Derivative Financial Instruments

9 Months Ended

Jun. 29, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the value of transactions and balances denominated in foreign currency resulting from changes in foreign currency exchange rates. We enter into derivative transactions, specifically foreign currency forward contracts with maturities of up to three months, to manage our exposure to fluctuations in foreign exchange rates that arise primarily from our foreign currency-denominated receivables and payables.

Generally, we do not designate foreign currency forward contracts as hedges for accounting purposes, and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, any gain or loss on the underlying foreign-denominated balance would be offset by the loss or gain on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in other income (expense), net.

As of June 29, 2013 and September 30, 2012, we had outstanding forward contracts with notional amounts equivalent to the following:

Currency Hedged	June 29, 2013		September 30, 2012
	(in thousands)
Canadian Dollar / U.S. Dollar	$	44,228	$	54,133
Euro / U.S. Dollar	46,356		53,716
Chinese Renminbi / U.S. Dollar	3,434		3,666
Japanese Yen / U.S. Dollar	8,834		13,415
Japanese Yen / Euro	3,034		—
Israeli New Sheqel / U.S. Dollar	2,233		—
All other	8,883		8,973
Total	$	117,002	$	133,903

The accompanying consolidated balance sheets include a net liability of $0.4 million in accrued expenses and a net asset of $2.6 million in other current assets as of June 29, 2013, and a net asset of $0.2 million as of September 30, 2012 related to the fair value of our forward contracts.

Net gains and losses on foreign currency exposures are recorded in other income (expense), net and include realized and unrealized gains and losses on forward contracts. Net gains and losses on foreign currency exposures for the three and nine month periods ended June 29, 2013 and June 30, 2012 were as follows:

	Three months ended						Nine months ended
	June 29, 2013			June 30, 2012			June 29, 2013			June 30, 2012
	(in thousands)
Net losses on foreign currency exposures	$	749		$	572		$	1,737		$	5,142
Net realized and unrealized (gain) loss on forward contracts (excluding the underlying foreign currency exposure being hedged)	$	(1,443	)	$	(1,570	)	$	(5,039	)	$	816