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A-55
NO T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S , CO N T I N U E D
For items carried at (or adjusted to) fair value in the consolidated financial statements, the following
tables summarize the fair value of these instruments at February 1, 2014 and February 2, 2013:
February 1, 2014 Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3) Total
Available-for-Sale Securities . . . . . . . . . . . . . . . $36 $— $ — $36
Warrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 16 — 16
Long-Lived Assets . . . . . . . . . . . . . . . . . . . . . . . — — 29 29
Interest Rate Hedges . . . . . . . . . . . . . . . . . . . . . — (2) — (2)
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $36 $14 $29 $79
February 2, 2013 Fair Value Measurements Using
Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3) Total
Available-for-Sale Securities . . . . . . . . . . . . . . . $ 8 $— $20 $28
Long-Lived Assets . . . . . . . . . . . . . . . . . . . . . . . — — 8 8
Interest Rate Hedges . . . . . . . . . . . . . . . . . . . . . — 6 — 6
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8 $ 6 $28 $42
In 2013, one of the Company’s available-for-sale securities began trading in an active market. Because of
this, the Company transferred the $20 fair value of securities from a Level 3 asset to a Level 1 asset in 2013. In
2013, unrealized gains on the Level 1 available-for-sale securities totaled $8.
The Company values warrants using the Black-Scholes option-pricing model. The Black-Scholes option-
pricing model is classified as a Level 2 input.
The Company values interest rate hedges using observable forward yield curves. These forward yield
curves are classified as Level 2 inputs.
Fair value measurements of non-financial assets and non-financial liabilities are primarily used in the
impairment analysis of goodwill, other intangible assets, long-lived assets and in the valuation of store lease
exit costs. The Company reviews goodwill and other intangible assets for impairment annually, during the
fourth quarter of each fiscal year, and as circumstances indicate the possibility of impairment. See Note 3 for
further discussion related to the Company’s carrying value of goodwill. Long-lived assets and store lease exit
costs were measured at fair value on a nonrecurring basis using Level 3 inputs as defined in the fair value
hierarchy. See Note 1 for further discussion of the Company’s policies and recorded amounts for impairments
of long-lived assets and valuation of store lease exit costs. In 2013, long-lived assets with a carrying amount of
$68 were written down to their fair value of $29, resulting in an impairment charge of $39. In 2012, long-lived
assets with a carrying amount of $26 were written down to their fair value of $8, resulting in an impairment
charge of $18.
Mergers are accounted for using the acquisition method of accounting, which requires that the purchase
price paid for an acquisition be allocated to the assets and liabilities acquired based on their estimated fair
values as of the effective date of the acquisition, with the excess of the purchase price over the net assets
being recorded as goodwill. See Note 2 for further discussion related to the merger with Harris Teeter.