Fair Value Measurements Of Assets And Liabilities

9 Months Ended

Jul. 01, 2011

Fair Value Measurements Of Assets And Liabilities

Fair Value Measurements Of Assets And Liabilities

(15) FAIR VALUE MEASUREMENTS OF ASSETS AND LIABILITIES:

Fair value is defined as the price 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. Assets and liabilities recorded at fair value are classified based upon the level of judgment associated with the inputs used to measure their fair value. The hierarchical levels related to the subjectivity of the valuation inputs are defined as follows:

• Level 1—inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets

• Level 2—inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument

• Level 3—inputs to the valuation methodology are unobservable and significant to the fair value measurement

Recurring Fair Value Measurements

The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, borrowings and derivatives. Management believes that the carrying value of cash and cash equivalents, accounts receivable and accounts payable are representative of their respective fair values. The fair value of the Company's borrowings at July 1, 2011 and October 1, 2010 was $5,853.3 million and $5,290.1 million, respectively. The carrying value of the Company's borrowings at July 1, 2011 and October 1, 2010 was $5,851.1 million and $5,401.8 million, respectively. The fair values were computed using market quotes, if available, or based on discounted cash flows using market interest rates as of the end of the respective periods. The increase in the carrying value of the Company's debt is primarily due to the adoption of the new accounting standards update on transfers of financial assets as the Company's sale of eligible receivables are now accounted for as secured borrowings (see Note 10) and an increase in borrowings on the extended U.S. Dollar revolving credit facility. At July 1, 2011 and October 1, 2010, the following financial assets and financial liabilities were measured at fair value on a recurring basis using the type of inputs shown (in thousands):

	July 1, 2011								October  1, 2010
	Level 1		Level 2		Level 3		Total		Total
Assets:
Undivided retained interest in receivables sold under the Company's Receivable Facility	$	—	$	—	$	—	$	—	$	253,331
Gasoline and diesel fuel hedge agreements		—		563		—		563		179
Total assets measured at fair value on a recurring basis	$	—	$	563	$	—	$	563	$	253,510
Liabilities:
Interest rate swap agreements	$	—	$	109,648	$	—	$	109,648	$	190,156
Cross currency swap agreements		—		48,266		—		48,266		38,261
Natural gas hedge agreements		—		49		—		49		152
Gasoline and diesel fuel hedge agreements		—		—		—		—		20
Foreign currency forward exchange contracts		—		1,625		—		1,625		2,065
Total liabilities measured at fair value on a recurring basis	$	—	$	159,588	$	—	$	159,588	$	230,654
Common Stock Subject to Repurchase	$	—	$	—	$	157,925	$	157,925	$	184,736

The following table presents the changes in financial instruments for which Level 3 inputs were significant to their valuation for the nine months ended July 1, 2011 (in thousands):

	Common Stock Subject to Repurchase
Balance at October 1, 2010	$	184,736
Net realized gains/(losses) included in earnings		—
Net purchases, issuances and settlements		(7,338	)
Change in fair market value of common stock of the Parent Company		(19,473	)
Balance at July 1, 2011	$	157,925

The decline in the fair value of the common stock of the Parent Company is related to the effect of the dividend paid to the Parent Company shareholders (see Note 17).

Nonrecurring Fair Value Measurements

During the second quarter of fiscal 2011, the Company recorded an impairment charge of $5.3 million in the Food and Support Services—International segment for all of the goodwill (approximately $4.0 million) and other intangible assets (approximately $1.3 million) associated with its India operations. These nonrecurring fair value measurements were developed using significant unobservable inputs (Level 3). The fair values were computed using a discounted cash flow valuation methodology (see Note 5).