Fair Value

9 Months Ended

Aug. 03, 2019

The Company defines fair value as the price that would be received to sell an asset or be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Level 1 — Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

Level 2 — Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3 — Level 3 inputs are unobservable inputs for the asset or liability in which there is little, if any, market activity for the asset or liability at the measurement date.

The tables below, set forth by level, presents the Company’s financial assets and liabilities, excluding accrued interest components that were accounted for at fair value on a recurring basis as of August 3, 2019 and November 3, 2018. The tables exclude cash on hand and assets and liabilities that are measured at historical cost or any basis other than fair value. As of August 3, 2019 and November 3, 2018, the Company held $250.7 million and $217.6 million, respectively, of cash and held-to-maturity investments that were excluded from the tables below.



	August 3, 2019
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	321,499	$	—	$	321,499
Corporate obligations (1)	—		39,968		39,968
Other assets:
Deferred compensation investments	46,888		—		46,888
Total assets measured at fair value	$	368,387	$	39,968	$	408,355
Liabilities
Forward foreign currency exchange contracts (2)	—		3,746		3,746
Interest rate derivatives	—		121,754		121,754
Total liabilities measured at fair value	$	—	$	125,500	$	125,500


(1)	The amortized cost of the Company’s investments classified as available-for-sale as of August 3, 2019 was $40.0 million.


(2)	The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.



	November 3, 2018
	Fair Value measurement at Reporting Date using:
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Total
Assets
Cash equivalents:
Available-for-sale:
Government and institutional money market funds	$	394,076	$	—	$	394,076
Corporate obligations (1)	—		204,886		204,886
Other assets:
Deferred compensation investments	41,001		—		41,001
Interest rate derivatives	—		1,436		1,436
Total assets measured at fair value	$	435,077	$	206,322	$	641,399
Liabilities
Forward foreign currency exchange contracts (2)	—		7,150		7,150
Total liabilities measured at fair value	$	—	$	7,150	$	7,150


(1)	The amortized cost of the Company’s investments classified as available-for-sale as of November 3, 2018 was $205.0 million.


(2)	The Company has master netting arrangements by counterparty with respect to derivative contracts. See Note 9, Derivatives, in these Notes to Condensed Consolidated Financial Statements for more information related to the Company's master netting arrangements.

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

Cash equivalents — These investments are adjusted to fair value based on quoted market prices or are determined using a yield curve model based on current market rates.

Deferred compensation plan investments — The fair value of these mutual fund, money market fund and equity investments are based on quoted market prices.

Interest rate derivatives — The fair value of the interest rate derivatives is estimated using a discounted cash flow analysis based on the contractual terms of the derivative.

Forward foreign currency exchange contracts — The estimated fair value of forward foreign currency exchange contracts, which includes derivatives that are accounted for as cash flow hedges and those that are not designated as cash flow hedges, is based on the estimated amount the Company would receive if it sold these agreements at the reporting date taking into consideration current interest rates as well as the creditworthiness of the counterparty for assets and the Company’s creditworthiness for liabilities. The fair value of these instruments is based upon valuation models using current market information such as strike price, spot rate, maturity date and volatility.

Financial Instruments Not Recorded at Fair Value on a Recurring Basis

The table below presents the estimated fair value of certain financial instruments not recorded at fair value on a recurring basis. The carrying amounts of the term loans approximate fair value. The term loans are classified as Level 2 measurements according to the fair value hierarchy. The fair values of the senior unsecured notes are obtained from broker prices and are classified as Level 1 measurements according to the fair value hierarchy. See Note 10, Debt, in these Notes to Condensed Consolidated Financial Statements for further discussion related to outstanding debt.



	August 3, 2019				November 3, 2018
	Principal Amount Outstanding		Fair Value		Principal Amount Outstanding		Fair Value
3-Year term loan, due March 2022	$	1,125,000	$	1,125,000	$	—	$	—
3-Year term loan, due March 2020	—		—		425,000		425,000
5-Year term loan, due March 2022	—		—		1,350,000		1,350,000
2.85% Senior unsecured notes, due March 2020	300,000		301,375		300,000		298,147
2.95% Senior unsecured notes, due January 2021	450,000		455,147		450,000		444,568
2.50% Senior unsecured notes, due December 2021	400,000		403,714		400,000		386,375
2.875% Senior unsecured notes, due June 2023	500,000		512,529		500,000		479,189
3.125% Senior unsecured notes, due December 2023	550,000		568,844		550,000		529,120
3.90% Senior unsecured notes, due December 2025	850,000		921,161		850,000		829,611
3.50% Senior unsecured notes, due December 2026	900,000		944,452		900,000		848,027
4.50% Senior unsecured notes, due December 2036	250,000		273,838		250,000		232,627
5.30% Senior unsecured notes, due December 2045	400,000		494,982		400,000		407,984
Total debt	$	5,725,000	$	6,001,042	$	6,375,000	$	6,230,648

- 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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