SYSCO CORP

CONSOLIDATED BALANCE SHEETS

(In millions, except for share data)

Note: The June 27, 2026 balance sheet has been derived from the audited financial statements at that date.

CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)

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

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

(In millions)

CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited)

(In millions, except for share data)

CONSOLIDATED CASH FLOWS (Unaudited)

(In millions)

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” 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 June 27, 2026 (our “fiscal 2026 Form 10-K”). 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 Balance Sheet Information

Supplier Financing Programs

We have agreements with third parties to provide supplier finance programs which facilitate participating suppliers’ ability to finance payment obligations from the 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 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.

Our outstanding payment obligations that suppliers financed to participating financial institutions, which are included inaccounts payable on the consolidated balance sheets, are as follows:

Accounts Receivable, Less Allowances

We utilize arrangements to sell portions of our trade accounts receivable to third-party financial institutions on a non-recourse basis in exchange for cash. The arrangements meet the requirements for the receivables transferred to be accounted for as sales and are accounted for as a reduction in trade receivables. Proceeds from the sales are reported net of negotiated discount and are recorded as a reduction to accounts receivable outstanding in the company’s consolidated balance sheets and as cash flows from operating activities in the company’s consolidated statements of cash flows. Accounts receivable sold under these arrangements were $1.6 billion and $1.4 billion for the first 13 weeks of fiscal 2027 and 2026, respectively.

In certain instances, Sysco has continuing involvement subsequent to the transfer, limited to providing certain servicing and collection actions on behalf of the purchasers of the designated trade receivables. The outstanding aggregate principal amount of receivables that has been derecognized and remain outstanding was $258 million and $222 million on September 26, 2026 and June 27, 2026, respectively. We continue to service the receivables post-transfer on a non-recourse basis with no participating interest.

Supplemental Cash Flow Information

The following table sets forth 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:

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

2. NEW ACCOUNTING STANDARDS

Recent Accounting Guidance Not Yet Adopted

Disaggregation of Income Statement Expenses

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about the types of expenses included within commonly presented income statement captions. The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026 (our fiscal 2028), and interim reporting periods for our fiscal years beginning after December 15, 2027 (our first quarter of fiscal 2029). Early adoption is permitted. The standard updates are to be applied prospectively with the option for retrospective application. We are currently evaluating the effect of adopting ASU 2024-03 on our disclosures.

Internal-Use Software

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40), which amends certain aspects of the accounting and disclosure of software costs under ASU 350-40. This ASU updates the cost capitalization threshold for internal-use software development costs by removing all references to software project development stages and providing new guidance on how to evaluate whether the probable-to-complete recognition threshold has been met. ASU 2025-06 is effective for annual reporting periods beginning after December 15, 2027 (our fiscal 2029), and interim reporting periods within those annual reporting periods (our first quarter of fiscal 2029). Early adoption is permitted. The standard updates may be applied prospectively, retrospectively, or via a modified prospective transition method. We are currently evaluating the effect of adopting ASU 2025-06 on our consolidated financial statements and disclosures.

Environmental Credits and Environmental Credit Obligations

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). This ASU enhances the recognition, measurement, presentation, and disclosure requirements of environmental credits and environmental credit obligations. ASU 2026-02 is effective for annual reporting periods beginning after December 15, 2027 (our fiscal 2029), and interim reporting periods within those annual reporting periods (our first quarter of fiscal 2029). Early adoption is permitted. The standard updates should be applied on a retrospective basis. We are currently evaluating the effect of adopting ASU 2026-02 on our consolidated financial statements and disclosures.

3. REVENUE

We recognize revenues when 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, were $5.8 billion and $5.5 billion as of September 26, 2026 and June 27, 2026, respectively.

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

4. ACQUISITIONS

On March 30, 2026, Sysco Corporation entered into an agreement and plan of merger (as amended, modified, or supplemented, the “Merger Agreement”) pursuant to which Sysco Corporation will acquire JRD Unico Inc. and Warehouse Realty, LLC (collectively, “Jetro Restaurant Depot” or “JRD”) through a series of transactions (the merger and the other transactions contemplated by the Merger Agreement, “JRD Acquisition Transactions”). JRD is a leading U.S. wholesale cash-and-carry foodservice provider serving smaller, independent restaurants and businesses with a broad assortment of fresh and low-priced products.

Sysco has agreed to pay approximately $29.1 billion to JRD equity holders, comprised of $21.6 billion in cash, subject to customary adjustments, and 91.5 million shares of Sysco Holdings Corporation (“Sysco Holdings”) common stock. Following the closing of the JRD Acquisition Transactions, former holders of Sysco common stock and former equity holders of JRD will own shares of Sysco Holdings common stock, which are expected to be listed for trading on the NYSE. JRD’s equity holders are expected to hold approximately 16% and our stockholders are expected to hold approximately 84% of the outstanding shares of Sysco Holdings common stock in the aggregate. Refer to Note 8, “Debt” for discussion on how Sysco is financing the acquisition of JRD and Note 7, “Derivative Financial Instruments” for details on how Sysco is hedging the interest rate risk associated with its financing arrangements. Refer to Note 15, “Subsequent Events” for discussion of JRD financing and hedging transactions that took place subsequent to September 26, 2026.

The JRD Acquisition Transactions are expected to close by the third quarter of Sysco’s fiscal 2027, subject to the satisfaction of customary closing conditions, including regulatory clearance under the Hart-Scott-Rodino Act. If the Merger Agreement is terminated due to a failure to obtain required regulatory clearances or because the mergers are not consummated by the termination date set forth in the Merger Agreement, Sysco has agreed to pay the JRD’s holder representative a termination fee of $1.164 billion.

5. FAIR VALUE MEASUREMENTS

Sysco’s policy is to invest only in high-quality investments. The fair values of 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 our marketable securities 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 our derivative instruments 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 values of derivative assets and liabilities designated as hedges in the consolidated balance sheet are disclosed in Note 7, “Derivative Financial Instruments.” The deal-contingent interest rate lock unwind proceeds were calculated as the difference between contractual strike rates and forward market interest rates on the termination date. The deal-contingent interest rate lock unwind proceeds of $241 million were placed in escrow and the present value is probability weighted for the likelihood of closure of the JRD Acquisition Transactions as of the valuation date to arrive at a fair value estimate as of September 26, 2026. The lowest level of inputs used that were significant in determining the fair value were considered Level 3 inputs. See Note 7, “Derivative Financial Instruments,” for more information on our deal-contingent rate lock transactions.

The following tables present our assets measured at fair value on a recurring basis as of September 26, 2026 and June 27, 2026:

The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of 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 $12.9 billion as of September 26, 2026 and $13.0 billion as of June 27, 2026, while the carrying value was $13.8 billion as of September 26, 2026 and $13.5 billion as of June 27, 2026.

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. We include fixed income securities maturing in less than 12 months within prepaid expenses and other current assets. Fixed income securities maturing in more than 12 months are included within other assets in the accompanying consolidated balance sheets. 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 in the first 13 weeks of fiscal 2027.

The following table presents our available-for-sale marketable securities as of September 26, 2026 and June 27, 2026:

As of September 26, 2026, 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.

There were no significant realized gains or losses in marketable securities in the first 13 weeks of fiscal 2027.

7. DERIVATIVE FINANCIAL INSTRUMENTS

Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, we do 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.

Hedging of interest rate risk

We manage our debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates. The Company’s portfolio includes receive-fixed, pay-floating swap agreements to trade the fixed interest rate on certain senior note issuances with variable rates. The interest rate swaps are designated as fair value hedges and gains or losses on the hedges impact interest expense within the consolidated statements of income. Additionally, the Company periodically executes forward starting swap agreements to hedge the risk of changes in cash flows attributable to changes in interest rates, which are designated as cash flow hedges with gains and losses on the hedge initially recognized in accumulated other comprehensive income (loss). The company considers economic mismatches between the swaps and hedged transactions on a periodic basis, and if the hedging instrument is not highly effective at achieving offsetting cash flows attributed to changes in interest rate risks, the hedging relationship will be discontinued.

In the first quarter of fiscal 2027, we cash settled forward starting swap agreements related to $1 billion of the 5-year and $1 billion of the 10-year fixed rate debt issuances that priced in the first quarter of fiscal 2027. Refer to Note 15, “Subsequent Events” for information related to the debt issuances. The swaps hedged the risk of changes in cash flows attributable to changes in the designated benchmark interest rate and were designated as cash flow hedges prior to settlement. The gain on cash settlement is recognized in accumulated other comprehensive income (loss), net of deferred tax and will be reclassified into interest expense in the same period(s) during which the hedged transactions affect earnings.

Hedging of foreign currency risk

Sysco has cross-currency swaps that hedge the foreign currency exposure of our net investment in certain foreign operations. These cross-currency swaps are designated as net investment hedges with gains and losses recognized within accumulated other comprehensive income (loss), net, including changes in fair value attributed to the spot-forward rate differential which are excluded from the assessment of hedge effectiveness. The initial value of the excluded component is recognized in earnings over the life of the hedging instrument. Additionally, the Company periodically designates foreign-denominated debt as a net investment hedge to mitigate foreign currency exposure in certain foreign operations. In the first quarter of fiscal 2027, we designated CAD $1.5 billion (approximately USD $1.1 billion) of newly issued senior notes as a net investment hedge to mitigate foreign currency exposure of our Canadian operations.

Sysco routinely manages foreign currency risk with spot and forward-rate cross-currency swaps on foreign-denominated balances. Where applicable, the swaps are designated as fair value hedges and for swaps hedging the change in foreign currency spot rates, we have 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 value of the excluded components which is recognized in earnings over the life of the hedging instrument. Unrealized gains or losses on components excluded from hedge effectiveness are recorded within accumulated other comprehensive income (loss) and recognized into earnings over the life of the hedged instrument.

Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the Euro, U.S. dollar, Polish zloty and Danish krone. Accounts payable associated with these inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. We periodically enter 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.

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 are designated as cash flow hedges.

Derivatives not designated as hedging instruments

The deal-contingent interest rate lock transactions executed in fiscal 2026 were terminated in the first quarter of fiscal 2027, specifically, on pricing date of the related notes. The deal-contingent unwind proceeds of $241 million were placed in escrow and the present value is probability weighted for the likelihood of closure of the JRD Acquisition Transactions as of the valuation date to arrive at a fair value estimate as of September 26, 2026. We did not apply hedge accounting, therefore changes in fair value have been recognized in other income and expense within our statement of consolidated results of operations.

None of our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of September 26, 2026 are presented below:

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheets as of September 26, 2026 and June 27, 2026 are as follows:

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:

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:

The location and effect of cash flow, net investment, and excluded components of fair value hedges on the consolidated statements of comprehensive income for the 13-week periods ended September 26, 2026 and September 27, 2025, presented on a pretax basis, are as follows:

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of September 26, 2026 are as follows:

The carrying amount of hedged liabilities in the consolidated balance sheet as of June 27, 2026 was $2.3 billion.

8. DEBT

The aggregate commitments of the lenders under Sysco’s long-term revolving credit facility are $3.0 billion, and such commitments will increase to $4.0 billion after the JRD Acquisition Transactions are complete. The revolving credit agreement has an option to increase such commitments to $5.0 billion. The facility includes a covenant requiring Sysco to maintain a ratio of consolidated EBITDA to consolidated interest expense of 3.0 to 1.0 over four consecutive fiscal quarters. The revolving credit facility expires on April 16, 2031. As of September 26, 2026, there wereno borrowings outstanding under this facility.

Sysco has a commercial paper program allowing the company to issue short-term unsecured 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 noted above. As of September 26, 2026, there wereno commercial paper issuances outstanding under this program in the U.S. and €329 million (the equivalent of $375 million) in commercial paper issuances outstanding in Europe.

Sysco expects to finance the cash portion of the purchase price of the acquisition partially with debt. In the fourth quarter of fiscal 2026, Sysco Corporation executed a commitment letter for a $22 billion senior unsecured 364-day bridge loan facility that, to the extent necessary, will be used to fund the cash portion of the purchase price and pay related fees and expenses. In the fourth quarter of fiscal 2026, Sysco Corporation entered into a $3 billion senior unsecured delayed draw term loan facility, comprised of a $1.25 billion 364-day tranche and a $1.75 billion 2-year tranche, reducing the bridge loan facility commitments from $22 billion to $19 billion. Sysco Corporation later amended the term loan facility on September 4, 2026, to establish an additional $750 million senior unsecured delayed draw term loan facility, consisting of a $375 millionsix-year delayed draw term loan tranche and a $375 million eight-year delayed draw term loan tranche. Fees paid upfront for the bridge facility as of September 26, 2026 total $126 million and will be amortized to interest expense within our statement of consolidated results of operations over the expected life of the bridge facility unless it is terminated at an earlier date. This bridge added approximately $30 million of interest expense in fiscal 2026 and is expected to add approximately $96 million of interest expense in fiscal 2027. Following the completion of the debt issuances described in Note 15, “Subsequent Events,” the bridge facility commitments under the commitment letter were terminated on October 8, 2026.

On September 25, 2026, Sysco Corporation and Sysco Holdings (collectively, the “Issuers”), co-issued CAD denominated senior notes in an aggregate principal amount of C$1.5 billion (approximately USD $1.1 billion) (the “CAD Senior Notes”). The CAD Senior Notes were issued pursuant to the Base Indenture dated as of September 25, 2026 (the “Base Indenture”), by and between the issuers, the guarantors named therein and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), as supplemented and amended by the First Supplemental Indenture thereto, dated as of September 25, 2026, by and among the issuers, the guarantors named therein and the Trustee (the “First Supplemental Indenture”, and together with the Base Indenture, the “CAD Senior Indenture”).

The details of the CAD Senior Notes are as follows:

The CAD Senior Notes are fully and unconditionally guaranteed, jointly and severally, by Sysco Corporation’s direct and indirect wholly owned domestic subsidiaries that guarantee Sysco Corporation’s existing senior notes. Interest on the 2030 notes and the 2034 notes will be paid semi-annually in arrears on April 3 and October 3 of each year, beginning on April 3, 2027. The 2030 notes will mature on October 3, 2030, and the 2034 notes will mature on October 3, 2034.

At the issuers’ option, any or all of the notes may be redeemed, in whole or in part, at any time prior to maturity. If the issuers elect to redeem (i) the 2030 notes before the date that isone month prior to the maturity date, or (ii) the 2034 notes before the date that istwo months prior to the maturity date, the issuers will pay a redemption price equal to (1)100% of the principal amount of the notes of the applicable series to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption and (2) a “make-whole” amount calculated by reference to the sum of the present values of the remaining scheduled payments of principal and interest on the notes of the applicable series to be redeemed discounted to the date of redemption. If (i) the consummation of the JRD Acquisition Transactions does not occur on or prior to (a) March 30, 2028 or (b) any later date as the parties to the Merger Agreement may agree, (ii) Sysco Corporation notifies the trustee in writing that the Merger Agreement has terminated in accordance with its terms prior to the consummation of the JRD Acquisition Transactions, or (iii) Sysco Corporation notifies the trustee in writing and publicly announces that Sysco Corporation will not pursue the consummation of the JRD Acquisition Transactions (as described in the CAD Senior Indenture), the issuers will be required to redeem the notes at a special mandatory redemption price equal to 101% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of the special mandatory redemption. The issuers may redeem all, but not part, of any series of notes upon the occurrence of certain tax events (as described in the CAD Senior Indenture) at the redemption price of 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.

The total carrying value of our debt was $13.8 billion as of September 26, 2026 and $13.5 billion as of June 27, 2026. The increase in the carrying value of our debt during the 13-week period ended September 26, 2026 was due to the issuance of new senior notes and new commercial paper issuances, partially offset by a senior note that Sysco Corporation repaid in July 2026.

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. EARNINGS PER SHARE

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

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 1,389,000 and 1,718,000 for the first 13 weeks of fiscal 2027 and 2026, respectively.

Common Stock

On September 16, 2026, we issued 12,345,679 shares of our common stock in an underwritten public offering at an offering price of $81.00 per share. The common stock has a $1.00 per share par value. As a result of this transaction, we received cash proceeds of approximately $967 million, net of underwriting fees and other issuance costs. We granted the underwriters of the offering a 30-day option to purchase up to $150 million of additional shares of common stock, solely to cover overallotments, if any, at the same price per share; however, the option was not exercised and no additional shares were issued. We intend to use the proceeds of the offering to finance a portion of the JRD Acquisition Transactions.

10. 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, amounts related to certain hedging arrangements, amounts related to pension and other postretirement plans and changes in marketable securities. Comprehensive income was $634 million and $445 million for the first quarter of fiscal 2027 and fiscal 2026, 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:

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

11. 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 2025 Employee Stock Purchase Plan (ESPP).

Stock Incentive Plans

In the first 13 weeks of fiscal 2027, employees were granted 559,076 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 is 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 13 weeks of fiscal 2027 was $86.98. The PSUs will convert into shares of Sysco’s common stock at the end of thethree-year performance period, as defined in each respective agreement, based on actual performance targets achieved. Certain awards also contain targets for the market-based return of Sysco’s common stock relative to that of each company within the S&P 500 index.

In the first 13 weeks of fiscal 2027, employees were granted 1,200,668 restricted stock units. The weighted average grant-date fair value per restricted stock unit granted during the first 13 weeks of fiscal 2027 was $78.16.

Employee Stock Purchase Plan

Plan participants purchased 341,052 shares of common stock under the ESPP during the first 13 weeks of fiscal 2027. The weighted average fair value per employee stock purchase right issued pursuant to the ESPP was $11.69 during the first 13 weeks of fiscal 2027. 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 $28 million and $31 million for the first 13 weeks of fiscal 2027 and fiscal 2026, respectively.

As of September 26, 2026, there was a total of $237 million of unrecognized compensation cost related to share-based compensation arrangements. This cost is expected to be recognized over a weighted-average period of 2.18 years.

12. INCOME TAXES

Effective Tax Rate

The effective tax rate for the first quarter of fiscal 2027 was 23.4%. This rate is higher than the company’s 21.0% statutory tax rate primarily due to the impact of state income taxes, partially offset by a foreign income tax benefit and equity-based compensation excess tax benefits.

The effective tax rate for the first quarter of fiscal 2026 was 20.6%. This rate is lower than the company’s 21.0% statutory tax rate primarily as a result of a foreign income tax benefit, equity-based compensation excess tax benefits, and foreign exchange losses, partially offset by state income taxes.

Uncertain Tax Positions

As of September 26, 2026, the gross amount of unrecognized tax benefit and related accrued interest was $70 million and $22 million, respectively. It is reasonably possible the amount of the unrecognized tax benefit with respect to certain 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.

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 2017 (TCJA). The 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 benefit of $131 million attributable to its 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

The Inflation Reduction Act includes provisions that allow for the transfer of certain federal clean energy tax credits (Transferable Tax Credits). In June 2026, we entered into a contract to purchase approximately $241 million of Transferable Tax Credits in fiscal 2027, which will be applied against our fiscal 2027 federal income taxes. In October 2026, we purchased $182 million of these credits.

The determination of our provision for income taxes requires judgment, the use of estimates and the interpretation and application of complex tax laws. Our provision for income taxes reflects income earned and taxed in the various 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 our change in the mix of earnings from these taxing jurisdictions all affect the overall effective tax rate.

13. 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.

14. 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 Buckhead | Newport Meat & Seafood specialty protein operations, our growing Italian Specialty platform anchored by Greco & Sons, Inc., our Edward Don restaurant equipment and supplies distribution business, our Asian specialty distribution company and a number of other small specialty businesses that are not material to the operations of Sysco;

•International Foodservice Operations – includes operations outside of the United States (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, 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 expenses generally include all expenses of the corporate office and Sysco’s shared service operations. Collectively, our Global Support Center provides numerous centralized services to our operating sites and performs support activities for employees, suppliers and customers. These services include customer and vendor contract administration, finance, legal, information technology, risk management and insurance, sales and marketing, merchandising, inbound logistics, human resources, and strategy. Expenses for the Global Support Center primarily consist of payroll costs for employees assigned to these operations, including severance, if any, all U.S. share-based compensation costs, and certain information technology, self-insurance, and depreciation expenses.

Our chief operating decision maker (CODM) is our chief executive officer, who is responsible for setting the company's strategic direction, managing overall operations, and is the main point of communication between the board of directors and key operational personnel within the organization. The CODM regularly reviews financial results, operating performance, and capital expenditures of our reportable segments. Our CODM uses operating income as a primary measure of segment performance and as a comparison between each of our segments. Operating income is defined as income before interest expense, other expense (income), net, and income taxes. The significant expense categories and amounts presented below align with the segment-level information that is regularly provided to the CODM. The following tables set forth certain financial information for Sysco’s business segments.

15. SUBSEQUENT EVENTS

In October 2026, we completed the remaining financing for the cash component of the JRD Acquisition Transactions.

USD Senior Notes Issuance

On October 6, 2026, Sysco Corporation and Sysco Holdings co-issued USD-denominated senior notes in an aggregate principal amount of $10.75 billion (the “USD Senior Notes”). The USD Senior Notes were issued pursuant to the Base Indenture, as supplemented and amended by the Second Supplemental Indenture thereto, dated as of October 6, 2026, by and among the issuers, the guarantors named therein and the Trustee (the “USD Senior Supplemental Indenture”, and together with the Base Indenture, the “USD Senior Indenture”).

The details of the USD Senior Notes are as follows:

The USD Senior Notes are fully and unconditionally guaranteed, jointly and severally, by Sysco Corporation’s direct and indirect wholly owned domestic subsidiaries that guarantee Sysco Corporation’s existing senior notes. Interest on the 2029 notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. Interest on the 2031 notes will be paid semi-annually in arrears on June 6 and December 6, beginning on December 6, 2026. Interest on the 2033 notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. Interest on the 2036 notes will be paid semi-annually in arrears on June 6 and December 6, beginning on December 6, 2026. Interest on the 2046 notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. Interest on the 2056 notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. Interest on the 2066 notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. The 2029 notes will mature on October 6, 2029. The 2031 notes will mature on June 6, 2031. The 2033 notes will mature on October 6, 2033. The 2036 notes will mature on June 6, 2036. The 2046 notes will mature on October 6, 2046. The 2056 notes will mature on October 6, 2056. The 2066 notes will mature on October 6, 2066.

At the issuers’ option, any or all of the notes may be redeemed, in whole or in part, at any time prior to maturity. If the issuers elect to redeem (i) the 2029 notes before the date that isone month prior to the maturity date, (ii) the 2031 notes before the date that isone month prior to the maturity date, (iii) the 2033 notes before the date that istwo months prior to the maturity date, (iv) the 2036 notes before the date that isthree months prior to the maturity date, (v) the 2046 notes before the date that issix months prior to the maturity date, (vi) the 2056 notes before the date that issix months prior to the maturity date, or (vii) the 2066 notes before the date that issix months prior to the maturity date, the issuers will pay a redemption price equal to (1)100% of the principal amount of the notes of the applicable series to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption and (2) a “make-whole” amount calculated by reference to the sum of the present values of the remaining scheduled payments of principal and interest on the notes of the applicable series to be redeemed discounted to the date of redemption. If (i) the consummation of the JRD Acquisition Transactions does not occur on or prior to (a) March 30, 2028 or (b) any later date as the parties to the Merger Agreement may agree, (ii) Sysco Corporation notifies the trustee in writing that the Merger Agreement has terminated in accordance with its terms prior to the consummation of the JRD Acquisition Transactions, or (iii) Sysco Corporation notifies the trustee in writing and publicly announces that Sysco Corporation will not pursue the consummation of the JRD Acquisition Transactions (as described in the USD Senior Indenture), the issuers will be required to redeem the notes (other than the 2036 notes) at a special mandatory redemption price equal to 101% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of the special mandatory redemption (the “Special Mandatory Redemption”). The 2036 notes will not be subject to the Special Mandatory Redemption and will remain outstanding if the JRD Acquisition Transactions are not consummated.

USD Junior Subordinated Notes Issuance

On October 6, 2026, Sysco Corporation and Sysco Holdings co-issued USD-denominated junior subordinated notes in an aggregate principal amount of $3.9 billion. The junior notes were issued pursuant to the Base Indenture dated as of October 6, 2026 (the “Junior Subordinated Base Indenture”), by and among the Issuers, the guarantors named therein and the Trustee, as supplemented and amended by the Second Supplemental Indenture thereto, dated as of October 6, 2026, by and among the Issuers, the guarantors named therein and the Trustee (the “USD Junior Supplemental Indenture”, and together with the Junior Subordinated Base Indenture, the “USD Junior Subordinated Indenture”).

The details of the junior subordinated notes are as follows:

The junior subordinated notes are fully and unconditionally guaranteed, jointly and severally, on an unsecured, subordinate and junior basis, by Sysco Corporation’s direct and indirect wholly owned domestic subsidiaries that guarantee Sysco Corporation’s existing senior notes. Interest on the Series A Notes will be paid semi-annually in arrears on January 6 and July 6, beginning on January 6, 2027. Interest on the Series B Notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. Interest on the Series C Notes will be paid semi-annually in arrears on April 6 and October 6, beginning on April 6, 2027. The junior subordinated notes will mature on October 6, 2056.

At the issuers’ option, any or all of the junior subordinated notes may be redeemed, in whole or in part, at any time prior to maturity. If the issuers elect to redeem (i) the Series A Notes on October 8, 2031, (ii) the Series B Notes on July 8, 2033, or (iii) the Series C Notes on July 8, 2036, the issuers will pay a redemption price equal to (1)100% of the principal amounts of the notes of the applicable series to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption and (2) a “make-whole” amount calculated by reference to the sum of the present values of the remaining scheduled payments of principal and interest on the notes of the applicable series to be redeemed discounted to the date of redemption. If (i) the consummation of the JRD Acquisition Transactions does not occur on or prior to (a) March 30, 2028 or (b) any later date as the parties to the Merger Agreement may agree, (ii) Sysco Corporation notifies the trustee in writing that the Merger Agreement has terminated in accordance with its terms prior to the consummation of the JRD Acquisition Transactions, or (iii) Sysco Corporation notifies the trustee in writing and publicly announces that Sysco Corporation will not pursue the consummation of the JRD Acquisition Transactions, the issuers will be required to redeem the notes at a special mandatory redemption price equal to 101% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of the special mandatory redemption. The issuers may redeem all, but not part, of any series of junior subordinated notes upon the occurrence of certain tax events (as described in the USD Junior Subordinated Indenture) at the redemption price of 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the redemption date.

From and including the applicable first reset date (as described in the USD Junior Subordinated Indenture), and on each fifth anniversary thereof, the interest rate on each series of junior subordinated notes will reset to a rate per annum equal to the Five-year U.S. Treasury Rate (as described in the USD Junior Subordinated Indenture) as of the applicable reset interest determination date plus a spread of 2.280% in the case of the Series A Notes,2.372% in the case of the Series B Notes and 2.401% in the case of the Series C Notes. In addition, such spread will be increased (i) in the case of the Series A Notes, by a total of 0.250% for each reset period from and including January 6, 2037 to, but excluding January 6, 2052, and by a total of 1.000% for each reset period thereafter, (ii) in the case of the Series B Notes, by a total of 0.250% for each reset period from and including October 6, 2038 to, but excluding October 6, 2053, and by a total of 1.000% for each reset period thereafter and (iii) in the case of the Series C Notes, by a total of 0.250% for each reset period from and including October 6, 2036 and for each reset period thereafter. The interest rate during any reset period will not reset below zero.

Euro Junior Subordinated Notes Issuance

On October 6, 2026, Sysco Corporation and Sysco Holdings, co-issued EUR-denominated junior subordinated notes in an aggregate principal amount of €1.0 billion (approximately USD $1.1 billion) (the “Euro Junior Subordinated Notes”). The Euro Junior Subordinated Notes were issued pursuant to the Junior Subordinated Base Indenture, as supplemented and amended by the First Supplemental Indenture thereto, dated as of October 6, 2026, by and among the issuers, the guarantors named therein and the Trustee (the “Euro Junior Subordinated Supplemental Indenture”, and together with the Junior Subordinated Base Indenture, the “EUR Junior Subordinated Indenture”).

The EUR Junior Subordinated Notes were issued at 100% of par and are fully and unconditionally guaranteed, jointly and severally, on an unsecured, subordinate and junior basis, by Sysco Corporation’s direct and indirect wholly owned domestic subsidiaries that guarantee Sysco Corporation’s existing senior notes. Interest on the notes will be paid annually in arrears on October 6 of each year, beginning on October 6, 2027. The notes will mature on October 6, 2056.

At the issuers’ option, any or all of the EUR-denominated junior subordinated notes may be redeemed, in whole or in part, at any time prior to maturity. If the issuers elect to redeem the EUR-denominated junior subordinated notes on July 8, 2032, the issuers will pay a redemption price equal to (1)100% of the principal amounts of the notes of the applicable series to be redeemed plus accrued and unpaid interest to, but excluding, the date of redemption and (2) a “make-whole” amount calculated by reference to the sum of the present values of the remaining scheduled payments of principal and interest on the notes of the applicable series to be redeemed discounted to the date of redemption. If (i) the consummation of the JRD Acquisition Transactions does not occur on or prior to (a) March 30, 2028 or (b) any later date as the parties to the Merger Agreement may agree, (ii) Sysco Corporation notifies the trustee in writing that the Merger Agreement has terminated in accordance with its terms prior to the consummation of the JRD Acquisition Transactions, or (iii) Sysco Corporation notifies the trustee in writing and publicly announces that Sysco Corporation will not pursue the consummation of the JRD Acquisition Transactions, the issuers will be required to redeem the notes at a special mandatory redemption price equal to 101% of the principal amount of the notes to be redeemed, plus accrued and unpaid interest to, but excluding, the date of the special mandatory redemption. The issuers may redeem the EUR-denominated junior subordinated notes, in whole but not in part, at a redemption price equal to: i)100% of the principal amount, if the redemption date is on or after the first par call date, plus accrued and unpaid interest (including any additional interest) to, but excluding, the redemption date, at any time following the occurrence of a tax deductibility event (as described in the EUR Junior Subordinated Indenture) or (ii)101% of the principal amount, if the redemption date is prior to the first par call date (as described in the EUR Junior Subordinated Indenture). The issuers may redeem all, but not part, of the EUR-denominated junior subordinated notes upon the occurrence of certain tax events (as described in the EUR Junior Subordinated Indenture) at the redemption price of 100% of their principal amount, plus accrued and unpaid interest to, but excluding, the redemption date. The issuers may redeem all, but not part, of the EUR-denominated junior subordinated notes within 120 days following a rating agency event (as described in the EUR Junior Subordinated Indenture) at the redemption price of (i)101% of the principal amount, if the redemption date is prior to the first par call date or (ii)100% of the principal amount, if the redemption date is on or after the first par call date, plus accrued and unpaid interest to, but excluding, the redemption date. The issuers may also redeem the notes, in whole but not in part, at a redemption price equal to 100% of the principal amount of the notes, plus accrued and unpaid interest (including any additional interest) to, but excluding, the redemption date, if prior to the redemption date an issuer has repurchased EUR-denominated junior subordinated notes equal to or in excess of 75% of the initial aggregate principal amount of notes issued.

From and including October 6, 2032, and on each fifth anniversary thereof, the interest rate on the EUR-denominated junior subordinated notes will reset to a rate per annum equal to the Five-year Swap Rate as of the applicable reset interest determination date plus an initial margin of 2.554%, which margin will be increased by a total of 0.250% for each reset period from and including October 6, 2037 to, but excluding October 6, 2052 and by a total of 1.000% for each reset period from and including October 6, 2052 and for each reset period thereafter. The interest rate during any reset period will not reset below zero.

To hedge our foreign currency risk on the EUR-denominated junior subordinated notes, we entered into a cross-currency swap for €1.0 billion and designated it as a fair value hedge.

With the completion of our financing for the cash component of the JRD Acquisition Transactions, we terminated our senior unsecured 364-day bridge loan facility on October 8, 2026, the commitments under which had previously been reduced to $19 billion.