Derivative Financial Instruments (Tables)

3 Months Ended

May 04, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Summary of fair value of derivative instruments in the condensed consolidated balance sheets

The fair value of derivative instruments in the condensed consolidated balance sheets as of May 4, 2019 and February 2, 2019 is as follows (in thousands):



	Derivative Balance Sheet Location	Fair Value at May 4, 2019		Fair Value at Feb 2, 2019
ASSETS:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Other current assets/ Other assets	$	6,291	$	4,058
Interest rate swap	Other assets	769		1,033
Total derivatives designated as hedging instruments		7,060		5,091
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other current assets	1,550		632
Total		$	8,610	$	5,723
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Accrued expenses and other current liabilities	$	—	$	77
Total		$	—	$	77

Summary of gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net loss

The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net loss for the three months ended May 4, 2019 and May 5, 2018 (in thousands):



	Gains (Losses) Recognized in OCI¹					Location of Gains (Losses) Reclassified from Accumulated OCI into Loss¹	Gains (Losses) Reclassified from Accumulated OCI into Loss
	Three Months Ended						Three Months Ended
	May 4, 2019			May 5, 2018			May 4, 2019		May 5, 2018
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	4,655		$	7,422	Cost of product sales	$	230	$	(1,686	)
Foreign exchange currency contracts	—			2		Other income (expense)	—		(201		)
Interest rate swap	(219		)	68		Interest expense	46		8

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Notes:

During the three months ended May 4, 2019, the Company adopted new authoritative guidance which eliminated the requirement to separately measure and report ineffectiveness for instruments that qualify for hedge accounting and generally requires that the entire change in the fair value of such instruments ultimately be presented in the same line as the respective hedge item. As a result, there is no interest component recognized for the ineffective portion of instruments that qualify for hedge accounting, but rather all changes in the fair value of such instruments are included in other comprehensive income (loss) beginning during the three months ended May 4, 2019. Upon adoption of this guidance, the Company reclassified $2.0 million in gains from retained earnings to accumulated other comprehensive loss related to the previously recorded interest component on outstanding instruments that qualified for hedge accounting. During the three months ended May 5, 2018, the Company recognized gains of $0.6 million resulting from the ineffective portion related to foreign exchange currency contracts in interest income. There was no ineffectiveness recognized related to the interest rate swap during the three months ended May 5, 2018.

Summary of net after-tax derivative activity recorded in accumulated other comprehensive income (loss)

The following table summarizes net after-tax derivative activity recorded in accumulated other comprehensive income (loss) (in thousands):



	Three Months Ended
	May 4, 2019			May 5, 2018
Beginning balance gain (loss)	$	2,999		$	(14,369	)
Cumulative adjustment from adoption of new accounting guidance¹	1,981			—
Net gains (losses) from changes in cash flow hedges	3,864			6,468
Net (gains) losses reclassified into loss	(181		)	1,616
Ending balance gain (loss)	$	8,663		$	(6,285	)

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Notes:

Summary of gains (losses) before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense)

The following table summarizes the gains before taxes recognized on the derivative instruments not designated as hedging instruments in other income (expense) for the three months ended May 4, 2019 and May 5, 2018 (in thousands):



	Location of Gain Recognized in Loss	Gain Recognized in Loss
		Three Months Ended
		May 4, 2019		May 5, 2018
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other income (expense)	$	575	$	3,690