Banana Republic 2014 Annual Report Download - page 63

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51
We maintain multiple agreements with third parties that make unsecured revolving credit facilities available for our
operations in foreign locations (the “Foreign Facilities”). They are uncommitted and are generally available for
borrowings, overdraft borrowings, and the issuance of bank guarantees. The total capacity of the Foreign
Facilities was $49 million as of January 31, 2015. As of January 31, 2015, there were no borrowings under the
Foreign Facilities. There were $11 million in bank guarantees primarily related to store leases under the Foreign
Facilities as of January 31, 2015.
We have a bilateral unsecured standby letter of credit agreement that is uncommitted and does not have an
expiration date. As of January 31, 2015, we had $21 million in standby letters of credit issued under the
agreement. We also have a $50 million, two-year, unsecured committed letter of credit agreement, which expires
in September 2016. We had no trade letters of credit issued under this letter of credit agreement as of January 31,
2015.
The Facility and the unsecured committed letter of credit agreement contain financial and other covenants
including, but not limited to, limitations on liens and subsidiary debt, as well as the maintenance of two financial
ratios—a minimum annual fixed charge coverage ratio of 2.00 and a maximum annual leverage ratio of 2.25. As
of January 31, 2015, we were in compliance with all such covenants. Violation of these covenants could result in a
default under the Facility and letter of credit agreement, which would permit the participating banks to terminate
our ability to access the Facility for letters of credit and advances, terminate our ability to request letters of credit
under the letter of credit agreement, require the immediate repayment of any outstanding advances under the
Facility, and require the immediate posting of cash collateral in support of any outstanding letters of credit under
the letter of credit agreement.
Note 7. Fair Value Measurements
There were no purchases, sales, issuances, or settlements related to recurring level 3 measurements during
fiscal 2014 or 2013. There were no transfers into or out of level 1 and level 2 during fiscal 2014 or 2013.
Financial Assets and Liabilities
Financial assets and liabilities measured at fair value on a recurring basis and cash equivalents held at amortized
cost are as follows:
Fair Value Measurements at Reporting Date Using
($ in millions) January 31, 2015
Quoted Prices in
Active Markets for
Identical Assets
(Level 1)
Significant Other
Observable Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cash equivalents $ 429 $ 88 $ 341 $ —
Derivative financial instruments 157 — 157 —
Deferred compensation plan assets 40 40 — —
Total $ 626 $ 128 $ 498 $ —
Liabilities:
Derivative financial instruments $ 1$ — $ 1 $ —