v3.25.1
Note 10 - Fair Value Measurements
 3 Months Ended
May 03, 2025
Notes to Financial Statements  
Fair Value Disclosures [Text Block]

10. Fair Value Measurements

 

Our financial assets and liabilities are recorded at fair value, using a three-level fair value hierarchy that prioritizes the inputs used to measure fair value.

 

Assets and Liabilities Measured at Fair Value on a Recurring Basis

 

($ in millions)

 

As of May 3, 2025

  

As of May 4, 2024

 

​

 

Level 1

  

Level 2

  

Level 3

  

Level 1

  

Level 2

  

Level 3

 

Assets

                        

Available-for-sale security

 $—  $6  $—  $—  $6  $— 

Foreign exchange forward contracts

  —   1   —   —   2   — 

Cross-currency swap contract

  —   9   —   —   9   — 

Total assets

 $—  $16  $—  $—  $17  $— 

Liabilities

                        

Foreign exchange forward contracts

 $—  $9  $—  $—  $—  $— 

Total liabilities

 $—  $9  $—  $—  $—  $— 

 

There were no transfers into or out of Level 1, Level 2, or Level 3 assets and liabilities for any of the periods presented.

 

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

 

Certain assets and liabilities are measured at fair value on a nonrecurring basis. Assets and liabilities recognized or disclosed at fair value on the consolidated financial statements on a nonrecurring basis include items such as property, plant and equipment, operating lease right-of-use assets, goodwill, other intangible assets, and minority investments that are not accounted for under the equity method of accounting. These assets are measured using Level 3 inputs, if determined to be impaired.

 

During the first quarter of 2025, we recorded $140 million of impairment on the WSS tradename. We calculated the fair value using a discounted cash flow method, based on the relief from royalty method, which uses estimates of future growth and trends, royalty rates in the category of intellectual property, discount rates, and other variables, which represent Level 3 assumptions.

 

Additionally, during the first quarter of 2025, we recorded $110 million of impairment on goodwill following a qualitative and quantitative analysis of the EMEA and Asia Pacific reporting units. We calculated the fair value using estimates of the discount rate, terminal growth rates, earnings before depreciation and amortization, capital expenditures forecasts, and other variables, which represent Level 3 assumptions.

 

As of May 3, 2025, cumulative impairments on our portfolio of minority investments were $566 million.

 

Long-Term Debt

 

The fair value of long-term debt is determined by using model-derived valuations in which all significant inputs or significant value drivers are observable in active markets and, therefore, are classified as Level 2. The carrying value and estimated fair value of long-term debt were as follows:

 

  

May 3,

  

May 4,

 

($ in millions)

 

2025

  

2024

 

Carrying value (1)

 $396  $395 

Fair value

 $324  $321 

 

(1)

The carrying value of debt as of May 3, 2025 and May 4, 2024, included $4 and $5 million, respectively, of issuer’s discount and costs.

 

The carrying values of cash and cash equivalents, and other current receivables and payables approximate their fair value.