Derivative Financial Instruments (Tables)

6 Months Ended

Jul. 28, 2012

Fair Values of Asset and Liability Derivative Financial Instruments

The fair values of asset and liability derivative financial instruments are as follows:

	July 28, 2012
	Asset Derivatives			Liability Derivatives
($ in millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as cash flow hedges:
Foreign exchange forward contracts	Other current assets	$	11	Accrued expenses and other current liabilities	$	5
Foreign exchange forward contracts	Other long-term assets		2	Lease incentives and other long-term liabilities		3
Total derivatives designated as cash flow hedges			13			8
Derivatives designated as net investment hedges:
Foreign exchange forward contracts	Other current assets		1	Accrued expenses and other current liabilities		—
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives designated as net investment hedges			1			—
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets		2	Accrued expenses and other current liabilities		1
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives not designated as hedging instruments			2			1
Total derivative instruments		$	16		$	9

	January 28, 2012
	Asset Derivatives			Liability Derivatives
($ in millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as cash flow hedges:
Foreign exchange forward contracts	Other current assets	$	9	Accrued expenses and other current liabilities	$	10
Foreign exchange forward contracts	Other long-term assets		1	Lease incentives and other long-term liabilities		—
Total derivatives designated as cash flow hedges			10			10
Derivatives designated as net investment hedges:
Foreign exchange forward contracts	Other current assets		—	Accrued expenses and other current liabilities		—
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives designated as net investment hedges			—			—
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets		3	Accrued expenses and other current liabilities		4
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives not designated as hedging instruments			3			4
Total derivative instruments		$	13		$	14
	July 30, 2011
	Asset Derivatives			Liability Derivatives
($ in millions)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Derivatives designated as cash flow hedges:
Foreign exchange forward contracts	Other current assets	$	—	Accrued expenses and other current liabilities	$	49
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		9
Total derivatives designated as cash flow hedges			—			58
Derivatives designated as net investment hedges:
Foreign exchange forward contracts	Other current assets		—	Accrued expenses and other current liabilities		3
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives designated as net investment hedges			—			3
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts	Other current assets		2	Accrued expenses and other current liabilities		7
Foreign exchange forward contracts	Other long-term assets		—	Lease incentives and other long-term liabilities		—
Total derivatives not designated as hedging instruments			2			7
Total derivative instruments		$	2		$	68

Effects of Derivative Financial Instruments on OCI and Condensed Consolidated Statements of Income

The effects of derivative financial instruments on OCI and the Condensed Consolidated Statements of Income, on a pre-tax basis, are as follows:

	Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
	13 Weeks Ended					26 Weeks Ended
($ in millions)	July 28, 2012		July 30, 2011			July 28, 2012		July 30, 2011
Derivatives in cash flow hedging relationships:
Foreign exchange forward contracts	$	2	$	(14	)	$	8	$	(54	)
Treasury rate lock agreements		—		—			—		1
	$	2	$	(14	)	$	8	$	(53	)
	Amount and Location of Gain (Loss) Reclassified from OCI into Income (Effective Portion)
	13 Weeks Ended					26 Weeks Ended
($ in millions)	July 28, 2012		July 30, 2011			July 28, 2012		July 30, 2011
Derivatives in cash flow hedging relationships:
Foreign exchange forward contracts - Cost of goods sold and occupancy expenses	$	1	$	(12	)	$	1	$	(21	)
Foreign exchange forward contracts - Operating expenses		—		(2	)		—		(3	)
	$	1	$	(14	)	$	1	$	(24	)
	Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion)
	13 Weeks Ended					26 Weeks Ended
($ in millions)	July 28, 2012		July 30, 2011			July 28, 2012		July 30, 2011
Derivatives in net investment hedging relationships:
Foreign exchange forward contracts	$	3	$	(2	)	$	3	$	(2	)
	Amount and Location of Gain (Loss) Recognized in Income on Derivatives
	13 Weeks Ended					26 Weeks Ended
($ in millions)	July 28, 2012		July 30, 2011			July 28, 2012		July 30, 2011
Derivatives not designated as hedging instruments:
Foreign exchange forward contracts - Operating expenses	$	4	$	3		$	4	$	(2	)

Derivatives in cash flow hedging relationships

Foreign Exchange Forward Contracts Outstanding

As of July 28, 2012, January 28, 2012, and July 30, 2011, we had foreign exchange forward contracts outstanding to sell various currencies related to our forecasted merchandise purchases, forecasted intercompany royalty payments, and forecasted intercompany revenue transactions and to buy the following notional amounts:

(notional amounts in millions)	July 28,     2012		January 28,   2012		July 30,     2011
U.S. dollars (1)	$	1,112	$	796	$	1,081
British pounds	£	19	£	30	£	43

(1) The principal currencies hedged against changes in the U.S. dollar were the Euro, British pound, Japanese yen, and Canadian dollar.

Derivatives in net investment hedging relationships

Foreign Exchange Forward Contracts Outstanding

As of July 28, 2012, January 28, 2012, and July 30, 2011, we had foreign exchange forward contracts outstanding to hedge the net assets of our French subsidiary and our Japanese subsidiary in the following notional amounts:

(notional amounts in millions)	July 28,     2012		January 28,   2012		July 30,     2011
Euro	€	26	€	—	€	—
Japanese yen	¥	—	¥	—	¥	3,000

Derivatives not designated as hedging instruments

Foreign Exchange Forward Contracts Outstanding

As of July 28, 2012, January 28, 2012, and July 30, 2011, we had foreign exchange forward contracts outstanding to buy the following currencies related to our intercompany balances that bear foreign exchange risk:

(notional amounts in millions)	July 28,     2012		January 28,   2012		July 30,     2011
U.S. dollars	$	84	$	77	$	7
British pounds	£	1	£	1	£	1
Japanese yen	¥	945	¥	2,564	¥	3,238
Euro	€	—	€	16	€	—