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A-52
NO T E S T O C O N S O L I D A T E D F I N A N C I A L S T A T E M E N T S , CO N T I N U E D
The Company reviews compliance with these guidelines annually with the Financial Policy Committee
of the Board of Directors. These guidelines may change as the Company’s needs dictate.
Fair Value Interest Rate Swaps
The table below summarizes the outstanding interest rate swaps designated as fair value hedges as of
February 1, 2014 and February 2, 2013.
2013 2012
Pay
Floating
Pay
Fixed
Pay
Floating
Pay
Fixed
Notional amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100 $— $ 475 $—
Number of contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 — 6 —
Duration in years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.94 — 1.41 —
Average variable rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.83 % — 3.29% —
Average fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.80 % — 5.38% —
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2018 Between
April 2013 and
December 2018
During the first quarter of 2013, four of the Company’s fair value swaps, with a notional amount
aggregating $375, matured.
The gain or loss on these derivative instruments as well as the offsetting gain or loss on the hedged items
attributable to the hedged risk is recognized in current earnings as “Interest expense.” These gains and losses
for 2013 and 2012 were as follows:
Year-To-Date
February 1, 2014 February 2, 2013
Consolidated Statement of Operations
Classification
Gain/(Loss) on
Swaps
Gain/(Loss) on
Borrowings
Gain/(Loss) on
Swaps
Gain/(Loss) on
Borrowings
Interest Expense . . . . . . . . . . . . . . . . . . . . $(3) $4 $(24) $16
The following table summarizes the location and fair value of derivative instruments designated as fair
value hedges on the Company’s Consolidated Balance Sheets:
Asset Derivatives
Fair Value
Derivatives Designated as Fair Value Hedging Instruments
February 1,
2014
February 2,
2013
Balance Sheet
Location
Interest Rate Hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(2) $1 (Other Long-Term
Liabilities)/Other
Assets
Cash Flow Forward-Starting Interest Rate Swaps
As of February 1, 2014, the Company did not have any outstanding forward-starting interest rate
swap agreements.
As of February 2, 2013, the Company had 17 forward-starting interest rate swap agreements with
maturity dates between April 2013 and January 2014 with an aggregate notional amount totaling $850. In
2012, the Company entered into seven of these forward-starting interest rate swap agreements with an
aggregate notional amount totaling $350. A forward-starting interest rate swap is an agreement that effectively
hedges the variability in future benchmark interest payments attributable to changes in interest rates on the
forecasted issuance of fixed-rate debt. The Company entered into the forward-starting interest rate swaps