Plantronics 2014 Annual Report Download - page 76

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64
Cash Flow Hedges
On a monthly basis, the Company enters into option contracts with a one-year term. The Company hedges a portion of the
forecasted EUR and GBP denominated revenues with costless collars. The Company does not purchase options for trading
purposes. As of March 31, 2014, the Company had foreign currency put and call option contracts of approximately €55.7 million
and £23.9 million. As of March 31, 2013, the Company had foreign currency put and call option contracts of approximately €50.2
million and £19.9 million. The Company will reclassify all amounts accumulated in other comprehensive income into earnings
within the next twelve months.
The Company hedges a portion of the forecasted Mexican Peso (“MXN”) denominated expenditures with a cross-currency swap.
There were no material gains in AOCI as of March 31, 2014 to be recognized during the next 12 months due to the recognition
of the hedged forecasted expenditures. As of March 31, 2014 and 2013, the Company had foreign currency swap contracts of
approximately MXN204.6 million and MXN325.4 million, respectively.
The following table summarizes the notional value of the Company's outstanding MXN currency swaps and approximate USD
Equivalent at March 31, 2014:
Local
Currency
USD
Equivalent Position Maturity
(in thousands) (in thousands)
MX$ 204,550 $ 15,339 Buy MXNMonthly over 9 months
Effect of Designated Derivative Contracts on AOCI and Consolidated Statements of Operations
The following table presents the pre-tax effects of derivative instruments designated as cash flow hedges on AOCI and the
consolidated statements of operations for fiscal years ended March 31, 2014, 2013, and 2012:
(in thousands) 2014 2013 2012
Gain (loss) included in AOCI as of beginning of period $ 1,371 $ 1,937 $ (3,814)
Amount of gain (loss) recognized in OCI (effective portion) (3,750) 3,441 2,951
Amount of gain (loss) reclassified from OCI into net revenues
(effective portion) (965) 3,367 (2,415)
Amount of gain (loss) reclassified from OCI into cost of revenues
(effective portion) 28 640 (385)
Total amount of gain (loss) reclassified from AOCI to income (loss)
(effective portion) (937) 4,007 (2,800)
Loss included in AOCI as of end of period $ (1,442) $ 1,371 $ 1,937
The Company recognized an immaterial loss in the consolidated statement operations on the ineffective portion of the cash flow
hedges reported in interest and other income, net during the year ended March 31, 2014. There was no ineffective portion of
hedges designated as cash flow hedging instruments during the years ended March 31, 2013 or March 31, 2012.