Derivative Financial Instruments

6 Months Ended

Jun. 28, 2015

Foreign Currency Derivatives [Abstract]

Derivative Financial Instruments

DERIVATIVE FINANCIAL INSTRUMENTS

The following tables present information about the Company's hedge instruments measured at fair value on a recurring basis as of June 28, 2015 and December 28, 2014, all of which utilize Level 2 inputs under the fair value hierarchy:

(In thousands)	Balance Sheet Classification	June 28, 2015		December 28, 2014
Assets
Derivatives designated as hedging instruments:
Foreign currency option contracts	Prepaid expenses and other current assets	$	—	$	2,240
Foreign currency forward exchange contracts	Prepaid expenses and other current assets	103		4
		$	103	$	2,244
Derivatives not designated as hedging instruments:
Foreign currency forward exchange contracts	Prepaid expenses and other current assets	1,804		4,774
Interest rate contracts	Other long-term assets	$	848	$	—
		$	2,652	$	4,774
Liabilities
Derivatives designated as hedging instruments:
Foreign currency forward exchange contracts	Accrued liabilities	925		—
Interest rate contracts	Other long-term liabilities	470		3,712
		$	1,395	$	3,712
Derivatives not designated as hedging instruments:
Foreign currency forward exchange contracts	Accrued liabilities	3,518		1,345
Interest rate contracts	Other long-term liabilities	—		—
		$	3,518	$	1,345

	June 28, 2015
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Rights to Offset
(In thousands)	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral		Net Amounts
Derivative assets	$	2,755	$	—	$	2,755	$	2,377	$	—	$	378
Derivative liabilities	$	4,913	$	—	$	4,913	$	2,377	$	—	$	2,536

	December 28, 2014
							Gross Amounts Not Offset in the Consolidated Balance Sheets, but Have Rights to Offset
(In thousands)	Gross Amounts Recognized		Gross Amounts Offset		Net Amounts Presented		Financial Instruments		Cash Collateral		Net Amounts
Derivative assets	$	7,018	$	—	$	7,018	$	1,345	$	—	$	5,673
Derivative liabilities	$	5,057	$	—	$	5,057	$	1,345	$	—	$	3,712

The following table summarizes the pre-tax amount of unrealized gain or loss recognized in "Accumulated other comprehensive income" ("OCI") in "Stockholders' equity" in the Consolidated Balance Sheets:

	Three Months Ended						Six Months Ended
(In thousands)	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Derivatives designated as cash flow hedges:
Loss in OCI at the beginning of the period	$	(5,631	)	$	(420	)	$	(1,443	)	$	(805	)
Unrealized gain (loss) recognized in OCI	7,343			(135		)	4,635			(138		)
Less: Loss (gain) reclassified from OCI to earnings	(2,347		)	107			(3,827		)	495
Net gain (loss) on derivatives	$	4,996		$	(28	)	$	808		$	357
Loss in OCI at the end of the period	$	(635	)	$	(448	)	$	(635	)	$	(448	)

The following table summarizes the amount of gain or loss recognized in "Other, net" in the Consolidated Statements of Operations in the three and six months ended June 28, 2015, and June 29, 2014:

	Three Months Ended						Six Months Ended
(In thousands)	June 28, 2015			June 29, 2014			June 28, 2015			June 29, 2014
Derivatives designated as cash flow hedges:
Gain (loss) recognized in "Other, net" on derivatives (ineffective portion and amount excluded from effectiveness testing)	$	(1,968	)	$	331		$	(5,223	)	$	811
Derivatives not designated as hedging instruments:
Gain (loss) recognized in "Other, net"	$	(8,417	)	$	(1,224	)	$	(902	)	$	206

Foreign Currency Exchange Risk

Designated Derivatives Hedging Cash Flow Exposure

The Company's cash flow exposure primarily relates to anticipated third-party foreign currency revenues and expenses and interest rate fluctuations. To protect financial performance, the Company enters into foreign currency forward and option contracts designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than their functional currencies.

As of June 28, 2015, the Company had designated outstanding cash flow hedge option contracts and forward contracts with an aggregate notional value of zero and $40.4 million, respectively. As of December 28, 2014, the Company had designated outstanding cash flow hedge option contracts and forward contracts with an aggregate notional value of $26.6 million and $12.2 million, respectively. The Company designates either gross external or intercompany revenue up to its net economic exposure. These derivatives have a maturity of 12 months or less and consist of foreign currency option and forward contracts. The effective portion of these cash flow hedges is reclassified into revenue when third-party revenue is recognized in the Consolidated Statements of Operations.

Non-Designated Derivatives Hedging Transaction Exposure

Derivatives not designated as hedging instruments consist of forward and option contracts used to hedge re-measurement of foreign currency denominated monetary assets and liabilities primarily for intercompany transactions, receivables from customers, and payables to third parties. Changes in exchange rates between the Company's subsidiaries' functional currencies and the currencies in which these assets and liabilities are denominated can create fluctuations in the Company's reported consolidated financial position, results of operations and cash flows. As of June 28, 2015, the Company held option contracts and forward contracts with an aggregate notional value of zero and $55.8 million, respectively, to hedge balance sheet exposure. The maturity dates of these contracts range from June 2015 to September 2015. The Company held option contracts and forward contracts with an aggregate notional value of zero and $122.5 million, respectively, as of December 28, 2014, to hedge balance sheet exposure.

Interest Rate Risk

The Company also enters into interest rate swap agreements to reduce the impact of changes in interest rates on its project specific non-recourse floating rate debt. As of June 28, 2015 and December 28, 2014, the Company had interest rate swap agreements designated as cash flow hedges with an aggregate notional value of $8.5 million and $247.0 million, respectively. These swap agreements allow the Company to effectively convert floating rate payments into fixed rate payments periodically over the life of the agreements. These derivatives have a maturity of more than 12 months. The effective portion of these cash flow hedges is reclassified into interest expense when the hedged transactions are recognized in the Consolidated Statements of Operations. The Company analyzes its interest rate swaps quarterly to determine if the hedge transaction remains effective or ineffective. The Company may discontinue hedge accounting for interest rate swaps prospectively if certain criteria are no longer met, the interest rate swap is terminated or exercised, or if the Company elects to remove the cash flow hedge designation. If hedge accounting is discontinued, and the forecasted hedged transaction is considered possible to occur, the previously recognized gain or loss on the interest rate swaps will remain in accumulated other comprehensive loss and will be reclassified into earnings during the same period the forecasted hedged transaction affects earnings or is otherwise deemed improbable to occur.

Credit Risk

The Company's option and forward contracts do not contain any credit-risk-related contingent features. The Company is exposed to credit losses in the event of nonperformance by the counterparties to these option and forward contracts. The Company enters into derivative contracts with high-quality financial institutions and limits the amount of credit exposure to any single counterparty. In addition, the Company continuously evaluates the credit standing of its counterparties.