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Sysco Reports Third Quarter Net Earnings of $201 Million and Diluted EPS of $0.34 ($0.40 After Adjusting for Certain Items)



Sysco Reports Third Quarter Net Earnings of $201 Million and Diluted EPS of
$0.34 ($0.40 After Adjusting for Certain Items)

HOUSTON, May 6, 2013 (GLOBE NEWSWIRE) -- Sysco Corporation (NYSE:SYY) today
announced financial results for its 13-week third fiscal quarter ended March
30, 2013.

Third Quarter Fiscal 2013 Highlights

  * Sales were $10.9 billion, an increase of 4.0% from $10.5 billion in the
    third quarter of fiscal 2012.
  * Operating income was $337 million, a decrease of 23.2%, compared to $439
    million in last year's third quarter.
  * Diluted earnings per share (EPS) were $0.34, which was 22.7% lower
    compared to $0.44 in last year's third quarter.
  * After adjusting for certain items, which mainly related to a
    multi-employer pension plan (MEPP) withdrawal, adjusted^1 diluted EPS was
    $0.40. After further adjusting for business transformation expenses, to
    reflect the performance of the company's underlying business, adjusted
    diluted EPS was $0.49, compared to $0.50 in the prior year period.

Year-To-Date Fiscal 2013 Highlights

  * Sales were $32.8 billion, an increase of 4.7% from $31.3 billion in the
    first 39 weeks of fiscal 2012.
  * Operating income was $1.2 billion, a decrease of 12.8%, compared to the
    prior year period.
  * Diluted EPS was $1.20, which was 13.0% lower compared to $1.38 in the
    prior year period.
  * After adjusting for certain items, adjusted diluted EPS was $1.28. After
    further adjusting for business transformation expenses to reflect the
    performance of the company's underlying business, adjusted diluted EPS was
    $1.55 compared to $1.52 in the prior year period.

"Our financial results reflect in part the difficult market conditions we
experienced in our underlying business during the third quarter. Sales and
operating earnings were negatively impacted by economic and weather related
headwinds which dampened consumers' willingness to spend on meals away from
home," said Bill DeLaney, Sysco's president and chief executive officer. "We
remain committed to and highly focused on both improving the consistency of
our business plan execution and successfully driving out our key strategic
initiatives in a manner that contributes to the long-term success of our
customers and shareholders."

^1 See Non-GAAP Reconciliations below for more information.

Third Quarter Fiscal 2013 Summary

Sales for the third quarter were $10.9 billion, an increase of 4.0% compared
to sales in the same period last year. Food cost inflation was 2.4%, as
measured by the estimated change in Sysco's product costs, driven mainly by
inflation in the produce and poultry categories. In addition, sales from
acquisitions (within the last 12 months) increased sales by 1.8%, and the
impact of changes in foreign exchange rates for the third quarter decreased
sales by 0.1%. Case volume for the company's Broadline and SYGMA operations
combined grew 1.7% during the quarter, including acquisitions, and declined
approximately 0.2%, excluding acquisitions.

Gross profit for the third quarter was $1.9 billion, an increase of 2.1%,
compared to the prior year. Operating expenses in the third quarter increased
$140 million, or 9.8%, compared to operating expenses in the prior year
period. This increase was due primarily to a $46 million increase in certain
items, including a $41 million charge from an MEPP withdrawal; a $34 million
increase in gross business transformation expenses; and a $22 million increase
in payroll expense. Excluding certain items and business transformation
expenses, adjusted operating expenses increased 4.4%.

Operating income was $337 million in the third quarter, decreasing $102
million, or 23.2% compared to operating income in the prior year. Excluding
certain items and business transformation expenses, adjusted operating income
decreased 4.4%.

Net earnings for the third quarter were $201 million, a decrease of $58
million, or 22%, compared to the prior year. Diluted EPS in the third quarter
of fiscal 2013 was $0.34, which was 22.7% lower compared to last year's third
quarter. Excluding certain items and business transformation expenses,
adjusted diluted EPS was $0.49, which was a decrease of 2.0%, compared to the
prior year.

Year-To-Date Fiscal 2013 Summary

Sales for the first 39 weeks of fiscal 2013 were $32.8 billion, an increase of
4.7% compared to sales in the same period last year. Food cost inflation was
2.3%, as measured by the estimated change in Sysco's product costs, driven
mainly by inflation in the poultry and meat categories. In addition, sales
from acquisitions (within the last 12 months) increased sales by 1.2%, and
there was no impact from foreign exchange rates. Case volume for the company's
Broadline and SYGMA operations combined grew 2.5% during the first 39 weeks,
including acquisitions, and approximately 1.5%, excluding acquisitions.

Gross profit for the first 39 weeks was $5.8 billion, an increase of 2.9%,
compared to the prior year. Operating expenses in the first 39 weeks increased
$343 million, or 8.0%, compared to operating expenses in the prior year
period. This increase was due primarily to a $119 million increase in gross
business transformation expenses, a $69 million increase in payroll expense, a
$65 million increase in certain items and an $18 million increase in fuel
expense. Excluding certain items and business transformation expenses,
adjusted operating expenses increased 3.8%.

Operating income was $1.2 billion in the first 39 weeks, decreasing $177
million, or 12.8%, compared to operating income in the prior year. Excluding
certain items and business transformation expenses, adjusted operating income
increased 0.5%.

Net earnings for the first 39 weeks were $709 million, a decrease of $103
million, or 12.7%, compared to the prior year. Diluted EPS in the first 39
weeks of fiscal 2013 was $1.20, which was 13.0% lower compared to the prior
year period. Excluding certain items and business transformation expenses,
adjusted diluted EPS was $1.55, which was an increase of 2.0%, compared to the
prior year.

Cash Flow and Capital Spending

Cash flow from operations was $759 million for the first 39 weeks of fiscal
2013, compared to $908 million in the first 39 weeks of fiscal 2012, a
decrease of $149 million or 16%. Capital expenditures totaled $111 million for
the third quarter and $373 million for the first 39 weeks of the year. The
primary areas for investment included facility replacements and expansions,
replacements to Sysco's fleet, and technology.

Free cash flow^1 increased $111 million, or 40%, in the first 39 weeks of
fiscal 2013 to $386 million compared to the first 39 weeks of fiscal 2012.

Conference Call & Webcast

Sysco's third quarter fiscal 2013 earnings conference call will be held on
Monday, May 6, 2013, at 10:00 a.m. Eastern. A live webcast of the call, a copy
of this press release and a slide presentation, will be available online at
www.sysco.com in the Investors section.

About Sysco

Sysco is the global leader in selling, marketing and distributing food
products to restaurants, healthcare and educational facilities, lodging
establishments and other customers who prepare meals away from home. Its
family of products also includes equipment and supplies for the foodservice
and hospitality industries. The company operates 185 distribution facilities
serving approximately 400,000 customers. For Fiscal Year 2012 that ended June
30, 2012, the company generated record sales of more than $42 billion. For
more information, visit www.sysco.com or connect with Sysco on Facebook at
www.facebook.com/SyscoCorporation or Twitter at www.twitter.com/Sysco_Corp.
For important news regarding Sysco, visit the Investor Relations portion of
the company's Internet home page at www.sysco.com/investors, follow us at
www.twitter.com/SyscoStock and download the new Sysco IR App, available on the
iTunes App Store and the Google Play Market. In addition, investors should
also continue to review our press releases and filings with the Securities and
Exchange Commission. It is possible that the information we disclose through
any of these channels of distribution could be deemed to be material
information.

^1 See Non-GAAP Reconciliations below for more information.

Forward-Looking Statements

Statements made in this press release or in our earnings call for the third
quarter of fiscal 2013 that look forward in time or that express management's
beliefs, expectations or hopes are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements reflect the views of management at the time such
statements are made and are subject to a number of risks, uncertainties,
estimates, and assumptions that may cause actual results to differ materially
from current expectations. These statements include our beliefs regarding
market conditions and industry growth and the trends and factors impacting the
foodservice market and industry, our intention to improve the consistency of
our business plan execution, our plans and expectations related to and the
timing, expected benefits, and costs of our business transformation
initiatives, including our technology transformation efforts, and other
strategic initiatives, the expected impact of changes in the timing of our
technology transformation on annualized benefits expected from the Business
Transformation Project by fiscal 2015, expectations regarding operating and
free cash flow, capital expenditures and fuel expenses in fiscal 2013, and the
benefits of recent acquisitions. These statements also include our belief that
our current business efforts, strategy and initiatives will position us to
take advantage of market trends, enhance our ability to grow our market share
over the long term and expand our leadership position in the industry. The
success of our business transformation initiatives and expectations regarding
operating and free cash flow are subject to the general risks associated with
our business, including the risk of interruption of supplies due to lack of
long-term contracts, severe weather, work stoppages or otherwise, inflation
risks, the impact of fuel prices, and labor issues. Risks and uncertainties
also include risks impacting the economy generally, including the risks that
the current general economic conditions will deteriorate, or that consumer
confidence in the economy may not increase and decreases in consumer spending,
particularly on food-away-from-home, may not reverse. Our ability to meet our
long-term strategic objectives to grow the profitability of our business
depends largely on the success of our Business Transformation Project, and the
risk exists that the project and its various components may not be
successfully implemented and may not provide the anticipated benefits. Also,
there are other risks related to our project, including that the expected
costs of our Business Transformation Project in fiscal 2013 and beyond may be
greater or less than currently expected because we may encounter the need for
changes in design or revisions of the project calendar and budget, including
the incurrence of expenses at an earlier or later time than currently
anticipated; the risk that our business and results of operations may be
adversely affected if we experience operating problems, scheduling delays,
cost overages or limitations on the extent of the business transformation
during the ERP implementation and deployment process; and the risk of adverse
effects if the ERP system, and the associated process changes, do not prove to
be cost effective or result in the cost savings and other benefits that we
anticipate. In fiscal 2011 and fiscal 2012, we took additional time to test
and improve the underlying ERP system prior to larger scale development, and
these actions caused a delay in the project. We have temporarily halted the
deployment of certain components of our ERP system as we have identified areas
of improvement that we want to address before we continue fully deploying to
additional locations. We may experience further delays, cost overages and/or
operating problems as we address these areas of improvement or when we deploy
the complete system on a larger scale. Planned conversions and deployments in
the coming quarters are dependent upon the success of current conversions and
deployments and plans are subject to change at any time based on management's
subjective evaluation of our overall business needs. Other aspects of our
business transformation initiatives, including our category management
initiative, our cost transformation initiative and our product cost
initiative, may fail to provide the expected benefits in a timely fashion, if
at all. Capital expenditures may vary from those projected based on changes in
business plans and other factors, including risks related to the
implementation of our Business Transformation Project and our regional
distribution centers, the timing and successful completions of acquisitions,
construction schedules and the possibility that other cash requirements could
result in delays or cancellations of capital spending. Current projections
regarding industry growth and consumer trends may change and growth in the
industry and trends regarding restaurant spending are subject to factors
beyond our control. The benefits of recent acquisitions may not be realized as
soon as expected, if at all, and the successful integration of acquisitions
into our business may require additional resources in the short-term. We may
not be successful in completing potential acquisitions that are currently in
the pipeline and, as such, may not realize the expected benefits from
potential acquisitions. Acquisitions may not close, or may be delayed, because
of factors beyond our control, including the need for regulatory
approvals. Fuel expense may vary from projections based on fluctuations in
fuel costs, which are impacted by general economic conditions beyond our
control. In the past, increased fuel prices have significantly increased our
costs and reduced consumers' demand for meals served away from home. For a
discussion of additional factors impacting Sysco's business, see the Company's
Annual Report on Form 10-K for the year ended June 30, 2012, as filed with the
Securities and Exchange Commission and the Company's subsequent filings with
the SEC. Sysco does not undertake to update its forward-looking statements.

Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED RESULTS OF OPERATIONS (Unaudited)
(In Thousands, Except for Share and Per Share Data)
                                                                  
                        13-Week Period Ended        39-Week Period Ended 
                       Mar. 30, 2013 Mar. 31, 2012 Mar. 30, 2013 Mar. 31, 2012
                                                                  
Sales                   $ 10,926,371  $ 10,504,746  $ 32,810,177  $ 31,335,557
Cost of sales           9,016,052     8,633,130     26,978,748    25,670,691
Gross profit            1,910,319     1,871,616     5,831,429     5,664,866
Operating expenses      1,573,117     1,432,786     4,632,794     4,289,698
Operating income        337,202       438,830       1,198,635     1,375,168
Interest expense        34,215        28,290        97,325        86,088
Other income, net       (3,410)       (2,248)       (7,640)       (5,470)
Earnings before         306,397       412,788       1,108,950     1,294,550
income taxes
Income taxes            104,980       153,238       399,566       482,234
Net earnings            $ 201,417     $ 259,550     $ 709,384     $ 812,316
                                                                  
Net earnings:                                                     
Basic earnings per      $ 0.34        $ 0.44        $ 1.21        $ 1.38
share
Diluted earnings per    0.34          0.44          1.20          1.38
share
                                                                  
Average shares          589,149,731   585,823,393   588,222,833   588,004,593
outstanding
Diluted shares          592,903,799   587,214,691   591,054,506   589,232,150
outstanding
                                                                  
Dividends declared      $ 0.28        $ 0.27        $ 0.83        $ 0.80
per common share

                                                                  
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In Thousands, Except for Share Data)
                                                   Mar. 30, 2013 June 30, 2012
                                                                  
ASSETS                                                            
Current assets                                                    
Cash and cash equivalents                           $ 331,520     $ 688,867
Accounts and notes receivable, less allowances of   3,396,850     2,966,624
$82,895, $42,919, and $82,762
Inventories                                         2,413,190     2,178,830
Deferred income taxes                               132,480       134,503
Prepaid expenses and other current assets           68,575        80,713
Prepaid income taxes                                32,967        35,271
Total current assets                                6,375,582     6,084,808
Plant and equipment at cost, less depreciation      3,938,277     3,883,750
Other assets                                                      
Goodwill                                            1,802,433     1,665,611
Intangibles, less amortization                      150,779       113,571
Restricted cash                                     145,270       127,228
Other assets                                        244,869       262,239
Total other assets                                  2,343,351     2,168,649
Total assets                                        $ 12,657,210  $ 12,137,207
                                                                  
LIABILITIES AND SHAREHOLDERS' EQUITY                              
Current liabilities                                               
Notes payable                                       $ 32,045      $ --
Accounts payable                                    2,464,215     2,209,469
Accrued expenses                                    951,852       909,144
Accrued income taxes                                --            50,316
Current maturities of long-term debt                208,792       254,650
Total current liabilities                           3,656,904     3,423,579
Other liabilities                                                 
Long-term debt                                      2,557,314     2,763,688
Deferred income taxes                               116,960       115,166
Other long-term liabilities                         1,173,671     1,149,734
Total other liabilities                             3,847,945     4,028,588
Commitments and contingencies                                     
Shareholders' equity                                              
Preferred stock, par value $1 per share,            --            --
Authorized 1,500,000 shares, issued none
Common stock, par value $1 per share, Authorized    765,175       765,175
2,000,000,000 shares, issued 765,174,900 shares
Paid-in capital                                     1,029,443     939,179
Retained earnings                                   8,394,426     8,175,230
Accumulated other comprehensive loss                (620,720)     (662,866)
Treasury stock at cost, 171,925,048, 179,228,383,   (4,415,963)   (4,531,678)
and 179,884,245 shares
Total shareholders' equity                          5,152,361     4,685,040
Total liabilities and shareholders' equity          $ 12,657,210  $ 12,137,207

 
Sysco Corporation and its Consolidated Subsidiaries
CONSOLIDATED CASH FLOWS (Unaudited)
(In Thousands)
                                                    39-Week Period Ended 
                                                   Mar. 30, 2013 Mar. 31, 2012
Cash flows from operating activities:                             
Net earnings                                        $ 709,384     $ 812,316
Adjustments to reconcile net earnings to cash                     
provided by operating activities:
Share-based compensation expense                    56,749        54,328
Depreciation and amortization                       379,998       304,966
Deferred income taxes                               (42,069)      (276,947)
Provision for losses on receivables                 29,068        29,663
Other non-cash items                                1,577         (1,267)
Additional investment in certain assets and                       
liabilities, net of effect of businesses acquired:
(Increase) in receivables                           (408,186)     (225,668)
(Increase) in inventories                           (206,244)     (167,964)
Decrease (increase) in prepaid expenses and other   14,826        (10,380)
current assets
Increase in accounts payable                        210,317       104,239
Increase in accrued expenses                        484           4,117
(Decrease) increase in accrued income taxes         (54,139)      141,784
(Increase) decrease in other assets                 (528)         67,843
Increase in other long-term liabilities             70,005        71,274
Excess tax benefits from share-based compensation   (1,834)       (15)
arrangements
Net cash provided by operating activities           759,408       908,289
                                                                  
Cash flows from investing activities:                             
Additions to plant and equipment                    (373,048)     (633,196)
Proceeds from sales of plant and equipment          12,115        5,852
Acquisition of businesses, net of cash acquired     (210,036)     (83,354)
(Increase) in restricted cash                       (18,042)      (29,771)
Net cash used for investing activities              (589,011)     (740,469)
                                                                  
Cash flows from financing activities:                             
Bank and commercial paper borrowings (repayments)   --            211,267
net
Other debt borrowings                               50,629        3,090
Other debt repayments                               (277,339)     (6,424)
Debt issuance costs                                 --            (977)
Proceeds from common stock reissued from treasury   497,688       82,545
for share-based compensation awards
Treasury stock purchases                            (321,042)     (272,299)
Dividends paid                                      (482,030)     (464,809)
Excess tax benefits from share-based compensation   1,834         15
arrangements
Net cash used for financing activities              (530,260)     (447,592)
                                                                  
Effect of exchange rates on cash                    2,516         (9,529)
                                                                  
Net (decrease) in cash and cash equivalents         (357,347)     (289,301)
Cash and cash equivalents at beginning of period    688,867       639,765
Cash and cash equivalents at end of period          $ 331,520     $ 350,464
                                                                  
Supplemental disclosures of cash flow information:                
Cash paid during the period for:                                  
Interest                                            $ 121,740     $ 109,618
Income taxes                                        501,499       617,640

 
Sysco Corporation and its Consolidated Subsidiaries
COMPARATIVE SEGMENT DATA (Unaudited)
(In Thousands)
                     13-Week Period Ended          39-Week Period Ended 
                    Mar. 30, 2013  Mar. 31, 2012  Mar. 30, 2013  Mar. 31, 2012
Sales:                                                            
Broadline            $ 8,861,568    $ 8,513,483    $ 26,698,301   $ 25,493,000
SYGMA                1,425,975      1,445,214      4,258,545      4,233,238
Other                699,505        586,440        2,019,967      1,734,123
Intersegment         (60,677)       (40,391)       (166,636)      (124,804)
Total                $ 10,926,371   $ 10,504,746   $ 32,810,177   $ 31,335,557
 
 
Comparative Supplemental Statistical Information Related to Sales (Unaudited)
Comparative Sysco Brand Sales and Marketing Associate-Served Sales data are
summarized below.
                                                                  
                     13-Week Period Ended          39-Week Period Ended 
                    Mar. 30, 2013  Mar. 31, 2012  Mar. 30, 2013  Mar. 31, 2012
Sysco Brand Sales                                                 
as a %
of MA-Served Sales  47.91%         45.92%         47.60%         46.03%
Sysco Brand Sales                                                 
as a %
of Broadline Sales  35.75%         35.06%         36.08%         35.55%
MA-Served Sales as                                                
a %
of Broadline Sales  40.05%         40.95%         41.99%         42.69%
                                                                  
Data excludes U.S. Meat operations

 
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items and Underlying Business
(In Thousands, Except for Share and Per Share Data)
                                                                      
Sysco's results of operations are impacted by certain items which include
charges from restructuring our executive retirement plans, charges from the
withdrawal from multiemployer pension plans, severance charges and charges
from facility closures. Management believes that adjusting its operating
expenses, operating income, net earnings and diluted earnings per share to
remove these certain items provides an important perspective with respect to
our results and provides meaningful supplemental information to both
management and investors that removes these items which are difficult to
predict and are often unanticipated, and which, as a result are difficult to
include in analyst's financial models and our investors' expectations with any
degree of specificity. Sysco believes the adjusted totals facilitate
comparison on a year-over year basis. 
Sysco's results of operations are further impacted by costs from our
multi-year Business Transformation Project. Management believes that further
adjusting its operating expenses, operating income, net earnings and diluted
earnings per share to remove the impact of the Business Transformation Project
expenses provides an important perspective with respect to underlying business
trends and results and provides meaningful supplemental information to both
management and investors that is indicative of the performance of the
company's underlying operations and facilitates comparison on a year-over year
basis. 
The company uses these non-GAAP measures when evaluating its financial results
as well as for internal planning and forecasting purposes. These financial
measures should not be used as a substitute in assessing the company's results
of operations for the periods presented. An analysis of any non-GAAP financial
measure should be used in conjunction with results presented in accordance
with GAAP. As a result, in the tables that follow, each period presented is
adjusted to remove the certain items noted above. Each period has been further
adjusted to remove expenses related to the Business Transformation Project. 
                                                                      
                      13-Week         13-Week        13-Week         13-Week
                      Period Ended    Period Ended   Period Change   Period
                      Mar. 30, 2013   Mar. 31, 2012  in Dollars      % Change
Operating expenses     $ 1,573,117     $ 1,432,786    $ 140,331      9.8%
(GAAP)
Impact of
Restructuring          (5,445)         --             (5,445)        NM
Executive Retirement
Plans
Impact of MEPP charge  (40,744)        (717)          (40,027)       NM
Impact of Severance    (3,595)         (3,318)        (277)          8.3
charges
Impact of Facility     (285)           --             (285)          NM
closure charges
Operating expenses
adjusted for certain   $ 1,523,048     $ 1,428,751    $ 94,297       6.6%
items (Non-GAAP)
Impact of Business
Transformation         (83,238)        (49,478)       (33,760)       68.2
Project costs
Adjusted operating
expenses underlying    $ 1,439,810     $ 1,379,273    $ 60,537       4.4%
bus. (Non-GAAP)
                                                                      
Operating Income       $ 337,202       $ 438,830      $ (101,628)    -23.2%
(GAAP)
Impact of
Restructuring          5,445           --             5,445          NM
Executive Retirement
Plans
Impact of MEPP charge  40,744          717            40,027         NM
Impact of Severance    3,595           3,318          277            8.3
charges
Impact of Facility     285             --             285            NM
closure charges
Operating income
adjusted for certain   $ 387,271       $ 442,865      $ (55,594)     -12.6%
items (Non-GAAP)
Impact of Business
Transformation         83,238          49,478         33,760         68.2
Project costs
Adjusted operating
income underlying      $ 470,509       $ 492,343      $ (21,834)     -4.4%
bus. (Non-GAAP)
                                                                      
Net earnings (GAAP)    $ 201,417       $ 259,550      $ (58,133)     -22.4%
Impact of
Restructuring          3,580           --             3,580          NM
Executive Retirement
Plans (net of tax)
Impact of MEPP charge  26,785          451            26,334         NM
(net of tax)
Impact of Severance    2,363           2,086          277            13.3
charges (net of tax)
Impact of Facility
closure charges (net   187             --             187            NM
of tax)
Net earnings adjusted
for certain items      $ 234,332       $ 262,087      $ (27,755)     -10.6%
(Non-GAAP)
Impact of Business
Transformation         54,721          31,112         23,609         75.9
Project costs (net of
tax)
Adjusted net earnings
underlying business    $ 289,053       $ 293,199      $ (4,146)      -1.4%
(Non-GAAP) (1),(2)
                                                                      
Diluted earnings per   $ 0.34          $ 0.44         $ (0.10)       -22.7%
share (GAAP)
Impact of
Restructuring          0.01            --             0.01           NM
Executive Retirement
Plans
Impact of MEPP charge  0.05            --             0.05           NM
Impact of Severance    --              --             --             NM
charges
Impact of Facility     --              --             --             NM
closure charges
Diluted EPS adjusted
for certain items      $ 0.40          $ 0.45         $ (0.05)       -11.1%
(Non-GAAP)
Impact of Business
Transformation         0.09            0.05           0.04           80.0
Project costs
Adjusted diluted EPS
underlying business    $ 0.49          $ 0.50         $ (0.01)       -2.0%
(Non-GAAP)
                                                                      
Diluted shares         592,903,799     587,214,691                    
outstanding
                                                                      
^(1) Tax impact of adjustments for executive retirement plans restructuring,
MEPP charge, severance charges, charges from facility closures and Business
Transformation expenses was $45,671 and $19,864 for the 13-week periods ended
March 30, 2013 and March 31, 2012, respectively. Amounts are calculated by
multiplying the operating income impact of each item by each quarter's
effective tax rate.
                                                                      
^(2) Individual components of diluted earnings per share may not add to the
total presented due to rounding. Total diluted earnings per share is
calculated using adjusted net earnings for certain items and adjusted net
earnings - underlying business, both divided by diluted shares outstanding.
                                                                      
NM represents that the percentage change is not meaningful

 
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Impact of Certain Items and Underlying Business
(In Thousands, Except for Share and Per Share Data)
                                                                      
                      39-Week         39-Week        39-Week         39-Week
                      Period Ended    Period Ended   Period Change   Period
                      March 30, 2013  Mar. 31, 2012  in Dollars      % Change
Operating expenses     $ 4,632,794     $ 4,289,698    $ 343,096      8.0%
(GAAP)
Impact of
Restructuring          (17,608)        --             (17,608)       NM
Executive Retirement
Plans
Impact of MEPP charge  (43,201)        (5,217)        (37,984)       NM
Impact of Severance    (15,341)        (7,678)        (7,663)        99.8
charges
Impact of Facility     (1,974)         --             (1,974)        NM
closure charges
Operating expenses
adjusted for certain   $ 4,554,670     $ 4,276,803    $ 277,867      6.5%
items (Non-GAAP)
Impact of Business
Transformation         (242,282)       (122,839)      (119,443)      97.2
Project costs
Adjusted operating
expenses underlying    $ 4,312,388     $ 4,153,964    $ 158,424      3.8%
bus. (Non-GAAP)
                                                                      
Operating Income       $ 1,198,635     $ 1,375,168    $ (176,533)    -12.8%
(GAAP)
Impact of
Restructuring          17,608          --             17,608         NM
Executive Retirement
Plans
Impact of MEPP charge  43,201          5,217          37,984         NM
Impact of Severance    15,341          7,678          7,663          99.8
charges
Impact of Facility     1,974           --             1,974          NM
closure charges
Operating income
adjusted for certain   $ 1,276,759     $ 1,388,063    $ (111,304)    -8.0%
items (Non-GAAP)
Impact of Business
Transformation         242,282         122,839        119,443        97.2
Project costs
Adjusted operating
income underlying      $ 1,519,041     $ 1,510,902    $ 8,139        0.5%
bus. (Non-GAAP)
                                                                      
Net earnings (GAAP)    $ 709,384       $ 812,316      $ (102,932)    -12.7%
Impact of
Restructuring          11,264          --             11,264         NM
Executive Retirement
Plans (net of tax)
Impact of MEPP charge  27,636          3,274          24,362         NM
(net of tax)
Impact of Severance    9,814           4,818          4,996          103.7
charges (net of tax)
Impact of Facility
closure charges (net   1,263           --             1,263          NM
of tax)
Net earnings adjusted
for certain items      $ 759,361       $ 820,408      $ (61,047)     -7.4%
(Non-GAAP)
Impact of Business
Transformation         154,988         77,081         77,907         101.1
Project costs (net of
tax)
Adjusted net earnings
underlying business    $ 914,349       $ 897,489      $ 16,860       1.9%
(Non-GAAP) (1),(2)
                                                                      
Diluted earnings per   $ 1.20          $ 1.38         $ (0.18)       -13.0%
share (GAAP)
Impact of
Restructuring          0.02            --             0.02           NM
Executive Retirement
Plans
Impact of MEPP charge  0.05            0.01           0.04           NM
Impact of Severance    0.02            0.01           0.01           100.0
charges
Impact of Facility     --              --             --             NM
closure charges
Diluted EPS adjusted
for certain items      $ 1.28          $ 1.39         $ (0.11)       -7.9%
(Non-GAAP)
Impact of Business
Transformation         0.26            0.13           0.13           100.0
Project costs
Adjusted diluted EPS
underlying business    $ 1.55          $ 1.52         $ 0.03         2.0%
(Non-GAAP)
                                                                      
Diluted shares         591,054,506     589,232,150                    
outstanding
                                                                      
^(1) Tax impact of adjustments for executive retirement plans restructuring,
MEPP charge, severance charges, charges from facility closures and Business
Transformation expenses was $115,442 and $50,561 for the 39-week periods ended
March 30, 2013 and March 31, 2012, respectively. Amounts are calculated by
multiplying the operating income impact of each item by each 39-week period's
effective tax rate.
                                                                      
^(2) Individual components of diluted earnings per share may not add to the
total presented due to rounding. Total diluted earnings per share is
calculated using adjusted net earnings for certain items and adjusted net
earnings - underlying business, both divided by diluted shares outstanding.
                                                                      
NM represents that the percentage change is not meaningful

 
Sysco Corporation and its Consolidated Subsidiaries
Non-GAAP Reconciliation (Unaudited)
Free Cash Flow
(In Thousands)
                                                                     
Free cash flow represents net cash provided from operating activities less
purchases of plant and equipment. Sysco considers free cash flow to be a
liquidity measure that provides useful information to management and investors
about the amount of cash generated by the business after the purchases of
buildings, fleet, equipment and technology, which may potentially be used to
pay for, among other things, strategic uses of cash including dividend
payments, share repurchases and acquisitions. We do not mean to imply that
free cash flow is necessarily available for discretionary expenditures,
however, as it may be necessary that we use it to make mandatory debt service
or other payments. Free cash flow should not be used as a substitute in
assessing the company's liquidity for the periods presented. An analysis of
any non-GAAP financial measure should be used in conjunction with results
presented in accordance with GAAP. In the table that follows, free cash flow
for each period presented is reconciled to net cash provided by operating
activities.
                                                                     
                  39-Week          39-Week         39-Week          39-Week
                  Period Ended     Period Ended    Period Change    Period
                  Mar. 30, 2013    Mar. 31, 2012   in Dollars       % Change
Net cash provided
by operating       $ 759,408        $ 908,289       $ (148,881)     -16.4%
activities (GAAP)
Additions to
plant and          (373,048)        (633,196)       260,148         41.1
equipment
Free Cash Flow     $ 386,360        $ 275,093       $ 111,267       40.4%
(Non-GAAP)
 

CONTACT: Neil Russell
         Vice President, Investor Relations
         T  281-584-1308
        
         Charley Wilson
         Vice President, Corporate Communications
         T  281-584-2423

Sysco Corporation
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