XML 23 R13.htm IDEA: XBRL DOCUMENT
v3.20.2

Derivative Instruments and Hedging Activities | 3 Months Ended
--- | ---
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES As part of our financial risk management program, we use certain derivative financial instruments. We do not enter into derivative transactions for speculative purposes and, therefore, we do not hold any derivative instruments for trading purposes. We account for derivative instruments as a hedge of the related asset, liability, firm commitment or anticipated transaction, when the derivative is specifically designated and qualifies as a hedge of such items. Our objective in managing foreign exchange exposures with derivative instruments is to reduce volatility in cash flow. We measure hedge effectiveness by assessing the changes in the fair value or expected future cash flows of the hedged item. The fair value of derivatives designated and not designated as hedging instruments in the condensed consolidated balance sheet are as follows:
(in thousands) | September 30, 2020 |  | June 30, 2020
Derivatives designated as hedging instruments |  |  |
Other current assets - range forward contracts | $ | 1 |  |  | $ | 4 |
Other assets - forward starting interest rate swap contracts | 431 |  |  | 20 |
Other liabilities - forward starting interest rate swap contracts | (912) |  |  | (2,094) |
Total derivatives designated as hedging instruments | (480) |  |  | (2,070) |
Derivatives not designated as hedging instruments |  |  |
Other current assets - currency forward contracts | — |  |  | 12 |
Other current liabilities - currency forward contracts | (747) |  |  | (45) |
Total derivatives not designated as hedging instruments | (747) |  |  | (33) |
Total derivatives | $ | (1,227) |  |  | $ | (2,103) |
Certain currency forward contracts that hedge significant cross-border intercompany loans are considered as other derivatives and therefore do not qualify for hedge accounting. These contracts are recorded at fair value in the condensed consolidated balance sheet, with the offset to other income, net. Losses related to derivatives not designated as hedging instruments have been recognized as follows:
| Three Months Ended September 30, |  |
(in thousands) | 2020 |  | 2019 |  |  |  |
Other income, net - currency forward contracts | $ | 719 |  |  | $ | 102 |  |  |  |  |
CASH FLOW HEDGES Currency forward contracts and range forward contracts (a transaction where both a put option is purchased and a call option is sold) are designated as cash flow hedges and hedge anticipated cash flows from cross-border intercompany sales of products and services. Gains and losses realized on these contracts are recorded in accumulated other comprehensive loss and are recognized as a component of cost of goods sold and other income, net when the underlying sale of products or services is recognized into earnings. All contracts expired as of September 30, 2020, and the notional amount of the contracts translated into U.S. dollars at June 30, 2020 was $2.2 million. The time value component of the fair value of range forward contracts is excluded from the assessment of hedge effectiveness. During fiscal 2020, we entered into forward starting interest rate swap contracts to hedge a portion of the interest rate risk related to our anticipated refinancing of our Senior Unsecured Notes due in fiscal 2022. We recorded the fair value of these contracts as an asset or a liability, as applicable, in the balance sheet, with the offset to accumulated other comprehensive income, net of tax. The notional amount of the contracts at September 30, 2020 and June 30, 2020 was $200.0 million. As of September 30, 2020 and June 30, 2020, we recorded assets of $0.4 million and an immaterial amount, respectively, and liabilities of $0.9 million and $2.1 million, respectively, on these contracts, the net effect of which was recorded as a decrease to other comprehensive income, net of tax. The following represents gains and losses related to cash flow hedges:
| Three Months Ended September 30, |  |
(in thousands) | 2020 |  | 2019 |  |  |  |
Gains recognized in other comprehensive income (loss), net | $ | 1,210 |  |  | $ | 395 |  |  |  |  |
Losses reclassified from accumulated other comprehensive loss into cost of goods sold and other income, net | $ | 453 |  |  | $ | 159 |  |  |  |  |
No portion of the gains or losses recognized in earnings was due to ineffectiveness and no amounts were excluded from our effectiveness testing for the three months ended September 30, 2020 and 2019. NET INVESTMENT HEDGES As of September 30, 2020 and June 30, 2020, we had certain foreign currency-denominated intercompany loans payable with total aggregate principal amounts of €15.9 million designated as net investment hedges to hedge the foreign exchange exposure of our net investment in our Euro-based subsidiaries. The notional value of the contract, which has a maturity date of June 26, 2022 and includes principal and accrued interest, was €16.0 million, or $18.8 million, as of September 30, 2020. A loss of $0.6 million and gain of $1.1 million were recorded as a component of foreign currency translation adjustments in other comprehensive income (loss) for the three months ended September 30, 2020 and 2019, respectively.

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://fasb.org/us-gaap/role/ref/legacyRef -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