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This excerpt taken from the HBI 10-Q filed May 11, 2009. Disclosures
About Derivative Instruments and Hedging
Activities
In March 2008, the FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging
Activities — an amendment of FASB Statement
No. 133 (“SFAS 161”). SFAS 161 expands
the disclosure requirements of FASB Statement No. 133 about
an entity’s derivative instruments and hedging activities.
The Company adopted SFAS 161 in the first quarter ended
April 4, 2009. The adoption of SFAS 161 did not have a
material impact on the Company’s financial condition,
results of operations or cash flows but resulted in certain
additional disclosures reflected in Note 8.
This excerpt taken from the HBI 10-Q filed Oct 31, 2008. Disclosures
About Derivative Instruments and Hedging
Activities
In March 2008, the FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging
Activities — an amendment of FASB Statement
No. 133 (“SFAS 161”). SFAS 161 expands
the disclosure requirements of FASB Statement No. 133 about
an entity’s derivative instruments and hedging activities
to include more detailed qualitative disclosures and expanded
quantitative disclosures. The provisions of SFAS 161 are
effective for fiscal years and interim periods beginning after
November 15, 2008. The adoption of SFAS 161 will not
have a material impact on our results of operations.
We are required under our senior secured credit facility and our
second lien credit facility to hedge a portion of our floating
rate debt to reduce interest rate risk caused by floating rate
debt issuance. At September 27, 2008, we have outstanding
hedging arrangements whereby we capped the interest rate on
$700 million of our floating rate debt at 5.75%. We also
entered into interest rate swaps tied to the
3-month and
6-month
LIBOR rates whereby we fixed the interest rate on an aggregate
of $600 million of our floating rate debt. Approximately
56% of our total debt outstanding at September 27, 2008 is
at a fixed or capped rate. Due to the recent significant changes
in the credit markets, the fair values of our interest rate
hedging instruments have decreased approximately
$6.7 million and $7.2 million during the third quarter
and nine months ended September 27, 2008, respectively.
This activity has been deferred into Accumulated Other
Comprehensive Loss in our Condensed Consolidated Balance Sheet
until the hedged transactions impact our earnings.
Subsequent to September 27, 2008, we entered into interest
rate swap agreements with a notional amount totaling
$400 million, as a result of which we have fixed LIBOR on a
portion of our outstanding debt at 2.80% for a
2-year term.
These agreements will become effective during the fourth quarter
of 2008 and, when combined with expirations of other portions of
our interest rate derivative portfolio, will result in
approximately 86% of our floating rate debt bearing interest at
a fixed or capped rate. Once these interest rate hedging
arrangements become effective in the fourth quarter of 2008, the
LIBOR interest rate component on $600 million of our
floating rate debt will be capped at 3.50% and the LIBOR
interest rate component on $1.4 billion of our floating
rate debt will be fixed at a weighted average rate of 4.17%.
Cotton is the primary raw material we use to manufacture many of
our products. While we attempt to protect our business from the
volatility of the market price of cotton through short-term
supply agreements and hedges, our business can be adversely
affected by dramatic movements in cotton prices. The price of
cotton currently in our inventory has risen to the mid 70 cents
per pound range which is the price that will impact our
operating results in the fourth quarter of 2008 and first
quarter of 2009. The prices for the most recent cotton crop,
which will impact our operating results in mid 2009, have
decreased to the 50 cents per pound range. The ultimate effect
of these pricing levels on our earnings cannot be quantified, as
the effect of movements in cotton prices on industry selling
prices are uncertain, but any dramatic increase in the price of
cotton could have a material adverse effect on our business,
results of operations, financial condition and cash flows.
Table of Contents
There have been no other significant changes in our market risk
exposures from those described in Item 7A of our Annual
Report on
Form 10-K
for the year ended December 29, 2007.
As required by Exchange Act
Rule 13a-15(b),
our management, including the Chief Executive Officer and Chief
Financial Officer, conducted an evaluation of the effectiveness
of our disclosure controls and procedures, as defined in
Exchange Act
Rule 13a-15(e),
as of the end of the period covered by this report. Based on
that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures
were effective.
In connection with the evaluation required by Exchange Act
Rule 13a-15(d),
our management, including the Chief Executive Officer and Chief
Financial Officer, concluded that no changes in our internal
control over financial reporting occurred during the period
covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control
over financial reporting.
Not applicable.
This excerpt taken from the HBI 10-Q filed Aug 1, 2008. Disclosures
About Derivative Instruments and Hedging
Activities
In March 2008, the FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging
Activities — an amendment of FASB Statement
No. 133 (“SFAS 161”). SFAS 161 expands
the disclosure requirements of FASB Statement No. 133 about
an entity’s derivative instruments and hedging activities
to include more detailed qualitative disclosures and expanded
quantitative disclosures. The provisions of SFAS 161 are
effective for fiscal years, and interim periods within those
fiscal years, beginning after November 15, 2008. We are
currently evaluating the impact that SFAS 161 will have on
our results of operations and financial position.
This excerpt taken from the HBI 10-Q filed May 7, 2008. Disclosures
About Derivative Instruments and Hedging
Activities
In March 2008, the FASB issued SFAS No. 161,
Disclosures About Derivative Instruments and Hedging
Activities — an amendment of FASB Statement
No. 133 (“SFAS 161”). SFAS 161 expands
the disclosure requirements of FASB Statement No. 133 about
an entity’s derivative instruments and hedging activities
to include more detailed qualitative disclosures and expanded
quantitative disclosures. The provisions of SFAS 161 are
effective for fiscal years beginning after November 15,
2008. We are currently evaluating the impact that SFAS 161
will have on our results of operations and financial position.
We are required under the Senior Secured Credit Facility and the
Second Lien Credit Facility to hedge a portion of our floating
rate debt to reduce interest rate risk caused by floating rate
debt issuance. At March 29, 2008, we have outstanding
hedging arrangements whereby we capped the interest rate on
$950 million of our floating rate debt at 5.75%. We also
entered into interest rate swaps tied to the
3-month and
6-month
LIBOR rates whereby we fixed the interest rate on an aggregate
of $600 million of our floating rate debt. Approximately
67% of our total debt outstanding at March 29, 2008 is at a
fixed or capped rate. Due to the recent significant changes in
the credit markets, the fair values of our interest rate hedging
instruments have decreased approximately $14.8 million during
the first quarter ended March 29, 2008, which has been
deferred into Accumulated Other Comprehensive Loss in our
Condensed Consolidated Balance Sheet until the hedged
transactions impact our earnings.
Table of Contents
Cotton is the primary raw material we use to manufacture many of
our products. While we attempt to protect our business from the
volatility of the market price of cotton through short-term
supply agreements and hedges, our business can be adversely
affected by dramatic movements in cotton prices. The price of
cotton has recently exceeded its historical trading range of 30
to 70 cents per pound. The price of cotton currently in our
inventory has risen to the 70 cents per pound range which is the
price that will impact our operating results in the third and
fourth quarters of 2008. Additionally, the prices for the cotton
crop grown this coming summer season, which will impact our
operating results in 2009, have risen to the upper 70 cents per
pound range. The ultimate effect of these pricing levels on our
earnings cannot be quantified, as the effect of movements in
cotton prices on industry selling prices are uncertain, but any
dramatic increase in the price of cotton could have a material
adverse effect on our business, results of operations, financial
condition and cash flows.
There have been no other significant changes in our market risk
exposures from those described in Item 7A of our Annual
Report on
Form 10-K
for the year ended December 29, 2007.
As required by Exchange Act
Rule 13a-15(b),
our management, including the Chief Executive Officer and Chief
Financial Officer, conducted an evaluation of the effectiveness
of our disclosure controls and procedures, as defined in
Exchange Act
Rule 13a-15(e),
as of the end of the period covered by this report. Based on
that evaluation, the Chief Executive Officer and Chief Financial
Officer concluded that our disclosure controls and procedures
were effective.
In connection with the evaluation required by Exchange Act
Rule 13a-15(d),
our management, including the Chief Executive Officer and Chief
Financial Officer, concluded that no changes in our internal
control over financial reporting occurred during the period
covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control
over financial reporting.
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