Plantronics 2015 Annual Report Download - page 73

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Non-Designated Hedges
As of March 31, 2015, the Company had foreign currency forward contracts denominated in EUR, GBP, and Australian Dollars
("AUD"). The Company does not elect to obtain hedge accounting for these forward contracts. 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, 2015:
Local
Currency
USD
Equivalent Position Maturity
(in thousands) (in thousands)
EUR € 28,200 $ 30,788 Sell EUR 1 month
GBP £ 6,500 $ 9,681 Sell GBP 1 month
AUD A$ 9,900 $ 7,674 Sell AUD 1 month
Effect of Non-Designated Derivative Contracts on the Consolidated Statements of Operations
The effect of non-designated derivative contracts on results of operations recognized in interest and other income (expense), net
in the consolidated statements of operations was as follows:
Fiscal Year Ended March 31,
(in thousands) 2015 2014 2013
Gain on foreign exchange contracts $ 9,649 $ 1,631 $ 1,065
Cash Flow Hedges
Costless Collars
The Company hedges a portion of the forecasted EUR and GBP denominated revenues with costless collars. On a monthly basis,
the Company enters into option contracts with a nine to eleven month term. Collar contracts are scheduled to mature at the
beginning of each fiscal quarter, at which time the instruments convert to forward contracts. Once the hedged revenues are
recognized, the forward contracts become non-designated hedges to protect the resulting foreign monetary asset position for the
Company.
The Company does not purchase options for trading purposes. As of March 31, 2015, the Company had foreign currency put and
call option contracts of approximately €67.9 million and £28.6 million. As of March 31, 2014, the Company had foreign currency
put and call option contracts of approximately €55.7 million and £23.9 million. The Company will reclassify all amounts
accumulated in other comprehensive income into earnings within the next twelve months.
Cross-currency Swaps
The Company hedges a portion of the forecasted Mexican Peso (“MXN”) denominated expenditures with a cross-currency swap.
A loss of $3.1 million, net of tax, in AOCI as of March 31, 2015 is expected to be reclassified to net revenues during the next 12
months due to the recognition of the hedged forecasted expenditures. As of March 31, 2015 and 2014, the Company had foreign
currency swap contracts of approximately MXN 431.9 million and MXN 204.6 million, respectively.
The following table summarizes the notional value of the Company's outstanding MXN currency swaps and approximate USD
Equivalent at March 31, 2015:
Local
Currency
USD
Equivalent Position Maturity
(in thousands) (in thousands)
MX$ 431,930 $ 31,450 Buy MXN Monthly over 15 months
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