Derivatives

9 Months Ended

Mar. 27, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

Derivatives

The Company uses interest rate swaps and cap agreements to convert a portion of its variable interest rate exposure to fixed rates to protect the Company from future interest rate increases. The Company’s interest rate swap and cap agreements consist of the following:

	March 27, 2022			June 27, 2021
	Notional Amounts		Expiration	Notional Amounts		Expiration
Interest rate swaps	$	552,500	June 30, 2022	$	552,500	June 30, 2022
Interest rate caps	97,500		March 31, 2022	97,500		March 31, 2022
Total notional amounts	$	650,000		$	650,000

Under the swap agreements, the Company pays a fixed rate of interest of 2.561% and receives an average variable rate of the one-month LIBOR adjusted monthly. Under the interest rate cap agreements, the Company pays a fixed rate fee of 0.179% on the notional amount and has a strike rate of 3.00%.

The fair values of the swap and cap agreements as of March 27, 2022 and June 27, 2021 were liabilities of $2,141 and $8,869, respectively, and are included in other current liabilities in the consolidated balance sheets.

The reclassifications from accumulated other comprehensive income ("AOCI") into income during the three and nine months ended March 27, 2022 and March 28, 2021 were as follows:

	Three Months Ended				Nine Months Ended
	March 27, 2022		March 28, 2021		March 27, 2022		March 28, 2021
Interest expense reclassified from AOCI into net loss	$	2,205	$	2,266	$	6,610	$	6,798

The fair value of the Swap and Cap Agreements excludes accrued interest and takes into consideration current interest rates and current likelihood of the swap counterparties’ compliance with its contractual obligations. There are no income taxes related to the amounts recorded to AOCI due to tax credits and the full valuation allowance on deferred taxes.