Note 6 - Derivative Financial Instruments

12 Months Ended

Apr. 28, 2012

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 2013.  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 2012 and Fiscal 2011:

	(In thousands)
	Fiscal 2012			Fiscal 2011			Fiscal 2010
Recognized in AOCI-
(Loss) gain before income taxes	$	(4,484	)	$	3,650		$	603
Less income tax (benefit) provision		(1,642	)		1,299			214
Net		(2,842	)		2,351			389
Reclassified from AOCI to cost of sales-
Gain (loss) before income taxes		290			(617	)		599
Less income tax provision (benefit)		69			(220	)		213
Net		221			(397	)		386
Net change to AOCI	$	(3,063	)	$	2,748		$	3

As of April 28, 2012, the notional amount of our outstanding aluminum swap contracts was $21.7 million and, assuming no change in the commodity prices, $503,000 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 28, 2012, the fair value of the derivative liability was $503,000, which was included in Accrued liabilities.  As of April 30, 2011, the fair value of the derivative asset was $4.3 million, which was included in Prepaid and other assets.  Such valuation does not entail a significant amount of judgment and the inputs that are significant to the fair value measurement are Level 2 in the fair value hierarchy as they are observable market based inputs or unobservable inputs that are corroborated by market data.