SYSCO CORPSYY
SYSCO CORP Leases Disclosure
LEASES
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 28, 2025 and June 29, 2024:
| Consolidated Balance Sheet Location | Jun. 28, 2025 | Jun. 29, 2024 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Finance lease right-of-use assets | $ | 476 | $ | 339 | ||||||||||||||||
| Current finance lease liabilities | 65 | 54 | ||||||||||||||||||
| Long-term finance lease liabilities | 387 | 307 | ||||||||||||||||||
The following table presents lease costs for each of the presented periods ended June 28, 2025 and June 29, 2024:
| Consolidated Results of Operations Location | Jun. 28, 2025 | Jun. 29, 2024 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Operating lease cost | Operating expenses | $ | 186 | $ | 154 | |||||||||||||||
| Financing lease cost: | ||||||||||||||||||||
| Amortization of right-of-use assets | Operating expenses | 70 | 60 | |||||||||||||||||
| Interest on lease obligations | Interest expense | 17 | 14 | |||||||||||||||||
| Variable lease cost | Operating expenses | 115 | 111 | |||||||||||||||||
| Short-term lease cost | Operating expenses | 54 | 68 | |||||||||||||||||
| Net lease cost | $ | 442 | $ | 407 | ||||||||||||||||
Future minimum lease obligations under existing noncancelable operating and finance lease agreements by fiscal year as of June 28, 2025 are as follows:
| Operating Leases | Finance Leases | |||||||||||||
| (In millions) | ||||||||||||||
| 2026 | $ | 187 | $ | 84 | ||||||||||
| 2027 | 188 | 77 | ||||||||||||
| 2028 | 154 | 62 | ||||||||||||
| 2029 | 130 | 48 | ||||||||||||
| 2030 | 119 | 39 | ||||||||||||
| Thereafter | 749 | 289 | ||||||||||||
| Total undiscounted lease obligations | 1,527 | 599 | ||||||||||||
| Less imputed interest | (342) | (147) | ||||||||||||
| Present value of lease obligations | $ | 1,185 | $ | 452 | ||||||||||
We have entered into operating lease agreements that have not yet commenced as of June 28, 2025 with legally binding minimum lease payments of $324 million. The leases are expected to commence during the next two fiscal years.
Other information related to lease agreements was as follows:
| Jun. 28, 2025 | Jun. 29, 2024 | |||||||||||||
| Cash Paid For Amounts Included In Measurement of Liabilities: | (Dollars in millions) | |||||||||||||
| Operating cash flows for operating leases | $ | 177 | $ | 144 | ||||||||||
| Operating cash flows for financing leases | 17 | 14 | ||||||||||||
| Financing cash flows for financing leases | 115 | 51 | ||||||||||||
| Supplemental Non-cash Information on Lease Liabilities: | ||||||||||||||
| Assets obtained in exchange for operating lease obligations | $ | 254 | $ | 287 | ||||||||||
| Assets obtained in exchange for finance lease obligations | 202 | 115 | ||||||||||||
| Operating lease asset adjustments, including renewals and remeasurements | 80 | 24 | ||||||||||||
| Operating lease liability adjustments, including renewals and remeasurements | 83 | 24 | ||||||||||||
| Lease Term and Discount Rate: | ||||||||||||||
| Weighted-average remaining lease term (years): | ||||||||||||||
| Operating leases | 11.10 years | 10.63 years | ||||||||||||
| Financing leases | 12.38 years | 12.50 years | ||||||||||||
| Weighted-average discount rate: | ||||||||||||||
| Operating leases | 4.56 | % | 4.19 | % | ||||||||||
| Financing leases | 4.65 | % | 4.50 | % | ||||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Aug 22, 2025 | Showing above |
| 2024 | Aug 28, 2024 | |
| 2023 | Aug 25, 2023 | |
| 2022 | Aug 26, 2022 | |
| 2021 | Aug 30, 2021 | |
| 2020 | Aug 26, 2020 | |
| 2019 | Aug 26, 2019 | |
| 2018 | Aug 27, 2018 | |
| 2017 | Aug 30, 2017 | |
| 2016 | Aug 30, 2016 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.