Derivative Financial Instruments (Tables)

6 Months Ended

Aug. 03, 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 August 3, 2019 and February 2, 2019 is as follows (in thousands):



	Derivative Balance Sheet Location	Fair Value at Aug 3, 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	$	5,894	$	4,058
Interest rate swap	Other assets	—		1,033
Total derivatives designated as hedging instruments		5,894		5,091
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other current assets	1,018		632
Total		$	6,912	$	5,723
LIABILITIES:
Derivatives designated as hedging instruments:
Cash flow hedges:
Foreign exchange currency contracts	Accrued expenses and other current liabilities	$	—	$	77
Interest rate swap	Other long-term liabilities	53		—
Total		$	53	$	77

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

The following table summarizes the gains (losses) before taxes recognized on the derivative instruments designated as cash flow hedges in OCI and net earnings for the three and six months ended August 3, 2019 and August 4, 2018 (in thousands):



	Gains (Losses) Recognized in OCI¹					Location of Gains (Losses) Reclassified from Accumulated OCI into Earnings¹	Gains (Losses) Reclassified from Accumulated OCI into Earnings
	Three Months Ended						Three Months Ended
	Aug 3, 2019			Aug 4, 2018			Aug 3, 2019		Aug 4, 2018
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	3,063		$	4,638	Cost of product sales	$	1,757	$	(2,342	)
Interest rate swap	(777		)	37		Interest expense	44		31



	Gains (Losses) Recognized in OCI¹					Location of Gain (Loss) Reclassified from Accumulated OCI into Earnings¹	Gains (Losses) Reclassified from Accumulated OCI into Earnings
	Six Months Ended						Six Months Ended
	Aug 3, 2019			Aug 4, 2018			Aug 3, 2019		Aug 4, 2018
Derivatives designated as cash flow hedges:
Foreign exchange currency contracts	$	7,718		$	12,060	Cost of product sales	$	1,987	$	(4,028	)
Foreign exchange currency contracts	—			2		Other income (expense)	—		(201		)
Interest rate swap	(996		)	105		Interest expense	90		39

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Notes:

During the first quarter of fiscal 2020, 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) during the three and six months ended August 3, 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 and six months ended August 4, 2018, the Company recognized gains of $0.8 million and $1.4 million, respectively, 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 and six months ended August 4, 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						Six Months Ended
	Aug 3, 2019			Aug 4, 2018			Aug 3, 2019			Aug 4, 2018
Beginning balance gain (loss)	$	8,663		$	(6,285	)	$	2,999		$	(14,369	)
Cumulative adjustment from adoption of new accounting guidance¹	—			—			1,981			—
Net gains from changes in cash flow hedges	1,978			4,111			5,842			10,579
Net (gains) losses reclassified into earnings	(1,572		)	2,032			(1,753		)	3,648
Ending balance gain (loss)	$	9,069		$	(142	)	$	9,069		$	(142	)

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Notes:

Summary of gains 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 and six months ended August 3, 2019 and August 4, 2018 (in thousands):



	Location of Gain Recognized in Earnings	Gain Recognized in Earnings
		Three Months Ended				Six Months Ended
		Aug 3, 2019		Aug 4, 2018		Aug 3, 2019		Aug 4, 2018
Derivatives not designated as hedging instruments:
Foreign exchange currency contracts	Other income (expense)	$	233	$	2,216	$	808	$	5,906