Sysco (SYY) 8-K An Increase of 12.5% Compared to the Prior Year

Exhibit 99.1

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Neil Russell
Vice President, Investor Relations
T 281-584-1308

SYSCO REPORTS SECOND FISCAL QUARTER DILUTED EPS OF $0.45,

AN INCREASE OF 12.5% COMPARED TO THE PRIOR YEAR

HOUSTON, February 1, 2010 —Sysco Corporation (NYSE: SYY) today announced financial results for its 13-week second quarter ended December 26, 2009.

Second Quarter Fiscal 2010 Highlights

• Sales were $8.9 billion, a decrease of 3.1% from $9.1 billion in the second quarter of fiscal 2009.

• Operating income was $462 million, an increase of 9.6% compared to $422 million in last year’s second quarter.

• Diluted earnings per share (EPS) was $0.45, an increase of 12.5% compared to $0.40 in last year’s second quarter.

First Half Fiscal 2010 Highlights

• Sales were $17.9 billion, a decrease of 5.7% from $19.0 billion in the first half of fiscal 2009.

• Operating income was $960 million, an increase of 3.6% compared to $927 million in last year’s first half.

• Diluted EPS was $1.00, an increase of 16.3% compared to $0.86 in last year’s first half.

     “I am encouraged by our operating performance this quarter,” said Bill DeLaney, Sysco’s chief executive officer. “While the business environment remains challenging, deflation pressures appear to be moderating from highs we saw early in the quarter and case volume trends continue to improve. I want to recognize our associates for their efforts during the quarter, as they continued to provide excellent service to our customers, improve productivity and maintain strong cost controls.”

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Second Quarter Fiscal 2010 Summary

     Sales for the second quarter were $8.9 billion, a decrease of 3.1% compared to the same period last year. Food cost deflation, as measured by the estimated change in Sysco’s cost of goods, was 3.5% percent for the quarter. Sales from acquisitions (within the last 12 months) increased sales by 0.6%. The impact of changes in foreign exchange rates for the quarter increased sales by 1.2%.

     Operating expenses declined $96 million, or 7.2%, for the second quarter of fiscal 2010 compared to the prior year period. The decrease in operating expenses was primarily a result of a $37 million favorable change in the value of Corporate Owned Life Insurance (COLI) and a $25 million decline in payroll expense related to reduced headcount. Operating income increased $40 million, or 9.6%, to $462 million during the second quarter, and operating margin was 5.2%.

     Net earnings for the second quarter were $268 million, an increase of $31 million, or 12.9%. Diluted EPS was $0.45, aided by a $0.01 favorable impact from COLI, compared to $0.40 in the prior year period which included a $0.05 negative impact from COLI.

First Half Fiscal 2010 Summary

     Sales for the first half of fiscal 2010 were $17.9 billion, a decrease of 5.7% compared to the same period last year. Food cost deflation, as measured by the estimated change in Sysco’s cost of goods, was 3.4% percent for the first half of the year. Sales from acquisitions (within the last 12 months) increased sales by 0.6%. The impact of changes in foreign exchange rates for the first half of the year increased sales by 0.3%.

     Operating expenses declined $227 million, or 8.4%, for the first half of fiscal 2010 compared to the prior year period. The decrease in operating expenses was primarily a result of a $95 million decline in payroll expense related to reduced headcount and lower incentive compensation, as well as an $81 million favorable change in the value of COLI. Operating income increased $33 million, or 3.6%, to $960 million during the first half of fiscal 2010, and operating margin was 5.3%.

     Net earnings for the first half of fiscal 2010 were $595 million, an increase of $80 million, or 15.6%. Diluted EPS was $1.00, aided by a $0.04 favorable impact from COLI and a $0.05 tax benefit related to the company’s IRS settlement announced in the first quarter of fiscal 2010. Diluted EPS in the prior year period was $0.86 which included a $0.09 negative impact from COLI.

Capital Spending

     Capital expenditures totaled $138 million and $248 million for the second quarter and first half of fiscal 2010, respectively. The primary areas for investments included facility replacements and expansions, technology, and additions and replacements to Sysco’s fleet. For the fiscal 2010 year, the company projects capital expenditures will be in the range of $600 million to $650 million.

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Conference Call & Webcast

     Sysco’s second quarter fiscal 2010 earnings conference call will be held on Monday, February 1, 2010 at 10:00 a.m. EST. A live webcast of the call, as well as a copy of this press release, will be available online at www.sysco.com in the Investor Relations section.

About Sysco

     Sysco is the global leader in selling, marketing and distributing food products to restaurants, healthcare and educational facilities, lodging establishments and other customers who prepare meals away from home. Its family of products also includes equipment and supplies for the foodservice and hospitality industries. The company operates 186 distribution facilities serving approximately 400,000 customers. For the fiscal year 2009 that ended June 27, 2009, the company generated more than $36 billion in sales. For more information about Sysco visit the company’s Internet home page at www.sysco.com.

Forward-Looking Statements

     Certain statements made herein are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include statements regarding the continued improvement in volume trend, moderation of deflation pressures and projections regarding capital expenditures. These statements involve risks and uncertainties and are based on management’s current expectations and estimates; actual results may differ materially. Those risks and uncertainties that could impact sales volume and deflation include risks relating to sensitivity to general economic conditions, including the current economic environment and decreases in consumer spending; the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise; and labor issues. Capital expenditures may vary from those projected based on changes in business plans and other factors, including risks related to the implementation of our business transformation project, 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. For a discussion of additional factors impacting Sysco’s business, see the Company’s Annual Report onForm 10-K for the year ended June 27, 2009 as filed with the Securities and Exchange Commission.

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Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands, Except for Share and Per Share Data)

	26-Week Period Ended						13-Week Period Ended
	Dec. 26, 2009			Dec. 27, 2008			Dec. 26, 2009			Dec. 27, 2008
Sales	$	17,949,925		$	19,027,232		$	8,868,499		$	9,149,803
Cost of sales		14,507,679			15,390,563			7,173,612			7,399,690
Gross margin		3,442,246			3,636,669			1,694,887			1,750,113
Operating expenses		2,482,567			2,710,053			1,232,536			1,328,249
Operating income		959,679			926,616			462,351			421,864
Interest expense		65,322			54,810			31,522			28,400
Other income, net		(3,150	)		(8,036	)		(1,138	)		(5,223	)
Earnings before income taxes		897,507			879,842			431,967			398,687
Income taxes		302,953			365,374			163,618			161,033
Net earnings	$	594,554		$	514,468		$	268,349		$	237,654
Net earnings:
Basic earnings per share	$	1.00		$	0.86		$	0.45		$	0.40
Diluted earnings per share		1.00			0.86			0.45			0.40
Average shares outstanding		592,110,975			599,903,629			592,651,712			597,549,831
Diluted shares outstanding		592,678,989			601,100,591			593,372,477			598,233,384
Dividends declared per common share	$	0.49		$	0.46		$	0.25		$	0.24

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Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except for Share Data)

	Dec. 26, 2009			June 27, 2009			Dec. 27, 2008
	(unaudited)						(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	647,606		$	1,087,084		$	373,074
Short-term investments		61,860			—			—
Accounts and notes receivable, less allowances of $67,035, $36,078 and $67,400		2,526,044			2,468,511			2,623,509
Inventories		1,790,327			1,650,666			1,862,187
Prepaid expenses and other current assets		63,674			64,418			60,938
Total current assets		5,089,511			5,270,679			4,919,708
Plant and equipment at cost, less depreciation		3,072,721			2,979,200			2,890,641
Other assets
Goodwill		1,551,550			1,510,795			1,384,790
Intangibles, less amortization		118,032			121,089			78,976
Restricted cash		128,683			93,858			93,541
Prepaid pension cost		70,753			26,746			249,840
Other assets		245,716			214,252			193,926
Total other assets		2,114,734			1,966,740			2,001,073
Total assets	$	10,276,966		$	10,216,619		$	9,811,422
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,906,745		$	1,856,887		$	1,707,331
Accrued expenses		793,303			797,756			806,055
Accrued income taxes		56,775			323,983			538,790
Deferred taxes		18,482			162,365			234,286
Current maturities of long-term debt		8,438			9,163			6,747
Total current liabilities		2,783,743			3,150,154			3,293,209
Other liabilities
Long-term debt		2,468,690			2,467,486			1,972,612
Deferred taxes		545,863			526,377			539,534
Other long-term liabilities		548,383			622,900			712,055
Total other liabilities		3,562,936			3,616,763			3,224,201
Commitments and contingencies
Shareholders’ equity
Preferred stock, par value $1 per share, Authorized 1,500,000 shares, issued none		—			—			—
Common stock, par value $1 per share, Authorized 2,000,000,000 shares, issued 765,174,900 shares		765,175			765,175			765,175
Paid-in capital		788,138			760,352			750,843
Retained earnings		6,844,095			6,539,890			6,281,575
Accumulated other comprehensive loss		(180,095	)		(277,986	)		(197,287	)
Treasury stock at cost, 173,100,605, 175,148,403 and 173,746,062 shares		(4,287,026	)		(4,337,729	)		(4,306,294	)
Total shareholders’ equity		3,930,287			3,449,702			3,294,012
Total liabilities and shareholders’ equity	$	10,276,966		$	10,216,619		$	9,811,422

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Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)

	26-Week Period Ended
	Dec. 26, 2009			Dec. 27, 2008
Cash flows from operating activities:
Net earnings	$	594,554		$	514,468
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense		39,913			35,129
Depreciation and amortization		189,428			190,609
Deferred tax (benefit) provision		(172,756	)		337,453
Provision for losses on receivables		19,815			30,652
Other non-cash items		536			(112	)
Additional investment in certain assets and liabilities, net of effect of businesses acquired:
(Increase) decrease in receivables		(53,597	)		26,769
(Increase) in inventories		(121,626	)		(57,859	)
Decrease in prepaid expenses and other current assets		1,307			2,144
Increase (decrease) in accounts payable		27,688			(301,018	)
(Decrease) in accrued expenses		(16,974	)		(149,811	)
(Decrease) in accrued income taxes		(236,099	)		(68,877	)
(Increase) decrease in other assets		(30,372	)		2,087
(Decrease) increase in other long-term liabilities and prepaid pension cost, net		(97,343	)		2,889
Excess tax benefits from share-based compensation arrangements		(475	)		(2,774	)
Net cash provided by operating activities		143,999			561,749
Cash flows from investing activities:
Additions to plant and equipment		(247,575	)		(178,596	)
Proceeds from sales of plant and equipment		2,422			2,077
Acquisition of businesses, net of cash acquired		(9,161	)		(16,277	)
Purchases of short-term investments		(60,162	)		—
(Increase) in restricted cash		(34,825	)		(954	)
Net cash used for investing activities		(349,301	)		(193,750	)
Cash flows from financing activities:
Other debt borrowings		4,580			9,316
Other debt repayments		(5,601	)		(5,610	)
Common stock reissued from treasury for share-based compensation awards		36,914			85,628
Treasury stock purchases		—			(358,751	)
Dividends paid		(283,766	)		(264,687	)
Excess tax benefits from share-based compensation arrangements		475			2,774
Net cash used for financing activities		(247,398	)		(531,330	)
Effect of exchange rates on cash		13,222			(15,147	)
Net (decrease) in cash and cash equivalents		(439,478	)		(178,478	)
Cash and cash equivalents at beginning of period		1,087,084			551,552
Cash and cash equivalents at end of period	$	647,606		$	373,074
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	67,670		$	55,577
Income taxes		759,704			73,830

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Sysco Corporation and its Consolidated Subsidiaries
COMPARATIVE SEGMENT DATA (Unaudited)
(In Thousands)

	26-Week Period Ended						13-Week Period Ended
	Dec. 26, 2009			Dec. 27, 2008			Dec. 26, 2009			Dec. 27, 2008
Sales:
Broadline	$	14,393,429		$	15,077,939		$	7,084,723		$	7,205,372
SYGMA		2,308,174			2,460,809			1,157,313			1,232,574
Other		1,495,543			1,726,797			752,666			831,057
Intersegment		(247,221	)		(238,313	)		(126,203	)		(119,200	)
Total	$	17,949,925		$	19,027,232		$	8,868,499		$	9,149,803

Comparative Supplemental Statistical Information Related to Sales (Unaudited)
Comparative Sysco Brand Sales and Marketing Associate-Served Sales data are summarized below.

	26-Week Period Ended						13-Week Period Ended
	Dec. 26, 2009			Dec. 27, 2008			Dec. 26, 2009			Dec. 27, 2008
Sysco Brand Sales as a % of MA-Served Sales		46.82	%		49.17	%		46.71	%		48.86	%
Sysco Brand Sales as a % of Total Broadline Sales		37.97	%		40.35	%		37.54	%		39.83	%
MA-Served Sales as a % of Total Broadline Sales		46.52	%		47.02	%		44.76	%		45.31	%

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