TOOTSIE ROLL INDUSTRIES INC - Quarter Report: 2010 October (Form 10-Q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended OCTOBER 2, 2010

 

OR

 

o                   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from            to            

 

COMMISSION FILE NUMBER 1-1361

 

Tootsie Roll Industries, Inc.

(Exact Name of Registrant as Specified in its Charter)

 

 

 

773-838-3400

(Registrant’s Telephone Number, Including Area Code)

 

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x  No o

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x  No o

 

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

 

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o  No x

 

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date (October 2, 2010).

 

Class		Outstanding
Common Stock, $.69 4/9 par value		36,458,839
Class B Common Stock, $.69 4/9 par value		20,475,865

 

 

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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

 

OCTOBER 2, 2010

 

INDEX

 

		Page No.
Part I —	Financial Information
Item 1.	Financial Statements:
	Condensed Consolidated Statements of Financial Position	3-4
	Condensed Consolidated Statements of Earnings, Comprehensive Earnings and Retained Earnings	5-6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8-13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14-19
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	19
Item 4.	Controls and Procedures	20
Part II —	Other Information
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 6.	Exhibits	22
Signatures		22
Certifications		23-25

 

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.  See “ Forward-Looking Statements” under Part I — Item 2 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Quarterly Report on Form 10-Q.

 

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PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(in thousands of dollars) (UNAUDITED)

 

		Oct. 2,			Dec. 31,			Oct. 3,
		2010			2009			2009
ASSETS
CURRENT ASSETS
Cash & cash equivalents		$	58,862		$	90,990		$	36,731
Investments		8,841			8,663			12,814
Trade accounts receivable, Less allowances of $2,949, $2,356 & $3,802		100,602			37,512			95,269
Other receivables		4,999			8,397			5,361
Inventories, at cost
Finished goods & work in process		43,835			35,570			43,251
Raw material & supplies		31,061			20,817			23,890
Prepaid expenses		4,780			8,562			5,820
Deferred income taxes		1,237			1,367			—
Total current assets		254,217			211,878			223,136
PROPERTY, PLANT & EQUIPMENT, at cost
Land		21,605			21,559			19,313
Buildings		102,419			102,374			89,096
Machinery & equipment		298,102			296,787			279,944
Construction in progress		15,237			6,877			36,724
		437,363			427,597			425,077
Less-accumulated depreciation		220,923			206,876			203,102
Net property, plant and equipment		216,440			220,721			221,975
OTHER ASSETS
Goodwill		73,237			73,237			73,237
Trademarks		175,024			175,024			189,024
Investments		60,480			58,136			49,674
Split dollar life insurance		74,627			74,642			74,797
Prepaid expenses		7,534			8,068			9,037
Investment in joint venture		3,522			4,961			9,521
Deferred income taxes		10,476			11,580			—
Total other assets		404,900			405,648			405,290
Total assets		$	875,557		$	838,247		$	850,401

 

(The accompanying notes are an integral part of these statements.)

 

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(in thousands except per share data) (UNAUDITED)

 

		Oct. 2,			Dec. 31,			Oct. 3,
		2010			2009			2009
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
Accounts payable		$	17,553		$	9,140		$	17,499
Dividends payable		4,554			4,458			4,460
Accrued liabilities		49,552			42,468			45,980
Income taxes payable		5,074			—			7,449
Deferred income taxes		—			—			631
Total current liabilities		76,733			56,066			76,019
NONCURRENT LIABILITIES
Deferred income taxes		42,734			44,582			45,513
Postretirement health care and life insurance benefits		17,837			16,674			16,570
Industrial development bonds		7,500			7,500			7,500
Liability for uncertain tax positions		18,065			21,101			18,173
Deferred compensation and other liabilities		42,470			39,839			37,270
Total noncurrent liabilities		128,606			129,696			125,026
SHAREHOLDERS’ EQUITY
Common Stock, $.69-4/9 par value-120,000 shares authorized; 36,459, 35,802 & 35,823, respectively, issued		25,319			24,862			24,877
Class B Common Stock, $.69-4/9 par value-40,000 shares authorized; 20,476, 19,919 & 19,924, respectively, issued		14,219			13,833			13,836
Capital in excess of par value		516,369			482,250			482,844
Retained earnings		130,474			145,928			142,810
Accumulated other comprehensive loss		(14,171		)	(12,396		)	(13,019		)
Treasury stock (at cost)-69, 67 & 67 shares, respectively		(1,992		)	(1,992		)	(1,992		)
Total shareholders’ equity		670,218			652,485			649,356
Total liabilities and shareholders’ equity		$	875,557		$	838,247		$	850,401

 

(The accompanying notes are an integral part of these statements.)

 

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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS

(in thousands except per share amounts) (UNAUDITED)

 

		13 WEEKS ENDED
		Oct. 2, 2010		&	Oct. 3, 2009
Net product sales		$	191,045		$	183,408
Rental and royalty revenue		1,080			943
Total revenue		192,125			184,351
Product cost of goods sold		129,021			117,707
Rental and royalty cost		274			218
Total costs		129,295			117,925
Product gross margin		62,024			65,701
Rental and royalty gross margin		806			725
Total gross margin		62,830			66,426
Selling, marketing and administrative expenses		31,242			30,877
Earnings from operations		31,588			35,549
Other income, net		4,618			3,083
Earnings before income taxes		36,206			38,632
Provision for income taxes		8,855			11,385
Net earnings		27,351			27,247
Other comprehensive income, before tax:
Foreign currency translation adjustments		183			(112		)
Unrealized gains (losses) on securities		(2,322		)	1
Unrealized gains on derivatives		3,545			1,062
Other comprehensive income before tax		1,406			951
Income tax expense related to items of other comprehensive income		(388		)	(521		)
Other comprehensive income, net of tax		1,018			430
Comprehensive earnings		$	28,369		$	27,677
Retained earnings at beginning of period		$	107,671		$	120,018
Net earnings		27,351			27,247
Cash dividends		(4,548		)	(4,455		)
Retained earnings at end of period		$	130,474		$	142,810
Net earnings per share		$	0.48		$	0.47
Dividends per share		$	0.08		$	0.08
Average number of shares outstanding		56,909			57,461

 

(The accompanying notes are an integral part of these statements.)

 

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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF

EARNINGS, COMPREHENSIVE EARNINGS AND RETAINED EARNINGS

(in thousands except per share amounts) (UNAUDITED)

 

		39 WEEKS ENDED
		Oct. 2, 2010		&	Oct. 3, 2009
Net product sales		$	399,315		$	385,274
Rental and royalty revenue		3,206			2,780
Total revenue		402,521			388,054
Product cost of goods sold		266,504			247,233
Rental and royalty cost		823			645
Total costs		267,327			247,878
Product gross margin		132,811			138,041
Rental and royalty gross margin		2,383			2,135
Total gross margin		135,194			140,176
Selling, marketing and administrative expenses		79,112			78,738
Earnings from operations		56,082			61,438
Other income, net		5,976			4,524
Earnings before income taxes		62,058			65,962
Provision for income taxes		17,151			20,057
Net earnings		44,907			45,905
Other comprehensive income, before tax:
Foreign currency translation adjustments		(402		)	671
Unrealized gains (losses) on securities		(1,810		)	72
Unrealized gains (losses) on derivatives		(994		)	2,630
Other comprehensive income (loss), before tax		(3,206		)	3,373
Income tax benefit (expense) related to items of other comprehensive income		1,432			(1,150		)
Other comprehensive income (loss), net of tax		(1,774		)	2,223
Comprehensive earnings		$	43,133		$	48,128
Retained earnings at beginning of period		$	145,928		$	142,872
Net earnings		44,907			45,905
Cash dividends		(13,556		)	(13,338		)
Stock dividends - 3%		(46,805		)	(32,629		)
Retained earnings at end of period		$	130,474		$	142,810
Net earnings per share		$	0.79		$	0.79
Dividends per share *		$	0.24		$	0.24
Average number of shares outstanding		57,108			57,863

 

*Does not include 3% stock dividend to shareholders of record on 3/09/10 and 3/10/09.

 

(The accompanying notes are an integral part of these statements.)

 

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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands of dollars) (UNAUDITED)

 

		39 WEEKS ENDED
		Oct. 2, 2010		&	Oct. 3, 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$	44,907		$	45,905
Adjustments to reconcile net earnings to net cash used in operating activities:
Depreciation and amortization		13,802			13,627
Amortization of marketable securities		367			240
Changes in operating assets and liabilities:
Accounts receivable		(62,889		)	(63,965		)
Other receivables		1,027			252
Inventories		(18,333		)	(11,499		)
Prepaid expenses and other assets		4,356			6,826
Accounts payable and accrued liabilities		15,389			9,203
Income taxes payable and deferred		4,289			7,242
Postretirement health care and life insurance benefits		1,163			1,102
Deferred compensation and other liabilities		1,388			1,925
Other		578			261
Net cash provided by operating activities		6,044			11,119
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(9,389		)	(17,918		)
Net purchases of trading securities		(2,699		)	(1,438		)
Purchase of available for sale securities		(5,283		)	—
Sale and maturity of available for sale securities		4,503			9,542
Net cash used in investing activities		(12,868		)	(9,814		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends paid in cash		(13,583		)	(13,370		)
Shares purchased and retired		(11,721		)	(20,112		)
Net cash used in financing activities		(25,304		)	(33,482		)
Decrease in cash and cash equivalents		(32,128		)	(32,177		)
Cash and cash equivalents-beginning of year		90,990			68,908
Cash and cash equivalents end of quarter		$	58,862		$	36,731
Supplemental cash flow information:
Income taxes paid, net		$	12,581		$	6,877
Interest paid		$	129		$	176
Stock dividend issued		$	46,682		$	32,538

 

(The accompanying notes are an integral part of these statements.)

 

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TOOTSIE ROLL INDUSTRIES, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

OCTOBER 2, 2010

(in thousands except per share amounts) (UNAUDITED)

 

Note 1 – Significant Accounting Policies

 

General Information

 

Foregoing data has been prepared from the unaudited financial records of Tootsie Roll Industries, Inc. and Subsidiaries (the Company) and in the opinion of management all adjustments necessary for a fair statement of the results for the interim period have been reflected.  All adjustments were of a normal and recurring nature.  Certain reclassifications have been made to the prior year financial statements to conform to the current year presentation. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the related notes included in the Company’s 2009 Annual Report on Form 10-K.

 

Results of operations for the period ended October 2, 2010 are not necessarily indicative of results to be expected for the year to end December 31, 2010 because of the seasonal nature of the Company’s operations.  Historically, the third quarter has been the Company’s largest sales quarter due to Halloween sales.

 

New Accounting Pronouncements

 

In January 2010, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2010-06, “Improving Disclosures about Fair Value Measurements”.  ASU 2010-06 requires additional disclosures about fair value measurements including transfers in and out of Levels 1 and 2 and a higher level of disaggregation for the different types of financial instruments.  For the reconciliation of Level 3 fair value measurements, information about purchases, sales, issuances and settlements are presented separately.  This standard is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of revised Level 3 disclosure requirements which are effective for interim and annual reporting periods beginning after December 15, 2010.  The Company adopted the provisions of the standard on January 1, 2010, which did not have a material impact on its Consolidated Financial Statements.

 

In June 2009, the FASB issued Accounting Standards Codification (ASC) 810, “Consolidation”, regarding the consolidation of variable interest entities (formerly SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)”). ASC 810 is intended to improve financial reporting by providing additional guidance to companies involved with variable interest entities and by requiring additional disclosures about a company’s involvement in variable interest entities.  This standard is effective for interim and annual periods beginning after November 15, 2009.  The Company adopted the provisions of the standard on January 1, 2010, which had no impact on its Consolidated Financial Statements.

 

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Note 2 – Average Shares Outstanding

 

Average shares outstanding for the nine months ended October 2, 2010 reflect stock purchases of 454 shares for $11,721 and a 3% stock dividend distributed on April 8, 2010. Average shares outstanding for the nine months ended October 3, 2009 reflect stock purchases of 912 shares for $20,112 and a 3% stock dividend distributed on April 9, 2009.

 

Note 3 – Income Taxes

 

The consolidated effective tax rates were 24.5% and 29.5% in third quarter 2010 and 2009, respectively, and 27.6% and 30.4% in nine months 2010 and 2009, respectively. The decreases in the effective tax rates in third quarter and nine months 2010 principally relate to the release of federal and state income tax reserves and the effects of statutory expirations.

 

The Company is subject to taxation in the U.S. and various state and foreign jurisdictions.  The Company remains subject to examination by U.S. federal and state and foreign tax authorities for the years 2007 through 2010.  With few exceptions, the Company is no longer subject to examinations by tax authorities for year 2006 and prior.

 

Note 4 – Fair Value Measurements

 

Current accounting guidance defines fair value as the price that would be received in the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Guidance requires disclosure of the extent to which fair value is used to measure financial assets and liabilities, the inputs utilized in calculating valuation measurements, and the effect of the measurement of significant unobservable inputs on earnings, or changes in net assets, as of the measurement date. Guidance establishes a three-level valuation hierarchy based upon the transparency of inputs utilized in the measurement and valuation of financial assets or liabilities as of the measurement date. Level 1 inputs include quoted prices for identical instruments and are the most observable.  Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves.  Level 3 inputs are not observable in the market and include management’s own judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the table below.

 

As of October 2, 2010, December 31, 2009 and October 3, 2009, the Company held certain financial assets that are required to be measured at fair value on a recurring basis. These included derivative hedging instruments related to the purchase of certain raw materials, investments in trading securities and available for sale securities, including auction rate securities (ARS).  The Company’s available for sale and trading securities principally consist of municipal bonds and mutual funds that are publicly traded.

 

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The following table presents information about the Company’s financial assets and liabilities measured at fair value as of October 2, 2010, December 31, 2009 and October 3, 2009, and indicates the fair value hierarchy of the valuation techniques utilized by the Company to determine such fair value:

 

		Estimated Fair Value October 2, 2010
		Total			Input Levels Used
		Fair Value			Level 1			Level 2			Level 3
Cash and equivalents		$	58,862		$	58,862		$	—		$	—
Auction rate security		5,960			—			—			5,960
Available-for-sale securities excluding ARS		27,203			—			27,203			—
Net derivatives contracts		2,953			2,953			—			—
Trading securities		36,158			36,158			—			—
Total assets measured at fair value		$	131,136		$	97,973		$	27,203		$	5,960

 

		Estimated Fair Value December 31, 2009
		Total			Input Levels Used
		Fair Value			Level 1			Level 2			Level 3
Cash and equivalents		$	90,990		$	90,990		$	—		$	—
Auction rate security		7,710			—			—			7,710
Available-for-sale securities excluding ARS		26,851			—			26,851			—
Net derivatives contracts		5,360			5,360			—			—
Trading securities		32,238			32,238			—			—
Total assets measured at fair value		$	163,149		$	128,588		$	26,851		$	7,710

 

		Estimated Fair Value October 3, 2009
		Total			Input Levels Used
		Fair Value			Level 1			Level 2			Level 3
Cash and equivalents		$	36,731		$	36,731		$	—		$	—
Auction rate security		8,410			—			—			8,410
Available-for-sale securities excluding ARS		23,652			—			23,652			—
Net derivatives contracts		2,978			2,978			—			—
Trading securities		30,426			30,426			—			—
Total assets measured at fair value		$	102,197		$	70,135		$	23,652		$	8,410

 

As of October 2, 2010, the Company’s long term investments include Jefferson County Alabama Sewer Revenue Refunding Warrants, an auction rate security, reported at a fair value of $5,960, after reflecting a $5,140 other than temporary impairment and a $2,450 temporary, as defined, decline in market value against its $13,550 par value.  In 2008, this ARS was determined to be other than temporarily impaired due to the duration and severity of the decline in fair value.  The Company estimated the fair value of this ARS utilizing a valuation model with Level 3 inputs.  This valuation model considered, among other items, the credit risk of the collateral underlying the ARS, the credit risk of the bond insurer, interest rates, current market trades and the amount and timing of expected future cash flows including the Company’s assumption about the market expectation of the next successful auction.  See also the Management’s Discussion and Analysis of Financial Condition and Results of Operations regarding Jefferson County ARS.

 

The Company classified this ARS as non-current and has included it in long term investments on the Condensed Consolidated Statements of Financial Position because the Company believes that the current condition of the ARS market may take more than twelve months to improve.

 

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The following table presents additional information about the Company’s financial instruments (all ARS) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at October 2, 2010 and October October 3, 2009:

 

		2010			2009
Balance at January 1		$	7,710		$	8,410
Unrealized loss in other comprehensive loss		(1,750		)	—
Balance at Oct. 2 and Oct. 3, respectively		$	5,960		$	8,410

 

Note 5 – Derivative Instruments and Hedging Activities

 

From time to time, the Company uses derivative instruments, including foreign currency forward contracts, commodity futures contracts and commodity option contracts, to manage its exposures to foreign exchange and commodity prices. Commodity futures contracts and most commodity option contracts are intended and effective as hedges of market price risks associated with the anticipated purchase of certain raw materials (primarily sugar).  Foreign currency forward contracts are intended and effective as hedges of the Company’s exposure to the variability of cash flows, primarily related to the foreign exchange rate changes of products manufactured in Canada and sold in the United States, and periodic equipment purchases from foreign suppliers denominated in a foreign currency.  The Company does not engage in trading or other speculative use of derivative instruments.

 

The Company recognizes all derivative instruments as either assets or liabilities at fair value in the Condensed Consolidated Statement of Financial Position.  The Company uses either hedge accounting or mark-to-market accounting for its derivative instruments.  Derivatives that qualify for hedge accounting are designated as cash flow hedges by formally documenting the hedge relationships, including identification of the hedging instruments, the hedged items and other critical terms, as well as the Company’s risk management objectives and strategies for undertaking the hedge transaction.

 

Changes in the fair value of the Company’s cash flow hedges are recorded in accumulated other comprehensive loss, net of tax, and are reclassified to earnings in the periods in which earnings are affected by the hedged item. Substantially all amounts reported in accumulated other comprehensive loss for commodity derivatives are expected to be reclassified to cost of goods sold.  Substantially all amounts reported in accumulated other comprehensive loss for foreign currency derivatives are expected to be reclassified to other income (expense), net.

 

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The following table summarizes the Company’s outstanding derivative contracts and their effects on its Condensed Consolidated Statements of Financial Position at October 2, 2010, October 3, 2009 and December 31, 2009:

 

		October 2, 2010
		Notional
		Amounts			Assets			Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts		$	3,572		$	820		$	—
Commodity futures contracts		4,941			647			—
Commodity option contracts		10,344			1,849			(350		)
Total derivatives designated as hedges					3,316			(350		)
Derivatives not designated as hedging instruments:
Commodity option contracts		462			—			(13		)
Total derivatives not designated as hedges					—			(13		)
Total derivatives					$	3,316		$	(363	)

 

		December 31, 2009
		Notional
		Amounts			Assets			Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts		$	17,772		$	3,674		$	—
Commodity futures contracts					—			—
Commodity option contracts					—			—
Total derivatives designated as hedges					3,674			—
Derivatives not designated as hedging instruments:
Commodity option contracts		12,708			1,896			(210		)
Total derivatives not designated as hedges					1,896			(210		)
Total derivatives					$	5,570		$	(210	)

 

		October 3, 2009
		Notional
		Amounts			Assets			Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward contracts		$	17,772		$	2,978		$	—
Commodity futures contracts					—			—
Commodity option contracts					—			—
Total derivatives designated as hedges					2,978			—
Derivatives not designated as hedging instruments:
Commodity option contracts		—			—			—
Total derivatives not designated as hedges					—			—
Total derivatives					$	2,978		$	—

 

Derivative assets are recorded in other receivables and derivative liabilities are recorded in accrued liabilities.

 

The effects of derivative instruments on the Company’s Condensed Consolidated Statement of Earnings, Comprehensive Earnings and Retained Earnings for 13 and 39 weeks ended October 2, 2010 and October 3, 2009 are as follows:

 

		For 13 Weeks Ended October 2, 2010
								Gain (Loss)
					Gain (Loss)			on Amount Excluded
		Gain(Loss)			Reclassified from			from Effectiveness
		Recognized			Accumulated OCI			Testing Recognized
		in OCI			into Earnings			in Earnings
Foreign currency forward contracts		$	323		$	875		$	—
Commodity futures contracts		1,532			62			—
Commodity option contracts		2,596			(30		)	—
Total		$	4,451		$	907		$	—

 

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		For 13 Weeks Ended October 3, 2009
								Gain (Loss)
					Gain (Loss)			on Amount Excluded
		Gain (Loss)			Reclassified from			from Effectiveness
		Recognized			Accumulated OCI			Testing Recognized
		in OCI			into Earnings			in Earnings
Foreign currency forward contracts		$	1,574		$	511		$	—
Commodity futures contracts		—			—			—
Commodity option contracts		—			—			—
Total		$	1,574		$	511		$	—

 

		For 39 Weeks Ended October 2, 2010
								Gain (Loss)
					Gain (Loss)			on Amount Excluded
		Gain(Loss)			Reclassified from			from Effectiveness
		Recognized			Accumulated OCI			Testing Recognized
		in OCI			into Earnings			in Earnings
Foreign currency forward contracts		$	344		$	3,200		$	—
Commodity futures contracts		248			(399		)	—
Commodity option contracts		856			(357		)	—
Total		$	1,448		$	2,444		$	—

 

		For 39 Weeks Ended October 3, 2009
								Gain (Loss)
					Gain (Loss)			on Amount Excluded
		Gain (Loss)			Reclassified from			from Effectiveness
		Recognized			Accumulated OCI			Testing Recognized
		in OCI			into Earnings			in Earnings
Foreign currency forward contracts		$	3,658		$	989		$	—
Commodity futures contracts		(12		)	26			—
Commodity option contracts		—			—			—
Total		$	3,646		$	1,015		$	—

 

During the 13 and 39 weeks ended October 3, 2010, the Company recognized gains of $172 and losses of $1,616 in earnings, respectively, related to mark-to-market accounting for certain commodity option contracts.

 

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