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SYSCO CORPORATION-Form10-K56
PARTII
ITEM8Financial Statements and Supplementary Data
The following is a description of the valuation methodologies used for assets measured at fair value.
•
Time deposits and commercial paper included in cash equivalents are valued at amortized cost, which approximates fair value. These are included
within cash equivalents as a Level2 measurement in the tables below.
•
Money market funds are valued at the closing price reported by the fund sponsor from an actively traded exchange. These are included within cash
equivalents and restricted cash as Level1 measurements in the tables below.
•
The interest rate swap agreements, discussed further in Note8, “Derivative Financial Instruments,” are valued using a swap valuation model that utilizes
an income approach using observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. These are included within
prepaid expenses and other current assets and other assets as Level2 measurements in the tables below.
The following tables present the company’s assets measured at fair value on a recurring basis as of June29,2013 and June30,2012:
(Inthousands)
Assets Measured at Fair Value as of June29,2013
Level1 Level2 Level3 Total
Assets:
Cash and cash equivalents
Cash equivalents $ 1,160 $ 132,731 $ - $ 133,891
Prepaid expenses and other current assets
Interest rate swap agreement - 2,988 - 2,988
Restricted cash 145,328 - - 145,328
TOTAL ASSETS AT FAIR VALUE $ 146,488 $ 135,719 $ - $ 282,207
(Inthousands)
Assets Measured at Fair Value as of June30,2012
Level1 Level2 Level3 Total
Assets:
Cash and cash equivalents
Cash equivalents $ 228,310 $ 248,714 $ - $ 477,024
Prepaid expenses and other current assets
Interest rate swap agreement - 2,475 - 2,475
Restricted cash 127,228 - - 127,228
Other assets
Interest rate swap agreements - 6,219 - 6,219
TOTAL ASSETS AT FAIR VALUE $ 355,538 $ 257,408 $ - $ 612,946
The carrying values of accounts receivable and accounts payable approximated their respective fair values due to the short-term maturities of these
instruments. The fair value of Sysco’s total debt is estimated based on the quoted market prices for the same or similar issue or on the current rates
offered to the company for debt of the same remaining maturities and is considered a Level2 measurement. The fair value of total debt approximated
$3,207.6million and $3,539.3million as of June29,2013 and June30,2012, respectively. The carrying value of total debt was $2,888.9million and
$3,018.3million as of June29,2013 and June30,2012, respectively.
NOTE5 Allowance For Doubtful Accounts
A summary of the activity in the allowance for doubtful accounts appears below:
(Inthousands)
2013 2012 2011
Balance at beginning of period $ 42,919 $ 42,436 $ 36,573
Charged to costs and expenses 35,243 33,359 42,623
Customer accounts written off, net of recoveries (30,824) (32,318) (37,823)
Other adjustments 7 (558) 1,063
BALANCE AT END OF PERIOD $ 47,345 $ 42,919 $ 42,436