Derivative Financial Instruments

12 Months Ended

Oct. 26, 2012

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 26, 2012.

At October 26, 2012, we had $9,198 notional amount of foreign currency contracts that mature during fiscal year 2013. These foreign currency contracts have been designated as cash flow hedges with unrealized gains or losses recorded in accumulated other comprehensive income (loss). Realized gains and losses were recognized in other expense (income) when they occurred. At October 28, 2011, we had $9,766 notional amount of foreign currency contracts maturing in fiscal year 2012. There was no material ineffectiveness for these hedges during 2012 or 2011.

At October 26, 2012, we had no treasury lock contracts in place. During the first quarter of 2012, we settled $200,000 notional amount of treasury lock contracts as a result of issuing $400,000 of Senior Notes, yielding a pretax loss of $27,875. This loss was recognized net of tax, in accumulated other comprehensive income in the first quarter of fiscal year 2012. The accumulated other comprehensive loss amount in our Consolidated Balance Sheets as of October 26, 2012 represents the unamortized gains and losses, net of tax, from our settled contracts. Unamortized gains and losses are reclassified ratably to interest expense in our Consolidated Statements of Operations over the term of the related debt. 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 issuances. 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 loss amount in our Consolidated Balance Sheet as of October 28, 2011 represents the unrealized gains and losses, net of tax, from our current contracts and unamortized net gains, net of tax, from our settled contracts. There was no material ineffectiveness related to these hedges for the 2012 and 2011 fiscal periods.

At October 26, 2012, we had no interest rate derivative contracts. We had $50,000 notional amount of interest rate derivative contracts that matured in fiscal year 2011. 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.

Our derivative assets and liabilities subject to fair value measurement (see Note 18) include the following:

	Fair Value at October 26, 2012		Fair Value at October 28, 2011
Assets
Prepaid expenses and other:
Foreign currency contracts	$	16	$	3
Total Assets	$	16	$	3
Liabilities
Accrued liabilities other:
Treasury lock contracts	$	—	$	20,005
Total Liabilities	$	—	$	20,005

Derivative gains (losses) recognized in AOCI¹ and on the Consolidated Statements of Operations for fiscal year ended October 26, 2012 and October 28, 2011, respectively, are as follows:

For the Year Ended October 26, 2012	Amount of Gain (Loss) Recognized in AOCI1			Statement of Operations Classification	Amount of Gain (Loss) Recognized in Earnings1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	12		Other income (expense), net	$	434
Treasury lock contracts		(7,086	)	Interest expense		(784	)
Total derivatives designated as cash flow hedges	$	(7,074	)	Total	$	(350	)
For the Year Ended October 28, 2011	Amount of Gain (Loss) Recognized in AOCI1			Statement of Operations Classification	Amount of Gain (Loss) Recognized in Earnings1
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

¹ 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.