v3.23.2
Derivatives and Hedging Activities (Tables)
 12 Months Ended
Jul. 01, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Outstanding Swap Agreements The following table summarizes the outstanding swap agreements as of July 1, 2023 (in millions):

 

Effective Date

 

Maturity Date

 

Notional
Amount

 

 

Fixed Rate
Swapped

 

April 17, 2023

 

December 15, 2024

 

$

350.0

 

 

 

0.77

%

December 16, 2024

 

December 15, 2027

 

$

100.0

 

 

 

3.14

%
Effect of Interest Rate Swaps Designated in Hedging Relationships on Consolidated Statement of Operations

The tables below present the effect of the interest rate swaps designated in hedging relationships on the consolidated statement of operations for the fiscal years ended July 1, 2023, July 2, 2022, and July 3, 2021:

 

(in millions)

 

Fiscal year
ended
July 1, 2023

 

 

Fiscal year
ended
July 2, 2022

 

 

Fiscal year
ended
July 3, 2021

 

Amount of (gain) loss recognized in OCI, pre-tax

 

$

(15.4

)

 

$

(19.3

)

 

$

(2.4

)

Tax expense (benefit)

 

 

3.9

 

 

 

5.0

 

 

 

0.6

 

Amount of (gain) loss recognized in OCI, after-tax

 

$

(11.5

)

 

$

(14.3

)

 

$

(1.8

)

Amount of (loss) gain reclassified from OCI into interest expense, pre-tax

 

$

10.8

 

 

$

(4.9

)

 

$

(4.3

)

Tax benefit (expense)

 

 

(2.7

)

 

 

1.2

 

 

 

1.1

 

Amount of (loss) gain reclassified from OCI into interest expense, after-tax

 

$

8.1

 

 

$

(3.7

)

 

$

(3.2

)

Total interest expense

 

$

218.0

 

 

$

182.9

 

 

$

152.4

 
Summary of Fair Value of Derivative Financial Instruments

The Company does not currently have a payable or receivable related to cash collateral for its derivatives, and therefore it has not established an accounting policy for offsetting the fair value of its derivatives against such balances. The table below presents the fair value of the derivative financial instruments as well as their classification on the balance sheet as of July 1, 2023 and July 2, 2022:

 

(in millions)

 

Balance Sheet Location

 

Fair Value
as of
July 1, 2023

 

 

Fair Value
as of
July 2, 2022

 

Assets

 

 

 

 

 

 

 

 

Derivatives designated as hedges:

 

 

 

 

 

 

 

 

Interest rate swaps

 

Prepaid expenses and other current assets

 

$

14.8

 

 

$

7.3

 

Interest rate swaps

 

Other assets

 

 

6.9

 

 

 

9.9

 

Derivatives not designated as hedges:

 

 

 

 

 

 

 

 

Diesel fuel derivative instruments

 

Prepaid expenses and other current assets

 

$

—

 

 

$

16.1

 

Diesel fuel derivative instruments

 

Other assets

 

 

—

 

 

 

—

 

Other derivative instruments

 

Prepaid expenses and other current assets

 

 

—

 

 

 

0.2

 

Total assets

 

 

 

$

21.7

 

 

$

33.5

 

Liabilities

 

 

 

 

 

 

 

 

Derivatives designated as hedges:

 

 

 

 

 

 

 

 

Interest rate swaps

 

Accrued expenses and other current liabilities

 

$

—

 

 

$

—

 

Interest rate swaps

 

Other long-term liabilities

 

 

—

 

 

 

—

 

Derivatives not designated as hedges:

 

 

 

 

 

 

 

 

Diesel fuel derivative instruments

 

Accrued expenses and other current liabilities

 

$

4.2

 

 

$

1.2

 

Diesel fuel derivative instruments

 

Other long-term liabilities

 

 

—

 

 

 

0.9

 

Other derivative instruments

 

Accrued expenses and other current liabilities

 

 

0.5

 

 

$

—

 

Total liabilities

 

 

 

$

4.7

 

 

$

2.1

 
Summary of Derivative Assets and Liability Balance by Type of Financial Instrument Before and After Effects of Offsetting The tables below present the derivative assets and liability balance, before and after the effects of offsetting, as of July 1, 2023 and July 2, 2022:

 

 

 

July 1, 2023

 

 

July 2, 2022

 

(In millions)

 

Gross
Amounts
Presented
in the
Consolidated
Balance Sheet

 

 

Gross Amounts
Not Offset in
the Consolidated
Balance Sheet
Subject to
Netting
Agreements

 

 

Net
Amounts

 

 

Gross Amounts
Presented in
the Consolidated
Balance Sheet

 

 

Gross Amounts
Not Offset in
the Consolidated
Balance Sheet
Subject to
Netting
Agreements

 

 

Net
Amounts

 

Total asset derivatives:

 

$

21.7

 

 

$

(2.9

)

 

$

18.8

 

 

$

33.5

 

 

$

(2.1

)

 

$

31.4

 

Total liability derivatives:

 

 

(4.7

)

 

 

2.9

 

 

 

(1.8

)

 

 

(2.1

)

 

 

2.1

 

 

 

—