Fair Value of Financial Instruments and Fair Value Measurements

12 Months Ended

Oct. 30, 2011

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

FAIR VALUE OF FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

16. 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 October 30, 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 year ends were:

	October 30, 2011				October 31, 2010
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	(In thousands)				(In thousands)
Amended Credit Agreement	$	130,699	$	127,106	$	136,305	$	132,046

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

Fair Value Measurements

On May 2, 2010, we adopted ASU No. 2010-06, Improving Disclosures about Fair Value Measurements. This update amended FASB ASC 820-10-50 to require new disclosures concerning (1) transfers into and out of Levels 1 and 2 of the fair value measurement hierarchy, and (2) activity in Level 3 measurements. In addition, this update clarified certain existing disclosure requirements regarding the level of disaggregation and inputs and valuation techniques. Finally, this update made conforming amendments to the guidance on employers’ disclosures about postretirement benefit plan assets.

ASC 820-10 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 October 30, 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.

Stocks, options and ETF’s: Stocks, options and ETF’s are valued at the closing price reported in the active market in which the fund is traded.

Foreign currency contracts: 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.

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.

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 on a recurring basis as of October 30, 2011, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2			Level 3			Total
Assets:
Short-term investments in deferred compensation plan(1):
Money market	$	149		—			—			149
Mutual funds — Growth		682		—			—			682
Mutual funds — Blend		1,798		—			—			1,798
Mutual funds — Foreign blend		743		—			—			743
Mutual funds — Fixed income		––		638			—			638
Total short-term investments in deferred compensation plan		3,372		638			—			4,010
Other investments:
Cash		45		—			—			45
Stocks, options and ETF’s		428		—			—			428
Total other investments		473		—			—			473
Foreign currency contracts		—		42			––			42
Total assets	$	3,845		680			—			4,525
Liabilities:
Deferred compensation plan liability	$	—		(4,077	)		—			(4,077	)
Embedded derivative		—		—			(79	)		(79	)
Total liabilities	$	—		(4,077	)		(79	)		(4,156	)

(1) Unrealized holding gains (losses) for the fiscal year ended October 30, 2011, October 31, 2010 and November 1, 2009 were $(0.1) million, $0.4 million and $0.9 million, respectively.

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of October 30, 2011, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale(1)	$	—		—		2,500		2,500
Total assets	$	—		—		2,500		2,500

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value. As of October 30, 2011, the fair value of one asset group held for sale exceeded that asset group’s cost and carrying value. Accordingly, that asset group held for sale has been excluded from the table as of October 30, 2011.

The following table summarizes information regarding our financial assets and liabilities that are measured at fair value on a recurring basis as of October 31, 2010, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1			Level 2		Level 3			Total
Assets:
Short-term investments in deferred compensation plan:
Money market	$	366			—		—			366
Mutual funds — Growth		394			—		—			394
Mutual funds — Blend		1,595			—		—			1,595
Mutual funds — Foreign blend		637			—		—			637
Mutual funds — Fixed income		746			—		—			746
Total short-term investments in deferred compensation plan		3,738			—		—			3,738
Total assets	$	3,738			—		—			3,738
Liabilities:
Deferred compensation plan liability	$	(3,920	)		—		—			(3,920	)
Embedded derivative		—			—		(104	)		(104	)
Total liabilities	$	(3,920	)		—		(104	)		(4,024	)

The following table summarizes information regarding our financial assets that are measured at fair value on a nonrecurring basis as of October 31, 2010, segregated by level of the valuation inputs within the fair value hierarchy utilized to measure fair value (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Assets held for sale(1)	$	—		—		3,740		3,740
Total assets	$	—		—		3,740		3,740

(1) Certain assets held for sale are valued at fair value and are measured at fair value on a nonrecurring basis. Assets held for sale are reported at fair value, if, on an individual basis, the fair value of the asset is less than cost. The fair value of assets held for sale is estimated using Level 3 inputs, such as broker quotes for like-kind assets or other market indications of a potential selling value which approximates fair value. As of October 31, 2010, the fair value of one asset group held for sale exceeded that asset group’s cost and carrying value. Accordingly, that asset group held for sale has been excluded from the table as of October 31, 2010.

The following table summarizes the activity in Level 3 financial instruments during fiscal 2011 and 2010:

	Embedded derivative
Balance at November 1, 2009	$	(1,041	)
Unrealized gains(1)		937
Balance at October 31, 2010	$	(104	)
Unrealized gains(1)		25
Balance at October 30, 2011	$	(79	)

(1) Unrealized gains on the embedded derivative are recorded net in other income in the Consolidated Statements of Operations during the fiscal year ended October 30, 2011, October 31, 2010 and November 1, 2009.