Fair Value Measurements

12 Months Ended

Sep. 29, 2013

Assets and Liabilities Measured at Fair Value on a Recurring Basis (in millions):



			Fair Value Measurements at Reporting Date Using
	Balance at September 29, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	2,575.7	$	2,575.7	$	—	$	—
Short-term investments:
Available-for-sale securities
Agency obligations	20.0		—		20.0		—
Commercial paper	127.0		—		127.0		—
Corporate debt securities	57.5		—		57.5		—
Government treasury securities	352.9		352.9		—		—
Certificates of deposit	34.1		—		34.1		—
Total available-for-sale securities	591.5		352.9		238.6		—
Trading securities	66.6		66.6		—		—
Total short-term investments	658.1		419.5		238.6		—
Short-term derivatives	12.5		—		12.5		—
Long-term investments:
Available-for-sale securities
Agency obligations	8.1		—		8.1		—
Corporate debt securities	36.8		—		36.8		—
Auction rate securities	13.4		—		—		13.4
Total long-term investments	58.3		—		44.9		13.4
Long-term derivatives	11.4		—		11.4		—
Total	$	3,316.0	$	2,995.2	$	307.4	$	13.4
Liabilities:
Short-term derivatives	$	3.5	$	—	$	3.5	$	—
Long-term derivatives	0.5		—		0.5		—
Total	$	4.0	$	—	$	4.0	$	—



			Fair Value Measurements at Reporting Date Using
	Balance at September 30, 2012		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:
Cash and cash equivalents	$	1,188.6	$	1,188.6	$	—	$	—
Short-term investments:
Available-for-sale securities
Agency obligations	80.0		—		80.0		—
Commercial paper	103.9		—		103.9		—
Corporate debt securities	84.3		—		84.3		—
Government treasury securities	459.7		459.7		—		—
Certificates of deposit	62.9		—		62.9		—
Total available-for-sale securities	790.8		459.7		331.1		—
Trading securities	57.6		57.6		—		—
Total short-term investments	848.4		517.3		331.1		—
Short-term derivatives	9.5		—		9.5		—
Long-term investments:
Available-for-sale securities
Agency obligations	14.0		—		14.0		—
Corporate debt securities	61.3		—		61.3		—
Auction rate securities	18.6		—		—		18.6
Certificates of deposit	22.1		—		22.1		—
Total long-term investments	116.0		—		97.4		18.6
Total	$	2,162.5	$	1,705.9	$	438.0	$	18.6
Liabilities:
Short-term derivatives	$	18.9	$	—	$	18.9	$	—
Long-term derivatives	3.0		—		3.0		—
Total	$	21.9	$	—	$	21.9	$	—

Short-term and long-term derivative assets are included in prepaid expenses and other current assets and other assets, respectively. Short-term and long-term derivative liabilities are included in other accrued liabilities and other long-term liabilities, respectively.

Available-for-sale Securities

Available-for-sale securities include government treasury securities, corporate and agency bonds, commercial paper, certificates of deposit placed through an account registry service and auction rate securities (“ARS”). Proceeds from sales of, and realized gains and losses on sales and maturities of, available-for-sale securities were not material for fiscal years 2013, 2012, and 2011.

Certificates of deposit have maturity dates ranging from approximately 1 month to 9 months and principal amounts, that when aggregated with interest that will accrue over the investment term, will not exceed Federal Deposit Insurance Corporation limits. Certificates of deposit with original maturities of 90 days or less, which are included in cash and cash equivalents, were not material as of September 29, 2013 and September 30, 2012.

Long-term investments (except for ARS) generally mature within 3 years. ARS have contractual maturities ranging from 17 to 30 years and are collateralized by portfolios of student loans, substantially all of which are guaranteed by the United States Department of Education.

Gross unrealized holding gains and losses on investments were not material as of September 29, 2013 and September 30, 2012.

Trading Securities

Trading securities include equity mutual funds and exchange-traded funds. For these securities, we use quoted prices in active markets for identical assets to determine fair value, thus these securities are considered Level 1 instruments. Our trading securities portfolio approximates a portion of the liability under the Management Deferred Compensation Plan (“MDCP”), a defined contribution plan. The corresponding deferred compensation liability of $101.6 million and $94.8 million as of September 29, 2013 and September 30, 2012, respectively, is included in accrued compensation and related costs on the consolidated balance sheets. The changes in net unrealized holding gains/losses in the trading portfolio included in earnings for fiscal years 2013, 2012 and 2011 were a net gain of $11.7 million, a net gain of $10.9 million, and a net loss of $2.1 million, respectively.

Derivative Assets and Liabilities

Derivative assets and liabilities include foreign currency forward contracts, commodity swaps and futures contracts. Where applicable, we use quoted prices in active markets for identical derivative assets and liabilities that are traded on exchanges. Derivative assets and liabilities included in Level 2 are over-the-counter currency forward contracts and commodity swaps whose fair values are estimated using industry-standard valuation models. Such models project future cash flows and discount the future amounts to a present value using market-based observable inputs, including interest rate curves and forward and spot prices for currencies and commodities.

Changes in Level 3 Instruments Measured at Fair Value on a Recurring Basis

Financial instruments measured using Level 3 inputs described above are comprised entirely of our ARS. Changes in this balance related primarily to calls of certain of our ARS. In fiscal 2013 and 2012, $5.0 million and $10.7 million, respectively, of our ARS were called at par.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Assets and liabilities recognized or disclosed at fair value on a nonrecurring basis include items such as property, plant and equipment, goodwill and other intangible assets, equity and cost method investments, and other assets. These assets are measured at fair value if determined to be impaired. During fiscal 2013 and 2012, there were no material fair market value adjustments.

Fair Value of Other Financial Instruments

The estimated fair value of the $750 million of 3.85% Senior Notes was approximately $762 million as of September 29, 2013, determined using Level 2 inputs.

The estimated fair value of the $550 million of 6.25% Senior Notes was approximately $644 million and $674 million as of September 29, 2013 and September 30, 2012, respectively, determined using Level 2 inputs.

- 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.

+ References+ Details