Saks Fifth Avenue 2008 Annual Report Download - page 91

SAKS INCORPORATED & SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
(In thousands, except per share amounts)
The Company may also be required, from time to time, to measure certain other financial assets and
liabilities at fair value on a non-recurring basis in accordance with GAAP.
As of January 31, 2009, the Company had no material financial assets or liabilities measured on a recurring
basis that required adjustments or write-downs.
NOTE 12 — FAIR VALUES OF FINANCIAL INSTRUMENTS
The fair values of the Company’s cash and cash equivalents and accounts payable approximate their
carrying amounts reported in the consolidated balance sheets, due to the immediate or short-term maturity of
these instruments. For variable rate notes that reprice frequently, such as the Company’s revolving credit
agreement, fair value approximates carrying value.
The fair values of the Company’s financial instruments other than the instruments considered short-term in
nature at January 31, 2009 and February 2, 2008 were as follows:
Carrying
Amount
Estimated
Fair Value
January 31, 2009
7.50% senior notes .................................................... $ 45,872 $ 36,698
9.875% senior notes ................................................... $141,557 $ 99,090
7.00% senior notes .................................................... $ 2,922 $ 1,753
7.375% senior notes ................................................... $ 1,911 $ 993
2.00% convertible notes ................................................ $230,000 $ 89,125
February 2, 2008
8.25% senior notes .................................................... $ 84,132 $ 84,868
7.50% senior notes .................................................... $ 45,872 $ 45,241
9.875% senior notes ................................................... $141,557 $144,211
7.00% senior notes .................................................... $ 2,922 $ 2,922
7.375% senior notes ................................................... $ 1,911 $ 1,911
2.00% convertible notes ................................................ $230,000 $367,425
The fair values of the long-term debt were estimated based on quotes obtained from financial institutions for
those or similar instruments or on the basis of quoted market prices. The estimated fair value of the convertible
note hedge and written call option was $0 and $11,339 at January 31, 2009 and February 2, 2008, respectively.
NOTE 13 — STORE DISPOSITIONS, INTEGRATION AND OTHER CHARGES
In October 2004, the Company announced its intention to close 12 SFA stores. The net pre-tax charges
resulting from the closing of these stores are principally related to asset impairments, lease terminations,
inventory write-downs and severance costs, partially offset by gains on the dispositions of one or more stores. As
it relates to these closings, the Company incurred charges of $6,353 for lease termination costs at closed stores
and $268 for severance charges during the fiscal year ended February 3, 2007. Severance costs represent the
portion of accrued benefits for employees that will exist when the stores are closed which were paid in the year
incurred. Lease termination costs are included in Impairments and Dispositions, markdown charges are included
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