Fair Value Measurements

9 Months Ended

Oct. 28, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

FAIR VALUE MEASUREMENTS

The fair value of an asset is considered to be the price at which the asset could be sold in an orderly transaction between unrelated knowledgeable and willing parties. A liability’s fair value is defined as the amount that would be paid to transfer the liability to a new obligor, rather than the amount that would be paid to settle the liability with the creditor. Assets and liabilities recorded at fair value are measured using a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include:

•	Level 1 –	Observable inputs that reflect quoted prices in active markets
•	Level 2 –	Inputs other than quoted prices in active markets that are either directly or indirectly observable
•	Level 3 –	Unobservable inputs in which little or no market data exists, therefore requiring the Company to develop its own assumptions

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The assets and liabilities of the Company that are measured at fair value on a recurring basis as of October 28, 2012 and January 29, 2012 were as follows (amounts in millions):

	Fair Value at October 28, 2012 Using							Fair Value at January 29, 2012 Using
	Level 1		Level 2			Level 3		Level 1		Level 2			Level 3
Derivative agreements - assets	$	—	$	84		$	—	$	—	$	91		$	—
Derivative agreements - liabilities	—		(20		)	—		—		(27		)	—
Total	$	—	$	64		$	—	$	—	$	64		$	—

The Company uses derivative financial instruments from time to time in the management of its interest rate exposure on long-term debt and its exposure on foreign currency fluctuations. The fair value of the Company’s derivative financial instruments was measured using level 2 inputs.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

The assets and liabilities of the Company that were measured at fair value on a nonrecurring basis during the nine months ended October 28, 2012 and October 30, 2011 were as follows (amounts in millions):

	Fair Value Measured During
	the Nine Months Ended			Gains
	October 28, 2012 - Level 3			(Losses)
Lease obligation costs, net	$	(169	)	$	(43	)
Total for the first nine months of fiscal 2012				$	(43	)

	Fair Value Measured During
	the Nine Months Ended			Gains
	October 30, 2011 - Level 3			(Losses)
Lease obligation costs, net	$	(145	)	$	(7	)
Total for the first nine months of fiscal 2011				$	(7	)

Lease obligation costs were related to certain store closings and the exit of certain businesses in fiscal 2009 and 2008, as well as the closing of seven stores in China in fiscal 2012. These charges were measured on a nonrecurring basis using fair value measurements with unobservable inputs (level 3).

Long-lived assets were analyzed for impairment on a nonrecurring basis using fair value measurements with unobservable inputs (level 3). Impairment charges related to long-lived assets in the first nine months of fiscal 2012 and 2011 were not material.

Upon announcement in the third quarter of fiscal 2012 of its intention to close seven stores in China, the Company completed an assessment on the recoverability of Goodwill for its China reporting unit. The fair value of the China reporting unit was estimated using the present value of expected future discounted cash flows through unobservable inputs. As a result of this analysis, the Company recorded a $97 million impairment charge to Goodwill in the third quarter of fiscal 2012. See Note 2 for further discussion of the China store closings.

Additionally, during the third quarter of fiscal 2012, the Company completed its annual assessment on the recoverability of Goodwill for its other reporting units. The Company performed qualitative assessments for each of its reporting units, concluding that the fair value of the reporting units was not more likely than not less than the carrying value. Accordingly, no Goodwill impairments were recorded for these reporting units.

The aggregate fair value of the Company’s Senior Notes, based on quoted market prices, was $12.6 billion and $12.1 billion at October 28, 2012 and January 29, 2012, respectively, compared to a carrying value of $10.3 billion at both October 28, 2012 and January 29, 2012.