Derivatives

9 Months Ended

Mar. 31, 2016

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. 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 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 sold, we recognize 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).

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 for that derivative, 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. For additional details regarding fair value, see “—Fair Value Measurements.”

At March 31, 2016, 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,  2016	Fair value as of
			March 31,  2016			June 30,  2015
Options	Brazilian Real calls	R$136,500		$	1,561		$	493
Options	Brazilian Real puts	R$136,500		$	(1,781)		$	(2,035)

The unrecognized gains (losses) at March 31, 2016, are unrealized and will fluctuate based on future exchange rates until the derivative contracts mature. Other comprehensive income (loss) included $4,316 and $1,322 of unrecognized gains for the three and nine months ended March 31, 2016, respectively. Accumulated other comprehensive income (loss) at March 31, 2016 included $220 of net unrecognized losses on derivative instruments; we anticipate that $289 of those losses will be recognized in earnings within the next twelve months. We realized net losses of  $618 and $2,559 related to contracts that matured during the three and nine months ended March 31, 2016, respectively, and recorded the cost as a component of inventory. In addition, during the three and nine months ended March 31, 2016 we recognized $174 of losses in earnings in relation to contracts that matured; we anticipate the balance of the realized net losses in inventory as of March 31, 2016 will be recognized in 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. We hedge forecasted transactions for periods not exceeding twenty-four months.