Fair Value

9 Months Ended

Oct. 27, 2012

Fair Value Disclosures [Abstract]

Fair Value

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 October 27, 2012 (in thousands)
	Level 1		Level 2		Level 3		Total
ASSETS:
ARS—available-for-sale—student loan backed	$	—	$	—	$	4,755	$	4,755
ARS—available-for-sale—municipal authority bonds	—		—		15,148		15,148
Derivative financial instruments	—		2,887		—		2,887
Total assets measured at fair value	$	—	$	2,887	$	19,903	$	22,790
LIABILITIES:
Derivative financial instruments	—		2,954		—		2,954
Total liabilities measured at fair value	$	—	$	2,954	$	—	$	2,954

	Assets and Liabilities at Fair Value as of January 28, 2012 (in thousands)
	Level 1		Level 2		Level 3		Total
ASSETS:
Money market funds	$	209,039	$	—	$	—	$	209,039
ARS—available-for-sale—student loan backed	—		—		84,650		84,650
ARS—available-for-sale—municipal authority bonds	—		—		14,858		14,858
Derivative financial instruments	—		10,770		—		10,770
Total assets measured at fair value	$	209,039	$	10,770	$	99,508	$	319,317
LIABILITIES:
Derivative financial instruments	—		1,458		—		1,458
Total liabilities measured at fair value	$	—	$	1,458	$	—	$	1,458

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

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

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 for Level 3 assets are unobservable in the market. The table below provides quantitative information on the unobservable inputs discussed above:

Quantitative information about Level 3 fair value measurements (in thousands)
	Fair Value at October 28,  2012		Valuation Technique	Unobservable Inputs	Range (weighted average)
Student loan ARS				Periodic coupon rate	0.51% - 3.79%
	$	4,755	Discounted cash flow	Market rate of return	0.21% - 2.34%
				Expected term	15.0
Municipal authority ARS				Periodic coupon rate	0.30% - 6.90%
	$	15,148	Discounted cash flow	Market rate of return	0.00% - 4.04%
				Expected term	21.5 - 27.0

Disclosures of Fair Value of Other Assets and Liabilities:

The Company’s borrowings under its Amended and Restated Credit Agreement are carried at historical cost in the accompanying Consolidated Balance Sheets. For disclosure purposes, the Company estimates the fair value of borrowings under the Amended and Restated Credit Agreement using discounted cash flow analysis based on market rates obtained from independent third parties for similar types of debt. The inputs used to value the borrowings under the Amended and Restated Credit Agreement are considered to be Level 2 instruments. The carrying amount of borrowings outstanding under the Amended and Restated Credit Agreement as of October 27, 2012 was approximately $60.0 million. The fair value of borrowings outstanding under the Amended and Restated Credit Agreement as of October 27, 2012 was approximately $60.0 million. There were no borrowings outstanding under the Amended and Restated Credit Agreement at January 28, 2012. See Note 12, “Borrowings” for further discussion on the Amended and Restated Credit Agreement.

The table below includes a roll-forward of the Company’s level 3 assets and liabilities from January 28, 2012 to October 27, 2012. 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 28, 2012	$	84,650		$	14,858	$	99,508
Redemptions / Settlements	(80,693		)	—		(80,693		)
Gains, net:
Reported in Net Income	798			290		1,088
Fair value, October 27, 2012	$	4,755		$	15,148	$	19,903