Derivative Financial Instruments (Tables)

9 Months Ended

Nov. 02, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of fair value of derivative instruments in the condensed consolidated balance sheets

The fair value of derivative instruments in the condensed consolidated balance sheets as of November 2, 2019 and February 2, 2019 is as follows (in thousands):



	Derivative Balance Sheet Location	Fair Value at Nov 2, 2019		Fair Value at Feb 2, 2019
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Other current assets/ Other assets	$	4,470	$	4,058
Interest rate swap	Other assets	—		1,033
Total derivatives designated as hedging instruments		4,470		5,091
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other current assets/ Other assets	761		632
Total		$	5,231	$	5,723
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Accrued expenses and other current liabilities	$	103	$	77
Interest rate swap	Other long-term liabilities	180		—
Total derivatives designated as hedging instruments		283		77
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other long-term liabilities	74		—
Total		$	357	$	77

Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss)

The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings (loss) for the three and nine months ended November 2, 2019 and November 3, 2018 (in thousands):



	Gains (Losses) Recognized in OCI¹					Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings (Loss)¹	Gains (Losses) Reclassified from Accumulated OCI into Earnings (Loss)
	Three Months Ended						Three Months Ended
	Nov 2, 2019			Nov 3, 2018			Nov 2, 2019		Nov 3, 2018
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	958		$	1,630	Cost of product sales	$	2,826	$	(1,618	)
Interest rate swap	(99		)	203		Interest expense	28		21



	Gains (Losses) Recognized in OCI¹					Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings (Loss)¹	Gains (Losses) Reclassified from Accumulated OCI into Earnings (Loss)
	Nine Months Ended						Nine Months Ended
	Nov 2, 2019			Nov 3, 2018			Nov 2, 2019		Nov 3, 2018
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	8,676		$	13,690	Cost of product sales	$	4,813	$	(5,646	)
Foreign exchange currency contracts	—			2		Other income (expense)	—		(201		)
Interest rate swap	(1,095		)	308		Interest expense	118		60

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Notes:

During the first quarter of fiscal 2020, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) during the three and nine months ended November 2, 2019. Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. During the three and nine months ended November 3, 2018, the Company recognized gains of $0.6 million and $2.0 million, respectively, resulting from the ineffective portion related to foreign exchange currency contracts in interest income. There was no ineffectiveness recognized related to the interest rate swap during the three and nine months ended November 3, 2018.

Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss)

The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):



	Three Months Ended						Nine Months Ended
	Nov 2, 2019			Nov 3, 2018			Nov 2, 2019			Nov 3, 2018
Beginning balance gain (loss)	$	9,069		$	(142	)	$	2,999		$	(14,369	)
Cumulative adjustment from adoption of new accounting guidance¹	—			—			1,981			—
Net gains from changes in cash flow hedges	776			1,596			6,618			12,175
Net (gains) losses reclassified into earnings (loss)	(2,527		)	1,419			(4,280		)	5,067
Ending balance gain (loss)	$	7,318		$	2,873		$	7,318		$	2,873

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Notes:

Summary of gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense)

The following table summarizes the gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) for the three and nine months ended November 2, 2019 and November 3, 2018 (in thousands):



	Location of Gain (Loss) Recognized in Earnings (Loss)	Gain (Loss) Recognized in Earnings (Loss)
		Three Months Ended					Nine Months Ended
		Nov 2, 2019			Nov 3, 2018		Nov 2, 2019		Nov 3, 2018
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other income (expense)	$	(184	)	$	794	$	624	$	6,700