FAIR VALUE MEASUREMENTS

9 Months Ended

Dec. 01, 2012

FAIR VALUE MEASUREMENTS

NOTE 4 — FAIR VALUE MEASUREMENTS

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Assets and liabilities recorded at fair value are categorized using defined hierarchical levels directly related to the amount of subjectivity associated with the inputs to fair value measurements, as follows:

Level 1	—	Quoted prices in active markets for identical assets or liabilities;
Level 2	—	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
Level 3	—	Unobservable inputs in which little or no market activity exists, requiring an entity to develop its own assumptions that market participants would use to value the asset or liability.

During the second quarter of fiscal 2013, the Company recorded $74 of intangible asset impairment charges, which were measured at fair value using Level 3 inputs. During the third quarter and year-to-date ended December 3, 2011, the Company recorded $907 of goodwill and intangible asset impairment charges, which were measured at fair value using Level 3 inputs. Goodwill and intangible asset impairment charges are discussed in Note 2 – Goodwill and Intangible Assets.

During the year-to-date ended December 1, 2012, Property, plant and equipment and favorable operating lease intangible related assets with carrying amounts of $163 were written down to their fair value of $82, resulting in an impairment charge of $81 primarily related to the announced closing of approximately 60 non-strategic stores. During the year-to-date ended December 3, 2011, Property, plant and equipment related assets with a carrying amount of $130 were written down to their fair value of $120, resulting in an impairment charge of $10. Property, plant and equipment and favorable operating lease intangible related impairment charges were measured at fair value on a nonrecurring basis using Level 3 inputs and are a component of Selling and administrative expenses in the Condensed Consolidated Statements of Earnings.

Financial Instruments

For certain of the Company’s financial instruments, including cash and cash equivalents, receivables and accounts payable, the fair values approximate book values due to their short maturities.

The estimated fair value of notes receivable was greater than the book value by approximately $2 as of December 1, 2012, and the estimated fair value of notes receivable approximated the book value as of February 25, 2012. Notes receivable are valued based on a discounted cash flow approach applying a market rate for similar instruments.

The estimated fair value of the Company’s long-term debt (including current maturities) was less than the book value by approximately $682 and $171 as of December 1, 2012 and February 25, 2012, respectively. The estimated fair value was based on market quotes, where available, or market values for similar instruments.