DERIVATIVE FINANCIAL INSTRUMENTS

9 Months Ended

Mar. 28, 2026

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

DERIVATIVE FINANCIAL INSTRUMENTS

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

not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate

risk, foreign currency risk and fuel price risk.

Hedging of interest rate risk

Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of

fixed and floating rates. In the third quarter of fiscal 2026, we entered into receive-fixed, pay-floating swap agreements to trade

the fixed interest rate on $600 million of 4.40% senior notes and $650 million of 4.95% senior notes with variable rates,

respectively. The interest rate swaps are designated as fair value hedges and gains or losses on the hedges impact interest

expense within the consolidated statements of income.

Hedging of foreign currency risk

Sysco has cross-currency swaps that hedge the foreign currency exposure of our net investment in certain foreign

operations. These cross-currency swaps are designated as net investment hedges with gains and losses recognized within

accumulated other comprehensive income (loss), including changes in fair value attributed to the spot-forward rate differential

which are excluded from the assessment of hedge effectiveness. The initial value of the excluded component is recognized in

earnings over the life of the hedging instrument. In the third quarter of fiscal 2026, we entered into $814 million Canadian

dollar cross-currency swaps which will mature on June 25, 2031 to hedge the foreign currency exposure of the net investment

in our Canadian operations.

Sysco routinely manages foreign currency risk with spot and forward-rate cross-currency swaps on foreign-

denominated balances. The swaps are designated as fair value hedges and for swaps hedging the change in foreign currency

spot rates, we have elected to exclude the changes in fair value of the forward points from the assessments of hedge

effectiveness. Gains or losses from fair value hedges impact the same category on the consolidated statements of income as the

item being hedged, including the value of the excluded components which is recognized in earnings over the life of the hedging

instrument. Subsequent to March 28, 2026, Sysco entered an intercompany loan with an affiliate that is denominated in euro

that will mature July 10, 2026. To hedge our foreign currency risk, we entered into a cross currency swap for €450 million and

designated it as a fair value hedge.

Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency,

such as the Euro, U.S. dollar, Polish zloty and Danish krone. Accounts payable associated with these inventory purchases give

rise to foreign currency exposure between the functional currency of each entity and these currencies. We periodically enter into

foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the

inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases.

Hedging of fuel price risk

Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel fuel on

anticipated future purchases. These swaps are designated as cash flow hedges.

None of our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging

instruments as of March 28, 2026 are presented below:

Maturity Date of the Hedging Instrument	Currency / Unit of Measure	Notional Value
		(In millions)
Hedging of interest rate risk
January 2034	U.S. Dollar	500
March 2035	U.S. Dollar	550
June 2031	U.S. Dollar	600
March 2036	U.S. Dollar	650
Hedging of foreign currency risk
January 2029	Euro	470
September 2030	Canadian Dollar	998
June 2031	Canadian Dollar	814
Hedging of fuel risk
Various (March 2026 to March 2028)	Gallons	81

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheets as of

March 28, 2026 and June 28, 2025 are as follows:

		Derivative Fair Value
	Balance Sheet location	Mar. 28, 2026	Jun. 28, 2025
		(In millions)
Fair Value Hedges:
Interest rate swaps	Prepaid expenses and other current assets	$2	$—
Interest rate swaps	Other assets	12	31
Interest rate swaps	Accrued expenses	2	1
Interest rate swaps	Other long-term liabilities	17	—
Cash Flow Hedges:
Fuel swaps	Prepaid expenses and other current assets	$59	$—
Fuel swaps	Other assets	14	—
Fuel swaps	Accrued expenses	—	7
Fuel swaps	Other long-term liabilities	—	2
Net Investment Hedges:
Cross currency swaps	Prepaid expenses and other current assets	$21	$11
Cross currency swaps	Other assets	53	55
Cross currency swaps	Accrued expenses	3	2
Cross currency swaps	Other long-term liabilities	100	134

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:

	13-Week Period Ended		39-Week Period Ended
	Mar. 28, 2026	Mar. 29, 2025	Mar. 28, 2026	Mar. 29, 2025
	(In millions)
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	$174	$158	$556	$501
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items	$15	$(35)	$(15)	$(41)
Derivatives designated as hedging instruments	(34)	24	(36)	16
Cross currency swaps and foreign currency forwards:
Hedged items	$—	$(1)	$—	$1
Derivatives designated as hedging instruments	—	1	—	(1)

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		39-Week Period Ended
	Mar. 28, 2026	Mar. 29, 2025	Mar. 28, 2026	Mar. 29, 2025
	(In millions)
Interest expense	$(21)	$(10)	$(51)	$(25)
(Increase) decrease in fair value of debt	36	(25)	36	(16)
Foreign currency gain (loss)	—	(1)	—	1
Hedged items	$15	$(36)	$(15)	$(40)

The location and effect of cash flow, net investment, and excluded components of fair value hedges on the

consolidated statements of comprehensive income for the 13-week periods ended March 28, 2026 and March 29, 2025,

presented on a pretax basis, are as follows:

	13-Week Period Ended Mar. 28, 2026
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)		(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$84	Operating expense	$—
Derivatives in net investment hedging relationships:
Cross currency contracts	$36	N/A	$—
	13-Week Period Ended Mar. 29, 2025
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)		(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$4	Operating expense	$1
Derivatives in net investment hedging relationships:
Cross currency contracts	$(8)	N/A	$—

The location and effect of cash flow, net investment, and excluded components of fair value hedges on the

consolidated statements of comprehensive income for the 39-week periods ended March 28, 2026 and March 29, 2025,

presented on a pretax basis, are as follows:

	39-Week Period Ended Mar. 28, 2026
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)		(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$81	Operating expense	$(1)
Derivatives in net investment hedging relationships:
Cross currency contracts	$43	N/A	$—
	39-Week Period Ended Mar. 29, 2025
	Amount of Gain or (Loss) Recognized in Other Comprehensive Income on Derivatives	Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
	(In millions)		(In millions)
Derivatives in cash flow hedging relationships:
Fuel swaps	$(8)	Operating expense	$6
Foreign currency contracts	(1)	Cost of sales / Other expense (income)	—
Total	$(9)		$6
Derivatives in net investment hedging relationships:
Cross currency contracts	$(4)	N/A	$—
Derivatives in fair value hedging relationships:
Change in excluded component of fair value hedge	$(2)	Other expense (income)	$—

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of March 28, 2026 are as

follows:

	Mar. 28, 2026
	Carrying Amount of Hedged Assets (Liabilities)	Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
	(In millions)
Balance sheet location:
Long-term debt	$(2,273)	$5

The carrying amount of hedged liabilities in the consolidated balance sheet as of June 28, 2025 is $1.1 billion.