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Derivative Financial Instruments | 12 Months Ended
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Sep. 29, 2012
Derivative Instruments and Hedges, Assets [Abstract] |
Derivative Financial Instruments | Derivative Financial Instruments We principally use derivative financial instruments to manage foreign exchange risk related to foreign operations and foreign currency transactions and interest rate risk associated with long-term debt . We enter into derivative financial instruments with a number of major financial institutions to minimize counterparty credit risk. Derivatives designated as hedging instruments We use foreign currency forward contracts as cash flow hedges to effectively fix the exchange rates on future payments. To mitigate exposure in movements between various currencies, primarily the Philippine peso, we had outstanding foreign currency forwards with notional amounts of $26,626 at September 29, 2012. These contracts mature at various times through the second quarter of 2014. Interest rate swaps are used to adjust the proportion of total debt that is subject to variable and fixed interest rates. The interest rate swaps are designated as hedges of the amount of future cash flows related to interest payments on variable-rate debt that, in combination with the interest payments on the debt, convert a portion of the variable-rate debt to fixed-rate debt. There were no outstanding interest rate swaps at September 29, 2012. These foreign currency forwards and interest rate swaps are recorded in the consolidated balance sheet at fair value and the related gains or losses are deferred in shareholders’ equity as a component of Accumulated Other Comprehensive Income (Loss) (AOCI). These deferred gains and losses are reclassified into expense during the periods in which the related payments or receipts affect earnings. However, to the extent the interest rate swaps and foreign currency forwards are not perfectly effective in offsetting the change in the value of the payments being hedged, the ineffective portion of these contracts is recognized in earnings immediately. Ineffectiveness was not material in 2012, 2011 or 2010. Activity in Accumulated Other Comprehensive Income (Loss) (AOCI) related to these derivatives is summarized below:
|  | September 29, 2012 |  | October 1, 2011
Balance at beginning of period |  | $ | (165 | ) |  | $ | 144 |
Net deferral in AOCI of derivatives: |  |  |  |
Net increase (decrease) in fair value of derivatives |  | 783 |  |  | (122 | )
Tax effect |  | (318 | ) |  | 34 |
|  | 465 |  |  | (88 | )
Net reclassification from AOCI into earnings: |  |  |  |
Reclassification from AOCI into earnings |  | (161 | ) |  | (346 | )
Tax effect |  | 81 |  |  | 125 |
|  | (80 | ) |  | (221 | )
Balance at end of period |  | $ | 220 |  |  | $ | (165 | )
Activity and classification of derivatives are as follows:
| Statement of earnings classification |  | Net deferral in AOCI of derivatives - effective portion
|  |  | 2012 |  | 2011
Foreign currency forwards | Cost of sales |  | $ | 783 |  |  | $ | (39 | )
Interest rate swaps | Interest expense |  | — |  |  | (83 | )
Net gain (loss) |  |  | $ | 783 |  |  | $ | (122 | )
| Statement of earnings classification |  | Net reclassification from AOCI into earnings - effective portion
|  |  | 2012 |  | 2011
Foreign currency forwards | Cost of sales |  | $ | 228 |  |  | $ | 769 |
Interest rate swaps | Interest expense |  | (67 | ) |  | (423 | )
Net gain |  |  | $ | 161 |  |  | $ | 346 |
Derivatives not designated as hedging instruments We also have foreign currency exposure on intercompany balances that are denominated in a foreign currency and are adjusted to current values using period-end exchange rates. The resulting gains or losses are recorded in the statements of earnings. To minimize foreign currency exposure, we have foreign currency forwards with notional amounts of $193,325 at September 29, 2012. The foreign currency forwards are recorded in the balance sheet at fair value and resulting gains or losses are recorded in the statements of earnings. We recorded net losses of $4,192 in 2012 and $3,994 in 2011 on the foreign currency forwards. These losses are included in other expense and generally offset the gains from the foreign currency adjustments on the intercompany balances that are also included in other income or expense. Summary of derivatives The fair value and classification of derivatives is summarized as follows:
|  |  | September 29, 2012 |  | October 1, 2011
Derivatives designated as hedging instruments: |  |  |  |  |
Foreign currency forwards | Other current assets |  | $ | 467 |  |  | $ | 25 |
Foreign currency forwards | Other assets |  | 32 |  |  | — |
| Total assets |  | $ | 499 |  |  | $ | 25 |
Foreign currency forwards | Other accrued liabilities |  | $ | 41 |  |  | $ | 143 |
Foreign currency forwards | Other long-term liabilities |  | 40 |  |  | 81 |
Interest rate swaps | Other accrued liabilities |  | — |  |  | 102 |
| Total liabilities |  | $ | 81 |  |  | $ | 326 |
Derivatives not designated as hedging instruments: |  |  |  |  |
Foreign currency forwards | Other current assets |  | $ | 1,456 |  |  | $ | 1,524 |
| Total assets |  | $ | 1,456 |  |  | $ | 1,524 |
Foreign currency forwards | Other accrued liabilities |  | $ | 2,549 |  |  | $ | 2,640 |
| Total liabilities |  | $ | 2,549 |  |  | $ | 2,640 |

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- Definition The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=7668309&loc=d3e80784-113994 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4E -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624181-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4K -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5708775-113959 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579245-113959 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08.(n)) -URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41641-113959 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5579240-113959 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 30 -Section 45 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41638-113959 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=7476318&loc=d3e41635-113959 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. 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