Derivative Financial Instruments

9 Months Ended

Jul. 26, 2013

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

NOTE 8 – DERIVATIVE FINANCIAL INSTRUMENTS

We use derivative financial instruments to manage 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 July 26, 2013.

At July 26, 2013, we had $2,895 and $2,572notional amount of foreign currency contracts that mature during fiscal year 2013 and 2014, respectively. These foreign currency contracts have been designated as cash flow hedges with unrealized gains or losses recorded in accumulated other comprehensive income (loss). Gains and losses are reclassified from accumulated other comprehensive income (loss) to other expense (income) in the Statement of Operations when the underlying hedged item is realized. At July 27, 2012, we had $3,249 and $2,786 notional amount of foreign currency contracts that matured in fiscal year 2012 and 2013, respectively. There was no material ineffectiveness related to these hedges during the quarter or year-to-date periods ended July 26, 2013 or July 27, 2012. 

At July 26, 2013 and July 27, 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 (loss) in the first quarter of fiscal year 2012. The accumulated other comprehensive loss amount in our Condensed Consolidated Balance Sheets as of July 26, 2013 and July 27, 2012 represents the unamortized net losses, net of tax, from our settled contracts. Unamortized net losses are reclassified ratably to interest expense in our Condensed Consolidated Statements of Operations over the term of the related debt. There was no material ineffectiveness related to these hedges. 

Our derivative assets and liabilities subject to fair value measurement (see Note 7) include the following:

	Fair Value at July 26, 2013		Fair Value at October 26, 2012		Fair Value at July 27, 2012
Assets
Prepaid expenses and other
Foreign currency contracts	$	94	$	16	$	42
Total Assets	$	94	$	16	$	42

Derivative gains (losses) recognized in AOCI¹ and on the Condensed Consolidated Statements of Operations for the three and nine months ended July 26, 2013 and July 27, 2012, respectively, are as follows:

Three Months Ended July 26, 2013	Amount of Gain (Loss) recognized in AOCI1		Statement of Operations Classification	Gain (Loss) recognized in Net Income1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	38	Other income / (expense), net	$	42
Treasury lock contracts		320	Interest expense		(320	)
Total derivatives designated as cash flow hedges	$	358	Total	$	(278	)
Three Months Ended July 27, 2012	Amount of Gain (Loss) recognized in AOCI1		Statement of Operations Classification	Gain (Loss) recognized in Net Income1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	224	Other income / (expense), net	$	62
Treasury lock contracts		319	Interest expense		(319	)
Total derivatives designated as cash flow hedges	$	543	Total	$	(257	)

Nine Months Ended July 26, 2013	Amount of Gain (Loss) recognized in AOCI1			Statement of Operations Classification	Gain (Loss) recognized in Net Income1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	79		Other income / (expense), net	$	84
Treasury lock contracts		958		Interest expense		(958	)
Total derivatives designated as cash flow hedges	$	1,037		Total	$	(874	)
Nine Months Ended July 27, 2012	Amount of Gain (Loss) recognized in AOCI1			Statement of Operations Classification	Gain (Loss) recognized in Net Income1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	38		Other income / (expense), net	$	414
Treasury lock contracts		(7,406	)	Interest expense		(464	)
Total derivatives designated as cash flow hedges	$	(7,368	)	Total	$	(50	)

¹ Accumulated other comprehensive income (loss) (AOCI) is included in the Condensed Consolidated Balance Sheets in the Stockholders' Equity section and is reported net of tax. The amounts disclosed in the above table are reported pretax and represent the quarterly derivative activity.