Derivative Financial Instruments

3 Months Ended

May 03, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our derivative instruments consist of interest rate swaps used to mitigate interest rate risk. As a result, we have counterparty credit exposure to large global financial institutions, which we monitor on an ongoing basis. Note 4 to the Consolidated Financial Statements provides the fair value and classification of these instruments.

We were party to interest rate swaps with notional amounts totaling $2.20 billion as of May 3, 2025, and February 1, 2025, and $2.45 billion as of May 4, 2024. We pay a floating rate and receive a fixed rate under each of these agreements. All of the agreements are designated as fair value hedges, and all were considered to be perfectly effective under the shortcut method during the three months ended May 3, 2025, and May 4, 2024.

Effect of Hedges on Debt (millions)	May 3, 2025		February 1, 2025		May 4, 2024
Long-term debt and other borrowings
Carrying amount of hedged debt	$	2,126	$	2,069	$	2,285
Cumulative hedging adjustments, included in carrying amount	(68)		(125)		(157)

Effect of Hedges on Net Interest Expense	Three Months Ended
(millions)	May 3, 2025		May 4, 2024
Gain (loss) on fair value hedges recognized in Net Interest Expense
Interest rate swaps designated as fair value hedges	$	57	$	(31)
Hedged debt	(57)		31
Gain on cash flow hedges recognized in Net Interest Expense	6		6
Total	$	6	$	6