Derivative Financial Instruments

9 Months Ended

Jun. 28, 2014

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 approximately 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 28, 2014 and September 30, 2013, we had outstanding forward contracts with notional amounts equivalent to the following:

Currency Hedged	June 28, 2014		September 30, 2013
	(in thousands)
Canadian Dollar / U.S. Dollar	$	26,764	$	41,852
Euro / U.S. Dollar	154,656		50,902
British Pound/U.S. Dollar	12,872		—
Japanese Yen / U.S. Dollar	—		6,496
Swiss Franc / U.S. Dollar	7,811		9,678
Israeli New Sheqel / U.S. Dollar	6,504		3,413
All other	8,802		12,093
Total	$	217,409	$	124,434

The accompanying consolidated balance sheets include a net asset of $0.6 million in prepaid expenses and other current assets and a net liability of $1.2 million in accrued expenses as of June 28, 2014, and a net asset of $0.3 million in prepaid expenses and other current assets and a net liability of $0.4 million in accrued expenses as of September 30, 2013 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 months ended June 28, 2014 and June 29, 2013 were as follows:

	Three months ended					Nine months ended
	June 28, 2014		June 29, 2013			June 28, 2014			June 29, 2013
	(in thousands)
Net losses on foreign currency exposures	$	746	$	749		$	2,739		$	1,737
Net realized and unrealized gain on forward contracts (excluding the underlying foreign currency exposure being hedged)	$	1,320	$	(1,443	)	$	(377	)	$	(5,039	)