Lowe's 2014 Annual Report Download - page 55

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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 30, 2015
and January 31, 2014, classified by fair value hierarchy:
Fair Value Measurements at Reporting Date Using
(In millions) January 30, 2015 Level 1 Level 2 Level 3
Available-for-sale securities:
Money market funds $ 81
$ 81
$
—
$
—
Municipal obligations 21
—
21
—
Certificates of deposit 17
17
—
—
Municipal floating rate obligations 6
—
6
—
Total short-term investments $ 125
$ 98
$ 27
$
—
Available-for-sale securities:
Municipal floating rate obligations $ 348
$
—
$ 348
$
—
Certificates of deposit 4
4
—
—
Municipal obligations 2
—
2
—
Total long-term investments $ 354
$ 4
$ 350
$
—
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
$
—
$
—
Municipal obligations 18
—
18
—
Certificates of deposit 21
21
—
—
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
$
—
There were no transfers between Levels 1, 2 or 3 during any of the periods presented.
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