Supercuts 2011 Annual Report Download - page 75

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Table of Contents
changing interest rates and to maintain its desired balances of fixed and variable rate debt. Generally, the terms of the interest rate swap
agreements contain monthly and quarterly settlement dates based on the notional amounts of the swap contracts.
Pay fixed rates, receive variable rates
During the three months ended December 31, 2008, the Company entered into two interest rate swap contracts that pay fixed rates of
interest and receive variable rates of interest (based on the one-month LIBOR) on notional amounts of indebtedness of $20.0 million each, that
had maturation dates in July 2011, respectively. These swaps were designated and were effective as cash flow hedges. These cash flow hedges
were recorded at fair value within other noncurrent liabilities in the Consolidated Balance Sheet, with a corresponding offset in deferred income
taxes and other comprehensive income within shareholders' equity. These contracts were terminated during fiscal year 2011 in conjunction with
the repayment of the $85.0 million term loan. The contracts were settled for an aggregate loss of $0.1 million recorded within interest expense in
the Consolidated Statement of Operations during fiscal year 2011. Prior to the termination of the contracts, the Company paid fixed rates of
interest of approximately 3.0 percent and 3.4 percent on their respective $20.0 million.
During the three months ended December 31, 2005, the Company entered into interest rate swap contracts that pay fixed rates of interest
and receive variable rates of interest (based on the three-month LIBOR) on notional amounts of indebtedness of $35.0 and $15.0 million, and
mature in March 2013 and March 2015, respectively. These swaps were designated and were effective as cash flow hedges. These cash flow
hedges were recorded at fair value within other noncurrent liabilities in the Consolidated Balance Sheet, with a corresponding offset in other
comprehensive income within shareholders' equity. These contracts were terminated during fiscal year 2010 in conjunction with the repayment
of the private placement senior term notes as discussed in Note 9 to the Consolidated Financial Statements. The contracts were settled for an
aggregate loss of $5.2 million recorded within interest expense in the Consolidated Statement of Operations during fiscal year 2010.
Tabular Presentation:
The following table presents information about the Company's debt obligations and derivative financial instruments that are sensitive to
changes in interest rates. For fixed rate debt obligations, the table presents principal amounts and related weighted-
average interest rates by fiscal
year of maturity. For variable rate obligations, the table presents principal amounts and the weighted
-average forward LIBOR interest rates as of
June 30, 2011 through June 30, 2016. For the Company's derivative financial instruments, the table presents notional amounts and weighted-
average interest rates by
73