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A-51
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
Fair Value Interest Rate Swaps
The table below summarizes the outstanding interest rate swaps designated as fair value hedges as of
January 31, 2015 and February 1, 2014.
2014 2013
Pay
Floating
Pay
Fixed
Pay
Floating
Pay
Fixed
Notional amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 100 $— $ 100 $—
Number of contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 — 2 —
Duration in years. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.94 — 4.94 —
Average variable rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.83% — 5.83% —
Average fixed rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.80% — 6.80% —
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . December 2018 December 2018
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 2014 and 2013 were as follows:
Year-To-Date
January 31, 2015 February 1, 2014
Consolidated Statements of Operations
Classification
Gain/(Loss)
on Swaps
Gain/(Loss) on
Borrowings
Gain/(Loss)
on Swaps
Gain/(Loss) on
Borrowings
Interest Expense . . . . . . . . . . . . . . . . . . . . $2 $(2) $(3) $4
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
January 31,
2015
February 1,
2014
Balance Sheet
Location
Interest Rate Hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $(2) (Other long-term
liabilities)/Other
assets
Cash Flow Forward-Starting Interest Rate Swaps
As of January 31, 2015, the Company had four forward-starting interest rate swap agreements with
maturity dates of October 2015 with an aggregate notional amount totaling $300 and seven forward-starting
interest rate swap agreements with maturity dates of August 2017 with an aggregate notional amount totaling
$400. 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 these forward-starting interest rate swaps in order to lock in fixed interest
rates on its forecasted issuances of debt in October 2015 and August 2017. Accordingly, the forward-starting
interest rate swaps were designated as cash-flow hedges as defined by GAAP. As of January 31, 2015, the fair
value of the interest rate swaps was recorded in other long-term liabilities for $39 and accumulated other
comprehensive loss for $25 net of tax.
As of February 1, 2014, the Company did not maintain any forward-starting interest rate swap agreements.