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Derivative Financial Instruments
 3 Months Ended
Dec. 27, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
Derivative Financial Instruments
Interest Rates
Depending on market conditions, we enter into interest rate swap agreements to hedge the variability in cash flows due to changes in benchmark interest rates related to anticipated debt issuances. These agreements are cash settled at the time of the pricing of the related debt. The effective portion of the derivative's gain or loss is recorded in accumulated other comprehensive income ("AOCI") and is subsequently reclassified to interest expense over the life of the related debt.
Foreign Currency
To reduce cash flow volatility from foreign currency fluctuations, we enter into forward and swap contracts to hedge portions of cash flows of anticipated intercompany royalty payments, inventory purchases, and intercompany borrowing and lending activities. The effective portion of the derivative's gain or loss is recorded in AOCI and is subsequently reclassified to revenue, cost of sales including occupancy costs, or net interest income and other, respectively, when the hedged exposure affects net earnings.
We also enter into forward contracts to hedge the foreign currency exposure of our net investment in certain foreign operations. The effective portion of the derivative's gain or loss is recorded in AOCI and will be subsequently reclassified to net earnings when the hedged net investment is either sold or substantially liquidated.
To mitigate the foreign exchange risk of certain balance sheet items, we enter into foreign currency forward contracts that are not designated as hedging instruments. Gains and losses from these derivatives are largely offset by the financial impact of translating foreign currency denominated payables and receivables; both are recorded in net interest income and other.
Commodities
Depending on market conditions, we enter into coffee futures contracts and collars (the combination of a purchased call option and a sold put option) to hedge a portion of anticipated cash flows under our price-to-be-fixed green coffee contracts, which are described further in Note 5, Inventories. The effective portion of each derivative's gain or loss is recorded in AOCI and is subsequently reclassified to cost of sales including occupancy costs when the hedged exposure affects net earnings.
To mitigate the price uncertainty of a portion of our future purchases of dairy products and diesel fuel, we enter into dairy swap contracts, futures and collars that are not designated as hedging instruments. Gains and losses from these derivatives are recorded in net interest income and other and help to offset price fluctuations on our dairy purchases and the financial impact of diesel fuel fluctuations on our shipping costs, which are included in cost of sales including occupancy costs on our consolidated statements of earnings.
Gains and losses on derivative contracts designated as hedging instruments included in AOCI and expected to be reclassified into earnings within 12 months, net of tax (in millions):
 
Net Gains/(Losses)
Included in AOCI
 
Net Gains/(Losses) Expected to be Reclassified from AOCI into Earnings within 12 Months
 
Outstanding Contract Remaining Maturity
(Months)
 
Dec 27,
2015
 
Sep 27,
2015
 
 
Cash Flow Hedges:
 
 
 
 
 
 
 
Interest rates
$
31.2

 
$
30.1

 
$
3.5

 
1
Cross-currency swaps
(30.8
)
 
(27.8
)
 
—

 
108
Foreign currency - other
29.7

 
29.0

 
19.6

 
35
Coffee
(6.7
)
 
(5.7
)
 
(5.7
)
 
9
Net Investment Hedges:
 
 
 
 
 
 
 
Foreign currency
1.3

 
1.3

 
—

 
0

Pretax gains and losses on derivative contracts designated as hedging instruments recognized in other comprehensive income ("OCI") and reclassifications from AOCI to earnings (in millions):
 
Quarter Ended
 
Gains/(Losses) Recognized in
OCI Before Reclassifications
 
Gains/(Losses) Reclassified from AOCI to Earnings
 
Dec 27,
2015
 
Dec 28,
2014
 
Dec 27,
2015
 
Dec 28,
2014
Cash Flow Hedges:
 
 
 
 
 
 
 
Interest rates
$
3.1

 
$
0.3

 
$
1.5

 
$
1.3

Cross-currency swaps
(5.3
)
 
37.8

 
(1.8
)
 
63.1

Foreign currency - other
9.3

 
16.4

 
8.5

 
3.9

Coffee
(1.3
)
 
(2.8
)
 
(0.1
)
 
(1.6
)
Net Investment Hedges:
 
 
 
 
 
 
 
Foreign currency
—

 
4.3

 
—

 
7.2


Pretax gains and losses on derivative contracts not designated as hedging instruments recognized in earnings (in millions):
 
Gains/(Losses) Recognized in Earnings
 
Quarter Ended
 
Dec 27, 2015
 
Dec 28, 2014
Foreign currency - other
$
2.1

 
$
18.6

Coffee
(0.1
)
 
—

Dairy
(5.6
)
 
(4.5
)
Diesel fuel
(4.7
)
 
(7.6
)

Notional amounts of outstanding derivative contracts (in millions):
 
Dec 27, 2015
 
Sep 27, 2015
Interest rates
$
375

 
$
125

Cross-currency swaps
607

 
717

Foreign currency - other
561

 
577

Coffee
28

 
38

Dairy
65

 
43

Diesel fuel
23

 
14


The fair values of our derivative assets and liabilities are included in Note 4, Fair Value Measurements, and additional disclosures related to cash flow and net investment hedge gains and losses included in accumulated other comprehensive income, as well as subsequent reclassifications to earnings, are included in Note 8, Equity.