Annual report pursuant to Section 13 and 15(d)

Hedging Transactions And Derivative Financial Instruments

v2.4.0.6
Hedging Transactions And Derivative Financial Instruments
 12 Months Ended
Dec. 31, 2011
Hedging Transactions And Derivative Financial Instruments [Abstract]  
Hedging Transactions And Derivative Financial Instruments

NOTE 19: Hedging Transactions and Derivative Financial Instruments

The following table shows the amount of gain (loss) included in accumulated other comprehensive income (loss), the amount of gain (loss) reclassified from accumulated other comprehensive income (loss) and included in earnings related to the foreign currency forward contracts designated as cash flow hedges and the amount of gain (loss) included in other income (expense), net related to contracts not designated as hedging instruments, which was allocated in the consolidated statement of operations as follows:

 

      2011     2010  
     (In millions)  

Foreign Currency Forward Contracts

     

Contracts designated as cash flow hedging instruments

     

Other comprehensive loss

    $ (8 )    $ —     

Research and development

      2        3   

Marketing, general and administrative

      1        2   

Contracts not designated as hedging instruments

     

Other expense, net

    $ 5      $ (13 ) 

The following table shows the fair value amounts included in prepaid expenses and other current assets should the foreign currency forward contracts be in a gain position or included in accrued liabilities should these contracts be in a loss position. These amounts were recorded in the consolidated balance sheet as follows:

 

     

December 31,

2011

    

December 25,

2010

  
     (In millions)  

Foreign Currency Forward Contracts

     

Contracts designated as cash flow hedging instruments

    $ (2 )    $ 1   

Contracts not designated as hedging instruments

    $ —        $ (4 ) 

For the foreign currency contracts designated as cash flow hedges, the ineffective portions of the hedging relationship and the amounts excluded from the assessment of hedge effectiveness were immaterial.

As of December 31, 2011 and December 25, 2010, the notional value of the Company's outstanding foreign currency forward contracts was $141 million and $302 million, respectively. All the contracts mature within 12 months, and upon maturity the amounts recorded in accumulated other comprehensive income (loss) are expected to be reclassified into earnings. The Company hedges its exposure to the variability in future cash flows for forecasted transactions over a maximum of 12 months. As of December 31, 2011, the Company's outstanding contracts were in a $2 million net loss position. The Company is required to post collateral should the derivative contracts be in a net loss position exceeding certain thresholds. As of December 31, 2011, the Company was not required to post any collateral.