Dillard's 2013 Annual Report Download - page 71

Download and view the complete annual report

Please find page 71 of the 2013 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 80

  • 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
  • 80

F-25
15. Fair Value Disclosures
The estimated fair values of financial instruments which are presented herein have been determined by the Company
using available market information and appropriate valuation methodologies. However, considerable judgment is required in
interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein are not necessarily
indicative of amounts the Company could realize in a current market exchange.
The fair value of the Company's long-term debt and subordinated debentures is based on market prices or dealer quotes.
The fair value of the Company's cash and cash equivalents and trade accounts receivable approximates their carrying
values at February 1, 2014 and February 2, 2013 due to the short-term maturities of these instruments. The fair values of the
Company's long-term debt at February 1, 2014 and February 2, 2013 were approximately $667 million and $672 million,
respectively. The carrying value of the Company's long-term debt at February 1, 2014 and February 2, 2013 was approximately
$615 million and $615 million, respectively. The fair value of the subordinated debentures at February 1, 2014 and February 2,
2013 was approximately $204 million. The carrying value of the subordinated debentures at February 1, 2014 and February 2,
2013 was $200 million.
During fiscal 2013, the Company recognized an impairment charge of $5.4 million on certain cost method investments.
The Company evaluated all factors and determined that an other-than-temporary impairment charge was necessary. These
investments are recorded in other assets on the balance sheet.
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
(in thousands of dollars)
Fair Value
of Assets
Quoted Prices
In Active
Markets for
Identical Items
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Long-lived assets held for use
As of February 2, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . $ 5,000 $ — $ 5,000 $ —
Long-lived assets held for sale
As of February 1, 2014 . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,374 $ — $ — $ 10,374
As of February 2, 2013 . . . . . . . . . . . . . . . . . . . . . . . . . 7,358 — 940 6,418
As of January 28, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . 17,348 — — 17,348
Long-lived assets held for use
During fiscal 2012, long-lived assets held for use were written down to their fair value of $5.0 million, resulting in an
impairment charge of $1.0 million, which was included in earnings for the period. The input used to calculate the fair value of
these long-lived assets held for use was based upon a contract the Company had entered to sell the assets. During fiscal 2013,
the sale was not consummated, and the store remained in operation.
Long-lived assets held for sale
During fiscal 2013, the Company sold two former retail store locations with carrying values totaling $1.2 million. The
Company also closed one store location with a carrying value of $4.2 million, which was held for sale as of February 1, 2014.
During fiscal 2012, the Company sold five former retail store locations with carrying values totaling $9.4 million. During
fiscal 2012, long-lived assets held for sale were written down to their fair value of $7.4 million, resulting in an impairment
charge of $0.6 million, which was included in earnings for the period. The input used to calculate the fair value of $0.9 million