Dillard's 2010 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2010 Dillard's annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 79

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79

Notes to Consolidated Financial Statements (Continued)
15. Fair Value Disclosures (Continued)
The fair value of the Company’s cash and cash equivalents and trade accounts receivable
approximates their carrying values at January 29, 2011 and January 30, 2010 due to the short-term
maturities of these instruments. The fair values of the Company’s long-term debt at January 29, 2011
and January 30, 2010 were approximately $725 million and $645 million, respectively. The carrying
value of the Company’s long-term debt at January 29, 2011 and January 30, 2010 was approximately
$746 million and $749 million, respectively. The fair value of the subordinated debentures at
January 29, 2011 and January 30, 2010 was approximately $190 million and $150 million, respectively.
The carrying value of the subordinated debentures at January 29, 2011 and January 30, 2010 was
$200 million.
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
The FASB’s accounting guidance utilizes a fair value hierarchy that prioritizes the inputs to the
valuation techniques used to measure fair value into three broad levels:
• Level 1: Observable inputs such as quoted prices (unadjusted) in active markets for identical
assets or liabilities
• Level 2: Inputs, other than quoted prices, that are observable for the asset or liability, either
directly or indirectly; these include quoted prices for similar assets or liabilities in active markets
and quoted prices for identical or similar assets or liabilities in markets that are not active
• Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions
Basis of Fair Value Measurements
Quoted Prices Significant
In Active Other Significant
Fair Value Markets for Observable Unobservable
of Assets Identical Items Inputs Inputs
(in thousands) (Liabilities) (Level 1) (Level 2) (Level 3)
Long-lived assets held for sale
As of January 29, 2011 ................... $27,548 $— $— $27,548
As of January 30, 2010 ................... 33,956 — — 33,956
In fiscal 2009, long-lived assets held for sale with a carrying value of $37.9 million were written
down to their fair value of $34.0 million, resulting in an impairment charge of $3.9 million, which was
included in earnings for the period. In fiscal 2010, long-lived assets held for sale were written down to
their fair value of $27.5 million, resulting in an impairment charge of $2.2 million, which was included
in earnings for the period. The inputs used to calculate the fair value of these long-lived assets in both
periods included selling prices from commercial real estate transactions for similar assets in similar
markets that we estimated would be used by a market participant in valuing these assets.
During fiscal 2010, the Company also sold three vacant retail store properties with carrying values
of $4.2 million.
F-29