Fair Value of Financial Instruments and Fair Value Measurements

9 Months Ended

Jul. 31, 2011

Fair Value of Financial Instruments and Fair Value Measurements [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

NOTE 13 — FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, trade accounts receivable and accounts payable approximate fair value as of July 31, 2011 and October 31, 2010 because of the relatively short maturity of these instruments. The fair values of the remaining financial instruments not currently recognized at fair value on our Consolidated Balance Sheets at the respective fiscal period ends were (in thousands):

	July 31, 2011				October 31, 2010
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Amended Credit Agreement	$	131,056	$	129,745	$	136,305	$	132,046

The fair value of the Amended Credit Agreement was based on recent trading activities of comparable market instruments.

Fair Value Measurements

ASC Subtopic 820-10, Fair Value Measurements and Disclosures, requires us to use valuation techniques to measure fair value that maximize the use of observable inputs and minimize the use of unobservable inputs. These inputs are prioritized as follows:

     Level 1: Observable inputs such as quoted prices for identical assets or liabilities in active markets.

     Level 2: Other inputs that are observable directly or indirectly, such as quoted prices for similar assets or liabilities or market-corroborated inputs.

     Level 3: Unobservable inputs for which there is little or no market data and which require us to develop our own assumptions about how market participants would price the assets or liabilities.

The following is a description of the valuation methodologies used for assets and liabilities measured at fair value. There have been no changes in the methodologies used at July 31, 2011 and October 31, 2010.

     Money market: Money market funds have original maturities of three months or less. The original cost of these assets approximates fair value due to their short-term maturity.

     Mutual funds: Mutual funds are valued at the closing price reported in the active market in which the mutual fund is traded.

     Assets held for sale: Assets held for sale are valued based on current market conditions, prices of similar assets in similar condition and expected proceeds from the sale of the assets.

     Foreign currency contract: The fair value of the foreign currency derivative is based on a market approach and takes into consideration current foreign currency exchange rates and current creditworthiness of us or the counterparty, as applicable.

     Deferred compensation plan liability: Deferred compensation plan liability comprises of phantom investments in the deferred compensation plan and is valued at the closing price reported in the active market in which the money market, mutual fund or NCI stock phantom investments are traded.

     Embedded derivative: The embedded derivative value is based on an income approach in which we used a probability-weighted discounted cash flow model and assigned probabilities for each qualified default event.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value as of July 31, 2011 (in thousands):

	Level 1			Level 2		Level 3			Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	205		$	—	$	—		$	205
Mutual funds — Growth		692			—		—			692
Mutual funds — Blend		1,782			—		—			1,782
Mutual funds — Foreign blend		780			—		—			780
Mutual funds — Fixed income		597			—		—			597
Total short-term investments in deferred compensation plan	$	4,056		$	—	$	—		$	4,056
Foreign currency contracts		—			56		—			56
Assets held for sale		—			5,804		—			5,804
Total assets	$	4,056		$	5,860	$	—		$	9,916
Liabilities:
Deferred compensation plan liability	$	(4,308	)	$	—	$	—		$	(4,308	)
Embedded derivative		—			—		(85	)		(85	)
Total liabilities	$	(4,308	)	$	—	$	(85	)	$	(4,393	)

(1) Unrealized holding gains (losses) for the three months ended July 31, 2011 and August 1, 2010 were $(0.2) million and $(0.1) million, respectively. Unrealized holding gains (losses) for the nine months ended July 31, 2011 and August 1, 2010 were $0.1 million and $0.2 million, respectively. These unrealized holding gains (losses) are primarily offset by changes in the deferred compensation plan liability.

The following table summarizes the activity in Level 3 financial instruments during the nine months ended July 31, 2011 and August 1, 2010 (in thousands):

	July 31,			August 1,
	2011			2010
Beginning balance	$	(104	)	$	(1,041	)
Unrealized gains (1)		19			930
Ending balance	$	(85	)	$	(111	)

(1) Unrealized gains on the embedded derivative are recorded in other income, net in the Consolidated Statements of Operations during the nine months ended July 31, 2011 and August 1, 2010.