10-Q 1 syy-20221001.htm 10-Q syy-20221001
00000960212023Q1FALSE07-0100000960212022-07-032022-10-010000096021us-gaap:CommonStockMember2022-07-032022-10-010000096021syy:SeniorNotes125Due2023Member2022-07-032022-10-0100000960212022-10-14xbrli:shares00000960212022-10-01iso4217:USD00000960212022-07-02iso4217:USDxbrli:shares00000960212021-07-042021-10-020000096021us-gaap:CommonStockMember2022-07-020000096021us-gaap:AdditionalPaidInCapitalMember2022-07-020000096021us-gaap:RetainedEarningsMember2022-07-020000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-020000096021us-gaap:TreasuryStockCommonMember2022-07-020000096021us-gaap:RetainedEarningsMember2022-07-032022-10-010000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-07-032022-10-010000096021us-gaap:TreasuryStockCommonMember2022-07-032022-10-010000096021us-gaap:AdditionalPaidInCapitalMember2022-07-032022-10-010000096021us-gaap:CommonStockMember2022-10-010000096021us-gaap:AdditionalPaidInCapitalMember2022-10-010000096021us-gaap:RetainedEarningsMember2022-10-010000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-10-010000096021us-gaap:TreasuryStockCommonMember2022-10-010000096021us-gaap:CommonStockMember2021-07-030000096021us-gaap:AdditionalPaidInCapitalMember2021-07-030000096021us-gaap:RetainedEarningsMember2021-07-030000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-030000096021us-gaap:TreasuryStockCommonMember2021-07-0300000960212021-07-030000096021us-gaap:RetainedEarningsMember2021-07-042021-10-020000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-07-042021-10-020000096021us-gaap:AdditionalPaidInCapitalMember2021-07-042021-10-020000096021us-gaap:TreasuryStockCommonMember2021-07-042021-10-020000096021us-gaap:CommonStockMember2021-10-020000096021us-gaap:AdditionalPaidInCapitalMember2021-10-020000096021us-gaap:RetainedEarningsMember2021-10-020000096021us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-10-020000096021us-gaap:TreasuryStockCommonMember2021-10-0200000960212021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:CannedAndDryProducts1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:CannedAndDryProducts1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:CannedAndDryProducts1Member2022-07-032022-10-010000096021syy:CannedAndDryProducts1Memberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:CannedAndDryProducts1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:FreshAndFrozenMeats1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:FreshAndFrozenMeats1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:FreshAndFrozenMeats1Member2022-07-032022-10-010000096021us-gaap:AllOtherSegmentsMembersyy:FreshAndFrozenMeats1Member2022-07-032022-10-010000096021syy:FreshAndFrozenMeats1Member2022-07-032022-10-010000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:U.S.FoodserviceOperationsMember2022-07-032022-10-010000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:InternationalFoodserviceOperationsMember2022-07-032022-10-010000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:SygmaSegmentMember2022-07-032022-10-010000096021syy:FrozenFruitsVegetablesBakeryAndOther1Memberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:FrozenFruitsVegetablesBakeryAndOther1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:Poultry1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:Poultry1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:Poultry1Member2022-07-032022-10-010000096021syy:Poultry1Memberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:Poultry1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:DairyProducts1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:DairyProducts1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:DairyProducts1Member2022-07-032022-10-010000096021us-gaap:AllOtherSegmentsMembersyy:DairyProducts1Member2022-07-032022-10-010000096021syy:DairyProducts1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:FreshProduce1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:FreshProduce1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:FreshProduce1Member2022-07-032022-10-010000096021us-gaap:AllOtherSegmentsMembersyy:FreshProduce1Member2022-07-032022-10-010000096021syy:FreshProduce1Member2022-07-032022-10-010000096021syy:PaperAndDisposables1Membersyy:U.S.FoodserviceOperationsMember2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:PaperAndDisposables1Member2022-07-032022-10-010000096021syy:PaperAndDisposables1Membersyy:SygmaSegmentMember2022-07-032022-10-010000096021syy:PaperAndDisposables1Memberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:PaperAndDisposables1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:Seafood1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:Seafood1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:Seafood1Member2022-07-032022-10-010000096021syy:Seafood1Memberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:Seafood1Member2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:BeverageProducts1Member2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:BeverageProducts1Member2022-07-032022-10-010000096021syy:SygmaSegmentMembersyy:BeverageProducts1Member2022-07-032022-10-010000096021us-gaap:AllOtherSegmentsMembersyy:BeverageProducts1Member2022-07-032022-10-010000096021syy:BeverageProducts1Member2022-07-032022-10-010000096021syy:OtherProductsMembersyy:U.S.FoodserviceOperationsMember2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMembersyy:OtherProductsMember2022-07-032022-10-010000096021syy:OtherProductsMembersyy:SygmaSegmentMember2022-07-032022-10-010000096021syy:OtherProductsMemberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:OtherProductsMember2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMember2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMember2022-07-032022-10-010000096021syy:SygmaSegmentMember2022-07-032022-10-010000096021us-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMembersyy:FreshAndFrozenMeats1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:FreshAndFrozenMeats1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:FreshAndFrozenMeats1Member2021-07-042021-10-020000096021us-gaap:AllOtherSegmentsMembersyy:FreshAndFrozenMeats1Member2021-07-042021-10-020000096021syy:FreshAndFrozenMeats1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:CannedAndDryProducts1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:CannedAndDryProducts1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:CannedAndDryProducts1Member2021-07-042021-10-020000096021syy:CannedAndDryProducts1Memberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:CannedAndDryProducts1Member2021-07-042021-10-020000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:U.S.FoodserviceOperationsMember2021-07-042021-10-020000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:InternationalFoodserviceOperationsMember2021-07-042021-10-020000096021syy:FrozenFruitsVegetablesBakeryAndOther1Membersyy:SygmaSegmentMember2021-07-042021-10-020000096021syy:FrozenFruitsVegetablesBakeryAndOther1Memberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:FrozenFruitsVegetablesBakeryAndOther1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:Poultry1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:Poultry1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:Poultry1Member2021-07-042021-10-020000096021syy:Poultry1Memberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:Poultry1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:DairyProducts1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:DairyProducts1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:DairyProducts1Member2021-07-042021-10-020000096021us-gaap:AllOtherSegmentsMembersyy:DairyProducts1Member2021-07-042021-10-020000096021syy:DairyProducts1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:FreshProduce1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:FreshProduce1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:FreshProduce1Member2021-07-042021-10-020000096021us-gaap:AllOtherSegmentsMembersyy:FreshProduce1Member2021-07-042021-10-020000096021syy:FreshProduce1Member2021-07-042021-10-020000096021syy:PaperAndDisposables1Membersyy:U.S.FoodserviceOperationsMember2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:PaperAndDisposables1Member2021-07-042021-10-020000096021syy:PaperAndDisposables1Membersyy:SygmaSegmentMember2021-07-042021-10-020000096021syy:PaperAndDisposables1Memberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:PaperAndDisposables1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:Seafood1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:Seafood1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:Seafood1Member2021-07-042021-10-020000096021syy:Seafood1Memberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:Seafood1Member2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMembersyy:BeverageProducts1Member2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:BeverageProducts1Member2021-07-042021-10-020000096021syy:SygmaSegmentMembersyy:BeverageProducts1Member2021-07-042021-10-020000096021us-gaap:AllOtherSegmentsMembersyy:BeverageProducts1Member2021-07-042021-10-020000096021syy:BeverageProducts1Member2021-07-042021-10-020000096021syy:OtherProductsMembersyy:U.S.FoodserviceOperationsMember2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMembersyy:OtherProductsMember2021-07-042021-10-020000096021syy:OtherProductsMembersyy:SygmaSegmentMember2021-07-042021-10-020000096021syy:OtherProductsMemberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021syy:OtherProductsMember2021-07-042021-10-020000096021syy:U.S.FoodserviceOperationsMember2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMember2021-07-042021-10-020000096021syy:SygmaSegmentMember2021-07-042021-10-020000096021us-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-07-032022-10-010000096021us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMember2022-10-010000096021us-gaap:SeriesOfIndividuallyImmaterialBusinessAcquisitionsMembersyy:EarnoutLiabilitiesMember2022-10-010000096021syy:GrecoAndSonsMember2021-08-12syy:centersyy:area0000096021us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-10-010000096021us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-10-010000096021us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-10-010000096021us-gaap:FairValueMeasurementsRecurringMember2022-10-010000096021us-gaap:FairValueInputsLevel1Memberus-gaap:FairValueMeasurementsRecurringMember2022-07-020000096021us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel2Member2022-07-020000096021us-gaap:FairValueMeasurementsRecurringMemberus-gaap:FairValueInputsLevel3Member2022-07-020000096021us-gaap:FairValueMeasurementsRecurringMember2022-07-020000096021us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-10-010000096021us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-07-020000096021us-gaap:CorporateDebtSecuritiesMember2022-10-010000096021us-gaap:USTreasuryAndGovernmentMember2022-10-010000096021us-gaap:CorporateDebtSecuritiesMember2022-07-020000096021us-gaap:USTreasuryAndGovernmentMember2022-07-020000096021syy:InterestRateSwapDueJune2023Member2022-10-01iso4217:EUR0000096021syy:ForeignCurrencyInterestRateVariousMaturityDatesMember2022-10-01iso4217:SEKiso4217:GBP0000096021syy:ForeignCurrencyInterestRateEuroMaturingJune2023Member2022-10-010000096021us-gaap:EnergyRelatedDerivativeMember2022-07-032022-10-01utr:gal0000096021us-gaap:OtherCurrentLiabilitiesMemberus-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherCurrentLiabilitiesMemberus-gaap:FairValueHedgingMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:OtherCurrentAssetsMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherCurrentAssetsMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:OtherCurrentAssetsMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherCurrentAssetsMemberus-gaap:CashFlowHedgingMemberus-gaap:ForeignExchangeForwardMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:OtherAssetsMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherAssetsMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:OtherCurrentLiabilitiesMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherCurrentLiabilitiesMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-10-010000096021us-gaap:OtherNoncurrentLiabilitiesMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-020000096021us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:FairValueHedgingMemberus-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:OperatingIncomeLossMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:CashFlowHedgingMemberus-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021syy:CostOfSalesAndOtherIncomeMemberus-gaap:CashFlowHedgingMemberus-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2022-07-032022-10-010000096021us-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:OperatingIncomeLossMemberus-gaap:EnergyRelatedDerivativeMemberus-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:CashFlowHedgingMemberus-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021syy:CostOfSalesAndOtherIncomeMemberus-gaap:CashFlowHedgingMemberus-gaap:CurrencySwapMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:CashFlowHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:ForeignExchangeContractMemberus-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021us-gaap:NetInvestmentHedgingMemberus-gaap:DesignatedAsHedgingInstrumentMember2021-07-042021-10-020000096021syy:CurrentMaturitiesOfLongtermDebtMember2022-10-010000096021syy:CurrentMaturitiesOfLongtermDebtMember2022-07-020000096021us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-07-032022-10-010000096021us-gaap:LineOfCreditMemberus-gaap:RevolvingCreditFacilityMember2022-10-0100000960212022-09-022022-09-020000096021us-gaap:CommercialPaperMember2022-10-010000096021us-gaap:EmployeeStockOptionMember2022-07-032022-10-010000096021us-gaap:EmployeeStockOptionMember2021-07-042021-10-020000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-07-032022-10-010000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-07-032022-10-010000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-07-032022-10-010000096021us-gaap:AccumulatedTranslationAdjustmentMember2022-07-032022-10-010000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-07-032022-10-010000096021us-gaap:OperatingExpenseMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-032022-10-010000096021syy:AccumulatedNetGainLossFromNetInvestmentHedgesAttributableToParentMember2022-07-032022-10-010000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2022-07-032022-10-010000096021us-gaap:InterestExpenseMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-032022-10-010000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2021-07-042021-10-020000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-07-042021-10-020000096021us-gaap:OtherExpenseMemberus-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-042021-10-020000096021us-gaap:AccumulatedTranslationAdjustmentMember2021-07-042021-10-020000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-07-042021-10-020000096021us-gaap:OperatingExpenseMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-042021-10-020000096021syy:AccumulatedNetGainLossFromNetInvestmentHedgesAttributableToParentMember2021-07-042021-10-020000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2021-07-042021-10-020000096021us-gaap:InterestExpenseMemberus-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-042021-10-020000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-07-020000096021us-gaap:AccumulatedTranslationAdjustmentMember2022-07-020000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2022-07-020000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-07-020000096021us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-07-032022-10-010000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2022-07-032022-10-010000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2022-07-032022-10-010000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2022-10-010000096021us-gaap:AccumulatedTranslationAdjustmentMember2022-10-010000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2022-10-010000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2022-10-010000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-07-030000096021us-gaap:AccumulatedTranslationAdjustmentMember2021-07-030000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2021-07-030000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-07-030000096021us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-07-042021-10-020000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetPriorServiceCostCreditMember2021-07-042021-10-020000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentNetUnamortizedGainLossMember2021-07-042021-10-020000096021us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember2021-10-020000096021us-gaap:AccumulatedTranslationAdjustmentMember2021-10-020000096021syy:AccumulatedNetGainLossFromCashFlowAndNetInvestmentHedgesAttributableToParentMember2021-10-020000096021us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember2021-10-020000096021us-gaap:PerformanceSharesMember2022-07-032022-10-010000096021us-gaap:RestrictedStockUnitsRSUMember2022-07-032022-10-010000096021syy:EmployeesStockPurchasePlanMember2022-07-032022-10-01xbrli:puresyy:segment0000096021syy:U.S.FoodserviceOperationsMemberus-gaap:OperatingSegmentsMember2022-07-032022-10-010000096021syy:U.S.FoodserviceOperationsMemberus-gaap:OperatingSegmentsMember2021-07-042021-10-020000096021syy:InternationalFoodserviceOperationsMemberus-gaap:OperatingSegmentsMember2022-07-032022-10-010000096021syy:InternationalFoodserviceOperationsMemberus-gaap:OperatingSegmentsMember2021-07-042021-10-020000096021syy:SygmaSegmentMemberus-gaap:OperatingSegmentsMember2022-07-032022-10-010000096021syy:SygmaSegmentMemberus-gaap:OperatingSegmentsMember2021-07-042021-10-020000096021us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2022-07-032022-10-010000096021us-gaap:OperatingSegmentsMemberus-gaap:AllOtherSegmentsMember2021-07-042021-10-020000096021us-gaap:OperatingSegmentsMember2022-07-032022-10-010000096021us-gaap:OperatingSegmentsMember2021-07-042021-10-020000096021us-gaap:CorporateNonSegmentMember2022-07-032022-10-010000096021us-gaap:CorporateNonSegmentMember2021-07-042021-10-020000096021us-gaap:SubsequentEventMembersyy:MassachusettsMutualLifeInsuranceCompanyMember2022-10-310000096021us-gaap:SubsequentEventMember2022-10-31syy:participant0000096021srt:MinimumMembersrt:ScenarioForecastMember2022-10-022023-01-020000096021srt:MaximumMembersrt:ScenarioForecastMember2022-10-022023-01-02


UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
Form 10-Q
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended October 1, 2022
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 1-6544
________________
syy-20221001_g1.jpg
Sysco Corporation
(Exact name of registrant as specified in its charter)
Delaware74-1648137
(State or other jurisdiction of incorporation or organization)(IRS employer identification number)

1390 Enclave Parkway, Houston, Texas 77077-2099
(Address of principal executive offices and zip code)

Registrant’s Telephone Number, Including Area Code:
(281) 584-1390

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading SymbolName of each exchange on which registered
Common stock, $1.00 Par ValueSYYNew York Stock Exchange
1.25% Notes due June 2023SYY 23New York Stock Exchange

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large Accelerated FilerAccelerated Filer
Non-accelerated FilerSmaller Reporting Company
(Do not check if a smaller reporting company)Emerging growth company

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

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

506,767,526 shares of common stock were outstanding as of October 14, 2022.

1


TABLE OF CONTENTS







PART I – FINANCIAL INFORMATION
Item 1. Financial Statements

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
 Oct. 1, 2022Jul. 2, 2022
 (unaudited)
ASSETS
Current assets
Cash and cash equivalents$437,670 $867,086 
Accounts receivable, less allowances of $74,002 and $70,790
5,336,857 4,838,912 
Inventories4,682,609 4,437,498 
Prepaid expenses and other current assets310,131 303,789 
Income tax receivable 35,934 
Total current assets10,767,267 10,483,219 
Plant and equipment at cost, less accumulated depreciation4,462,608 4,456,420 
Other long-term assets
Goodwill4,434,476 4,542,315 
Intangibles, less amortization906,385 952,683 
Deferred income taxes382,778 377,604 
Operating lease right-of-use assets, net704,664 723,297 
Other assets552,765 550,150 
Total other long-term assets6,981,068 7,146,049 
Total assets$22,210,943 $22,085,688 
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable$6,018,227 $5,752,958 
Accrued expenses2,177,793 2,270,753 
Accrued income taxes113,388 40,042 
Current operating lease liabilities94,027 105,690 
Current maturities of long-term debt555,829 580,611 
Total current liabilities8,959,264 8,750,054 
Long-term liabilities
Long-term debt10,263,331 10,066,931 
Deferred income taxes241,748 250,171 
Long-term operating lease liabilities628,861 636,417 
Other long-term liabilities971,190 967,907 
Total long-term liabilities12,105,130 11,921,426 
Noncontrolling interest31,208 31,948 
Shareholders’ equity
Preferred stock, par value $1 per share Authorized 1,500,000 shares, issued none
  
Common stock, par value $1 per share Authorized 2,000,000,000 shares, issued 765,174,900 shares
765,175 765,175 
Paid-in capital1,754,409 1,766,305 
Retained earnings10,757,136 10,539,722 
Accumulated other comprehensive loss(1,711,325)(1,482,054)
Treasury stock at cost, 258,414,989 and 256,531,543 shares
(10,450,054)(10,206,888)
Total shareholders’ equity1,115,341 1,382,260 
Total liabilities and shareholders’ equity$22,210,943 $22,085,688 
Note: The July 2, 2022 balance sheet has been derived from the audited financial statements at that date.

See Notes to Consolidated Financial Statements
1


Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In thousands, except for share and per share data)
 13-Week Period Ended
 Oct. 1, 2022Oct. 2, 2021
Sales$19,126,830 $16,456,546 
Cost of sales15,637,975 13,484,838 
Gross profit3,488,855 2,971,708 
Operating expenses2,754,522 2,340,026 
Operating income734,333 631,682 
Interest expense124,150 128,214 
Other expense (income), net15,281 (3,252)
Earnings before income taxes594,902 506,720 
Income taxes129,334 128,707 
Net earnings$465,568 $378,013 
  
Net earnings:  
Basic earnings per share$0.92 $0.74 
Diluted earnings per share0.91 0.73 
Average shares outstanding507,578,576 512,516,067 
Diluted shares outstanding510,383,149 515,782,928 

See Notes to Consolidated Financial Statements
2


Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
(In thousands)
 13-Week Period Ended
 Oct. 1, 2022Oct. 2, 2021
Net earnings$465,568 $378,013 
Other comprehensive (loss) income:
Foreign currency translation adjustment(232,182)(87,194)
Items presented net of tax:
Amortization of cash flow hedges2,155 2,155 
Change in net investment hedges23,509 10,165 
Change in cash flow hedges(26,390)(429)
Amortization of prior service cost74 74 
Amortization of actuarial loss6,891 6,367 
Change in marketable securities(3,328)(311)
Total other comprehensive loss(229,271)(69,173)
Comprehensive income$236,297 $308,840 

See Notes to Consolidated Financial Statements
3



Sysco Corporation and its Consolidated Subsidiaries
CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY (Unaudited)
(In thousands, except for share data)

Accumulated
Other Comprehensive
Loss
 Common StockPaid-in
Capital
Retained
Earnings
Treasury Stock 
 SharesAmountSharesAmountsTotals
Balance as of July 2, 2022765,174,900 $765,175 $1,766,305 $10,539,722 $(1,482,054)256,531,543 $(10,206,888)$1,382,260 
Net earnings465,568 465,568 
Foreign currency translation adjustment(232,182)(232,182)
Amortization of cash flow hedges, net of tax2,155 2,155 
Change in cash flow hedges, net of tax(26,390)(26,390)
Change in net investment hedges, net of tax23,509 23,509 
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax6,965 6,965 
Change in marketable securities, net of tax(3,328)(3,328)
Dividends declared ($0.49 per common share)
(248,154)(248,154)
Treasury stock purchases3,099,268 (267,727)(267,727)
Share-based compensation awards(11,896)(1,215,822)24,561 12,665 
Balance as of October 1, 2022765,174,900 $765,175 $1,754,409 $10,757,136 $(1,711,325)258,414,989 $(10,450,054)$1,115,341 
Accumulated
Other Comprehensive
Loss
 Common StockPaid-in
Capital
Retained
Earnings
Treasury Stock 
 SharesAmountSharesAmountsTotals
Balance as of July 3, 2021765,174,900 $765,175 $1,619,995 $10,151,706 $(1,148,764)253,342,595 $(9,835,216)$1,552,896 
Net earnings378,013 378,013 
Foreign currency translation adjustment(87,194)(87,194)
Amortization of cash flow hedges, net of tax2,155 2,155 
Change in cash flow hedges, net of tax(429)(429)
Change in net investment hedges, net of tax10,165 10,165 
Reclassification of pension and other postretirement benefit plans amounts to net earnings, net of tax6,441 6,441 
Change in marketable securities, net of tax(311)(311)
Dividends declared ($0.47 per common share)
(241,428)(241,428)
Share-based compensation awards35,115 (517,515)17,869 52,984 
Balance as of October 2, 2021765,174,900 $765,175 $1,655,110 $10,288,291 $(1,217,937)252,825,080 $(9,817,347)$1,673,292 

See Notes to Consolidated Financial Statements

4


Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In thousands)
 13-Week Period Ended
 Oct. 1, 2022Oct. 2, 2021
Cash flows from operating activities:
Net earnings$465,568 $378,013 
Adjustments to reconcile net earnings to cash provided by operating activities:
Share-based compensation expense27,224 29,313 
Depreciation and amortization188,924 186,466 
Operating lease asset amortization27,542 28,221 
Amortization of debt issuance and other debt-related costs5,435 5,577 
Deferred income taxes(31,226)(30,452)
Provision for losses on receivables3,865 2,097 
Other non-cash items5,011 (201)
Additional changes in certain assets and liabilities, net of effect of businesses acquired:
Increase in receivables(576,585)(478,671)
Increase in inventories(283,252)(294,517)
Increase in prepaid expenses and other current assets(28,372)(12,528)
Increase in accounts payable288,517 329,523 
Decrease in accrued expenses(10,893)(103,483)
Decrease in operating lease liabilities(33,319)(34,146)
Increase in accrued income taxes109,280 69,256 
Decrease (increase) in other assets17,627 (9,345)
(Decrease) increase in other long-term liabilities(16,740)45,689 
Net cash provided by operating activities158,606 110,812 
Cash flows from investing activities:
Additions to plant and equipment(167,260)(85,019)
Proceeds from sales of plant and equipment22,448 5,627 
Acquisition of businesses, net of cash acquired(32,651)(714,010)
Purchase of marketable securities(3,296)(9,925)
Proceeds from sales of marketable securities2,650 8,700 
Other investing activities3,274 6,022 
Net cash used for investing activities(174,835)(788,605)
Cash flows from financing activities:
Bank and commercial paper borrowings, net97,000  
Other debt borrowings including senior notes59,063 3 
Other debt repayments including senior notes(18,104)(10,051)
Proceeds from stock option exercises24,561 17,881 
Stock repurchases(267,727) 
Dividends paid(249,294)(240,561)
Other financing activities(45,851)(5,003)
Net cash used for financing activities(400,352)(237,731)
Effect of exchange rates on cash, cash equivalents and restricted cash(11,369)(9,355)
Net decrease in cash, cash equivalents and restricted cash(427,950)(924,879)
Cash, cash equivalents and restricted cash at beginning of period931,376 3,037,100 
Cash, cash equivalents and restricted cash at end of period$503,426 $2,112,221 
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest$84,010 $225,031 
Income taxes, net of refunds47,985 76,712 

See Notes to Consolidated Financial Statements
5


Sysco Corporation and its Consolidated Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

Unless this Form 10-Q indicates otherwise or the context otherwise requires, the terms “we,” “our,” “us,” “Sysco,” or “the company” 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 audit. The financial statements include consolidated balance sheets, consolidated results of operations, consolidated statements of comprehensive income (loss), 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 (loss), cash flows and changes in shareholders’ equity for all periods presented have been made.

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

Supplemental Cash Flow Information

The following table sets forth the company’s 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:
Oct. 1, 2022Oct. 2, 2021
(In thousands)
Cash and cash equivalents$437,670 $2,067,873 
Restricted cash (1)
65,756 44,348 
Total cash, cash equivalents and restricted cash shown in the consolidated statement of cash flows$503,426 $2,112,221 
(1)
Restricted cash primarily represents cash and cash equivalents of Sysco’s wholly owned captive insurance subsidiary, restricted for use to secure the insurer’s obligations for workers’ compensation, general liability and auto liability programs. Restricted cash is located within other assets in each consolidated balance sheet.

2. NEW ACCOUNTING STANDARDS

Liabilities – Supplier Financing Programs

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

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

The guidance requires retrospective application to all periods in which a balance sheet is presented, except for the rollforward requirement, which will be applied prospectively. The company is currently reviewing the provisions of the new standard.

6


3. REVENUE

The company recognizes revenues when its 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 $4.9 billion and $4.6 billion as of October 1, 2022 and July 2, 2022, respectively.

Sysco has certain customer contracts in which upfront monies are paid to its customers. These payments have become industry practice and are not related to financing of the customer’s business. They are not associated with any distinct good or service to be received from the customer and, therefore, are treated as a reduction of transaction prices. All upfront payments are capitalized in other assets and amortized over the life of the contract or the expected life of the relationship with the customer. As of October 1, 2022, Sysco’s contract assets were not significant. Sysco has no significant commissions paid that are directly attributable to obtaining a particular contract.

The following tables present our sales disaggregated by reportable segment and sales mix for the company’s principal product categories for the periods presented:
13-Week Period Ended Oct. 1, 2022
US Foodservice OperationsInternational Foodservice OperationsSYGMAOtherTotal
(In thousands)
Principal Product Categories
Canned and dry products$2,577,255 $691,374 $236,168 $2,068 $3,506,865 
Fresh and frozen meats2,465,450 453,364 463,440  3,382,254 
Frozen fruits, vegetables, bakery and other1,843,464 580,032 309,197 149 2,732,842 
Poultry1,574,251 292,849 277,464  2,144,564 
Dairy products1,525,483 366,847 164,648  2,056,978 
Fresh produce1,337,919 254,737 65,244  1,657,900 
Paper and disposables1,022,904 144,068 209,358 15,056 1,391,386 
Seafood638,405 121,201 40,124  799,730 
Beverage products315,619 136,475 138,169 24,657 614,920 
Other (1)
301,732 242,788 29,645 265,226 839,391 
Total Sales$13,602,482 $3,283,735 $1,933,457 $307,156 $19,126,830 
(1)
Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment, and other janitorial products, medical supplies and smallwares.

7


13-Week Period Ended Oct. 2, 2021
US Foodservice OperationsInternational Foodservice OperationsSYGMAOtherTotal
(In thousands)
Principal Product Categories
Fresh and frozen meats$2,444,461 $417,171 $474,656 $ $3,336,288 
Canned and dry products2,076,779 581,895 137,597  2,796,271 
Frozen fruits, vegetables, bakery and other1,501,293 518,255 273,148  2,292,696 
Poultry1,351,200 241,202 229,357  1,821,759 
Dairy products1,101,423 305,112 140,224  1,546,759 
Fresh produce986,998 218,963 66,563  1,272,524 
Paper and disposables911,350 119,740 188,243 15,499 1,234,832 
Seafood693,013 121,465 33,224  847,702 
Beverage products256,385 117,220 137,515 22,089 533,209 
Other (1)
280,061 254,224 23,506 216,715 774,506 
Total Sales$11,602,963 $2,895,247 $1,704,033 $254,303 $16,456,546 
(1)
Other sales relate to non-food products, including textiles and amenities for our hotel supply business, equipment, and other janitorial products, medical supplies and smallwares.

4.  ACQUISITIONS

During the first 13 weeks of fiscal 2023, the company paid cash of $32.7 million for acquisitions. These acquisitions did not have a material effect on the company’s operating results, cash flows or financial position. Certain acquisitions involve contingent consideration that may include earnout agreements that are typically payable over periods of up to three years in the event that certain operating results are achieved. As of October 1, 2022, aggregate contingent consideration outstanding was $93.0 million, of which $89.0 million was recorded as earnout liabilities. Earnout liabilities are all measured using unobservable inputs that are considered a Level 3 fair value measurement.

Greco and Sons

On August 12, 2021, Sysco consummated its acquisition of Greco and Sons (Greco), a leading independent Italian specialty distributor in the United States, operating out of 10 distribution centers and servicing 22 geographies nationwide. Greco imports and distributes a full line of food and non-food products and manufactures specialty meat products. The acquisition also includes Bellissimo Foods Company, which distributes a broad selection of Italian and Mediterranean ingredients, including a proprietary branded line of products that are sold exclusively through the Bellissimo Foods Company distribution network, serving independent pizza and Italian restaurants. The purpose of the acquisition was to strengthen Sysco’s business within the Italian foodservice sector.

During the first quarter of fiscal 2023, the company completed the determination of fair value of the assets acquired and liabilities assumed. The company recorded certain measurement period adjustments during each quarter of fiscal 2022 and fiscal 2023, none of which were individually or in aggregate material to the company’s financial statements.

8


5.  FAIR VALUE MEASUREMENTS

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

The following tables present the company’s assets measured at fair value on a recurring basis as of October 1, 2022 and July 2, 2022:
 Assets Measured at Fair Value as of Oct. 1, 2022
 Level 1Level 2Level 3Total
 (In thousands)
Assets:
Cash equivalents
Cash and cash equivalents$183,816 $5,008 $ $188,824 
Other assets (1)
65,756   65,756 
Total assets at fair value$249,572 $5,008 $ $254,580 
(1)
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.

 Assets Measured at Fair Value as of Jul. 2, 2022
 Level 1Level 2Level 3Total
 (In thousands)
Assets:
Cash equivalents
Cash and cash equivalents$625,281 $10,007 $ $635,288 
Other assets (1)
64,290   64,290 
Total assets at fair value$689,571 $10,007 $ $699,578 
(1)
Represents restricted cash balance recorded within other assets in the consolidated balance sheet.

The carrying values of accounts receivable and accounts payable approximated their respective fair values due to their short-term maturities. The fair value of Sysco’s total debt is estimated based on the quoted market prices for the same or similar issues or on the current rates offered to the company for new debt with the same maturities as existing debt, and is considered a Level 2 measurement. The fair value of total debt was approximately $10.2 billion as of October 1, 2022 and $10.5 billion as of July 2, 2022, while the carrying value was $10.8 billion as of October 1, 2022 and $10.6 billion as of July 2, 2022.

9


6. MARKETABLE SECURITIES

Sysco invests a portion of the assets held by its wholly owned captive insurance subsidiary in a restricted investment portfolio of marketable fixed income securities, which have been classified and accounted for as available-for-sale. The company includes fixed income securities maturing in less than twelve months within prepaid expenses and other current assets and includes fixed income securities maturing in more than twelve months within other assets in the accompanying consolidated balance sheets. The company records 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 2023. The following table presents the company’s available-for-sale marketable securities as of October 1, 2022 and July 2, 2022:
Oct. 1, 2022
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair ValueShort-Term Marketable SecuritiesLong-Term Marketable Securities
(In thousands)
Fixed income securities:
Corporate bonds$96,457 $ $(8,615)$87,842 $5,955 $81,887 
Government bonds29,997  (1,885)28,112  28,112 
Total marketable securities$126,454 $ $(10,500)$115,954 $5,955 $109,999 
Jul. 2, 2022
Amortized Cost BasisGross Unrealized GainsGross Unrealized LossesFair ValueShort-Term Marketable SecuritiesLong-Term Marketable Securities
(In thousands)
Fixed income securities:
Corporate bonds$96,167 $8 $(5,995)$90,180 $5,983 $84,197 
Government bonds30,070  (302)29,768  29,768 
Total marketable securities$126,237 $8 $(6,297)$119,948 $5,983 $113,965 

As of October 1, 2022, 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.

Oct. 1, 2022
(In thousands)
Due in one year or less$5,955 
Due after one year through five years71,062 
Due after five years through ten years38,937 
Total$115,954 

There were no significant realized gains or losses in marketable securities in the first 13 weeks of fiscal 2023.

7. DERIVATIVE FINANCIAL INSTRUMENTS

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

10


Hedging of interest rate risk

Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates.

Hedging of foreign currency risk

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

Hedging of fuel price risk

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

None of the company’s hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of October 1, 2022 are presented below:
Maturity Date of the Hedging InstrumentCurrency / Unit of MeasureNotional Value
(In millions)
Hedging of interest rate risk
June 2023Euro500
Hedging of foreign currency risk
Various (October 2022 to January 2023)Swedish Krona131
Various (October 2022 to December 2022)British Pound Sterling10
June 2023Euro500
Hedging of fuel risk
Various October 2022 to December 2024)Gallons59

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of October 1, 2022 and July 2, 2022 are as follows:
 Derivative Fair Value
 Balance Sheet locationOct. 1, 2022Jul. 2, 2022
(In thousands)
Fair Value Hedges:
Interest rate swapsOther current liabilities$7,136 $2,820 
Cash Flow Hedges:
Fuel swapsOther current assets$16,188 $47,170 
Foreign currency forwardsOther current assets945 633 
Fuel swapsOther assets3  
Fuel swapsOther current liabilities1,647  
Fuel swapsOther long-term liabilities3,844 209 

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:
11


13-Week Period Ended
Oct. 1, 2022Oct. 2, 2021
(In thousands)
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded$124,150 $128,214 
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items$2,376 $(2,433)
Derivatives designated as hedging instruments(4,759)(8,390)

The gains and losses on the fair value hedging relationships associated with the hedged items as disclosed in the table above consist of the following components for each of the periods presented:
13-Week Period Ended
Oct. 1, 2022Oct. 2, 2021
(In thousands)
Interest expense$(1,939)$(6,526)
Decrease in fair value of debt(4,315)(4,093)
Hedged items$2,376 $(2,433)

The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week periods ended October 1, 2022 and October 2, 2021, presented on a pretax basis, are as follows:
12


13-Week Period Ended Oct. 1, 2022
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on DerivativesLocation of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(In thousands)(In thousands)
Derivatives in cash flow hedging relationships:
Fuel swaps$(36,295)Operating expense$12,985 
Foreign currency contracts286 Cost of sales / Other income 
Total$(36,009)$12,985 
Derivatives in net investment hedging relationships:
Foreign denominated debt$31,346 N/A$ 
Total$31,346 $ 
13-Week Period Ended Oct. 2, 2021
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on DerivativesLocation of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(In thousands)(In thousands)
Derivatives in cash flow hedging relationships:
Fuel swaps$(485)Operating expense$7,972 
Foreign currency contracts(78)Cost of sales / Other income 
Total$(563)$7,972 
Derivatives in net investment hedging relationships:
Foreign denominated debt$13,553 N/A$ 
Total$13,553 $ 

13


The location and carrying amount of hedged liabilities in the consolidated balance sheet as of October 1, 2022 are as follows:
Oct. 1, 2022
Carrying Amount of Hedged Assets (Liabilities)Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
(In thousands)
Balance sheet location:
Current maturities of long-term debt$(568,766)$7,136 

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of July 2, 2022 are as follows:
Jul. 2, 2022
Carrying Amount of Hedged Assets (Liabilities)Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
(In thousands)
Balance sheet location:
Current maturities of long-term debt$(568,601)$2,820 

8. DEBT

Sysco has a long-term revolving credit facility that includes aggregate commitments of the lenders thereunder of $3.0 billion, with an option to increase such commitments to $4.0 billion. As of October 1, 2022, there were no borrowings outstanding under this facility.

Sysco has a U.S commercial paper program allowing the company to issue short-term unsecured notes. On September 2, 2022, Sysco entered into an amended and restated commercial paper dealer agreement increasing the issuance allowance from an aggregate amount not to exceed $2.0 billion to an aggregate amount not to exceed $3.0 billion. Any outstanding amounts are classified within long-term debt, as the program is supported by the long-term revolving credit facility. As of October 1, 2022, there were $97.0 million in commercial paper issuances outstanding under this program.

9.  EARNINGS PER SHARE

The following table sets forth the computation of basic and diluted earnings per share:
 13-Week Period Ended
 Oct. 1, 2022Oct. 2, 2021
 (In thousands, except for share
and per share data)
Numerator:  
Net earnings$465,568 $378,013 
Denominator:
Weighted-average basic shares outstanding507,578,576 512,516,067 
Dilutive effect of share-based awards2,804,573 3,266,861 
Weighted-average diluted shares outstanding510,383,149 515,782,928 
Basic earnings per share$0.92 $0.74 
Diluted earnings per share$0.91 $0.73 

The number of securities that were not included in the diluted earnings per share calculation because the effect would have been anti-dilutive was approximatel