Plantronics 2013 Annual Report Download - page 78

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68
13. ACCUMULATED OTHER COMPREHENSIVE INCOME
The components of accumulated other comprehensive income, net of associated tax impacts, were as follows:
March 31,
(in thousands) 2013 2012
Accumulated unrealized gain on cash flow hedges $ 1,349 $ 1,904
Accumulated foreign currency translation adjustments 4,131 4,392
Accumulated unrealized gain on investments 87 61
Accumulated other comprehensive income $ 5,567 $ 6,357
14. EMPLOYEE BENEFIT PLANS
The Company has a defined contribution benefit plan under Section 401(k) of the Internal Revenue Code, which covers substantially
all U.S. employees. Eligible employees may contribute pre-tax amounts to the plan through payroll withholdings, subject to certain
limitations. Under the plan, the Company currently matches 50% of the first 6% of employees' compensation and provides a non-
elective Company contribution equal to 3% of base salary. All matching contributions are currently 100% vested immediately.
The Company reserves the right to modify its policies at any time, including increasing, decreasing, or eliminating contribution
matching and vesting requirements. Total Company contributions in fiscal years 2013, 2012, and 2011 were $4.0 million, $3.8
million, and $3.7 million, respectively.
15. FOREIGN CURRENCY DERIVATIVES
The Company's foreign currency derivatives consist primarily of foreign currency forward exchange contracts, option contracts,
and cross-currency swaps. The derivatives expose the Company to credit risk to the extent the counterparties may be unable to
meet the terms of the derivative instrument. The Company's maximum exposure to loss due to credit risk that it would incur if
parties to derivative contracts failed completely to perform according to the terms of the contracts was equal to the carrying value
of the Company's derivative contracts as of March 31, 2013. The Company seeks to mitigate such risk by limiting its counterparties
to large financial institutions. In addition, the Company monitors, on an ongoing basis, the potential risk of loss with any one
counterparty resulting from this type of credit risk. Refer to Note 5, Fair Value Measurements, for disclosure of the Company's
fair value hierarchy for its derivative instruments.
Non-Designated Hedges
As of March 31, 2013, the Company had foreign currency forward contracts denominated in EUR, GBP and Australian Dollars
("AUD"). These forward contracts hedge against a portion of the Company's foreign currency-denominated cash, accounts
receivable, and accounts payable balances. The following table summarizes the notional value of the Company’s outstanding
foreign exchange currency contracts and approximate U.S. Dollar equivalent (“USD Equivalent”) at March 31, 2013:
Local
Currency USD
Equivalent Position Maturity
(in thousands) (in thousands)
EUR 19,000 $ 24,371 Sell EUR 1 month
GBP 4,800 $ 7,277 Sell GBP 1 month
AUD 2,500 $ 2,598 Sell AUD 1 month
Foreign currency transactions, net of the effect of hedging activity on forward contracts, resulted in immaterial losses in fiscal
year 2013 and immaterial gains in fiscal years 2012 and 2011, which are included in interest and other income (expense), net in
the consolidated statements of operations.
Cash Flow Hedges
On a monthly basis, the Company enters into option contracts with a one-year term. The Company does not purchase options for
trading purposes. As of March 31, 2013, the Company had foreign currency put and call option contracts of approximately €50.2
million and £19.9 million. As of March 31, 2012, the Company had foreign currency put and call option contracts of approximately
€63.7 million and £20.0 million.
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