Other Comprehensive Income-Hedging Instruments

9 Months Ended

Dec. 28, 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 purchases 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.

The following table summarizes the impact of the effective portion of gains and losses of the forward contracts designated as hedges for the three and nine months ended December 28, 2013 (in thousands):

	Three Months Ended December 28, 2013						Nine Months Ended December 28, 2013
	Pre-Tax (Loss) Recognized in OCI (Effective Portion)			(Loss) Reclassified from Accumulated OCI into Earnings (Effective Portion)			Pre-Tax (Loss) Recognized in OCI (Effective Portion)			Gain Reclassified from Accumulated OCI into Earnings (Effective Portion)
Forward currency exchange contracts	$	(695	)	$	(422	)	$	(4,208	)	$	133

Contracts designated as hedging for hedge accounting purposes as of December 29, 2012, as well as the related activity, were de minimis, as the Company had adopted the provisions of hedge accounting late in the fiscal quarter then ended.