Accounting For Derivatives

6 Months Ended

Sep. 30, 2011

Accounting For Derivatives [Abstract]

ACCOUNTING FOR DERIVATIVES

(3) ACCOUNTING FOR DERIVATIVES

     The Company uses derivative contracts to hedge the volatility arising from changes in the fair value of certain assets and liabilities that are subject to market risk, such as interest rates on debt instruments, foreign currency exchange rates, and certain commodities. The Company does not enter into derivative contracts for trading or speculative purposes.

     The Company recognizes outstanding derivative instruments as assets or liabilities, based on measurements of their fair values. If a derivative qualifies for hedge accounting, gains or losses in its fair value that offset changes in the fair value of the asset or liability being hedged (“effective” gains or losses) are reported in accumulated other comprehensive income, and subsequently recorded in earnings only as the related variability on the hedged transaction is recorded in earnings. If a derivative does not qualify for hedge accounting, changes in its fair value are reported in earnings immediately upon occurrence, and the classification of cash flows from these instruments is consistent with that of the transactions being hedged. Derivatives qualify for hedge accounting if they are designated as hedging instruments at their inception, and if they are highly effective in achieving fair value changes that offset the fair value changes of the assets or liabilities being hedged. Regardless of a derivative’s accounting designation, changes in its fair value that are not offset by fair value changes in the asset or liability being hedged are considered ineffective, and are recognized in earnings immediately.

     The Company enters into commodity swap and forward contracts for various time periods usually not exceeding one year. The Company uses these contracts to mitigate the effects of its exposure to price variability on certain raw materials and other costs included in the delivered cost of its products. These contracts have generally been designated as cash flow hedging instruments. Changes in the fair value of these contracts are recognized in cost of sales as the products containing the hedged commodities are sold to customers.

     The Company enters into foreign currency forward contracts for various time periods ranging from one month to several years. The Company uses these contracts to mitigate the effect of its exposure to foreign currency remeasurement gains and losses on selected transactions that will be settled in a currency other than the functional currency of the transacting entity. These contracts have been designated as fair value hedging instruments. Changes in the fair value of these currency forward contracts are recognized immediately in earnings.

     The Company also enters into interest rate swaps for time periods ranging from one month to several years in order to mitigate exposures related to interest rates on long-term debt. During the second quarter of fiscal 2012, the Company entered into two interest rate swap contracts to convert a total of $100.0 million of its $675.0 million Senior Secured Notes from a fixed rate of 8.625% to floating rates through February 1, 2018. The swaps’ notional values were $75.0 million and $25.0 million, and were both designated as fair value hedging instruments in which changes in the fair value of the instruments are reflected as adjustments to the carrying value of the hedged debt. On September 22, 2011, the counterparty to the $25.0 million swap notified the Company of its intention to exercise a call option on a portion of that instrument, at which point the Company de-designated that swap as a fair value hedging instrument.

     The following tables set forth information on the presentation of these derivative instruments in the Company’s Condensed Consolidated Financial Statements:

		Fair Value As of
	Balance Sheet Location	September 30, 2011		March 31, 2011
		(In thousands)
Asset Derivatives:
Interest rate swap	Current assets	$	1,773	$	—
Foreign currency forwards	Current assets		1,389		—
Commodity swaps	Current assets		—		1,564
Interest rate swap	Noncurrent assets		2,427		—
Liability Derivatives:
Foreign currency forwards	Current liabilities		—		2,555
Commodity swap / forwards	Current liabilities		5,500		1,263

	Statement of	For the Three Months Ended						For the Six Months Ended
	Operations Location	September 30, 2011			September 30, 2010			September 30, 2011			September 30, 2010
	(In thousands)
Foreign currency forwards
(Gain) loss	Other (income) expense, net	$	(8,121	)	$	12,922		$	(6,157	)	$	(2,824	)
Commodity swaps / forwards
Loss (gain)	Cost of goods sold		810			(185	)		810			(78	)
Interest Rate Swaps
(gain) loss	Interest expense, net		(518	)		1,469			(518	)		2,898