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TABLE OF CONTENTS
COACH, INC.
Notes to Consolidated Financial Statements
(dollars and shares in thousands, except per share data)
8. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES – (continued)
The following tables provide information related to the Company’s derivatives:
Derivatives Designated as Hedging Instruments Balance Sheet Classification Fair Value
At
July 2,
2011
At
July 3,
2010
Foreign exchange contracts Other Current Assets $ 2,020 $ 2,052
Total derivative assets $ 2,020 $ 2,052
Foreign exchange contracts Accrued Liabilities $ 1,713 $ 7,538
Total derivative liabilities $ 1,713 $ 7,538
Amount of Loss Recognized
in OCI on Derivatives
(Effective Portion)
Year Ended
Derivatives in Cash Flow Hedging Relationships July 2,
2011
July 3,
2010
Foreign exchange contracts $ (9,394) $ (3,363)
Total $ (9,394) $ (3,363)
For fiscal 2011 and fiscal 2010, the amounts above are net of tax of $5,960 and $2,858, respectively.
Amount of Loss Reclassified from
Accumulated OCI into Income
(Effective Portion)
Year Ended
Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) July 2,
2011
July 3,
2010
Cost of Sales $ (15,886) $ (5,453)
Total $ (15,886) $ (5,453)
During fiscal 2011 and fiscal 2010, there were no material gains or losses recognized in income due to hedge ineffectiveness.
The Company expects that $2,356 of net derivative losses included in accumulated other comprehensive income at July 2, 2011 will be
reclassified into earnings within the next 12 months. This amount will vary due to fluctuations in the Japanese yen and Canadian dollar
exchange rates.
Hedging activity affected accumulated other comprehensive income, net of tax, as follows:
Year Ended
July 2,
2011
July 3,
2010
Balance at beginning of period $ (2,092) $ (335)
Net losses transferred to earnings 10,021 1,606
Change in fair value, net of tax (9,394) (3,363)
Balance at end of period $ (1,465) $ (2,092)
60