Derivative Financial Instruments

6 Months Ended

Aug. 03, 2013

Derivative Financial Instruments

Derivative Financial Instruments

5. Derivative Financial Instruments

We use interest rate swaps 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 3 for a description of the fair value measurement of our derivative instruments and their classification on the Consolidated Statements of Financial Position.

As of August 3, 2013 and July 28, 2012, one swap was designated as a fair value hedge for accounting purposes, and no ineffectiveness was recognized during the three and six months ended August 3, 2013 or July 28, 2012.

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		Three Months Ended				Six Months Ended
(millions)		August 3,		July 28,		August 3,		July 28,
Type of Contract	Classification of Income/(Expense)	2013		2012		2013		2012
Interest rate swaps	Net interest expense	$	7	$	9	$	15	$	19

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 $63 million, $75 million and $93 million, at August 3, 2013, February 2, 2013 and July 28, 2012, respectively.