Financial Instruments

9 Months Ended

Sep. 28, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Financial Instruments

Financial Instruments

The Company is directly and indirectly affected by changes in certain market conditions. These changes in market conditions may adversely impact the Company's financial performance and are referred to as "market risks." The Company, when deemed appropriate, uses derivatives as a risk management tool to mitigate the potential impact of certain market risks. The primary market risk managed by the Company through the use of derivative instruments is foreign currency exchange rate risk. The Company does not enter into derivative contracts for trading purposes.

The Company has entered into forward contracts to buy or sell a quantity of a currency at a predetermined future date, and at a predetermined rate or price to mitigate uncertainty and volatility, and to cover underlying exposures to certain payments in currencies other than the functional currency. The Company has not designated these contracts for hedge accounting treatment and, therefore, the gains and losses on these contracts are recorded in other income (loss). In the first nine months of 2012, the Company recognized a loss of $(0.1) million in other income (loss), net related to these forward contracts.

Derivatives are carried at fair value in the condensed consolidated balance sheet in the line item other current assets. As of September 28, 2012, the fair value of outstanding derivative financial instruments was not significant. As of December 30, 2011, derivatives totaled $0.6 million. The Company determined that the fair value of the foreign exchange contracts were level 1 measurements in the fair value hierarchy. To measure the fair value of the foreign exchange contracts the Company obtained quotations from financial institutions.