Fair Value Measurements

12 Months Ended

Jan. 29, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, not the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•	Level 1	–	Observable inputs that reflect quoted prices in active markets
•	Level 2	–	Inputs other than quoted prices in active markets that are either directly or indirectly observable
•	Level 3	–	Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The assets and liabilities of the Company that are measured at fair value on a recurring basis as of January 29, 2012 and January 30, 2011 were as follows (amounts in millions):

	Fair Value at January 29, 2012 Using							Fair Value at January 30, 2011 Using
	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Derivative agreements - assets	$	—	$	91		$	—	$	—	$	47		$	—
Derivative agreements - liabilities	—		(27		)	—		—		(40		)	—
Total	$	—	$	64		$	—	$	—	$	7		$	—

The Company uses derivative financial instruments from time to time in the management of its interest rate exposure on long-term debt and its exposure on foreign currency fluctuations. The fair value of the Company’s derivative financial instruments was measured using level 2 inputs. The Company’s derivative agreements are discussed further in Note 4.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The assets and liabilities of the Company that were measured at fair value on a nonrecurring basis during fiscal 2011, 2010 and 2009 were as follows (amounts in millions):

	Fair Value Measured During Fiscal 2011 Level 3			Gains (Losses)
Lease obligation costs, net	$	(144	)	$	(15	)
Total for fiscal 2011				$	(15	)
	Fair Value Measured During Fiscal 2010 Level 3			Gains (Losses)
Lease obligation costs, net	$	(158	)	$	(9	)
Guarantee of HD Supply loan	$	(67	)	(51		)
Total for fiscal 2010				$	(60	)
	Fair Value Measured During Fiscal 2009 Level 3			Gains (Losses)
HD Supply investment	$	—		$	(163	)
Lease obligation costs, net	$	(191	)	(84		)
Total for fiscal 2009				$	(247	)

Lease obligation costs included in the Company’s Rationalization Charges were measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 2. The guarantee of the HD Supply loan was measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3), as further discussed in Note 3. Additionally, the Company impaired the value of its investment in HD Supply using fair value measurements with unobservable inputs (level 3), as further discussed in Note 3.

Long-lived assets, goodwill and other intangible assets were also analyzed for impairment on a nonrecurring basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets, goodwill and other intangible assets in fiscal 2011 and 2010 were not material, as further discussed in Note 1 under the captions "Impairment of Long-Lived Assets" and "Goodwill and Other Intangible Assets," respectively.

The aggregate fair value of the Company’s Senior Notes, based on quoted market prices, was $12.1 billion and $9.8 billion at January 29, 2012 and January 30, 2011, respectively, compared to a carrying value of $10.3 billion and $9.3 billion at January 29, 2012 and January 30, 2011, respectively.