Logitech 2014 Annual Report Download - page 279

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The following table presents the fair values of the Company’s derivative instruments and their locations on its
consolidated balance sheets as of March 31, 2014 and 2013 (in thousands):
Derivatives
Asset Liability
March 31, March 31,
2014 2013 2014 2013
Designed as hedging instruments:
Cash flow hedges ............................................. $ 4 $1,165 $243 $ —
Not designed as hedging instruments:
Foreign exchange forward contract ............................... 23 — 96 270
Foreign exchange swap contract ................................. 128 32 362 437
151 32 458 707
$155 $1,197 $701 $707
The following table presents the amounts of gains and losses on the Company’s derivative instruments for
fiscal years 2014, 2013, and 2012 and their locations on its consolidated statements of operations (in thousands):
Years Ended March 31,
Amount of
Gain (Loss)
Deferred as
a Component of
Accumulated Other
Comprehensive Loss
Amount of
Gain (Loss)
Reclassified
from Accumulated
Other Comprehensive
Loss to Costs of
Goods Sold
Amount of
Gain (Loss)
Immediately
Recognized in
Other Income
(Expense), Net
2014 2013 2012 2014 2013 2012 2014 2013 2012
Designed as hedging instruments:
Cash flow hedges ........ $(1,025) $566 $2,916 $2,472 $1,756 $(421) $ (126) $ 275 $ (198)
Not designed as hedging
instruments:
Foreign exchange
forward contract ...... — — — — — — (464) (848) (350)
Foreign exchange
swap contract ........ — — — — — — 1,288 1,176 (1,884)
— — — — — — 824 328 (2,234)
$(1,025) $566 $2,916 $2,472 $1,756 $(421) $ 698 $ 603 $(2,432)
Cash Flow Hedges
The Company enters into foreign exchange forward contracts to hedge against exposure to changes in foreign
currency exchange rates related to its subsidiaries’ forecasted inventory purchases. The Company has one entity
with a Euro functional currency that purchases inventory in U.S. Dollars. The primary risk managed by using
derivative instruments is the foreign currency exchange rate risk. The Company has designated these derivatives as
cash flow hedges. The Company does not use derivative financial instruments for trading or speculative purposes.
These hedging contracts mature within four months, and are denominated in the same currency as the underlying
transactions. 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. The Company assesses the effectiveness of the hedges by comparing
Note 9 — Financial Instruments (Continued)
ANNUAl REPORT
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