Fair Value Measurements Level 1 (Notes) | 9 Months Ended |
Nov. 30, 2014 |
Fair Value Measurements [Abstract] | |
Fair Value Disclosures [Text Block] | Fair Value Measurements and Derivatives |
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The Company applies the authoritative guidance on “Fair Value Measurements," which among other things, requires enhanced disclosures about investments that are measured and reported at fair value. This guidance establishes a hierarchal disclosure framework that prioritizes and ranks the level of market price observability used in measuring investments at fair value. Market price observability is impacted by a number of factors, including the type of investment and the characteristics specific to the investment. Investments with readily available active quoted prices, or for which fair value can be measured from actively quoted prices, generally will have a higher degree of market price observability and a lesser degree of judgment used in measuring fair value. |
Investments measured and reported at fair value are classified and disclosed in one of the following categories: |
Level 1 - Quoted market prices in active markets for identical assets or liabilities. |
Level 2 - Inputs other than Level 1 inputs that are either directly or indirectly observable. |
Level 3 - Unobservable inputs developed using the Company's estimates and assumptions, which reflect those that market participants would use. |
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The following table presents assets measured at fair value on a recurring basis at November 30, 2014: |
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| | | Fair Value Measurements at Reporting Date Using | | | | | | | | | | | | |
| Total | | Level 1 | | Level 2 | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | | |
Cash and money market funds | $ | 11,056 | | | $ | 11,056 | | | $ | — | | | | | | | | | | | | | |
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Derivatives | | | | | | | | | | | | | | | | | | | | |
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Designated for hedging | $ | 892 | | | $ | — | | | $ | 892 | | | | | | | | | | | | | |
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Total derivatives | $ | 892 | | | $ | — | | | $ | 892 | | | | | | | | | | | | | |
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Investment securities: | | | | | | | | | | | | | | | | | | | | |
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Trading securities | $ | 4,489 | | | $ | 4,489 | | | $ | — | | | | | | | | | | | | | |
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Available-for-sale securities | 3 | | | 3 | | | — | | | | | | | | | | | | | |
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Other investments at amortized cost (a) | 8,953 | | | — | | | — | | | | | | | | | | | | | |
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Total investment securities | $ | 13,445 | | | $ | 4,492 | | | $ | — | | | | | | | | | | | | | |
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The following table presents assets measured at fair value on a recurring basis at February 28, 2014: |
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| | | Fair Value Measurements at Reporting Date Using | | | | | | | | | | | | |
| Total | | Level 1 | | Level 2 | | | | | | | | | | | | |
Cash and cash equivalents: | | | | | | | | | | | | | | | | | |
Cash and money market funds | $ | 10,603 | | | $ | 10,603 | | | $ | — | | | | | | | | | | | | | |
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Derivatives | | | | | | | | | | | | | | | | | | | | |
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Designated for hedging | $ | (963 | ) | | $ | — | | | $ | (963 | ) | | | | | | | | | | | | |
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Total derivatives | $ | (963 | ) | | $ | — | | | $ | (963 | ) | | | | | | | | | | | | |
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Long-term investment securities: | | | | | | | | | | | | | | | | | | | | |
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Trading securities | $ | 4,234 | | | $ | 4,234 | | | $ | — | | | | | | | | | | | | | |
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Available-for-sale securities | 3 | | | 3 | | | — | | | | | | | | | | | | | |
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Other investments at amortized cost (a) | 9,865 | | | — | | | — | | | | | | | | | | | | | |
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Total long-term investment securities | $ | 14,102 | | | $ | 4,237 | | | $ | — | | | | | | | | | | | | | |
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(a) | Included in this balance is the Company's held-to-maturity investment in bonds issued by the Venezuela government, which are recorded at amortized cost taking into consideration the currency devaluation in Venezuela (see Note 4). Additionally, this amount includes investments in three non-controlled corporations accounted for by the cost method (see Note 4). The fair values of these investments would be based upon Level 3 inputs. At November 30, 2014 and February 28, 2014, it is not practicable to estimate the fair values of these bonds and cost method investments. | | | | | | | | | | | | | | | | | | | | | | |
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The carrying amount of the Company's accounts receivable, short-term debt, accounts payable, accrued expenses, bank obligations and long-term debt approximates fair value because of (i) the short-term nature of the financial instrument; (ii) the interest rate on the financial instrument being reset every quarter to reflect current market rates, and (iii) the stated or implicit interest rate approximates the current market rates or are not materially different than market rates. |
Derivative Instruments |
The Company's derivative instruments include forward foreign currency contracts utilized to hedge a portion of its foreign currency inventory purchases and local operating expenses. The Company also has three interest rate swap agreements, two of which hedge interest rate exposure related to the forecasted outstanding borrowings on a portion of its amended credit facility ("Amended Facility"), and the third hedges interest rate exposure related to the forecasted outstanding balance of one of its mortgage notes, with monthly payments due through May 2023. The two swap agreements related to the Amended Facility lock the Company's LIBOR rates at 0.515% and 0.518% (exclusive of credit spread) for the respective agreements through the swaps' maturities of February 28, 2017 and April 29, 2016, respectively. The swap agreement related to the Company's mortgage locks the interest rate on the debt at 3.92% (inclusive of credit spread) through the end of the mortgage. The forward foreign currency derivatives qualifying for hedge accounting are designated as cash flow hedges and valued using observable forward rates for the same or similar instruments (Level 2). The duration of open forward foreign currency contracts range from 1 - 15 months and are classified in the balance sheet according to their terms. Interest rate swap agreements qualifying for hedge accounting are designated as cash flow hedges and valued based on a comparison of the change in fair value of the actual swap contracts designated as the hedging instruments and the change in fair value of a hypothetical swap contract (Level 2). We calculate the fair value of interest rate swap agreements quarterly based on the quoted market price for the same or similar financial instruments. Interest rate swaps are classified in the balance sheet as either non-current assets or non-current liabilities based on the fair value of the instruments at the end of the period. |
It is the Company's policy to enter into derivative instrument contracts with terms that coincide with the underlying exposure being hedged. As such, the Company's derivative instruments are expected to be highly effective. Hedge ineffectiveness, if any, is recognized as incurred through Other Income (Expense) in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) and amounted to $85 and $121 for the three and nine months ended November 30, 2014, respectively and $(84) and $(114) for the three and nine months ended November 30, 2013, respectively. |
Financial Statement Classification |
The Company holds derivative instruments that are designated as hedging instruments. The following table discloses the fair value as of November 30, 2014 and February 28, 2014 of derivative instruments: |
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| | Derivative Assets and Liabilities | | | | | | | | | | | | | |
| | | | Fair Value | | | | | | | | | | | | | |
| | Account | | November 30, 2014 | | February 28, 2014 | | | | | | | | | | | | | |
Designated derivative instruments | | | | | | | | | | | | | | | | | | | |
Foreign currency contracts | | Accrued expenses and other current liabilities | | $ | — | | | $ | (784 | ) | | | | | | | | | | | | | |
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| | Prepaid expenses and other current assets | | 1,006 | | | — | | | | | | | | | | | | | | |
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Interest rate swap agreements | | Other liabilities | | (114 | ) | | (179 | ) | | | | | | | | | | | | | |
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Total derivatives | | | | $ | 892 | | | $ | (963 | ) | | | | | | | | | | | | | |
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Cash flow hedges |
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During Fiscal 2014 and during the third quarter of Fiscal 2015, the Company entered into forward foreign currency contracts, which have a current outstanding notional value of $29,060 and are designated as cash flow hedges at November 30, 2014. The current outstanding notional value of the Company's three interest rate swaps at November 30, 2014 is $6,695, $33,750 and $25,000. For cash flow hedges, the effective portion of the gain or loss is reported as a component of Other Comprehensive Income (Loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. |
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Activity related to cash flow hedges recorded during the three and nine months ended November 30, 2014 and 2013 was as follows: |
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| Three months ended | | Nine months ended |
| November 30, 2014 | | November 30, 2014 |
| Pretax Gain (Loss) Recognized in Other Comprehensive Income | | Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (a) | | Gain (Loss) for Ineffectiveness in Other Income | | Pretax Gain (Loss) Recognized in Other Comprehensive Income | | Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income | | Gain (Loss) for Ineffectiveness in Other Income |
Cash flow hedges | | | | | | | | | | | |
Foreign currency contracts | $ | 1,181 | | | $ | 213 | | | $ | 85 | | | $ | 2,012 | | | $ | (59 | ) | | $ | 121 | |
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Interest rate swaps | $ | (99 | ) | | $ | — | | | $ | — | | | $ | 65 | | | $ | — | | | $ | — | |
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| Three months ended | | Nine months ended |
| November 30, 2013 | | November 30, 2013 |
| Pretax Gain (Loss) Recognized in Other Comprehensive Income | | Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (a) | | Gain (Loss) for Ineffectiveness in Other Income | | Pretax Gain (Loss) Recognized in Other Comprehensive Income | | Pretax Gain (Loss) Reclassified from Accumulated Other Comprehensive Income | | Gain (Loss) for Ineffectiveness in Other Income |
Cash flow hedges | | | | | | | | | | | |
Foreign currency contracts | $ | (455 | ) | | $ | (129 | ) | | $ | (84 | ) | | $ | (470 | ) | | $ | (67 | ) | | $ | (114 | ) |
Interest rate swaps | $ | (510 | ) | | $ | — | | | $ | — | | | $ | 146 | | | $ | — | | | $ | — | |
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(a) Gains and losses related to foreign currency contracts are reclassified to cost of sales. Gains and losses related to interest rate swaps are reclassified to interest expense. |
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The net loss recognized in Other Comprehensive Income for foreign currency contracts is expected to be recognized in cost of sales within the next eighteen months. No amounts were excluded from the assessment of hedge effectiveness during the respective periods. As of November 30, 2014, no contracts originally designated for hedge accounting were de-designated or terminated. |