Derivatives

3 Months Ended

Apr. 30, 2011

Note 4 — Derivatives

The Company has entered into an interest rate contract for an initial amount of $540 million to hedge a portion of its variable rate $725 million term loan facility (“interest rate contract”). The interest rate contract provides for a fixed interest rate of approximately 7.75%, portions of which mature on a series of dates through 2012. As of April 30, 2011, the Company has hedges remaining on $220 million of its $488.1 million outstanding Term Loan Facility balance.

The Company has also entered into a series of forward contracts to hedge a portion of certain foreign currency purchases (“foreign currency contracts”). The foreign currency contracts provide for a fixed exchange rate and mature over a series of dates through October 2011. As of April 30, 2011, the Company has hedged $15.5 million of its forecasted foreign currency purchases.

The interest rate and foreign currency contracts are designated as cash flow hedging instruments. The change in the fair value of the interest rate and foreign currency contracts are recorded as a component of accumulated other comprehensive income (“AOCI”) and reclassified into earnings in the periods in which earnings are impacted by the hedged item. The following table presents the fair value of the Company’s hedging portfolio related to its interest rate contract and foreign currency contracts:


		Fair Value
	Location on Condensed	April 30,		May 1,		January 29,
(dollars in millions)	Consolidated Balance Sheet	2011		2010		2011

Interest rate contract	Other liabilities	$	0.6	$	4.3	$	1.3
Interest rate contract	Accrued expenses	$	4.1	$	7.7	$	6.1
Foreign currency contracts	Accrued expenses	$	0.9	$	0.4	$	0.4
Foreign currency contracts	Other current assets	$	0.2	$	—	$	0.1

It is the Company’s policy to enter into derivative instruments with terms that match the underlying exposure being hedged. As such, the Company’s derivative instruments are considered highly effective, and the net gain or loss from hedge ineffectiveness is not significant. Realized gains or losses on the hedging instruments occur when a portion of the hedge settles or if it is probable that the forecasted transaction will not occur. The impact of the derivative instruments on the Condensed Consolidated Financial Statements is as follows:


	Loss Recognized in OCI on							Loss Reclassified from AOCI into
	Derivatives							Earnings
	13 Weeks Ended						Location on Condensed	13 Weeks Ended
	April 30,			May 1,			Consolidated Statement of	April 30,			May 1,
(dollars in millions)	2011			2010			Earnings	2011			2010

Interest rate contract	$	(0.2	)	$	(0.2	)	Interest expense	$	(1.6	)	$	(2.2	)
Foreign currency contracts	$	(0.2	)	$	(0.3	)	Cost of sales	$	—		$	(0.1	)

The Company expects $4.1 million of the fair value of the interest rate contract and $0.7 million of the fair value of the foreign currency contracts recorded in AOCI to be recognized in earnings during the next 12 months. These amounts may vary based on actual changes to LIBOR and foreign currency exchange rates.