The high gasoline cost has struck the core of Sysco's business and has been largely responsible for bringing the stock price down. Although oil prices have fallen, Sysco hedged 60% of its 2009 fuel needs in late July and August, when oil was still above $120. Sysco will not fully benefit from lower diesel prices until all the hedge contracts are exercised.
The IRS will announce in early 2009 whether certain tax deferrals that Sysco has reported since 2002 are acceptable under tax law. If the IRS decides the deferrals unacceptable and forces the company to change its reporting, Sysco will have to add up to $1 billion in debt to its balance sheet.