Other Comprehensive Income- Hedging Instruments

3 Months Ended

Jun. 29, 2013

Other Comprehensive Income- Hedging Instruments

9. Other Comprehensive Income- Hedging Instruments

The Company designates certain forward currency exchange contracts as hedges for hedge accounting purposes (see Note 2, Summary of Significant Accounting Policies- Derivative Financial Instruments). The Company employs forward currency contracts to hedge the Company’s exposures, as they relate to certain forecasted inventory purchase in foreign currencies, and as such are regarded as cash flow hedges up to such time the forecasted transaction occurs.

Changes in the fair value of the effective portion of these contracts are recorded in equity as a component of accumulated other comprehensive income, as of each balance sheet date, and are reclassified from accumulated other comprehensive income into earnings when the items underlying the hedged transactions are recognized into earnings, as a component of cost of sales within the Company’s consolidated statements of operations. During the three months ended June 29, 2013, the net realized loss of $0.6 million, related to the change in fair value of those contracts, the effective portion, was charged to other comprehensive income. For the three months ended June 29, 2013, the amounts reclassified out of accumulated other comprehensive income were de minimis.

There were no contracts designated as hedging for hedge accounting purposes prior to and as of June 30, 2012.