The Gap 2011 Annual Report Download - page 49

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Our interest rate risk associated with the term loan as of January 28, 2012 is as follows:
Expected Maturity Date (Fiscal Year)
($ in millions) 2012 2013 2014 2015 2016 Thereafter Total Fair Value (1)
Principalpayments.................... $40 $40 $40 $40 $240 $— $400 $400
Average interest rate (2) ............... 2% 2% 2% 2% 2% 2% 2%
(1) The carrying amount of the term loan approximates its fair value, as the interest rate varies depending on market rates and our credit
rating.
(2) The average interest rate for all periods presented was calculated based on LIBOR plus a margin, including fees, based on our long-term
senior unsecured credit ratings as of January 28, 2012. As the interest rate for the term loan is variable, it is subject to change for all
periods presented.
Cash Equivalents
We have highly liquid fixed and variable income investments classified as cash equivalents, 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. The value of our
investments is not subject to material interest rate risk. However, changes in interest rates would impact the
interest income derived from our investments. We earned interest income of $5 million in fiscal 2011.
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