Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2012

Financial Instruments [Abstract]

Carrying amounts and fair values of the Company's financial instruments

The carrying amounts and fair values of the Company’s financial instruments as of March 31, 2012, December 31, 2011 and April 2, 2011 are as follows:

		March 31, 2012						December 31, 2011				April 2, 2011
	Balance Sheet Location	Carrying Amount		Fair Value		Level in Fair Value Hierarchy		Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets:
Accounts receivable	Accounts receivable, net of reserves	$	346,941	$	346,941			$	322,976	$	322,976	$	396,035	$	396,035
Open foreign currency exchange contracts	Prepaid expenses and other current assets		1,287		1,287		2		5,587		5,587		376		376
Interest rate cap	Other assets		6,047		6,047		2		6,276		6,276		—		—
Liabilities:
Accounts payable	Accounts payable	$	143,798	$	143,798			$	141,797	$	141,797	$	164,721	$	164,721
Short-term debt	Short-term debt		74,872		74,872		1		43,021		43,021		146,423		146,423
Open foreign currency exchange contracts	Accrued liabilities		1,148		1,148		2		532		532		7,133		7,133
2011 Term Loan, current portion	Short-term debt		2,000		1,985		2		2,000		1,980		—		—
2011 Term Loan	Long-term debt		196,500		195,026		2		197,000		195,030		—		—

Summary of Company's derivative instruments

The following table summarizes the Company’s derivative instruments as of March 31, 2012, December 31, 2011 and April 2, 2011:

		Asset Derivatives							Liability Derivatives
			Fair Value							Fair Value
	Type (a)	Balance Sheet Location	March 31, 2012		December 31, 2011		April 2, 2011		Balance Sheet Location	March 31, 2012		December 31, 2011		April 2, 2011
Derivatives designated as hedging instruments under FASB ASC 815-20
Foreign exchange contracts	CF	Prepaid expenses and other current assets	$	75	$	1,308	$	—	Accrued liabilities	$	802	$	—	$	4,191
Interest rate cap	CF	Other assets		6,047		6,276		—			—		—		—
			$	6,122	$	7,584	$	—		$	802	$	—	$	4,191
Derivatives not designated as hedging instruments under FASB ASC 815-20
Foreign exchange contracts		Prepaid expenses and other current assets	$	1,212	$	4,279	$	376	Accrued liabilities	$	346	$	532	$	2,942
Total derivatives			$	7,334	$	11,863	$	376		$	1,148	$	532	$	7,133

(a) CF = cash flow hedge

Effect of derivative instruments on Consolidated Condensed Statements of Operations

The following tables summarize the effect of the Company’s derivative instruments on the Consolidated Condensed Statements of Operations for the Three Months Ended March 31, 2012 and the Three Months Ended April 2, 2011:

Derivatives in FASB ASC 815-20 Cash Flow Hedging Relationships	Nature of Hedged Transaction	Amount of (Loss) Recognized in OCI on Derivatives (Effective Portion)				Location of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)	Amount of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)						Location of Gain (Loss) Recognized in Income on Derivative (Ineffective Portion) (c)	Amount of (Loss) Recognized in Income on Derivative (Ineffective Portion)
		Three Months Ended	Three Months Ended				Three Months Ended			Three Months Ended				Three Months Ended			Three Months Ended
		March 31, 2012	April 2, 2011				March 31, 2012			April 2, 2011				March 31, 2012			April 2, 2011
Foreign exchange contracts	Minimum royalty and advertising costs (a)	$(516)	$	(700	)	cost of goods sold	$	176		$	(337	)	other loss/income	$	(15	)	$	(22	)
Foreign exchange contracts	Purchases of inventory (b)	(1,561)		(2,538	)	cost of goods sold		(120	)		(749	)	other loss/income		(20	)		(58	)
Interest rate cap	Interest expense on 2011 Term Loan	(229)		—		interest expense		(7	)		—		other loss/income		—			—
Total		$(2,306)	$	(3,238	)		$	49		$	(1,086	)		$	(35	)	$	(80	)

(a) At March 31, 2012, the amount of minimum royalty costs hedged was $16,918; contracts expire through March 2013. At April 2, 2011, the amount of minimum royalty costs hedged was $13,366; contracts expire through March 2012.

(b) At March 31, 2012, the amount of inventory purchases hedged was $48,850; contracts expire through March 2013. At April 2, 2011, the amount of inventory purchases hedged was $66,800; contracts expire through August 2012.

(c) No amounts were excluded from effectiveness testing.

Derivatives not designated as hedging instruments under FASB ASC 815-20	Nature of Hedged Transaction	Instrument	Amount Hedged				Maturity Date				Location of Gain (Loss) Recognized in Income on Derivative	Amount of Gain (Loss) Recognized in Income on Derivative
			Three Months Ended				Three Months Ended					Three Months Ended
			March 31, 2012		April 2, 2011		March 31, 2012		April 2, 2011			March 31, 2012			April 2, 2011
Foreign exchange contracts (d)	Intercompany sales of inventory	Forward contracts		10,794		10,152		March 2013		April 2012	other loss/income		(20	)		268
Foreign exchange contracts (e)	Minimum royalty and advertising costs	Forward contracts		10,000		10,000		January 2013		January 2012	other loss/income		(251	)		(671	)
Foreign exchange contracts	Intercompany payables	Forward contracts		24,500		26,000		October 2012		November 2011	other loss/income		(769	)		(1,798	)
Foreign exchange contracts	Intercompany loans	Forward contracts		34,500		20,000		September 2012		November 2011	other loss/income		(939	)		(1,156	)
Foreign exchange contracts	Intercompany loans	Forward contracts		6,000				July 2012			other loss/income		171			—
Total												$	(1,808	)	$	(3,357	)

(d) Forward contracts used to offset 50% of British Pounds-denominated intercompany sales by a subsidiary whose functional currency is the Euro.

(e) Forward contracts used to offset payment of minimum royalty and advertising costs related to sales of inventory by the Company's foreign subsidiary whose functional currency was the Euro, entered into by Warnaco on behalf of a foreign subsidiary.

Reconciliation of the balance of Accumulated Other Comprehensive Income related to cash flow hedges related to inventory-related transactions

A reconciliation of the balance of AOCI during the Three Months Ended March 31, 2012 and the Three Months Ended April 2, 2011 related to cash flow hedges is as follows:

Balance January 1, 2011	$	(2,331	)
Derivative losses recognized		(3,238	)
Losses amortized to earnings		1,086
Balance before tax effect		(4,483	)
Tax effect		953
Balance April 2, 2011, net of tax	$	(3,530	)
Balance December 31, 2011	$	(3,937	)
Derivative losses recognized		(2,306	)
Gain amortized to earnings		(49	)
Balance before tax effect		(6,292	)
Tax effect		647
Balance March 31, 2012, net of tax	$	(5,645	)