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Table of Contents
Revenue Recognition
The Company does not consider revenue recognition to be a critical accounting policy due to the nature of its business because revenues
are generally recognized when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the sales
price is fixed or determinable and collectability is reasonably assured. Generally, these criteria are met upon the actual shipment of product to the
customer. Accordingly, other than for estimates related to possible returns of products from customers, discounts or rebates, the recording of
revenue does not require significant judgments or estimates.
Provisions for returns are estimated based on historical sales returns, credit memo analysis and other known factors. Provisions are made
for discounts and rebates, which are primarily volume-
based, and are generally based on historical trends and anticipated customer buying
patterns. Finally, revenues from maintenance contracts, which are deferred and recognized in income over the life of the agreement, are not
material to the consolidated results of operations of the Company.
The Company evaluates the criteria outlined in ASC Topic 605-45, Principal Agent Considerations
, in determining whether it is
appropriate to record the gross amount of revenue and related costs or the net
amount (gross fees less related cost of sales or services) earned
when acting as an agent for certain customers and suppliers. Generally, transactions that qualify for net accounting treatment consist of the sale
of supplier service contracts for which the Company has no continuing involvement or the performance of logistics services to deliver product
for which the Company is not the primary obligor.
Recently Issued Accounting Pronouncements
See Note 1 in the Notes to Consolidated Financial Statements
contained in Item 15 of this Report for the discussion of recently issued
accounting pronouncements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company seeks to reduce earnings and cash flow volatility associated with changes in interest rates and foreign currency exchange
rates by entering into financial arrangements, from time to time, which are intended to provide a hedge against all or a portion of the risks
associated with such volatility. The Company continues to have exposure to such risks to the extent they are not hedged.
The following table sets forth the scheduled maturities of the Company’s debt outstanding at June 29, 2013 (dollars in millions):
______________________
The following table sets forth the carrying value and fair value of the Company’s debt at June 29, 2013 (dollars in millions):
______________________
32
Fiscal Year
2014
2015
2016
2017
2018
Thereafter
Total
Liabilities:
Fixed rate debt
(1)
$
361.2
$
0.4
$
250.4
$
300.2
$
—
$
650.4
$
1,562.6
Floating rate debt
$
477.0
$
0.8
$
7.2
$
0.2
$
—
$
—
$
485.2
(1) Excludes discounts on long-
term notes.
Carrying Value at
June 29, 2013
Fair Value at
June 29, 2013
Carrying Value
at June 30, 2012
Fair Value at
June 30, 2012
Liabilities:
Fixed rate debt
(1)
$
1,562.6
$
1,645.1
$
1,152.8
$
1,285.6
Average interest rate
5.8
%
6.1
%
Floating rate debt
$
485.2
$
485.2
$
994.1
$
994.1
Average interest rate
1.1
%
1.5
%
(1) Excludes discounts on long-term notes. Fair value was estimated primarily based upon quoted market prices for the Company's long-
term
notes.