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DERIVATIVE FINANCIAL INSTRUMENTS
 12 Months Ended
Jun. 27, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTS
Sysco uses derivative financial instruments to enact hedging strategies for risk mitigation purposes; however, the company does not use derivative financial instruments for trading or speculative purposes. Hedging strategies are used to manage interest rate risk, foreign currency risk and fuel price risk.

Hedging of interest rate risk

Sysco manages its debt portfolio with interest rate swaps from time to time to achieve an overall desired position of fixed and floating rates.

Hedging of foreign currency risk

Sysco enters into cross-currency swap contracts to hedge the foreign currency transaction risk of certain intercompany loans. There are no credit-risk related contingent features associated with these swaps, which have been designated as cash flow hedges. The company uses euro-bond denominated debt to hedge the foreign currency exposure of our net investment in certain foreign operations. In the third quarter of fiscal 2020, Sysco settled some of its previously held cross-currency swap contracts used in net investment hedges, which resulted in a gain of $56.7 million recorded in other comprehensive income (loss). Additionally, Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the euro, United States dollar, Polish zloty and Danish krone. These inventory purchases give rise to foreign currency exposure between the functional currency of each entity and these currencies. The company enters into foreign currency forward swap contracts to sell the applicable entity’s functional currency and buy currencies matching the inventory purchase, which operate as cash flow hedges of the company’s foreign currency-denominated inventory purchases.

Hedging of fuel price risk

Sysco uses fuel commodity swap contracts to hedge against the risk of the change in the price of diesel on anticipated future purchases. These swaps have been designated as cash flow hedges.
None of the company’s hedging instruments contain credit-risk-related contingent features. Details of outstanding hedging instruments as of June 27, 2020 are presented below:

Maturity Date of the Hedging InstrumentCurrency / Unit of MeasureNotional Value
(In millions)
Hedging of interest rate risk
October 2020U.S. Dollar750
July 2021U.S. Dollar500
June 2023Euro500
March 2025U.S. Dollar500
Hedging of foreign currency risk
Various (June 29, 2020 to August 2020)Swedish Krona133
Various (July 2020 to February 2021)British Pound Sterling14
July 2021British Pound Sterling234
June 2023Euro500
Hedging of fuel risk
Various (June 30, 2020 to December 2021)Gallons54

The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of June 27, 2020 and June 29, 2019 are as follows:
 Derivative Fair Value
 Balance Sheet locationJun. 27, 2020Jun. 29, 2019
(In thousands)
Fair Value Hedges:
Interest rate swapsOther current assets$1,388 $— 
Interest rate swapsOther assets69,782 37,396 
Interest rate swapsOther long-term liabilities— 9,285 
Cash Flow Hedges:
Fuel swapsOther current assets$233 $154 
Foreign currency forwardsOther current assets1,063 624 
Fuel swapsOther assets1,173 136 
Cross currency swapsOther assets19,614 8,592 
Fuel swapsOther current liabilities28,242 6,537 
Foreign currency forwardsOther current liabilities222 162 
Fuel swapsOther long-term liabilities— 239 
Net Investment Hedges:
Foreign currency swapsOther assets$— $18,614 
Foreign currency swapsOther long-term liabilities— 9,973 
Gains or losses recognized in the consolidated results of operations for cash flow hedging relationships are not significant for each of the periods presented. The location and amount of gains or losses recognized in the consolidated results of operations for fair value hedging relationships for each of the periods, presented on a pretax basis, are as follows:


Jun. 27, 2020Jun. 29, 2019
Total amounts of income and expense line items presented in the consolidated results of operations in which the effects of fair value hedges are recorded$408,220 $360,423 
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items$(101,255)$(143,711)
Derivatives designated as hedging instruments44,489 68,689 

The losses on the fair value hedging relationships associated with the hedged items as disclosed in the table above are comprised of the following components for each of the periods presented:
Jun. 27, 2020Jun. 29, 2019
Interest expense$(58,244)$(62,443)
Increase in fair value of debt43,011 81,268 
Hedged items$(101,255)$(143,711)



The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the fiscal years ended June 27, 2020 and June 29, 2019, presented on a pretax basis, are as follows:

2020
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on DerivativesLocation of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(In thousands)(In thousands)
Derivatives in cash flow hedging relationships:
Fuel swaps$(16,586)Operating expense$(22,058)
Foreign currency contracts6,755 Cost of sales / Other income3,626 
Total$(9,831)$(18,432)
Derivatives in net investment hedging relationships:
Foreign currency contracts$51,354 N/A$— 
Foreign denominated debt7,402 N/A— 
Total$58,756 $— 
2019
Amount of Gain or (Loss) Recognized in Other Comprehensive Income on DerivativesLocation of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into IncomeAmount of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income into Income
(In thousands)(In thousands)
Derivatives in cash flow hedging relationships:
Fuel swaps$(22,100)Operating expense$8,180 
Foreign currency contracts16,706 Cost of goods sold / Other income509 
Total$(5,394)$8,689 
Derivatives in net investment hedging relationships:
Foreign currency contracts$42,488 N/A$— 
Foreign denominated debt15,650 N/A— 
Total$58,138 $— 

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of June 27, 2020 are as follows:
Jun. 27, 2020
Carrying Amount of Hedged Assets (Liabilities)Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
(In thousands)
Balance sheet location:
Current maturities of long-term debt$(749,924)$(1,388)
Long-term debt(1,563,636)(70,239)

The location and carrying amount of hedged liabilities in the consolidated balance sheet as of June 29, 2019 are as follows:
Jun. 29, 2019
Carrying Amount of Hedged Assets (Liabilities)Cumulative Amount of Fair Value Hedging Adjustments Included in the Carrying Amount of Hedged Assets (Liabilities)
(In thousands)
Balance sheet location:
Long-term debt$(2,311,636)$(28,616)