Supercuts 2012 Annual Report Download - page 123

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Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. DERIVATIVE FINANCIAL INSTRUMENTS (Continued)
During September 2006, the Company's cross-currency swap (which had a notional amount of $21.3 million and hedged a portion of the
Company's net investment in its foreign operations) was settled, resulting in a cash outlay of $8.9 million. This cash outlay was recorded within
investing activities within the Consolidated Statement of Cash Flows. The related cumulative tax-
effected net loss of $7.9 million was recorded
in accumulated other comprehensive income (AOCI) in fiscal year 2007. The amount will remain deferred within AOCI until an event which
would trigger its release from AOCI and recognition in earnings being the sale or liquidation of the Company's international operations that the
cross-currency swap hedged.
Freestanding Derivative Forward Contracts
The Company uses freestanding derivative forward contracts to offset the Company's exposure to the change in fair value of certain
foreign currency denominated investments and intercompany assets and liabilities. These derivatives are not designated as hedges and
therefore, changes in the fair value of these forward contracts are recognized currently in earnings, thereby offsetting the current earnings effect
of the related foreign currency denominated assets and liabilities.
The Company had the following derivative instruments in its Consolidated Balance Sheet as of June 30, 2012 and 2011:
The table below sets forth the gain (loss) on the Company's derivative instruments recorded within AOCI in the Consolidated Balance
Sheet for the twelve months ended June 30, 2012 and 2011. The table also sets forth the gain (loss) on the Company's derivative instruments
that has been reclassified
120
Asset Liability
Fair Value
Fair Value
Type
Classification June 30,
2012 June 30,
2011 Classification June 30,
2012 June 30,
2011
(Dollars
in thousands)
(Dollars
in thousands)
Designated as hedging
instruments—Cash
Flow Hedges:
Forward foreign currency
contracts
Other
current
assets
$
37
$
—
Other
current
liabilities
$
—
$
(
599
)
Freestanding derivative
contracts—not
designated as hedging
instruments:
Forward foreign currency
contracts
Other
current
assets
$
108
$
212
Other
current
liabilities
$
—
$
—
Total
$
145
$
212
$
—
$
(
599
)