XML 31 R19.htm IDEA: XBRL DOCUMENT v3.8.0.1
Fair Value Measurements
6 Months Ended
Jan. 28, 2018
Fair Value Disclosures [Abstract]  
Fair Value Measurements
Fair Value Measurements
We categorize financial assets and liabilities based on the following fair value hierarchy:
Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2: Inputs other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with observable market data.
Level 3: Unobservable inputs, which are valued based on our estimates of assumptions that market participants would use in pricing the asset or liability.
Fair value is defined as the 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 as of the measurement date. When available, we use unadjusted quoted market prices to measure the fair value and classify such items as Level 1. If quoted market prices are not available, we base fair value upon internally developed models that use current market-based or independently sourced market parameters such as interest rates and currency rates. Included in the fair value of derivative instruments is an adjustment for credit and nonperformance risk.
Assets and Liabilities Measured at Fair Value on a Recurring Basis
The following table presents our financial assets and liabilities that are measured at fair value on a recurring basis as of January 28, 2018, and July 30, 2017, consistent with the fair value hierarchy:
 
Fair Value
as of
January 28,
2018
 
Fair Value Measurements at
January 28, 2018 Using
Fair Value Hierarchy
 
Fair Value
as of
July 30,
2017
 
Fair Value Measurements at
July 30, 2017 Using
Fair Value Hierarchy
 
Level 1
 
Level 2
 
Level 3
 
Level 1
 
Level 2
 
Level 3
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward starting interest rate swaps(1)
$
10

 
$

 
$
10

 
$

 
$

 
$

 
$

 
$

Treasury lock contracts(2)
1

 

 
1

 

 

 

 

 

Foreign exchange forward contracts(3)
1

 

 
1

 

 
3

 

 
3

 

Commodity derivative contracts(4)
5

 
4

 
1

 

 
6

 
6

 

 

Deferred compensation derivative contracts(5)
3

 

 
3

 

 
1

 

 
1

 

Fair value option investments (6)
70

 

 

 
70

 
50

 

 
1

 
49

Total assets at fair value
$
90

 
$
4

 
$
16

 
$
70

 
$
60

 
$
6

 
$
5

 
$
49

 
Fair Value
as of
January 28,
2018
 
Fair Value Measurements at
January 28, 2018 Using
Fair Value Hierarchy
 
Fair Value
as of
July 30,
2017
 
Fair Value Measurements at
July 30, 2017 Using
Fair Value Hierarchy
 
 
Level 1
 
Level 2
 
Level 3
 
 
Level 1
 
Level 2
 
Level 3
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Forward starting interest rate swaps(1)
$

 
$

 
$

 
$

 
$
22

 
$

 
$
22

 
$

Foreign exchange forward contracts(3)
6

 

 
6

 

 
21

 

 
21

 

Commodity derivative contracts(4)
2

 
2

 

 

 
1

 
1

 

 

Deferred compensation obligation(7)
127

 
127

 

 

 
112

 
112

 

 

Total liabilities at fair value
$
135

 
$
129

 
$
6

 
$

 
$
156

 
$
113

 
$
43

 
$

___________________________________ 
(1) 
Based on LIBOR swap rates.
(2) 
Based on U.S. Treasury rates.
(3) 
Based on observable market transactions of spot currency rates and forward rates.
(4) 
Based on quoted futures exchanges and on observable prices of futures and options transactions in the marketplace.
(5) 
Based on LIBOR and equity index swap rates.
(6) 
Primarily represents investments in equity securities that are not readily marketable and are accounted for under the fair value option. The investments were funded by Acre. See Note 12 for additional information. Fair value is based on analyzing recent transactions and transactions of comparable companies, and the discounted cash flow method. In addition, allocation methods, including the option pricing method, are used in distributing fair value among various equity holders according to rights and preferences. Changes in the fair value of investments were not material in 2018 or 2017.
(7) 
Based on the fair value of the participants’ investments.
Items Measured at Fair Value on a Nonrecurring Basis
In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain items at fair value on a nonrecurring basis.
During the second quarter of 2018, we performed an interim impairment assessment as of December 31, 2017, and recognized an impairment charge of $75 on goodwill of the Bolthouse Farms carrot and carrot ingredients reporting unit, which represented the remaining carrying value of goodwill.
Fair value was determined based on unobservable Level 3 inputs. The fair value of goodwill was determined based on discounted cash flow analysis that include significant management assumptions such as revenue growth rates, operating margins, weighted average cost of capital, and future economic and market conditions.
See Note 5 for additional information on the impairment charge.
Fair Value of Financial Instruments
The carrying values of cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings, excluding the current portion of long-term debt, approximate fair value.
Cash equivalents of $16 at January 28, 2018, and $8 at July 30, 2017, represent fair value as these highly liquid investments have an original maturity of three months or less. Fair value of cash equivalents is based on Level 2 inputs.
The fair value of long-term debt, including the current portion of long-term debt in Short-term borrowings, was $2,516 at January 28, 2018, and $2,582 at July 30, 2017. The carrying value was $2,486 at January 28, 2018, and $2,499 at July 30, 2017. The fair value of long-term debt is principally estimated using Level 2 inputs based on quoted market prices or pricing models using current market rates.