Other Income (Expense)

6 Months Ended

Jun. 29, 2012

Other Income and Expenses [Abstract]

Other Income (Expense)

Other Income (Expense)

Other income (expense) includes foreign currency transaction gains or losses, which result from changes in exchange rates between the designated functional currency and the currency in which a transaction is denominated as well as gains and losses on derivative instruments that are not designated as cash flow hedges and ineffectiveness on derivatives designated as cash flow hedges. During the three months ended June 29, 2012 and July 1, 2011, the Company recorded other expense of $13.5 million and $3.9 million, respectively. During the six months ended June 29, 2012 and July 1, 2011, the Company recorded other expense of $6.7 million and other income of $3.1 million, respectively. For the three months ended June 29, 2012, other expense was primarily the result of $6.5 million related to losses on derivative instruments that were not designated as cash flow hedges and other expense of $6.5 million related to foreign currency transaction losses. For the six months ended June 29, 2012, other expense was primarily the result of $0.3 million related to losses on derivative instruments that were not designated as cash flow hedges and other expense of $5.1 million related to foreign currency transaction losses. For the three months ended July 1, 2011, other expense of $3.9 million was primarily attributable to foreign currency transaction losses which resulted from changes in exchange rates in the various countries in which the Company operates. For the six months ended July 1, 2011, other income of $3.1 million was primarily the result of unrealized gains on derivative instruments which were not designated as cash flow hedges and foreign currency transaction gains.

The functional currency of the Company’s subsidiary in Venezuela is the U.S. dollar. The Company remeasures the financial statements of the Venezuelan subsidiary at the rate the Company expects to remit dividends, which is 4.30 Venezuelan Bolivar (“BsF”) per U.S. dollar.

Effective January 1, 2011, the Central Bank of Venezuela and the Ministry of Finance published an amendment to Convenio Cambiario No. 14 (the Exchange Law), whereby the official exchange rate was set at 4.30 BsF per U.S. dollar. See Item 2, “Venezuelan Operations” for additional details.