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SYSCO CORPORATION-Form10-K 47
PARTII
ITEM 7AQuantitative and Qualitative Disclosures AboutMarket Risk
The following tables present our interest rate position as of June 29, 2013. All amounts are stated in U.S. dollar equivalents.
(Dollars in thousands)
Interest Rate Position as of June 29, 2013
Principal Amount by Expected Maturity
Average Interest Rate
2014 2015 2016 2017 2018 Thereafter Total Fair Value
U.S. $ Denominated:
Fixed Rate Debt $ 3,251 $ 301,632 $ 1,856 $ 1,149 $ 498,867 $ 1,719,270 $ 2,526,025 $ 2,838,162
Average Interest Rate 4.4 % 0.8 % 4.4 % 4.2 % 5.4 % 5.2 % 4.7 %
Floating Rate Debt(1) $ 297,690 $ - $ - $ - $ - $ - $ 297,690 $ 301,364
Average Interest Rate 1.5 % - - - - - 1.5 %
Canadian $ Denominated:
Fixed Rate Debt $ 1,396 $ 1,520 $ 1,430 $ 1,345 $ 1,312 $ 15,410 $ 22,413 $ 25,183
Average Interest Rate 8.0 % 7.7 % 8.6 % 9.1 % 9.7 % 9.7 % 9.4 %
Euro € Denominated:
Fixed Rate Debt $ 464 $ 695 $ - $ - $ - $ - $ 1,159 $ 1,302
Average Interest Rate 3.8 % 3.8 % - - - - 3.8 %
Floating Rate Debt $ 41,632 $ - $ - $ - $ - $ - $ 41,632 $ 41,632
Average Interest Rate 1.0 % - - - - - 1.0 %
(1) Includes fixed rate debt that has been converted to floating rate debt through interest rate swap agreements.
(Dollars in thousands)
Interest Rate Position as of June 29, 2013
Notional Amount by Expected Maturity
Average Interest Swap Rate
2014 2015 2016 2017 2018 Thereafter Total Fair Value
Interest Rate Swaps
Related To Debt:
Pay Variable/Receive Fixed $ 200,000 $ - $ - $ - $ - $ - $ 200,000 $ 2,988
Average Variable Rate Paid:
Rate A Plus 2.1 % - - - - - 2.1 %
Fixed Rate Received 4.6 % - - - - - 4.6 %
Rate A – three-month LIBOR
Foreign Currency Exchange Rate Risk
The majority of our foreign subsidiaries use their local currency as their functional currency. To the extent that business transactions are not denominated
in a foreign subsidiary’s functional currency, we are exposed to foreign currency exchange rate risk. We will also incur gains and losses within our
shareholders’ equity due to the translation of our  nancial statements from foreign currencies into U.S. dollars. Our income statement trends may be
impacted by the translation of the income statements of our foreign subsidiaries into U.S. dollars. The exchange rates used to translate our foreign sales
into U.S. dollars negatively impacted sales by 0.7% in  scal 2014 when compared to  scal 2013. The changes in the exchange rates used to translate
our foreign sales into U.S. dollars did not have a signi cant impact on sales in  scal 2013 when compared to  scal 2012. The impact to our operating
income, net earnings and earnings per share was not material in  scal 2014 or  scal 2013. A 10% unfavorable change in the  scal 2014 weighted
year-to-date exchange rate and the resulting impact on our  nancial statements would have negatively impacted  scal 2014 sales by 1.1% and would
not have materially impacted our operating income, net earnings and earnings per share. We do not routinely enter into material agreements to hedge
foreign currency exchange rate risks.
Fuel Price Risk
Due to the nature of our distribution business, we are exposed to potential volatility in fuel prices. The price and availability of diesel fuel  uctuates 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 con dence and discretionary spending and thus reduce the
frequency and amount spent by consumers for food-away-from-home purchases. Second, the high cost of fuel can increase the price we pay for product
purchases and we may not be able to pass these costs fully to our customers. Third, increased fuel costs impact the costs we incur to deliver product to
our customers. During each of  scal 2014, 2013 and 2012, fuel costs related to outbound deliveries represented approximately 0.7% of sales. Fuel costs,
excluding any amounts recovered through fuel surcharges, incurred by Sysco increased by approximately $16.5 million in  scal 2014 from  scal 2013 and
by $18.9 million in  scal 2013 over  scal 2012.