Fair Value Measurements and Concentrations of Credit Risk
The following table shows the Company’s financial assets that are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| February 1, 2014 | | February 2, 2013 |
| | | Fair Value Measurements | | | | Fair Value Measurements |
| Total | | Quoted Prices in Active Markets for Identical
Assets (Level 1) | | Significant Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Total | | Quoted Prices in Active Markets for Identical
Assets (Level 1) | | Significant Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) |
| (millions) |
Marketable
equity and
debt securities | $ | 75 |
| | $ | — |
| | $ | 75 |
| | $ | — |
| | $ | 68 |
| | $ | — |
| | $ | 68 |
| | $ | — |
|
Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, receivables, short-term debt, merchandise accounts payable, accounts payable and accrued liabilities and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value because of the short maturity of these instruments. The fair values of long-term debt, excluding capitalized leases, are generally estimated based on quoted market prices for identical or similar instruments, and are classified as Level 2 measurements within the hierarchy as defined by applicable accounting standards.
The following table shows the estimated fair value of the Company’s long-term debt:
|
| | | | | | | | | | | | | | | | | | | | | | | |
| February 1, 2014 | | February 2, 2013 |
| Notional Amount | | Carrying Amount | | Fair Value | | Notional Amount | | Carrying Amount | | Fair Value |
| (millions) |
Long-term debt | $ | 6,522 |
| | $ | 6,698 |
| | $ | 7,171 |
| | $ | 6,583 |
| | $ | 6,774 |
| | $ | 7,351 |
|
The following table shows certain of the Company’s non-financial assets that were measured at fair value on a nonrecurring basis during 2013 and 2012:
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| February 1, 2014 | | February 2, 2013 |
| | | Fair Value Measurements | | | | Fair Value Measurements |
| Total | | Quoted Prices in Active Markets for Identical
Assets (Level 1) | | Significant Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) | | Total | | Quoted Prices in Active Markets for Identical
Assets (Level 1) | | Significant Observable Inputs (Level 2) | | Significant Unobservable Inputs (Level 3) |
| (millions) |
Long-lived assets held and used | $ | 13 |
| | $ | — |
| | $ | — |
| | $ | 13 |
| | $ | 1 |
| | $ | — |
| | $ | — |
| | $ | 1 |
|
During 2013, long-lived assets held and used with a carrying value of $52 million were written down to their fair value of $13 million, resulting in asset impairment charges of $39 million. During 2012, long-lived assets held and used with a carrying value of $5 million were written down to their fair value of $1 million, resulting in asset impairment charges of $4 million. The fair values of these locations were calculated based on the projected cash flows and an estimated risk-adjusted rate of return that would be used by market participants in valuing these assets or prices of similar assets.
Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its temporary cash investments in what it believes to be high credit quality financial instruments.
