Ross 2006 Annual Report Download - page 43

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25
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), effective for fiscal years begin-
ning after November 15, 2007. SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands
disclosures about fair value measurements. We do not believe the adoption of SFAS No. 157 will have a material impact on our
operating results or financial position.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans” (“SFAS No. 158”), effective for fiscal years ending after December 15, 2006. This statement requires recognition of the
overfunded or underfunded status of defined benefit pension and other postretirement benefit plans as an asset or liability in the
balance sheet. SFAS No. 158 does not change the amount of expense that is recorded related to these plans. Adoption of this
standard did not have a material impact on our operating results or financial position.
Forward-Looking Statements
Our Annual Report on Form 10-K for fiscal 2006, and information we provide in our Annual Report to Stockholders, press
releases, telephonic reports and other investor communications including on our website, may contain a number of forward-
looking statements regarding, without limitation, planned store growth, new markets, expected sales, projected earnings levels,
capital expenditures and other matters. These forward-looking statements reflect our then current beliefs, projections and esti-
mates with respect to future events and our projected financial performance, operations and competitive position. The words
“plan,” “expect,” “anticipate,” “estimate,” “believe,” “forecast,” “projected,” “guidance,” “looking ahead” and similar expressions
identify forward-looking statements.
Future economic and industry trends that could potentially impact revenue, profitability, and growth remain difficult to predict.
As a result, our forward-looking statements are subject to risks and uncertainties which could cause our actual results to differ
materially from those forward-looking statements and our previous expectations and projections. Refer to Item 1A in this Annual
Report on Form 10-K for a more complete discussion of risk factors for Ross and dd’s DISCOUNTS. The factors underlying our
forecasts are dynamic and subject to change. As a result, any forecasts or forward-looking statements speak only as of the date
they are given and do not necessarily reflect our outlook at any other point in time. We disclaim any obligation to update or revise
these forward-looking statements.
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 financial transactions for
trading or speculative purposes.
We occasionally use forward contracts to hedge against fluctuations in foreign currency prices. We had no outstanding forward
contracts as of February 3, 2007.
Interest that is payable on our revolving credit facilities is based on variable interest rates and is, therefore, affected by changes
in market interest rates. 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. As of February 3, 2007, we had no borrow-
ings outstanding under our revolving credit facilities. In addition, the Company issued notes to institutional investors in two
series; Series A for $85.0 million accrues interest at 6.38% and Series B for $65.0 million accrues interest at 6.53%. The amount
outstanding under these notes as of February 3, 2007 is $150.0 million.
A hypothetical 100 basis point increase in prevailing market interest rates would not have materially impacted our consolidated
financial position, results of operations, or cash flows as of and for the year ended February 3, 2007. We do not consider the
potential losses in future earnings and cash flows from reasonably possible, near term changes in interest rates to be material.