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DERIVATIVE FINANCIAL INSTRUMENTS
 6 Months Ended
Dec. 26, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS DERIVATIVE FINANCIAL INSTRUMENTSSysco 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. In the first quarter of fiscal 2021, Sysco settled some of its previously held interest rate swap contracts, which had a notional value of $750 million, due to the redemption of Sysco’s 2.60% senior notes.

Hedging of foreign currency risk

Sysco previously entered into cross-currency swap contracts to hedge the foreign currency transaction risk of certain intercompany loans. There were no credit-risk related contingent features associated with these swaps, which had been designated as cash flow hedges. In the first quarter of 2021, Sysco settled its cross-currency swaps, which had a notional value of £234 million. The company also uses euro-bond denominated debt to hedge the foreign currency exposure of our net investment in certain foreign operations. Additionally, Sysco’s operations in Europe have inventory purchases denominated in currencies other than their functional currency, such as the euro, U.S. 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 December 26, 2020 are presented below:

Maturity Date of the Hedging InstrumentCurrency / Unit of MeasureNotional Value
(In millions)
Hedging of interest rate risk
July 2021U.S. Dollar500
June 2023Euro500
March 2025U.S. Dollar500
Hedging of foreign currency risk
Various (December 28, 2020 to January 2021)Swedish Krona64
June 2023Euro500
Hedging of fuel risk
Various (December 31, 2020 to December 2021)Gallons33
The location and the fair value of derivative instruments designated as hedges in the consolidated balance sheet as of December 26, 2020 and June 27, 2020 are as follows:
 Derivative Fair Value
 Balance Sheet locationDec. 26, 2020Jun. 27, 2020
(In thousands)
Fair Value Hedges:
Interest rate swapsOther current assets$2,678 $1,388 
Interest rate swapsOther assets58,053 69,782 
Cash Flow Hedges:
Fuel swapsOther current assets$3,428 $233 
Foreign currency forwardsOther current assets34 1,063 
Fuel swapsOther assets— 1,173 
Cross currency swapsOther assets— 19,614 
Fuel swapsOther current liabilities6,973 28,242 
Foreign currency forwardsOther current liabilities163 222 

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:

13-Week Period Ended26-Week Period Ended
Dec. 26, 2020Dec. 28, 2019Dec. 26, 2020Dec. 28, 2019
(In thousands)
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$146,498 $76,762 $293,215 $160,097 
Gain or (loss) on fair value hedging relationships:
Interest rate swaps:
Hedged items$(3,793)$(5,350)$(13,791)$(30,086)
Derivatives designated as hedging instruments(296)(9,248)3,161 (391)

    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:
13-Week Period Ended26-Week Period Ended
Dec. 26, 2020Dec. 28, 2019Dec. 26, 2020Dec. 28, 2019
(In thousands)
Interest expense$(9,735)$(14,560)$(24,568)$(29,117)
Increase (decrease) in fair value of debt(5,942)(9,210)(10,777)969 
Hedged items$(3,793)$(5,350)$(13,791)$(30,086)

The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 13-week periods ended December 26, 2020 and December 28, 2019, presented on a pretax basis, are as follows:
13-Week Period Ended Dec. 26, 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$16,939 Operating expense$(7,613)
Foreign currency contracts(587)Cost of sales / Other income— 
Total$16,352 $(7,613)
Derivatives in net investment hedging relationships:
Foreign denominated debt(27,554)N/A— 
Total$(27,554)$— 
13-Week Period Ended Dec. 28, 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$10,345 Operating expense$(3,213)
Foreign currency contracts(29,658)Cost of sales / Other income3,624 
Total$(19,313)$411 
Derivatives in net investment hedging relationships:
Foreign currency contracts$(34,639)N/A$— 
Foreign denominated debt(11,650)N/A— 
Total$(46,289)$— 

The location and effect of cash flow and net investment hedge accounting on the consolidated statements of comprehensive income for the 26-week periods ended December 26, 2020 and December 28, 2019, presented on a pretax basis, are as follows:
26-Week Period Ended Dec. 26, 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$19,830 Operating expense$(16,265)
Foreign currency contracts(20,319)Cost of sales / Other income(2,692)
Total$(489)$(18,957)
Derivatives in net investment hedging relationships:
Foreign currency contracts$— N/A$— 
Foreign denominated debt(47,953)N/A— 
Total$(47,953)$— 
26-Week Period Ended Dec. 28, 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$10,689 Operating expense$(6,619)
Foreign currency contracts(17,351)Cost of sales / Other income3,626 
Total$(6,662)$(2,993)
Derivatives in net investment hedging relationships:
Foreign currency contracts$(13,787)N/A$— 
Foreign denominated debt9,800 N/A— 
Total$(3,987)$— 
The location and carrying amount of hedged liabilities in the consolidated balance sheet as of December 26, 2020 are as follows:
Dec. 26, 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$(499,778)$(2,797)
Long-term debt(1,064,694)(58,053)

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)