GameStop 2012 Annual Report Download - page 96

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GAMESTOP CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
We value our Foreign Currency Contracts, Company-owned life insurance policies with cash surrender
values and certain nonqualified deferred compensation liabilities based on Level 2 inputs using quotations
provided by major market news services, such as Bloomberg and The Wall Street Journal, and industry-standard
models that consider various assumptions, including quoted forward prices, time value, volatility factors, and
contractual prices 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 millions):
February 2, 2013
Level 2
January 28, 2012
Level 2
Assets
Foreign Currency Contracts ............................... $ 8.2 $17.0
Company-owned life insurance ............................ 3.5 3.1
Total assets ............................................ $11.7 $20.1
Liabilities
Foreign Currency Contracts ............................... $13.5 $ 2.5
Nonqualified deferred compensation ........................ 0.9 0.8
Total liabilities ......................................... $14.4 $ 3.3
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. The total gross notional value of derivatives
related to our Foreign Currency Contracts was $669.9 million and $507.1 million as of February 2, 2013 and
January 28, 2012, respectively. The total net notional value of derivatives related to our Foreign Currency
Contracts was $102.7 million and $228.6 million as of February 2, 2013 and January 28, 2012, respectively.
Activity related to the trading of derivative instruments and the offsetting impact of related intercompany
loans and foreign currency assets and liabilities recognized in selling, general and administrative expense is as
follows (in millions):
53 Weeks
Ended
February 2,
2013
52 Weeks
Ended
January 28,
2012
52 Weeks
Ended
January 29,
2011
Gains (losses) on the changes in fair value of derivative
instruments ........................................ $(19.8) $ 13.5 $(7.1)
Gains (losses) on the re-measurement of related intercompany
loans and foreign currency assets and liabilities ........... 22.3 (14.1) 9.6
Total ............................................... $ 2.5 $ (0.6) $ 2.5
F-21