Sysco 2008 Annual Report Download - page 53

instruments, potential increases in interest expense due to market increases in floating interest rates and the creditworthiness of the
counterparties in such transactions.
Fiscal 2008
As of June 28, 2008, we had no commercial paper outstanding. Our long-term debt obligations as of June 28, 2008 were
$1,980,331,000, of which approximately 99% were at fixed rates of interest. We had no interest rate swaps outstanding as of June 28,
2008.
The following table presents our interest rate position as of June 28, 2008. All amounts are stated in U.S. dollar equivalents.
2009 2010 2011 2012 2013 Thereafter Total Fair Value
Interest Rate Position as of June 28, 2008
Principal Amount by Expected Maturity
Average Interest Rate
(In thousands)
U.S. $ Denominated:
Fixed Rate Debt . . . . . . . $ 4,437 $ 3,366 $ 2,318 $ 201,205 $ 251,055 $ 1,478,309 $ 1,940,690 $ 1,889,602
Average Interest Rate . . 3.7% 3.8% 4.2% 6.1% 4.3% 5.5% 5.4%
Floating Rate Debt. . . . . . $ — $ — $ — $ — $ — $ 15,000 $ 15,000 $ 15,000
Average Interest Rate . . — — — — — 2.2% 2.2%
Canadian $ Denominated:
Fixed Rate Debt . . . . . . . $ 459 $ 506 $ 637 $ 744 $ 818 $ 21,477 $ 24,641 $ 23,992
Average Interest Rate . . 9.8% 9.8% 9.8% 9.8% 9.8% 9.8% 9.8%
Floating Rate Debt. . . . . . $ — $ — $ — $ — $ — $ — $ — $ —
Average Interest Rate . . — — — — — — —
Fiscal 2007
As of June 30, 2007, we had outstanding $531,826,000 of commercial paper at variable rates of interest with maturities through
September 24, 2007. Excluding commercial paper issuances, our long-term debt obligations as of June 30, 2007 were $1,229,969,000, of
which approximately 99% were at fixed rates of interest. We had no interest rate swaps outstanding as of June 30, 2007.
In the following table as of June 30, 2007, commercial paper issuances are reflected as floating rate debt and both the U.S. and
Canadian commercial paper issuances outstanding are classified as long-term based on the maturity date of our revolving loan agreement
which supports our U.S. and Canadian commercial paper programs and our intent to continue to refinance this facility on a long-term basis.
The following table presents our interest rate position as of June 30, 2007. All amounts are stated in U.S. dollar equivalents.
2008 2009 2010 2011 2012 Thereafter Total Fair Value
Interest Rate Position as of June 30, 2007
Principal Amount by Expected Maturity
Average Interest Rate
(In thousands)
U.S. $ Denominated:
Fixed Rate Debt . . . . . . . $ 3,149 $ 3,525 $ 976 $ 679 $ 200,641 $ 982,214 $ 1,191,184 $ 1,124,343
Average Interest Rate . . 5.1% 5.9% 2.1% 1.5% 6.1% 5.6% 5.7%
Floating Rate Debt . . . . . . $ 18,900 $ — $ — $ — $ 487,727 $ 15,000 $ 521,627 $ 521,627
Average Interest Rate . . 5.7% — — — 5.3% 4.4% 5.3%
Canadian $ Denominated:
Fixed Rate Debt . . . . . . . $ 419 $ 434 $ 478 $ 602 $ 704 $ 21,148 $ 23,785 $ 22,450
Average Interest Rate . . 9.5% 9.8% 9.8% 9.8% 9.8% 9.8% 9.8%
Floating Rate Debt . . . . . . $ — $ — $ — $ — $ 44,099 $ — $ 44,099 $ 44,099
Average Interest Rate . . — — — — 4.4% — 4.4%
Foreign Currency Exchange Rate Risk
We have Canadian subsidiaries, all of which use the Canadian dollar as their functional currency with the exception of a financing
subsidiary. To the extent that business transactions are not denominated in Canadian dollars, we are exposed to foreign currency exchange
rate risk. We will also incur gains and losses within shareholders’ equity due to translation of the financial statements from Canadian dollars to
U.S. dollars. Our Canadian financing subsidiary has notes denominated in U.S. dollars, which has the potential to create taxable income in
Canada when the debt is paid due to changes in the exchange rate from the inception of the debt through the payment date. A 10%
unfavorable change in the fiscal 2008 year-end exchange rate and the resulting increase in the tax liability associated with these notes would
not have a material impact on our results of operations. We do not routinely enter into material agreements to hedge foreign currency risks.
Fuel Price Risk
The price and availability of diesel fuel fluctuates due to changes in production, seasonality and other market factors generally outside
of our control. Increased fuel costs may have a negative impact on our results of operations in three areas. First, the high cost of fuel can
negatively impact consumer confidence and discretionary spending and thus reduce the frequency and amount spent by consumers for food
prepared away from home. Second, the high cost of fuel can increase the price we pay for product purchases and we may not be able to pass
29