Fair Value Measurements

3 Months Ended

Apr. 28, 2012

Fair Value Measurements

6. Fair Value Measurements

The Company’s financial assets recorded at fair value are categorized as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs or significant value-drivers are observable in active markets.

Level 3 – Model-derived valuations in which one or more significant inputs or significant value-drivers are unobservable.

The following tables provide a summary of the Company’s recognized assets and liabilities that are measured at fair value on a recurring basis:

	At April 28, 2012						At April 30, 2011						At January 28, 2012
(in millions)	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Assets
Short-term investments	$	—	$	50	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Auction rate security		—		5		—		—		5		—		—		5		—
Forward foreign exchange contracts		—		—		—		—		4		—		—		—		—
Total Assets	$	—	$	55	$	—	$	—	$	9	$	—	$	—	$	5	$	—
Liabilities
Forward foreign exchange contracts		—		2		—		—		—		—		—		2		—
Total Liabilities	$	—	$	2	$	—	$	—	$	—	$	—	$	—	$	2	$	—

The Company’s short-term investments consisted of available-for-sale securities, which are primarily comprised of investments in corporate bonds. Available-for-sale securities are recorded at fair value with unrealized gains and losses reported, net of tax, in other comprehensive income, unless unrealized losses are determined to be other than temporary. As of April 28, 2012, the Company held $50 million of available-for-sale securities with maturity dates within one year from the purchase date. These securities are valued using market prices in markets that are not active and therefore are classified as Level 2 instruments. Level 2 instrument valuations are obtained from readily available pricing sources for comparable instruments.

Interest income related to the short-term investments included within interest expense was not significant for the three months ended April 28, 2012.

The Company’s auction rate security is classified as available-for-sale and, accordingly, is reported at fair value. The fair value of the security is determined by review of the underlying security at each reporting period. The Company’s derivative financial instruments are valued using market-based inputs to valuation models. These valuation models require a variety of inputs, including contractual terms, market prices, yield curves, and measures of volatility.

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.