v2.3.0.11
Fair Value Measurements
 6 Months Ended
Jul. 30, 2011
Fair Value Measurements Disclosure [Abstract]  
Fair Value Measurements
Fair Value Measurements
 
ASC Topic 820, “Fair Value Measurements and Disclosures,” establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 measurement), then priority to quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant assumptions are observable in the market (Level 2 measurement), then the lowest priority to unobservable inputs (Level 3 measurement).
 
The fair values of cash and cash equivalents, receivables, accounts payable, accrued expenses, other current liabilities and short-term debt approximate their carrying values because of their short-term nature.  The Company has $1.5 billion, 9.75% notes due January 15, 2014 (the “January 2014 Notes”), of which $750.0 million was hedged in March 2010.  The fair value of the unhedged portion of the January 2014 Notes was determined based on quoted market prices and is classified as a Level 1 liability.  The following table reflects the difference between the carrying value and fair value of these notes as of July 30, 2011 and January 29, 2011 (in thousands):
 
 
July 30, 2011
 
January 29, 2011
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
Unhedged Portion of the January 2014 Notes
$
750,000


 
$
892,529


 
$
750,000


 
$
915,450




 
The following table shows the Company’s assets and liabilities as of July 30, 2011 that are measured at fair value on a recurring basis (in thousands):
 
 
Quoted Prices in Active Markets for Identical Assets or Liabilities
 
Significant Other Observable Inputs
 
Unobservable Inputs
 
Level 1
 
Level 2
 
Level 3
Assets




 




 




Money market funds
$
149,363


 
—


 
—


Derivative assets
—


 
$
46,647


 
—


Liabilities




 




 




Derivative liabilities
—


 
$
(32,745
)
 
—




 
The fair value of the Company’s money market funds are based on quotes received from third party banks.  The Company’s derivative assets and liabilities are based on quotes received from third party banks and represent the estimated amount the Company would receive or pay to terminate the agreements taking into consideration current interest and forward exchange rates as well as the creditworthiness of the counterparty.