Derivative Financial Instruments

12 Months Ended

Oct. 25, 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 October 25, 2013.

At October 25, 2013, we had $29,505 notional amount of foreign currency contracts that mature during fiscal year 2014. 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 Consolidated Statements of Operations when the underlying hedged item is realized. At October 26, 2012, we had $9,198 notional amount of foreign currency contracts maturing in fiscal year 2013. There was no material ineffectiveness for these hedges during 2013 or 2012.

At October 25, 2013 and October 26, 2012, we had no interest rate hedges 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 Consolidated Balance Sheets as of October 25, 2013 and October 26, 2012 represent 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. There was no material ineffectiveness related to these hedges for the 2013 and 2012 fiscal periods.

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

		Fair Value at		Fair Value at
		October 25, 2013		October 26, 2012
Assets
Prepaid expenses and other:
Foreign currency contracts	$	—	$	16
Total Assets	$	—	$	16
Liabilities
Accrued liabilities other:
Foreign currency contracts	$	145	$	—
Total Liabilities	$	145	$	—

Derivative gains (losses) recognized in AOCI¹ and on the Consolidated Statements of Operations for fiscal year ended October 25, 2013 and October 26, 2012, respectively, are as follows:

For the Year Ended October 25, 2013		Amount of Gain				Amount of Gain
		(Loss)				(Loss)
		Recognized in		Statement of Operations		Recognized in
		AOCI 1		Classification		Earnings 1
Derivatives designated as cash flow hedges
Foreign currency contracts	$	(160	)	Other income (expense), net	$	135
Treasury lock contracts		1,278		Interest expense		(1,278	)
Total derivatives designated as cash flow hedges	$	1,118		Total	$	(1,143	)
For the Year Ended October 26, 2012		Amount of Gain				Amount of Gain
		(Loss)				(Loss)
		Recognized in		Statement of Operations		Recognized in
		AOCI 1		Classification		Earnings 1
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	)

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.