The Company is exposed to certain market risks during the normal course of its business arising from adverse changes in interest rates. The Company’s exposure to interest rate risk results primarily from its variable-rate borrowings. The Company may selectively use derivative financial instruments to manage the risks from fluctuations in interest rates. The Company does not purchase or hold derivatives for trading or speculative purposes. Fluctuations in interest rates can be volatile, and the Company’s risk management activities do not totally eliminate these risks. Consequently, these fluctuations could have a significant effect on the Company’s financial results.

In July 2018, the Company purchased, for $2.2 million, a forward starting interest rate cap based on 3-month LIBOR effective October 23, 2018 through October 23, 2021. The objective of the hedging instrument is to offset the variability of cash flows in term loan debt interest payments attributable to fluctuations in LIBOR beyond 3.5 percent.

The following table summarizes the fair value and balance sheet classification of the Company’s outstanding derivative within the accompanying Consolidated Balance Sheets as of May 1, 2021 and May 2, 2020:

Instrument

Balance Sheet Location

May 1,

2021

May 2,

2020

(Dollars in millions)

Interest Rate Cap

Other Assets

—

0.1

The interest rate cap had an amortized notional amount of $663.7 million and $685.8 million as of May 1, 2021 and May 2, 2020, respectively.

The time value of the interest rate cap is excluded from the assessment of effectiveness and is being amortized to interest expense over the life of the hedge. The impacts of the Company’s derivative instrument on the accompanying Consolidated Statements of Comprehensive Income (Loss) for the thirteen weeks ended May 1, 2021 and May 2, 2020 are presented in the table below:

	Thirteen Weeks Ended
	May 1, 2021		May 2, 2020
	(Dollars in millions)
Gain recognized in Other Comprehensive Income (Loss) on derivatives, gross of income taxes	$	—	$	0.2
Amount reclassified from Other Comprehensive Income (Loss) into earnings		—		—
Amortization of excluded component to interest expense		0.2		0.2