DERIVATIVE FINANCIAL INSTRUMENTS

12 Months Ended

Feb. 01, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE FINANCIAL INSTRUMENTS

 DERIVATIVE FINANCIAL INSTRUMENTS

The Company has exposure to changes in foreign currency exchange rates related to certain anticipated cash flows principally associated with certain international inventory purchases and certain intercompany transactions. To help manage these exposures, the Company periodically uses foreign currency forward exchange contracts.

The Company also has exposure to interest rate volatility related to its senior secured term loan facilities. The Company has entered into interest rate swap agreements and an interest rate cap agreement to hedge against this exposure. Please see Note 7, “Debt,” for a further discussion of the Company’s senior secured term loan facilities and these agreements.

The Company records the foreign currency forward exchange contracts and interest rate contracts at fair value in its Consolidated Balance Sheets, and does not net the related assets and liabilities. Changes in fair value of the foreign currency forward exchange contracts associated with certain international inventory purchases and the interest rate contracts that are designated as effective hedging instruments (collectively referred to as “cash flow hedges”) are recorded in equity as a component of AOCI. The cash flows from such hedges are presented in the same category on the Consolidated Statements of Cash Flows as the items being hedged. No amounts were excluded from effectiveness testing. There was no ineffective portion of cash flow hedges in 2014 or 2013. In addition, the Company records immediately in earnings changes in the fair value of hedges that are not designated as effective hedging instruments (“undesignated contracts”), including all of the foreign currency forward exchange contracts related to intercompany loans that are not of a long-term investment nature. Any gains and losses that are immediately recognized in earnings on such contracts related to intercompany loans are largely offset by the remeasurement of the underlying intercompany loan balances. The Company does not use derivative financial instruments for trading or speculative purposes.

The following table summarizes the fair value and presentation in the Consolidated Balance Sheets for the Company’s derivative financial instruments:

(In millions)	Asset Derivatives (Classified in Other Current Assets and Other Assets)				Liability Derivatives (Classified in Accrued  Expenses and Other Liabilities)
	2014		2013		2014		2013
Contracts designated as cash flow hedges:
Foreign currency forward exchange contracts (inventory purchases)	$	79.8	$	5.0	$	0.2	$	6.2
Interest rate contracts	0.6		2.2		15.3		6.8
Total contracts designated as cash flow hedges	80.4		7.2		15.5		13.0
Undesignated contracts:
Foreign currency forward exchange contracts (principally intercompany transactions)	30.6		0.8		1.1		0.0
Total undesignated contracts	30.6		0.8		1.1		0.0
Total	$	111.0	$	8.0	$	16.6	$	13.0

At February 1, 2015, the notional amount outstanding of foreign currency forward exchange contracts was $887.7 million. Such contracts expire principally between February 2015 and January 2016.

The following table summarizes the effect of the Company’s hedges designated as cash flow hedging instruments:

	Gain (Loss) Recognized in Other Comprehensive (Loss) Income						Gain (Loss) Reclassified from AOCI into Income (Expense)
(In millions)							Location	Amount
	2014			2013				2014			2013
Foreign currency forward exchange contracts (inventory purchases)	$	114.2		$	4.8		Cost of goods sold	$	10.2		$	(1.1	)
Interest rate contracts	(16.7		)	(5.9		)	Interest expense	(6.4		)	(6.3		)
Total	$	97.5		$	(1.1	)		$	3.8		$	(7.4	)

A net gain in AOCI on foreign currency forward exchange contracts at February 1, 2015 of $103.6 million is estimated to be reclassified in the next 12 months in the Consolidated Income Statements to costs of goods sold as the underlying inventory is purchased and sold. In addition, a net loss in AOCI for interest rate contracts at February 1, 2015 of $2.9 million is estimated to be reclassified to interest expense within the next 12 months.

The following table summarizes the effect of the Company’s foreign currency forward exchange undesignated contracts:

	Gain (Loss) Recognized in Income
(In millions)	Location	Amount
		2014		2013
Foreign currency forward exchange contracts (inventory purchases)	Selling, general and administrative expenses	$	—	$	0.2
Foreign currency forward exchange contracts (principally intercompany transactions)	Selling, general and administrative expenses	30.1		(1.4		)

The Company had no derivative financial instruments with credit risk related contingent features underlying the related contracts as of February 1, 2015.