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DERIVATIVES FINANCIAL INSTRUMENTS (Notes)
 6 Months Ended
Mar. 28, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVES FINANCIAL INSTRUMENTS
DERIVATIVE FINANCIAL INSTRUMENTS
The Company’s international operations are exposed to changes in foreign exchange rates due to transactions denominated in currencies other than U.S. dollars. Most of the Company’s revenue and cost of materials are transacted in U.S. dollars. However, a significant amount of the Company’s operating expenses are denominated in local currencies, primarily in Singapore.
The foreign currency exposure of our operating expenses is generally hedged with foreign exchange forward contracts. The Company’s foreign exchange risk management programs include using foreign exchange forward contracts with cash flow hedge accounting designation to hedge exposures to the variability in the U.S.-dollar equivalent of forecasted non-U.S.-dollar-denominated operating expenses. These instruments generally mature within 6 months. For these derivatives, we report the after-tax gain or loss from the effective portion of the hedge as a component of accumulated other comprehensive income (loss), and we reclassify it into earnings in the same period or periods in which the hedged transaction affects earnings and in the same line item on the consolidated statements of income as the impact of the hedged transaction.
There were no outstanding derivative instruments as of March 28, 2015 and September 27, 2014.
 

The effect of derivative instruments designated as cash flow hedges in our Consolidated Statements of Income for the three and six months ended March 28, 2015 and March 29, 2014 are as follows:
(in thousands)
 
Three months ended
 
Six months ended
 
 
March 28, 2015
 
March 29, 2014
 
March 28, 2015
 
March 29, 2014
Foreign exchange forward contract in cash flow hedging relationships:
 
 
 
 
 
 
 
 
Net loss recognized in OCI, net of tax(1)
 
$
(133
)
 
$
—

 
$
(773
)
 
$
—

Net loss reclassified from accumulated OCI into income, net of tax(2)
 
$
(524
)
 
$
—

 
$
(773
)
 
$
—

Net gain recognized in income(3)
 
$
—

 
$
—

 
$
—

 
$
—

(1)Net change in the fair value of the effective portion classified in other comprehensive income (“OCI”).
(2)Effective portion classified as selling, general and administrative expense.
(3)Ineffective portion and amount excluded from effectiveness testing classified in selling, general and administrative expense.