Annual report pursuant to Section 13 and 15(d)

Hedging Transactions and Derivative Financial Instruments

v2.4.0.8
Hedging Transactions and Derivative Financial Instruments
 12 Months Ended
Dec. 28, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Hedging Transactions and Derivative Financial Instruments
Hedging Transactions and Derivative Financial Instruments
The following table shows the amount of gain (loss) included in accumulated other comprehensive loss, the amount of gain (loss) reclassified from accumulated other comprehensive 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:
 
2013
 
2012
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
Contracts designated as cash flow hedging instruments
 
 
 
Other comprehensive income (loss)
$
(3
)
 
$
2

Research and development
(2
)
 
—

Marketing, general and administrative
(1
)
 
—

Contracts not designated as hedging instruments
 
 
 
Other income (expense), net
$
(2
)
 
$
1


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 and other current liabilities should these contracts be in a loss position. These amounts were recorded in the consolidated balance sheets as follows:
 
December 28,
2013
 
December 29,
2012
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
Contracts designated as cash flow hedging instruments
$
(3
)
 
$
—

Contracts not designated as hedging instruments
$
(1
)
 
$
—


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 28, 2013 and December 29, 2012, the notional value of the Company’s outstanding foreign currency forward contracts was $124 million and $142 million, respectively. All the contracts mature within 12 months, and upon maturity, the amounts recorded in accumulated other comprehensive 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 28, 2013, the Company’s outstanding contracts were in a net loss position of $4 million. The Company is required to post collateral should the derivative contracts be in a net loss position exceeding certain thresholds. As of December 28, 2013, the Company was not required to post any collateral.