the crisis;

•the expected long-term rate of return on plan assets of the U.S. Retirement Plan;

•the sufficiency of our available liquidity to sustain our operations for multiple years;

•estimates regarding the outcome of legal proceedings;

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

•estimates regarding our capital expenditures and the sources of financing for our capital expenditures;

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

•our expectations regarding real sales growth in the U.S. foodservice market and trends in produce markets;

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

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

•our expectations regarding our effective tax rate in fiscal ~~2023;~~2024;

•the sufficiency of our mechanisms for managing working capital and competitive pressures, and our beliefs regarding the impact of these mechanisms;

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

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

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

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

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

•~~the expected maturity of $528.2 million of debt in the next 12 months;~~ and

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

These statements are based on management’s current expectations and estimates; actual results may differ materially due in part to the risk factors set forth below, those within Part II, Item 1A of this ~~document~~Form 10-Q and those discussed in Item 1A of our fiscal ~~2022~~2023 Form 10-K:

•the impact and effects of public health crises, pandemics and epidemics, such as the recent outbreak of COVID-19, and the adverse impact thereof on our business, financial condition and results of operations;

•the risk that if sales from our locally managed customers do not grow at the same rate as sales from multi-unit customers, our gross margins may decline;

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

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

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

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

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

•the risks related to our efforts to implement our transformation initiatives and meet our other long-term strategic objectives, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected;

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

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

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

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

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

•the impact and effects of public health crises, pandemics and epidemics, such as the outbreak of COVID-19, and the adverse impact thereof on our business, financial condition and results of operations;

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

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

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

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

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

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

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

•the potential impact of product liability claims;

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

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

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

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

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

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

•the risk that ~~Brexit may adversely impact our operations in the U.K., including those of the Brakes Group, as well as our operations throughout the European Union (EU);~~

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

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

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

•the risk ~~that a cybersecurity incident and other technology disruptions could negatively impact~~of negative impacts to our business and our relationships with ~~customers;~~customers from a cybersecurity incident and/or other technology disruptions;

•the risk that changes in the method of determining LIBOR, or the replacement of LIBOR with an alternative reference rate, may adversely affect interest expense related to outstanding debt;

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

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

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

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

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

•the risk that the exclusive forum provisions in our amended and restated bylaws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

For a more detailed discussion of factors that could cause actual results to differ from those contained in the forward-looking statements, see the risk factors discussion contained in Item 1A of our fiscal ~~2022~~2023 Form 10-K and in Item 1A of Part II of this Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Our market risks consist of interest rate risk, foreign currency exchange rate risk, fuel price risk and investment risk. For a discussion on our exposure to market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures about Market Risks” in our fiscal ~~2022~~2023 Form 10-K. There have been no significant changes to our market risks since July ~~2, 2022.~~1, 2023.

Item 4. Controls and Procedures

Sysco’s management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of December ~~31, 2022.~~30, 2023. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the Exchange Act), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding the required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Sysco’s disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. Based on the evaluation of our disclosure controls and procedures as of December ~~31, 2022,~~30, 2023, our chief executive officer and chief financial officer concluded that, as of such date, Sysco’s disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fiscal quarter ended December ~~31, 2022,~~30, 2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

5859

PART II – OTHER INFORMATION

Item 1. Legal Proceedings

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 material environmental matters to disclose for this period.

From time to time, we may be party to legal proceedings that arise in the ordinary course of our business. We do not believe there are any pending legal proceedings that, individually or in the aggregate, will have a material adverse effect on the company’s financial condition, results of operations or cash flows.

Item 1A. Risk Factors

~~Except as provided below, there were no material changes from the~~For a discussion of our risk factors, ~~disclosed in Item 1A of our fiscal 2022 Form 10-K.~~

~~Unfavorable macroeconomic conditions, as well as unfavorable conditions in particular local markets, may adversely affect our results of operations and financial condition.~~

~~Our results of operations are susceptible to regional, national and international economic trends and uncertainties. Economic conditions can affect us in~~see the ~~following ways:~~

•~~Unfavorable conditions can depress sales and/or gross margins in a given market.~~

•~~Food cost and fuel cost inflation can lead to reductions in the frequency of dining out and the amount spent by consumers for food-away-from-home purchases, reducing demand for our products.~~

•~~Heightened uncertainty in the financial markets negatively affects consumer confidence and discretionary spending.~~

•~~The inability to consistently access credit markets could impair our ability to market and distribute food products, support our operations and meet our customers’ needs.~~

•~~Liquidity and the inability of our customers and suppliers to consistently access credit markets to obtain cash to support their operations can cause temporary interruptions~~section entitled “Risk Factors” in our ~~ability to collect funds from our customers and obtain the products and supplies that we need in the quantities and at the prices that we request.~~

•~~Foreign exchange rate fluctuations can adversely impact our competitiveness and/or financial results.~~

The countries in which we operate, have experienced, and are experiencing, from time to time, deteriorating economic conditions and heightened uncertainty in financial markets, which have adversely impacted business and consumer confidence and spending and depressed capital investment and economic activity in the affected regions. Such conditions and high levels of uncertainty make it difficult to predict when, or if, a recession may occur. In fact, some commentators have suggested that the U.S. is already in a recession. A prolonged economic downturn or recession in the U.S. or global economies, and the impact2023 Annual Report on gross domestic product growth, corporate earnings, consumer confidence, employment rates, income levels and/or personal wealth, could have a material adverse effect on our results of operations and financial condition.Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

None

Issuer Purchases of Equity Securities

~~None~~

We made the following share repurchases during the second quarter of fiscal 2024:


ISSUER PURCHASES OF EQUITY SECURITIES
Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Month #1
October 1 - October 28	569,405	$	64.48	569,405	—
Month #2
October 29 - November 25	574,847	67.62		574,847	—
Month #3
November 26 - December 30	338,707	72.61		338,707	—
Totals	1,482,959	$	67.56	1,482,959	—


(1)			The total number of shares purchased includes 0, 1,637 and 1,602 shares tendered by individuals in connection with stock option exercises in Month #1, Month #2 and Month #3, respectively.
(2)			See the discussion in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources – Equity Transactions” for additional information regarding Sysco’s share repurchase program.

We repurchased 2,862,667 shares for $199.9 million during fiscal 2024. As of December 30, 2023, we had a remaining authorization of approximately $3.8 billion. We purchased 6,026,110 additional shares under our authorization through January 12, 2024.

Item 3. Defaults Upon Senior Securities

None

Item 4. Mine Safety Disclosures

Not applicable

Item 5. Other Information

~~None~~Insider Trading Arrangements and Policies

The table below shows the plans or other arrangements (each, a (Plan)) adopted or terminated during the quarter ended December 30, 2023 providing for the purchase and/or sale of Sysco securities by Sysco’s directors and Section 16 officers:

Name

Title

Action

Date

Trading Arrangement

Number of Securities Covered

Expiration Date (3)

Rule 10b5-1 (1)

Non-Rule 10b5-1 (2)

Kevin Hourican

President and Chief Executive Officer

Adopt

December 13, 2023

75,019 shares to be sold

December 31, 2024

Neil Russell

Senior Vice President,
Corporate Affairs and Chief Administrative Officer

Adopt

December 7, 2023

5,129 shares to be sold

December 31, 2024

Chris Jasper

Senior Vice President and President, U.S. Broadline and Foodservice Operations

Adopt

December 13, 2023

4,000 shares to be sold

December 31, 2024


(1)			Intended to satisfy the affirmative defense conditions of SEC Rule 10b5-1(c).
(2)			Non-Rule Rule 10b5-1 trading arrangement as defined in Item 408 of Regulation S-K.
(3)			Each Plan terminates on the earlier of: (i) the expiration date listed in the table above; (ii) the first date on which all trades set forth in the Plan have been executed; or (iii) such date the Plan is otherwise terminated according to its terms.

Item 6. Exhibits

The exhibits listed on the Exhibit Index below are filed as a part of this Quarterly Report on Form 10-Q.

6061

EXHIBIT INDEX


3.1	—	Restated Certificate of Incorporation, incorporated by reference to Exhibit 3(a) to Form 10-K for the year ended June 28, 1997 (File No. 1-6544).

3.2	—	Certificate of Amendment to Restated Certificate of Incorporation increasing authorized shares, incorporated by reference to Exhibit 3(e) to Form 10-Q for the quarter ended December 27, 2003 (File No. 1-6544).

3.3	—	Form of Amended Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock, incorporated by reference to Exhibit 3(c) to Form 10-K for the year ended June 29, 1996 (File No. 1-6544).

3.4	—	Amended and Restated Bylaws of Sysco Corporation dated ~~August 27, 2021,~~June 21, 2023, incorporated by reference to Exhibit ~~3.4~~3.1 to the Form 10-K ~~for the year ended July 3, 2021~~ filed on ~~August 30, 2021~~June 23, 2023 (File No. 1-6544).

~~10.1#~~4.1	—	~~Commitment Agreement~~Forty-Fourth Supplemental Indenture, dated ~~October 18, 2022, by and~~as of November 17, 2023, among Sysco Corporation, ~~Massachusetts Mutual Life Insurance Company~~the guarantors named therein and ~~State Street Global Advisors Trust Company.~~U.S. Bank National Association, as Trustee, to the 5.750% Senior Notes due 2029 (including the Form of 5.750% Senior Note), incorporated by reference to Exhibit 4.1 to the Form 8-K filed on November 17, 2023 (File No. 1-6544).

~~10.2†#~~4.2	—	Forty-Fifth Supplemental Indenture, dated as of November 17, 2023, among Sysco Corporation, the guarantors named therein and U.S. Bank National Association, as Trustee, relating to the 6.000% Senior Notes due 2034 (including the Form of ~~Severance Letter Agreement for~~6.000% Senior ~~Vice Presidents.~~Note), incorporated by reference to Exhibit 4.2 to the Form 8-K filed on November 17, 2023 (File No. 1-6544).

~~10.3†~~10.1†#	—	Form of Restricted Stock Award Agreement for Directors ~~(2022)~~(2023) pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan.

~~10.4†~~10.2†#	—	Form of Restricted Stock Award Agreement for Directors ~~(2022)~~(2023) pursuant to the Sysco Corporation 2018 Omnibus Incentive Plan (for directors who elected to defer receipt of shares under the 2009 Board of Directors Stock Deferral Plan).

~~10.5†~~10.3†#	—	Description of Compensation Arrangements with Non-Employee Directors.











22.1	—	Subsidiary Guarantors and Issuers of Guaranteed Securities, incorporated by reference to Exhibit 22.1 to the Form 10-K for the year ended July ~~2, 2022~~1, 2023 filed on August ~~26, 2022~~25, 2023 (File No. 1-6544).

31.1#	—	CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2#	—	CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1#	—	CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2#	—	CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.SCH#	—	Inline XBRL Taxonomy Extension Schema Document

101.CAL#	—	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF#	—	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB#	—	Inline XBRL Taxonomy Extension Labels Linkbase Document

101.PRE#	—	Inline XBRL Taxonomy Extension Presentation Linkbase Document



104	—	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

___________

† Executive Compensation Arrangement pursuant to Item 601(b)(10)(iii)(A) of Regulation S-K

# Filed herewith

6163

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


		Sysco Corporation
		(Registrant)


Date: January ~~31, 2023~~30, 2024	By:	/s/ KEVIN P. HOURICAN
		Kevin P. Hourican
		President and Chief Executive Officer

Date: January ~~31, 2023~~30, 2024	By:	/s/ ~~NEIL A. RUSSELL~~KENNY K. CHEUNG
		~~Neil A. Russell~~Kenny K. Cheung
		~~Senior~~Executive Vice President
		~~Corporate Affairs and Chief~~
		~~Communications Officer~~ and
		~~Interim~~ Chief Financial Officer

Date: January ~~31, 2023~~30, 2024	By:	/s/ ~~SCOTT B. STONE~~JENNIFER L. JOHNSON
		~~Scott B. Stone~~Jennifer L. Johnson
		Senior Vice President ~~of Financial Reporting~~and
		~~and Interim~~ Chief Accounting Officer



	PART I – FINANCIAL INFORMATION	Page No.
Item 1.	Financial Statements	1
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2731
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	57
Item 4.	Controls and Procedures	5758
	PART II – OTHER INFORMATION
Item 1.	Legal Proceedings	5859
Item 1A.	Risk Factors	5859
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5859
Item 3.	Defaults Upon Senior Securities	59
Item 4.	Mine Safety Disclosures	5960
Item 5.	Other Information	5960
Item 6.	Exhibits	5960

Signatures		6163