Fair Value Measurements

12 Months Ended

Oct. 02, 2016

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



			Fair Value Measurements at Reporting Date Using
	Balance at Oct 2, 2016		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	$	2,128.8	$	2,128.8	$	—	$	—
Short-term investments:
Available-for-sale securities
Agency obligations	1.3		—		1.3		—
Commercial paper	2.6		—		2.6		—
Corporate debt securities	34.2		—		34.2		—
Foreign government obligations	5.5		—		5.5
U.S. government treasury securities	15.8		15.8		—		—
State and local government obligations	0.5		—		0.5		—
Certificates of deposit	5.8		—		5.8		—
Total available-for-sale securities	65.7		15.8		49.9		—
Trading securities	68.7		68.7		—		—
Total short-term investments	134.4		84.5		49.9		—
Prepaid expenses and other current assets:
Derivative assets	27.7		3.1		24.6		—
Long-term investments:
Available-for-sale securities
Agency obligations	44.4		—		44.4		—
Corporate debt securities	459.3		—		459.3		—
Auction rate securities	5.7		—		—		5.7
Foreign government obligations	46.7		—		46.7		—
U.S. government treasury securities	358.2		358.2		—		—
State and local government obligations	57.5		—		57.5		—
Mortgage and other asset-backed securities	169.9		—		169.9		—
Total long-term investments	1,141.7		358.2		777.8		5.7
Other long-term assets:
Derivative assets	6.4		—		6.4		—
Total assets	$	3,439.0	$	2,574.6	$	858.7	$	5.7
Liabilities:
Accrued liabilities:
Derivative liabilities	$	18.0	$	1.7	$	16.3	$	—
Other long-term liabilities:
Derivative liabilities	71.6		—		71.6		—
Total liabilities	$	89.6	$	1.7	$	87.9	$	—



			Fair Value Measurements at Reporting Date Using
	Balance at Sep 27, 2015		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	$	1,530.1	$	1,530.1	$	—	$	—
Short-term investments:
Available-for-sale securities
Corporate debt securities	10.2		—		10.2		—
Foreign government obligations	2.0		—		2.0		—
State and local government obligations	3.3		—		3.3		—
Total available-for-sale securities	15.5		—		15.5		—
Trading securities	65.8		65.8		—		—
Total short-term investments	81.3		65.8		15.5		—
Prepaid expenses and other current assets:
Derivative assets	50.8		—		50.8		—
Long-term investments:
Available-for-sale securities
Agency obligations	8.6		—		8.6		—
Corporate debt securities	121.8		—		121.8		—
Auction rate securities	5.9		—		—		5.9
Foreign government obligations	18.5		—		18.5		—
U.S. government treasury securities	104.8		104.8		—		—
State and local government obligations	9.7		—		9.7		—
Mortgage and other asset-backed securities	43.2		—		43.2		—
Total long-term investments	312.5		104.8		201.8		5.9
Other long-term assets:
Derivative assets	54.7		—		54.7		—
Total assets	$	2,029.4	$	1,700.7	$	322.8	$	5.9
Liabilities:
Accrued liabilities:
Derivative liabilities	$	19.2	$	3.6	$	15.6	$	—
Other long-term liabilities:
Derivative liabilities	14.5		—		14.5		—
Total	$	33.7	$	3.6	$	30.1	$	—

There were no material transfers between levels and there was no significant activity within Level 3 instruments during the periods presented. The fair values of any financial instruments presented above exclude the impact of netting assets and liabilities when a legally enforceable master netting agreement exists.

Available-for-sale Securities

Long-term investments generally mature within 4 years. Proceeds from sales of available-for-sale securities were $680.7 million, $600.6 million, and $1.5 billion for fiscal years 2016, 2015 and 2014, respectively. The increase in fiscal 2014 was due to the liquidation of a significant portion of our offshore investment portfolio in the fourth quarter of fiscal 2014 in anticipation of funding the acquisition of Starbucks Japan. Realized gains and losses on sales and maturities of available-for-sale securities were not material for fiscal years 2016, 2015, and 2014. Gross unrealized holding gains and losses on available-for-sale securities were not material as of October 2, 2016 and September 27, 2015.

Trading Securities

Trading securities include equity mutual funds and exchange-traded funds. Our trading securities portfolio approximates a portion of our liability under our Management Deferred Compensation Plan ("MDCP"), a defined contribution plan. Our MDCP liability was $101.5 million and $98.3 million as of October 2, 2016 and September 27, 2015, respectively. The changes in net unrealized holding gains and losses in the trading securities portfolio included in earnings for fiscal years 2016 and 2014 were net gains of $3.6 million and $1.2 million, respectively, and a net loss of $4.5 million in fiscal year 2015. Gross unrealized holding gains and losses on trading securities were not material as of October 2, 2016 and September 27, 2015.

Derivative Assets and Liabilities

Derivative assets and liabilities include foreign currency forward contracts, commodity futures contracts, collars and swaps, which are described further in Note 3, Derivative Financial Instruments.

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. Impairment of property, plant, and equipment is included at Note 1, Summary of Significant Accounting Policies. During fiscal 2016 and 2015, there were no other material fair value adjustments.

Fair Value of Other Financial Instruments

The estimated fair value of our long-term debt based on the quoted market price (Level 2) is included at Note 9, Debt.

- 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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