XML 35 R18.htm IDEA: XBRL DOCUMENT v3.7.0.1
Derivative Financial Instruments
 12 Months Ended
Mar. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments
Derivative Financial Instruments
 The following table presents the fair values of the Company's derivative instruments as of March 31, 2017 and 2016 (in thousands):
 
 
Derivatives
 
 
Asset
 
Liability
 
 
March 31,
 
March 31,
 
 
2017
 
2016
 
2017
 
2016
Designated as hedging instruments:
 
 

 
 

 
 

 
 

Cash flow hedges
 
$
48

 
$
10

 
$
402

 
$
1,038


Under certain agreements with the respective counterparties to the Company's derivative contracts, subject to applicable requirements, the Company is allowed to net settle transactions of the same type with a single net amount payable by one party to the other. However, the Company presents its derivative assets and derivative liabilities on a gross basis in other current assets or accrued and other current liabilities on the consolidated balance sheets as of March 31, 2017 and 2016.
The following table presents the amounts of gains and losses on the Company's derivative instruments for fiscal years 2017, 2016 and 2015 and their locations on its consolidated statements of operations and consolidated statements of comprehensive income (loss) (in thousands):
 
Amount of
Gain (Loss) Deferred as
a Component of
Accumulated Other
Comprehensive Loss
 
Amount of Loss (Gain)
Reclassified from
Accumulated Other
Comprehensive Loss
to Costs of Goods Sold
 
2017
 
2016
 
2015
 
2017
 
2016
 
2015
Designated as hedging instruments:
 
 
 

 
 

 
 
 
 

 
 

Cash flow hedges
$
2,928

 
$
(2,432
)
 
$
8,971

 
$
(1,670
)
 
$
(3,296
)
 
$
(4,505
)

Cash Flow Hedges: The Company enters into​ cash flow hedge​ contracts to ​protect​ against exchange rate exposure ​ of ​forecasted inventory purchases. These hedging contracts mature within four months. Gains and losses in the fair value of the effective portion of the hedges are deferred as a component of accumulated other comprehensive loss until the hedged inventory purchases are sold, at which time the gains or losses are reclassified to cost of goods sold. Cash flows from such hedges are classified as operating activities in the consolidated statements of cash flows. As of March 31, 2017, and 2016, the notional amounts of foreign exchange forward contracts outstanding related to forecasted inventory purchases were $59.4 million and $39.8 million, respectively. The Company estimates that $0.5 million of net losses related to its cash flow hedges included in accumulated other comprehensive loss as of March 31, 2017 will be reclassified into earnings within the next 12 months.
Other Derivatives: The Company also enters into foreign exchange forward and swap contracts to reduce the short-term effects of currency fluctuations on certain receivables or payables denominated in currencies other than the functional currencies of its subsidiaries. These forward and swap contracts generally mature within one month. The primary risk managed by using forward and swap contracts is the currency exchange rate risk. The gains or losses on these contracts are recognized in other income (expense), net in the consolidated statements of operations based on the changes in fair value. The notional amounts of these contracts outstanding as of March 31, 2017 and 2016 were $56.7 million and $63.7 million, respectively. Open forward and swap contracts as of March 31, 2017 and 2016 consisted of contracts in Taiwanese Dollars, Australian Dollars, Mexican Pesos, Japanese Yen, Canadian Dollars and British Pounds to be settled at future dates at pre-determined exchange rates.
The fair value of all foreign exchange forward and swap contracts is determined based on observable market transactions of spot currency rates and forward rates. Cash flows from these contracts are classified as operating activities in the consolidated statements of cash flows.