GameStop 2009 Annual Report Download - page 86

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for the underlying instruments, as well as other relevant economic measures. When appropriate, valuations are
adjusted to reflect credit considerations, generally based on available market evidence.
The following table provides the fair value of our assets and liabilities measured on a recurring basis and
recorded on our consolidated balance sheets, in thousands:
January 30, 2010
Level 2
January 31, 2009
Level 2
Assets
Foreign Currency Contracts ............................. $20,062 $12,104
Company-owned life insurance .......................... 2,584 2,134
Total assets ......................................... $22,646 $14,238
Liabilities
Foreign Currency Contracts ............................. $ 8,991 $11,766
Nonqualified deferred compensation ...................... 762 905
Total liabilities ...................................... $ 9,753 $12,671
The Company uses Foreign Currency Contracts to manage currency risk primarily related to intercompany
loans denominated in non-functional currencies and certain foreign currency assets and liabilities. These Foreign
Currency Contracts are not designated as hedges and, therefore, changes in the fair values of these derivatives are
recognized in earnings, thereby offsetting the current earnings effect of the re-measurement of related intercompany
loans and foreign currency assets and liabilities. We do not use derivative financial instruments for trading or
speculative purposes. We are exposed to counterparty credit risk on all of our derivative financial instruments and
cash equivalent investments. The Company manages counterparty risk according to the guidelines and controls
established under comprehensive risk management and investment policies. We continuously monitor our
counterparty credit risk and utilize a number of different counterparties to minimize our exposure to potential
defaults. We do not require collateral under derivative or investment agreements.
The fair values of derivative instruments not receiving hedge accounting treatment in the consolidated balance
sheets presented herein were as follows, in thousands:
January 30, 2010 January 31, 2009
Assets
Foreign Currency Contracts
Other current assets ................................. $20,062 $ 12,104
Liabilities
Foreign Currency Contracts
Accrued liabilities .................................. (8,991) (10,164)
Other long-term liabilities ............................ — (1,602)
Total derivatives ..................................... $11,071 $ 338
As of January 30, 2010, the Company had a series of Forward Currency Contracts outstanding, with a gross
notional value of $643,490 and a net notional value of $356,561. For the 52 weeks ended January 30, 2010, the
Company recognized gains of $8,683 in selling, general and administrative expenses related to the trading of
derivative instruments. As of January 31, 2009, the Company had a series of Forward Currency Contracts
outstanding, with a gross notional value of $389,447 and a net notional value of $189,205. For the 52 weeks
F-18
GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)