Sysco (SYY) Risk Factor Changes

As of June 27, 2026, we had approximately 75,000 employees, approximately 14% of whom were represented by unions, primarily the International Brotherhood of Teamsters and unions in France and Sweden.

We contribute to several multiemployer defined benefit pension plans based on obligations arising under collective bargaining agreements covering union-represented employees.

Of the $13.5 billion of total indebtedness, $792 million will mature within the next twelve months.

As described in Note 12, “Debt and Other Financing Arrangements,” in the Notes to Consolidated Financial Statements in Item 8, as of June 27, 2026, we had approximately $13.5 billion of total indebtedness, which prima…

Data privacy laws and the regulatory activity associated therewith, continue to evolve across most jurisdictions in which we operate.

operations.

Potential consequences of a future material cybersecurity incident include: business disruption; disruption to systems; theft, destruction, loss, corruption, misappropriation or unauthorized release of sensitive and/o…

A significant expansion of our business and operations, in terms of geography or magnitude, could strain our administrative and operational resources.

In the past we have faced, and in the future we may also face the risk of exposure to product liability claims if the use of products sold by Sysco does cause or is alleged to have caused injury, illness, or death.

Further, in the ordinary course of a global business, there are many intercompany transactions and calculations where the ultimate tax determination could change if tax laws or tax rulings were to be modified.

Our business strategy also includes the possibility of expansion into businesses that are closely related or complementary to, but not currently part of, our core foodservice distribution business.

Changing consumer eating habits also occur due to generational shifts.

We have long-standing relationships and agreements with a number of our customers.

The effects of climate change may create financial and operational risks to our business, both directly and indirectly.

Finally, demand for food-away-from-home products is volatile and price sensitive, imposing limits on our customers’ ability to absorb cost increases.

Our international operations subject us to certain risks, including economic and political instability and potential unfavorable changes in laws and regulations in international markets in which we operate.

The cost of fuel affects the prices we pay for products, as well as the costs we incur to deliver products to our customers.

individuals.

Additionally, both the GDPR and the California Consumer Privacy Act of 2018 (the CCPA) are continuously evolving and developing and may be interpreted and applied differently from jurisdiction to jurisdiction and may…

In the UK and Europe, the General Data Protection Regulation (the GDPR) places stringent requirements on companies when handling personal data and local regulatory guidance continues to evolve.

comply with data privacy laws can result in substantial fines or penalties, legal liability and / or reputational damage and litigation.

Potential consequences of a future material cybersecurity incident include: business disruption; disruption to systems; theft, destruction, loss, corruption, misappropriation or unauthorized release of sensitive and/o…

In the past we have, and in the future we may also face the risk of exposure to product liability claims if the use of products sold by Sysco does cause or is alleged to have caused injury, illness, or death.

include the costs and difficulties of managing operations outside of our core business, which may require additional skills and competencies, as well as difficulties in identifying and gaining access to suppliers or c…

customers might owe us.

The effects of climate change may create financial and operational risks to our business, both directly and indirectly.

limiting price increases or may require increased discounting or other concessions.

concerns.

The Sysco Merger is intended to qualify as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended, and the Sysco Merger and JRD Merger, taken together, are intended to…

If the Sysco Merger does not qualify as a “reorganization” under Section 368(a) of the Internal Revenue Code of 1986, as amended (the Code) or, taken together with the JRD Merger, as a transaction described in Section…

After the completion of the Transactions, our stockholders will own a smaller percentage of Sysco Holdings than they currently own in Sysco.

Our existing stockholders will have reduced ownership and economic interest in Sysco Holdings after the Transactions.

Our stockholders may file lawsuits against us and/or our directors and officers in connection with the Transactions.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into Merger Agreements.

Potential litigation against us could result in substantial costs, an injunction preventing the completion of the Transactions and/or a judgment resulting in the payment of damages.

In addition, even if the operations of the business of Sysco and Jetro Restaurant Depot are integrated successfully, the full benefits of the Transactions may not be realized within the anticipated time frame or at all.

administrative infrastructures and eliminating duplicative operations; coordinating separate organizations; addressing differences in business backgrounds, corporate cultures and management philosophies; unanticipated…

There can be no assurance that Sysco Holdings will be able to successfully integrate Jetro Restaurant Depot’s assets and operations or otherwise realize the expected benefits of the Transactions (including cost synerg…

We may not achieve the intended benefits, and the Transactions may disrupt our current plans or operations.

The cash portion of the purchase price, which is $21.6 billion, subject to customary adjustments, to be paid by us for the Transactions, as well as any refinancing of Jetro Restaurant Depot’s indebtedness, and the fee…

We expect to obtain financing in connection with the Transactions but cannot guarantee that we will be able to obtain such financing on favorable terms or at all.

On May 27, 2026, Sysco and Jetro Restaurant Depot each received a request for additional information and documentary material, often referred to as a “second request,” from the FTC under the HSR Act.

Before the Transactions may be completed, any waiting period (or extension thereof) under the provisions of the HSR Act must have expired or been terminated.

The mergers are subject to the requirements of the HSR Act, and regulatory authorities may impose conditions that could have an adverse effect on us following the Transactions or that could delay, prevent or increase…

also divert our and Jetro Restaurant Depot management’s attention from their respective businesses as we work to take all steps necessary to close the Transactions.

Uncertainty about the effect of the Transactions on employees, commercial partners, clients, customers, suppliers and vendors may have an adverse effect on our and/or Jetro Restaurant Depot’s ongoing business operatio…

We and Jetro Restaurant Depot are subject to business uncertainties and contractual restrictions while the Transactions are pending.

In addition, even if we are able to complete the Transactions, one or more conditions in the Merger Agreement may not be satisfied in a timely manner.

•We may commit significant time and resources to defend against litigation related to any failure to complete the Transactions or related to any enforcement proceeding commenced against us to perform our obligations p…

•We will be required to pay costs relating to the Transactions, such as legal, accounting, financial advisory and printing fees, whether or not the Transactions are completed; and

•We will still be required to pay significant fees and expenses relating to financing arrangements, which may include investment banking fees and commissions, professional fees and other costs and expenses;

•We have committed and will continue to commit time and resources to matters relating to the Transactions that could otherwise have been devoted to ongoing business operations and pursuing other beneficial opportuniti…

•We may experience negative publicity, which could have an adverse effect on our ongoing operations, including on our ability to retain and attract key employees and those with whom we do business, such as customers,…

•We could owe a termination fee of $1.164 billion under certain circumstances;

•The market price of our common stock could decline to the extent that the current market price reflects a market assumption that the Transactions will be completed;

Without realizing any of the benefits of having completed the Transactions, we will be subject to a number of risks, including the following:

The completion of the Transactions is subject to a number of conditions, some of which are not under our control.

The Transactions are subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all.

•“Warehouse Realty Merger” refers to, immediately following the JRD Merger, Merger Sub 3 merging with and into Warehouse Realty, with Warehouse Realty continuing as the surviving entity and a wholly owned subsidiary o…

•“Warehouse Realty” refers to Warehouse Realty, LLC, a Delaware limited liability company; and

•“Sysco Merger” refers to Merger Sub 1 merging with and into us, with us continuing as the surviving corporation and a wholly owned subsidiary of Sysco Holdings;

•“Sysco Holdings common stock” refers to the common stock, par value $1.00 per share, of Sysco Holdings;

•“Sysco Holdings” refers to Sysco Holdings Corporation (formerly known as New Slider Holdco, Inc.), a Delaware corporation and a wholly owned subsidiary of ours that was formed solely for the purpose of effecting the…

•“mergers” refers to the Sysco Merger, the JRD Merger and the Warehouse Realty Merger, collectively;

•“merger subs” refers to Merger Sub 1, Merger Sub 2 and Merger Sub 3 together;

•“Merger Sub 3” refers to Slider Merger Sub 3, LLC;

•“Merger Sub 2” refers to Slider Merger Sub 2, Inc.;

•“Merger Sub 1” refers to Slider Merger Sub 1, Inc.;

•“Merger Agreement” refers to the Agreement and Plan of Merger, dated as of March 30, 2026, by and among us, Sysco Holdings, Merger Sub 1, Merger Sub 2, Merger Sub 3, JRD Unico, Warehouse Realty and a holder represent…

•“JRD Merger” refers to, immediately following the Sysco Merger, Merger Sub 2 merging with and into JRD Unico, with JRD Unico continuing as the surviving corporation and a wholly owned subsidiary of Sysco Holdings;

•“JRD Unico” refers to JRD Unico, Inc., a Delaware corporation;

As used in this section, the following terms have the meanings set forth below.

Failure to successfully renegotiate union contracts could result in work stoppages, which could have a material adverse effect on our business, financial condition and results of operations.

Our funding requirements for our company-sponsored qualified pension plan may increase should financial markets experience future declines, which could adversely affect our financial condition, results of operations a…

between December 31, 2021 and December 31, 2025.

We may be required to pay material amounts under multiemployer defined benefit pension plans, which could adversely affect our financial condition, results of operations and cash flows.

Our level of indebtedness and the terms of our indebtedness could adversely affect our business and liquidity position.

processing and transforming personal data.

One area of increasing risk is the rapid use of artificial intelligence and the evolving legal and regulatory landscape governing its use.

As a consequence of the evolving landscape, regulatory guidance and action also continues to increase, particularly across the EU and U.S., with a growing number of enforcement activities and monetary penalties being…

Outside of the U.S., countries continue to adopt data privacy laws, with many placing stringent requirements on companies when handling and sharing personal data.

Our failure to comply with data privacy regulations could adversely affect our business.

Our growing use of artificial intelligence systems in our operations poses inherent risks and could adversely affect our results of operations.

Our efforts to prevent security breaches and cybersecurity incidents, and to implement effective disaster recovery plans, may not be entirely effective to insulate us from technology disruption or protect us from adve…

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.

If we are unable to finance and integrate acquired businesses effectively, our earnings per share could be materially adversely affected.

We may incur significant costs to comply with environmental laws and regulations, and we may be subject to substantial fines, penalties or third-party claims for non-compliance.

If we fail to comply with requirements imposed by applicable law or other governmental regulations, we could become subject to lawsuits, investigations and other liabilities and restrictions on our operations that cou…

If our products are alleged to have caused injury, illness, or death, or to have failed to comply with governmental regulations, we may need to recall or withdraw our products and may experience product liability claims.

no assurance that the final determination of tax audits or tax disputes will not be different from what is reflected in our historical income tax provisions and accruals.

changes, including 100% bonus depreciation on qualified property.

•The One Big Beautiful Bill Act (OBBBA) was enacted in July 2025 and introduced a series of corporate tax

Changes in applicable tax laws or regulations and the resolution of tax disputes could negatively affect our financial results.

Expanding into new markets and complementary lines of business presents unique challenges and may not be successful, and failure to successfully expand may adversely affect the implementation of our business strategy.

may not be able to effectively respond to changes in consumer health perceptions or resulting new laws or regulations or to adapt our menu offerings to trends in eating habits.

Changes in consumer eating habits could materially and adversely affect our business, financial condition, and results of operations.

Our anticipated change to the mix of locally managed customers versus multi-unit customers could reduce our gross and operating margins.

Our relationships with long-term customers may be materially diminished or terminated, which could adversely affect our business, financial condition and results of operations.

Adverse publicity about us or lack of confidence in our products could negatively impact our reputation and reduce earnings.

Climate change and other social and governance matters, as well as the legal, regulatory or market measures being implemented to address such matters, may have an adverse impact on our business, results of operations…