Fair Value Measurements

12 Months Ended

Feb. 02, 2013

Fair Value Measurements

19.  Fair Value Measurements

The following table provides a summary of the recognized assets and liabilities that are measured at fair value on a recurring basis:

	As of February 2, 2013						As of January 28, 2012
	(in millions)
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Short-term investments	$	—	$	48	$	—	$	—	$	—	$	—
Auction rate security		—		6		—		—		5		—
Forward foreign exchange contracts		—		6		—		—		—		—
Total Assets	$	—	$	60	$	—	$	—	$	5	$	—
Liabilities
Forward foreign exchange contracts		—		—		—		—		2		—
Total Liabilities	$	—	$	—	$	—	$	—	$	2	$	—

Available-for-sale securities are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. As of February 2, 2013, the Company held $54 million of available-for-sale securities, which was comprised of $48 million in short-term investments and a $6 million auction rate security.

Short-term investments represent corporate bonds with maturity dates within one year from the purchase date. These securities are valued using quoted prices for similar instruments in active markets and therefore are classified as Level 2 instruments. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments.

The fair value of the auction rate security is determined by review of the underlying security at each reporting period.

The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility.

Interest income related to the short-term investments included within interest expense was not significant for 2012.

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.

The following table provides a summary of recognized assets that are measured at fair value on a non-recurring basis. See Note 3, Impairment Charges, for further discussion and additional disclosures.

(in millions)	Level 1		Level 2		Level 3		Loss Recognized
Year ended February 2, 2013:
Intangible assets	$	—	$	—	$	3	$	7
Long-lived assets held and used	$	—	$	—	$	—	$	5
Year ended January 28, 2012:
Intangible assets	$	—	$	—	$	10	$	5

The carrying value and estimated fair value of long-term debt were as follows:

	2012		2011
	(in millions)
Carrying Value	$	133	$	135
Fair Value	$	152	$	140

The fair value of long-term debt is determined using quoted prices in active markets and therefore is classified as Level 2. The carrying values of cash and cash equivalents, short-term investments, and other current receivables and payables approximate their fair value.