Quarterly report pursuant to Section 13 or 15(d)

Derivative Financial Instruments

v2.4.0.8
Derivative Financial Instruments
 9 Months Ended
Sep. 28, 2013
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments

17) Derivative Financial Instruments

At September 28, 2013, we had interest rate swaps consisting of the following:

 

  a) An interest rate swap with a notional amount of approximately $1.9 million at September 28, 2013, entered into on February 6, 2006, related to the Company’s Series 1999 New York Industrial Revenue Bond which effectively fixes the rate at 3.99% plus a spread based on the Company’s leverage ratio on this obligation through February 1, 2016.

 

  b) An interest rate swap entered into on March 19, 2009 related to the Company’s term note issued January 30, 2009, was terminated in the third quarter of 2013 with no significant impact to the results of our operations.

At both September 28, 2013 and December 31, 2012, the fair value of interest rate swaps was a liability of $0.1 million, which is included in other liabilities (See Note 16). Amounts expected to be reclassified to earnings in the next 12 months is insignificant.

To the extent the interest rate swaps are not perfectly effective in offsetting the change in the value of the payments being hedged; the ineffective portion of these contracts is recognized in earnings immediately as interest expense. Ineffectiveness, if any, was not significant for the three and nine months ended September 28, 2013 and September 29, 2012. The Company classifies the cash flows from hedging transactions in the same category as the cash flows from the respective hedged items. Amounts from ineffectiveness, if any, to be reclassified during 2013 are not expected to be significant.

Activity in AOCI related to these derivatives is summarized below:

 

     Nine months Ended     Three Months Ended  
(In thousands)    September 28,
2013		     September 29,
2012		     September 28,
2013		     September 29,
2012		  

Derivative balance at the beginning of the period in AOCI

    $ (142 )    $ (256 )    $ (104 )    $ (206 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net deferral in AOCI of derivatives:

         

Net (increase) decrease in fair value of derivatives

      11        (48 )      22        (10 ) 

Tax effect

      (4 )      17        (8 )      4   
  

 

 

    

 

 

    

 

 

    

 

 

  
     7        (31 )      14        (6 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net reclassification from AOCI into earnings:

         

Reclassification from AOCI into earnings – Interest Expense

      90        163        20        50   

Tax effect

      (32 )      (56 )      (7 )      (18 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  
     58        107        13        32   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net change in derivatives for the period

      65        76        27        26   
  

 

 

    

 

 

    

 

 

    

 

 

  

Derivative balance at the end of the period in AOCI

    $ (77 )    $ (180 )    $ (77 )    $ (180 )