v2.4.0.6
Fair Value Measurements
 6 Months Ended
Jul. 28, 2012
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 2014 (the “January 2014 Notes”), of which $750 million was hedged from March 2010 to September 2011.  The Company received cash consideration of $30.3 million when the hedge was terminated in September 2011. The Company also has $325 million, 7.375% notes due October 2012 (the “October 2012 Notes”), which were hedged from January 2003 to September 2011. When the hedge was terminated in September 2011, the Company received cash consideration of $12.4 million. The termination of these hedges resulted in gains which are being amortized over the remaining terms of the respective notes, the unamortized portions of which are reflected in the carrying values of the notes.

The fair values of the January 2014 Notes and the October 2012 Notes were determined based on quoted market prices and are classified as Level 1 liabilities.  The following table reflects the difference between the financial statement carrying values and fair values of these notes as of July 28, 2012 and January 28, 2012 (in thousands):
 
July 28, 2012
 
January 28, 2012
 
Carrying Value
 
Fair Value
 
Carrying Value
 
Fair Value
October 2012 Notes
$
326,904

 
$
328,468

 
$
332,617

 
$
339,372

January 2014 Notes
1,518,620

 
1,680,000

 
1,525,003

 
1,721,490


 
The following table shows the Company’s assets and liabilities as of July 28, 2012 and January 28, 2012 that are measured and recorded in the financial statements at fair value on a recurring basis (in thousands): 
 
July 28, 2012
 
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
$
377,677

 
$
—

 
$
—

Derivative assets
—

 
7,138

 
—

Liabilities
 
 
 
 
 
Derivative liabilities
—

 
(23,487
)
 
—



 
January 28, 2012
 
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
$
468,913

 
$
—

 
$
—

Liabilities
 
 
 
 
 
Derivative liabilities
—

 
(36,418
)
 
—



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