Derivative Instruments

9 Months Ended

Oct. 28, 2023

5. Derivative Instruments

We manage our economic and transaction exposure to certain risks by using foreign exchange forward contracts to hedge against the effect of Canadian dollar exchange rate fluctuations on a portion of our net investment in our Canadian operations and by using interest rate swaps to mitigate the effect of interest rate fluctuations on our $500 million of principal amount of notes due October 1, 2028. In addition, we use foreign currency forward contracts not designated as hedging instruments to manage the impact of fluctuations in foreign currency exchange rates relative to recognized receivable and payable balances denominated in non-functional currencies.

Our derivative instruments designated as net investment hedges and interest rate swaps are recorded on our Condensed Consolidated Balance Sheets at fair value. When significant, the gross fair values of our outstanding derivative instruments and corresponding fair value classifications are included in Note 4, Fair Value Measurements.

Notional amounts of our derivative instruments were as follows ($ in millions):


Contract Type	October 28, 2023		January 28, 2023		October 29, 2022
Derivatives designated as net investment hedges	$	102	$	114	$	118
Derivatives designated as interest rate swap contracts		500		500		500
No hedge designation (foreign exchange contracts)		93		56		112
Total	$	695	$	670	$	730

Effects of our derivative instruments on our Condensed Consolidated Statements of Earnings were as follows ($ in millions):


		Gain (Loss) Recognized
		Three Months Ended				Nine Months Ended
	Statement of Earnings Location	October 28, 2023		October 29, 2022		October 28, 2023		October 29, 2022
Interest rate swap contracts	Interest expense	$	(15)	$	(45)	$	(29)	$	(76)
Adjustments to carrying value of long-term debt	Interest expense		15		45		29		76
Total		$	-	$	-	$	-	$	-