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Financial Derivatives
 12 Months Ended
Aug. 31, 2015
Financial Derivatives [Abstract]  
Financial Derivatives

L. FINANCIAL DERIVATIVES 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Values of Derivative Instruments

 

 

Asset (Liability)

 

 

 

 

August 31,

 

August 31,

$ in thousands

 

Balance Sheet Location

 

2015

 

2014

Derivatives designated as hedging instruments:

 

 

 

 

 

 

 

 

   Foreign currency forward contracts

 

Other current assets

 

$
217 

 

$
900 

   Foreign currency forward contracts

 

Other current liabilities

 

 
(352)

 

 
(240)

Total derivatives designated as hedging instruments

 

 

 

$
(135)

 

$
660 

 

 

 

 

 

 

 

 

 

Derivatives not designated as hedging instruments:

 

 

 

 

 

 

   Foreign currency forward contracts

 

Other current assets

 

 
495 

 

 

 -

   Foreign currency forward contracts

 

Other current liabilities

 

 
(61)

 

 
(160)

Total derivatives not designated as hedging instruments

 

 

 

$
434 

 

$
(160)

 

 

 

 

 

 

 

 

 

In addition, accumulated other comprehensive income (“AOCI”) included realized and unrealized after-tax gains of $5.4 million and $2.0 million at August 31, 2015 and 2014, respectively, related to derivative contracts designated as hedging instruments. 

 

Net Investment Hedging Relationships

 

 

 

 

 

 

 

 

 

 

 

 

 

Amount of (Loss) Recognized in OCI on Derivatives

 

 

 

For the years ended August 31,

$ in thousands

 

 

2015

 

 

2014

 

 

2013

Foreign currency forward contracts, net of tax expense (benefit) of $2,083,  $16, and ($286)

 

$
(3,420)

 

$
(53)

 

$
(357)

 

 

 

 

 

 

 

 

 

 

During fiscal 2015,  2014 and 2013, the Company settled Euro foreign currency forward contracts resulting in after-tax net (losses) gains of $3.8 million, ($0.5 million) and ($0.6 million), respectively, which were included in OCI as part of a currency translation adjustment.  There were no amounts recorded in the consolidated statement of operations related to ineffectiveness of Euro foreign currency forward contracts for the years ended August 31, 2015, 2014 and 2013.  Accumulated currency translation adjustment in AOCI at August 31, 2015,  2014 and 2013 reflected realized and unrealized after-tax gains of $5.4 million, $2.0 million and $2.0 million, respectively.

 

At August 31, 2015 and 2014, the Company had outstanding Euro foreign currency forward contracts to sell 29.1 million Euro and 28.9 million Euro, respectively, at fixed prices to settle during the next fiscal quarter. At August 31, 2015 and 2014, the Company also had an outstanding foreign currency forward contract to sell 43.0 million South African Rand at fixed prices to settle during the next fiscal quarter. The Company’s foreign currency forward contracts qualify as hedges of a net investment in foreign operations.

 

Derivatives Not Designated as Hedging Instruments

In order to reduce exposures related to changes in foreign currency exchange rates, the Company, at times, may enter into forward exchange or option contracts for transactions denominated in a currency other than the functional currency for certain of the Company’s operations.  This activity primarily relates to economically hedging against foreign currency risk in purchasing inventory, sales of finished goods, and future settlement of foreign denominated assets and liabilities.  The Company may choose whether or not to designate these contracts as hedges.  For those contracts not designated, changes in fair value are recognized currently in the income statement.  At August 31, 2015 and 2014, the Company had $9.5 million and $4.9 million, respectively, of U.S. dollar equivalent of foreign currency forward contracts outstanding.