Derivative Instruments And Hedging Activities

12 Months Ended

Mar. 31, 2014

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivative Instruments And Hedging Activities

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company may use derivative instruments to manage its exposure to changes in market interest rates. The Company’s involvement with derivative instruments has been limited to highly effective interest rate swap agreements used to manage well-defined interest rate risk exposures and treasury rate lock agreements used to fix the interest rate related to forecasted debt issuances. When the Company has derivative instruments outstanding, it monitors its positions as well as the credit ratings of its counterparties, including the potential for non-performance by the counterparties. The Company does not enter into interest rate swap or treasury rate lock agreements for trading purposes. The Company recognizes outstanding derivative instruments as either assets or liabilities at fair value on the consolidated balance sheet.

Cash Flow Hedges

In anticipation of the issuance of the 2015 Notes, the Company entered into a treasury rate lock agreement in July 2010 with a notional amount of $100 million that matured in September 2010. The treasury rate lock agreement was designated as a cash flow hedge of the semi-annual interest payments associated with the forecasted issuance of the 2015 Notes. When the treasury rate lock agreement matured, the Company realized a loss of $2.6 million ($1.6 million after tax) which was reported as a component within accumulated other comprehensive income (“AOCI”) and is being reclassified into earnings over the term of the 2015 Notes. For the years endedMarch 31, 2014, 2013 and 2012, $517 thousand of the loss on the treasury rate lock was reclassified to interest expense during each period. At March 31, 2014, the estimated loss recorded in AOCI on the treasury rate lock agreement that is expected to be reclassified into earnings within the next twelve months is $517 thousand ($326 thousand after tax). See Note 12 for additional details regarding the impact of the treasury rate lock agreement on the Company’s other comprehensive income balance and reclassifications from AOCI into earnings.

Fair Value Hedges

The Company previously had five variable interest rate swap agreements outstanding with a notional amount of $300 million, which were designated as fair value hedges. These variable interest rates swaps were used to effectively convert the Company’s $300 million of fixed rate 2013 Notes to variable rate debt. The swap agreements matured on October 1, 2013, coinciding with the maturity date of the Company’s 2013 Notes. For derivative instruments designated as fair value hedges, the gain or loss on the derivative as well as the offsetting gain or loss on the hedged item attributable to the hedged risk are recognized in current earnings.

During the year ended March 31, 2014, the fair value of the variable interest rate swap assets decreased by $2.5 million and liability carrying value of the 2013 Notes caused by the hedged risk also decreased by $2.5 million. The Company recorded the gain or loss on the hedged item (i.e., the 2013 Notes) and the gain or loss on the variable interest rate swaps in interest expense. The net gain or loss recorded in earnings as a result of hedge ineffectiveness related to the designated fair value hedges was immaterial for the years ended March 31, 2014, 2013 and 2012.

Tabular Disclosure

The following tables reflect the fair values of derivative instruments on the Company’s consolidated balance sheets as well as the effect of derivative instruments in fair value hedging relationships on the Company’s earnings. See Note 12 for the tabular presentation of derivative instruments in cash flow hedging relationships related to the treasury rate lock agreement.

Fair Value of Derivatives Designated as Hedging Instruments

	March 31, 2014			March 31, 2013
(In thousands)	Balance Sheet Location	Fair Value		Balance Sheet Location	Fair Value
Interest rate swaps:
Variable interest rate swaps	Prepaid expenses and other current assets	$	—	Prepaid expenses and other current assets	$	2,490

Effect of Derivative Instruments in Fair Value Hedging Relationships on Earnings

	Location of Gain (Loss) Recognized in Pre-tax Income	Amount of Gain (Loss) Recognized in Pre-Tax Income
(In thousands)		Years Ended March 31,
Derivatives in Fair Value Hedging Relationships		2014			2013			2012
Change in fair value of variable interest rate swaps	Interest expense, net	$	(2,490	)	$	(4,244	)	$	1,648
Change in carrying value of 2013 Notes	Interest expense, net	2,496			4,273			(1,597		)
Net effect	Interest expense, net	$	6		$	29		$	51