Derivatives

3 Months Ended

Mar. 29, 2015

Derivatives

Note 4 – Derivatives

We use derivative instruments to manage exposures to changes in foreign currency exchange rates. The fair value of these hedges is recorded on the balance sheet. Please refer to Note 2 Fair Value Measurements for further information about the fair value of derivatives.

Foreign Currency Derivatives. We use currency forwards to hedge a portion of our forecasted foreign exchange denominated revenues and expenses. We monitor our foreign currency exposures in an effort to maximize the overall effectiveness of our foreign currency hedge positions. Our objective for holding derivatives is to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures. The maturities of the cash flow hedges are 12 months or less as of March 29, 2015.

Changes in the fair value of derivative instruments related to time value are included in the assessment of hedge effectiveness. Hedge ineffectiveness did not have a material impact on earnings for the three months ended March 29, 2015. No cash flow hedges were derecognized or discontinued in the three months ended March 29, 2015.

Derivative gains and losses included in accumulated other comprehensive income (AOCI) are reclassified into earnings at the time the forecasted transaction is recognized. We estimate that $0.3 million of net unrealized derivative losses included in AOCI will be reclassified into earnings within the next twelve months.

The following tables present derivatives designated as hedging instruments:

	As of March 29, 2015									As of December 28, 2014
	Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI			Balance Sheet Classification	Notional Amount		Fair Value			Amount of Gain (Loss) Recognized In AOCI
	(In millions)									(In millions)
Derivatives in Cash Flow Hedges
Derivatives for forecasted revenues	Current assets	$	54.4	$	3.6		$	3.6		Current assets	$	43.3	$	2.7		$	2.7
Derivatives for forecasted revenues	Current liabilities		—		—			—		Current liabilities		—		—			—
Derivatives for forecasted expenses	Current assets		50.5		0.1			0.1		Current assets		13.7		—			—
Derivatives for forecasted expenses	Current liabilities		131.9		(4.0	)		(4.0	)	Current liabilities		205.2		(5.5	)		(5.5	)
Total foreign exchange contract derivatives, net		$	236.8	$	(0.3	)	$	(0.3	)		$	262.2	$	(2.8	)	$	(2.8	)

	For the Three Months Ended March 29, 2015							For the Three Months Ended March 30, 2014
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income		Amount of Gain (Loss) Reclassified from AOCI
	(In millions)							(In millions)
Derivatives in Cash Flow Hedges
Foreign exchange contract	Revenue	$	2.2		$	2.2		Revenue	$	0.1	$	0.1
Foreign exchange contract	Expenses		(2.1	)		(2.1	)	Expenses		2.0		2.0
Total foreign exchange contracts		$	0.1		$	0.1			$	2.1	$	2.1

	Gain (Loss) Recognized in OCI for Derivative Instruments (1)
	For the Three Months Ended March 29, 2015
	(In millions)
Foreign exchange contracts	$	(0.3	)

(1) This amount is inclusive of both realized and unrealized gains and losses recognized in OCI.

The following tables present derivatives not designated as hedging instruments.

	As of March 29, 2015						As of December 28, 2014
	Balance Sheet Classification	Notional Amount		Fair Value			Balance Sheet Classification	Notional Amount		Fair Value
	(In millions)						(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts	Current assets	$	5.7	$	—		Current assets	$	8.5	$	0.1
Foreign exchange contracts	Current liabilities		23.0		(0.1	)	Current liabilities		20.1		—
Total foreign exchange contracts, net		$	28.7	$	(0.1	)		$	28.6	$	0.1

	For the Three Months Ended March 29, 2015				For the Three Months Ended March 30, 2014
	Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income			Income Statement Classification of Gain (Loss)	Amount of Gain (Loss) Recognized In Income
		(In millions)				(In millions)
Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts	Revenue	$	0.1		Revenue	$	—
Foreign exchange contracts	Expenses		(0.4	)	Expenses		—
Net gain (loss) recognized in income		$	(0.3	)		$	—

We net the fair value of all derivative financial instruments with counter-parties for which a master netting arrangement is utilized.

The gross amounts of the derivative assets and liabilities are as follows:

	As of
	March 29, 2015			December 28, 2014
	(In millions)
Gross Assets	$	3.8		$	2.8
Gross Liabilities		(0.1	)		—
Current Assets	$	3.7		$	2.8
Gross Assets	$	—		$	0.1
Gross Liabilities		(4.1	)		(5.6	)
Current Liabilities	$	(4.1	)	$	(5.5	)