The Gap 2014 Annual Report Download - page 67

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55
The effective portion of gains and losses on foreign exchange forward contracts in cash flow hedging and net
investment hedging relationships recorded in OCI and the Consolidated Statements of Income, on a pre-tax
basis, are as follows:
Fiscal Year
($ in millions) 2014 2013 2012
Derivatives in cash flow hedging relationships:
Gain recognized in other comprehensive income $ 166 $ 78 $ 46
Gain reclassified into cost of goods sold and occupancy
expenses $ 53 $ 59 $ 5
Gain reclassified into operating expenses $ 8 $ 11 $ 4
Derivatives in net investment hedging relationships:
Gain recognized in other comprehensive income $ 4 $ 17 $ —
For fiscal 2014, 2013, and 2012, there were no amounts of gain or loss reclassified from accumulated OCI into
income for derivative financial instruments in net investment hedging relationships, as we did not sell or liquidate
(or substantially liquidate) any of our hedged subsidiaries during the periods.
Gains and losses on foreign exchange forward contracts not designated as hedging instruments recorded in the
Consolidated Statements of Income, on a pre-tax basis are as follows:
Fiscal Year
($ in millions) 2014 2013 2012
Gain recognized in operating expenses $ 20 $ 5 $ 5
Note 9. Common Stock
Common and Preferred Stock
The Company is authorized to issue 2.3 billion shares of common stock. We are also authorized to issue 60
million shares of Class B common stock, which is convertible into shares of common stock on a share-for-share
basis. Transfer of the Class B shares is restricted. In addition, the holders of the Class B common stock have six
votes per share on most matters and are entitled to a lower cash dividend. No Class B shares have been issued
as of January 31, 2015.
The Company is authorized to issue 30 million shares of one or more series of preferred stock, which has a par
value of $0.05 per share, and to establish at the time of issuance the issue price, dividend rate, redemption price,
liquidation value, conversion features, and such other terms and conditions of each series (including voting rights)
as the Board of Directors deems appropriate, without further action on the part of the stockholders. No preferred
shares have been issued as of January 31, 2015.
Treasury Stock
As of March 1, 2014, the Company retired all existing treasury stock. Upon retirement, the treasury stock balance
as of March 1, 2014 was reduced for the amount originally recorded for the shares repurchased. Common stock
was also reduced, at par, for the shares repurchased, and the remaining balance was allocated between
additional paid-in-capital and retained earnings. All common stock repurchased subsequent to March 1, 2014 is
immediately retired and all shares related to stock options and other stock awards are issued from authorized but
unissued common stock.