Fair Value Measurements

9 Months Ended

Oct. 29, 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 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 fair values of the January 2014 Notes and the October 2012 Notes were determined based on quoted market prices and are classified as a Level 1 liability.  The following table reflects the difference between the carrying value and fair value of these notes as of October 29, 2011 and January 29, 2011 (in thousands). The values in the table below reflect the unhedged portion of the notes only.

	October 29, 2011				January 29, 2011
	Carrying Value		Fair Value		Carrying Value		Fair Value
October 2012 Notes	$	335,474	$	343,517	$	—	$	—
January 2014 Notes	$	1,528,196	$	1,730,229	$	750,000	$	915,450

The following table shows the Company’s assets and liabilities as of October 29, 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	$	139,576	—			—
Derivative assets	—		$	8,125		—
Liabilities
Derivative liabilities	—		$	(21,505	)	—

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.