v3.20.4
FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
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| Fair Value Disclosures [Abstract] |
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| FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS |
NOTE 6—FAIR VALUE MEASUREMENTS OF FINANCIAL INSTRUMENTS
Recurring Fair Value Measurements
The following tables provides the fair value hierarchy for financial assets and liabilities measured on a recurring basis: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Condensed Consolidated Balance Sheets Location | | Fair Value at January 30, 2021 | | (in thousands) | | | Level 1 | | Level 2 | | Level 3 | | Assets: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Foreign currency derivatives designated as hedging instruments | | Prepaid expenses and other current assets | | $ | — | | | $ | 63 | | | $ | — | | | Fuel derivatives designated as hedging instruments | | Prepaid expenses and other current assets | | $ | — | | | $ | 680 | | | $ | — | | | Mutual funds | | Other long-term assets | | $ | 1,592 | | | $ | — | | | $ | — | | | | | | | | | | | | Liabilities: | | | | | | | | | | Foreign currency derivatives not designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 3 | | | $ | — | | | Fuel derivatives designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 1 | | | $ | — | | | Foreign currency derivatives designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 774 | | | $ | — | | | Interest rate swaps designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 34,779 | | | $ | — | | | Interest rate swaps designated as hedging instruments | | Other long-term liabilities | | $ | — | | | $ | 66,374 | | | $ | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Condensed Consolidated Balance Sheets Location | | Fair Value at August 1, 2020 | | (in thousands) | | | Level 1 | | Level 2 | | Level 3 | | Assets: | | | | | | | | | | Foreign currency derivatives not designated as hedging instruments | | Prepaid expenses and other current assets | | $ | — | | | $ | 26 | | | $ | — | | | Fuel derivatives designated as hedging instruments | | Prepaid expenses and other current assets | | $ | — | | | $ | 36 | | | $ | — | | | Foreign currency derivatives designated as hedging instruments | | Prepaid expenses and other current assets | | $ | — | | | $ | 94 | | | $ | — | | | Fuel derivatives designated as hedging instruments | | Other long-term assets | | $ | — | | | $ | 23 | | | $ | — | | | Mutual funds | | Other long-term assets | | $ | 1,678 | | | $ | — | | | $ | — | | | | | | | | | | | Liabilities: | | | | | | | | | | Fuel derivatives designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 197 | | | $ | — | | | Foreign currency derivatives designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 357 | | | $ | — | | | Interest rate swaps designated as hedging instruments | | Accrued expenses and other current liabilities | | $ | — | | | $ | 46,743 | | | $ | — | | | Interest rate swaps designated as hedging instruments | | Other long-term liabilities | | $ | — | | | $ | 91,994 | | | $ | — | |
The fair values of interest rate swap contracts are measured using Level 2 inputs. The interest rate swap contracts are valued using an income approach interest rate swap valuation model incorporating observable market inputs including interest rates, LIBOR swap rates and credit default swap rates. As of January 30, 2021, a 100 basis point increase in forward LIBOR interest rates would decrease the fair value of the interest rate swap liabilities by approximately $40.6 million; a 100 basis point decrease in forward LIBOR interest rates would increase the fair value of the interest rate swap liabilities by approximately $42.2 million. Refer to Note 7—Derivatives for further information on interest rate swap contracts.
Mutual Funds
Mutual fund assets consist of balances held in investments to fund certain deferred compensation plans. The fair values of mutual fund assets are based on quoted market prices of the mutual funds held by the plan at each reporting period. Mutual funds traded in active markets are classified within Level 1 of the fair value hierarchy.
Fuel Supply Agreements and Derivatives
To reduce diesel price risk, the Company has entered into derivative financial instruments and/or forward purchase commitments for a portion of our projected monthly diesel fuel requirements at fixed prices. The fair values of fuel derivative agreements are measured using Level 2 inputs.
Foreign Exchange Derivatives
To reduce foreign exchange risk, the Company has entered into derivative financial instruments for a portion of our projected monthly foreign currency requirements at fixed prices. The fair values of foreign exchange derivatives are measured using Level 2 inputs. Fair Value Estimates
For certain of the Company’s financial instruments including cash and cash equivalents, receivables, accounts payable, accrued vacation, compensation and benefits, and other current assets and liabilities the fair values approximate carrying amounts due to their short maturities. The fair value of notes receivable is estimated by using a discounted cash flow approach prior to consideration for uncollectible amounts and is calculated by applying a market rate for similar instruments using Level 3 inputs. The fair value of debt is estimated based on market quotes, where available, or market values for similar instruments, using Level 2 and 3 inputs. In the table below, the carrying value of the Company’s long-term debt is net of original issue discounts and debt issuance costs. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | January 30, 2021 | | August 1, 2020 | | (In thousands) | | Carrying Value | | Fair Value | | Carrying Value | | Fair Value | | Notes receivable, including current portion | | $ | 41,264 | | | $ | 40,655 | | | $ | 77,598 | | | $ | 78,877 | | | Long-term debt, including current portion | | $ | 2,387,241 | | | $ | 2,474,902 | | | $ | 2,497,626 | | | $ | 2,535,851 | | | | | | | | | | |
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- DefinitionThe entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.
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