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DERIVATIVE FINANCIAL INSTRUMENTS
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12 Months Ended |
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Feb. 01, 2014
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| DERIVATIVE FINANCIAL INSTRUMENTS [Abstract] | |
| DERIVATIVE FINANCIAL INSTRUMENTS |
DERIVATIVE FINANCIAL INSTRUMENTS
Hedging Derivatives
In order to manage fluctuations in cash flows resulting from changes in diesel fuel costs, the Company entered into fuel derivative contracts with third parties. The Company hedged 2.8 million, 4.8 million and 3.5 million gallons of diesel fuel in 2013, 2012 and 2011, respectively. These hedges represented approximately 20%, 35% and 31% of the total domestic truckload fuel needs in 2013, 2012 and 2011, respectively. Under these contracts, the Company pays the third party a fixed price for diesel fuel and receives variable diesel fuel prices at amounts approximating current diesel fuel costs, thereby creating the economic equivalent of a fixed-rate obligation. These derivative contracts do not qualify for hedge accounting and therefore all changes in fair value for these derivatives are included under "Other (income) expense, net" on the accompanying consolidated statements of operations. The Company did not have any active fuel derivative contracts as of February 1, 2014.
In 2008, the Company entered into two $75.0 million interest rate swap agreements. These interest rate swaps were used to manage the risk associated with interest rate fluctuations on a portion of the Company’s variable rate debt. Under these agreements, the Company paid interest to financial institutions at a fixed rate of 2.8%. In exchange, the financial institutions paid the Company at a variable rate, which equals the variable rate on the debt, excluding the credit spread. These swaps qualified for hedge accounting treatment and expired in March 2011.
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