The Gap 2013 Annual Report Download - page 80

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56
Quantitative Disclosures about Derivative Financial Instruments
The fair values of foreign exchange forward contracts are as follows:
($ in millions) February 1,
2014 February 2,
2013
Derivatives designated as cash flow hedges:
Other current assets $ 48 $ 41
Other long-term assets $ 6 $ 2
Accrued expenses and other current liabilities $ 13 $ 10
Lease incentives and other long-term liabilities $ 1 $ —
Derivatives designated as net investment hedges:
Other current assets $ 1 $ —
Other long-term assets $ — $ —
Accrued expenses and other current liabilities $ — $ 1
Lease incentives and other long-term liabilities $ — $ —
Derivatives not designated as hedging instruments:
Other current assets $ 9 $ 8
Other long-term assets $ — $ —
Accrued expenses and other current liabilities $ 1 $ 3
Lease incentives and other long-term liabilities $ — $ —
Total derivatives in an asset position $ 64 $ 51
Total derivatives in a liability position $ 15 $ 14
Substantially all of the unrealized gains and losses from designated cash flow hedges as of February 1, 2014 will
be recognized in income within the next 12 months at the then-current values, which may differ from the fair
values as of February 1, 2014 shown above.
Effective February 3, 2013, we adopted requirements to disclose the potential effect of rights of setoff associated
with our derivative financial instruments. Our foreign exchange forward contracts are subject to master netting
arrangements with each of our counterparties and such arrangements are enforceable in the event of default or
early termination of the contract. We do not elect to offset the fair values of our derivative financial instruments in
the Consolidated Balance Sheets, and as such, the fair values shown above represent gross amounts. The
amounts subject to enforceable master netting arrangements are $1 million and $4 million as of February 1, 2014
and February 2, 2013, respectively. If we did elect to offset, the net amounts of our derivative financial instruments
in an asset position would be $63 million and $47 million and the net amounts of the derivative financial
instruments in a liability position would be $14 million and $10 million as of February 1, 2014 and February 2,
2013, respectively.
See Note 7 of Notes to Consolidated Financial Statements for disclosures on the fair value measurements of our
derivative financial instruments.