Derivative Financial Instruments

12 Months Ended

Feb. 02, 2013

Derivative Financial Instruments

Derivative Financial Instruments

21. Derivative Financial Instruments

Historically our derivative instruments have primarily consisted of interest rate swaps, which are used to mitigate our interest rate risk. We have counterparty credit risk resulting from our derivative instruments, primarily with large global financial institutions. We monitor this concentration of counterparty credit risk on an ongoing basis. See Note 9 for a description of the fair value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial Position.

As of February 2, 2013 and January 28, 2012, one swap was designated as a fair value hedge for accounting purposes, and no ineffectiveness was recognized in 2012 or 2011.

Outstanding Interest Rate Swap Summary	February 2, 2013
	Designated Swap	De-designated Swap
(dollars in millions)	Pay Floating	Pay Floating	Pay Fixed
Weighted average rate:
Pay	three-month LIBOR	one-month LIBOR	3.1%
Receive	1.0%	5.3%	one-month LIBOR
Weighted average maturity	1.5 years	2.4 years	2.4 years
Notional	$350	$750	$750

Derivative Contracts – Type, Statement of Financial Position Classification and Fair Value (millions)
	Assets					Liabilities
	Classification	Feb. 2, 2013		Jan. 28, 2012		Classification	Feb. 2, 2013		Jan. 28, 2012
Designated as hedging instrument:
Interest rate swaps	Other noncurrent assets	$	3	$	3	N/A	$	—	$	—
Not designated as hedging instruments:
Interest rate swaps	Other current assets		4		20	Other current liabilities		2		7
Interest rate swaps	Other noncurrent assets		82		111	Other noncurrent liabilities		54		69
Total		$	89	$	134		$	56	$	76

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

Derivative Contracts – Effect on Results of Operations (millions)
Type of Contract	Classification of Income/(Expense)	2012		2011		2010
Interest rate swaps	Net interest expense	$	44	$	41	$	51

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 $75 million, $111 million and $152 million, at the end of 2012, 2011 and 2010, respectively.