XML 33 R13.htm IDEA: XBRL DOCUMENT v2.4.0.6
Note 6 - Derivative Financial Instruments
3 Months Ended
Jul. 28, 2012
Derivative Instruments and Hedging Activities Disclosure [Text Block]
6.  DERIVATIVE FINANCIAL INSTRUMENTS

We have entered into various aluminum swap contracts to partially mitigate our exposure to changes in the cost of aluminum cans through April 2013.  The financial instruments were designated and accounted for as a cash flow hedge.  Accordingly, gains or losses attributable to the effective portion of the cash flow hedge are reported in Accumulated Other Comprehensive Income (“AOCI”) and reclassified into earnings through cost of sales in the period in which the hedged transaction affects earnings.  The ineffective portion of the change in fair value of our cash flow hedge was immaterial.  The following summarizes the gains (losses) recognized in the Consolidated Statements of Income and AOCI relative to cash flow hedges for the three months ended July 28, 2012 and July 30, 2011:

   
(In thousands)
 
   
2012
 
2011
 
Recognized in AOCI:
         
   Loss before income taxes
  $ (2,318 )   $ (588 )
   Less income tax benefit
    (881 )     (219 )
   Net
  $ (1,437 )   $ (369 )
Reclassified from AOCI to cost of sales:
               
   Gain (loss) before income taxes
  $ (902 )   $ 1,143  
   Less income tax provision (benefit)
     (343 )      407  
   Net
  $ (559 )   $ 736  
Net change to AOCI
  $ (878 )   $ (1,105 )

As of July 28, 2012, the notional amount of our outstanding aluminum swap contracts was $18.9 million and, assuming no change in the commodity prices, $1.9 million of unrealized net loss (before tax) will be reclassified from AOCI and recognized in earnings over the next twelve months.  See Note 1.

As of July 28, 2012 and April 28, 2012, the fair value of the derivative liability was $1.9 million and $503,000, respectively, which was included in Accrued liabilities.  Such valuation does not entail a significant amount of judgment and the inputs that are significant to the fair value measurement are Level 2 in the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.