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DERIVATIVES AND RISK MANAGEMENT | 9 Months Ended
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Sep. 30, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
DERIVATIVES AND RISK MANAGEMENT | DERIVATIVES AND RISK MANAGEMENT Cash Flow Hedges. The primary risks managed by using derivative instruments are the fluctuations in global currencies that will ultimately be used by non-U.S. dollar functional currency subsidiaries to settle future payments of intercompany inventory transactions denominated in U.S. dollars. Specifically, the Company projects future intercompany purchases by its non-U.S. dollar functional currency subsidiaries generally over a period of up to 24 months. The Company enters into forward contracts, generally for up to 85% of the forecasted purchases, to manage fluctuations in global currencies that will ultimately be used to settle such U.S. dollar denominated inventory purchases. Additionally, the Company enters into forward contracts to manage fluctuations in Japanese yen exchange rates that will be used to settle future third-party inventory component purchases by a U.S. dollar functional currency subsidiary. Forward contracts represent agreements to exchange the currency of one country for the currency of another country at an agreed-upon settlement date and exchange rate. These forward contracts are designated as single cash flow hedges. Fluctuations in exchange rates will either increase or decrease the Company’s U.S. dollar equivalent cash flows from these inventory transactions, which will affect the Company’s U.S. dollar earnings. Gains or losses on the forward contracts are expected to offset these fluctuations to the extent the cash flows are hedged by the forward contracts. These forward contracts meet the criteria for hedge accounting, which requires that they represent foreign currency-denominated forecasted transactions in which (i) the operating unit that has the foreign currency exposure is a party to the hedging instrument and (ii) the hedged transaction is denominated in a currency other than the hedging unit’s functional currency. At the inception of each forward contract designated as a cash flow hedge, the hedging relationship is expected to be highly effective in achieving offsetting cash flows attributable to the hedged risk. The Company assesses hedge effectiveness under the critical terms matched method at inception and at least quarterly throughout the life of the hedging relationship. If the critical terms (i.e., amounts, currencies and settlement dates) of the forward contract match the terms of the forecasted transaction, the Company concludes that the hedge is effective. For a derivative instrument that is designated and qualifies as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss), net of taxes and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, the Company’s hedges resulted in no ineffectiveness in the condensed consolidated statements of income (loss) and comprehensive income (loss), and there were no components excluded from the assessment of hedge effectiveness for the Third Quarter, Prior Year Quarter, Year To Date Period or Prior Year YTD Period. All derivative instruments are recognized as either assets or liabilities at fair value in the condensed consolidated balance sheets. Derivatives designated as cash flow hedges are recorded at fair value at each balance sheet date and the change in fair value is recorded to accumulated other comprehensive income (loss) within the equity section of the Company’s condensed consolidated balance sheet until such derivative’s gains or losses become realized or the cash flow hedge relationship is terminated. If the cash flow hedge relationship is terminated, the derivative’s gains or losses that are recorded in accumulated other comprehensive income (loss) will be recognized in earnings when the hedged cash flows occur. However, for cash flow hedges that are terminated because the forecasted transaction is not expected to occur in the original specified time period, the derivative’s gains or losses are immediately recognized in earnings. There were no gains or losses reclassified into earnings as a result of the discontinuance of cash flow hedges in the Third Quarter, Prior Year Quarter, Year To Date Period or Prior Year YTD Period. Hedge accounting is discontinued if it is determined that the derivative is not highly effective. The Company records all forward contract hedge assets and liabilities on a gross basis as they do not meet the balance sheet netting criteria because the Company does not have master netting agreements established with the derivative counterparties that would allow for net settlement. As of September 30, 2017, the Company had the following outstanding forward contracts designated as cash flow hedges that were entered into to hedge the future payments of inventory transactions (in millions):
Functional Currency |  | Contract Currency
Type |  | Amount |  | Type |  | Amount
Euro |  | 253.4 |  |  | U.S. dollar |  | 291.0 |
Canadian dollar |  | 95.0 |  |  | U.S. dollar |  | 73.2 |
British pound |  | 43.5 |  |  | U.S. dollar |  | 58.1 |
Japanese yen |  | 4,636.4 |  |  | U.S. dollar |  | 42.8 |
Mexican peso |  | 378.6 |  |  | U.S. dollar |  | 20.3 |
Australian dollar |  | 21.2 |  |  | U.S. dollar |  | 16.5 |
U.S. dollar |  | 41.1 |  |  | Japanese yen |  | 4,470.0 |
The Company is also exposed to interest rate risk related to its outstanding debt. To manage the interest rate risk related to its U.S.-based term loan (as amended and restated, the "Term Loan") which had an outstanding balance of $168.3 million net of debt issuance costs as of September 30, 2017, the Company entered into an interest rate swap agreement on July 26, 2013 with a term of approximately five years. The objective of this hedge is to offset the variability of future payments associated with interest rates on the Term Loan. The interest rate swap agreement hedges the 1-month London Interbank Offer Rate ("LIBOR") based variable rate debt obligations under the Term Loan. Under the terms of the swap, the Company pays a fixed interest rate of 1.288% per annum to the swap counterparty plus the LIBOR rate applicable margin of 3.50%. See “Note 14—Debt Activity” for additional disclosures about the Company’s Term Loan. The notional amount amortizes through May 17, 2018 and coincides with repayments on the underlying loan. The Company receives interest from the swap counterparty at a variable rate based on 1-month LIBOR. This hedge is designated as a cash flow hedge. Non-designated Hedges. The Company also periodically enters into forward contracts to manage exchange rate risks associated with certain intercompany transactions and for which the Company does not elect hedge accounting treatment. As of September 30, 2017, the Company had non-designated forward contracts of approximately $2.2 million on 28.3 million rand associated with a South African rand-denominated foreign subsidiary. Changes in the fair value of derivatives not designated as hedging instruments are recognized in earnings when they occur. The effective portion of gains and losses on cash flow hedges that were recognized in other comprehensive income (loss), net of taxes during the Third Quarter, Prior Year Quarter, Year To Date Period and Prior Year YTD Period are set forth below (in thousands):
| For the 13 Weeks Ended September 30, 2017 |  | For the 13 Weeks Ended October 1, 2016
Cash flow hedges: |  |  |  |  |
Forward contracts | $ | (13,923 | ) |  | $ | 2,708 |
Interest rate swaps | 3 |  |  | 296 |
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ | (13,920 | ) |  | $ | 3,004 |
| For the 39 Weeks Ended September 30, 2017 |  | For the 39 Weeks Ended October 1, 2016
Cash flow hedges: |  |  |  |  |
Forward contracts | $ | (21,731 | ) |  | $ | 2,488 |
Interest rate swaps | 146 |  |  | (1,217 | )
Total gain (loss) recognized in other comprehensive income (loss), net of taxes | $ | (21,585 | ) |  | $ | 1,271 |
The following table illustrates the effective portion of gains and losses on derivative instruments recorded in accumulated other comprehensive income (loss), net of taxes during the term of the hedging relationship and reclassified into earnings, and gains and losses on derivatives not designated as hedging instruments recorded directly to earnings during the Third Quarter, Prior Year Quarter, Year To Date Period and Prior Year YTD Period (in thousands):
Derivative Instruments |  | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location |  | Effect of Derivative Instruments |  | For the 13 Weeks Ended September 30, 2017 |  | For the 13 Weeks Ended October 1, 2016
Forward contracts designated as cash flow hedging instruments |  | Other income (expense)-net |  | Total gain (loss) reclassified from accumulated other comprehensive income (loss) |  | $ | (4,133 | ) |  | $ | 1,907 |
Forward contracts not designated as hedging instruments |  | Other income (expense)-net |  | Total gain (loss) recognized in income |  | $ | (12 | ) |  | $ | 75 |
Interest rate swap designated as a cash flow hedging instrument |  | Interest expense |  | Total gain (loss) reclassified from accumulated other comprehensive income (loss) |  | $ | (16 | ) |  | $ | (263 | )
Derivative Instruments |  | Condensed Consolidated Statements of Income (Loss) and Comprehensive Income (Loss) Location |  | Effect of Derivative Instruments |  | For the 39 Weeks Ended September 30, 2017 |  | For the 39 Weeks Ended October 1, 2016
Forward contracts designated as cash flow hedging instruments |  | Other income (expense)-net |  | Total gain (loss) reclassified from accumulated other comprehensive income (loss) |  | $ | 36 |  |  | $ | 6,858 |
Forward contracts not designated as hedging instruments |  | Other income (expense)-net |  | Total gain (loss) recognized in income |  | $ | 170 |  |  | $ | (222 | )
Interest rate swap designated as a cash flow hedging instrument |  | Interest expense |  | Total gain (loss) reclassified from accumulated other comprehensive income (loss) |  | $ | (257 | ) |  | $ | (846 | )
The following table discloses the fair value amounts for the Company’s derivative instruments as separate asset and liability values, presents the fair value of derivative instruments on a gross basis, and identifies the line items in the condensed consolidated balance sheets in which the fair value amounts for these categories of derivative instruments are included (in thousands):
|  | Asset Derivatives |  | Liability Derivatives
|  | September 30, 2017 |  | December 31, 2016 |  | September 30, 2017 |  | December 31, 2016
Derivative Instruments |  | Condensed Consolidated Balance Sheets Location |  | Fair Value |  | Condensed Consolidated Balance Sheets Location |  | Fair Value |  | Condensed Consolidated Balance Sheets Location |  | Fair Value |  | Condensed Consolidated Balance Sheets Location |  | Fair Value
Forward contracts designated as cash flow hedging instruments |  | Prepaid expenses and other current assets |  | $ | 2,710 |  |  | Prepaid expenses and other current assets |  | $ | 23,288 |  |  | Accrued expenses- other |  | $ | 15,215 |  |  | Accrued expenses- other |  | $ | 4,696 |
Forward contracts not designated as cash flow hedging instruments |  | Prepaid expenses and other current assets |  | 72 |  |  | Prepaid expenses and other current assets |  | — |  |  | Accrued expenses- other |  | 1 |  |  | Accrued expenses- other |  | 2 |
Interest rate swap designated as a cash flow hedging instrument |  | Prepaid expenses and other current assets |  | 109 |  |  | Prepaid expenses and other current assets |  | — |  |  | Accrued expenses- other |  | 15 |  |  | Accrued expenses- other |  | 613 |
Forward contracts designated as cash flow hedging instruments |  | Intangible and other assets-net |  | 448 |  |  | Intangible and other assets-net |  | 5,648 |  |  | Other long-term liabilities |  | 4,557 |  |  | Other long-term liabilities |  | 268 |
Interest rate swap designated as a cash flow hedging instrument |  | Intangible and other assets-net |  | — |  |  | Intangible and other assets-net |  | 73 |  |  | Other long-term liabilities |  | — |  |  | Other long-term liabilities |  | — |
Total |  |  |  | $ | 3,339 |  |  |  |  | $ | 29,009 |  |  |  |  | $ | 19,788 |  |  |  |  | $ | 5,579 |
At the end of the Third Quarter, the Company had forward contracts designated as cash flow hedges with maturities extending through June 2019. As of September 30, 2017, an estimated net loss of $9.2 million is expected to be reclassified into earnings within the next twelve months at prevailing foreign currency exchange rates. See “Note 1—Financial Statement Policies” for additional disclosures on foreign currency hedging instruments.

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- 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://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -URI http://asc.fasb.org/topic&trid=2229140 + Details
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