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42
NOTE 2: Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The authoritative guidance for fair value measurements establishes a
three-level hierarchy, which encourages an entity to maximize the use of observable inputs and minimize the use of
unobservable inputs when measuring fair value. The three levels of the hierarchy are defined as follows:
• Level 1 - inputs to the valuation techniques that are quoted prices in active markets for identical assets or liabilities
• Level 2 - inputs to the valuation techniques that are other than quoted prices but are observable for the assets or
liabilities, either directly or indirectly
• Level 3 - inputs to the valuation techniques that are unobservable for the assets or liabilities
Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
The following tables present the Company’s financial assets measured at fair value on a recurring basis as of January 31, 2014
and February 1, 2013, classified by fair value hierarchy:
Fair Value Measurements at Reporting Date Using
(In millions)
January 31, 2014
Level 1
Level 2
Level 3
Available-for-sale securities:
Money market funds
$
128
$
128
$
—
$
—
Certificates of deposit
21
21
—
—
Municipal obligations
18
—
18
—
Municipal floating rate obligations
18
—
18
—
Total short-term investments
$
185
$
149
$
36
$
—
Available-for-sale securities:
Municipal floating rate obligations
$
265
$
—
$
265
$
—
Municipal obligations
14
—
14
—
Total long-term investments
$
279
$
—
$
279
$
—
Fair Value Measurements at Reporting Date Using
(In millions)
February 1, 2013
Level 1
Level 2
Level 3
Available-for-sale securities:
Money market funds
$
49
$
49
$
—
$
—
Municipal obligations
56
—
56
—
Municipal floating rate obligations
14
—
14
—
Other
6
—
6
—
Total short-term investments
$
125
$
49
$
76
$
—
Available-for-sale securities:
Municipal floating rate obligations
$
230
$
—
$
230
$
—
Municipal obligations
41
—
41
—
Total long-term investments
$
271
$
—
$
271
$
—
There were no transfers between Levels 1, 2 or 3 during any of the periods presented.
When available, quoted prices were used to determine fair value. When quoted prices in active markets were available,
investments were classified within Level 1 of the fair value hierarchy. When quoted prices in active markets were not
available, fair values were determined using pricing models, and the inputs to those pricing models were based on observable