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Fair Value Measurements | 3 Months Ended
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Sep. 29, 2012
Fair Value Measurements [Abstract] |
Fair Value Measurements | 3. FAIR VALUE MEASUREMENTS Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (i.e. an exit price). The accounting guidance includes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The three levels of the fair value hierarchy are as follows:
· | Level 1 – Unadjusted quoted prices for identical assets or liabilities in active markets;
· | Level 2 – Inputs other than quoted prices in active markets for identical assets and liabilities that are observable either directly or indirectly for substantially the full term of the asset or liability; and
· | Level 3 – Unobservable inputs for the asset or liability, which include management’s own assumption about the assumptions market participants would use in pricing the asset or liability, including assumptions about risk.
Sysco’s policy is to invest in only high-quality investments. Cash equivalents primarily include time deposits, certificates of deposit, commercial paper, high-quality money market funds and all highly liquid instruments with original maturities of three months or less. Restricted cash consists of investments in high-quality money market funds. The following is a description of the valuation methodologies used for assets and liabilities 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 4, “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 and liabilities measured at fair value on a recurring basis as of September 29, 2012, June 30, 2012 and October 1, 2011:
| Assets Measured at Fair Value as of Sept. 29, 2012
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
Assets: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | $ | 134,935 |  | $ | 196,383 |  | $ | - |  | $ | 331,318
Prepaid expenses and other current assets |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreement |  | - |  |  | 1,598 |  |  | - |  |  | 1,598
Restricted cash |  | 145,233 |  |  | - |  |  | - |  |  | 145,233
Other assets |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreement |  | - |  |  | 5,961 |  |  | - |  |  | 5,961
Total assets at fair value | $ | 280,168 |  | $ | 203,942 |  | $ | - |  | $ | 484,110
| Assets Measured at Fair Value as of Jun. 30, 2012
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
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 agreement |  | - |  |  | 6,219 |  |  | - |  |  | 6,219
Total assets at fair value | $ | 355,538 |  | $ | 257,408 |  | $ | - |  | $ | 612,946
| Assets Measured at Fair Value as of Oct. 1, 2011
| Level 1 |  | Level 2 |  | Level 3 |  | Total
| (In thousands)
Assets: |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  |  |  |  |  |  |  |  |  |  |
Cash equivalents | $ | - |  | $ | 83,808 |  | $ | - |  | $ | 83,808
Restricted cash |  | 123,773 |  |  | - |  |  | - |  |  | 123,773
Other assets |  |  |  |  |  |  |  |  |  |  |
Interest rate swap agreements |  | - |  |  | 13,246 |  |  | - |  |  | 13,246
Total assets at fair value | $ | 123,773 |  | $ | 97,054 |  | $ | - |  | $ | 220,827
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 $3,551.3 million, $3,539.3 million and $3,015.6 million as of September 29, 20 12, June 30, 2012 and October 1, 20 11, respectively. The carrying value of total debt was $3,019.1 million, $3,018.3 million and $2,596.7 million as of September 29, 20 12, June 30, 2012 and October 1, 20 11, respectively.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 16 -URI http://asc.fasb.org/extlink&oid=7491637&loc=d3e13504-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15C, 15D -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. 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