DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Oct. 02, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

10. DERIVATIVE FINANCIAL INSTRUMENTS

During fiscal 2009, the Company entered into two separate three-year interest rate swap agreements with an aggregate notional amount of $80.0 million. The swap agreements effectively fixed the interest rate on $80.0 million of the Company's term loan, of which $40.0 million was at 1.81% and $40.0 million was at 1.80%, excluding the applicable margin and associated fees. Both interest rate swaps were designated as cash flow hedges. The swap agreements expired according to their terms on January 30, 2012 and May 12, 2012.

In order to limit the price variability in fuel purchases associated with its distribution operations, the Company has entered into a series of purchased call options and written put options. The options effectively establish a low and high purchase price, excluding shipping, handling and taxes, for a set amount of gallons. All of the options are deemed to be net purchase options which are designated as a cash flow hedge. The following table summarizes the primary terms for options that have been entered into or were in effect during the reporting periods:

		Option Period		Price Per Gallon
Contract Date	Gallons Under Options	Begin	End	Low	High
12-14-09	1,092,000	01-01-10	06-30-10	$1.62	$2.40
05-04-10	168,000	08-01-10	10-31-10	$2.09	$2.60
05-04-10	588,000	07-01-10	10-31-10	$2.12	$2.60
11-16-10	1,092,000	12-01-10	04-30-11	$1.95	$2.56
01-05-11	1,344,000	05-01-11	11-30-11	$2.43	$2.80
08-05-11	1,218,000	12-01-11	05-31-12	$2.77	$3.13
10-04-11	1,260,000	06-01-12	11-30-12	$2.50	$2.88
05-08-12	1,260,000	12-01-12	11-30-13	$2.84	$3.20
06-07-12	1,260,000	12-01-12	11-30-13	$2.59	$2.96

The following tables present the required fair value quantitative disclosures, on a combined basis, for the Company's financial instruments, designated as cash flow hedges (in thousands):

		Carrying Value		Quoted Prices in Active Markets for Identical Instruments (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Fair Value Measurement as of October 2, 2012:
Net purchase options (included with Prepaid Expenses and Other Current Assets on the balance sheet)	$	302	$	-	$	302	$	-
Fair Value Measurement as of October 2, 2011:
Interest rate swaps (included with Other Long-Term Liabilities on the balance sheet)	$	565	$	-	$	565	$	-
Net purchase options (included with Prepaid Expenses and Other Current Assets on the balance sheet)	$	16	$	-	$	16	$	-
Net purchase options (included with Accounts Payable on the Balance Sheet)	$	276	$	-	$	276	$	-

There were no transfers into or out of Level 1 and Level 2 fair value measurements during the year ended October 2, 2012.

The pre-tax unrealized gains (losses) associated with the cash flow hedges for the fiscal years were as follows (in thousands):

		2012		2011		2010
Unrealized gains (losses) recorded in other comprehensive income	$	1,036	$	758	$	(975	)