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Fair Value

3 Months Ended

May 01, 2021

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 were measured at fair value on a recurring basis, as of May 1, 2021 and January 30, 2021 were as follows:


	Assets at Fair Value as of May 1, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents (1)	$	124,293	$	11,586	$	—	$	135,879
Derivative instruments (2)	—		906		—		906
Rabbi Trust assets (3)	1		61,162		—		61,163
Restricted cash equivalents (4)	5,843		4,814		—		10,657
Total assets	$	130,137	$	78,468	$	—	$	208,605

Liabilities:
Derivative instruments (2)	$	—	$	2,518	$	—	$	2,518
Total liabilities	$	—	$	2,518	$	—	$	2,518


	Assets and Liabilities at Fair Value as of January 30, 2021
(in thousands)	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents (1)	$	296,279	$	11,589	$	—	$	307,868
Derivative instruments (2)	—		79		—		79
Rabbi Trust assets (3)	1		60,789		—		60,790
Restricted cash equivalents (4)	2,943		7,775		—		10,718
Total assets	$	299,223	$	80,232	$	—	$	379,455

Liabilities:
Derivative instruments (2)	$	—	$	4,694	$	—	$	4,694
Total liabilities	$	—	$	4,694	$	—	$	4,694

(1) Level 1 assets consisted of investments in money market funds. Level 2 assets consist of time deposits.

(2) Level 2 assets and liabilities consisted primarily of foreign currency exchange forward contracts.

(3) Level 1 assets consisted of investments in money market funds. Level 2 assets consist of trust-owned life insurance policies.

(4) Level 1 assets consisted of investments in money market funds. Level 2 assets consist of time deposits.

The Company’s Level 2 assets and liabilities consisted of:

•Time deposits, which were valued at cost approximating fair value due to the short-term nature of these investments;

•Trust-owned life insurance policies which were valued using the cash surrender value of the life insurance policies; and

•Derivative instruments, primarily foreign currency exchange forward contracts, which were valued using quoted market prices of the same or similar instruments, adjusted for counterparty risk.

Fair value of long-term borrowings

The Company’s borrowings under the Senior Secured Notes are carried at historical cost in the accompanying Condensed Consolidated Balance Sheets. The carrying amount and fair value of the Company’s long-term gross borrowings were as follows:


(in thousands)	May 1, 2021		January 30, 2021
Gross borrowings outstanding, carrying amount	$	350,000	$	350,000
Gross borrowings outstanding, fair value	$	388,063	$	389,813

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial 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 entity 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 risks 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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