Note 16 – Other Comprehensive Income

Stockholders’ equity includes certain items classified as accumulated other comprehensive income (AOCI), including:

•

Unrealized gains (losses) on anticipated sales hedging transactions relate to derivative instruments used to hedge the currency exchange rates for forecasted euro sales and interest rates on variable rate commitments. These hedges are designated as cash flow hedges, and we have deferred income statement recognition of gains and losses until the hedged transaction occurs. See Note 9 for more details.

•

Unrealized gains (losses) on forward interest rate swap hedging transactions refers to the hedging of the interest rate risk associated with the variable rate commitment entered into for the acquisition of the Enterprise business of Motorola Solutions, Inc. See Note 9 for more details.

•

Unrealized gains (losses) on investments are deferred from income statement recognition until the gains or losses are realized.

•

Foreign currency translation adjustment relates to our non-U.S. subsidiary companies that have designated a functional currency other than the U.S. dollar. We are required to translate the subsidiary functional currency financial statements to dollars using a combination of historical, period-end, and average foreign exchange rates. This combination of rates creates the foreign currency translation adjustment component of other comprehensive income.

The components of other comprehensive loss for the three months ended September 27, 2014 are as follows (in thousands):


	As of June 28, 2014			Gain (Loss) recognized in OCI			Gain (Loss) reclassified from AOCI to income			Three Months ended September 27, 2014			As of September 27, 2014
Unrealized gains (losses) on anticipated sales hedging transactions:
Gross	$	(594	)	$	6,304		$	113	(1)	$	6,417		$	5,823
Income tax (benefit)		(119	)		1,260			24			1,284			1,165

Net		(475	)		5,044			89			5,133			4,658

Unrealized gains (losses) forward interest rate swaps hedging transactions:
Gross		0			(1,224	)		0	(2)		(1,224	)		(1,224	)
Income tax (benefit)		0			(443	)		0			(443	)		(443	)

Net		0			(781	)		0			(781	)		(781	)

Unrealized gains (losses) on investments:
Gross		526			(67	)		443	(3)		376			902
Income tax (benefit)		108			(22	)		158			136			244

Net		418			(45	)		285			240			658

Foreign currency translation adjustments		(8,035	)		(191	)		0	(4)		(191	)		(8,226	)

Total accumulated other comprehensive gains (losses)	$	(8,092	)	$	4,027		$	374		$	4,401		$	(3,691	)


	As of June 29, 2013			Gain (Loss) recognized in OCI			Gain (Loss) reclassified from AOCI to income			Three Months ended September 28, 2013			As of September 28, 2013
Unrealized gains (losses) on anticipated sales hedging transactions:
Gross	$	(821	)	$	(563	)	$	(749	)(1)	$	(1,312	)	$	(2,133	)
Income tax (benefit)		(191	)		(118	)		(187	)		(305	)		(496	)

Net		(630	)		(445	)		(562	)		(1,007	)		(1,637	)

Unrealized gains (losses) on investments:
Gross		(844	)		518			106	(3)		624			(220	)
Income tax (benefit)		(283	)		157			34			191			(92	)

Net		(561	)		361			72			433			(128	)

Foreign currency translation adjustments		(8,404	)		182			0	(4)		182			(8,222	)

Total accumulated other comprehensive gains (losses)	$	(9,595	)	$	98		$	(490	)	$	(392	)	$	(9,987	)

(1)	Transfer of unrealized gains and (losses) from AOCI to income on anticipated sales hedging transactions are included in net sales of tangible products.

(2)	Transfer from AOCI to income and (losses) on forward interest rate swap hedging transactions are reported in forward swaps gain (loss).

(3)	Transfer of unrealized gains and (losses) from AOCI to income on investments are included in investment income.

(4)	Transfer of foreign currency translation gains and (losses) from AOCI to income, are included in foreign exchange.

The components of other comprehensive loss for the nine months ended September 27, 2014 are as follows (in thousands):


	As of December 31, 2013			Gain (Loss) recognized in OCI			Gain (Loss) reclassified from AOCI to income			Nine Months ended September 27, 2014			As of September 27, 2014
Unrealized gains (losses) on anticipated sales hedging transactions:
Gross	$	(2,373	)	$	9,892		$	(1,696	)(1)	$	8,196		$	5,823
Income tax (benefit)		(509	)		2,039			(365	)		1,674			1,165

Net		(1,864	)		7,853			(1,331	)		6,522			4,658

Unrealized gains (losses) forward interest rate swaps hedging transactions:
Gross		0			(1,224	)		0	(2)		(1,224	)		(1,224	)
Income tax (benefit)		0			(443	)		0			(443	)		(443	)

Net		0			(781	)		0			(781	)		(781	)

Unrealized gains (losses) on investments:
Gross		(151	)		536			517	(3)		1,053			902
Income tax (benefit)		(73	)		139			178			317			244

Net		(78	)		397			339			736			658

Foreign currency translation adjustments		(7,839	)		(380	)		(7	)(4)		(387	)		(8,226	)

Total accumulated other comprehensive gains (losses)	$	(9,781	)	$	7,089		$	(999	)	$	6,090		$	(3,691	)


	As of December 31, 2012			Gain (Loss) recognized in OCI			Gain (Loss) reclassified from AOCI to income			Nine Months ended September 28, 2013			As of September 28, 2013
Unrealized gains (losses) on anticipated sales hedging transactions:
Gross	$	(2,581	)	$	3,096		$	(2,648	)(1)	$	448		$	(2,133	)
Income tax (benefit)		(599	)		765			(662	)		103			(496	)

Net		(1,982	)		2,331			(1,986	)		345			(1,637	)

Unrealized gains (losses) on investments:
Gross		540			(1,140	)		380	(3)		(760	)		(220	)
Income tax (benefit)		162			(373	)		119			(254	)		(92	)

Net		378			(767	)		261			(506	)		(128	)

Foreign currency translation adjustments		(8,721	)		390			109	(4)		499			(8,222	)

Total accumulated other comprehensive gains (losses)	$	(10,325	)	$	1,954		$	(1,616	)	$	338		$	(9,987	)

(1)	Transfer of unrealized gains and (losses) from AOCI to income on anticipated sales hedging transactions are included in net sales of tangible products.

(2)	Transfer from AOCI to income and (losses) on forward interest rate swap hedging transactions are reported in forward swaps gain (loss).

(3)	Transfer of unrealized gains and (losses) from AOCI to income on investments are included in investment income.

(4)	Transfer of foreign currency translation gains and (losses) from AOCI to income, are included in foreign exchange.