LEASES

12 Months Ended

Jun. 27, 2026

Sysco leases certain of its distribution and warehouse facilities, office facilities, fleet vehicles, and office and warehouse equipment. We determine if an arrangement is a lease at inception and recognize a finance or operating lease liability and right-of-use (ROU) asset in the consolidated balance sheets if a lease exists. Lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at the commencement date. If the borrowing rate implicit in the lease is not readily determinable, we use our incremental borrowing rate based on the information available at the commencement date in determining the present value of future payments.

The lease term is defined as the noncancelable period of the lease plus any options to extend or terminate the lease when it is reasonably certain that the company will exercise one of these options. Leases with an initial term of twelve months or less are not recorded in Sysco’s consolidated balance sheets, and we recognize expense for these leases on a straight-line basis over the lease term. Variable lease payments that do not depend on an index or a rate, such as insurance and property taxes, are excluded from the measurement of the lease liability and are recognized as variable lease cost when the obligation for that payment is incurred. For leases in which the lease and non-lease components have been combined, the variable lease expense includes expenses such as common area maintenance, utilities, and repairs and maintenance. Sysco’s leases do not contain significant residual value guarantees and do not impose significant restrictions or covenants.

The following table presents the location of the finance lease ROU assets and lease liabilities in our consolidated balance sheets at June 27, 2026 and June 28, 2025:


	Consolidated Balance Sheet Location	Jun. 27, 2026		Jun. 28, 2025
		(In millions)
Finance lease right-of-use assets	Plant and equipment at cost, less accumulated depreciation	$	413	$	476
Current finance lease liabilities	Current maturities of long-term debt	72		65
Long-term finance lease liabilities	Long-term debt	321		387

The following table presents lease costs for each of the presented periods ended June 27, 2026 and June 28, 2025:


	Consolidated Results of Operations Location	Jun. 27, 2026		Jun. 28, 2025
		(In millions)
Operating lease cost	Operating expenses	$	217	$	186
Financing lease cost:
Amortization of right-of-use assets	Operating expenses	81		70
Interest on lease obligations	Interest expense	20		17
Variable lease cost	Operating expenses	141		115
Short-term lease cost	Operating expenses	47		54
Net lease cost		$	506	$	442

Future minimum lease obligations under existing noncancelable operating and finance lease agreements by fiscal year as of June 27, 2026 are as follows:


	Operating Leases		Finance Leases
	(In millions)
2027	$	233	$	89
2028	196		73
2029	168		57
2030	162		46
2031	145		33
Thereafter	1,085		213
Total undiscounted lease obligations	1,989		511
Less imputed interest	(538)		(118)
Present value of lease obligations	$	1,451	$	393

We have entered into operating lease agreements that have not yet commenced as of June 27, 2026 with legally binding minimum lease payments of $18 million. The leases are expected to commence during the next two fiscal years.

Other information related to lease agreements was as follows:


	Jun. 27, 2026			Jun. 28, 2025
Cash Paid For Amounts Included In Measurement of Liabilities:	(Dollars in millions)
Operating cash flows for operating leases	$	215		$	177
Operating cash flows for financing leases	20			17
Financing cash flows for financing leases	76			115

Supplemental Non-cash Information on Lease Liabilities:
Assets obtained in exchange for operating lease obligations	$	325		$	254
Assets obtained in exchange for finance lease obligations	55			202
Operating lease asset adjustments, including renewals and remeasurements	86			80
Operating lease liability adjustments, including renewals and remeasurements	86			83

Lease Term and Discount Rate:
Weighted-average remaining lease term (years):
Operating leases	12.04 years			11.10 years
Financing leases	10.08 years			12.38 years
Weighted-average discount rate:
Operating leases	5.22		%	4.56		%
Financing leases	4.98		%	4.65		%

LEASES

The following table presents the location of the finance lease ROU assets and lease liabilities in our consolidated balance sheets at June 27, 2026 and June 28, 2025:


	Consolidated Balance Sheet Location	Jun. 27, 2026		Jun. 28, 2025
		(In millions)
Finance lease right-of-use assets	Plant and equipment at cost, less accumulated depreciation	$	413	$	476
Current finance lease liabilities	Current maturities of long-term debt	72		65
Long-term finance lease liabilities	Long-term debt	321		387

The following table presents lease costs for each of the presented periods ended June 27, 2026 and June 28, 2025:


	Consolidated Results of Operations Location	Jun. 27, 2026		Jun. 28, 2025
		(In millions)
Operating lease cost	Operating expenses	$	217	$	186
Financing lease cost:
Amortization of right-of-use assets	Operating expenses	81		70
Interest on lease obligations	Interest expense	20		17
Variable lease cost	Operating expenses	141		115
Short-term lease cost	Operating expenses	47		54
Net lease cost		$	506	$	442

Future minimum lease obligations under existing noncancelable operating and finance lease agreements by fiscal year as of June 27, 2026 are as follows:


	Operating Leases		Finance Leases
	(In millions)
2027	$	233	$	89
2028	196		73
2029	168		57
2030	162		46
2031	145		33
Thereafter	1,085		213
Total undiscounted lease obligations	1,989		511
Less imputed interest	(538)		(118)
Present value of lease obligations	$	1,451	$	393

Other information related to lease agreements was as follows:


	Jun. 27, 2026			Jun. 28, 2025
Cash Paid For Amounts Included In Measurement of Liabilities:	(Dollars in millions)
Operating cash flows for operating leases	$	215		$	177
Operating cash flows for financing leases	20			17
Financing cash flows for financing leases	76			115

Supplemental Non-cash Information on Lease Liabilities:
Assets obtained in exchange for operating lease obligations	$	325		$	254
Assets obtained in exchange for finance lease obligations	55			202
Operating lease asset adjustments, including renewals and remeasurements	86			80
Operating lease liability adjustments, including renewals and remeasurements	86			83

Lease Term and Discount Rate:
Weighted-average remaining lease term (years):
Operating leases	12.04 years			11.10 years
Financing leases	10.08 years			12.38 years
Weighted-average discount rate:
Operating leases	5.22		%	4.56		%
Financing leases	4.98		%	4.65		%