Banana Republic 2011 Annual Report Download - page 69

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Financial Assets and Liabilities
Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents and short-term
investments held at amortized cost are as follows:
Fair Value Measurements at Reporting Date Using
($ in millions) January 28, 2012
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cashequivalents .......................... $1,009 $224 $785 $—
Short-terminvestments.................... —— ——
Derivative financial instruments ............ 13 — 13 —
Deferred compensation plan assets ......... 22 22 — —
Total ..................................... $1,044 $246 $798 $—
Liabilities:
Derivative financial instruments ............ $ 14 $ — $ 14 $—
Fair Value Measurements at Reporting Date Using
($ in millions) January 29, 2011
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cashequivalents .......................... $ 942 $338 $604 $—
Short-terminvestments .................... 100 — 100 —
Derivative financial instruments ............ 4— 4—
Deferred compensation plan assets ......... 27 27 — —
Total ..................................... $1,073 $365 $708 $—
Liabilities:
Derivative financial instruments ............ $ 37 $ — $ 37 $—
We have highly liquid investments classified as cash equivalents and short-term investments, which are placed
primarily in money market funds, time deposits, and commercial paper. These investments are classified as
held-to-maturity based on our positive intent and ability to hold the securities to maturity. We value these
investments at their original purchase prices plus interest that has accrued at the stated rate. As discussed in Note
2 of Notes to Consolidated Financial Statements, the table above includes money market funds of $338 million as
of January 29, 2011 as level 1.
Derivative financial instruments primarily include foreign exchange forward contracts. The principal currencies
hedged against changes in the U.S. dollar are Euro, British pounds, Japanese yen, and Canadian dollars. The fair
value of the Company’s derivative financial instruments is determined using pricing models based on current
market rates. Derivative financial instruments in an asset position are recorded in other current assets or other
long-term assets in the Consolidated Balance Sheets. Derivative financial instruments in a liability position are
recorded in accrued expenses and other current liabilities or lease incentives and other long-term liabilities in the
Consolidated Balance Sheets.
We maintain the Gap Inc. Deferred Compensation Plan (“DCP”), which allows eligible employees to defer
compensation up to a maximum amount. Plan investments are recorded at market value and are designated for
the DCP. The fair value of the Company’s DCP assets is determined based on quoted market prices, and the assets
are recorded in other long-term assets in the Consolidated Balance Sheets.
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