FAIR VALUE MEASUREMENTS

12 Months Ended

May 01, 2011

Notes to Consolidated Financial Statements [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 15:    FAIR VALUE MEASUREMENTS

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. We are required to consider and reflect the assumptions of market participants in fair value calculations. These factors include nonperformance risk (the risk that an obligation will not be fulfilled) and credit risk, both of the reporting entity (for liabilities) and of the counterparty (for assets). 

We use, as appropriate, a market approach (generally, data from market transactions), an income approach (generally, present value techniques), and/or a cost approach (generally, replacement cost) to measure the fair value of an asset or liability.  These valuation approaches incorporate inputs such as observable, independent market data that management believes are predicated on the assumptions market participants would use to price an asset or liability. These inputs may incorporate, as applicable, certain risks such as nonperformance risk, which includes credit risk. 

The FASB has established a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. The fair value hierarchy gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). The three levels of inputs used to measure fair value are as follows: 

▪ Level 1—quoted prices in active markets for identical assets or liabilities accessible by the reporting entity.

▪ Level 2—observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

▪ Level 3—unobservable for an asset or liability. Unobservable inputs should only be used to the extent observable inputs are not available.

The fair value hierarchy gives the highest priority to quoted market prices (Level 1) and the lowest priority to unobservable inputs (Level 3). Financial assets and liabilities have been classified in their entirety based on the lowest level of input that is significant to the fair value measurement.

When available, we use quoted market prices to determine fair value and we classify such measurements within Level 1.  In some cases where market prices are not available, we make use of observable market-based inputs (i.e., Bloomberg and commodity exchanges) to calculate fair value, in which case the measurements are classified within Level 2. When quoted market prices or observable market-based inputs are unavailable, or when our fair value measurements incorporate significant unobservable inputs, we would classify such measurements within Level 3.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables set forth, by level within the fair value hierarchy, our non-pension financial assets and liabilities that were measured at fair value on a recurring basis as of May 1, 2011 and May 2, 2010:

	May 1, 2011								May 2, 2010
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
	(in millions)								(in millions)
Assets
Derivatives:
Commodity contracts	$	45.2	$	34.6	$	—	$	79.8	$	—	$	—	$	—	$	—
Foreign exchange contracts	—		0.5		—		0.5		—		3.5		—		3.5
Money market fund	—		—		—		—		325.4		—		—		325.4
Insurance contracts	49.4		—		—		49.4		42.7		—		—		42.7
Total	$	94.6	$	35.1	$	—	$	129.7	$	368.1	$	3.5	$	—	$	371.6
Liabilities
Derivatives:
Commodity contracts	$	16.8	$	—	$	—	$	16.8	$	112.2	$	7.3	$	—	$	119.5
Interest rate contracts	—		2.3		—		2.3		—		8.1		—		8.1
Foreign exchange contracts	—		1.9		—		1.9		—		0.2		—		0.2
Total	$	16.8	$	4.2	$	—	$	21.0	$	112.2	$	15.6	$	—	$	127.8

We invest our cash in an overnight money market fund, which is treated as a trading security with the unrealized gains recorded in earnings. 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

Certain assets and liabilities are measured at fair value on a nonrecurring basis after initial recognition; that is, the assets and liabilities are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances, for example, when there is evidence of impairment.

In fiscal 2011 and fiscal 2010, we recorded impairment charges totaling $9.2 million and $51.3 million, respectively, to write-down certain assets, consisting primarily of property, plant and equipment, to their estimated fair values. The fair value measurements of these assets were determined using relevant market data based on recent transactions for similar assets and third party estimates, which we classify as Level 2 inputs. Fair values were also determined using valuation techniques, which incorporate unobservable inputs that reflect our own assumptions regarding how market participants would price the assets, which we classify as Level 3 inputs.

Pension Plan Assets

The following table summarizes our pension plan assets measured at fair value on a recurring basis (at least annually) as of May 1, 2011 and May 2, 2010:

	May 1, 2011									May 2, 2010
	Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
	(in millions)									(in millions)
Cash equivalents	$	3.0	$	87.5	$	—	$	90.5		$	2.8	$	93.9	$	—	$	96.7
Equity securities:
Preferred stock	—		0.3		—		0.3			—		0.2		—		0.2
U.S. common stock:
Health care	32.0		—		—		32.0			27.3		—		—		27.3
Utilities	3.8		—		—		3.8			3.9		—		—		3.9
Financials	41.0		—		—		41.0			32.9		—		—		32.9
Consumer staples	128.1		—		—		128.1			82.0		—		—		82.0
Consumer discretionary	32.3		—		—		32.3			23.3		—		—		23.3
Materials	14.6		—		—		14.6			9.1		—		—		9.1
Energy	30.0		—		—		30.0			18.6		—		—		18.6
Information technology	34.2		—		—		34.2			19.4		—		—		19.4
Industrials	38.5		—		—		38.5			25.1		—		—		25.1
Telecommunication service	2.1		—		—		2.1			1.2		—		—		1.2
International common stock	23.0		—		—		23.0			15.2		—		—		15.2
Mutual funds:
International	42.9		45.0		—		87.9			35.8		70.1		—		105.9
Domestic large cap	—		70.0		—		70.0			—		57.8		—		57.8
Balanced	32.7		—		—		32.7			—		—		—		—
Fixed income:
Mutual funds	108.9		1.5		—		110.4			72.7		2.7		—		75.4
Asset-backed securities	—		69.5		—		69.5			—		53.4		—		53.4
Corporate debt securities	—		44.4		—		44.4			—		67.7		—		67.7
Government debt securities	32.9		9.4		—		42.3			35.7		17.4		—		53.1
Limited partnerships	—		—		33.6		33.6			—		—		29.2		29.2
Insurance contracts	—		—		1.8		1.8			—		—		1.8		1.8
Total fair value	$	600.0	$	327.6	$	35.4	963.0			$	405.0	$	363.2	$	31.0	799.2
Net payables for unsettled transactions							(6.6		)							(10.5		)
Total plan assets							$	956.4								$	788.7

The following table summarizes the changes in our Level 3 pension plan assets for the year-ended May 1, 2011 and May 2, 2010: 

	Insurance Contracts			Limited Partnerships
	(in millions)
Balance, May 3, 2009	$	2.0		$	23.9
Actual return on plan assets:
Related to assets held at the reporting date	—			(2.9		)
Related to assets sold during the period	—			0.2
Purchases, sales and settlements, net	(0.2		)	8.0
Balance, May 2, 2010	1.8			29.2
Actual return on plan assets:
Related to assets held at the reporting date	—			1.2
Related to assets sold during the period	—			1.3
Purchases, sales and settlements, net	—			1.9
Balance, May 1, 2011	$	1.8		$	33.6

Other Financial Instruments

We determine the fair value of public debt using quoted market prices. We value all other debt using discounted cash flow techniques at estimated market prices for similar issues. The following table presents the fair value and carrying value of long-term debt, including the current portion of long-term debt as of May 1, 2011 and May 2, 2010.

	May 1, 2011				May 2, 2010
	Fair Value		Carrying Value		Fair Value		Carrying Value
	(in millions)
Total Debt	$	2,418.0	$	2,094.7	$	3,229.3	$	2,963.0

The carrying amounts of cash and cash equivalents, accounts receivable, notes payable and accounts payable approximate their fair values because of the relatively short-term maturity of these instruments.