Sysco 2008 Annual Report Download - page 76

Before-Tax
Amount Income Tax
After-Tax
Amount
2007
Minimum pension liability adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,633,000 $ 2,164,000 $ 3,469,000
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . 25,052,000 — 25,052,000
Amortization of cash flow hedge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 694,000 266,000 428,000
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,379,000 $ 2,430,000 $ 28,949,000
Before-Tax
Amount Income Tax
After-Tax
Amount
2006
Minimum pension liability adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,097,000 $ 26,917,000 $ 43,180,000
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . 47,718,000 — 47,718,000
Change in fair value of interest rate swap . . . . . . . . . . . . . . . . . . . . . . . . 11,388,000 4,324,000 7,064,000
Amortization of cash flow hedge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 540,000 207,000 333,000
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 129,743,000 $ 31,448,000 $ 98,295,000
The following table provides a summary of the changes in accumulated other comprehensive income (loss) for the years presented:
Pension and Other
Postretirement
Benefit Plans
Foreign Currency
Translation Interest Rate Swap Total
Balance as of July 2, 2005 . . . . . . . . . . . . . . . . . . $ (54,286,000) $ 60,730,000 $ (20,121,000) $ (13,677,000)
Minimum pension liability adjustment . . . . . . . . . . 43,180,000 — — 43,180,000
Foreign currency translation adjustment . . . . . . . . — 47,718,000 — 47,718,000
Change in fair value of interest rate swap . . . . . . . — — 7,064,000 7,064,000
Amortization of cash flow hedge . . . . . . . . . . . . . — — 333,000 333,000
Balance as of July 1, 2006 . . . . . . . . . . . . . . . . . . (11,106,000) 108,448,000 (12,724,000) 84,618,000
Minimum pension liability adjustment . . . . . . . . . . 3,469,000 — — 3,469,000
Foreign currency translation adjustment . . . . . . . . — 25,052,000 — 25,052,000
Amortization of cash flow hedge . . . . . . . . . . . . . — — 428,000 428,000
Adoption of SFAS 158 recognition provision . . . . . (117,628,000) — — (117,628,000)
Balance as of June 30, 2007 . . . . . . . . . . . . . . . . (125,265,000) 133,500,000 (12,296,000) (4,061,000)
Adoption of SFAS 158 measurement date
provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,780,000 — — 22,780,000
Foreign currency translation adjustment . . . . . . . . — 30,514,000 — 30,514,000
Amortization of cash flow hedge . . . . . . . . . . . . . — — 427,000 427,000
Amortization of prior service cost . . . . . . . . . . . . . 3,777,000 — — 3,777,000
Amortization of net actuarial losses . . . . . . . . . . . 2,003,000 — — 2,003,000
Amortization of transition obligation . . . . . . . . . . . 93,000 — — 93,000
Pension funded status adjustment . . . . . . . . . . . . (124,301,000) — — (124,301,000)
Balance as of June 28, 2008 . . . . . . . . . . . . . . . . $ (220,913,000) $ 164,014,000 $ (11,869,000) $ (68,768,000)
15. SHARE-BASED COMPENSATION
Prior to July 3, 2005, SYSCO accounted for its stock option plans and its Employees’ Stock Purchase Plan using the intrinsic value
method of accounting provided under APB Opinion No. 25, “Accounting for Stock Issued to Employees,” (APB 25) and related
interpretations, as permitted by FASB Statement No. 123, “Accounting for Stock-Based Compensation,” (SFAS 123) under which no
compensation expense was recognized for stock option grants and issuances of stock pursuant to the Employees’ Stock Purchase Plan.
However, share-based compensation expense was recognized in periods prior to fiscal 2006 (and continues to be recognized) for stock
issuances pursuant to the Management Incentive Plan and stock grants to non-employee directors. Share-based compensation was a pro
forma disclosure in the financial statement footnotes and continues to be provided for periods prior to fiscal 2006.
Effective July 3, 2005, SYSCO adopted the fair value recognition provisions of FASB Statement No. 123(R), “Share-Based Payment,”
(SFAS 123(R)) using the modified-prospective transition method. Under this transition method, compensation cost recognized in fiscal
2006 and later years includes: a) compensation cost for all share-based payments granted through July 2, 2005, but for which the requisite
service period had not been completed as of the beginning of the fiscal year, based on the grant date fair value estimated in accordance with
the original provisions of SFAS 123, and b) compensation cost for all share-based payments granted during the fiscal year, based on the grant
date fair value estimated in accordance with the provisions of SFAS 123(R). Results for prior periods were not restated.
The adoption of SFAS 123(R) results in lower diluted shares outstanding than would have been calculated had compensation cost not
been recorded for stock options and stock issuances under the Employees’ Stock Purchase Plan. This is due to a modification required by
SFAS 123(R) of the treasury stock method calculation utilized to compute the dilutive effect of stock options.
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