Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from the line of Jeff Klinefelter with Piper Jaffray.
Jeff Klinefelter - Piper Jaffray
Thank you. Congratulations, everyone on another great quarter. Also thank you for the detail today. That was very helpful with respect to the guidance that you could provide. Carlos or Dennis, I wanted to start off with just one question on hedging and clarify something -- so just to be clear, the year-to-date translation of revenue and operating expenses back from Europe and Asia resulted in a $0.09 gain. You expect that full $0.09 to reverse in Q4, is that correct?
Carlos Alberini
That’s correct.
Jeff Klinefelter - Piper Jaffray
Okay, so on a run-rate basis, assuming the dollar stays at the current value, we should -- how should we look at that as we head into next year, a similar sort of rate year over year, so that $0.09 drag would continue through the first few quarters of next year?
Dennis Secor
Well I mean, if you look at where we are right now, the Euro and the Canadian dollar, if they stay flat to where they are now, for the first three quarters of the year we are going to be anniversarying a much stronger Euro and a much stronger Canadian dollar, so that’s not going to turn until the fourth quarter.
Jeff Klinefelter - Piper Jaffray
No, I understand that -- so does that mean -- how can we sort of think about quantifying at current exchange rates the drag, the non-operating drag of that translation through the first three quarters, that same $0.09 level?
Dennis Secor
Well, I think the way I would look at it is if you do the math on how the currencies behave this year, on average for this year, the Euro was probably in the low 1.40 kind of range and in Canada, probably in the $1.10 kind of range. So to the extent that the dollar would hold flat for next year, then that gap would represent the change in the earnings plus or minus any growth or decline that you would want to model in.
Jeff Klinefelter - Piper Jaffray
Okay. In terms of the balance of your FX impact, just to be clear the hedging that you do on your gross margins resulted -- as a result of that hedging and then your balance sheet adjustments, there was only a $0.01 gain through the first nine months of this year?
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