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Disclosures about Fair Value of Financial Instruments
 9 Months Ended
Oct. 27, 2012
Disclosures about Fair Value of Financial Instruments

Note E. Disclosures about Fair Value of Financial Instruments

The following table sets forth TJX’s financial assets and liabilities that are accounted for at fair value on a recurring basis:

 

In thousands

    October 27,
2012		      January 28,
2012		      October 29,
2011		  

Level 1

         

Assets:

         

Executive Savings Plan investments

    $ 94,037       $ 81,702       $ 79,139   

Level 2

         

Assets:

         

Short-term investments

    $ 200,986       $ 94,691       $ 71,737   

Foreign currency exchange contracts

      14,247         6,702         11,175   

Diesel fuel contracts

      1,832         1,698         775   

Liabilities:

         

Foreign currency exchange contracts

    $ 5,631       $ 4,217       $ 10,276   

The fair value of TJX’s general corporate debt, including current installments, was estimated by obtaining market quotes given the trading levels of other bonds of the same general issuer type and market perceived credit quality. These inputs are considered to be Level 2. The fair value of long-term debt as of October 27, 2012 was $936.2 million versus a carrying value of $774.5 million. The fair value of long-term debt as of January 28, 2012 was $936.8 million versus a carrying value of $$774.5 million. The fair value of long-term debt as of October 29, 2011 was $916.1 million versus a carrying value of $774.5 million. These estimates do not necessarily reflect provisions or restrictions in the various debt agreements that might affect TJX’s ability to settle these obligations.

TJX’s cash equivalents are stated at cost, which approximates fair value, due to the short maturities of these instruments.

Investments designed to meet obligations under the Executive Savings Plan are invested in securities traded in active markets and are recorded at unadjusted quoted prices.

Short-term investments, foreign currency exchange contracts and diesel fuel contracts are valued using broker quotations which include observable market information. TJX does not make adjustments to quotes or prices obtained from brokers or pricing services but does assess the credit risk of counterparties and will adjust final valuations when appropriate. Where independent pricing services provide fair values, TJX obtains an understanding of the methods used in pricing. As such, these instruments are classified within Level 2.