Annual report pursuant to Section 13 and 15(d)

Fair Value Measurements and Concentrations of Credit Risk

v3.21.1
Fair Value Measurements and Concentrations of Credit Risk
12 Months Ended
Jan. 30, 2021
Fair Value By Fair Value Hierarchy Level Extensible List [Abstract]  
Fair Value Measurements and Concentrations of Credit Risk

 

14.

Fair Value Measurements and Concentrations of Credit Risk

The following table shows the Company’s financial assets that are required to be measured at fair value on a recurring basis, by level within the hierarchy as defined by applicable accounting standards:

 

 

 

January 30, 2021

 

 

February 1, 2020

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

 

Quoted

Prices

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quoted

Prices

 

 

 

 

 

 

 

 

 

 

 

Total

 

 

in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

Total

 

 

in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

 

(millions)

 

Marketable

   equity and

   debt securities

 

$

100

 

 

$

37

 

 

$

63

 

 

$

 

 

$

132

 

 

$

34

 

 

$

98

 

 

$

 

 

Other financial instruments not measured at fair value on a recurring basis include cash and cash equivalents, receivables, certain-short term investments and other assets, short-term debt, merchandise accounts payable, accounts payable and accrued liabilities and long-term debt. With the exception of long-term debt, the carrying amount approximates fair value because of the short maturity of these instruments. The fair values of long-term debt, excluding capitalized leases, are generally estimated based on quoted market prices for identical or similar instruments, and are classified as Level 2 measurements within the hierarchy as defined by applicable accounting standards.

The following table shows the estimated fair value of the Company’s long-term debt, excluding capital leases and other obligations:

 

 

 

January 30, 2021

 

 

February 1, 2020

 

 

 

Notional

Amount

 

 

Carrying

Amount

 

 

Fair

Value

 

 

Notional

Amount

 

 

Carrying

Amount

 

 

Fair

Value

 

 

 

(millions)

 

Long-term debt

 

$

4,454

 

 

$

4,407

 

 

$

4,320

 

 

$

3,607

 

 

$

3,621

 

 

 

3,702

 

 

The following table shows certain of the Company’s long-lived assets, which includes tangible and intangible assets, that were measured at fair value on a nonrecurring basis during 2020 and 2019:

 

 

 

January 30, 2021

 

 

February 1, 2020

 

 

 

 

 

 

 

Fair Value Measurements

 

 

 

 

 

 

Fair Value Measurements

 

 

 

Total

 

 

Quoted

Prices

in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

Total

 

 

Quoted

Prices

in Active

Markets for

Identical

Assets

(Level 1)

 

 

Significant

Observable

Inputs

(Level 2)

 

 

Significant

Unobservable

Inputs

(Level 3)

 

 

 

(millions)

 

Long-lived assets

 

$

95

 

 

$

 

 

$

 

 

$

95

 

 

$

129

 

 

$

 

 

$

 

 

$

129

 

Goodwill

 

 

828

 

 

 

 

 

 

 

 

 

828

 

 

 

 

 

 

 

 

 

 

 

 

 

 

During 2020, long-lived assets with a carrying value of $295 million were written down to their fair value of $95 million, resulting in asset impairment charges of $200 million, and goodwill with a carrying value of $3,908 million was written down to its fair value of $828 million, resulting in goodwill impairment charges of $3,080 million. During 2019, long-lived assets with a carrying value of $326 million were written down to their fair value of $129 million, resulting in asset impairment charges of $197 million. The fair values of these assets were calculated based on the projected cash flows and an estimated risk-adjusted rate of return that would be used by market participants in valuing these assets or prices of similar assets.

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of temporary cash investments. The Company places its temporary cash investments in what it believes to be high credit quality financial instruments.