Ross 2010 Annual Report Download - page 33

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31
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
We are exposed to market risks, which primarily include changes in interest rates. We do not engage in fi nancial transactions for
trading or speculative purposes.
We occasionally use forward contracts to hedge against fl uctuations in foreign currency prices. We had no outstanding forward
contracts as of January 29, 2011.
Interest that is payable on our revolving credit facility is based on variable interest rates and is, therefore, affected by changes in
market interest rates. As of January 29, 2011, we had no borrowings outstanding under our revolving credit facility. In addition,
lease payments under certain of our synthetic lease agreements are determined based on variable interest rates and are,
therefore, affected by changes in market interest rates.
In addition, we issued unsecured notes to institutional investors in two series: Series A for $85 million accrues interest at 6.38%
and Series B for $65 million accrues interest at 6.53%. The amount outstanding under these notes as of January 29, 2011 was
$150 million.
Interest is receivable on our short- and long-term investments. Changes in interest rates may impact interest income recognized
in the future, or the fair value of our investment portfolio.
A hypothetical 100 basis point increase or decrease in prevailing market interest rates would not have materially impacted our
consolidated fi nancial position, results of operations, cash fl ows, or the fair values of our short- and long-term investments as
of and for the year ended January 29, 2011. We do not consider the potential losses in future earnings and cash fl ows from
reasonably possible, near term changes in interest rates to be material.