XML 55 R14.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Financial Instruments Measured at Fair Value | 6 Months Ended
--- | ---
Jun. 28, 2014
Fair Value Disclosures [Abstract] |
Financial Instruments Measured At Fair Value [Text Block] | Financial Instruments Measured at Fair Value Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The company utilizes a fair value hierarchy, which maximizes the use of observable inputs and minimizes the use of unobservable inputs when measuring fair value. The fair value hierarchy has three levels of inputs that may be used to measure fair value:
Level 1 | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.
Level 2 | Quoted prices in markets that are not active; or other inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability.
Level 3 | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable.
The following table presents assets (liabilities) measured at fair value on a recurring basis at June 28, 2014:
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Cash equivalents |  | $ | 25,000 |  |  | $ | — |  |  | $ | — |  |  | $ | 25,000 |
Available-for-sale securities |  | 79,302 |  |  | — |  |  | — |  |  | 79,302 |
Interest rate swaps |  | — |  |  | 270 |  |  | — |  |  | 270 |
Foreign exchange contracts |  | — |  |  | (495 | ) |  | — |  |  | (495 | )
Contingent consideration |  | — |  |  | — |  |  | (12,698 | ) |  | (12,698 | )
|  | $ | 104,302 |  |  | $ | (225 | ) |  | $ | (12,698 | ) |  | $ | 91,379 |
The following table presents assets (liabilities) measured at fair value on a recurring basis at December 31, 2013:
|  | Level 1 |  | Level 2 |  | Level 3 |  | Total
Available-for-sale securities |  | $ | 69,857 |  |  | $ | — |  |  | $ | — |  |  | $ | 69,857 |
Foreign exchange contracts |  | — |  |  | (654 | ) |  | — |  |  | (654 | )
Contingent consideration |  | — |  |  | — |  |  | (5,845 | ) |  | (5,845 | )
|  | $ | 69,857 |  |  | $ | (654 | ) |  | $ | (5,845 | ) |  | $ | 63,358 |
The following table summarizes the Level 3 activity for the first six months of 2014:
Balance as of December 31, 2013 | $ | (5,845 | )
Fair value of initial contingent consideration | (5,853 | )
Change in fair value of contingent consideration included in earnings | (1,051 | )
Foreign currency translation adjustment | 51 |
Balance as of June 28, 2014 | $ | (12,698 | )
The change in the fair value of contingent consideration is included in "Restructuring, integration, and other charges," in the company's consolidated statements of operations. During the first six months of 2014 and 2013, there were no transfers of assets (liabilities) measured at fair value between the three levels of the fair value hierarchy. Available-For-Sale Securities The company h as an 8.4% equity ownership interest in Marubun Corporation ("Marubun"), a 1.9% equity ownership interest in WPG Holdings Co., Ltd. ("WPG"), and a portfolio of mutual funds with quoted market prices, all of which are accounted for as available-for-sale securities. The fair value of the company's available-for-sale securities at June 28, 2014 is as follows:
|  | Marubun |  | WPG |  | Mutual Funds
Cost basis |  | $ | 10,016 |  |  | $ | 10,798 |  |  | $ | 15,735 |
Unrealized holding gain |  | 4,311 |  |  | 31,710 |  |  | 6,732 |
Fair value |  | $ | 14,327 |  |  | $ | 42,508 |  |  | $ | 22,467 |
The fair value of the company's available-for-sale securities at December 31, 2013 is as follows:
|  | Marubun |  | WPG |  | Mutual Funds
Cost basis |  | $ | 10,016 |  |  | $ | 10,798 |  |  | $ | 15,614 |
Unrealized holding gain |  | 2,709 |  |  | 24,903 |  |  | 5,817 |
Fair value |  | $ | 12,725 |  |  | $ | 35,701 |  |  | $ | 21,431 |
The fair value of these investments are included in "Other assets" in the company's consolidated balance sheets, and the related unrealized holding gains or losses are included in "Accumulated other comprehensive income" in the shareholders' equity section in the company's consolidated balance sheets. Derivative Instruments The company uses various financial instruments, including derivative instruments, for purposes other than trading. Certain derivative instruments are designated at inception as hedges and measured for effectiveness both at inception and on an ongoing basis. Derivative instruments not designated as hedges are marked-to-market each reporting period with any unrealized gains or losses recognized in earnings. Interest Rate Swaps The company occasionally enters into interest rate swap transactions that convert certain fixed-rate debt to variable-rate debt or variable-rate debt to fixed-rate debt in order to manage its targeted mix of fixed- and floating-rate debt. The company uses the hypothetical derivative method to assess the effectiveness of its interest rate swaps on a quarterly basis. The effective portion of the change in the fair value of interest rate swaps designated as fair value hedges is recorded as a change to the carrying value of the related hedged debt, and the effective portion of the change in fair value of interest rate swaps designated as cash flow hedges is recorded in the shareholders' equity section in the company's consolidated balance sheets in "Accumulated other comprehensive income." The ineffective portion of the interest rate swap, if any, is recorded in "Interest and other financing expense, net" in the company's consolidated statements of operations. In April 2014, the company entered into an interest rate swap, with a notional amount of $50,000. The swap modifies the company's interest rate exposure by effectively converting a portion of the fixed 6.00% notes to a floating rate, based on the six-month U.S. dollar LIBOR plus a spread (an effective rate of 4.2% at June 28, 2014), through its maturity. The swap is classified as a fair value hedge and had a fair value of $166 at June 28, 2014. In April 2014, the company entered into an interest rate swap, with a notional amount of $50,000. The swap modifies the company's interest rate exposure by effectively converting a portion of the fixed 6.875% senior debentures to a floating rate, based on the six-month U.S. dollar LIBOR plus a spread (an effective rate of 5.5% at June 28, 2014), through its maturity. The swap is classified as a fair value hedge and had a fair value of $104 at June 28, 2014. In September 2011, the company entered into a ten-year forward-starting interest rate swap (the "2011 swap") which locked in a treasury rate of 2.63% on an aggregate notional amount of $175,000. This swap managed the risk associated with changes in treasury rates and the impact of future interest payments. The 2011 swap related to the interest payments for anticipated debt issuances to replace the company's 6.875% senior notes due to mature in July 2013. The 2011 swap was classified as a cash flow hedge. In the first six months of 2013, the company paid $7,700 to terminate the 2011 swap upon issuance of the ten-year notes due in 2023. The fair value of the 2011 swap is recorded in the shareholders' equity section in the company's consolidated balance sheets in "Accumulated other comprehensive income" and is being reclassified into income over the ten-year term of the notes due in 2023. For the 2011 swap, the company reclassified into income $(163) and $(324) for the second quarter and first six months of 2014 and $(222) and $70 for the second quarter and first six months of 2013, respectively. Foreign Exchange Contracts The company enters into foreign exchange forward, option, or swap contracts (collectively, the "foreign exchange contracts") to mitigate the impact of changes in foreign currency exchange rates. These contracts are executed to facilitate the hedging of foreign currency exposures resulting from inventory purchases and sales and generally have terms of no more than six months. Gains or losses on these contracts are deferred and recognized when the underlying future purchase or sale is recognized or when the corresponding asset or liability is revalued. The company does not enter into foreign exchange contracts for trading purposes. The risk of loss on a foreign exchange contract is the risk of nonperformance by the counterparties, which the company minimizes by limiting its counterparties to major financial institutions. The fair value of the foreign exchange contracts are estimated using market quotes. The notional amount of the foreign exchange contracts at June 28, 2014 and December 31, 2013 was $358,922 and $445,684, respectively. The fair values of derivative instruments in the company's consolidated balance sheets are as follows:
|  | Asset (Liability) Derivatives
|  |  |  | Fair Value
|  | Balance Sheet Location |  | June 28, 2014 |  | December 31, 2013
Derivative instruments designated as hedges: |  |  |  |  |  |
Interest rate swaps designated as fair value hedges |  | Other Assets |  | $ | 270 |  |  | $ | — |
Foreign exchange contracts designated as cash flow hedges |  | Other current assets |  | 185 |  |  | 368 |
Foreign exchange contracts designated as cash flow hedges |  | Accrued expenses |  | (432 | ) |  | (203 | )
Total derivative instruments designated as hedging instruments |  |  |  | 23 |  |  | 165 |
Derivative instruments not designated as hedges: |  |  |  |  |  |  |  |
Foreign exchange contracts |  | Other current assets |  | 844 |  |  | 1,275 |
Foreign exchange contracts |  | Accrued expenses |  | (1,092 | ) |  | (2,094 | )
Total derivative instruments not designated as hedging instruments |  |  |  | (248 | ) |  | (819 | )
Total |  |  |  | $ | (225 | ) |  | $ | (654 | )
The effect of derivative instruments on the company's consolidated statements of operations is as follows:
|  | Gain (Loss) Recognized in Income
|  | Quarter Ended |  | Six Months Ended
|  | June 28, 2014 |  | June 29, 2013 |  | June 28, 2014 |  | June 29, 2013
Fair value hedges: |  |  |  |  |  |  |  |
Interest rate swaps (a) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Total |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Derivative instruments not designated as hedges: |  |  |  |  |  |  |  |
Foreign exchange contracts (b) |  | $ | (1,685 | ) |  | $ | 194 |  |  | $ | 228 |  |  | $ | (940 | )
Total |  | $ | (1,685 | ) |  | $ | 194 |  |  | $ | 228 |  |  | $ | (940 | )
|  | Cash Flow Hedges
|  | Quarter Ended |  | Six Months Ended
|  | June 28, 2014 |  | June 28, 2014
|  | Interest Rate Swaps (c) |  | Foreign Exchange Contracts (d) |  | Interest Rate Swaps (c) |  | Foreign Exchange Contracts (d)
Effective portion: |  |  |  |  |  |  |  |
Gain (loss) recognized in other comprehensive income |  | $ | — |  |  | $ | (22 | ) |  | $ | — |  |  | $ | (390 | )
Gain (loss) reclassified into income |  | $ | (163 | ) |  | $ | (69 | ) |  | $ | (324 | ) |  | $ | 67 |
Ineffective portion: |  |  |  |  |  |  |  |
Gain (loss) recognized in income |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
|  | Cash Flow Hedges
|  | Quarter Ended |  | Six Months Ended
|  | June 29, 2013 |  | June 29, 2013
|  | Interest Rate Swaps (c) |  | Foreign Exchange Contracts (d) |  | Interest Rate Swaps (c) |  | Foreign Exchange Contracts (d)
Effective portion: |  |  |  |  |  |  |  |
Gain (loss) recognized in other comprehensive income |  | $ | — |  |  | $ | (441 | ) |  | $ | 3,132 |  |  | $ | (500 | )
Gain (loss) reclassified into income |  | $ | (222 | ) |  | $ | 228 |  |  | $ | (222 | ) |  | $ | 480 |
Ineffective portion: |  |  |  |  |  |  |  |
Gain (loss) recognized in income |  | $ | — |  |  | $ | — |  |  | $ | 292 |  |  | $ | — |
(a) | The amount of gain (loss) recognized in income on derivatives is recorded in "Interest and other financing expense, net" in the company's consolidated statements of operations.
(b) | The amount of gain (loss) recognized in income on derivatives is recorded in "Cost of sales" in the company's consolidated statements of operations.
(c) | Both the effective and ineffective portions of any gain (loss) reclassified or recognized in income are recorded in "Interest and other financing expense, net" in the company's consolidated statements of operations.
(d) | Both the effective and ineffective portions of any gain (loss) reclassified or recognized in income are recorded in "Cost of sales" in the company's consolidated statements of operations.
Contingent Consideration In connection with the 2014 acquisition, payment of a portion of the respective purchase price is contingent upon the achievement of certain operating results, with maximum possible payouts of $9,000 over an eighteen-month period. Additionally, in connection with three acquisitions prior to 2014, payment of a portion of the respective purchase price is contingent upon the achievement of certain operating results, with maximum possible payouts of $6,000 over a two-year period and $23,400 at the end of a three-year period. The company estimated the fair value of the contingent consideration as the present value of the expected contingent payments, determined using the weighted probabilities of the possible payments. The company reassesses the fair value of the contingent consideration on a quarterly basis. Contingent consideration of $4,155 and $8,543 was included in "Accrued Expenses" and "Other liabilities" in the company's consolidated balance sheet as of June 28, 2014, respectively. Contingent consideration of $2,123 and $3,722 was included in "Accrued Expenses" and "Other liabilities" in the company's consolidated balance sheet as of December 31, 2013, respectively. A twenty percent increase or decrease in projected operating performance over the remaining performance period would not result in a material change in the fair value of the contingent consideration recorded as of June 28, 2014. Other Cash equivalents consist of overnight time deposits with quality financial institutions. These financial institutions are located in many different geographical regions, and the company's policy is designed to limit exposure with any one institution. As part of its cash and risk management processes, the company performs periodic evaluations of the relative credit standing of these financial institutions. The carrying amount of cash and cash equivalents, accounts receivable, net, and accounts payable approximate their fair value due to the short maturities of these financial instruments.

X
- Details
Name: | us-gaap_FairValueDisclosuresAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration