NOTE 10—Derivative Instruments
The Company transacts business in various foreign countries and is, therefore, subject to risk of foreign currency exchange rate fluctuations. The Company from time to time enters into forward contracts to economically hedge transactional exposure associated with commitments arising from trade accounts receivable, trade accounts payable and fixed purchase obligations denominated in a currency other than the functional currency of the respective operating entity. All derivative instruments are recorded on the Consolidated Balance Sheets at their respective fair market values. The Company has elected not to prepare and maintain the documentation required to qualify its forward contracts for hedge accounting treatment and, therefore, changes in fair value are recorded in the Consolidated Statements of Operations.
The effects of derivative instruments on the Company’s Consolidated Financial Statements are as follows as of February 28, 2013 and for the year then ended (in thousands):
| Year Ended February 28, 2013 | ||||||||||||||||
| As of February 28, 2013 | Location of
Gain (Loss) Recognized in Income on Derivative |
Amount of
Gain (Loss) Recognized in Income on Derivative |
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| Balance Sheet Location | Fair Value |
Notional Value |
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Assets—foreign currency forward contracts not designated as hedges |
Other current assets | $ | 280 | $ | 36,214 | Other income (expense), net |
$ | 1,309 | ||||||||
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Liabilities—foreign currency forward contracts not designated as hedges |
Accounts payable and accrued expenses |
(219 | ) | 29,328 | Other income (expense), net |
(1,695 | ) | |||||||||
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TOTAL |
$ | 61 | $ | 65,542 | $ | (386 | ) | |||||||||
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The effects of derivative instruments on the Company’s Consolidated Financial Statements are as follows as of February 29, 2012 and for the year then ended (in thousands):
| Year Ended February 29, 2012 | ||||||||||||||||
| As of February 29, 2012 | Location of
Gain (Loss) Recognized in Income on Derivative |
Amount of
Gain (Loss) Recognized in Income on Derivative |
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| Balance Sheet Location | Fair Value |
Notional Value |
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|
Assets—foreign currency forward contracts not designated as hedges |
Other current assets | $ | 147 | $ | 24,450 | Other income (expense), net |
$ | 1,518 | ||||||||
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Liabilities—foreign currency forward contracts not designated as hedges |
Accounts payable and accrued expenses |
(473 | ) | 35,263 | Other income (expense), net |
(2,785 | ) | |||||||||
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TOTAL |
$ | (326 | ) | $ | 59,713 | $ | (1,267 | ) | ||||||||
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