Old COPPER Company, Inc. - 10-K filing on 2013-03-20

Fair Value Disclosures

12 Months Ended

Feb. 02, 2013

9. Fair Value Disclosures

In determining fair value, the accounting standards establish a three-level hierarchy for inputs used in measuring fair value, as follows:

·	Level 1 — Quoted prices in active markets for identical assets or liabilities.

Level 2 — Significant observable inputs other than quoted prices in active markets for similar assets and liabilities, such as quoted prices for identical or similar assets or liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

·	Level 3 — Significant unobservable inputs reflecting our own assumptions, consistent with reasonably available assumptions made by other market participants.

REIT Assets Measured on a Recurring Basis

The market value of our investment in public REIT assets are accounted for as available-for-sale securities and are carried at fair value on an ongoing basis in Other assets in the Consolidated Balance Sheets. We determined the fair value of our investments in REITs using quoted market prices. There were no transfers in or out of any levels during any period presented. Our REIT assets measured at fair value on a recurring basis are as follows:



			REIT Assets - Fair Value Measurements Using
				Quoted Prices in Active		Significant Other		Significant
		Cost		Markets of Identical Assets		Observable Inputs		Unobservable Inputs
($ in millions)		Basis		(Level 1)		(Level 2)		(Level 3)
As of February 2, 2013	$	7	$	33	$	-	$	-
As of January 28, 2012		80		336		-		-

Other Non-Financial Assets Measured on a non-Recurring Basis

In 2012, we wrote the assets of 13 underperforming department stores that continued to operate down to their fair value. In 2011, we wrote the assets of eight underperforming department stores of which seven continued to operate down to their fair value. Impairment charges are included in real estate and other, net in the Consolidated Statement of Operations (see Note 17). The inputs to determine fair values were primarily based on projected discounted cash flow as well as other market information obtained from brokers.

The following table presents fair values for those assets measured at fair values and gains or losses during 2012 and 2011 on a non-recurring basis, and remaining on our Consolidated Balance Sheet:

Store Assets - Fair Value Measurements Using

Quoted Prices

Significant

in Active Markets

Other Observable

Unobservable

Total

Carrying

of Identical Assets

Inputs

Gains

($ in millions)

Value

(Level 1)

(Level 2)

(Level 3)

(Losses)

February 2, 2013

(26)

January 28, 2012

(58)

Other Financial Instruments

Carrying values and fair values of financial instruments that are not carried at fair value in the Consolidated Balance Sheets are as follows:


	As of February 2, 2013				As of January 28, 2012
		Carrying		Fair		Carrying		Fair
($ in millions)		Amount		Value		Amount		Value
Long-term debt, including current maturities	$	2,868	$	2,456	$	3,098	$	3,046
Cost investment		36		-		36		-

The fair value of long-term debt is estimated by obtaining quotes from brokers or is based on current rates offered for similar debt. The cost investment is for equity securities that are not registered and freely tradable shares and their fair values are not readily determinable; however, we believe the carrying value approximates or is less than the fair value.

As of February 2, 2013 and January 28, 2012, the fair values of cash and cash equivalents and accounts payable approximate their carrying values due to the short-term nature of these instruments. In addition, the fair values of the capital lease commitments and the note payable approximate their carrying values. These items have been excluded from the table above.

Concentrations of Credit Risk

We have no significant concentrations of credit risk.