Note 5—Derivatives

We used derivative instruments in 2015 and 2014 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 3 Fair Value Measurements for further information about the fair value of derivatives. Currencies hedged include the Euro, Japanese yen, Philippine peso, Malaysian ringgit, Korean won, Taiwanese dollar and Chinese yuan. Our objectives for holding derivatives are to minimize the risks using the most effective methods to eliminate or reduce the impacts of these exposures.

Foreign Currency Forward Contracts—Hedging Instruments

In 2015 and 2014, we used foreign currency forward contracts 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 hedges are 12 months or less as of the end of December 27, 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 years ended December 27, 2015, December 28, 2014, and December 29, 2013.

Derivative gains and losses included in AOCI are reclassified into earnings at the time the forecasted transaction is recognized. For derivative transactions related to inventory, the effective portion of foreign exchange gains and losses deferred in AOCI is reclassified into earnings as the underlying inventory is sold, using historical inventory turnover rates. We estimate that $3.6 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 December 27, 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 Designated as Hedging Instruments
Foreign exchange contracts
Derivatives for forecasted revenues	Other current assets	$	30.8	$	0.7		$	0.7		Other current assets	$	43.3	$	2.7		$	2.7
Derivatives for forecasted revenues	Other current liabilities		7.6		(0.1	)		(0.1	)	Other current liabilities		—		—			—
Derivatives for forecasted expenses	Other current assets		29.1		0.3			0.3		Other current assets		13.7		—			—
Derivatives for forecasted expenses	Other current liabilities		121.0		(4.3	)		(4.3	)	Other current liabilities		205.2		(5.5	)		(5.5	)

Total foreign exchange contract derivatives		$	188.5	$	(3.4	)	$	(3.4	)		$	262.2	$	(2.8	)	$	(2.8	)


	For the Twelve Months Ended December 27, 2015						For the Twelve Months Ended December 28, 2014
	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Reclassified from AOCI			Amount of Gain (Loss) Recognized In Income		Amount of Gain (Loss) Reclassified from AOCI
	(In millions)
Derivatives Designated as Hedging Instruments
Total revenue	$	5.8		$	5.8		$	0.9	$	0.9
Expenses		(9.4	)		(9.4	)		5.5		5.5

Net gain (loss) recognized in income	$	(3.6	)	$	(3.6	)	$	6.4	$	6.4


	Gain (Loss) Recognized in OCI for Derivative Instruments (1)
	Year Ended
	December 27, 2015			December 28, 2014			December 29, 2013
				(In millions)
Foreign exchange contracts	$	(0.9	)	$	(7.1	)	$	(2.7	)

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

Foreign Currency Forward Contracts—Other Derivatives

We also enter into other foreign currency forward contracts, usually with one month durations, to mitigate the foreign currency risk related to certain balance sheet positions. We have not elected hedge accounting for these transactions.

The following tables present derivatives not designated as hedging instruments:


	As of December 27, 2015				As of December 28, 2014
	Notional Amount		Fair Value		Notional Amount		Fair Value
	(In millions)
Derivatives Not Designated as Hedging Instruments
Other current assets	$	14.7	$	—	$	8.5	$	0.1
Other current liabilities		5.4		—		20.1		—

Total derivatives, net	$	20.1	$	—	$	28.6	$	0.1


	For the Twelve Months Ended December 27, 2015			For the Twelve Months Ended December 28, 2014
	Amount of Gain (Loss) Recognized In Income			Amount of Gain (Loss) Recognized In Income
	(In millions)
Derivatives Not Designated as Hedging Instruments
Total revenue	$	0.1		$	—
Expenses		(2.0	)		0.1

Net gain (loss) recognized in income	$	(1.9	)	$	0.1

We net the fair value of all derivative instruments with counter-parties for which a master netting arrangement is utilized. Please refer to Note 2 Summary of Significant Accounting Policies for a description of our derivative instruments under master netting agreements.

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


	As of December 27, 2015			As of December 28, 2014
	(In millions)
Gross Assets	$	1.0		$	2.8
Gross Liabilities		—			—

Current Assets	$	1.0		$	2.8

Gross Assets	$	—		$	0.1
Gross Liabilities		(4.4	)		(5.6	)

Current Liabilities	$	(4.4	)	$	(5.5	)