Company: SYY
Filing Date: 2025-10-29
Form Type: 10-Q
Source: 0000096021-25-000157
Chunk: 34

Company: SYSCO CORP
Filing Date: 2025-10-29
Form: 10-Q
Item: Item 1
Chunk 34
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 consolidated statements of income. Hedging of foreign currency riskSysco has cross-currency swaps that hedge the foreign currency exposure of our net investment in certain foreignoperations. These cross-currency swaps are designated as net investment hedges with gains and losses recognized within accumulated other comprehensive income (loss). 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 earnings impact of the excluded components. Unrealized gains or losses on components excluded from hedge effectiveness are recorded within accumulated other comprehensive income (loss) and recognized into earnings over the life of the hedged instrument. 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 riskSysco 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.

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None of our hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of September 27, 2025 are presented below:Maturity Date of the Hedging InstrumentCurrency / Unit of MeasureNotional Value(In millions)Hedging of interest rate riskJanuary 2034U.S. Dollar500March 2035U.S. Dollar550Hedging of foreign currency riskJanuary 2029Euro470September 2030Canadian Dollar998Hedging of fuel riskVarious (September 2025 to April 2027)Gallons72The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheets as of September 27, 2025 and June 28, 2025 are as follows: Derivative Fair Value Balance Sheet locationSep. 27,