Quarterly report pursuant to Section 13 or 15(d)

Hedging Transactions and Derivative Financial Instruments (Notes)

v2.4.0.8
Hedging Transactions and Derivative Financial Instruments (Notes)
 9 Months Ended
Sep. 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 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 condensed consolidated statement of operations:
 
 
Quarter Ended
 
Nine Months Ended
 
 
September 28,
2013
 
September 29,
2012
 
September 28,
2013
 
September 29,
2012
 
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
 
 
 
 
 
Contracts designated as cash flow hedging instruments
 
 
 
 
 
 
 
 
Other comprehensive income (loss)
 
$
3

 
$
3

 
$
(1
)
 
$
4

Research and development
 
(1
)
 
—

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

 
$
2

 
$
(1
)
 
$
2


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 condensed consolidated balance sheet as follows:
 
 
September 28,
2013
 
December 29,
2012
 
 
(In millions)
Foreign Currency Forward Contracts
 
 
 
 
Contracts designated as cash flow hedging instruments
 
$
(1
)
 
$
—

Contracts not designated as hedging instruments
 
$
—

 
$
—


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 September 28, 2013 and December 29, 2012, the notional values of the Company’s outstanding foreign currency forward contracts were $128 million and $142 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 September 28, 2013, the Company’s outstanding contracts were in a $1 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 September 28, 2013, the Company was not required to post any collateral.