| DERIVATIVE INSTRUMENTS |
| 5. |
DERIVATIVE INSTRUMENTS: |
The fair value and location of the Company’s derivative instruments on its Consolidated Balance Sheets are as
follows (see Note 6):
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Balance Sheet Location
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February 29,
2012
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February 28,
2011
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| (in millions) |
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Derivative instruments designated as hedging instruments
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Foreign currency contracts:
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Prepaid expenses and other
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$ |
7.9 |
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$ |
11.0 |
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Other accrued expenses and liabilities
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$ |
2.7 |
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$ |
3.4 |
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Other assets, net
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$ |
3.6 |
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$ |
2.8 |
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Other liabilities
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$ |
2.2 |
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$ |
0.9 |
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Interest rate swap contracts:
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Other accrued expenses and liabilities
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$ |
15.0 |
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$ |
6.1 |
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Other assets, net
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$ |
— |
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$ |
1.7 |
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Other liabilities
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$ |
30.7 |
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$ |
— |
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Derivative instruments not designated as hedging instruments
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Foreign currency contracts:
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Prepaid expenses and other
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$ |
1.4 |
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$ |
3.2 |
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Other accrued expenses and liabilities
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$ |
1.1 |
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$ |
1.0 |
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Other assets, net
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$ |
0.3 |
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$ |
— |
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Other liabilities
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$ |
0.4 |
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$ |
— |
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The effect of the
Company’s derivative instruments designated in cash flow hedging relationships on its Consolidated Statements of Operations, as well as its Other Comprehensive Income (“OCI”), net of income tax effect, for the years ended
February 29, 2012, February 28, 2011, and February 28, 2010, is as follows. As a result of the CWAE Divestiture, the Company recognized net gains of $6.3 million, net of income tax effect, for the year ended February 28,
2011, related to the discontinuance of cash flow hedge accounting due to the probability that the original forecasted transaction would not occur by the end of the originally specified time period (or within the two months following). There were no
such amounts recognized for the years ended February 29, 2012, and February 28, 2010.
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Derivative Instruments in
Designated Cash Flow
Hedging
Relationships
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Net
Gain (Loss)
Recognized
in OCI
(Effective
portion)
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Location of Net Gain (Loss)
Reclassified from AOCI to
Income (Effective
portion)
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Net
Gain (Loss)
Reclassified
from AOCI
to Income
(Effective
portion)
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| (in millions) |
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For the Year Ended February 29, 2012
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Foreign currency contracts
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$ |
5.8 |
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Sales
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$ |
6.4 |
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Foreign currency contracts
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3.1 |
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Cost of product sold
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1.6 |
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Interest rate swap contracts
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(27.2 |
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Interest expense, net
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(3.8 |
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Total
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$ |
(18.3 |
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Total
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$ |
4.2 |
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For the Year Ended February 28, 2011
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Foreign currency contracts
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$ |
11.2 |
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Sales
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$ |
13.6 |
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Foreign currency contracts
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0.6 |
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Cost of product sold
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9.5 |
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Interest rate swap contracts
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(2.7 |
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Interest expense, net
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— |
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Total
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$ |
9.1 |
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Total
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$ |
23.1 |
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For the Year Ended February 28, 2010
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Foreign currency contracts
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$ |
39.3 |
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Sales
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$ |
18.6 |
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Foreign currency contracts
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13.2 |
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Cost of product sold
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(4.6 |
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Foreign currency contracts
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12.4 |
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Selling, general and administrative expenses
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22.8 |
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Interest rate swap contracts
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(4.7 |
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Interest expense, net
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(27.7 |
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Total
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$ |
60.2 |
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Total
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$ |
9.1 |
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Derivative Instruments in
Designated Cash Flow
Hedging
Relationships
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Location of Net Gain
Recognized in Income
(Ineffective portion)
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Net Gain
Recognized
in Income
(Ineffective
portion)
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| (in millions) |
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For the Year Ended February 29, 2012
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Foreign currency contracts
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Selling, general and administrative expenses
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$ |
2.2 |
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For the Year Ended February 28, 2011
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Foreign currency contracts
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Selling, general and administrative expenses
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$ |
1.4 |
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For the Year Ended February 28, 2010
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Foreign currency contracts
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Selling, general and administrative expenses
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$ |
2.5 |
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Non-Derivative Instruments in
Designated Net Investment
Hedging
Relationships
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Net
Gain
(Loss)
Recognized
in OCI
(Effective
portion)
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Location of Net Gain
Reclassified from AOCI to
Income (Effective portion)
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Net
Gain
Reclassified
from AOCI to
Income
(Effective
portion)
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| (in millions) |
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For the Year Ended February 28, 2011
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Sterling Senior Debt Instrument
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$ |
— |
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Selling, general and administrative expenses
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$ |
17.8 |
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The effect of the Company’s undesignated derivative instruments on its Consolidated Statements of
Operations for the years ended February 29, 2012, February 28, 2011, and February 28, 2010, is as follows:
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Derivative Instruments not
Designated as Hedging Instruments
|
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Location of Net (Loss) Gain
Recognized in Income
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Net
(Loss) Gain
Recognized
in Income
|
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| (in millions) |
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For the Year Ended February 29, 2012
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|
|
|
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Foreign currency contracts
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|
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Selling, general and administrative expenses
|
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$ |
(1.9 |
) |
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For the Year Ended February 28, 2011
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Foreign currency contracts
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Selling, general and administrative expenses
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$ |
4.3 |
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For the Year Ended February 28, 2010
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Foreign currency contracts
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Selling, general and administrative expenses
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$ |
12.8 |
|
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Interest rate swap contracts
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Interest expense, net
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(0.4 |
) |
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Total
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$ |
12.4 |
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