Company: SYY
Filing Date: 2025-08-22
Form Type: 10-K
Source: 0000096021-25-000099
Chunk: 31

Company: SYSCO CORP
Filing Date: 2025-08-22
Form: 10-K
Item: Item 8
Chunk 31
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 28, 2025 is shown below: Amount (In millions)2026$120 2027101 202897 202996 203080 Goodwill ImpairmentSysco had approximately $5.2 billion of goodwill at June 28, 2025. We test goodwill for impairment annually at the reporting unit level in our fiscal fourth quarter, or more frequently if events or circumstances indicate that they could be impaired. Potential impairment indicators include (but are not limited to)  macroeconomic conditions, industry and market considerations, cost factors, overall financial performance, other relevant entity-specific events, specific events affecting the reporting unit or sustained decrease in share price.In our annual fiscal 2025 assessment, we concluded that one reporting unit, Guest Worldwide, had a fair value less than book value due to its recent financial performance and downward revisions in its long-range financial outlook. In the fourth quarter of fiscal 2025 we recorded a noncash goodwill impairment charge of $92 million for a portion of the goodwill attributable to our Guest Worldwide reporting unit. This charge is included within operating expenses in the consolidated results of operations. All other reporting units were concluded to have a fair value that exceeded book value.We estimate the fair value of our reporting units using a combination of discounted cash flow and earnings or revenue multiple models. For the purposes of the discounted cash flow models, fair value was determined based on the present value of estimated future cash flows, discounted at an appropriate risk adjusted rate. Our fair value conclusions as of June 28, 2025 for the reporting units are sensitive to changes in the assumptions used in the income approach which include forecasted revenues and EBITDA, perpetual growth rates, and long-term discount rates, among others, all of which require significant judgments by management. Fair value of the reporting unit is, therefore, determined using significant unobservable inputs, or level 3 in the fair value hierarchy. We used recent historical performance, current forecasted financial information, and broad-based industry and economic statistics as a basis to estimate the key assumptions utilized in the discounted cash flow model. These key 

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assumptions are inherently uncertain and require a high degree of estimation and judgment and are subject to change based on actual results, industry and global economic and geo-political conditions, and the timing and success of the implementation of current strategic initiatives.

10.  DERIVATIVE FINANCIAL INSTRUMENTS

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