Fair Value Measurements

6 Months Ended

Jan. 27, 2013

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The company is required to 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 that reflect the reporting entity’s own assumptions.

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, the company uses unadjusted quoted market prices to measure the fair value and classifies such items as Level 1. If quoted market prices are not available, the company bases 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 the company’s financial assets and liabilities that are measured at fair value on a recurring basis as of January 27, 2013, and July 29, 2012, consistent with the fair value hierarchy:

	Fair Value as of January 27, 2013		Fair Value Measurements at January 27, 2013 Using Fair Value Hierarchy						Fair Value as of July 29, 2012		Fair Value Measurements at July 29, 2012 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Assets
Interest rate swaps(1)	$	6	$	—	$	6	$	—	$	13	$	—	$	13	$	—
Forward starting interest rate swaps(1)	9		—		9		—		2		—		2		—
Foreign exchange forward contracts(2)	1		—		1		—		2		—		2		—
Cross-currency swap contracts(3)	2		—		2		—		19		—		19		—
Commodity derivative contracts(4)	5		3		2		—		8		5		3		—
Deferred compensation derivative contracts(5)	2		—		2		—		1		—		1		—
Total assets at fair value	$	25	$	3	$	22	$	—	$	45	$	5	$	40	$	—

	Fair Value as of January 27, 2013		Fair Value Measurements at January 27, 2013 Using Fair Value Hierarchy						Fair Value as of July 29, 2012		Fair Value Measurements at July 29, 2012 Using Fair Value Hierarchy
			Level 1		Level 2		Level 3				Level 1		Level 2		Level 3
Liabilities
Foreign exchange forward contracts(2)	$	1	$	—	$	1	$	—	$	—	$	—	$	—	$	—
Cross-currency swap contracts(3)	80		—		80		—		79		—		79		—
Commodity derivative contracts(4)	3		1		2		—		4		2		2		—
Deferred compensation obligation(6)	123		123		—		—		109		109		—		—
Total liabilities at fair value	$	207	$	124	$	83	$	—	$	192	$	111	$	81	$	—

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(1) Based on LIBOR swap rates.

(2) Based on observable market transactions of spot currency rates and forward rates.

(3) Based on observable local benchmarks for currency and interest 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) Based on the fair value of the participants’ investments.

Fair Value of Financial Instruments

The carrying value 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 $202 at January 27, 2013 and $80 at July 29, 2012 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 $3,461 at January 27, 2013 and $2,663 at July 29, 2012. The carrying value was $3,250 at January 27, 2013 and $2,408 at July 29, 2012. 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.