On July 1, 2018, Sysco adopted ASC Topic 606 with no significant impact to its financial position or results of operations, using the modified retrospective method. There were no contracts which were not completed as of July 1, 2018. Results for reporting periods beginning after July 1, 2018 are presented under ASC Topic 606, while prior period amounts have not been restated and continue to be reported in accordance with our historic accounting under ASC Topic 605, Revenue Recognition. Sysco had no adjustment to opening retained earnings as of July 1, 2018 as a result of adopting ASC Topic 606. There was no material impact on revenues for the quarter and 39 weeks ended March 30, 2019 as a result of applying ASC Topic 606.

The company recognizes revenues when the performance obligation is satisfied, which is the point at which control of the promised goods or services are transferred to its customers, in an amount that reflects the consideration Sysco expects to be entitled to receive in exchange for those goods or services. For the majority of Sysco’s customer arrangements, control transfers to customers at a point-in-time when goods have been delivered, as that is generally when legal title, physical possession and risks and rewards of goods/services transfers to the customer. The timing of satisfaction of the performance obligation is not subject to significant judgment. While certain additional services may be identified within a contract, we have concluded that those services are individually immaterial in the context of the contract with the customer, and therefore, not assessed as performance obligations.

Sales tax collected from customers is not included in revenue, but rather recorded as a liability due to the respective taxing authorities. Shipping and handling costs include costs associated with the selection of products and delivery to customers and are included within operating expenses.

Sysco generates revenue primarily from the distribution and sale of food and related products to its customers. Substantially all revenue is recognized at the point in time in which the product is delivered to the customer. The company grants certain customers sales incentives, such as rebates or discounts, which are accounted for as variable consideration. The variable consideration is based on amounts known at the time the performance obligation is satisfied and, therefore, requires minimal judgment.

After completion of Sysco’s performance obligations, the company has an unconditional right to consideration as outlined in its contracts with customers. Sysco’s customer receivables will generally be collected in less than 30 days in accordance with the underlying payment terms. Customer receivables, which are included in Accounts and notes receivable, less allowances in the consolidated balance sheet, were $4.1 billion and $3.8 billion as of March 30, 2019 and June 30, 2018, 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 on a straight-line basis. As of March 30, 2019, Sysco’s contract assets were not significant. Sysco has no significant commissions paid that are directly attributable to obtaining a particular contract.



	13-Week Period Ended Mar. 30, 2019
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	2,035,201	$	389,126	$	386,074	$	—	$	2,810,401
Canned and dry products	1,812,070		554,653		69,730		—		2,436,453
Frozen fruits, vegetables, bakery and other	1,408,601		500,999		300,725		—		2,210,325
Dairy products	1,030,209		304,315		145,460		—		1,479,984
Poultry	1,013,513		195,816		200,518		—		1,409,847
Fresh produce	936,972		245,436		56,847		—		1,239,255
Paper and disposables	686,732		88,400		178,465		14,287		967,884
Seafood	624,953		166,103		32,959		—		824,015
Beverage products	277,421		129,366		136,876		19,787		563,450
Other ⁽¹⁾	279,611		183,677		29,658		223,514		716,460
Total Sales	$	10,105,283	$	2,757,891	$	1,537,312	$	257,588	$	14,658,074



	13-Week Period Ended Mar. 31, 2018
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	1,964,633	$	403,684	$	376,554	$	—	$	2,744,871
Canned and dry products	1,759,588		577,363		78,810		—		2,415,761
Frozen fruits, vegetables, bakery and other	1,325,252		618,684		296,774		—		2,240,710
Dairy products	1,016,360		314,272		151,835		—		1,482,467
Poultry	956,664		201,133		269,142		—		1,426,939
Fresh produce	878,802		248,261		59,016		—		1,186,079
Paper and disposables	646,278		95,295		181,112		13,804		936,489
Seafood	610,291		170,210		30,010		—		810,511
Beverage products	273,849		45,938		141,137		19,682		480,606
Other ⁽¹⁾	272,778		124,411		21,363		206,519		625,071
Total Sales	$	9,704,495	$	2,799,251	$	1,605,753	$	240,005	$	14,349,504



	39-Week Period Ended Mar. 30, 2019
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	6,241,367	$	1,218,668	$	1,132,476	$	—	$	8,592,511
Canned and dry products	5,463,772		1,777,733		214,070		—		7,455,575
Frozen fruits, vegetables, bakery and other	4,249,051		1,483,735		907,718		—		6,640,504
Dairy products	3,158,050		929,025		448,369		—		4,535,444
Poultry	3,042,028		620,940		681,253		—		4,344,221
Fresh produce	2,802,548		825,000		178,745		—		3,806,293
Paper and disposables	2,079,381		280,315		548,977		44,871		2,953,544
Seafood	1,868,294		550,953		81,795		—		2,501,042
Beverage products	839,173		342,753		420,414		63,389		1,665,729
Other ⁽¹⁾	848,135		540,317		81,559		674,186		2,144,197
Total Sales	$	30,591,799	$	8,569,439	$	4,695,376	$	782,446	$	44,639,060



	39-Week Period Ended Mar. 31, 2018
	US Foodservice Operations		International Foodservice Operations		SYGMA		Other		Total
	(In thousands)
Principal Product Categories
Fresh and frozen meats	$	5,971,490	$	1,250,050	$	1,138,404	$	—	$	8,359,944
Canned and dry products	5,241,179		1,750,597		245,569		—		7,237,345
Frozen fruits, vegetables, bakery and other	3,908,210		1,890,105		858,500		—		6,656,815
Poultry	3,000,575		621,150		843,861		—		4,465,586
Dairy products	3,053,156		938,288		480,894		—		4,472,338
Fresh produce	2,705,538		770,590		188,508		—		3,664,636
Paper and disposables	1,940,107		297,663		546,146		42,639		2,826,555
Seafood	1,786,608		535,874		74,894		—		2,397,376
Beverage products	815,081		145,816		426,401		62,134		1,449,432
Other ⁽¹⁾	812,718		371,416		76,392		620,865		1,881,391
Total Sales	$	29,234,662	$	8,571,549	$	4,879,569	$	725,638	$	43,411,418