XML 39 R52.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivatives And Fair Value Measurements (Narrative) (Details) (USD $)
 12 Months Ended 12 Months Ended
Sep. 27, 2014
Jun. 28, 2008
Sep. 28, 2013
Interest Rate Swaps [Member]
Sep. 27, 2014
Interest Rate Swaps [Member]
Jun. 28, 2008
Interest Rate Swaps [Member]
Sep. 27, 2014
First Interest Rate Swaps Contracts [Member]
Jun. 28, 2008
First Interest Rate Swaps Contracts [Member]
Jun. 28, 2008
Second Interest Rate Swaps Contracts [Member]
Jun. 28, 2008
Third Interest Rate Swaps Contracts [Member]
Sep. 27, 2014
Malaysian Operations [Member]
Forward Contracts [Member]
Sep. 28, 2013
Malaysian Operations [Member]
Forward Contracts [Member]
Sep. 27, 2014
ROMANIA
Forward Contracts [Member]
Apr. 04, 2008
Term Loans Prior Credit Facility [Member]
Sep. 27, 2014
Term Loans New Credit Facility [Member]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum 1.00%                          
Notional amount of forward exchange contracts       $ 75,000,000 $ 150,000,000         $ 64,600,000 $ 71,000,000 $ 37,900,000    
Derivatives and Fair Value [Text Block]
Derivatives and Fair Value Measurements
All derivatives are recognized in the accompanying Consolidated Balance Sheets at their estimated fair value. The Company uses derivatives to manage the variability of foreign currency obligations and interest rates. The Company has cash flow hedges related to variable rate debt and forecasted foreign currency obligations, in addition to fair value hedges to manage foreign currency exposures associated with certain foreign currency denominated assets and liabilities. The Company does not enter into derivatives for speculative purposes. Changes in the fair value of the derivatives that qualify as cash flow hedges are recorded in “Accumulated other comprehensive income” in the accompanying Consolidated Balance Sheets until earnings are affected by the variability of the cash flows. Changes in the fair value of the derivatives related to recognized foreign currency denominated assets and liabilities are recorded in "Other income (expense)" in the accompanying Consolidated Statements of Comprehensive Income.
The Company enters into forward currency exchange contracts on a rolling basis. The Company had cash flow hedges outstanding with a notional value of $64.6 million as of September 27, 2014 and a notional value of $71.0 million as of September 28, 2013. These forward currency contracts fix the exchange rates for the settlement of future foreign currency obligations that have yet to be realized. The total fair value of the forward currency exchange contracts was a $0.8 million asset as of September 27, 2014 and a $1.0 million liability as of September 28, 2013.
The Company had additional forward currency exchange contracts outstanding with a notional value of $37.9 million as of September 27, 2014. The Company has not designated these derivative instruments as hedging instruments. The net settlement amount (fair value) related to these contracts is recorded on the Consolidated Balance Sheets as either a current or long-term asset or liability, depending on the term, and as an element of other income (expense). The total fair value of these derivatives was a $1.5 million asset as of September 27, 2014. No contracts were outstanding as of September 28, 2013.
On June 4, 2013, the Company entered into an interest rate swap contract to replace the three interest rate swap contracts that matured on April 4, 2013, as described below. The new interest rate swap contract is related to the borrowings outstanding under the Company's Credit Facility, as amended. This interest rate swap pays the Company variable interest at the one month LIBOR rate, and the Company pays the counterparty a fixed interest rate. The fixed interest rate for the contract is 0.875%. Based on the terms of the interest rate swap contract and the underlying borrowings outstanding under the Credit Facility, as amended, the interest rate contract was determined to be effective, and thus qualifies as a cash flow hedge. As such, any changes in the fair value of the interest rate swap are recorded in "Accumulated other comprehensive income" on the accompanying Consolidated Balance Sheets until earnings are affected by the variability of cash flows. The total fair value of the interest rate swap contract was a $0.2 million asset as of September 27, 2014 and a $0.1 million asset as of September 28, 2013. The notional amount of the Company's interest rate swap was $75.0 million as of both September 27, 2014 and September 28, 2013.
The Company entered into three interest rate swap contracts related to the term loans under its prior credit facility that had an initial total notional value of $150.0 million and matured on April 4, 2013, which resulted in a $2.0 million discrete tax benefit in fiscal 2013. The fixed interest rates for each of these contracts were 4.415%, 4.490% and 4.435%, respectively. These interest rate swap contracts were originally entered into to convert $150.0 million of the variable rate term loan under the prior credit facility into fixed rate debt. Based on the terms of the interest rate swap contracts and the underlying debt, these interest rate contracts were determined to be effective, and thus qualified as a cash flow hedge. As such, any changes in the fair value of these interest rate swaps were recorded in “Accumulated other comprehensive income” on the accompanying Consolidated Balance Sheets until earnings were affected by the variability of cash flows.
The tables below present information regarding the fair values of derivative instruments (as defined in Note 1, "Description of Business and Significant Accounting Policies") and the effects of derivative instruments on the Company’s Consolidated Financial Statements:
 
Fair Values of Derivative Instruments
In thousands of dollars
  
 
Asset Derivatives
 
Liability Derivatives
  
 
  
 
September 27,
2014
 
September 28,
2013
 
  
 
September 27,
2014
 
September 28,
2013
Derivatives designated
as hedging instruments
 
Balance Sheet
Classification
 
Fair Value
 
Fair Value
 
Balance Sheet
Classification
 
Fair Value
 
Fair Value
Interest rate swaps
 
Prepaid expenses and other
 
$182
 
$34
 
Current liabilities –
Other
 
$—
 
$—
Forward contracts
 
Prepaid expenses and other
 
$812
 
$—
 
Current liabilities –
Other
 
$—
 
$999

 
Fair Values of Derivative Instruments
In thousands of dollars
  
 
Asset Derivatives
 
Liability Derivatives
  
 
  
 
September 27,
2014
 
September 28,
2013
 
  
 
September 27,
2014
 
September 28,
2013
Derivatives not designated
as hedging instruments
 
Balance Sheet
Classification
 
Fair Value
 
Fair Value
 
Balance Sheet
Classification
 
Fair Value
 
Fair Value
Forward contracts
 
Prepaid expenses and other
 
$1,512
 
$—
 
Current liabilities –
Other
 
$—
 
$—


 
The Effect of Derivative Instruments on the Statements of Comprehensive Income
 
for the Twelve Months Ended
In thousands of dollars
 
 
Derivatives    
in Cash Flow    
Hedging    
Relationships    
 
Amount of Gain or  
(Loss) Recognized in  
Other Comprehensive  
Income (“OCI”) on  
Derivative (Effective  
Portion)  
 
Classification of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
Amount of Gain or
(Loss) Reclassified from
Accumulated OCI into
Income (Effective
Portion)
  
 
September 27, 2014
 
September 28, 2013
 
September 29, 2012
 
  
 
September 27, 2014
 
September 28, 2013
 
September 29, 2012
Interest rate swaps
 
$(393)
 
$961
 
$(40)
 
Interest income
(expense)
 
$(542)
 
$(788)
 
$(3,564)
Forward contracts
 
$1,198
 
$(1,389)
 
$3,021
 
Selling and
administrative
expenses
 
$(609)
 
$709
 
$(597)
Treasury Rate Locks
 
$—
 
$—
 
$—
 
Interest income
(expense)
 
$321
 
$321
 
$320
Income tax expense
 
$—
 
$—
 
$—
 
Income tax expense
 
$70
 
$2,031
 
$—

There were no gains or losses recognized in income for derivatives related to ineffective portions and amounts excluded from effectiveness testing for fiscal years 2014, 2013, and 2012.
The following table lists the fair values of assets/(liabilities) of the Company’s derivatives as of September 27, 2014, by input level as defined in Note 1, "Description of Business and Significant Accounting Policies":
  
 
 
Fair Value Measurements Using Input Levels Asset/
(Liability) (in thousands):
 
Fiscal year ended September 27, 2014
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
Total
 
Derivatives
 
 
 
 
 
 
 
 
Interest rate swaps
 
$—
 
$182
 
$—
 
$182
Forward currency forward contracts
 
$—
 
$2,324
 
$—
 
$2,324
 
 
 
 
 
 
 
 
 
Fiscal year ended September 28, 2013
 
 
 
 
 
 
 
 
Derivatives
 
 
 
 
 
 
 
 
Interest rate swaps
 
$—
 
$34
 
$—
 
$34
Forward currency forward contracts
 
$—
 
$(999)
 
$—
 
$(999)

The fair value of interest rate swaps and foreign currency forward contracts is determined using a market approach, which includes obtaining directly or indirectly observable values from third parties active in the relevant markets. The primary input in the fair value of the interest rate swaps is the relevant LIBOR forward curve. Inputs in the fair value of the foreign currency forward contracts include prevailing forward and spot prices for currency and interest rate forward curves.
                          
Derivative Instruments, Gain (Loss) Reclassified from Accumulated OCI into Income, Effective Portion, Net     2,000,000                      
Foreign Currency Contract, Asset, Fair Value Disclosure                   800,000 (1,000,000) 1,500,000    
Number of contracts   3                        
Credit facility outstanding at end of period                         150,000,000 75,000,000
Fixed interest rate           0.875% 4.415% 4.49% 4.435%          
Interest Rate Cash Flow Hedge Derivative at Fair Value, Net     $ 100,000 $ 200,000