Fair Value Measurements

6 Months Ended

Aug. 03, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

Note 5.  Fair Value Measurements

Our financial instruments consist of cash and cash equivalents, marketable securities, trade receivables and payables.  The carrying values of these assets and liabilities approximate their fair value due to the short-term nature of the instruments. 

Marketable securities are classified as available-for-sale and as of August 3, 2013 generally consist of corporate bonds, municipal bonds, and U.S. government and agency securities with $134.9million of securities with maturity dates within one year or less and $73.5 million with maturity dates over one year and less than two years. 

We consider all securities available-for-sale, including those with maturity dates beyond 12 months, and therefore classify these securities within current assets on the consolidated balance sheets as they are available to support current operational liquidity needs.  Marketable securities are carried at fair value, with the unrealized holding gains and losses, net of income taxes, reflected as a separate component of stockholders’ equity until realized.  For the purposes of computing realized and unrealized gains and losses, cost is determined on a specific identification basis.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date.  Entities are required to use a three-level hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The valuation hierarchy is based upon the transparency of inputs to the valuation of an asset or liability on the measurement date.  The three levels are defined as follows:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities

Level 2 – Unadjusted quoted prices in active markets for similar assets or liabilities, or; Unadjusted quoted

prices for identical or similar assets or liabilities in markets that are not active, or; Inputs other than quoted prices that are observable for the asset or liability

Level 3 – Unobservable inputs for the asset or liability

We measure certain financial assets at fair value on a recurring basis, including our marketable securities, which are classified as available-for-sale securities, certain cash equivalents, specifically our money market accounts, and assets held in our non-qualified deferred compensation plan.  The money market accounts are valued based on quoted market prices in active markets.  Our marketable securities are generally valued based on other observable inputs for those securities (including market corroborated pricing or other models that utilize observable inputs such as interest rates and yield curves) based on information provided by independent third party pricing entities, except for U.S. government securities which are valued based on quoted market prices in active markets.  The investments in our non-qualified deferred compensation plan are valued using quoted market prices and are included in other assets on our consolidated balance sheets. 

From time to time, we measure certain assets at fair value on a non-recurring basis, specifically long-lived assets evaluated for impairment.  We estimate the fair value of our long-lived assets using company-specific assumptions which would fall within Level 3 of the fair value hierarchy. 

During the quarter ended August 3, 2013, we did not make any transfers between Level 1 and Level 2 financial assets.  Furthermore, as of August 3, 2013, February 2, 2013 and July 28, 2012, we did not have any Level 3 financial assets.  We conduct reviews on a quarterly basis to verify pricing, assess liquidity, and determine if significant inputs have changed that would impact the fair value hierarchy disclosure. 

In accordance with the provisions of the guidance, we categorized our financial assets, which are valued on a recurring basis, based on the priority of the inputs to the valuation technique for the instruments, as follows:

			Fair Value Measurements at Reporting Date Using
	Balance as of August 3, 2013		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs          (Level 2)		Significant Unobservable Inputs               (Level 3)
Current Assets	(in thousands)
Cash equivalents:
Money market accounts	$	5,829	$	5,829	$	-	$	-
Marketable securities:								-
Municipal securities		91,903		-		91,903		-
U.S. government securities		35,026		35,026		-		-
U.S. government agencies		5,008		-		5,008		-
Corporate bonds		76,497		-		76,497		-
Commercial paper		-		-		-		-
Certificates of deposit		-		-		-		-
Non Current Assets
Deferred compensation plan		5,092		5,092		-		-
Total	$	219,355	$	45,947	$	173,408	$	-
	Balance as of February 2, 2013
Current Assets
Cash equivalents:
Money market accounts	$	25,366	$	25,366	$	-	$	-
Marketable securities:								-
Municipal securities		92,448		-		92,448		-
U.S. government securities		44,714		44,714		-		-
U.S. government agencies		28,064		-		28,064		-
Corporate bonds		100,255		-		100,255		-
Commercial paper		4,996		-		4,996		-
Certificates of deposit		2,022		-		2,022		-
Non Current Assets
Deferred compensation plan		4,629		4,629		-		-
Total	$	302,494	$	74,709	$	227,785	$	-
	Balance as of July 28, 2012
Current Assets
Cash equivalents:
Money market accounts	$	18,808	$	18,808	$	-	$	-
Marketable securities:
Municipal securities		87,741		-		87,741		-
U.S. government securities		28,569		28,569		-		-
U.S. government agencies		26,596		-		26,596		-
Corporate bonds		101,580		-		101,580		-
Commercial paper		3,994		-		3,994		-
Certificates of deposit		-		-		-		-
Non Current Assets
Deferred compensation plan		4,175		4,175		-		-
Total	$	271,463	$	51,552	$	219,911	$	-