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DERIVATIVES | 3 Months Ended
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Nov. 02, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES | NOTE 7—DERIVATIVES Management of Interest Rate Risk The Company enters into interest rate swap contracts from time to time to mitigate its exposure to changes in market interest rates as part of its overall strategy to manage its debt portfolio to achieve an overall desired position of notional debt amounts subject to fixed and floating interest rates. Interest rate swap contracts are entered into for periods consistent with related underlying exposures and do not constitute positions independent of those exposures. The Company’s interest rate swap contracts are designated as cash flow hedges as of November 2, 2024. Interest rate swap contracts are reflected at their fair values in the Condensed Consolidated Balance Sheets. Refer to Note 6—Fair Value Measurements of Financial Instruments for further information on the fair value of interest rate swap contracts. Details of active swap contracts as of November 2, 2024, which are all pay fixed and receive floating, are as follows:
Effective Date |  | Swap Maturity |  | Notional Value (in millions) |  | Pay Fixed Rate |  | Receive Floating Rate |  | Floating Rate Reset Terms
October 26, 2018 |  | October 22, 2025 |  | 50 |  |  | 2.8725 | % |  | One-Month Term SOFR |  | Monthly
November 16, 2018 |  | October 22, 2025 |  | 50 |  |  | 2.8750 | % |  | One-Month Term SOFR |  | Monthly
November 16, 2018 |  | October 22, 2025 |  | 50 |  |  | 2.8380 | % |  | One-Month Term SOFR |  | Monthly
January 24, 2019 |  | October 22, 2025 |  | 50 |  |  | 2.4750 | % |  | One-Month Term SOFR |  | Monthly
December 29, 2023 |  | June 3, 2027 |  | 100 |  |  | 3.7525 | % |  | One-Month Term SOFR |  | Monthly
December 29, 2023 |  | June 3, 2027 |  | 100 |  |  | 3.7770 | % |  | One-Month Term SOFR |  | Monthly
June 25, 2024 |  | June 30, 2028 |  | 50 |  |  | 4.1175 | % |  | One-Month Term SOFR |  | Monthly
June 25, 2024 |  | June 30, 2028 |  | 50 |  |  | 4.1300 | % |  | One-Month Term SOFR |  | Monthly
October 31, 2024 |  | October 30, 2026 |  | 100 |  |  | 3.5965 | % |  | One-Month Term SOFR |  | Monthly
October 31, 2024 |  | October 30, 2026 |  | 100 |  |  | 3.6000 | % |  | One-Month Term SOFR |  | Monthly
October 31, 2024 |  | October 30, 2026 |  | 50 |  |  | 3.6000 | % |  | One-Month Term SOFR |  | Monthly
|  |  |  | $ | 750 |  |  |  |  |  |  |
The Company performs an initial quantitative assessment of hedge effectiveness using the “Hypothetical Derivative Method” in the period in which the hedging transaction is entered. Under this method, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged transactions. In future reporting periods, the Company performs a qualitative analysis for quarterly prospective and retrospective assessments of hedge effectiveness. The Company also monitors the risk of counterparty default on an ongoing basis and noted that the counterparties are reputable financial institutions. The entire change in the fair value of the derivative is initially reported in Other comprehensive loss (outside of earnings) in the Condensed Consolidated Statements of Comprehensive Loss and subsequently reclassified to earnings in Interest expense, net in the Condensed Consolidated Statements of Operations when the hedged transactions affect earnings. The location and amount of gains or losses recognized in the Condensed Consolidated Statements of Operations for interest rate swap contracts for each of the periods, presented on a pre-tax basis, are as follows:
|  |  |  | 13-Week Period Ended
|  |  |  |  |  | November 2, 2024 |  | October 28, 2023
(in millions) |  |  |  | Interest expense, net
Total amounts of expense line items presented in the Condensed Consolidated Statements of Operations in which the effects of cash flow hedges are recorded |  |  |  |  |  | $ | 36 |  |  | $ | 35 |
Gain on cash flow hedging relationships: |  |  |  |  |  |  |  |
Gain reclassified from comprehensive loss into earnings |  |  |  |  |  | $ | 4 |  |  | $ | 5 |

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- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 40 -Name Accounting Standards Codification -Section 50 -Paragraph 5 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480237/815-40-50-5 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 815 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 5C -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147480434/815-10-50-5C Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 815 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/815/tableOfContent + Details
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