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Investor Day Presentation

September 15, 2015

© 2015 All Rights Reserved. Sysco Corporation.

P A G E 2

Forward-Looking StatementsCertain statements made herein that look forward in time or express management’s expectations or beliefs with respect to the occurrence of future events are forward-looking statements under the Private Securities Litigation Reform Act of 1995. They include, but are not limited to, statements regarding Sysco’s market potential in the U.S. and Canada; opportunities across market segments; our plans to repurchase $3 billion in Sysco common stock; Sysco’s targeted financial results for FY15-FY18 and the estimated CAGR during that period for those financial metrics; our plans to grow operating income at least $400 million by accelerating local case growth, increasing gross profit, stabilizing gross margins, leveraging supply chain costs and reducing administrative costs; our capital allocation expectations, including projected adjusted operating cash flow and free cash flow; Sysco’s commercial strategy focused on capturing growth in multi-cultural segments, building differentiated products and services and addressing service and support gaps to improve customer experience; estimated future benefits of category management and brand growth; expectations concerning the benefits of various marketing, supply chain and business technology initiatives; plans to reduce administrative costs and the related financial impact; the financial assumptions underlying the strategic business plan for FY15-FY18; Sysco’s plans to achieve ROIC target of 15% by improving working capital management, managing capital spend in a rigorous manner and assessing business segment strategic value and ROIC; and the anticipated timing and amount of the new debt issuance and the intended use of the proceeds.

These statements involve risks and uncertainties and are based on management's current expectations and estimates. Forward looking statements are not guarantees of future performance and our actual results may differ materially. Factors impacting these forward-looking statements include the general risks associated with our business, including the risks of interruption of supplies due to lack of long-term contracts, severe weather, crop conditions, work stoppages, intense competition, technology disruptions, dependence on large regional and national customers, inflation risks, the impact of fuel prices, adverse publicity, 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 consumer confidence in the economy may not improve and decreases in consumer spending, particularly on food-away-from-home, may not reverse. Market conditions may not improve. If sales from our locally managed customers do not grow at the same rate as sales from regional and national customers, our gross margins may decline. Our ability to meet our long-term strategic objectives to grow the profitability of our business depends largely on the success of our various business initiatives. There are various risks related to these efforts, including the risk that these efforts may not provide the expected benefits in our anticipated time frame, if at all, and may prove costlier than expected; the risk that the actual costs of any initiatives may be greater or less than currently expected; and the risk of adverse effects to our business, results of operations and liquidity if past and future undertakings, and the associated changes to our business, do not prove to be cost effective or do not result in the cost savings and other benefits at the levels that we anticipate. Our plans related to and the timing of any initiatives are subject to change at any time based on management’s subjective evaluation of our overall business needs. If we are unable to realize the anticipated benefits from our cost cutting efforts, we could become cost disadvantaged in the marketplace, and our competitiveness and our profitability could decrease. Capital expenditures may vary from those projected based on changes in business plans and other factors, including risks related to the implementation of various initiatives, 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. Periods of high inflation, either overall or in certain product categories, can have a negative impact on us and our customers, as high food costs can reduce consumer spending in the food-away-from-home market, and may negatively impact our sales, gross profit, operating income and earnings. Expanding into international markets presents unique challenges and risks, including compliance with local laws, regulations and customs and the impact of local political and economic conditions, and such expansion efforts may not be successful. Any business that we acquire may not perform as expected, and we may not realize the anticipated benefits of our acquisitions. Expectations regarding the accounting treatment of any acquisitions may change based on management’s subjective evaluation. Expectations regarding tax rates are subject to various factors beyond management’s control.

Estimates related to future years are particularly difficult to forecast with accuracy and investors should take caution with respect to estimates related to FY16-FY18, as future periods will be impacted by general economic conditions and numerous factors beyond our control. Also, management’s plans with respect to any specific strategies and goals are subject to change based on the needs of our company in general. For a discussion of additional factors impacting Sysco’s business, see the Risk Factors contained in Sysco’s Annual Report on Form 10-K for the year ended June 27, 2015, as filed with the Securities and Exchange Commission, and Sysco’s subsequent filings with the SEC. Except where otherwise noted, the forward-looking statements contained herein speak as of the date of this Presentation. We do not undertake to update the forward-looking statements contained in this Presentation.

This presentation shall not constitute an offer to sell or the solicitation of an offer to buy securities, and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such jurisdiction.

0 9 . 1 5 . 1 5

I N V E S T O R D A Y


P A G E 3

Agenda

Topic

BREAK3:00 – 3:15

Business and Strategic Overview

1:00 – 1:45

Business and Commercial Operations

1:45 – 2:30

End-to-End Supply Chain2:30 – 3:00

Business Technology3:15 – 3:45

Financial Overview3:45 – 4:30

Closing Comments4:30 – 5:00

Q&A

Welcome and Agenda12:45 – 1:00

Presenter

Neil Russell, VP of Investor Relations

Bill DeLaney, President and Chief Executive Officer

Tom Bené, EVP and President - Foodservice Operations

Scott Charlton, EVP – Supply Chain

Wayne Shurts, EVP and Chief Technology Officer

Joel Grade, EVP and Chief Financial Officer

Bill DeLaney

Executive Team5:00 – 5:30

Time

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P A G E 4

Trian Partners Investment in Sysco

0 9 . 1 5 . 1 5


• Trian disclosed an approximate 7% stake in SYY on August

14, 2015; Trian is now Sysco’s largest stockholder

• Trian’s Nelson Peltz and Josh Frank joined Sysco’s Board

effective August 21, 2015

• Trian and Sysco have had preliminary and constructive

dialogue

• Today’s presentation reflects the exclusive views of Sysco

management

Sysco will continually update its strategic and financial targets

Business and Strategic

OverviewSysco Investor Day

Bill DeLaneySeptember 15, 2015


P A G E 6

Our vision

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Serving our customers as One Sysco

“To be our customers’ most valued and trusted business partner.”


P A G E 7

PeoplePartnership Productivity Products Expansion

Profoundly enrich the experience of doing business with Sysco

Continuously improve productivity in all areas of our business

Enhance offer-ings through a customer-centric innovation program

Explore, assess and pursue new businesses and markets

0 9 . 1 5 . 1 5


The five-point strategy

Our Mission: Market and Deliver Great Products To Our Customers With Exceptional Service

Implement enterprise-wide talent management process


P A G E 8

Customer centric approach

0 9 . 1 5 . 1 5


Operating Companies

Markets

Corporate Functions

Operate the Business

Execute Flawlessly

Enable theOperatingCompanies

Provide Resources

and Support

Create Tools, Processes

and Strategy

Customers


P A G E 9

Strategic plan update: 2016 - 2018

Market context

Sysco overview

Contents


P A G E 1 0

Industry leader in a $265 billion market

$265B$260B$252B$246B$236B$230B$226B

2.7%CAGR

2015(p)2011 2012 2014201320102009

US and Canada foodservice market size (excluding alcohol)

$B; nominal growth

Source: Technomic Data Digest (2014), Restaurants Canada, Statistics Canada, strategy Inc. & Pannell Kerr Forster

0 9 . 1 5 . 1 5



P A G E 1 1

Away from home foodservice sales trending favorably

49%

57%

51%

42%

40%

45%

50%

55%

60% Retail

Foodservice

Source: US Census Bureau (2015)

1 Retail Sales Equivalent Share; Retail includes grocery and other food/beverage sales (excluding foodservice) at all retail establishments

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% of total food spend; retail sales equivalent1

1997 2008 20151982


P A G E 1 2

2015 forecasted top distributor sales1

$Billions

Resta

ura

nts

Top Segments

Forecasted 2015-20 Real CAGRPercent

2.1%

1.6%

3.5%

4.2%

1.2%

3.5%13

18

18

27

66

87

Travel andLeisure

Education

Healthcare

FSR

LSR

Retailhosts

Source: Technomic (July 2015), Foodservice Sector Trends & Opportunities

1 US Food and Beverage (Non-Alcoholic only) and Non-foods; Only representing top segments by size, does not include Business and industry as well as all others (e.g., Caterers, military, corrections, etc.) which equal roughly ~$32M

0 9 . 1 5 . 1 5


Growth forecasted across all segments

Sysco is well positioned to participate in all segments


P A G E 1 3

Competitors are numerous and varied

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Foodservice Distribution in the U.S.

• Fragmented

• Low entry barriers

• Product offerings and service level matter

Competition remains acute


P A G E 1 4

Consumer confidence is near pre-recession levels…

Source: The Conference Board (August 2015)

Index; 1985 level = 100

US consumer confidence

70

0

60

30

40

100

90

80

110

50

10

110

25

Pre-recession level (Jan ‘07)

2011 201420132012 2015

Worst during recession (Feb ‘09)

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P A G E 1 5

102.5

101.5

95

96

97

98

99

100

101

102

103

104

…restaurant operators’ outlook is similarly favorableRestaurant current situation and expectations indices

Expectations

Current situation

20132012

Index: Values >100 = Expansion Values <100 = Contraction

2014201120102009 2015

Source: National Restaurant Association (NRA)

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P A G E 1 6

Sysco is well positioned for the future

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• 50,000 highly engaged associates

• Broad array of products and value added services

• Comprehensive geographic footprint

• Enhanced technology platform

• $1 billion of annual free cash flow and strong balance sheet


P A G E 1 7

Contents


Market context

Sysco overview


P A G E 1 80 9 . 1 5 . 1 5


U.S. Broadline

• 70% of revenue and 90% of profit• Strong local relationships • Pre-tax ROIC of approximately 30%

Specialty companies

• Enhance product portfolio• Provide expertise and service• Increases customer traction

SYGMA

• Represents a large market segment (~ $50B)

• Customized distribution services specializing in service to large national chain restaurants

International

• Canada provides solid foundation

• Represents future growth opportunities

• Supports customer needs

Business segment overview

U.S. Broadline drives our enterprise sales and profitability


P A G E 1 9

We have enhanced our leadership and

organizational capabilities

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Committed to developing a more diverse workforce

Improved recruiting, development and retention

High level of associate engagement

Competitive compensation and aligned incentives

Experienced and well-tenured leadership team


P A G E 2 0

We are building on our recent momentum

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• Record sales for FY15 of $49 billion

• Local case growth trends are improving

• Gross margins have stabilized

• Generated free cash flow of $1 billion1

• Adjusted ROIC of 13%1

• Distributed $700 million in dividends in FY15

• Recently announced $3 billion share buyback

(1) See Non-GAAP Reconciliations for an explanation of this non-GAAP measure


P A G E 2 10 9 . 1 5 . 1 5


US. Broadline annual cases soldUS. Broadline recent trend in local case growth1

Millions Year over year change, %

Local case growth trends are improving

750

700

900

600

550

650

950

1,000

800

0

850

FY 14

FY15

FY13

FY12

FY10

FY10

Total

Local

2.0%

Flat

CAGR‘10- ‘15

1 Case growth excludes acquisitions

0%

1.5%

2.0%

0.5%

1.0%

2.5%

Q3 FY15

Q2 FY15

Q1 FY15

Q4 FY15

FY14


P A G E 2 2

Gross margin has stabilized

20%

25%

10%

$7

$1

15%

$4

0

$3

$6

$2

$5

$9

$8

+3.3% CAGR

17.6%

$7.8$8.0

FY13

18.4%

$8.2

$7.3

17.6%

19.1%

FY15FY12

$8.6

FY14

$7.5

FY10

19.6%

FY11

18.0%

Gross margin Gross profit

$2.2

15%

$2.0

$1.8

$1.0

$0.4

0

$0.8

$0.6

$0.2

10%

20%$1.6

$1.4

25%

$1.2

$2.4

17.9%

Q3 FY15

$2.1

17.5%

Q4 FY15

$2.2

Q1 FY15

$2.1

Q4 FY14

Q2 FY15

$2.2

17.3%17.6%

$2.2

17.6%

Gross profitGross margin

Total Sysco gross profit and gross margin

$ Billions

Recent trends in gross profit and gross margin

$ Billions

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P A G E 2 3

Increased volume and transformative

investments have driven expense growth

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• Standing up key capabilities comprises about one third of our operating expense growth over the past five years

• These capabilities are primarily in the following areas:

‒ Business technology

‒ Shared services

‒ Sales and marketing

‒ Merchandising

• They are critical to positioning Sysco for long term success

• Our incremental annual spend in these areas will moderate going forward

We have begun to realize the targeted benefits from these investments


P A G E 2 4

Contents


Market context

Sysco overview


P A G E 2 5

Some historical context

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• Sysco IPO’d on the NYSE

• Food away from home demand increasing

• Sysco begins to build core foundation

• Recorded $1B in annualized sales

1970’s: “Early Days”

• Geographic expansion

– CFS acquisition

– 110 other acquisitions

• SYGMA created

• Investment in Sysco branded products

• Acquisition of specialty companies

• Industry growth plateaus

• 2009 changes consumer behavior

• Competition intensifies

• Sysco invests significantly in strategic capabilities

• Begins to build new functional expertise

1980-2005: “Rapid growth”

2005-2015: “Strengthen foundation”

Sysco is well positioned for the future…


P A G E 2 6

Improve customer experience

Achieve our financial objectives

• Grow operating income by at least $400M

• Achieve ROIC of 15%

Enhance associate engagement

• Advance workplace safety

• Improve associate retention and engagement

• Provide attractive career growth opportunities

• Enhance overall service levels

• Improve sales retention

• Drive higher customer loyalty

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Key targeted results: 2015-2018


P A G E 2 7

Key levers to achieving our financial goals

0 9 . 1 5 . 1 5


To Be Our Customers’ Most Valued and Trusted Business Partner

Improve ROIC

Enablers:

Grow gross profit

Leverage supply chain costs

Reduce administrative costs

• Accelerate local case growth

• Improve margins

Our People

Business Technology


P A G E 2 80 9 . 1 5 . 1 5


• Accelerate local case growth to 2-3%

• Achieve gross profit growth of 4%

• Limit operating expense growth to 3%

Achieve ROIC of 15%

Note: All growth rates are 2015-2018 CAGRs

Roadmap to at least $400M…


P A G E 2 90 9 . 1 5 . 1 5


Total gross operating income benefit

Gross incremental cost

Net Operating Income Improvement

$650

At least $400

Gross operating income benefit

Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Gross operating income impact by lever


P A G E 3 0

$400M in operating income impact phasing

Cumulative Capture by Year, %

FY2018FY2017FY2016

Operating Income Benefit

20-30% 50-60% 100%

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Operating income impact is net of incremental costs


P A G E 3 1

Capital allocation priorities

0 9 . 1 5 . 1 5


1. Disciplined investment in the business

2. Grow the dividend

3. Pursue attractive strategic acquisitions

4. Opportunistically repurchase shares

$1 billion in annual free cash flow


P A G E 3 20 9 . 1 5 . 1 5


• $265B market

• Significant segment and category growth opportunities

• Improved market environment

• Multiple impactful commercial initiatives

• Leverage our supply chain costs

• Reduce administrative costs

• Improve operating income by $400 million

• Achieve 15% ROIC

Substantial market opportunity

Executing our strategy

Improving financial performance(2015-2018)

We are well positioned for success


P A G E 3 3

Our vision

0 9 . 1 5 . 1 5


Serving our customers as One Sysco

“To be our customers’ most valued and trusted business partner.”

Business and Commercial

OperationsSysco Investor Day

Tom BenéSeptember 15, 2015


P A G E 3 50 9 . 1 5 . 1 5



Improve ROIC

Enablers:



Focus of the section


Our People

Business technology

Grow gross profit


• Improve margins


P A G E 3 60 9 . 1 5 . 1 5





$650

At least $400


Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Growing gross profit will contribute significantly to the strategic plan



P A G E 3 7

Objectives for today

0 9 . 1 5 . 1 5


• Share insights into the needs of our customers and the recent improvement in our overall trends

• Provide an overview of the key Commercial Strategies that will allow us to:

– Accelerate local case growth

– Improve our gross margin

• Highlight the core business enablers that will support our growth strategies


P A G E 3 8

Flat local case growth has contributed to margin

performance over the past few years

17.6%17.6%18.0%18.4%19.1%

FY11

FY13

FY15

FY14

FY12

0 9 . 1 5 . 1 5


US. Broadline annual cases sold

Millions

1,200

1,000

800

400

0

600

200

FY14

FY11

933

+2.0% CAGR

962917

FY10

869

FY15

901868

FY13

FY12

CMU Local

Flat

CAGR‘10- ‘15

Total Sysco gross margin, %

5.2%


P A G E 3 9

Our commercial strategy is focused on growing cases and

maintaining margin - recent trends are promising

USBL Local YoY case growth, % Total Sysco gross margin, %

FY15

17.6%

FY14

17.6%

0 9 . 1 5 . 1 5


Our plans build on recent momentum of accelerating local case growth…

…and stabilizing gross margins

FY16 Plan

2.1%

FY15

1.7%

1.4%1.3%

Q2 FY15

Q4 FY15

2.1%

1.7%

Q1 FY15

Q3 FY15

17.3%

Q1 FY15

Q4 FY15

Q2 FY15

Q3 FY15

17.9%17.5%17.6%


P A G E 4 0

Our commercial initiatives have enabled us to

accelerate local case growth and improve margins

Build a compelling

suite of products and

services

Execute flawlessly to

serve our customers

Know our customers

Grow profitably with our

customers

Key Commercial Focus Areas

• Accelerate investment into customer insights

• Improved tools that drive Customer loyalty

‒ Enhanced Business Review and Menu Planning

• Launched Category Management

• Developed a robust Customer Segmentation approach

‒ Built differentiated solutions by segment

‒ Established segment profitability guardrails

• Suite of selling tools - growth / improve profitability

‒ CRM tool – prospecting, penetration, retention

‒ Strategic / Portfolio Selling w/ key CMU customers

• Consistent management routines – Sales / Operations0 9 . 1 5 . 1 5



P A G E 4 1

We remain driven by the needs and expectations

of our core customers to accelerate our growth

The evolving needs of our Customers:

A consistent, fresh, on-trend

product assortment

The ability to order where

and how I want

Consistent, dependable

deliveries and drivers

Innovative and value-added

solutions that enable me to

compete

0 9 . 1 5 . 1 5


A knowledgeable partner that will help me grow my

business


P A G E 4 2

Our commercial strategy is focused on 3 key areas

0 9 . 1 5 . 1 5


Address service and support gaps with our customers to improve their Sysco experience

3

Capture share in growing multi-cultural segments and customer groups

1

Build a differentiated set of products and services to accelerate local sales and improve margins

2

Enabled by Enhanced Selling and Revenue Management Capabilities


P A G E 4 3

Understanding segment trends and our relative

market share allows us to focus our efforts

0 9 . 1 5 . 1 5


Retail

Travel and Leisure

Foodservice Mgmt

Government

Education

Healthcare

Segment

Restaurants

Projected industry growth (’15-’20)

H

H

L

L

L

H

M

Source: Technomic (July 2015)

Market share by segment

US and Canada Foodservice Total: ~$260B

Locally ManagedRestaurants

$18B

$61B

Travel andLeisure National

Chains

Healthcare

$93B

$13B

$32B

$18B

$27B

Education

Other

Retail

1


P A G E 4 4

Two recent examples of accelerating growth exist in

both the Retail and Travel and Leisure segments

0 9 . 1 5 . 1 5


1

Foodservice Partnership Joint Business Planning

• Stable and more consistent pricing

• Product quality and consistency

• Guest satisfaction

• Annual cost savings

• Value creation for hotel partners

• “ONE” Sysco sales approach

• Operational efficiencies / scale benefits

• Sysco brand growth

• International expansion

In-store Deli

Convenience Store

Fresh Kitchen (Commissary)

2,800 locations

6 locations

800 locations


P A G E 4 5

Local restaurants represent a large opportunity

and multi-cultural segments lead the growth

0 9 . 1 5 . 1 5


Local restaurants market size1

71696765636158585857

Flat CAGR

+3.1% CAGR

17 ‘20‘11 14 1912 16 181513

$ Billions

1 Technomic (July 2015); Local defined as “Small chains & independents”

ProjectedActuals

Community engagement

Measurement and calibration

Customer insights

Targeted sales and marketing tools

Authentic product line

Culturally knowledgeable sales force

Proven pilot model that can be leveraged across segments

1


P A G E 4 6

Delivering a differentiated set of products is

critical to enabling local restaurant growth

0 9 . 1 5 . 1 5


Category Innovation

Fresh Meat and Produce

Locally Grown and Sourced

2


P A G E 4 70 9 . 1 5 . 1 5


Our 3 year journey in Category Management continues

to improve margins and accelerate Sysco brand growth

FY13-FY15

FY16 Plan

~$400

$500+

TotalFY18FY17

Gross profit, $M

Sysco brand growth, % Broadline cases

2

Variety

A broader set of fresh, local and on-trend products to help customers evolve their menu

Value

Consistent set of core products to help operators stay competitive

Innovation

A pipeline of new products to address the changing consumer needs

36%

Other

Sysco brand

64%


P A G E 4 8

We are partnering with local suppliers to meet the

growing request for locally sourced solutions


0 9 . 1 5 . 1 5

2


P A G E 4 9

We are partnering with local suppliers to meet the

growing request for locally sourced solutions


0 9 . 1 5 . 1 5

2


P A G E 5 0

New programs leveraging our specialty meats and

produce businesses are driving significant growth

0 9 . 1 5 . 1 5


2

Sysco opportunities Customer needs

Better utilize our Specialty Companies:

• Specialty meat companies

• FreshPoint Produce

• European Imports

Current pilot programs are delivering solid results

• Southeast Fresh Express produce category initiative

• “ONE” Sysco Sales / Service model

• Expanded Product Specialists to support MAs

Service flexibility, competitive pricing, and customer product offerings (cuts)

Meat

Long shelf life, service flexibility, and locally-sourced products

Produce

Improved pricing (typically delivered by local dairy) and more cheese variety

Dairy

What customers want


P A G E 5 1

Bringing value-added services that solve the needs

of our customers, builds loyalty and retention

0 9 . 1 5 . 1 5


Menu Analysis and Design

Technology and Training

Marketing Tools and Solutions

2


P A G E 5 20 9 . 1 5 . 1 5


Category

Management

Core Product

Innovative

Product

Menu Analysis and Design represents a significant

opportunity to improve customer margins

2


P A G E 5 3

We are helping customers to better manage their

restaurant through social media solutions and tools

0 9 . 1 5 . 1 5


Education Listening “Insights”

2

Chipotle

Qdoba

Freebirds

Bullritos


P A G E 5 4

AppsFor Restaurants and ConsumersConsumer apps. Restaurant websites and

social media.

We are investing in technology and training programs

that are focused on improving operator performance

2

Operator trainingTechnology

0 9 . 1 5 . 1 5



P A G E 5 5

Programs such as “My Sysco Truck” improve

communication and our overall service offering

0 9 . 1 5 . 1 5


3

Nightly emails with estimated delivery time, # cases, out-of-stocks and substitutions

Innovation Delivered


P A G E 5 6

Our new customer engagement model allows our

partners to order how, when and where they want

0 9 . 1 5 . 1 5


Customer

Experience

Email

Leads Gen

Chat

Text

Multi-lingual

Social media

MAMOBILE

3


P A G E 5 7

3 We are scaling the new mobile ordering

platform based on pilot success

A new way to order… …has been well received

28% growth in customer accounts using mobile vs. prior trailing quarter

20%+ increase in overall eCommerce activity over the past 60 days –driven as a side effect of mobile usage

53% increase in transaction count vs. prior trailing quarter

Customers rate ease of ordering as the #1 driver of their ordering experience

0 9 . 1 5 . 1 5



P A G E 5 8

We are focused on becoming our customers’ most trusted advisor

0 9 . 1 5 . 1 5


More helpful More relevant More convenient

• Insights driven products and services

• “Value-Added” business solutions

• Innovative and on-trend products

• Tailored customer specific promotions

• Offer a flexible engagement model

• Dependable service and support


P A G E 5 9

We are building a more capable sales force by

leveraging new tools and processes across Sysco

0 9 . 1 5 . 1 5


World-classsales engine driving

growth

Leading capabilities and talent

Consistent, winning routines

Data-driven deployment


P A G E 6 0

Improving the CMU Customer Experience represents an

opportunity to improve retention and drive growth

0 9 . 1 5 . 1 5


Advantages to consolidating

To Sysco…

• Better manage pricing and revenue cycle

• Increase expertise

• Frees up time for local CMU account managers

To our customers…

• More consistency

• Higher service levels

• Single point of contact

Corp

CMU activities are currently fragmented…

…and will be consolidated under Shared Services

Customer

Shared Services

OpCo

Shared Services

Customer


P A G E 6 1

Revenue management tools and routines have laid a

solid foundation for ongoing margin improvement

0 9 . 1 5 . 1 5


0 9 . 1 5 . 1 5


Mix ManagementDisciplined Approach Tools and Insights

• Increase Sysco brand penetration

• Grow share in profitable categories

• Identify profitable customers

• New revenue management organization

• Enhanced training and coaching in the field

VP, RevMan

Field

…

Corp

FY14FY13 FY15


P A G E 6 2

Key takeaways

We have solid momentum and are confident we will accelerate local case growth and improve margins

• Favorable market environment

• Significant segment growth opportunities

• Multiple impactful commercial initiatives

0 9 . 1 5 . 1 5



P A G E 6 30 9 . 1 5 . 1 5





$650

At least $400


Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Growing gross profit will contribute significantly

to the strategic plan


Scott CharltonSeptember 15, 2015

End-to-End Supply ChainSysco Investor Day


P A G E 6 50 9 . 1 5 . 1 5



Improve ROIC

Enablers:

Grow gross profit





Our People

Business technology


• Improve margins


P A G E 6 60 9 . 1 5 . 1 5





$650

At least $400


Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Leveraging supply chain costs will contribute

20-25% of the FY18 gross impact



P A G E 6 7


0 9 . 1 5 . 1 5


• Provide an overview of the Sysco end-to-end supply chain

• Review key areas of supply chain focus

• Discuss detailed examples of cost reduction opportunities


P A G E 6 8

The end-to-end supply chain focuses on a customer centric approach

0 9 . 1 5 . 1 5


Forecast demandTransport and

receiveReplenish inventory

DeliverWarehouse

Manage facilities, construction and real estate

Manage fleet and indirect sourcing


P A G E 6 9

The Sysco supply chain is extensive and complex

0 9 . 1 5 . 1 5


2014 top 10 private fleets in North America (by tractor count)

Tractors TrailersCompany

12,132 10,548

7,647 9,577

7,479 9,523

6,239 61,743

5,438 6,472

3,650 4,867

3,395 4,431

3,052 3,972

3,002 4,048

5,025 8,437

• 7,500+ tractors and 7,000 drivers

• $4.8 billion in cost

• ~400,000 SKUs

• 25M+ drops per year

• 1B+ cases per year

• Our scale presents tremendous opportunities

• At the same time, the distributed/fragmented nature of our network complicates implementation of improvement levers


P A G E 7 0

Broad geographic coverage across the US and Canada

0 9 . 1 5 . 1 5


Alaska

Note: 96 Broadline


P A G E 7 1

Safety Service levels

Important supply chain priorities going forward

0 9 . 1 5 . 1 5


• Improve customer service levels

• Food safety

• Workplace safety

Cost per case

• Improve productivity and efficiency


P A G E 7 2

7 key supply chain areas of focus

0 9 . 1 5 . 1 5


Facilities excellence

• Use best-in-class capacity planning to defer capital• Standardize maintenance, construction and real estate

practices

• Standardize best practices in Warehousing and Distribution to improve safety, service and costOpCo

productivity

• Strategically source ~$1B of indirect spend• Increase purchasing complianceIndirect

sourcing

• Build process discipline to fully leverage technology • Improve service levels and reduce inventory days through

advanced inventory management practices

Inventory management

• Right size the fleet and degree of outsourcing• Optimize preventative maintenance and shop executionFleet

excellence

• Completed national freight bid• Increase backhaul utilization• Shift freight to lower cost modes (backhaul and intermodal)

Inbound logistics

• Support commercial strategy by integrating enterprise spend and supply chain networks One Sysco

Network

Prioritized 4 areas in the near term based on impact


P A G E 7 30 9 . 1 5 . 1 5


Transportation and Warehouse productivity performance by OpCo

Key priorities:

• Distribution continuous improvement program

• Workforce staffing and productivity management tools

• Routing and customer service tools and technology

• New unloading and delivery methods

• Fleet maintenance cost and MPG improvement efforts

Standardized best practices across the supply chain will improve OpCo productivity


P A G E 7 40 9 . 1 5 . 1 5


Example indirect categories by spend

Key priorities:

• Significant opportunity in indirect spend

• Successfully implemented first wave of categories

• In process of tackling new categories (e.g., fleet rentals, bulk fuel, hotels, rental cars)

• Additionally tackling corrugated packaging

Strategically sourcing indirect spend will lead to significant savings

Bulk fuel

Uniforms

Office equipment and furniture

Airfare

Vehicle repair services

Facilities services

Fleet rentals

Meals and entertainment

Utilities

Hotel and rental cars


P A G E 7 50 9 . 1 5 . 1 5


Key drivers to improving inventory management…

• Rolled out demand planning and replenishment tool

• Leverage Center of Excellence (COE)

• Reducing inactive and aged inventories

…done in conjunction with enhancing service levels


P A G E 7 6

Best-in-class capacity planning will defer capital

expenditures

0 9 . 1 5 . 1 5


Actively addressing capacity planning in a number of ways, for example:

• New tools to assess, redesign and improve overall productivity

• Continuously piloting new technology

• Leverage inventory management best practices


P A G E 7 7

Key takeaways

0 9 . 1 5 . 1 5


• Our supply chain is extensive and complex

• We have and will further develop a sustainable competitive advantage

• Our organization is set up to drive results


P A G E 7 80 9 . 1 5 . 1 5





$650

At least $400


Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Leveraging supply chain costs will contribute 20-

25% of the FY18 gross impact


Wayne ShurtsSeptember 15, 2015

Business TechnologySysco Investor Day


P A G E 8 00 9 . 1 5 . 1 5



Improve ROIC

Enablers:

Grow gross profit





Our People

Business technology


• Improve margins


P A G E 8 1


0 9 . 1 5 . 1 5


• Provide an overview of our technology platform

• Present business technology initiatives

• Review how these initiatives support the business strategy


P A G E 8 2

Business Technology (BT) supports the business through a robust ecosystem

0 9 . 1 5 . 1 5


Infrastructure

Agility platform

Analytic platform

Operational platform

Enterprise applications


P A G E 8 30 9 . 1 5 . 1 5


Enterprise Applications

Infrastructure

Operational Platform

Demand Planning

Replenish-ment

Truck Routing

Order Entry

Order Management

Inventory Management

Warehouse Management

Financial and HR Systems

Analytics Platform• Business Intelligence• Reporting • Analytics/insights

Agility Platform• Systems of Engagement• Example: My Sysco Truck

Sysco WarehouseReceivePickPackShip

CustomersRestaurantsHospitalsSchoolsHotels

Suppliers

Technology platform


P A G E 8 4

SAP look back

0 9 . 1 5 . 1 5


• Rolled out SAP to 5 OpCos (initial approach was a full roll-out OpCo by OpCo)

• Paused the roll-out to rebuild and enhance the solution

• Successfully implemented 7 OpCos (larger and diverse OpCos) in 8 months

• Major upgrade to latest SAP version

• Improved approach to the SAP roll-out • Deployed Demand Planning to all USBL

2010 – Fall 2012

Fall 2012 –Fall 2013

Fall 2013 –Summer 2014

Fall 2014

2015


P A G E 8 5

Improved approach to rolling out technology platform

0 9 . 1 5 . 1 5


• Former: Rollout all new functional systems to an OpCo all at once

• New: Rollout a single functional system across all OpCosDeployment

• Introduces less simultaneous change and disruption to the customer and OpCo

• Introduces benefits more quickly to stakeholders

Rationale

Demand Planning

Replenish-ment

Truck Routing

Order Entry

Order Management


Warehouse Management

Financial and HR Systems


P A G E 8 6

BT is focused on enabling the strategic plan with

immediate priority on enhancing the customer experience


0 9 . 1 5 . 1 5

Business technology projects

Strategic Goals

Accelerate local case growth

Improve gross margins


Reduce admin costs

Improve ROIC

CMU Optimiz-

ation

Revenue mgmt. project

OBC(On-board Computers/ Telogis)

Demand, Planning, Replenish

ment

SC Incentives ODI and

DCIP

Digital customer

experience

Reduce telecom

expenses

Technology platform

Master data management and Business Intelligence

1

2

3

4

5


P A G E 8 7

Customer Facing Technology

Restaurant TechnologyEnterprise Technology

Competitor Focus

MAJOR VARIED but MINORVARIED but MINOR• Competition has

predominately aged legacy system environments

MINOR INVESTING• Primarily Cake

MAJOR• SAP, SWMS, DPR,

OBC, etc.Sysco Focus

• Technology that helps your customer interact and conduct business with you

• Technology that helps the restaurant run their business

• Technology that helps you run your company betterDescriptions

…we plan to overweight our near-term spend on customer facing technologies

Immediate focus


0 9 . 1 5 . 1 5

1 In recent years, we have focused on enterprise

technology, driving business efficiencies…

ACCELERATE LOCAL CASE GROWTH


P A G E 8 8

We are encouraged with our mobile success

and expanding our digital capabilities

This technology is directly tied to our ability to improve local growth


0 9 . 1 5 . 1 5

Expanding the capabilities of Sysco Mobile…

…And building additional digital opportunities

Integrated digital updates on delivery and current inventory

Multiple channels for ordering and product lists

Integrated system for invoices, returns, credits and payment

Online products and service details for prospects and new customers

Focus on improving the efficiency of our customers’ ordering experience

Include inventory management

Extend visibility to menu analysis and food cost

Enhance search and product information (e.g., pictures, nutritional)

Custom list creation and management

1

ACCELERATE LCOAL CASE GROWTH


P A G E 8 9


0 9 . 1 5 . 1 5

BT is implementing technology to fully support

Revenue Management enabling margins

Price Manager

Customer Investment

Manager

Performance Manager

2

IMPROVE GROSS MARGINS


P A G E 9 0

Supply chain initiative


Indirect sourcing

BT enabler

ARIBA (on-line marketplace)

Telecom expense

OBC (On-board Computers / Telogis)

Supply Chain Incentives DCIP/ODI

Demand forecaster

Demand, Planning, ReplenishmentI N V E S T O R D A Y

0 9 . 1 5 . 1 5

OpCoproductivity

Achieving supply chain cost reductions will rely on new

functionality from technology systems and platforms

3

LEVERAGE SUPPLY CHAIN COSTS


P A G E 9 1


0 9 . 1 5 . 1 5

Improved CMU customer experience and cost efficiency

driven by technology and Shared Services

…is enabled by BT solutions and tools

• Service request tool

• Consolidated payment tool

• DPM tool (pricing management)

Corp

CMU activities are currently fragmented…

…and will be consolidated under Shared Services

Customer

Shared Services

OpCo

Shared Services

Customer

4

REDUCE ADMINISTRATIVE COSTS


P A G E 9 2


0 9 . 1 5 . 1 5

Master Data Management and Business Intelligence

are key enablers for delivering the business strategyBusiness technology projects

Strategic Goals

Accelerate local case growth

Improve gross margins


Reduce admin costs

Improve ROIC

CMU Optimiz-

ation

Revenue mgmt. project

OBC(On-board Computers/ Telogis)

Demand, Planning, Replenish

ment

SC Incentives ODI and

DCIP

Digital customer

experience

Reduce telecom

expenses

Technology platform

Master data management and Business Intelligence

1

2

3

4

5

5

TECHNOLOGY PLATFORM


P A G E 9 3

Key takeaways

0 9 . 1 5 . 1 5


• Supporting our business objectives

• Accelerating local case growth

• Improving margins

• Leveraging supply chain costs

• Reducing administrative costs

• Priorities going forward are customer oriented

• Building our digital capabilities

Joel GradeSeptember 15, 2015

Financial OverviewSysco Investor Day


P A G E 9 5

Contents

Return on Invested Capital

Sysco financial overview

$400M operating income improvement

Financial roadmap


P A G E 9 6

We have recent momentum of accelerating

local case growth and improving margins

0 9 . 1 5 . 1 5


As Tom mentioned earlier…we are accelerating our local case growth


P A G E 9 7

Our end-to-end supply chain is creating

sustainable competitive advantages

0 9 . 1 5 . 1 5


As Scott mentioned earlier…we have many supply chain advantages


P A G E 9 8

We generate significant cash flow

Adjusted free cash flow1

FY13

1.11.3

FY15FY14

1.0


0 9 . 1 5 . 1 5

$ Billions

1) See Non-GAAP Reconciliations for an explanation of this non-GAAP measure


P A G E 9 9

Strong balance sheet provides flexibility

0 9 . 1 5 . 1 5


Current balance sheet

Upcoming debt issuance

• $2B in new debt issuance around the end of fiscal 1Q16

– $1.5B to fund Accelerated Share Repurchase

– $0.5B to term out commercial paper

• Will result in adjusted interest expense being higher in FY16 vs. FY15

• Post announcement of the levered recapitalization, S&P and Moody’s published new ratings

– Moody’s: A2 negative watch

– S&P: A- stable

• Solid investment-grade credit rating

• Substantial flexibility to pursue strategic transactions where appropriate

Further leverage balance sheet for the right opportunity


P A G E 1 0 0

Contents




Financial roadmap


P A G E 1 0 10 9 . 1 5 . 1 5



Improve ROIC

Enablers:

Grow gross profit




We are committed to achieving at least $400M in operating income improvement

Our People

Business technology


• Improve margins


P A G E 1 0 20 9 . 1 5 . 1 5





$650

At least $400


Grow gross profit



55-65%

20-25%

15-20%

$(250)

FY 18 impact, $M

Reducing administrative costs will contribute

15-20% of the FY18 gross impact



P A G E 1 0 3


0 9 . 1 5 . 1 5

We will reduce administrative costs through a variety of different levers

Focus on priorities that drive the most

valueOptimize

organizational structure

Integrate support

functions

Utilize technology to

enable efficiency

Leverage third party

spend

Streamline the work

Focus on the customer


P A G E 1 0 4

Contents




Financial roadmap


P A G E 1 0 5

We will achieve our ROIC target of 15% by focusing on 3 key activities

0 9 . 1 5 . 1 5


1) Improving working capital management

2) Continue to manage capital spend in a rigorous manner

3) Continually assess business segment strategic value and ROIC

2

3

1

The path to 15% ROIC will not be linear


P A G E 1 0 6

Description

Accounts Payable

• Improve payment terms

• Enhance vendor relationships

Accounts Receivable

• Leverage technology to improve speed and reliability of customer payments:

– Mobile check scanning encourages faster check deposits

– Online invoice management improve process speed and reliability

– Real time payment reminders and capability

Inventory

• Improve inventory management practices

• Prevent inventory from becoming aged/obsolete

We plan to achieve an improvement in working capital by ~ 4 days


0 9 . 1 5 . 1 5

Improving working capital is centered around

three areas


P A G E 1 0 71.1% 1.1%

% of Sales

Gross capital expenditures, $ millions

543523550-600

FY15FY14FY13 Plan FY16

512


0 9 . 1 5 . 1 5

Sysco continues to follow a disciplined

approach to capital spend

1.1%


P A G E 1 0 8

Contents




Financial roadmap


P A G E 1 0 9

Targeted financial results

FY 2018FY 2015

CAGR2015 - 2018

Adjusted EPS2

Adjusted Operating Income2

$1,792

Sales ($ Millions) $48,681 4%

7%

$1.84 $2.40-2.50 10%

Gross Profit($Millions)

(%)

Adjusted Expenses2

($Millions)

(%)

($Millions)

(%) 3.7%

Adjusted Net Income2 ($Millions)

$8,552 4%

17.6%

$6,760 3%

13.9%

$1,100 5%

Adjusted ROIC2 13%

Cases1 (Millions) ~1,400 2%

0 9 . 1 5 . 1 5


15%

Targeting at least $400M in Operating

Incomeimprove-

ment

1) Represents cases for total Broadline and SYGMA2) See Non-GAAP Reconciliations for an explanation of these non-GAAP measures


P A G E 1 1 0

Metric

Key underlying assumptions

Assumption

Dividend• Moderate growth

0 9 . 1 5 . 1 5


Shares outstanding

• Reduce diluted shares outstanding

– $3B in Share Buyback program over the next two years

– Additionally, any new share issuances will be covered with standard buybacks

Acquisition investment

• Continue to pursue core portfolio acquisitions

• Ongoing assessment of other strategic opportunities


P A G E 1 1 1


0 9 . 1 5 . 1 5

• Sysco has announced a 2 year, $3B repurchase program

• We have approximately $5 - $7 billion of borrowing capacity remaining for acquisitions assuming a BBB credit rating

• Alternatively, borrowing capacity remaining would be approximately $3 - $5 billion if proceeds were used for share repurchases

Sysco has substantial borrowing capacity

Note: Assumes 3.5x leverage; 10x multiple


P A G E 1 1 2

Our Financial Roadmap


0 9 . 1 5 . 1 5

• Improve Operating Income by at least $400 million

– Grow gross profit at a faster rate than operating expenses

• Achieve 15% ROIC

• Grow EPS at a faster rate than operating income

• Generate $1 billion+ in free cash flow

• Leverage Balance Sheet for the right strategic opportunity

Closing CommentsSysco Investor Day

Bill DeLaneySeptember 15, 2015


P A G E 1 1 40 9 . 1 5 . 1 5



Improve ROIC

Enablers:

Grow gross profit




Our People

Business technology


• Improve margins


P A G E 1 1 5

Governance structure to support execution

0 9 . 1 5 . 1 5


Leverage supply chain

costs

Program management

Steering Committee

Grow gross profit

Reduce administrative

costs

Improve ROIC

Executive compensation will be aligned with the metrics shared with you today


P A G E 1 1 6

Sysco is well positioned for the future


0 9 . 1 5 . 1 5

• Leader in $265 billion market

• Committed to disciplined and profitable growth

• Targeting at least $400 million increase operating income improvement over the next three years

• Achieve 15% ROIC by 2018

• Grow dividend

• Leverage balance sheet for strategic opportunities

Non-GAAP ReconciliationsSysco Investor Day

September 15, 2015


P A G E 1 1 80 9 . 1 5 . 1 5


Impact of Certain Items - Fiscal 2015

Non-GAAP Reconciliation (Unaudited)

Sysco Corporation and its Consolidated Subsidiaries

(In Thousands, Except for Share and Per Share Data)

Sysco’s results of operations are impacted by certain items that include multiemployer withdrawal charges (MEPP), severance charges, integration planning, litigation and termination costs in connection with the merger that had been proposed with US Foods, Inc. (US Foods), charges from facility closures and US Foods related financing costs. These items are collectively referred to as "Certain Items." Management believes that adjusting its operating expenses, operating expenses as a percentage of sales, operating income, operating income as a percentage of sales, interest expense, net earnings and diluted earnings per share to remove these charges provides an important perspective of 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 comparisons 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 for GAAPmeasures 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, fiscal 2015 is adjusted to remove the Certain Items noted above

52-Week Period Ended Jun. 27, 2015

Sales (GAAP) $ 48,680,752

Operating expenses (GAAP) $ 7,322,154

Impact of severance charge (5,598)

Impact of US Foods merger and integration planning costs (554,667)

Impact of facility closure charges (2,203)

Subtotal - Impact of Certain Items on operating expenses (562,468)

Operating expenses adjusted for Certain Items (Non-GAAP) $ 6,759,687

Operating expenses as a percentage of sales (GAAP) 15.0%

Adjusted operating expenses as a percentage of sales (Non-GAAP) 13.9%

Operating income (GAAP) $ 1,229,362

Impact of Certain Items on operating income 562,468

Operating income adjusted for Certain Items (Non-GAAP) $ 1,791,830

Operating income as a percentage of sales (GAAP) 2.5%

Adjusted operating income as a percentage of sales (Non-GAAP) 3.7%

Interest Expense (GAAP) 254,807

Impact of US Foods financing costs (138,422)

Adjusted Interest Expense (Non-GAAP) 116,385

Net earnings (GAAP)1 686,773

Impact of severance charge (net of tax) 3,302

Impact of US Foods merger and integration planning costs (net of tax) 327,149

Impact of facility closure charges (net of tax) 1,299

Impact of US Foods Financing Costs (net of tax) 81,643

Subtotal - Impact of Certain Items on net earnings 413,393

Net earnings adjusted for Certain Items (Non-GAAP)1 1,100,166

Diluted earnings per share (GAAP) 1 1.15

Impact of severance charge 0.01

Impact of US Foods merger and integration planning costs 0.55

Impact of US Foods Financing Costs 0.14

Diluted EPS adjusted for Certain Items (Non-GAAP)12 1.84

Diluted shares outstanding 596,849,034

1 The net earnings and diluted earnings per share impacts are shown net of tax. Tax impact of adjustments for Certain Items was $287,497 for the 52-week periods ended June 27, 2015. The amount is calculated by multiplying the pretax impact of each Certain Item by the statutory rates in effect for each jurisdiction

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 divided by diluted shares outstanding


P A G E 1 1 90 9 . 1 5 . 1 5




Return on Invested Capital (ROIC) and Adjusted ROIC

(In Thousands)

We calculate ROIC as net earnings divided by (i) stockholder’s equity, computed as the average of adjusted stockholders’ equity at the beginning of the year and at the end of each fiscal quarter during the year; and (ii) long-term debt, computed as the average of the long-term debt at the beginning of the year and at the end of each fiscal quarter during the year. All components of our ROIC calculation are impacted by Certain Items. As a result, in the non-GAAPreconciliation below for fiscal 2015, adjusted total invested capital is computed as the sum of (i) adjusted stockholder’s equity, computed as the average of adjusted stockholders’ equity at the beginning of the year and at the end of each fiscal quarter during the year; and (ii) adjusted long-term debt, computed as the average of the adjusted long-term debt at the beginning of the year and at the end of each fiscal quarter during the year. Sysco considers adjusted ROIC to be a measure that provides useful information to management and investors in evaluating the efficiency and effectiveness of the company's long-term capital investments, and we have used ROIC as a performance criteria in our managment incentive programs. It is possible that a different definition of ROIC may be used by other companies since it can be defined differently. 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, adjusted ROIC for fiscal 2015 is reconciled to a GAAP based calculation of ROIC.

With respect to our target adjusted ROIC of 15%, which we expect to achieve by FY18, we cannot provide a quantitative reconciliation to the most directly comparable GAAP measure without unreasonable effort due to uncertainty related to the timing of achieving such results. However, we would expect to calculate adjusted ROIC in the same manner that we calculated FY15 adjusted ROIC as described above and reflected in the table below.

Fiscal 2015

Net earnings (GAAP) $ 686,773

Impact of Certain Items on net earnings 413,393

Adjusted net earnings (Non-GAAP) $ 1,100,166

Invested Capital (GAAP) $ 10,985,527

Adjustments to invested capital (1) (2,565,346)

Adjusted Invested capital (GAAP) $ 8,420,181

Return on invested capital (GAAP) 6.3%

Return on invested capital (Non-GAAP) 13.1%

(1) Adjustments to invested capital includes the removal of excess cash obtained from debt incurred for the US Foods merger that had been proposed and the debt issuance costs and hedge settlement borrowings that would not have been borrowed absent this merger-related debt. Shareholder's equity adjustments include the impact of Certain Items from earnings and removal of foreign currency translation adjustments that arose in fiscal 2015.


P A G E 1 2 00 9 . 1 5 . 1 5




Free Cash Flow and Adjusted Free Cash Flow

(In Thousands)

Free cash flow represents net cash provided from operating activities less purchases of plant and equipment and includes proceeds from sales of plant and equipment. Adjusted free cash flow adjusts out the cash impact of our Certain Items representing primarily payments for integration planning, litigation and termination costs in connection with the merger that had been proposed with US Foods, interest payments on debt we had issued in connection with the proposed merger, and a payment for a contingency accrual that arose in fiscal 2014. Sysco considers free cash flow and adjusted free cash flow to be liquidity measures that provide useful information to management and investors about the amount of cash generated by the business after the purchases and sales 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. Adjusted free cash flow further provides the amount of cash generated excluding larger payments sometimes incurred with our Certain Items. However, free cash flow may not be available for discretionary expenditures, as it may be necessary that we use it to make mandatory debt service or other payments Free cash flow and adjusted free cash flow should not be used as a substitute in assessing the company’s liquidity. 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 and adjusted free cash flow for fiscal 2015 is reconciled to net cash provided by operating activities.

With respect to our expectation to generate more than $1 billion in free cash flow in each fiscal year through FY18, we cannot provide a quantitative reconciliation to the most directly comparable GAAP measure without unreasonable effort due to the uncertainty associated with the impacts of unforeseen future special items. However, for FY16, we expect our free cash flow to reflect adjustments for (1) cash payments associated with the termination of the merger that had been proposed with US Foods and related interest payments associated with the redemption of debt that had been issued in contemplation of the proposed merger and (2) the amount of plant and equipment, which the company projects to be in the range of $550-600 million. We would expect to calculate our free cash flow for each of the periods in the same manner that we calculated FY15 free cash flow as described above and reflected in the table below.


52-Week Period Ended Jul. 28, 2014


Net cash provided by operating activities (GAAP) $ 1,511,594 $ 1,492,815 $ 1,555,484

Additions to plant and equipment (511,862) (523,206) (542,830)

Proceeds from sales of plant and equipment 15,527 25,790 24,472

Free Cash Flow (Non-GAAP) $ 1,015,259 $ 995,399 $ 1,037,126

Cash impact of Certain Items 34,445 84,210 230,837

Adjusted Free Cash Flow (Non-GAAP) $ 1,049,704 $ 1,079,609 $ 1,267,963

Adjustments represent the cash impact of Certain Items. Adjustments for fiscal 2013 primarily included payments related to these items an MEPP withdrawal, severance and an acquisition related payment. Adjustments for fiscal 2014 primarily included payments related to integration planning costs in connection with the merger that had been proposed with US Foods and an MEPP withdrawal. Adjustments for fiscal 2015 included $159.2 million related to integration planning, litigation costs and termination costs in connection with the merger that had been proposed with US Foods, interest payments of $49.8 million related to the debt that had been issued for the proposed merger and $17.2 million related to the payment of a contingency accrual that arose in fiscal 2014 that was considered a Certain Item in fiscal 2014 and $5.7 million for all remaining applicable Certain Items. These amounts will differ from the earnings impact of Certain Items; as the timing of payments for these items may occur in a different period from the period in which the Certain Item charges were recognized in the Statement of Consolidated Results of Operations. In fiscal 2013 and fiscal 2015, there were pension contributions of $70.0 million and $50.0 million.