Derivative Financial Instruments

12 Months Ended

Oct. 28, 2011

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS

We use derivative financial instruments to manage well-defined interest rate and foreign currency exchange risks. We enter into derivative financial instruments with high-credit quality counterparties and diversify our positions among such counterparties to reduce our exposure to credit losses. We do not have any credit-risk-related contingent features in our derivative contracts as of October 28, 2011.

At October 28, 2011, we had $9,766notional amount of foreign currency contracts that mature during fiscal year 2012. These foreign currency contracts have been designated as cash flow hedges with unrealized gains or losses recorded in accumulated other comprehensive income. Realized gains and losses were recognized in other expense (income) when they occurred. At October 29, 2010, we had approximately $8,629 notional amount of foreign currency contracts maturing in fiscal year 2011. There was no ineffectiveness for these hedges during 2011 or 2010.

At October 28, 2011, we had $200,000 notional amount of treasury locks to hedge, or lock-in, interest rates on anticipated long-term debt to be issued. We designated the treasury locks as cash flow hedges with unrealized gains and losses recorded, net of tax, to accumulated other comprehensive income. The accumulated other comprehensive income amount in our Consolidated Balance Sheets represents the unrealized losses, net of tax, from our current contracts and the unamortized gain, net of tax, from our settled contracts. The unamortized gain from our settled contracts is reclassified ratably to our Consolidated Statements of Operations as a decrease to interest expense over the term of the related bond issuance. At October 29, 2010 we had no treasury lock contracts in place.

At October 28, 2011, we had no interest rate derivative contracts. We had $50,000 notional amount of interest rate derivative contracts in place as of October 29, 2010. These contracts were designated as cash flow hedges, to pay fixed rates of interest and receive a floating interest rate based on LIBOR. Prior to maturity, the interest rate derivative contracts were reflected at fair value in the Consolidated Balance Sheets. Unrealized gains and losses were recorded in accumulated other comprehensive income. Amounts to be received or paid under the contracts were recognized as interest expense over the life of the contracts. There was no ineffectiveness for these derivatives during the 2011 and 2010 periods.Our derivative assets and liabilities subject to fair value measurement disclosures are the following:

	Fair Value at October 28, 2011			Fair Value at October 29, 2010
	Level 2 1		Level 2 1
Assets
Prepaid expenses and other:
Foreign currency contracts	$	3	$	—
Total Assets	$	3	$	—
Liabilities
Accrued liabilities other:
Foreign currency contracts	$	—	$	366
Treasury lock contracts		20,005		—
Interest rate derivative contracts		—		385
Total Liabilities	$	20,005	$	751

¹  See Note 1 for more information on fair value measurements.

Derivative gains (losses) recognized in AOCI ² and on the Consolidated Statements of Operations for fiscal year ended October 28, 2011 and October 29, 2010, respectively, are as follows:

October 28, 2011		Amount of Gain (Loss) Recognized in AOCI 2		Statement of Operations Classification		Amount of Gain (Loss) Recognized in Earnings 2
Derivatives designated as cash flow hedges
Foreign currency contracts	$	369		Other income / (expense), net	$	(647)
Treasury lock contracts		(21,569	)	Interest expense		1,564
Interest rate derivative contracts		385		Interest expense		(388)
Total derivatives designated as cash flow hedges	$	(20,815	)	Total	$	529
October 29, 2010		Amount of Gain (Loss) Recognized in AOCI 2		Statement of Operations Classification		Amount of Gain (Loss) Recognized in Earnings 2
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(195)		Other income / (expense), net	$	177
Treasury lock contracts		(1,564)		Interest expense		1,564
Interest rate derivative contracts		1,091		Interest expense		(1,354)
Total derivatives designated as cash flow hedges	$	(668)		Total	$	387

² Accumulated other comprehensive income (loss) (AOCI) is included on the Consolidated Balance Sheet in the Stockholders' Equity section and is reported net of tax. The amounts disclosed in the above table are reported pretax and represent the full year derivative activity.