GlobeNewswire Inc | Aug 11, 2020 08:01AM EDT

August 11, 2020

THE COMPANY IS MAKING SUBSTANTIAL PROGRESS ON A BOLD TRANSFORMATION THAT WILLENABLE THE COMPANY TOIMPROVE HOW IT SERVES CUSTOMERS, DIFFERENTIATE FROM COMPETITORS, AND TRANSFORM THE INDUSTRY

HOUSTON, Aug. 11, 2020 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE: SYY) today announced financial results for its 13-week fourth fiscal quarter and its fiscal year ended June 27, 2020.

Fourth Quarter Fiscal 2020 Highlights

-- Sales decreased 42.7% to $8.9 billion -- Gross profit decreased 47.4% to $1.6 billion; gross margin decreased 159 basis points -- Operating income (loss) decreased 173.8% to $(531.6) million; adjusted operating income (loss) decreased 104.1% to $(33.9) million -- Earnings (loss) per share (EPS) decreased $2.25 to $(1.22); adjusted EPS decreased $1.39 to $(0.29)

Fiscal 2020 Highlights

-- Sales decreased 12.0% to $52.9 billion -- Gross profit decreased 13.2% to $9.9 billion; gross margin decreased 26 basis points -- Operating income decreased 67.8% to $749.5 million; adjusted operating income decreased 37.4% to $1.7 billion -- EPS decreased $2.78 to $0.42; adjusted EPS decreased $1.54 to $2.01

I am immensely proud of the actions taken by the Sysco team to manage our business during this time of crisis, specifically led by our associates focus and agility when launching strategic transformational initiatives, said Kevin Hourican, Syscos president and chief executive officer. While our fourth quarter and fiscal 2020 results were significantly impacted by the COVID-19 pandemic, we quickly responded by strengthening our balance sheet, adding new and different types of customers, and strategically committing resources to plan for the eventual return of demand. Our quarterly results came in notably better than we anticipated. More importantly, we are confident that the transformational steps we are taking better position Sysco to meet the evolving needs of our customers and the marketplace as we emerge from this crisis.

With concerted effort, we have continued to manage through the COVID-19 pandemic by leveraging our salesforce to drive incremental business and actively prepare for the return of food-away-from-home demand. As we move forward, our leadership is turning the page and deploying substantial business transformation initiatives that will improve how we serve our customers and run our business. We are also proud to continue our charitable programs by delivering 30 million meals to help fight hunger in the communities we serve.

Earnings (Loss) Per Share (EPS) are shown on a diluted basis unless otherwise specified. Adjusted financial results exclude certain items, which primarily include excess bad debt expense, goodwill impairment charges, restructuring costs, transformational project costs and acquisition-related costs. Specific to EPS, this years Certain Items include the impact of an impairment on assets held for sale and last years Certain Items include the gain on the sale of Iowa Premium, LLC (Iowa Premium) and the impact of recognizing a foreign tax credit. Reconciliations of all non-GAAP measures are included at the end of this release.

Our customers continue to face uncertainty as COVID-19 outbreaks affect their businesses. In this challenging environment, we are utilizing our strong capabilities to help restaurant partners succeed now and into the future. With our efforts, restaurants are reshaping food-away-from-home models through our restaurant resources, which include the virtual restaurant readiness tool and the bundled restaurant operator toolkits. Our tools provide solutions associated with meal kits, safety and sanitation, contactless menus, and curbside/takeout. We are proud to highlight that we have successfully helped convert over 16,000 restaurants into food marketplaces, and we believe that restaurant operators who have partnered with Sysco are better equipped to improve their sales and profitability.

Fourth Quarter Fiscal 2020 Results

U.S. Foodservice Operations

Sales for the fourth quarter were $6.1 billion, a decrease of 42.8% compared to the same period last year. Local case volume within U.S. Broadline operations decreased 38.7% for the fourth quarter, of which a decrease of 39.4% was organic, while total case volume within U.S. Broadline operations decreased 41.5%, of which a decrease of 41.9% was organic.

Gross profit decreased 45.7% to $1.2 billion, and gross margin decreased 102 basis points to 19.1%, compared to the same period last year. Food cost inflation was relatively flat in U.S. Broadline as measured by the estimated change in Syscos product costs, as a result of inflationary pressure primarily in the meat category, specifically beef, offset by deflation in the poultry and frozen categories.

Operating expenses decreased $196.3 million, or 14.9%, compared to the same period last year. Adjusted operating expenses decreased $323.6 million, or 24.4%, compared to the same period last year.

Operating income was $40.6 million, a decrease of $786.0 million, or 95.1%, compared to the same period last year. Adjusted operating income was $164.9 million, a decrease of $658.7 million, or 80.0%, compared to the same period last year.

International Foodservice Operations

Sales for the fourth quarter were $1.4 billion, a decrease of 53.4% compared to the same period last year. On a constant currency basis, sales for the fourth quarter were $1.4 billion, a decrease of 51.9% compared to the same period last year. Foreign exchange rates negatively affected International Foodservice Operations sales by 1.5% and total Sysco sales by 0.3% during the quarter.

Gross profit decreased 57.7% to $263.0 million, and gross margin decreased 193 basis points to 19.3%, in each case as compared to the same period last year. On a constant currency basis, gross profit decreased 56.4% to $270.9 million. Foreign exchange rates negatively affected International Foodservice Operations gross profit by 1.3% and total Sysco gross profit by 0.3% during the quarter.

Operating expenses increased $82.1 million, or 14.7%, compared to the same period last year. Adjusted operating expenses decreased $170.3 million, or 33.8%, compared to the same period last year. On a constant currency basis, adjusted operating expenses decreased $159.3 million, or 31.6%, compared to the same period last year. Foreign exchange rates positively affected International Foodservice Operations operating expense by 2.2% and total Sysco operating expense by 0.6% during the quarter.

The international segment delivered an operating loss of $377.3 million, a decrease of $440.7 million compared to the same period last year. Adjusted operating loss was $70.0 million, a decrease of $188.3 million compared to the same period last year. On a constant currency basis, adjusted operating loss was $73.1 million, a decrease of $191.4 million, or 161.8%, compared to the same period last year. Foreign exchange rates positively affected International Foodservice Operations operating income by 2.6% and total Sysco operating income by 0.4% during the quarter.

Fiscal 2020 Results

U.S. Foodservice Operations

Sales for fiscal 2020 were $36.8 billion, a decrease of 10.9% compared to the prior year. Local case volume within U.S. Broadline operations decreased 9.6% for fiscal 2020, of which a decrease of 10.6% was organic, while total case volume within U.S. Broadline operations decreased 11.2%, of which a decrease of 11.7% was organic.

Gross profit decreased 12.1% to $7.3 billion, and gross margin decreased 25 basis points to 19.7%, compared in each case to the prior year. Food cost inflation was 1.8% in U.S. Broadline, as measured by the estimated change in Syscos product costs, primarily in the dairy and meat categories.

Operating expenses decreased $5.7 million, or 0.1%, compared to the prior year. Adjusted operating expenses decreased $246.5 million, or 4.7%, compared to the prior year.

Operating income was $2.0 billion, a decrease of $988.6 million, or 33.0%, compared to the prior year. Adjusted operating income was $2.2 billion, a decrease of $747.8 million, or 25.0%, compared to the prior year.

International Foodservice Operations

Sales for fiscal 2020 were $9.7 billion, a decrease of $1.8 billion, or 15.8%, compared to the prior year. On a constant currency basis, sales for fiscal 2020 were $9.9 billion, a decrease of 14.1% compared to the prior year. Foreign exchange rates negatively affected International Foodservice Operations sales by 1.7% and total Sysco sales by 0.5% during the year.

Gross profit decreased 18.3% to $2.0 billion, and gross margin decreased 60 basis points to 20.2%, in each case as compared to the prior year. On a constant currency basis, gross profit decreased 16.5% to $2.0 billion, as compared to the prior year.

Operating expenses increased $59.9 million, or 2.6%, compared to the prior year. Adjusted operating expenses decreased $190.2 million, or 9.3%, compared to the prior year. On a constant currency basis, adjusted operating expenses decreased $144.7 million, or 7.1%, compared to the prior year.

The international segment delivered an operating loss of $371.4 million, a decrease of $496.9 million compared to the prior year. Adjusted operating income was $108.0 million, a decrease of $246.8 million, or 69.6%, compared to the prior year. On a constant currency basis, adjusted operating income was $105.6 million, a decrease of $249.2 million, or 70.2%, compared to the prior year. Foreign exchange rates positively affected total Sysco operating income during fiscal 2020 by 0.1%.

Balance Sheet, Capital Spending and Cash Flow

Capital expenditures, net of proceeds from sales of plant and equipment, for fiscal 2020 were $20.3 million higher compared to the prior year.

Cash flow from operations was $1.6 billion for fiscal 2020, which was $792.5 million lower compared to the prior year. Free cash flow2 for fiscal 2020 was $927.0 million, which was $812.8 million lower compared to the prior year.

2 Free cash flow is a non-GAAP measure that represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Reconciliations for all non-GAAP measures are included at the end of this release.

Conference Call & Webcast

Sysco will host a conference call to review the companys fourth quarter fiscal 2020 financial results on Tuesday, August11, 2020, at 10:00 a.m. Eastern. A live webcast of the call, accompanying slide presentation and a copy of this news release will be available online at investors.sysco.com.

Key Highlights:

13-Week Period Ended 52-Week Period Ended Financial Comparison: June 27, Change June 27, Change 2020 2020Sales $8.9 billion -42.7% $52.9 -12.0% billionGross profit $1.6 billion -47.4% $9.9 billion -13.2%Gross Margin 17.66% -159 18.72% -26 bps bps GAAP: Operating expenses $2.1 billion -7.1% $9.2 billion 0.8%Certain Items $(497.7) NM $(962.5) 138.8% million millionOperating (Loss) Income $(531.6) -173.8% $749.5 -67.8% million millionOperating Margin (6.00)% -1065 1.42% -246 bps bpsCertain Items in Other expense $(47.0) -170.8% $(47.0) -170.8%(income), net million millionNet (Loss) Earnings $(618.4) -215.4% $215.5 -87.1% million millionDiluted (Loss) Earnings Per Share $(1.22) -218.4% $0.42 -86.9% Non-GAAP ^(1): Operating Expenses $1.6 billion -26.0% $8.2 billion -5.6%Operating (Loss) Income $(33.9) -104.1% $1.7 billion -37.4% millionOperating Margin (0.38)% -567 3.24% -131 bps bpsNet (Loss) Earnings $(147.8) -125.8% $1.0 billion -44.4% millionDiluted (Loss) Earnings Per Share ^ $(0.29) -126.4% $2.01 -43.4%(2) Case Growth: U.S. Broadline -41.5% -11.2% Local -38.7% -9.6% Sysco Brand Sales as a % of Cases: U.S. Broadline 38.46% -2 bps 38.48% 39 bpsLocal 45.19% -239 46.84% -24 bps bps

Note:

(1)A reconciliation of non-GAAP measures is included at the end of this release.

(2) Individual components in the table above may not sum to the totals due to the rounding.

Forward-Looking Statements

Statements made in this press release or in our earnings call for the fourth quarter of fiscal 2020 that look forward in time or that express managements beliefs, expectations or hopes are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the views of management at the time such statements are made and are subject to a number of risks, uncertainties, estimates, and assumptions that may cause actual results to differ materially from current expectations. These statements include: the effect, impact, potential duration or other implications of the recent outbreak of a novel strain of coronavirus (COVID-19) and any expectations we may have with respect thereto; our expectations regarding our ability to manage the current downturn and capitalize on our position as the industry leader as the global economy recovers; our expectations regarding future market share gains; our expectations regarding the effects of our business transformation initiatives, including on our ability to increase our share of customer spending and to increase sales in premium products, and on our ability to benefit from our efforts to centralize key customer support functions for large and/or national accounts; our belief that our transformation initiatives will drive future growth; our expectations regarding our efforts to regionalize our operations and the benefits to our company from regionalization; our expectations regarding our investment capability to build inventory and set up new customers; our plans to leverage technology improvements to enable reductions in our workforce without compromising service or quality; our expectations regarding our company, and our ability to attract and serve new customers, following the COVID-19 crisis; our plans to remove structural expense from our companys operations; our expectations regarding savings starting in fiscal 2022 from additional cost improvement opportunities; the effects of our planned investments in digital technology; our expectations regarding the timing of improvements in the economy following the COVID-19 crisis; our expectations that our work to accelerate growth will return to pre-COVID levels as demand resurges; our expectations that our investments in technology and our business will allow for future growth and exceptional customer service; our belief that the steps undertaken as part of our management of the COVID-19 crisis to date will help us retain and win additional business from our independent restaurant customers beyond the pandemic; our expectations regarding the impact of our strategy on our future operations, including on the service we provide our customers and on our ability to differentiate Sysco from other companies in our industry; our expectations regarding our ability to increase profitability for SYGMA; our expectations regarding our ability to leverage operating expense growth to gross profit growth; our expectations regarding our investments across Europe, including, but not limited to, the integration of Brakes France and Davigel to Sysco France, including our ability to continue to succeed in the French marketplace; expectations regarding growth opportunities in Europe; expectations regarding growth opportunities in Latin America; our ability to deliver against our strategic priorities, which we believe will provide excellent customer service and improve our overall performance; statements regarding economic trends in the United States and abroad; our expectations regarding the amount of our capital expenditures in fiscal 2021; our expectations regarding the deployment of capital proceeds that Sysco currently holds; our expectations regarding the effects of our divestiture of our CAKE business; our plans regarding the suspension of our share buyback position throughout fiscal 2021; our expectations regarding gross margins during fiscal 2021; and our expectations regarding our overall effective tax rate in fiscal 2021.

The success of our plans and expectations regarding our operating performance are subject to the general risks associated with our business, including the risks of interruption of supplies due to lack of long-term contracts, severe weather, crop conditions, work stoppages, intense competition, technology disruptions, dependence on large, long-term regional and national customers, inflation risks, the impact of fuel prices, adverse publicity, labor issues, political or financial instability, trade restrictions, tariffs, currency exchange rates, transport capacity and costs and other factors relating to foreign trade, any or all of which could delay our receipt of product or increase our input costs. Risks and uncertainties also include 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, including, but not limited to, our growth, product costs, supply chain, labor availability, logistical capabilities, customer demand for our products and industry demand generally, consumer spending, our liquidity, the price of our securities and trading markets with respect thereto, our credit ratings, our ability to maintain compliance with the covenants in our credit agreement, our ability to access capital markets, and the global economy and financial markets generally. Risks and uncertainties also include risks impacting the economy generally, including the risks that the current general economic conditions will deteriorate, or consumer confidence in the economy or consumer spending, particularly on food-away-from-home, may decline. Market conditions may not improve. Competition and the impact of GPOs may reduce our margins and make it difficult for us to maintain our market share, growth rate and profitability. We may not be able to fully compensate for increases in fuel costs, and fuel hedging arrangements intended to contain fuel costs could result in above market fuel costs. Our ability to meet our long-term strategic objectives depends on our ability to grow gross profit, leverage our supply chain costs and reduce administrative costs. This will depend largely on the success of our various business initiatives, including efforts related to revenue management, expense management, our digital e-commerce strategy and any efforts related to restructuring or the reduction of administrative costs. There are various risks related to these efforts, including the risk that if sales from our locally managed customers do not grow at the same rate as sales from regional and national customers, or if we are unable to continue to accelerate local case growth, our gross margins may decline; 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 not be effective; the risk that our efforts to mitigate increases in warehouse 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; 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 risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. Our plans related to and the timing of any initiatives are subject to change at any time based on managements subjective evaluation of our overall business needs. If we are unable to realize the anticipated benefits from our efforts, we could become cost disadvantaged in the marketplace, and our competitiveness and our profitability could decrease. Adverse publicity about us or lack of confidence in our products could negatively impact our reputation and reduce earnings. 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. Periods of significant or prolonged inflation or deflation, either overall or in certain product categories, can have a negative impact on us and our customers, as high food costs can reduce consumer spending in the food-away-from-home market, and may negatively impact our sales, gross profit, operating income and earnings, and periods of deflation can be difficult to manage effectively. Fluctuations in inflation and deflation, as well as fluctuations in the value of foreign currencies, are beyond our control and subject to broader market forces. Expanding into international markets presents unique challenges and risks, including compliance with local laws, regulations and customs and the impact of local political and economic conditions, including the impact of Brexit and the yellow vest protests in France against a fuel tax increase, pension reform and the French government, and such expansion efforts may not be successful. Any business that we acquire may not perform as expected, and we may not realize the anticipated benefits of our acquisitions. Expectations regarding the financial statement impact of any acquisitions may change based on managements subjective evaluation. A divestiture of one or more of our businesses may not provide the anticipated effects on our operations. Meeting our dividend target objectives depends on our level of earnings, available cash and the success of our various strategic initiatives. Changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results. We rely on technology in our business and any cybersecurity incident, other technology disruption or delay in implementing new technology could negatively affect our business and our relationships with customers. For a discussion of additional factors impacting Syscos business, see our Annual Report on Form 10-K for the year ended June 29, 2019 and our Quarterly Report on Form 10-Q for the period ended March 28, 2020, each as filed with the SEC, and our subsequent filings with the SEC. We do not undertake to update our forward-looking statements, except as required by applicable law.

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. With more than 57,000 associates, the company operates approximately 326 distribution facilities worldwide and serves more than 625,000 customer locations. For fiscal 2020 that ended June 27, 2020, the company generated sales of more than $52 billion. Information about our CSR program, including Syscos 2019 Corporate Social Responsibility Report, can be found at sysco.com/csr2019report.

For more information, visit www.sysco.com or connect with Sysco on Facebook at www.facebook.com/SyscoCorporationor Twitter at https://twitter.com/Sysco. For important news and information regarding Sysco, visit the Investor Relations section of the companys Internet home page at investors.sysco.com, which Sysco plans to use as a primary channel for publishing key information to its investors, some of which may contain material and previously non-public information. Investors should also follow us at www.twitter.com/SyscoStockand download the Sysco IR App, available on the iTunes App Storeand the Google Play Market. In addition, investors should continue to review our news releases and filings with the SEC. It is possible that the information we disclose through any of these channels of distribution could be deemed to be material information.

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

13-Week Period Ended 52-Week Period Ended Jun. 27, 2020 Jun. 29, 2019 Jun. 27, 2020 Jun. 29, 2019 Sales $ 8,866,564 $ 15,474,862 $ 52,893,310 $ 60,113,922 Cost of 7,300,909 12,495,670 42,991,646 48,704,935 salesGross 1,565,655 2,979,192 9,901,664 11,408,987 profitOperating 2,097,235 2,258,662 9,152,159 9,078,837 expensesOperating(loss) (531,580 ) 720,530 749,505 2,330,150 incomeInterest 164,269 89,780 408,220 360,423 expenseOtherexpense 40,396 (51,558 ) 47,901 (36,109 )(income),net(Loss)earningsbefore (736,245 ) 682,308 293,384 2,005,836 incometaxesIncome (117,826 ) 146,542 77,909 331,565 taxesNet (loss) $ (618,419 ) $ 535,766 $ 215,475 $ 1,674,271 earnings Net (loss) earnings:Basic(loss) $ (1.22 ) $ 1.04 $ 0.42 $ 3.24 earningsper shareDiluted(loss) (1.22 ) 1.03 0.42 3.20 earningsper share Averageshares 508,296,452 514,646,741 510,121,071 516,890,581 outstandingDilutedshares 508,296,452 520,060,241 514,025,974 523,381,124 outstanding

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

June 27, 2020 June 29, 2019 ASSETSCurrent assets Cash and cash equivalents $ 6,059,427 $ 513,460 Accounts and notes receivable, less allowances 2,893,551 4,181,696 of $334,810 and $28,176Inventories 3,095,085 3,216,034 Prepaid expenses and other current assets 192,163 210,582 Income tax receivable 108,006 19,733 Total current assets 12,348,232 8,141,505 Plant and equipment at cost, less accumulated 4,458,567 4,501,705 depreciationOther long-term assets Goodwill 3,732,469 3,896,226 Intangibles, less amortization 780,172 857,301 Deferred income taxes 194,115 80,760 Operating lease right-of-use assets, net 603,616 ? Other assets 511,095 489,025 Total other long-term assets 5,821,467 5,323,312 Total assets $ 22,628,266 $ 17,966,522 LIABILITIES AND SHAREHOLDERS? EQUITYCurrent liabilities Notes payable $ 2,266 $ 3,957 Accounts payable 3,447,065 4,314,620 Accrued expenses 1,616,289 1,729,941 Accrued income taxes 2,938 17,343 Current operating lease liabilities 107,167 ? Current maturities of long-term debt 1,542,128 37,322 Total current liabilities 6,717,853 6,103,183 Long-term liabilities Long-term debt 12,902,485 8,122,058 Deferred income taxes 86,601 172,232 Long-term operating lease liabilities 523,496 ? Other long-term liabilities 1,204,953 1,031,020 Total long-term liabilities 14,717,535 9,325,310 Commitments and contingencies Noncontrolling interest 34,265 35,426 Shareholders? equity Preferred stock, par value $1 per share ? ? Authorized 1,500,000 shares, issued noneCommon stock, par value $1 per share Authorized 765,175 765,175 2,000,000,000 shares, issued 765,174,900 sharesPaid-in capital 1,506,901 1,457,419 Retained earnings 10,563,008 11,229,679 Accumulated other comprehensive loss (1,710,881 ) (1,599,729 )Treasury stock at cost, 256,915,825 and (9,965,590 ) (9,349,941 )252,297,926 sharesTotal shareholders? equity 1,158,613 2,502,603 Total liabilities and shareholders? equity $ 22,628,266 $ 17,966,522

Sysco Corporation and its Consolidated SubsidiariesCONSOLIDATED CASH FLOWS(In Thousands)

52-Week Period Ended Jun. 27, 2020 Jun. 29, 2019Cash flows from operating activities: Net earnings $ 215,475 $ 1,674,271 Adjustments to reconcile net earnings to cash provided by operating activities:Share-based compensation expense 42,234 104,904 Depreciation and amortization 805,765 763,935 Operating lease asset amortization 108,376 ? Amortization of debt issuance and other 22,663 21,382 debt-related costsGoodwill impairment 203,206 ? Impairment of assets held for sale 55,942 ? Gain on sale of business ? (66,309 )Deferred income taxes (191,317 ) (126,719 )Provision for losses on receivables 404,158 62,946 Other non-cash items (525 ) (3,172 )Additional changes in certain assets andliabilities, net of effect of businesses acquired:Decrease (increase) in receivables 915,717 (203,458 )Decrease (increase) in inventories 114,563 (114,667 )Decrease (increase) in prepaid expenses and other 9,835 (18,535 )current assets(Decrease) increase in accounts payable (834,118 ) 246,420 (Decrease) increase in accrued expenses (139,891 ) 137,517 (Decrease) in operating lease liabilities (124,040 ) ? (Decrease) increase in accrued income taxes (102,678 ) 4,929 Decrease (increase) in other assets 20,666 (21,346 )Increase (decrease) in other long-term 92,649 (50,891 )liabilitiesNet cash provided by operating activities 1,618,680 2,411,207 Cash flows from investing activities: Additions to plant and equipment (720,423 ) (692,391 )Proceeds from sales of plant and equipment 28,717 20,941 Acquisition of businesses, net of cash acquired (142,780 ) (106,616 )Proceeds from sale of business ? 149,879 Purchase of marketable securities (11,424 ) (116,440 )Proceeds from sales of marketable securities 20,532 ? Other investing activities ^(1) 69,071 1,772 Net cash used for investing activities (756,307 ) (742,855 ) Cash flows from financing activities: Bank and commercial paper borrowings, net 616,657 132,100 Other debt borrowings 6,783,562 388,180 Other debt repayments (1,119,232 ) (790,250 )Proceeds from stock option exercises 227,602 253,135 Treasury stock purchases (844,699 ) (1,022,033 )Dividends paid (856,312 ) (775,430 )Other financing activities ^(2) (87,778 ) (22,976 )Net cash provided by (used for) for financing 4,719,800 (1,837,274 )activities Effect of exchange rates on cash, cash (18,848 ) (14,677 )equivalents and restricted cash Net increase (decrease) in cash and cash 5,563,325 (183,599 )equivalents ^(3)Cash, cash equivalents and restricted cash at 532,245 715,844 beginning of periodCash, cash equivalents and restricted cash at end $ 6,095,570 $ 532,245 of period ^(3) Supplemental disclosures of cash flow information:Cash paid during the period for: Interest $ 325,308 $ 346,670 Income taxes 376,609 531,103

(1) Change primarily includes proceeds from the settlement of net investment hedges and proceeds from the settlement of corporate-owned life insurance policies.(2) Change includes cash paid for shares withheld to cover taxes, debt issuance costs and other financing activities.(3) Change includes restricted cash included within other assets in the Consolidated Balance Sheet.

Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items

Syscos results of operations for fiscal 2020 and fiscal 2019 were impacted by restructuring and transformational project costs consisting of: (1) expenses associated with our various transformation initiatives; (2) severance and facility closure charges; and (3) restructuring charges. All acquisition-related costs in fiscal 2020 and fiscal 2019 that have been designated as Certain Items relate to the Brakes Acquisition. These include acquisition-related intangible amortization expense. Fiscal 2020 results of operations were also negatively impacted by costs arising from the COVID-19 pandemic, the most significant including (1) excess bad debt expense, (2) goodwill impairment charges and (3) fixed asset impairment charges. Many of Syscos customers, including those in the restaurant, hospitality and education segments, are closed or operating at a substantially reduced volume due to governmental requirements for closures. Some of these customers have ceased paying their outstanding receivables, creating uncertainty as to their collectability. We have experienced an increase in past due receivables and have recognized additional bad debt charges. We have estimated uncollectible amounts by applying write-off percentages based on an aging of past due receivables. These write-off percentages are based in part on historical loss experience, including losses incurred during times of local and regional disasters. We have estimated the amount attributable to the impact of the COVID-19 pandemic on our customers by comparing our June allowance results to average results for periods ended prior to the onset of the COVID-19 pandemic, with excess amounts being a reasonable estimate of what the reserve for the allowance for doubtful accounts would have been for fiscal 2020, absent the impact of the COVID-19 pandemic. Because the COVID-19 pandemic is more widespread and longer in duration than historical disasters impacting our business, it is possible that actual uncollectible amounts will differ and additional charges may be required in fiscal 2021. Although Sysco traditionally incurs bad debt expense, the magnitude of such expenses that we have experienced is not indicative of our normal operations. Our adjusted results have not been normalized in a manner that would exclude the full impact of the COVID-19 pandemic on our business. As such, Sysco has not adjusted its results for lost sales, inventory write-offs or other costs associated with the COVID-19 pandemic not previously stated. Fiscal 2019 Certain Items include the gain on the sale of Iowa Premium and the impact of recognizing a foreign tax credit.

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 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 provides meaningful supplemental information to both management and investors that (1) is indicative of the performance of the companys underlying operations, facilitating comparisons on a year-over-year basis and (2) removes those items that are difficult to predict and are often unanticipated and that, as a result, are difficult to include in analysts financial models and our investors expectations with any degree of specificity.

Although Sysco has a history of growth through acquisitions, the Brakes Group was significantly larger than the companies historically acquired by Sysco, with a proportionately greater impact on Syscos consolidated financial statements. Accordingly, Sysco is excluding from its non-GAAP financial measures for the relevant period solely those acquisition costs specific to the Brakes Acquisition. We believe this approach significantly enhances the comparability of Syscos results for fiscal 2020 and fiscal 2019.

Set forth below is a reconciliation of sales, operating expenses, operating income, interest expense, other income and 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 to the total presented due to rounding. Adjusteddiluted earnings per share is calculated using adjusted net earnings divided by diluted shares outstanding.

Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items(Dollars in Thousands, Except for Share and Per Share Data)

13-Week Period 13-Week Period Change in Ended Jun. 27, Ended Jun. 29, Dollars % Change 2020 2019Operating expenses $ 2,097,235 $ 2,258,662 $ (161,427 ) -7.1 %(GAAP)Impact ofrestructuring and (180,066 ) (77,753 ) (102,313 ) 131.6 transformationalproject costs ^(1)Impact ofacquisition-related (13,251 ) (19,789 ) 6,538 -33.0 costs ^(2)Impact of excess (169,903 ) ? (169,903 ) NMbad debt expenseImpact of goodwill (134,481 ) ? (134,481 ) NMimpairmentOperating expensesadjusted for $ 1,599,534 $ 2,161,120 $ (561,586 ) -26.0 %Certain Items(Non-GAAP) Operating (loss) $ (531,580 ) $ 720,530 $ (1,252,110 ) -173.8 %income (GAAP)Impact ofrestructuring and 180,066 77,753 102,313 131.6 transformationalproject costs ^(1)Impact ofacquisition-related 13,251 19,789 (6,538 ) -33.0 costs ^(2)Impact of excess 169,903 ? 169,903 NMbad debt expenseImpact of goodwill 134,481 ? 134,481 NMimpairmentOperating (loss)income adjusted for $ (33,879 ) $ 818,072 $ (851,951 ) -104.1 %Certain Items(Non-GAAP) Other (income) $ 40,396 $ (51,558 ) $ 91,954 -178.4 %expense (GAAP)Impact ofimpairment on (46,968 ) ? (46,968 ) NMassets held forsaleImpact of gain onsale of Iowa ? 66,309 (66,309 ) NMPremiumOther (income) $ (6,572 ) $ 14,751 $ (21,323 ) -144.6 %expense (Non-GAAP) Net (loss) earnings $ (618,419 ) $ 535,766 $ (1,154,185 ) -215.4 %(GAAP)Impact ofrestructuring and 180,066 77,753 102,313 131.6 transformationalproject costs ^(1)Impact ofacquisition-related 13,251 19,789 (6,538 ) -33.0 costs ^(2)Impact of excess 169,903 ? 169,903 NMbad debt expenseImpact of goodwill 134,481 ? 134,481 NMimpairmentImpact ofimpairment on 46,968 ? 46,968 NMassets held forsaleImpact of gain onsale of Iowa ? (66,309 ) 66,309 NMPremiumTax impact ofrestructuring and (32,926 ) (16,891 ) (16,035 ) 94.9 transformationalproject costs ^(3)Tax impact ofacquisition-related 1,943 (4,352 ) 6,295 -144.6 costs ^(3)Tax impact ofexcess bad debt (30,454 ) ? (30,454 ) NMexpense ^(3)Tax impact ofimpairment on (12,644 ) ? (12,644 ) NMassets held forsale ^(3)Tax impact of gainon sale of Iowa ? 18,119 (18,119 ) NMPremium ^(3)Impact of France,U.K., and Sweden ? 6,464 (6,464 ) NMtax law changesImpact of US ? 2,631 (2,631 ) NMtransition taxNet (loss) earningsadjusted for $ (147,831 ) $ 572,970 $ (720,801 ) -125.8 %Certain Items(Non-GAAP) Diluted (loss)earnings per share $ (1.22 ) $ 1.03 $ (2.25 ) -218.4 %(GAAP)Impact ofrestructuring and 0.35 0.15 0.20 133.3 transformationalproject costs ^(1)Impact ofacquisition-related 0.03 0.04 (0.01 ) -25.0 costs ^(2)Impact of excess 0.33 ? 0.33 NMbad debt expenseImpact of goodwill 0.26 ? 0.26 NMimpairmentImpact ofimpairment on 0.09 ? 0.09 NMassets held forsaleImpact of gain onsale of Iowa ? (0.13 ) 0.13 NMPremiumTax impact ofrestructuring and (0.06 ) (0.03 ) (0.03 ) 100.0 transformationalproject costs ^(3)Tax impact ofacquisition-related ? (0.01 ) 0.01 NMcosts ^(3)Tax impact ofexcess bad debt (0.06 ) ? (0.06 ) NMexpense ^(3)Tax impact ofimpairment on (0.02 ) ? (0.02 ) NMassets held forsale ^(3)Tax impact of gainon sale of Iowa ? 0.03 (0.03 ) NMPremium ^(3)Impact of France,U.K. and Sweden tax ? 0.01 (0.01 ) NMlaw changesImpact of US ? 0.01 (0.01 ) NMtransition taxDiluted EPSadjusted for $ (0.29 ) $ 1.10 $ (1.39 ) -126.4 %Certain Items(Non-GAAP)^ (4) Diluted shares 508,296,452 520,060,241 outstanding

Fiscal 2020 includes $165 million related to restructuring, facility closure and severance charges, of which $75 million relates to severance^ charges, and $15 million related to various transformation initiative(1) costs, primarily consisting of changes to our business technology strategy. Fiscal 2019 includes $41 million related to restructuring, facility closure and severance charges and $37 million related to various transformation initiative costs.^ Fiscal 2020 and fiscal 2019 include $13 million and $19 million,(2) respectively, related to intangible amortization expense from the Brakes Acquisition, which is included in the results of International Foodservice.^ The tax impact of adjustments for Certain Items are calculated by(3) multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. Individual components of diluted earnings per share may not add up to the^ total presented due to rounding. Total diluted earnings per share is(4) calculated using adjusted net earnings divided by diluted shares outstanding. NM represents that the percentage change is not meaningful.

Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Impact of Certain Items(Dollars in Thousands, Except for Share and Per Share Data)

52-Week Period 52-Week Period Change in Ended Jun. 27, Ended Jun. 29, Dollars % Change 2020 2019Operating expenses $ 9,152,159 $ 9,078,837 $ 73,322 0.8 %(GAAP)Impact ofrestructuring and (371,088 ) (325,300 ) (45,788 ) 14.1 transformationalproject costs ^(1)Impact ofacquisition-related (64,793 ) (77,832 ) 13,039 -16.8 costs ^(2)Impact of excess (323,403 ) ? (323,403 ) NMbad debt expenseImpact of goodwill (203,206 ) ? (203,206 ) NMimpairmentOperating expensesadjusted for $ 8,189,669 $ 8,675,705 $ (486,036 ) -5.6 %Certain Items(Non-GAAP) Operating income $ 749,505 $ 2,330,150 $ (1,580,645 ) -67.8 %(GAAP)Impact ofrestructuring and 371,088 325,300 45,788 14.1 transformationalproject costs ^(1)Impact ofacquisition-related 64,793 77,832 (13,039 ) -16.8 costs ^(2)Impact of excess 323,403 ? 323,403 NMbad debt expenseImpact of goodwill 203,206 ? 203,206 NMimpairmentOperating incomeadjusted for $ 1,711,995 $ 2,733,282 $ (1,021,287 ) -37.4 %Certain Items(Non-GAAP) Other (income) $ 47,901 $ (36,109 ) $ 84,010 -232.7 %expense (GAAP)Impact ofimpairment on (46,968 ) ? (46,968 ) NMassets held forsaleImpact of gain onsale of Iowa ? 66,309 (66,309 ) NMPremiumOther (income) $ 933 $ 30,200 $ (29,267 ) -96.9 %expense (Non-GAAP) Net earnings (GAAP) $ 215,475 $ 1,674,271 $ (1,458,796 ) -87.1 %Impact ofrestructuring and 371,088 325,300 45,788 14.1 transformationalproject costs ^(1)Impact ofacquisition-related 64,793 77,832 (13,039 ) -16.8 costs ^(2)Impact of excess 323,403 ? 323,403 NMbad debt expenseImpact of goodwill 203,206 ? 203,206 NMimpairmentImpact ofimpairment on 46,968 ? 46,968 NMassets held forsaleImpact of gain onsale of Iowa ? (66,309 ) 66,309 NMPremiumTax impact ofrestructuring and (90,683 ) (81,722 ) (8,961 ) 11.0 transformationalproject costs ^(3)Tax impact ofacquisition-related (13,641 ) (19,553 ) 5,912 -30.2 costs ^(3)Tax impact ofexcess bad debt (76,864 ) ? (76,864 ) NMexpense ^(3)Tax impact ofimpairment on (12,644 ) ? (12,644 ) NMassets held forsale ^(3)Tax impact of gainon sale of Iowa ? 18,119 (18,119 ) NMPremium ^(3)Impact of French 924 ? 924 NMtax rate changeImpact of foreign ? (95,067 ) 95,067 NMtax credit benefitImpact of France,U.K., and Sweden ? 6,464 (6,464 ) NMtax law changesImpact of US ? 17,516 (17,516 ) NMtransition taxNet earningsadjusted for $ 1,032,025 $ 1,856,851 $ (824,826 ) -44.4 %Certain Items(Non-GAAP) Diluted earnings $ 0.42 $ 3.20 $ (2.78 ) -86.9 %per share (GAAP)Impact ofrestructuring and 0.72 0.62 0.10 16.1 transformationalproject costs ^(1)Impact ofacquisition-related 0.13 0.15 (0.02 ) -13.3 costs ^(2)Impact of excess 0.63 ? 0.63 NMbad debt expenseImpact of goodwill 0.40 ? 0.40 NMimpairmentImpact ofimpairment on 0.09 ? 0.09 NMassets held forsaleImpact of gain onsale of Iowa ? (0.13 ) 0.13 NMPremiumTax impact ofrestructuring and (0.18 ) (0.16 ) (0.02 ) 12.5 transformationalproject costs ^(3)Tax impact ofacquisition-related (0.03 ) (0.04 ) 0.01 -25.0 costs ^(3)Tax impact ofexcess bad debt (0.15 ) ? (0.15 ) NMexpense ^(3)Tax impact ofimpairment on (0.02 ) ? (0.02 ) NMassets held forsale ^(3)Tax impact of gainon sale of Iowa ? 0.03 (0.03 ) NMPremium ^(3)Impact of foreign ? (0.18 ) 0.18 NMtax credit benefitImpact of France,U.K. and Sweden tax ? 0.01 (0.01 ) NMlaw changesImpact of US ? 0.03 (0.03 ) NMtransition taxDiluted EPSadjusted for $ 2.01 $ 3.55 $ (1.54 ) -43.4 %Certain Items(Non-GAAP)^ (4) Diluted shares 514,025,974 523,381,124 outstanding

Fiscal 2020 includes $265 million related to restructuring, severance and facility closure charges, of which $99 million relates to severance charges. Fiscal 2020 also includes $106 million related to various transformation initiative costs, primarily consisting of changes to our^ business technology strategy. Fiscal 2019 includes $174 million related to(1) severance, restructuring and facility closure charges in Europe and Canada and at Corporate, of which $61 million relates to our France restructuring (i.e. our integration of Brake France and Davigel into Sysco France), and $151 million related to various transformation initiatives costs, of which $18 million relates to accelerated depreciation with regard to software that was replaced. Fiscal 2020 and fiscal 2019 include $65 million and $77 million,^ respectively, related to intangible amortization expense from the Brakes(2) Acquisition, which is included in the results of International Foodservice and integration costs in fiscal 2019.^ The tax impact of adjustments for Certain Items are calculated by(3) multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction where the Certain Item was incurred. Individual components of diluted earnings per share may not add up to the^ total presented due to rounding. Total diluted earnings per share is(4) calculated using adjusted net earnings divided by diluted shares outstanding. NM represents that the percentage change is not meaningful.

Sysco Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Thousands)

13-Week Period 13-WeekPeriod Change in %/bps Ended Jun. 27, Ended Jun. 29, Dollars Change 2020 2019U.S. FOODSERVICE OPERATIONSSales $ 6,114,931 $ 10,696,389 $ (4,581,458 ) -42.8 %Gross Profit 1,165,551 2,147,852 (982,301 ) -45.7 %Gross Margin 19.06 % 20.08 % -102 bps Operating expenses $ 1,124,986 $ 1,321,306 $ (196,320 ) -14.9 %(GAAP)Impact ofrestructuring and (938 ) 2,927 (3,865 ) -132.0 transformationalproject costs ^(1)Impact of excess (123,424 ) ? (123,424 ) NMbad debt expenseOperating expensesadjusted for $ 1,000,624 $ 1,324,233 $ (323,609 ) -24.4 %Certain Items(Non-GAAP) Operating income $ 40,565 $ 826,546 $ (785,981 ) -95.1 %(GAAP)Impact ofrestructuring and 938 (2,927 ) 3,865 -132.0 transformationalproject costs ^(1)Impact of excess 123,424 ? 123,424 NMbad debt expenseOperating incomeadjusted for $ 164,927 $ 823,619 $ (658,692 ) -80.0 %Certain Items(Non-GAAP) INTERNATIONALFOODSERVICE OPERATIONSSales (GAAP) $ 1,361,109 $ 2,923,601 $ (1,562,492 ) -53.4 %Impact of currency 44,508 ? 44,508 1.5 fluctuations ^(2)Comparable salesusing a constant $ 1,405,617 $ 2,923,601 $ (1,517,984 ) -51.9 %currency basis(Non-GAAP) Gross Profit (GAAP) $ 263,037 $ 621,636 $ (358,599 ) -57.7 %Impact of currency 7,887 ? 7,887 1.3 fluctuations ^(2)Comparable grossprofit using a $ 270,924 $ 621,636 $ (350,712 ) -56.4 %constant currencybasis (Non-GAAP) Gross Margin (GAAP) 19.33 % 21.26 % -193 bpsImpact of currency 0.06 ? 6 bpsfluctuations ^(2)Comparable grossmargin using a 19.27 % 21.26 % -199 bpsconstant currencybasis (Non-GAAP) Operating expenses $ 640,339 $ 558,193 $ 82,146 14.7 %(GAAP)Impact ofrestructuring and (117,597 ) (35,533 ) (82,064 ) 231.0 transformationalproject costs ^(3)Impact ofacquisition-related (13,251 ) (19,305 ) 6,054 -31.4 costs ^(4)Impact of excess (42,002 ) ? (42,002 ) NMbad debt expenseImpact of goodwill (134,481 ) ? (134,481 ) NMimpairmentOperating expensesadjusted for $ 333,008 $ 503,355 $ (170,347 ) -33.8 %Certain Items(Non-GAAP)Impact of currency 11,058 ? 11,058 2.2 fluctuations ^(2)Comparableoperating expensesadjusted for $ 344,066 $ 503,355 $ (159,289 ) -31.6 %Certain Items usinga constant currencybasis (Non-GAAP) Operating (loss) $ (377,302 ) $ 63,443 $ (440,745 ) NMincome (GAAP)Impact ofrestructuring and 117,597 35,533 82,064 231.0 transformationalproject costs ^(3)Impact ofacquisition-related 13,251 19,305 (6,054 ) -31.4 costs ^(4)Impact of excess 42,002 ? 42,002 NMbad debt expenseImpact of goodwill 134,481 ? 134,481 NMimpairmentOperating (loss)income adjusted for $ (69,971 ) $ 118,281 $ (188,252 ) -159.2 %Certain Items(Non-GAAP)Impact of currency (3,170 ) ? (3,170 ) 2.6 fluctuations ^(2)Comparableoperating (loss)income adjusted for $ (73,141 ) $ 118,281 $ (191,422 ) -161.8 %Certain Items usinga constant currencybasis (Non-GAAP) SYGMA Sales $ 1,288,928 $ 1,548,952 $ (260,024 ) -16.8 %Gross Profit 114,446 128,860 (14,414 ) -11.2 %Gross Margin 8.88 % 8.32 % 56 bps Operating expenses $ 105,298 $ 118,293 $ (12,995 ) -11.0 %(GAAP)Impact ofrestructuring and (2,131 ) (2,241 ) 110 -4.9 transformationalproject costs ^(5)Operating expensesadjusted for $ 103,167 $ 116,052 $ (12,885 ) -11.1 %Certain Items(Non-GAAP) Operating income $ 9,148 $ 10,567 $ (1,419 ) -13.4 %(GAAP)Impact ofrestructuring and 2,131 2,241 (110 ) -4.9 transformationalproject costs ^(5)Operating incomeadjusted for $ 11,279 $ 12,808 $ (1,529 ) -11.9 %Certain Items(Non-GAAP) OTHER Sales $ 101,596 $ 305,920 $ (204,324 ) -66.8 %Gross Profit 24,636 73,783 (49,147 ) -66.6 %Gross Margin 24.25 % 24.12 % 13 bps Operating expenses $ 46,483 $ 60,364 $ (13,881 ) -23.0 %(GAAP)Impact of excess (4,478 ) ? (4,478 ) NMbad debt expenseOperating expensesadjusted for $ 42,005 $ 60,364 (18,359 ) -30.4 %Certain Items(Non-GAAP) Operating (loss) $ (21,847 ) $ 13,419 $ (35,266 ) -262.8 %income (GAAP)Impact of excess 4,478 ? 4,478 NMbad debt expenseOperating (loss)income adjusted for $ (17,369 ) $ 13,419 (30,788 ) -229.4 %Certain Items(Non-GAAP) CORPORATE Gross Profit $ (2,015 ) $ 7,061 $ (9,076 ) -128.5 % Operating expenses $ 180,129 $ 200,506 $ (20,377 ) -10.2 %(GAAP)Impact ofrestructuring and (59,400 ) (42,906 ) (16,494 ) 38.4 transformationalproject costs ^(6)Impact ofacquisition-related ? (484 ) 484 NMcosts ^(7)Operating expensesadjusted for $ 120,729 $ 157,116 $ (36,387 ) -23.2 %Certain Items(Non-GAAP) Operating loss $ (182,144 ) $ (193,445 ) $ 11,301 -5.8 %(GAAP)Impact ofrestructuring and 59,400 42,906 16,494 38.4 transformationalproject costs ^(6)Impact ofacquisition-related ? 484 (484 ) NMcosts ^(7)Operating lossadjusted for $ (122,744 ) $ (150,055 ) $ 27,311 -18.2 %Certain Items(Non-GAAP) TOTAL SYSCO Sales $ 8,866,564 $ 15,474,862 $ (6,608,298 ) -42.7 %Gross Profit 1,565,655 2,979,192 (1,413,537 ) -47.4 %Gross Margin 17.66 % 19.25 % -159 bps Operating expenses $ 2,097,235 $ 2,258,662 $ (161,427 ) -7.1 %(GAAP)Impact ofrestructuring andtransformational (180,066 ) (77,753 ) (102,313 ) 131.6 project costs ^(1)(3) (5) (6)Impact ofacquisition-related (13,251 ) (19,789 ) 6,538 -33.0 costs ^(4) (7)Impact of excess (169,903 ) ? (169,903 ) NMbad debt expenseImpact of goodwill (134,481 ) ? (134,481 ) NMimpairmentOperating expensesadjusted for $ 1,599,534 $ 2,161,120 $ (561,586 ) -26.0 %Certain Items(Non-GAAP) Operating (loss) $ (531,580 ) $ 720,530 $ (1,252,110 ) -173.8 %income (GAAP)Impact ofrestructuring andtransformational 180,066 77,753 102,313 131.6 project costs ^(1)(3) (5) (6)Impact ofacquisition-related 13,251 19,789 (6,538 ) -33.0 costs ^(4) (7)Impact of excess 169,903 ? 169,903 NMbad debt expenseImpact of goodwill 134,481 ? 134,481 NMimpairmentOperating (loss)income adjusted for $ (33,879 ) $ 818,072 $ (851,951 ) -104.1 %Certain Items(Non-GAAP)

^ Includes charges related to restructuring and business transformation(1) projects.^ Represents a constant currency adjustment, which eliminates the impact of(2) foreign currency fluctuations on current year results.^ Includes restructuring, severance and facility closure costs primarily in(3) Europe and Canada.^ Fiscal 2020 and fiscal 2019 include $13 million and $19 million,(4) respectively, related to intangible amortization expense from the Brakes Acquisition.^ Includes charges related to transformation initiatives and other(5) restructuring charges. Fiscal 2020 and fiscal 2019 include various transformation initiative^ costs, primarily consisting of changes to our business technology strategy(6) and severance related to restructuring. Fiscal 2020 also includes severance charges incurred in response to the COVID-19 pandemic.^ Fiscal 2019 includes integration costs from the Brakes Acquisition.(7) NM represents that the percentage change is not meaningful.

Sysco Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Thousands)

52-Week 52-Week Change in %/bps Period Ended Period Ended Dollars Change Jun. 27, 2020 Jun. 29, 2019U.S. FOODSERVICE OPERATIONSSales $ 36,774,146 $ 41,288,188 $ (4,514,042 ) -10.9 %Gross Profit 7,254,722 8,249,027 (994,305 ) -12.1 %Gross Margin 19.73 % 19.98 % -25 bps Operating expenses $ 5,251,563 $ 5,257,233 $ (5,670 ) -0.1 %(GAAP)Impact ofrestructuring and (10,145 ) ? (10,145 ) NMtransformationalproject costs ^(1)Impact of excess (230,654 ) ? (230,654 ) NMbad debt expenseOperating expensesadjusted for $ 5,010,764 $ 5,257,233 $ (246,469 ) -4.7 %Certain Items(Non-GAAP) Operating income $ 2,003,159 $ 2,991,794 $ (988,635 ) -33.0 %(GAAP)Impact ofrestructuring and 10,145 ? 10,145 NMtransformationalproject costs ^(1)Impact of excess 230,654 ? 230,654 NMbad debt expenseOperating incomeadjusted for $ 2,243,958 $ 2,991,794 $ (747,836 ) -25.0 %Certain Items(Non-GAAP) INTERNATIONALFOODSERVICE OPERATIONSSales (GAAP) $ 9,672,190 $ 11,493,040 $ (1,820,850 ) -15.8 %Impact of currency 198,422 ? 198,422 1.7 fluctuations ^(2)Comparable salesusing a constant $ 9,870,612 $ 11,493,040 $ (1,622,428 ) -14.1 %currency basis(Non-GAAP) Gross Profit (GAAP) $ 1,955,190 $ 2,392,179 $ (436,989 ) -18.3 %Impact of currency 43,076 ? 43,076 1.8 fluctuations ^(2)Comparable grossprofit using a $ 1,998,266 $ 2,392,179 $ (393,913 ) -16.5 %constant currencybasis (Non-GAAP) Gross Margin (GAAP) 20.21 % 20.81 % -60 bpsImpact of currency (0.03 ) ? -3 bpsfluctuations ^(2)Comparable grossmargin using a 20.24 % 20.81 % -57 bpsconstant currencybasis (Non-GAAP) Operating expenses $ 2,326,597 $ 2,266,736 $ 59,861 2.6 %(GAAP)Impact ofrestructuring and (191,900 ) (152,852 ) (39,048 ) 25.5 transformationalproject costs ^(3)Impact ofacquisition-related (64,793 ) (76,530 ) 11,737 -15.3 costs ^(4)Impact of excess (88,271 ) ? (88,271 ) NMbad debt expenseImpact of goodwill (134,481 ) ? (134,481 ) NMimpairmentOperating expensesadjusted for $ 1,847,152 $ 2,037,354 $ (190,202 ) -9.3 %Certain Items(Non-GAAP)Impact of currency 45,493 ? 45,493 2.2 fluctuations ^(2)Comparableoperating expensesadjusted for $ 1,892,645 $ 2,037,354 $ (144,709 ) -7.1 %Certain Items usinga constant currencybasis (Non-GAAP) Operating (loss) $ (371,407 ) $ 125,443 $ (496,850 ) NMincome (GAAP)Impact ofrestructuring and 191,900 152,852 39,048 25.5 transformationalproject costs ^(3)Impact ofacquisition-related 64,793 76,530 (11,737 ) -15.3 costs ^(4)Impact of excess 88,271 ? 88,271 NMbad debt expenseImpact of goodwill 134,481 ? 134,481 NMimpairmentOperating incomeadjusted for $ 108,038 $ 354,825 $ (246,787 ) -69.6 %Certain Items(Non-GAAP)Impact of currency (2,417 ) ? (2,417 ) 0.6 fluctuations ^(2)Comparableoperating incomeadjusted for $ 105,621 $ 354,825 $ (249,204 ) -70.2 %Certain Items usinga constant currencybasis (Non-GAAP) SYGMA Sales $ 5,555,926 $ 6,244,328 $ (688,402 ) -11.0 %Gross Profit 483,494 505,638 (22,144 ) -4.4 %Gross Margin 8.70 % 8.10 % 60 bps Operating expenses $ 446,614 $ 477,858 $ (31,244 ) -6.5 %(GAAP)Impact ofrestructuring and (5,793 ) (2,609 ) (3,184 ) 122.0 transformationalproject costs ^(5)Operating expensesadjusted for $ 440,821 $ 475,249 $ (34,428 ) -7.2 %Certain Items(Non-GAAP) Operating income $ 36,880 $ 27,780 $ 9,100 32.8 %(GAAP)Impact ofrestructuring and 5,793 2,609 3,184 122.0 transformationalproject costs ^(5)Operating incomeadjusted for $ 42,673 $ 30,389 $ 12,284 40.4 %Certain Items(Non-GAAP) OTHER Sales $ 891,048 $ 1,088,366 $ (197,318 ) -18.1 %Gross Profit 218,884 272,697 (53,813 ) -19.7 %Gross Margin 24.56 % 25.06 % -50 bps Operating expenses $ 240,245 $ 236,849 $ 3,396 1.4 %(GAAP)Impact of excess (4,478 ) ? (4,478 ) NMbad debt expenseImpact of goodwill (11,660 ) ? (11,660 ) NMimpairmentOperating expensesadjusted for $ 224,107 $ 236,849 $ (12,742 ) -5.4 %Certain Items(Non-GAAP) Operating (loss) $ (21,361 ) $ 35,848 $ (57,209 ) -159.6 %income (GAAP)Impact of excess 4,478 ? 4,478 NMbad debt expenseImpact of goodwill 11,660 ? 11,660 NMimpairmentOperating (loss)income adjusted for $ (5,223 ) $ 35,848 (41,071 ) -114.6 %Certain Items(Non-GAAP) CORPORATE Gross Profit $ (10,626 ) $ (10,554 ) $ (72 ) 0.7 % Operating expenses $ 887,140 $ 840,161 $ 46,979 5.6 %(GAAP)Impact ofrestructuring and (163,249 ) (169,838 ) 6,589 -3.9 transformationalproject costs ^(6)Impact ofacquisition-related ? (1,302 ) 1,302 NMcosts ^(7)Impact of goodwill (57,066 ) ? (57,066 ) NMimpairmentOperating expensesadjusted for $ 666,825 $ 669,021 $ (2,196 ) -0.3 %Certain Items(Non-GAAP) Operating loss $ (897,766 ) $ (850,715 ) $ (47,051 ) 5.5 %(GAAP)Impact ofrestructuring and 163,249 169,838 (6,589 ) -3.9 transformationalproject costs ^(6)Impact ofacquisition-related ? 1,302 (1,302 ) NMcosts ^(7)Impact of goodwill 57,066 ? 57,066 NMimpairmentOperating lossadjusted for $ (677,451 ) $ (679,575 ) $ 2,124 -0.3 %Certain Items(Non-GAAP) TOTAL SYSCO Sales $ 52,893,310 $ 60,113,922 $ (7,220,612 ) -12.0 %Gross Profit 9,901,664 11,408,987 (1,507,323 ) -13.2 %Gross Margin 18.72 % 18.98 % -26 bps Operating expenses $ 9,152,159 $ 9,078,837 $ 73,322 0.8 %(GAAP)Impact ofrestructuring andtransformational (371,088 ) (325,300 ) (45,788 ) 14.1 project costs ^(1)(3) (5) (6)Impact ofacquisition-related (64,793 ) (77,832 ) 13,039 -16.8 costs ^(4) (7)Impact of excess (323,403 ) ? (323,403 ) NMbad debt expenseImpact of goodwill (203,206 ) ? (203,206 ) NMimpairmentOperating expensesadjusted for $ 8,189,669 $ 8,675,705 $ (486,036 ) -5.6 %Certain Items(Non-GAAP) Operating income $ 749,505 $ 2,330,150 $ (1,580,645 ) -67.8 %(GAAP)Impact ofrestructuring andtransformational 371,088 325,300 45,788 14.1 project costs ^(1)(3) (5) (6)Impact ofacquisition-related 64,793 77,832 (13,039 ) -16.8 costs ^(4) (7)Impact of excess 323,403 ? 323,403 NMbad debt expenseImpact of goodwill 203,206 ? 203,206 NMimpairmentOperating incomeadjusted for $ 1,711,995 $ 2,733,282 $ (1,021,287 ) -37.4 %Certain Items(Non-GAAP)

^ Includes charges related to restructuring and business transformation(1) projects.^ Represents a constant currency adjustment, which eliminates the impact of(2) foreign currency fluctuations on current year results.^ Includes restructuring, severance and facility closure costs in Europe and(3) Canada.^ Fiscal 2020 and fiscal 2019 include $65 million and $77 million,(4) respectively, related to intangible amortization expense from the Brakes Acquisition.^ Includes charges related to facility closures and other restructuring(5) charges. Fiscal 2020 and fiscal 2019 include various transformation initiative costs, primarily consisting of changes to our business technology strategy^ and severance related to restructuring. Fiscal 2019 includes $18 million of(6) accelerated depreciation on software that was replaced and severance charges related to restructuring. Fiscal 2020 also includes severance charges incurred in response to the COVID-19 pandemic.^ Fiscal 2019 includes integration costs from the Brakes Acquisition.(7) NM represents that the percentage change is not meaningful.

Sysco Corporation and its Consolidated SubsidiariesNon-GAAP Reconciliation (Unaudited)Free Cash Flow(In Thousands)

Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Sysco considers free cash flow to be a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business after the purchases and sales of buildings, fleet, equipment and technology, which may potentially be used to pay for, among other things, strategic uses of cash including dividend payments, share repurchases and acquisitions. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments. Free cash flow should not be used as a substitute for the most comparable GAAP measure in assessing the companys 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. In the table that follows, free cash flow for each period presented is reconciled to net cash provided by operating activities.

52-Week Period 52-Week Period 52-Week Period Ended Jun. 27, Ended Jun. 29, Change in 2020 2019 DollarsNet cash provided byoperating activities $ 1,618,680 $ 2,411,207 $ (792,527 )(GAAP)Additions to plant (720,423 ) (692,391 ) (28,032 )and equipmentProceeds from salesof plant and 28,717 20,941 7,776 equipmentFree Cash Flow $ 926,974 $ 1,739,757 $ (812,783 )(Non-GAAP)

Sysco Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Thousands)

During the fourth quarter of fiscal 2020,Sysco revised the way performance is assessed for the U.S. Foodservice Operations segment. As a result of this change, charges incurred by the companys corporate and shared services center to provide direct support functions to the U.S. Foodservice Operations reportable segment have been reclassified from Corporate expenses into the U.S. Foodservice reportable segment. The segment information disclosed for fiscal 2020 reflects this change in reporting structure and prior year amounts have been reclassified to conform with the current year presentation.

As Reclassified As Reclassified 13-Week Period Ended 52-Week Period Ended Sep. 28, 2019 Dec. 28, 2019 Mar. 28, 2020 Jun. 27, 2020 Jun. 27, 2020U.S. FOODSERVICE OPERATIONSSales (GAAP) $ 10,658,633 $ 10,413,576 $ 9,587,006 $ 6,114,931 $ 36,774,146 Gross Profit (GAAP) 2,144,886 2,048,905 1,895,380 1,165,551 7,254,722 Gross Margin (GAAP) 20.12 % 19.68 % 19.77 % 19.06 % 19.73 % Operating expenses $ 1,351,269 $ 1,344,103 $ 1,431,205 $ 1,124,986 $ 5,251,563 (GAAP)Impact ofrestructuring and (4,126 ) (3,679 ) (1,402 ) (938 ) (10,145 ) transformationalproject costs ^(1)Impact of excess ? ? (107,230 ) (123,424 ) (230,654 ) bad debt expenseOperating expensesadjusted for $ 1,347,143 $ 1,340,424 $ 1,322,573 $ 1,000,624 $ 5,010,764 Certain Items(Non-GAAP) Operating income $ 793,617 $ 704,802 $ 464,175 $ 40,565 $ 2,003,159 (GAAP)Impact ofrestructuring and 4,126 3,679 1,402 938 10,145 transformationalproject costs ^(1)Impact of excess ? ? 107,230 123,424 230,654 bad debt expenseOperating incomeadjusted for $ 797,743 $ 708,481 $ 572,807 $ 164,927 $ 2,243,958 Certain Items(Non-GAAP) INTERNATIONALFOODSERVICE OPERATIONSSales (GAAP) $ 2,912,387 $ 2,890,052 $ 2,508,642 $ 1,361,109 $ 9,672,190 Gross Profit (GAAP) 605,185 586,039 500,929 263,037 1,955,190 Gross Margin (GAAP) 20.78 % 20.28 % 19.97 % 19.33 % 20.21 % Operating expenses $ 550,385 $ 551,158 $ 584,715 $ 640,339 $ 2,326,597 (GAAP)Impact ofrestructuring and (27,273 ) (21,850 ) (25,180 ) (117,597 ) (191,900 ) transformationalproject costs ^(2)Impact ofacquisition-related (16,909 ) (17,312 ) (17,321 ) (13,251 ) (64,793 ) costs ^(3)Impact of excess ? ? (46,269 ) (42,002 ) (88,271 ) bad debt expenseImpact of goodwill ? ? ? (134,481 ) (134,481 ) impairmentOperating expensesadjusted for $ 506,203 $ 511,996 $ 495,945 $ 333,008 $ 1,847,152 Certain Items(Non-GAAP) Operating income $ 54,800 $ 34,881 $ (83,786 ) $ (377,302 ) $ (371,407 ) (loss) (GAAP)Impact ofrestructuring and 27,273 21,850 25,180 117,597 191,900 transformationalproject costs ^(2)Impact ofacquisition-related 16,909 17,312 17,321 13,251 64,793 costs ^(3)Impact of excess ? ? 46,269 42,002 88,271 bad debt expenseImpact of goodwill ? ? ? 134,481 134,481 impairmentOperating income(loss) adjusted for $ 98,982 $ 74,043 $ 4,984 $ (69,971 ) $ 108,038 Certain Items(Non-GAAP) SYGMA Sales (GAAP) $ 1,446,994 $ 1,455,893 $ 1,364,111 $ 1,288,928 $ 5,555,926 Gross Profit (GAAP) 125,918 124,239 118,891 114,446 483,494 Gross Margin (GAAP) 8.70 % 8.53 % 8.72 % 8.88 % 8.70 % Operating expenses $ 118,348 $ 114,378 $ 108,590 $ 105,298 $ 446,614 (GAAP)Impact ofrestructuring and (2,584 ) (956 ) (122 ) (2,131 ) (5,793 ) transformationalproject costs ^(4)Operating expensesadjusted for $ 115,764 $ 113,422 $ 108,468 $ 103,167 $ 440,821 Certain Items(Non-GAAP) Operating income $ 7,570 $ 9,861 $ 10,301 $ 9,148 $ 36,880 (GAAP)Impact ofrestructuring and 2,584 956 122 2,131 5,793 transformationalproject costs ^(4)Operating incomeadjusted for $ 10,154 $ 10,817 $ 10,423 $ 11,279 $ 42,673 Certain Items(Non-GAAP) OTHER Sales (GAAP) $ 284,990 $ 265,521 $ 238,941 $ 101,596 $ 891,048 Gross Profit (GAAP) 71,744 66,506 56,000 24,636 218,884 Gross Margin (GAAP) 25.17 % 25.05 % 23.44 % 24.25 % 24.56 % Operating expenses $ 61,607 $ 57,104 $ 75,051 $ 46,483 $ 240,245 (GAAP)Impact of excess ? ? ? (4,478 ) (4,478 ) bad debt expenseImpact of goodwill ? ? (11,660 ) ? (11,660 ) impairmentOperating expensesadjusted for $ 61,607 $ 57,104 $ 63,391 $ 42,005 $ 224,107 Certain Items(Non-GAAP) Operating income $ 10,137 $ 9,400 $ (19,051 ) $ (21,847 ) $ (21,361 ) (loss) (GAAP)Impact of excess ? ? ? 4,478 4,478 bad debt expenseImpact of goodwill ? ? 11,660 ? 11,660 impairmentOperating income(loss) adjusted for $ 10,137 $ 9,400 $ (7,391 ) $ (17,369 ) $ 5,223 Certain Items(Non-GAAP) CORPORATE Gross Profit (GAAP) $ (4,363 ) $ 2,710 $ (6,958 ) $ (2,015 ) $ (10,626 ) Operating expenses $ 193,444 $ 209,162 $ 304,405 $ 180,129 $ 887,140 (GAAP)Impact ofrestructuring and (22,739 ) (30,621 ) (50,489 ) (59,400 ) (163,249 ) transformationalproject costs ^(5)Impact of goodwill ? ? (57,066 ) ? (57,066 ) impairmentOperating expensesadjusted for $ 170,705 $ 178,541 $ 196,850 $ 120,729 $ 666,825 Certain Items(Non-GAAP) Operating loss $ (197,807 ) $ (206,452 ) $ (311,363 ) $ (182,144 ) $ (897,766 ) (GAAP)Impact ofrestructuring and 22,739 30,621 50,489 59,400 163,249 transformationalproject costs ^(5)Impact of goodwill ? ? 57,066 ? 57,066 impairmentOperating lossadjusted for $ (175,068 ) $ (175,831 ) $ (203,808 ) $ (122,744 ) $ (677,451 ) Certain Items(Non-GAAP) TOTAL SYSCO Sales (GAAP) $ 15,303,004 $ 15,025,042 $ 13,698,700 $ 8,866,564 $ 52,893,310 Gross Profit (GAAP) 2,943,369 2,828,398 2,564,242 1,565,655 9,901,664 Gross Margin (GAAP) 19.23 % 18.82 % 18.72 % 17.66 % 18.72 % Operating expenses $ 2,275,053 $ 2,275,906 $ 2,503,966 $ 2,097,235 $ 9,152,160 (GAAP)Impact ofrestructuring andtransformational (56,722 ) (57,106 ) (77,194 ) (180,066 ) (371,088 ) project costs ^(1)(2)(4)(5)Impact ofacquisition-related (16,909 ) (17,312 ) (17,321 ) (13,251 ) (64,793 ) costs ^(3)Impact of excess ? ? (153,500 ) (169,903 ) (323,403 ) bad debt expenseImpact of goodwill ? ? (68,725 ) (134,481 ) (203,206 ) impairmentOperating expensesadjusted for $ 2,201,422 $ 2,201,488 $ 2,187,226 $ 1,599,534 $ 8,189,670 Certain Items(Non-GAAP) Operating income $ 668,317 $ 552,492 $ 60,276 $ (531,580 ) $ 749,505 (loss) (GAAP)Impact ofrestructuring andtransformational $ 56,722 $ 57,106 $ 77,194 $ 180,066 $ 371,088 project costs ^(1)(2)(4)(5)Impact ofacquisition-related 16,909 17,312 17,321 13,251 64,793 costs ^(3)Impact of excess ? ? 153,500 169,903 323,403 bad debt expenseImpact of goodwill ? ? 68,725 134,481 203,206 impairmentOperating income(loss) adjusted for $ 741,948 $ 626,910 $ 377,016 $ (33,879 ) $ 1,711,995 Certain Items(Non-GAAP)

* Segment has no applicable Certain items^ Includes charges related to additional benefits provided to employees in(1) response to the COVID-19 pandemic, restructuring and business transformation projects.^ Includes restructuring, severance and facility closure costs in Europe and(2) Canada.^ Includes intangible amortization expense from the Brakes Acquisition.(3)^ Includes charges related to facility closures and other restructuring(4) charges. Includes various transformation initiative costs, primarily consisting of^ changes to our business technology strategy, severance related to(5) restructuring and severance charges incurred in response to the COVID-19 pandemic.

Sysco Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Thousands)

As Reclassified As Reclassified 13-Week Period Ended 52-Week Period Ended Sep. 29, 2018 Dec. 29, 2018 Mar. 30, 2019 Jun. 29, 2019 Jun. 29, 2019U.S. FOODSERVICE OPERATIONSSales (GAAP) $ 10,399,411 $ 10,087,105 $ 10,105,283 $ 10,696,389 $ 41,288,188 Gross Profit (GAAP) 2,090,227 2,001,819 2,009,129 2,147,852 8,249,027 Gross Margin (GAAP) 20.10 % 19.85 % 19.88 % 20.08 % 19.98 % Operating expenses $ 1,325,111 $ 1,317,517 $ 1,293,299 $ 1,321,306 $ 5,257,233 (GAAP)Impact ofrestructuring and ? ? (2,927 ) 2,927 ? transformationalproject costs ^(1)Operating expensesadjusted for $ 1,325,111 $ 1,317,517 $ 1,290,372 $ 1,324,233 $ 5,257,233 Certain Items(Non-GAAP) Operating income $ 765,116 $ 684,302 $ 715,830 $ 826,546 $ 2,991,794 (GAAP)Impact ofrestructuring and ? ? 2,927 (2,927 ) ? transformationalproject costs ^(1)Operating incomeadjusted for $ 765,116 $ 684,302 $ 718,757 $ 823,619 $ 2,991,794 Certain Items(Non-GAAP) INTERNATIONALFOODSERVICE OPERATIONSSales (GAAP) $ 2,920,950 $ 2,890,598 $ 2,757,891 $ 2,923,601 $ 11,493,040 Gross Profit (GAAP) 615,505 589,922 565,116 621,636 2,392,179 Gross Margin (GAAP) 21.07 % 20.41 % 20.49 % 21.26 % 20.81 % Operating expenses $ 548,733 $ 604,839 $ 554,971 $ 558,193 $ 2,266,736 (GAAP)Impact ofrestructuring and (6,727 ) (81,020 ) (29,572 ) (35,533 ) (152,852 ) transformationalproject costs ^(2)Impact ofacquisition-related (21,899 ) (16,947 ) (18,379 ) (19,305 ) (76,530 ) costs ^(3)Operating expensesadjusted for $ 520,107 $ 506,872 $ 507,020 $ 503,355 $ 2,037,354 Certain Items(Non-GAAP) Operating income $ 66,772 $ (14,917 ) $ 10,145 $ 63,443 $ 125,443 (loss) (GAAP)Impact ofrestructuring and 6,727 81,020 29,572 35,533 152,852 transformationalproject costs ^(2)Impact ofacquisition-related 21,899 16,947 18,379 19,305 76,530 costs ^(3)Operating incomeadjusted for $ 95,398 $ 83,050 $ 58,096 $ 118,281 $ 354,825 Certain Items(Non-GAAP) SYGMA Sales (GAAP) $ 1,621,457 $ 1,536,607 $ 1,537,312 $ 1,548,952 $ 6,244,328 Gross Profit (GAAP) 129,326 121,537 125,915 128,860 505,638 Gross Margin (GAAP) 7.98 % 7.91 % 8.19 % 8.32 % 8.10 % Operating expenses $ 126,895 $ 118,423 $ 114,247 $ 118,293 $ 477,858 (GAAP)Impact ofrestructuring and ? ? (368 ) (2,241 ) (2,609 ) transformationalproject costs ^(4)Operating expensesadjusted for $ 126,895 $ 118,423 $ 113,879 $ 116,052 $ 475,249 Certain Items(Non-GAAP) Operating income $ 2,431 $ 3,114 $ 11,668 $ 10,567 $ 27,780 (GAAP)Impact ofrestructuring and ? ? 368 2,241 2,609 transformationalproject costs ^(4)Operating incomeadjusted for $ 2,431 $ 3,114 $ 12,036 $ 12,808 $ 30,389 Certain Items(Non-GAAP) OTHER * Sales (GAAP) $ 273,461 $ 251,397 $ 257,588 $ 305,920 $ 1,088,366 Gross Profit (GAAP) 71,535 63,501 63,878 73,783 272,697 Gross Margin (GAAP) 26.16 % 25.26 % 24.80 % 24.12 % 25.06 % Operating expenses $ 61,200 $ 57,783 $ 57,502 $ 60,364 $ 236,849 (GAAP)Operating income 10,335 5,718 6,376 13,419 35,848 (loss) (GAAP) CORPORATE Gross Profit (GAAP) $ (2,808 ) $ (5,067 ) $ (9,740 ) $ 7,061 $ (10,554 ) Operating expenses $ 213,706 $ 221,255 $ 204,694 $ 200,506 $ 840,161 (GAAP)Impact ofrestructuring and (34,177 ) (53,417 ) (39,338 ) (42,906 ) (169,838 ) transformationalproject costs ^(5)Impact ofacquisition-related (737 ) (61 ) (20 ) (484 ) (1,302 ) costs ^(6)Operating expensesadjusted for $ 178,792 $ 167,777 $ 165,336 $ 157,116 $ 669,021 Certain Items(Non-GAAP) Operating loss $ (216,514 ) $ (226,322 ) $ (214,434 ) $ (193,445 ) $ (850,715 ) (GAAP)Impact ofrestructuring and 34,177 53,417 39,338 42,906 169,838 transformationalproject costs ^(5)Impact ofacquisition-related 737 61 20 484 1,302 costs ^(6)Operating lossadjusted for $ (181,600 ) $ (172,844 ) $ (175,076 ) $ (150,055 ) $ (679,575 ) Certain Items(Non-GAAP) TOTAL SYSCO Sales (GAAP) $ 15,215,279 $ 14,765,707 $ 14,658,074 $ 15,474,862 $ 60,113,922 Gross Profit (GAAP) 2,903,785 2,771,712 2,754,298 2,979,192 11,408,987 Gross Margin (GAAP) 19.08 % 18.77 % 18.79 % 19.25 % 18.98 % Operating expenses $ 2,275,645 $ 2,319,817 $ 2,224,713 $ 2,258,662 $ 9,078,837 (GAAP)Impact ofrestructuring andtransformational (40,904 ) (134,437 ) (72,206 ) (77,753 ) (325,300 ) project costs ^(1)(2)(4)(5)Impact ofacquisition-related (22,636 ) (17,008 ) (18,399 ) (19,789 ) (77,832 ) costs ^(3)(6)Operating expensesadjusted for $ 2,212,105 $ 2,168,372 $ 2,134,108 $ 2,161,120 $ 8,675,705 Certain Items(Non-GAAP) Operating income $ 628,140 $ 451,895 $ 529,585 $ 720,530 $ 2,330,150 (GAAP)Impact ofrestructuring andtransformational $ 40,904 $ 134,437 $ 72,206 $ 77,753 $ 325,300 project costs ^(1)(2)(4)(5)Impact ofacquisition-related 22,636 17,008 18,399 19,789 77,832 costs ^(3)(6)Operating incomeadjusted for $ 691,680 $ 603,340 $ 620,190 $ 818,072 $ 2,733,282 Certain Items(Non-GAAP)

* Segment has no applicable Certain items^ Includes charges related to business transformation projects.(1)^ Includes restructuring charges in France and other restructuring, severance(2) and facility closure costs in Europe and Canada.^ Includes intangible amortization expense from the Brakes Acquisition.(3)^ Includes charges related to facility closures and other restructuring(4) charges. Includes various transformation initiative costs, primarily consisting of^ changes to our business technology strategy, including accelerated(5) depreciation on software that was being replaced, and severance charges related to restructuring.^ Includes integration costs from the Brakes Acquisition.(6)

Sysco Corporation and its Consolidated SubsidiariesSegment ResultsNon-GAAP Reconciliation (Unaudited)Impact of Certain Items on Applicable Segments(Dollars in Thousands)

As Reclassified As Reclassified 13-Week Period Ended 52-Week Period Ended Sep. 30, 2017 Dec. 30, 2017 Mar. 31, 2018 Jun. 30, 2018 Jun. 30, 2018U.S. FOODSERVICE OPERATIONSSales (GAAP) $ 9,848,942 $ 9,681,225 $ 9,704,495 $ 10,407,601 $ 39,642,263 Gross Profit (GAAP) 1,986,283 1,915,466 1,911,704 2,086,823 7,900,276 Gross Margin (GAAP) 20.17 % 19.79 % 19.70 % 20.05 % 19.93 % Operating expenses $ 1,256,265 $ 1,251,004 $ 1,264,674 $ 1,268,521 $ 5,040,464 (GAAP)Impact of MEPP ? ? (1,700 ) ? (1,700 ) chargeOperating expensesadjusted for $ 1,256,265 $ 1,251,004 $ 1,262,974 $ 1,268,521 $ 5,038,764 Certain Items(Non-GAAP) Operating income $ 730,018 $ 664,462 $ 647,030 $ 818,302 $ 2,859,812 (GAAP)Impact of MEPP ? ? 1,700 ? 1,700 chargeOperating incomeadjusted for $ 730,018 $ 664,462 $ 648,730 $ 818,302 $ 2,861,512 Certain Items(Non-GAAP) INTERNATIONALFOODSERVICE OPERATIONSSales (GAAP) $ 2,903,255 $ 2,869,043 $ 2,799,251 $ 2,947,016 $ 11,518,565 Gross Profit (GAAP) 615,103 599,647 583,226 638,992 2,436,968 Gross Margin (GAAP) 21.19 % 20.90 % 20.84 % 21.68 % 21.16 % Operating expenses $ 538,299 $ 547,053 $ 563,750 $ 594,002 $ 2,243,104 (GAAP)Impact ofrestructuring costs (3,898 ) (5,602 ) (3,552 ) (23,615 ) (36,667 ) ^(1)Impact ofacquisition-related (14,514 ) (20,809 ) (21,679 ) (33,002 ) (90,004 ) costs ^(2)Operating expensesadjusted for $ 519,887 $ 520,642 $ 538,519 $ 537,385 $ 2,116,433 Certain Items(Non-GAAP) Operating income $ 76,804 $ 52,594 $ 19,476 $ 44,990 $ 193,864 (GAAP)Impact ofrestructuring costs 3,898 5,602 3,552 23,615 36,667 ^(1)Impact ofacquisition-related 14,514 20,809 21,679 33,002 90,004 costs ^(2)Operating incomeadjusted for $ 95,216 $ 79,005 $ 44,707 $ 101,607 $ 320,535 Certain Items(Non-GAAP) SYGMA * Sales (GAAP) $ 1,640,671 $ 1,633,145 $ 1,605,753 $ 1,677,464 $ 6,557,033 Gross Profit (GAAP) 125,607 122,760 127,074 135,837 511,278 Gross Margin (GAAP) 7.66 % 7.52 % 7.91 % 8.10 % 7.80 % Operating expenses $ 120,762 $ 119,407 $ 122,597 $ 124,194 $ 486,960 (GAAP)Operating income 4,845 3,353 4,477 11,643 24,318 (GAAP) OTHER * Sales (GAAP) $ 257,556 $ 228,077 $ 240,005 $ 283,825 $ 1,009,463 Gross Profit (GAAP) 67,827 61,697 64,524 69,315 263,363 Gross Margin (GAAP) 26.33 % 27.05 % 26.88 % 24.42 % 26.09 % Operating expenses $ 60,895 $ 55,517 $ 55,563 $ 51,903 $ 223,878 (GAAP)Operating income 6,932 6,180 8,961 17,412 39,485 (loss) (GAAP) CORPORATE Gross Profit (GAAP) $ 1,152 $ (184 ) $ (10,900 ) $ (14,258 ) $ (26,494 ) Operating expenses $ 198,082 $ 197,853 $ 186,841 $ 194,153 $ 776,929 (GAAP)Impact ofrestructuring costs (15,154 ) (15,775 ) (19,229 ) (22,699 ) (72,857 ) ^(3)Impact ofacquisition-related (5,232 ) (4,990 ) (3,682 ) (4,228 ) (18,132 ) costs ^(4)Operating expensesadjusted for $ 177,696 $ 177,088 $ 163,930 $ 167,226 $ 685,940 Certain Items(Non-GAAP) Operating loss $ (199,234 ) $ (198,037 ) $ (197,741 ) $ (208,411 ) $ (803,423 ) (GAAP)Impact ofrestructuring costs 15,154 15,775 19,229 22,699 72,857 ^(3)Impact ofacquisition-related 5,232 4,990 3,682 4,228 18,132 costs ^(4)Operating lossadjusted for $ (178,848 ) $ (177,272 ) $ (174,830 ) $ (181,484 ) $ (712,434 ) Certain Items(Non-GAAP) TOTAL SYSCO Sales (GAAP) $ 14,650,424 $ 14,411,490 $ 14,349,504 $ 15,315,906 $ 58,727,324 Gross Profit (GAAP) 2,793,668 2,699,386 2,675,628 2,916,709 11,085,391 Gross Margin (GAAP) 19.07 % 18.73 % 18.65 % 19.04 % 18.88 % Operating expenses $ 2,174,303 $ 2,170,834 $ 2,193,425 $ 2,232,773 $ 8,771,335 (GAAP)Impact of MEPP ? ? (1,700 ) ? (1,700 ) chargeImpact ofrestructuring costs (19,053 ) (21,377 ) (22,781 ) (46,313 ) (109,524 ) ^(1)(3)Impact ofacquisition-related (19,745 ) (25,799 ) (25,361 ) (37,231 ) (108,136 ) costs ^(2)(4)Operating expensesadjusted for $ 2,135,505 $ 2,123,658 $ 2,143,583 $ 2,149,229 $ 8,551,975 Certain Items(Non-GAAP) Operating income $ 619,365 $ 528,552 $ 482,203 $ 683,936 $ 2,314,056 (GAAP)Impact of MEPP ? ? 1,700 ? 1,700 chargeImpact ofrestructuring andtransformational 19,053 21,377 22,781 46,313 109,524 project costs ^(1)(3)Impact ofacquisition-related 19,745 25,799 25,361 37,231 108,136 costs^ (2)(4)Operating incomeadjusted for $ 658,163 $ 575,728 $ 532,045 $ 767,480 $ 2,533,416 Certain Items(Non-GAAP)

* Segment has no applicable Certain items^ Includes Brakes Acquisition-related restructuring charges, facility closure(1) charges and other severance charges related to restructuring.^ Includes intangible amortization expense from the Brakes Acquisition, which(2) is included in the results of Sysco Europe and integration costs, and a write-off for an intangible asset due to restructuring in France. Fiscal 2018 includes business technology transformation initiative costs,^ professional fees on three-year financial objectives, severance charges(3) related to restructuring, costs to convert to legacy systems in conjunction with our revised business technology strategy and facility closure charges.^ Includes integration costs from the Brakes Acquisition.(4)



For more information contact: Shannon Mutschler Rachel LeeMedia Contact Investor Contactmutschler.shannon@corp.sysco.com lee.rachel@corp.sysco.comT 281-584-4059 T 281-436-7815