Derivative Financial Instruments (Tables)

12 Months Ended

Feb. 01, 2020

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

The fair value of derivative instruments in the consolidated balance sheets as of February 1, 2020 and February 2, 2019 is as follows (in thousands):



	Derivative Balance Sheet Location	Fair Value at Feb 1, 2020		Fair Value at Feb 2, 2019
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Other current assets/ Other assets	$	3,987	$	4,058
Interest rate swap	Other assets	—		1,033
Total derivatives designated as hedging instruments		3,987		5,091
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other current assets/ Other assets	867		632
Total		$	4,854	$	5,723
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Accrued expenses	$	—	$	77
Interest rate swaps	Other long-term liabilities	348		—
Total		$	348	$	77

Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in accumulated other comprehensive income (loss) 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 fiscal 2020, fiscal 2019 and fiscal 2018 (in thousands):



	Year Ended February 1, 2020
	Gain (Loss) Recognized in OCI¹			Location of Gain Reclassified from Accumulated OCI into Earnings¹	Gain Reclassified from Accumulated OCI into Earnings
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	10,557		Cost of product sales	$	7,776
Interest rate swap	(1,253		)	Interest expense	128



	Year Ended February 2, 2019
	Gain (Loss) Recognized in OCI¹			Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings¹	Gain (Loss) Reclassified from Accumulated OCI into Earnings
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	12,973		Cost of product sales	$	(7,020	)
Foreign exchange currency contracts	2			Other income (expense)	(201		)
Interest rate swap	(324		)	Interest expense	103



	Year Ended February 3, 2018
	Gain (Loss) Recognized in OCI¹			Location of Gain (Loss) Reclassified from Accumulated OCI into Loss¹	Gain (Loss) Reclassified from Accumulated OCI into Loss
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	(22,497	)	Cost of product sales	$	14
Foreign exchange currency contracts	(1,163		)	Other income (expense)	(583		)
Interest rate swap	272			Interest expense	(87		)

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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 fiscal 2020. 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. The Company recognized gains of $3.5 million and $2.7 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income during fiscal 2019 and fiscal 2018, respectively. There was no ineffectiveness recognized related to the interest rate swap during fiscal 2020, fiscal 2019 or fiscal 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):



	Year Ended Feb 1, 2020			Year Ended Feb 2, 2019
Beginning balance gain (loss)	$	2,999		$	(14,369	)
Cumulative adjustment from adoption of new accounting guidance¹	1,981			—
Net gains from changes in cash flow hedges	8,316			10,962
Net (gains) losses reclassified to earnings	(6,996		)	6,406
Ending balance gain	$	6,300		$	2,999

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Summary of gains (loss) before taxes recognized on the derivative instruments not designated as hedging instruments in other income and 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 fiscal 2020, fiscal 2019 and fiscal 2018 (in thousands):



	Location of Gain (Loss) Recognized in Earnings (Loss)	Gain (Loss) Recognized in Earnings (Loss)
	Location of Gain (Loss) Recognized in Earnings (Loss)	Year Ended Feb 1, 2020		Year Ended Feb 2, 2019		Year Ended Feb 3, 2018
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other income (expense)	$	1,254	$	6,785	$	(10,511	)