Derivative Financial Instruments

9 Months Ended

Jul. 04, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial Instruments

Our foreign currency risk management strategy is principally designed to mitigate the future potential financial impact of changes in the value of transactions and balances denominated in foreign currency resulting from changes in foreign currency exchange rates. We enter into derivative transactions, specifically foreign currency forward contracts with maturities of up to approximately three months, to manage our exposure to fluctuations in foreign exchange rates that arise primarily from our foreign currency-denominated receivables and payables.

Generally, we do not designate foreign currency forward contracts as hedges for accounting purposes, and changes in the fair value of these instruments are recognized immediately in earnings. Because we enter into forward contracts only as an economic hedge, any gain or loss on the underlying foreign-denominated balance would be offset by the loss or gain on the forward contract. Gains and losses on forward contracts and foreign denominated receivables and payables are included in other income (expense), net.

As of July 4, 2015 and September 30, 2014, we had outstanding forward contracts with notional amounts equivalent to the following:

Currency Hedged	July 4, 2015		September 30, 2014
	(in thousands)
Canadian Dollar / U.S. Dollar	$	19,971	$	25,583
Euro / U.S. Dollar	77,987		61,751
British Pound / Euro	9,713		14,259
Israeli New Sheqel / U.S. Dollar	5,681		6,144
Japanese Yen / Euro	24,080		—
Swiss Franc /Euro	8,516		—
All other	10,990		9,251
Total	$	156,938	$	116,988

As of July 4, 2015 and September 30, 2014, the accompanying Consolidated Balance Sheets include a net asset of $0.9 million and $0.3 million, respectively, in prepaid expenses and other current assets, and a net liability of $0.9 million for both periods, in accrued expenses related to the fair value of our forward contracts.

Net gains and losses on foreign currency exposures are recorded in other income (expense), net and include realized and unrealized gains and losses on forward contracts. Net gains and losses on foreign currency exposures for the three and nine months ended July 4, 2015 and June 28, 2014 were as follows:

	Three months ended				Nine months ended
	July 4, 2015		June 28, 2014		July 4, 2015		June 28, 2014
	(in thousands)
Net foreign currency losses	$	449	$	746	$	1,362	$	2,739
Net realized and unrealized loss (gain) on forward contracts (excluding the underlying foreign currency exposure being hedged)	$	741	$	1,320	$	1,122	$	(377	)