Fair Value Measurements - Notes to Financial Statements

9 Months Ended

12 Months Ended

Oct. 31, 2015

Nov. 01, 2014

Jan. 31, 2015

NOTE 7 – FAIR VALUE MEASUREMENTS:

The following tables set forth information regarding the Company’s financial assets that are measured at fair value (in thousands) as of October 31, 2015, January 31, 2015 and November 1, 2014

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
	October 31, 2015		Assets		Inputs		Inputs
Description	October 31, 2015		Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	197,601	$	-	$	197,601	$	-
Corporate Bonds		19,128		-		19,128		-
U.S. Treasury Notes		2,602		2,602		-		-
Cash Surrender Value of Life Insurance		6,455		-		-		6,455
Privately Managed Funds		9		-		-		9
Corporate Equities		638		638		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	226,533	$	3,340	$	216,729	$	6,464

Liabilities:
Deferred Compensation		(6,231)		-		-		(6,231)
Total Liabilities	$	(6,231)	$	-	$	-	$	(6,231)

The Company’s investment portfolio was primarily invested in corporate bonds and tax-exempt and taxable governmental debt securities held in managed accounts with underlying ratings of A or better at October 31, 2015 and January 31, 2015 and Aa3 or better at November 1, 2014. The state, municipal and corporate bonds have contractual maturities which range from less than one month to 5.8 years. The U.S. Treasury Notes and Certificates of Deposit have contractual maturities which range from 11 months to 1.4 years. These securities are classified as available-for-sale and are recorded as Short-term investments, Restricted cash and investments and Other assets on the accompanying Condensed Consolidated Balance Sheets. These assets are carried at fair value with unrealized gains and losses reported net of taxes in Accumulated other comprehensive income.

Additionally, at October 31, 2015, the Company had $0.6 million of corporate equities and deferred compensation plan assets of $6.5 million. At January 31, 2015, the Company had $0.3 million of privately managed funds, $0.6 million of corporate equities and deferred compensation plan assets of $4.3 million. At November 1, 2014, the Company had $0.3 million of privately managed funds, a single auction rate security (“ARS”) of $3.1 million which was redeemed at par in the fourth quarter 2014, $0.6 million of corporate equities and deferred compensation plan assets of $3.9 million. All of these assets are recorded within Other assets in the Condensed Consolidated Balance Sheets.

Level 1 category securities are measured at fair value using quoted active market prices. Level 2 investment securities include corporate and municipal bonds for which quoted prices may not be available on active exchanges for identical instruments. Their fair value is principally based on market values determined by management with assistance of a third-party pricing service. Since quoted prices in active markets for identical assets are not available, these prices are determined by the pricing service using observable market information such as quotes from less active markets and/or quoted prices of securities with similar characteristics, among other factors.

The Company’s privately managed funds consist of two types of funds. The privately managed funds cannot be redeemed at net asset value at a specific date without advance notice. As a result, the Company has classified the investments as Level 3.

Deferred compensation plan assets consist of life insurance policies. These life insurance policies are valued based on the cash surrender value of the insurance contract, which is determined based on such factors as the fair value of the underlying assets and discounted cash flow and are therefore classified within Level 3 of the valuation hierarchy. The Level 3 liability associated with the life insurance policies represents a deferred compensation obligation, the value of which is tracked via underlying insurance funds. These funds are designed to mirror existing mutual funds and money market funds that are observable and actively traded. Cash surrender values are provided by third parties and reviewed for reasonableness by the Company.

The following tables summarize the change in fair value of the Company’s financial assets and liabilities associated with deferred compensation measured using Level 3 inputs as of October 31, 2015 and November 1, 2014 (in thousands):

		Fair Value Measurements Using Significant
		Unobservable Asset Inputs (Level 3)
	Available-For-Sale					Cash
	Debt Securities		Other Investments			Surrender
	ARS		Private Equity			Value	Total
Beginning Balance at January 31, 2015	$	-	$	306	$	4,558	$	4,864
Redemptions		-		(276)		-		(276)
Additions		-				1,858		1,858
Total gains or (losses)
Included in interest and other income (or changes in net assets)		-		-		39		39
Included in other comprehensive income		-		(21)		-		(21)
Ending Balance at October 31, 2015	$	-	$	9	$	6,455	$	6,464

	Fair Value Measurements Using Significant
	Unobservable Liability Inputs (Level 3)
	Deferred
	Compensation			Total
Beginning Balance at January 31, 2015	$	(4,272)	$	(4,272)
Additions		(1,901)		(1,901)
Total (gains) or losses
Included in interest and other income (or changes in net assets)		(58)		(58)
Included in other comprehensive income		-		-
Ending Balance at October 31, 2015	$	(6,231)	$	(6,231)


	Fair Value Measurements Using Significant
	Unobservable Asset Inputs (Level 3)
	Available-For-Sale					Cash
	Debt Securities		Other Investments			Surrender
	ARS		Private Equity			Value		Total
Beginning Balance at February 1, 2014	$	3,140	$	392	$	2,957	$	6,489
Redemptions		-		(70)		-		(70)
Additions						753		753
Total gains or (losses)
Included in interest and other income (or changes in net assets)		-		(1)		142		141
Included in other comprehensive income		-		(13)				(13)
Ending Balance at November 1, 2014	$	3,140	$	308	$	3,852	$	7,300

	Fair Value Measurements Using Significant
	Unobservable Liability Inputs (Level 3)
	Deferred
	Compensation			Total
Beginning Balance at February 1, 2014	$	(3,298)	$	(3,298)
Additions		(663)		(663)
Total (gains) or losses
Included in interest and other income (or changes in net assets)		(240)		(240)
Included in other comprehensive income		-		-
Ending Balance at November 1, 2014	$	(4,201)	$	(4,201)

			Quoted Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		November 1, 2014	Assets		Inputs		Inputs
Description		November 1, 2014	Level 1		Level 2		Level 3

Assets:
State/Municipal Bonds	$	149,893	$	-	$	149,893	$	-
Corporate Bonds		8,384		-		8,384		-
Auction Rate Securities (ARS)		3,140		-		-		3,140
U.S. Treasury Notes		3,754		3,754		-		-
Cash Surrender Value of Life Insurance		3,852		-		-		3,852
Privately Managed Funds		308		-		-		308
Corporate Equities		642		642		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	170,073	$	4,496	$	158,277	$	7,300

Liabilities:
Deferred Compensation		(4,201)		-		-		(4,201)
Total Liabilities	$	(4,201)	$	-	$	-	$	(4,201)

Quantitative information regarding the significant unobservable inputs related to the ARS as of November 1, 2014 were as follows:

As of November 1, 2014
Fair Value (in thousands)	Valuation Technique	Unobservable Inputs
$3,140	Net present value	Total Term	7.9 Years
	of cash flows	Yield	0.07%
		Comparative bond discount rate	0.12%

			Quote Prices
			in Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
		January 31, 2015	Assets		Inputs		Inputs
Description		January 31, 2015	Level 1		Level 2		Level 3
Assets:
State/Municipal Bonds	$	148,650	$	-	$	148,650	$	-
Corporate Bonds		14,052		-		14,052		-
Auction Rate Securities (ARS)		-		-		-		-
U.S. Treasury Notes		3,758		3,758		-		-
Cash Surrender Value of Life Insurance		4,558		-		-		4,558
Privately Managed Funds		306		-		-		306
Corporate Equities		613		613		-		-
Certificates of Deposit		100		100		-		-
Total Assets	$	172,037	$	4,471	$	162,702	$	4,864

Liabilities:
Deferred Compensation		(4,272)		-		-		(4,272)
Total Liabilities	$	(4,272)	$	-	$	-	$	(4,272)