Derivative Instruments

9 Months Ended

Jul. 07, 2013

Derivative Instruments and Hedges, Assets [Abstract]

Derivative Instruments

DERIVATIVE INSTRUMENTS

Objectives and strategies — We are exposed to interest rate volatility related to our variable rate debt. To reduce our exposure to rising interest rates, in August 2010, we entered into two interest rate swap agreements that effectively convert the first $100.0 million of our variable rate term loan borrowings to a fixed-rate basis from September 2011 through September 2014. These agreements have been designated as cash flow hedges.

Financial position — The following derivative instruments were outstanding as of the end of each period (in thousands):

	July 7, 2013				September 30, 2012
	Balance Sheet Location	Fair Value			Balance Sheet Location	Fair Value
Derivatives designated as hedging instruments:
Interest rate swaps (Note 5)	Accrued liabilities	$	(1,427	)	Accrued liabilities	$	(2,433	)
Total derivatives		$	(1,427	)		$	(2,433	)

Financial performance — The following is a summary of the accumulated other comprehensive income (“OCI”) gain or loss activity related to our interest rate swap derivative instruments (in thousands):

	Location of Loss in Income	Quarter						Year-to-Date
		July 7, 2013			July 8, 2012			July 7, 2013			July 8, 2012
Gain (loss) recognized in OCI	N/A	$	59		$	(264	)	$	(31	)	$	(883	)
Loss reclassified from accumulated OCI into income	Interest expense,  net	$	(313	)	$	(304	)	$	(1,037	)	$	(1,001	)

Amounts reclassified from accumulated OCI into interest expense represent payments made to the counterparty for the effective portions of the interest rate swaps. During the periods presented, our interest rate swaps had no hedge ineffectiveness.