Financial Instruments

9 Months Ended

Sep. 25, 2011

Financial Instruments [Abstract]

Financial Instruments

Note 8 — Financial instruments

The Company uses derivative instruments for risk management purposes and does not utilize derivative instruments for trading or speculation purposes. Foreign exchange contracts are used to manage foreign currency transaction exposure, and an interest rate swap is used to reduce exposure to interest rate changes. These derivative instruments, whose settlement dates extend through December 2012, are designated as cash flow hedges and are recorded on the balance sheet at fair market value. The effective portion of the gains or losses on derivatives is reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivatives representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 9, "Fair value measurement" for additional information.

The following table provides the location and fair values of derivative instruments designated as hedging instruments in the condensed consolidated balance sheet as of September 25, 2011 and December 31, 2010:

	September 25, 2011 Fair Value		December 31, 2010 Fair Value
	(Dollars in thousands)
Asset derivatives:
Foreign exchange contracts:
Other assets – current	$	60	$	880
Other assets – noncurrent		6		—
Total asset derivatives	$	66	$	880
Liability derivatives:
Interest rate swap:
Derivative liabilities – current	$	14,811	$	15,004
Other liabilities – noncurrent		236		9,566
Foreign exchange contracts:
Derivative liabilities – current		519		630
Total liability derivatives	$	15,566	$	25,200

The following table provides the amount of the gains and losses attributable to derivative instruments in cash flow hedging relationships that were reported in other comprehensive income ("OCI"), and the location and amount of gains and losses attributable to such derivatives that were reclassified from accumulated other comprehensive income ("AOCI") to the condensed consolidated statement of income for the three and nine months ended September 25, 2011 and September 26, 2010:

	After Tax Gain/(Loss) Recognized in OCI
	Three Months Ended						Nine Months Ended
	September 25, 2011			September 26, 2010			September 25, 2011			September 26, 2010
	(Dollars in thousands)
Interest rate swap	$	2,433		$	(92	)	$	5,784		$	(243	)
Foreign exchange contracts		(250	)		(387	)		(276	)		233
Total	$	2,183		$	(479	)	$	5,508		$	(10	)

	Pre-Tax (Gain)/Loss Reclassified from AOCI into Income
	Three Months Ended					Nine Months Ended
	September 25, 2011		September 26, 2010			September 25, 2011			September 26, 2010
	(Dollars in thousands)
Interest rate swap:
Interest expense	$	3,978	$	4,042		$	11,633		$	13,206
Foreign exchange contracts:
Net revenues		—		(141	)		—			(131	)
Cost of goods sold		183		(957	)		(479	)		(2,812	)
Income from discontinued operations		257		(85	)		(511	)		(27	)
Total	$	4,418	$	2,859		$	10,643		$	10,236

For the three and nine months ended September 25, 2011 and September 26, 2010, there was no reclassification from AOCI to income resulting from ineffectiveness related to the Company's derivative instruments.

The following table provides information on the changes in AOCI related to derivative instruments, net of tax, for the nine months ended September 25, 2011 and September 26, 2010:

	September 25, 2011			September 26, 2010
	(Dollars in thousands)
Balance at beginning of year	$	(15,262	)	$	(17,343	)
Additions and revaluations		(1,014	)		(5,864	)
Loss reclassified from AOCI into income		6,675			5,831
Tax rate adjustment		(153	)		23
Balance at end of period	$	(9,754	)	$	(17,353	)

Based on interest rates and exchange rates at September 25, 2011, approximately $9.6 million of unrealized losses, net of tax, within AOCI are expected to be reclassified from AOCI during the next twelve months. However, the actual amount reclassified from AOCI could vary due to future changes in interest rates and exchange rates.