Derivative Instruments and Hedging Activities

12 Months Ended

Aug. 02, 2013

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 credit spreads at August 2, 2013 and August 3, 2012 were 1.50% and 2.00%, respectively. All of the Company's interest rate swaps are accounted for as cash flow hedges.

A summary of the Company's interest rate swaps at August 2, 2013 is as follows:

Trade Date	Effective Date	Term (in Years)		Notional Amount		Fixed Rate
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	%
March 18, 2013	May 3, 2015		3		50,000		1.51	%
April 8, 2013	May 3, 2015		2		50,000		1.05	%
April 15, 2013	May 3, 2015		2		50,000		1.03	%
April 22, 2013	May 3, 2015		3		25,000		1.30	%
April 25, 2013	May 3, 2015		3		25,000		1.30	%

The Company's seven-year interest rate swap, which was entered into on May 4, 2006, expired on May 3, 2013. This interest rate swap had a notional amount of $525,000 prior to expiration and a fixed rate of 5.57%.

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

(See Note 3)	Balance Sheet Location	August 2, 2013		August 3, 2012
Interest rate swaps	Other assets	$	883	$	--
Interest rate swap	Current interest rate swap liability	$	--	$	20,215
Interest rate swaps	Long-term interest rate swap liability		11,644		14,166
Total liabilities		$	11,644	$	34,381

The estimated fair values of the Company's interest rate swap assets and liabilities incorporate the Company's non-performance risk. The adjustment related to the Company's non-performance risk at August 2, 2013 and August 3, 2012 resulted in reductions of $123 and $851, respectively, in the total fair value of the interest rate swap asset and liabilities. The offset to the interest rate swap assets and 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 2, 2013, the estimated pre-tax portion of AOCL that is expected to be reclassified into earnings over the next twelve months is $5,915. 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 for each of the three years:

	Amount of Income Recognized in AOCL on Derivatives (Effective Portion)
	2013		2012		2011
Cash flow hedges:
Interest rate swaps	$	23,620	$	17,223	$	14,677

The following table summarizes the pre-tax effects of the Company's derivative instruments on income for each of the three years:

	Location of Loss Reclassified from AOCL into Income (Effective Portion)	Amount of Loss Reclassified from AOCL into Income (Effective Portion)
		2013		2012		2011
Cash flow hedges:
Interest rate swaps	Interest expense	$	20,773	$	35,903	$	30,355

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 2013, 2012 and 2011.