Note 6 - Derivative Financial Instruments

12 Months Ended

Apr. 27, 2013

Derivative Instruments and Hedging Activities Disclosure [Text Block]

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 2014. 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 the cash flow hedge for Fiscal 2013, Fiscal 2012 and Fiscal 2011:

	(In thousands)
	Fiscal 2013			Fiscal 2012			Fiscal 2011
Recognized in AOCI-
(Loss) gain before income taxes	$	(2,521	)	$	(4,484	)	$	3,650
Less income tax (benefit) provision		(935	)		(1,642	)		1,299
Net		(1,586	)		(2,842	)		2,351
Reclassified from AOCI to cost of sales-
(Loss) gain before income taxes		(2,060	)		290			(617	)
Less income tax (benefit) provision		(769	)		69			(220	)
Net		(1,291	)		221			(397	)
Net change to AOCI	$	(295	)	$	(3,063	)	$	2,748

As of April 27, 2013, the notional amount of our outstanding aluminum swap contracts was $21.0 million and, assuming no change in the commodity prices, $964,000 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 April 27, 2013 and April 28, 2012, the fair value of the derivative liability was $964,000 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 as defined by the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.