Fair Value Measurement

3 Months Ended

Jan. 24, 2014

NOTE 6 – FAIR VALUE MEASUREMENT

We measure certain assets and liabilities at fair value or disclose the fair value of certain assets and liabilities recorded at cost in the Condensed Consolidated Financial Statements on both a recurring and non-recurring basis. Fair value is defined as an exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value accounting rules establish a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs. Observable inputs must be used when available. Observable inputs are inputs that market participants would use in valuing the asset or liability based on market data obtained from independent sources. Unobservable inputs are inputs that reflect our assumptions about the factors market participants would use in valuing the asset or liability based upon the best information available. Assets and liabilities measured at fair value are to be categorized into one of the three hierarchy levels based on the inputs used in the valuation. We classify assets and liabilities in their entirety based on the lowest level of input significant to the fair value measurement. Transfers of instruments between levels are recorded based on end of period values. There were no transfers between levels for all periods presented. The three levels are defined as follows:

Level 1: Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Observable inputs based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.
Level 3: Unobservable inputs that reflect an entity's own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.

Recurring Fair Value Measurements

The following tables provide information by level for assets and liabilities that are recorded at fair value on a recurring basis:


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		January 24, 2014		Level 1		Level 2		Level 3
Assets
Cash equivalents	$	62,238	$	62,238	$	—	$	—
Restricted cash ¹		3,241		3,241		—		—
Total Assets	$	65,479	$	65,479	$	—	$	—
Liabilities
Foreign currency contracts ²	$	398	$	—	$	398	$	—
Total Liabilities	$	398	$	—	$	398	$	—


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		October 25, 2013		Level 1		Level 2		Level 3
Assets
Cash equivalents	$	69,671	$	69,671	$	—	$	—
Restricted cash ¹		3,550		3,550		—		—
Total Assets	$	73,221	$	73,221	$	—	$	—
Liabilities
Foreign currency contracts ²	$	145	$	—	$	145	$	—
Total Liabilities	$	145	$	—	$	145	$	—


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		January 25, 2013		Level 1		Level 2		Level 3
Assets
Cash equivalents	$	92,296	$	92,296	$	—	$	—
Restricted cash ¹		19,893		19,893		—		—
Total Assets	$	112,189	$	112,189	$	—	$	—
Liabilities
Foreign currency contracts ²	$	5	$	—	$	5	$	—
Total Liabilities	$	5	$	—	$	5	$	—

1	Restricted cash represents cash that is restricted from withdrawal for contractual or legal reasons.
2	Foreign currency contracts are included in prepaid expenses and other when in an asset position and other accrued liabilities when in a liability position in the Condensed Consolidated Balance Sheets. The fair market value was estimated using observable market data for similar financial instruments. See Note 7 for additional information on derivative financial instruments.

The following tables provide information regarding the estimated fair value of our outstanding debt. We did not elect the option to report our debt at fair value in our Condensed Consolidated Balance Sheets.


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		January 24, 2014		Level 1		Level 2		Level 3
Debt ³
Publicly traded debt	$	1,090,795	$	1,090,795	$	—	$	—
Non-publicly traded debt		552,197		—		552,197		—
Total Debt	$	1,642,992	$	1,090,795	$	552,197	$	—


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		October 25, 2013		Level 1		Level 2		Level 3
Debt ³
Publicly traded debt	$	1,097,309	$	1,097,309	$	—	$	—
Non-publicly traded debt		478,557		—		478,557		—
Total Debt	$	1,575,866	$	1,097,309	$	478,557	$	—


		Fair Value at		Fair Value Measurements Using Inputs Considered as
		January 25, 2013		Level 1		Level 2		Level 3
Debt ³
Publicly traded debt	$	1,155,541	$	1,155,541	$	—	$	—
Non-publicly traded debt		269,102		—		269,102		—
Total Debt	$	1,424,643	$	1,155,541	$	269,102	$	—

Debt is recorded at carrying value of $1,552,516, $1,478,557 and $1,269,583 on the Condensed Consolidated Balance Sheet as of January 24, 2014, October 25, 2013 and January 25, 2013, respectively. The fair value of our publicly traded debt is based on quoted prices (unadjusted) in active markets. The fair market value of our non-publicly traded debt was estimated using a discounted cash flow analysis based on our current borrowing costs for debt with similar maturities. In addition, the carrying values of our commercial paper included in non-publicly traded debt approximate the financial instrument's fair value as the maturities are less than three months. See Note 8 for additional information on debt.

Nonrecurring Fair Value Measurements

We measure certain assets at fair value on a nonrecurring basis. These assets primarily include assets acquired and liabilities assumed as part of an acquisition. See Note 2 for further information on our acquisitions.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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