XML 96 R18.htm IDEA: XBRL DOCUMENT v2.4.0.8
Derivative Financial Instruments
 12 Months Ended
Dec. 29, 2013
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

10.    Derivative Financial Instruments

Interest

The Company uses derivatives from time to time to partially manage the Company’s exposure to changes in interest rates on outstanding debt instruments.

The Company had no interest rate derivative contracts outstanding at December 29, 2013 and December 30, 2012.

Commodities

The Company is subject to the risk of increased costs arising from adverse changes in certain commodity prices. In the normal course of business, the Company manages these risks through a variety of strategies, including the use of derivative instruments. The Company does not use derivative instruments for trading or speculative purposes. All derivative instruments are recorded at fair value as either assets or liabilities in the Company’s consolidated balance sheets. These derivative instruments are not designated as hedging instruments under GAAP and are used as “economic hedges” to manage certain commodity price risk. Derivative instruments held are marked to market on a monthly basis and recognized in earnings consistent with the expense classification of the underlying hedged item. Settlements of derivative agreements are included in cash flows from operating activities on the Company’s consolidated statements of cash flows.

The Company uses several different financial institutions for commodity derivative instruments, to minimize the concentration of credit risk. While the Company is exposed to credit loss in the event of nonperformance by these counterparties, the Company does not anticipate nonperformance by these parties.

The Company has master agreements with the counterparties to its derivative financial agreements that provide for net settlement of derivative transactions. The Company did not have any offsetting derivative transactions with its counterparties on December 30, 2012. Accordingly, the gross amounts of derivative assets are recognized in prepaid expenses and other current assets in the consolidated balance sheet at December 30, 2012. The Company did not have any outstanding derivative transactions at December 29, 2013.

The Company periodically uses derivative instruments to hedge part or all of its requirements for diesel fuel and aluminum.

The following summarizes 2013, 2012 and 2011 pre-tax changes in the fair value of the Company’s commodity derivative financial instruments and the classification, either as cost of sales or S,D&A expenses, of such changes in the consolidated statements of operations.

 

            Fiscal Year  

In Thousands

   

Classification of Gain (Loss)

    2013     2012      2011  

Commodity hedges

    S,D&A expenses    $ 0      $ 0       $ (171 ) 

Commodity hedges

    Cost of sales      (500 )      500         (6,666 ) 
     

 

 

    

 

 

     

 

 

  

Total

       $ (500 )    $ 500       $ (6,837 ) 
     

 

 

    

 

 

     

 

 

  

 

The following summarizes the fair values and classification in the consolidated balance sheets of derivative instruments held by the Company:

 

In Thousands

   

Balance Sheet Classification

      Dec. 29,  
2013		      Dec. 30,  
2012		  

Assets

         

Commodity hedges at fair market value

    Prepaid expenses and other current assets    $0    $ 500   

Unamortized cost of commodity hedging agreements

    Prepaid expenses and other current assets      0      562   
     

 

   

 

 

  

Total

       $0    $ 1,062   
     

 

   

 

 

  

Subsequent to December 29, 2013, the Company paid $0.9 million for agreements to hedge certain commodity costs for 2014. The notional amount of these agreements was $31.6 million.