INTEREST RATE SWAP AGREEMENT

12 Months Ended

Jan. 31, 2015

INTEREST RATE SWAP AGREEMENT

INTEREST RATE SWAP AGREEMENT

NOTE 16—INTEREST RATE SWAP AGREEMENT

        In the third quarter of fiscal 2012, the Company settled its interest rate swap designated as a cash flow hedge on $145.0 million of the Company's Term Loan prior to its amendment and restatement. The swap was used to minimize interest rate exposure and overall interest costs by converting the variable component of the total interest rate to a fixed rate of 5.04%. Since February 1, 2008, this swap was deemed to be fully effective and all adjustments in the interest rate swap's fair value were recorded to accumulated other comprehensive loss. The settlement of this swap resulted in an interest charge of $7.5 million, which was previously recorded within accumulated other comprehensive loss. Immediately subsequent to the previous interest rate swap's settlement, on October 11, 2012, the Company entered into two new interest rate swaps for a notional amount of $50.0 million each that together are designated as a cash flow hedge on the first $100.0 million of the amended and restated Term Loan. The Company uses interest rate swap agreements to hedge the variability in cash flows related to interest payments. The interest rate swaps convert the variable LIBOR portion of the interest payments due on the first $100.0 million of the Term Loan to a fixed rate of 1.86%. As of January 31, 2015 and February 1, 2014, the fair value of the new swap was a net $0.6 million liability and a net $0.6 million asset, respectively, recorded within other long-term liabilities and other long-term assets on the balance sheet.

        The Company's refinancing of the $200.0 million Term Loan on November 12, 2013, which lowered the interest rate payable by the Company from LIBOR, subject to a 1.25% floor plus 3.75%, to LIBOR, subject to a 1.25% floor plus 3.00%, had no impact on the Company's interest rate swap or hedge accounting.