Derivatives

9 Months Ended

Mar. 31, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives

12.   Derivatives

We monitor our exposure to commodity prices, interest rates and foreign currency exchange rates, and use derivatives to manage certain of these risks. We designate derivatives as a hedge of a forecasted transaction or of the variability of the cash flows to be received or paid in the future related to a recognized asset or liability (cash flow hedge). We record the portion of the changes in the value of the derivative, related to a hedged asset or liability (the effective portion), in accumulated other comprehensive income (loss). As the hedged item is realized, we reverse the gain or loss recorded in accumulated other comprehensive income (loss) to the consolidated statements of operations on the same line where the hedged item is charged when released/sold. We immediately recognize in the consolidated statements of operations in the same line as the hedged item, the portion of the changes in fair value of derivatives used as cash flow hedges that is not offset by changes in the expected cash flows related to a recognized asset or liability (the ineffective portion). These derivatives generally have an expiration/maturity of two years or less and are intended to hedge cash flows related to the purchase of inventory.

We routinely assess whether the derivatives used to hedge transactions are effective. If we determine a derivative ceases to be an effective hedge, we discontinue hedge accounting in the period of the assessment, and immediately recognize any unrealized gains or losses related to the fair value of that derivative in the consolidated statements of operations.

We record derivatives at fair value in the consolidated balance sheets. We determine the fair value of derivative instruments based upon pricing models using observable market inputs for these types of financial instruments (Level 2 inputs per ASC 820).

At March 31, 2015, the following table details the Company’s outstanding derivatives that are designated and effective as cash flow hedges:

Instrument	Hedge	Notional Amount at  March 31, 2015	Fair value as of
			March 31,  2015			June 30, 2014
Options	Brazilian Real calls	R$136,500	​	$	327	​	$	432
Options	Brazilian Real puts	R$(136,500)	​	$	(3,288)	​	$	(46)

The unrecognized gains (losses) at March 31, 2015, are unrealized and will fluctuate relative to the value of future exchange rates until the derivative contracts mature. Of the $(2,961) of unrecognized gain (losses) on derivative instruments included in accumulated other comprehensive income (loss) at March 31, 2015, we anticipate that $(1,800) of the current fair value will be recognized into earnings within the next twelve months. We recognize gains (losses) related to these derivative instruments as a component of cost of goods sold at the time the hedged item is sold.