Logitech 2015 Annual Report Download - page 220

LOGITECH INTERNATIONAL S.A.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Note 8—Fair Value Measurements (Continued)
The following table presents the fair values of the Company’s derivative instruments as of March 31,
2015 and 2014 (in thousands):
Derivatives
Asset Liability
March 31, March 31,
2015 2014 2015 2014
Designated as hedging instruments:
Cash flow hedges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,080 $ 4 $— $243
Not designated as hedging instruments:
Foreign exchange contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . — 151 75 458
$2,080 $155 $75 $701
The following table presents the amounts of gains and losses on the Company’s derivative
instruments for fiscal years 2015, 2014 and 2013 and their locations on its consolidated statements of
operations and consolidated statements of comprehensive income (in thousands):
Amount of
Gain (Loss) Deferred as
a Component of
Accumulated Other
Comprehensive Loss After
Reclassification to Costs of
Goods Sold
Amount of Loss (Gain)
Reclassified from
Accumulated Other
Comprehensive Loss
to Costs of Goods Sold
Amount of
Gain (Loss)
Immediately Recognized
in Other Income
(Expense), Net
2015 2014 2013 2015 2014 2013 2015 2014 2013
Designated as
hedging instruments:
Cash flow hedges . . . . $4,466 $(1,025) $566 $(4,505) $2,472 $1,756 $ 20 $(126) $275
Not designated as
hedging instruments:
Foreign exchange
contracts. . . . . . . . . — — — — — — 2,479 824 328
$4,466 $(1,025) $566 $(4,505) $2,472 $1,756 $2,499 $ 698 $603
Cash Flow Hedges: The Company enters into foreign exchange forward contracts to hedge
against exposure to changes in 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 currency exchange rate risk.
The Company has designated these derivatives as cash flow hedges. 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 changes in the spot rate of the currency underlying the forward contract with changes in
the spot rate of the currency in which the forecasted transaction will be consummated. If the underlying
transaction being hedged fails to occur or if a portion of the hedge does not generate offsetting changes
in the currency exposure of forecasted inventory purchases, the Company immediately recognizes the
gain or loss on the associated financial instrument in other income (expense), net. Such gains and losses
were not material during fiscal years 2015, 2014 and 2013. Cash flows from such hedges are classified
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Annual Report Fiscal Year 2015