Fair Value Measurements

3 Months Ended

Apr. 30, 2012

Fair Value Measurements [Abstract]

Fair Value Measurements

F. Fair Value Measurements

The Company’s financial assets and liabilities subject to fair value measurements are interest rate caps, interest rate swap agreements, TRS and borrowings subject to TRS (see Note E—Derivative Instruments and Hedging Activities). The Company’s impairment of real estate and unconsolidated entities are also subject to fair value measurements (see Note K - Impairment of Real Estate, Impairment of Unconsolidated Entities and Write-Off of Abandoned Development Projects and Note L – Discontinued Operations and Gain on Disposition of Rental Properties).

Financial Instruments Measured at Fair Value on a Recurring Basis

The Company’s financial assets consist of interest rate caps, interest rate swap agreements and TRS with positive fair values that are included in other assets. The Company’s financial liabilities consists of interest rate swap agreements and TRS with negative fair values that are included in accounts payable, accrued expenses and other liabilities and borrowings subject to TRS included in mortgage debt and notes payable, nonrecourse. The Company records the redeemable noncontrolling interest related to Brooklyn Arena, LLC at redemption value, which approximates fair value.

The following table presents information about the Company’s financial assets and liabilities and redeemable noncontrolling interest that were measured at fair value on a recurring basis, and indicates the fair value hierarchy of the valuation techniques utilized to determine such fair value.

		XXXX,XX		XXXX,XX			XXXX,XX			XXXX,XX
	Fair Value Measurements April 30, 2012
	Level 1		Level 2			Level 3			Total
	(in thousands)
Interest rate caps	$	—	$	17		$	—		$	17
Interest rate swap agreements (positive fair value)		—		894			—			894
Interest rate swap agreements (negative fair value)		—		(4,628	)		(136,517	)		(141,145	)
TRS (positive fair value)		—		—			13,500			13,500
TRS (negative fair value)		—		—			(24,355	)		(24,355	)
Fair value adjustment to the borrowings subject to TRS		—		—			9,325			9,325
Redeemable noncontrolling interest		—		—			(230,438	)		(230,438	)
Total	$	—	$	(3,717	)	$	(368,485	)	$	(372,202	)
	January 31, 2012
	(in thousands)
Interest rate caps	$	—	$	13		$	—		$	13
Interest rate swap agreements (positive fair value)		—		1,083			—			1,083
Interest rate swap agreements (negative fair value)		—		(5,396	)		(143,303	)		(148,699	)
TRS (positive fair value)		—		—			10,308			10,308
TRS (negative fair value)		—		—			(25,321	)		(25,321	)
Fair value adjustment to the borrowings subject to TRS		—		—			9,180			9,180
Redeemable noncontrolling interest		—		—			(229,149	)		(229,149	)
Total	$	—	$	(4,300	)	$	(378,285	)	$	(382,585	)

The table below presents a reconciliation of all financial assets and liabilities and redeemable noncontrolling interest measured at fair value on a recurring basis using significant unobservable inputs (Level 3).

	Fair Value Measurements
	Redeemable Noncontrolling Interest			Interest Rate Swaps			Net TRS			Fair value adjustment to the borrowings subject to TRS			Total TRS Related			Total
	(in thousands)
Three months ended April 30, 2012
Balance, February 1, 2012	$	(229,149	)	$	(143,303	)	$	(15,013	)	$	9,180		$	(5,833	)	$	(378,285	)
Loss attributable to redeemable noncontrolling interest		1,691			—			—			—			—			1,691
Total realized and unrealized gains (losses):
Included in earnings		—			—			4,158			145			4,303			4,303
Included in other comprehensive income		—			6,786			—			—			—			6,786
Included in additional paid-in capital		(2,980	)		—			—			—			—			(2,980	)
Balance, April 30, 2012	$	(230,438	)	$	(136,517	)	$	(10,855	)	$	9,325		$	(1,530	)	$	(368,485	)
Three months ended April 30, 2011
Balance, February 1, 2011	$	(226,829	)	$	(102,387	)	$	(30,034	)	$	21,938		$	(8,096	)	$	(337,312	)
Loss attributable to redeemable noncontrolling interest		666			—			—			—			—			666
Total realized and unrealized gains (losses):
Included in earnings		—			—			2,522			(1,482	)		1,040			1,040
Included in other comprehensive income		—			(1,750	)		—			—			—			(1,750	)
Included in additional paid-in capital		(619	)		—			—			—			—			(619	)
Balance, April 30, 2011	$	(226,782	)	$	(104,137	)	$	(27,512	)	$	20,456		$	(7,056	)	$	(337,975	)

The following table presents quantitative information about the significant unobservable inputs used to estimate the fair value of financial instruments measured on a recurring basis as of April 30, 2012.

	Quantitative Information about Level 3 Fair Value  Measurements
	Fair Value April 30, 2012			Valuation Technique	Unobservable Input	Range of Input Values
	(in thousands)
Credit valuation adjustment of interest rate swap	$	14,712		Potential future exposure	Credit spreads		2.72%(1)  -4.25%
TRS	$	(10,855	)	Third party bond pricing	Bond quote		84.41-102.28	(1)
Fair value adjustment to the borrowings subject to TRS	$	9,325		Third party bond pricing	Bond quote		84.41-100.79	(1)
Redeemable noncontrolling interest	$	(230,438	)	Discounted cash flows	Discount rate		10.3	%

(1) This fair value measurement was developed by third party service providers, subject to the Company’s corroboration for reasonableness.

Third party service providers involved in fair value measurements are evaluated for competency and qualifications on an ongoing basis. Internally developed fair value measurements, including unobservable inputs, are evaluated for reasonableness based on current transactions and experience in the real estate and capital markets.

The Company does not deem the impact of changes in unobservable inputs used to determine the fair market value of the CVA, TRS and fair value adjustment to the borrowings subject to TRS to be significant; however, changes in the discount rate used to determine the fair market value of the redeemable noncontrolling interest could have a significant impact on its fair market value.

Fair Value of Other Financial Instruments

The carrying amount of notes and accounts receivable and accounts payable, accrued expenses and other liabilities approximates fair value based upon the short-term nature of the instruments. The Company estimates the fair value of its debt instruments by discounting future cash payments at interest rates that the Company believes approximate the current market. Estimated fair value is based upon market prices of public debt, available industry financing data, current treasury rates and recent financing transactions. The fair value of the Company’s debt instruments is classified as Level 2 in the fair value hierarchy.

The following table summarizes the fair value of nonrecourse mortgage debt and notes payable, bank revolving facility, senior and subordinated debt and nonrecourse mortgage debt and notes payable of land held for divestiture:

	April 30, 2012				January 31, 2012
	Carrying Value		Fair Value		Carrying Value		Fair Value
	(in thousands)				(in thousands)
Fixed Rate Debt	$	4,622,503	$	4,917,174	$	4,458,214	$	4,719,636
Variable Rate Debt		2,105,983		2,193,283		2,239,838		2,341,862
Total	$	6,728,486	$	7,110,457	$	6,698,052	$	7,061,498