Fair Value

3 Months Ended

Apr. 30, 2011

7. FAIR VALUE

Fair value is 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. The inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs to measure fair value are as follows:

Level 1 – inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets.

Level 2 – inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities, directly or indirectly.

Level 3 – inputs to the valuation methodology are unobservable.

The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The three levels of the hierarchy and the distribution of the Company's assets and liabilities, measured at fair value, within it were as follows:

		Assets and Liabilities at Fair Value as of April 30, 2011
		(in thousands)
			Level 1		Level 2		Level 3		Total
ASSETS:
	Money market funds⁽¹⁾	$	287,250	$	-	$	-	$	287,250
	Treasury bills		124,991		-		-		124,991
	ARS - available-for-sale - student loan backed		-		-		86,758		86,758
	ARS - available-for-sale - municipal authority bonds		-		-		14,792		14,792
	Municipal notes and bonds held in the Rabbi Trust		11,782		-		-		11,782
Total assets measured at fair value		$	424,023	$	-	$	101,550	$	525,573
LIABILITIES:
	Derivative financial instruments		-		5,274		-		5,274
Total liabilities measured at fair value		$	-	$	5,274	$	-	$	5,274

(1)	Includes $286.8 million of money market funds included in Cash and Equivalents and $0.5 million of money market funds held in the Rabbi Trust included in Other Assets on the Consolidated Balance Sheet.

The level 2 liabilities consist of derivative financial instruments, primarily forward foreign exchange contracts. The fair value of forward foreign exchange contracts is determined by using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

The level 3 assets include investments in insured student loan backed ARS and insured municipal authority bond ARS which are available-for-sale.

As a result of a lack of liquidity in the current ARS market, the Company measures the fair value of its ARS primarily using a discounted cash flow model as well as a comparison to similar securities in the market. Certain significant inputs into the model are unobservable in the market including the periodic coupon rate, market rate of return and expected term.

As of April 30, 2011 and January 29, 2011, approximately 73% of the Company's ARS were “AAA” rated, approximately 12% were “AA” rated, and approximately 15% were “A-” rated, in each case as rated by one or more of the major credit rating agencies.

The table below includes a roll-forward of the Company's level 3 assets and liabilities from January 29, 2011 to April 30, 2011. When a determination is made to classify an asset or liability within level 3, the determination is based upon the lack of significance of the observable parameters to the overall fair value measurement. However, the fair value determination for level 3 financial assets and liabilities may include observable components.

(in thousands)		Available-for-sale ARS - Student Loans		Available-for-sale ARS - Muni Bonds		Total
Fair value, January 29, 2011	$	85,732	$	14,802	$	100,534
Redemptions		(125)				(125)
Transfers (out)/in		-		-		-
Gains and (losses), net:
Reported in Net Income		-		-		-
Reported in Other Comprehensive Income		1,151		(10)		1,141
Fair value, April 30, 2011	$	86,758	$	14,792	$	101,550

- Definition

This item represents the complete disclosure regarding the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the Company is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risk is are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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