Derivative Instruments and Hedging Activities

12 Months Ended

Aug. 03, 2012

Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments and Hedging Activities

6.  Derivative Instruments and Hedging Activities

For each of the Company's interest rate swaps, the Company has agreed to exchange with a counterparty the difference between fixed and variable interest amounts calculated by reference to an agreed-upon notional principal amount.  The interest rates on the portion of the Company's outstanding debt covered by its interest rate swaps is fixed at the rates in the table below plus the Company's credit spread.  The Company's weighted average credit spread at August 3, 2012 and July 29, 2011 was 2.00%.  All of the Company's interest rate swaps are accounted for as cash flow hedges.

A summary of the Company's interest rate swaps is as follows:

Trade Date	Effective Date	Term (in Years)		Notional Amount		Fixed Rate
May 4, 2006	August 3, 2006		7	$	525,000		5.57	%
August 10, 2010	May 3, 2013		2		200,000		2.73	%
July 25, 2011	May 3, 2013		2		50,000		2.00	%
July 25, 2011	May 3, 2013		3		50,000		2.45	%
September 19, 2011	May 3, 2013		2		25,000		1.05	%
September 19, 2011	May 3, 2013		2		25,000		1.05	%
December 7, 2011	May 3, 2013		3		50,000		1.40	%

The notional amount of the Company's interest rate swap entered into on May 4, 2006 was $575,000 and $550,000 at July 30, 2010 and July 29, 2011, respectively.  At August 3, 2012, the notional amount was $525,000 and will remain at this amount throughout the remainder of its term.

The estimated fair values of the Company's derivative instruments were as follows:

	Balance Sheet Location	August 3, 2012		July 29, 2011
Interest rate swap	Current interest rate swap liability	$	20,215	$	--
Interest rate swaps	Long-term interest rate swap liability		14,166		51,604
Total (See Note 3)		$	34,381	$	51,604

The estimated fair value of the Company's interest rate swap liabilities incorporates the Company's non-performance risk.  The adjustment related to the Company's non-performance risk at August 3, 2012 and July 29, 2011 resulted in reductions of $851 and $1,546, respectively, in the total fair value of the interest rate swap liabilities.  The offset to the interest rate swap liabilities is recorded in accumulated other comprehensive loss ("AOCL"), net of the deferred tax assets, and will be reclassified into earnings over the term of the underlying debt.  As of August 3, 2012, the estimated pre-tax portion of AOCL that is expected to be reclassified into earnings over the next twelve months is $20,539.  Cash flows related to the interest rate swaps are included in interest expense and in operating activities.

The following table summarizes the pre-tax effects of the Company's derivative instruments on AOCL at:

	Amount of Income (Loss) Recognized in AOCL on Derivatives (Effective Portion)
	2012		2011		2010
Cash flow hedges:
Interest rate swaps	$	17,223	$	14,677	$	(5,049	)

The following table summarizes the pre-tax effects of the Company's derivative instruments on income at:

	Location of Loss Reclassified from AOCL into Income (Effective Portion)	Amount of Loss Reclassified from AOCL into Income (Effective Portion)
		2012		2011		2010
Cash flow hedges:
Interest rate swaps	Interest expense	$	35,903	$	30,355	$	30,722

Any portion of the fair value of the interest rate swaps determined to be ineffective will be recognized currently in earnings.  No ineffectiveness has been recorded in 2012, 2011 and 2010.