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Derivative Financial Instruments
12 Months Ended
Apr. 24, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
We are a party to certain offsetting and identical interest rate cap agreements entered into to fulfill certain covenants of the equipment finance contract sale agreements. The interest rate cap agreements also provide a credit enhancement feature for the financing contracts sold by PDC Funding and PDC Funding II to the commercial paper conduit.
The interest rate cap agreements are canceled and new agreements are entered into periodically to maintain consistency with the dollar maximum of the sale agreements and the maturity of the underlying financing contracts. As of April 24, 2021, PDC Funding had purchased an interest rate cap from a bank with a notional amount of $525,000 and a maturity date of August 2028. We sold an identical interest rate cap to the same bank. As of April 24, 2021, PDC Funding II had purchased an interest rate cap from a bank with a notional amount of $100,000 and a maturity date of November 2027. We sold an identical interest rate cap to the same bank.
These interest rate cap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.
In January 2014, we entered into a forward interest rate swap agreement with a notional amount of $250,000 and accounted for it as a cash flow hedge, in order to hedge interest rate fluctuations in anticipation of refinancing the 5.17% senior notes due March 25, 2015. These notes were repaid on March 25, 2015 and replaced with new
$250,000 3.48% senior notes due March 24, 2025. A cash payment of $29,003 was made in March 2015 to settle the interest rate swap. This amount is recorded in other comprehensive income (loss), net of tax, and is recognized as interest expense over the life of the related debt. In fiscal 2020, we repaid certain indebtedness, resulting in accelerating a portion of this interest expense and recording a pre-tax non-cash charge of $8,134. See Note 10 for additional information.
We utilize forward interest rate swap agreements to hedge against interest rate fluctuations that impact the amount of net sales we record related to our customer financing contracts. These interest rate swap agreements do not qualify for hedge accounting treatment and, accordingly, we record the fair value of the agreements as an asset or liability and the change in fair value as income or expense during the period in which the change occurs.
As of April 25, 2020, the remaining notional amount for interest rate swap agreements was $634,029, with the latest maturity date in fiscal 2027. During fiscal 2021, we entered into forward interest rate swap agreements with a notional amount of $281,778. As of April 24, 2021, the remaining notional amount for interest rate swap agreements was $653,122, with the latest maturity date in fiscal 2028.
Net cash payments of $9,373 and $1,881 were made in fiscal 2021 and 2020, respectively, to settle a portion of our liabilities related to these interest rate swap agreements. These payments are reflected as cash outflows in the consolidated statements of cash flows within net cash (used in) provided by operating activities.
The following presents the fair value of derivative instruments included in the consolidated balance sheets:
Derivative typeClassificationApril 24, 2021April 25, 2020
Assets:
Interest rate contractsOther non-current assets$2,120 $204 
Liabilities:
Interest rate contractsOther accrued liabilities3,776 6,789 
Interest rate contractsOther non-current liabilities7,795 13,060 
Total liability derivatives$11,571 $19,849 
The following tables present the pre-tax effect of derivative instruments on the consolidated statements of operations and other comprehensive income (loss):
Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income (Effective Portion)
Fiscal Year Ended
Derivatives in cash flow hedging relationshipsStatements of operationsApril 24, 2021April 25, 2020April 27, 2019
Interest rate contractsInterest expense$(1,363)$(10,458)$(2,908)
Amount of Gain (Loss) Recognized in Income on Derivatives
Fiscal Year Ended
Derivatives not designated as hedging instrumentsStatements of operationsApril 24, 2021April 25, 2020April 27, 2019
Interest rate contractsOther income, net$1,151 $(18,712)$(2,903)
There were no gains or losses recognized in other comprehensive income (loss) on cash flow hedging derivatives in fiscal 2021, 2020 or 2019.
We recorded no ineffectiveness during fiscal 2021, 2020 or 2019. As of April 24, 2021, the estimated pre-tax portion of accumulated other comprehensive loss that is expected to be reclassified into earnings over the next twelve months is $1,363, which will be recorded as an increase to interest expense.