Abercrombie & Fitch 2013 Annual Report Download - page 63

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63
million for Fiscal 2012 and Fiscal 2011, respectively, recorded as part of Interest Expense, Net on the Consolidated Statements
of Operations and Comprehensive Income.
8. FAIR VALUE
Fair value is 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 inputs used to measure fair value are prioritized based on a three-
level hierarchy. The three levels of inputs to measure fair value are as follows:
• Level 1 — inputs are unadjusted quoted prices for identical assets or liabilities that are available in active markets.
• Level 2 — inputs are other than quoted market prices included within Level 1 that are observable for assets or liabilities,
directly or indirectly.
• Level 3 — inputs to the valuation methodology are unobservable.
The lowest level of significant input determines the placement of the entire fair value measurement in the hierarchy. The
three levels of the hierarchy and the distribution of the Company’s assets and liabilities, measured at fair value, within it were as
follows:
Assets and Liabilities at Fair Value as of February 2, 2013
Level 1 Level 2 Level 3 Total
(in thousands)
ASSETS:
Money market funds(1) $ 245,019 $ — $ — $ 245,019
Derivative financial instruments — 2,493 — 2,493
Total assets measured at fair value $ 245,019 $ 2,493 $ — $ 247,512
LIABILITIES:
Derivative financial instruments — 9,987 — 9,987
Total liabilities measured at fair value $ — $ 9,987 $ — $ 9,987
(1) Includes $245.0 million of money market funds included in Cash and Equivalents. Amounts held in the Rabbi Trust were immaterial.
Assets and Liabilities at Fair Value as of January 28, 2012
Level 1 Level 2 Level 3 Total
(in thousands)
ASSETS:
Money market funds(1) $ 209,039 $ — $ — $ 209,039
ARS — available-for-sale — student loan backed — — 84,650 84,650
ARS — available-for-sale — municipal authority bonds — — 14,858 14,858
Derivative financial instruments — 10,770 — 10,770
Total assets measured at fair value $ 209,039 $ 10,770 $ 99,508 $ 319,317
LIABILITIES:
Derivative financial instruments — 1,458 — 1,458
Total liabilities measured at fair value $ — $ 1,458 $ — $ 1,458
(1) Includes $209.0 million of money market funds included in Cash and Equivalents. Amounts held in the Rabbi Trust were immaterial.
The level 2 assets and liabilities consist of derivative financial instruments, primarily forward foreign exchange contracts.
The fair value of forward foreign exchange contracts is determined by using quoted market prices of the same or similar
instruments, adjusted for counterparty risk.
The level 3 assets included available-for-sale investments in insured student loan backed ARS and insured municipal
authority bond ARS.
Table of Contents ABERCROMBIE & FITCH CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)