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 that the Company can access at the measurement date.


•	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 that are measured at fair value on a recurring basis were as follows:



	Assets and Liabilities at Fair Value as of August 4, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Trust-owned life insurance policies (at cash surrender value)	$	—	$	104,310	$	—	$	104,310
Money market funds	25,073		—		—		25,073
Derivative financial instruments	—		12,343		—		12,343
Total assets	$	25,073	$	116,653	$	—	$	141,726

Liabilities:
Derivative financial instruments	$	—	$	28	$	—	$	28
Total liabilities	$	—	$	28	$	—	$	28



	Assets and Liabilities at Fair Value as of February 3, 2018
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Trust-owned life insurance policies (at cash surrender value)	$	—	$	102,784	$	—	$	102,784
Money market funds	330,649		—		—		330,649
Derivative financial instruments	—		37		—		37
Total assets	$	330,649	$	102,821	$	—	$	433,470

Liabilities:
Derivative financial instruments	$	—	$	9,147	$	—	$	9,147
Total liabilities	$	—	$	9,147	$	—	$	9,147

The Level 2 assets and liabilities consist of trust-owned life insurance policies and derivative financial instruments, primarily foreign currency exchange forward contracts.The fair value of trust-owned life insurance policies is determined using the cash surrender value of the life insurance policies. The fair value of foreign currency exchange forward contracts is determined using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

Fair value of borrowings

The Company’s borrowings under the Company’s credit facilities are carried at historical cost in the accompanying Condensed Consolidated Balance Sheets.

The carrying amount and fair value of the Company’s gross borrowings under the term loan credit facility were as follows:



(in thousands)	August 4, 2018		February 3, 2018
Gross borrowings outstanding, carrying amount	$	253,250	$	253,250
Gross borrowings outstanding, fair value	$	254,200	$	253,250

No borrowings were outstanding under the Company’s senior secured revolving credit facility as of August 4, 2018 or February 3, 2018.