XML 30 R13.htm IDEA: XBRL DOCUMENT
v3.8.0.1

Derivatives | 3 Months Ended
--- | ---
Dec. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Derivatives | Derivatives Interest Rate Cap - Cash Flow Hedge The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company manages its exposure to some of its interest rate risk through the use of interest rate caps, which are derivative financial instruments. The Company does not use derivatives for speculative purposes. For a derivative that is designated as a cash flow hedge, changes in the fair value of the derivative are recognized in accumulated other comprehensive income ("AOCI") to the extent the derivative is effective at offsetting the changes in the cash flows being hedged until the hedged item affects earnings. To the extent there is any hedge ineffectiveness, changes in fair value relating to the ineffective portion are immediately recognized in earnings in other income (expense) in the Consolidated Statements of Income. During fiscal 2015, the Company entered into separate interest rate cap agreements with multiple counter-parties to help mitigate the interest rate volatility associated with the variable interest rate on amounts borrowed under the term loan feature of its credit facilities (see Note 6). Interest rate cap agreements provide the right to receive cash if the reference interest rate rises above a contractual rate. The aggregate premium paid for the interest rate cap agreements was $13.2 million, which was the initial fair value of the instruments recorded in the Company's financial statements. During fiscal 2017, the Company entered into new separate interest rate cap agreements with multiple counter-parties to extend the expiration date of its hedges by an additional year. The aggregate premium paid for the interest rate cap agreements was $1.9 million, which was the initial fair value of the instruments recorded in the Company's financial statements. The critical terms of the interest rate caps were designed to mirror the terms of the Company’s LIBOR-based borrowings under its Prior Credit Agreement and Amended and Restated Credit Agreement and therefore are highly effective at offsetting the cash flows being hedged. The Company designated these derivatives as cash flow hedges of the variability of the LIBOR-based interest payments on $1.0 billion of principal, which ended on December 29, 2017 and which will end on December 30, 2018 for the interest rate cap agreements entered into in fiscal 2015 and fiscal 2017, respectively. As of December 30, 2017, the Company determined that the existence of hedge ineffectiveness, if any, was immaterial, and all changes in the fair value of the interest rate caps were recorded in the Consolidated Statements of Comprehensive Income as a component of AOCI. During the three months ended December 30, 2017 and December 31, 2016, $2.3 million and $2.1 million, respectively, was reclassified from AOCI to the Company’s Consolidated Statements of Income related to the interest rate cap agreements. The Company expects to similarly reclassify a loss of approximately $1.9 million from AOCI to the Consolidated Statements of Income in the next twelve months. The aggregate fair value of these interest rate caps was $5.3 million and $4.8 million at December 30, 2017 and September 30, 2017, respectively, and is included in Prepaid expenses and other current assets on the Company’s Consolidated Balance Sheet. Refer to Note 2 “Fair Value Measurements” above for related fair value disclosures. Forward Foreign Currency Contracts The Company enters into forward foreign currency exchange contracts to mitigate certain operational exposures from the impact of changes in foreign currency exchange rates. Such exposures result from the portion of the Company's operations that are denominated in currencies other than the U.S. dollar, primarily the Euro, the UK Pound, the Australian dollar, the Canadian dollar and the Japanese Yen. These foreign currency exchange contracts are entered into to support transactions made in the ordinary course of business and are not speculative in nature. The contracts are generally for periods of one year or less. The Company has not elected hedge accounting for any of the forward foreign currency contracts it has executed; however, the Company may seek to apply hedge accounting in future scenarios. The change in the fair value of these contracts is recognized directly in earnings as a component of other income (expense), net. During the three months ended December 30, 2017 and December 31, 2016, the Company recorded net realized loss of $0.2 million and a net realized gain of $1.2 million, respectively, from settling forward foreign currency contracts and unrealized gains of $1.5 million and $8.4 million, respectively, on the mark-to-market for its outstanding forward foreign currency contracts. As of December 30, 2017, the Company had outstanding forward foreign currency contracts that were not designated for hedge accounting and were used to hedge fluctuations in the U.S. dollar of forecasted transactions denominated in the Euro, UK Pound, Australian dollar, Canadian Dollar and Japanese Yen with an aggregate notional amount of $157.4 million. Financial Instrument Presentation The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the balance sheet as of December 30, 2017:
| Balance Sheet Location |  | December 30, 2017 |  | September 30, 2017
Assets: |  |  |  |  |
Derivative instruments designated as a cash flow hedge: |  |  |  |  |
Interest rate cap agreements | Prepaid expenses and other current assets |  | $ | 5.3 |  |  | $ | 3.6 |
Interest rate cap agreements | Other assets |  | — |  |  | 1.2 |
|  |  | $ | 5.3 |  |  | $ | 4.8 |
Derivatives not designated as hedging instruments: |  |  |  |  |
Forward foreign currency contracts | Prepaid expenses and other current assets |  | $ | 0.4 |  |  | $ | 0.4 |
Liabilities: |  |  |  |  |
Derivatives not designated as hedging instruments: |  |  |  |  |
Forward foreign currency contracts | Accrued expenses |  | $ | 2.6 |  |  | $ | 4.0 |
The following table presents the unrealized gain recognized in AOCI related to the interest rate caps for the following reporting periods:
| Three Months Ended
| December 30, 2017 |  | December 31, 2016
Amount of gain (loss) recognized in other comprehensive income, net of taxes: |  |  |
Interest rate cap agreements | $ | (4.3 | ) |  | $ | 0.7 |
The following table presents the adjustment to fair value (realized and unrealized) recorded within the Consolidated Statements of Income for derivative instruments for which the Company did not elect hedge accounting:
Derivatives not classified as hedging instruments |  | Amount of Gain (Loss) Recognized in Income | Location of Gain (Loss) Recognized in Income
|  | Three Months Ended December 30, 2017 |  | Three Months Ended December 31, 2016 |
Forward foreign currency contracts |  | $ | 1.2 |  |  | $ | 9.6 |  | Other income, net

X
- References No definition available. + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for derivative instruments and hedging activities including, but not limited to, risk management strategies, non-hedging derivative instruments, assets, liabilities, revenue and expenses, and methodologies and assumptions used in determining the amounts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration