Derivative Financial Instruments

3 Months Ended

May 03, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our derivative instruments primarily consist of interest rate swaps, which we use to mitigate interest rate risk. As a result of our use of derivative instruments, we have counterparty credit risk with large global financial institutions. We monitor this concentration of counterparty credit risk on an ongoing basis. See Note 2 for a description of the fair value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial Position.

In March 2014, we entered into an interest rate swap with a notional amount of $250 million, under which we pay a variable rate and receive a fixed rate. We designated this swap as a fair value hedge. With the addition of this swap, as of May 3, 2014, we have two swaps designated as fair value hedges. As of May 4, 2013, one swap was designated as a fair value hedge. No ineffectiveness was recognized during the three months ended May 3, 2014 or May 4, 2013.

Periodic payments, valuation adjustments and amortization of gains or losses on our derivative contracts had the following effect on our Consolidated Statements of Operations:

Derivative Contracts - Effect on Results of Operations (millions)		Three Months Ended
Type of Contract	Classification of Income/(Expense)	May 3, 2014		May 4, 2013
Interest rate swaps	Net interest expense	$	5	$	8

The amount remaining on unamortized hedged debt valuation gains from terminated or de-designated interest rate swaps that will be amortized into earnings over the remaining lives of the underlying debt totaled $48 million, $52 million and $69 million, at May 3, 2014, February 1, 2014 and May 4, 2013, respectively.