Fair Value Measurements

9 Months Ended

Jul. 03, 2011

Fair Value Measurements

Fair Value Measurements

Note 4: Fair Value Measurements

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

			Fair Value Measurements at Reporting Date Using
	Balance at July 3, 2011		Quoted Prices  in Active Markets for  Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Short-term investments:
Available-for-sale securities
Agency obligations	$	10.0	$	0.0	$	10.0	$	0.0
Commercial paper		50.0		0.0		50.0		0.0
Corporate debt securities		73.6		0.0		73.6		0.0
Government treasury securities		40.0		40.0		0.0		0.0
Total available-for-sale securities		173.6		40.0		133.6		0.0
Trading securities		58.1		58.1		0.0		0.0
Total short-term investments		231.7		98.1		133.6		0.0
Long-term investments:
Available-for-sale securities
Corporate debt securities		61.7		0.0		61.7		0.0
State and local government obligations		27.9		0.0		0.0		27.9
Total long-term investments		89.6		0.0		61.7		27.9
Total	$	321.3	$	98.1	$	195.3	$	27.9
Liabilities:
Derivatives	$	25.9	$	0.0	$	25.9	$	0.0

			Fair Value Measurements at Reporting Date Using
	Balance at October 3, 2010		Quoted Prices  in Active Markets for  Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable  Inputs (Level 3)
Assets:
Short-term investments:
Available-for-sale securities
Agency obligations	$	30.0	$	0.0	$	30.0	$	0.0
Corporate debt securities		15.0		0.0		15.0		0.0
Government treasury securities		190.8		190.8		0.0		0.0
State and local government obligations		0.7		0.0		0.7		0.0
Total available-for-sale securities		236.5		190.8		45.7		0.0
Trading securities		49.2		49.2		0.0		0.0
Total short-term investments		285.7		240.0		45.7		0.0
Long-term investments:
Available-for-sale securities
Agency obligations		27.0		0.0		27.0		0.0
Corporate debt securities		123.5		0.0		123.5		0.0
State and local government obligations		41.3		0.0		0.0		41.3
Total long-term investments		191.8		0.0		150.5		41.3
Total	$	477.5	$	240.0	$	196.2	$	41.3
Liabilities:
Derivatives	$	34.7	$	0.0	$	34.7	$	0.0

Gross unrealized holding gains and losses were not material at July 3, 2011 and October 3, 2010.

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 auction rate securities ("ARS"). Changes in this balance related primarily to calls of certain of our ARS. In the first three quarters of fiscal 2011, $15.8 million of our ARS were called at par. No transfers among the levels within the fair value hierarchy occurred during the third quarter.

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

Assets and liabilities recognized or disclosed at fair value in the financial statements on a nonrecurring basis include items such as property, plant and equipment, equity and cost method investments, and other assets. These assets are measured at fair value if determined to be impaired.

During the quarter and three quarters ended July 3, 2011 and June 27, 2010, we recognized fair market value adjustments with a charge to earnings for these assets as follows:

	Quarter Ended July 3, 2011							Three Quarters Ended July 3, 2011
	Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment		Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment
Other assets (1)	$	1.6	$	(1.6	)	$	0.0	$	22.1	$	(22.1	)	$	0.0
Property, plant and equipment (2)	$	1.7	$	(1.2	)	$	0.5	$	2.8	$	(2.1	)	$	0.7

	Quarter Ended June 27, 2010							Three Quarters Ended June 27, 2010
	Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment		Carrying Value before adjustment		Fair value adjustment			Carrying value after adjustment
Property, plant and equipment (2)	$	9.2	$	(7.8	)	$	1.4	$	25.6	$	(21.1	)	$	4.5
Equity and cost investments (1)	$	0.8	$	(0.2	)	$	0.6	$	10.4	$	(7.7	)	$	2.7
Goodwill (3)	$	4.1	$	(1.6	)	$	2.5	$	4.1	$	(1.6	)	$	2.5

(1) The fair value was determined using valuation techniques, including discounted cash flows, comparable transactions, and/or comparable company analyses. The resulting impairment charge was included in other operating expenses.

(2) These assets primarily consist of leasehold improvements in underperforming stores. The fair value was determined using a discounted cash flow model based on expected future store revenues and operating costs, using internal projections. The resulting impairment charge was included in store operating expenses.

(3) The fair value was determined using a discounted cash flow model based on future cash flows for the reporting unit, using internal projections. The resulting impairment charge was included in store operating expenses

Fair Value of Other Financial Instruments

The carrying value of cash and cash equivalents approximates fair value because of the short-term nature of those instruments. The estimated fair value of the $550 million of 6.25% Senior Notes was approximately $643 million and $637 million as of July 3, 2011 and October 3, 2010, respectively.