Financial Instruments (Tables)
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9 Months Ended |
Sep. 29, 2019 |
Schedule of Fair Value of Financial Assets and Liabilities Measured on Recurring Basis |
The following table sets forth by fair value hierarchy Teradyne’s financial assets and liabilities that were measured at fair value on a recurring basis as of September 29, 2019 and December 31, 2018.
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$ |
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$ |
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$ |
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$ |
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Available-for-sale securities: |
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Corporate debt securities |
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Certificates of deposit and time deposits |
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U.S. government agency securities |
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Non-U.S. government securities |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Cash and cash equivalents |
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$ |
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$ |
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$ |
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$ |
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Long-term marketable securities |
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$ |
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$ |
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$ |
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$ |
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Other current liabilities |
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$ |
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$ |
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$ |
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$ |
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Long-term contingent consideration |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Available-for-sale securities: |
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Corporate debt securities |
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U.S. government agency securities |
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Certificates of deposit and time deposits |
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Non-U.S. government securities |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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$ |
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Cash and cash equivalents |
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$ |
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$ |
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$ |
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$ |
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Long-term marketable securities |
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$ |
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$ |
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$ |
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$ |
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Other accrued liabilities |
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$ |
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$ |
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$ |
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$ |
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Long-term contingent consideration |
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$ |
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$ |
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$ |
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$ |
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Schedule of Changes in Fair Value of Level 3 Contingent Consideration |
Changes in the fair value of Level 3 contingent consideration for the three and nine months ended September 29, 2019 and September 30, 2018 were as follows:
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Balance at beginning of period |
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$ |
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$ |
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$ |
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$ |
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Fair value adjustment (a) |
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) |
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) |
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) |
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) |
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) |
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) |
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) |
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) |
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) |
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$ |
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$ |
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$ |
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$ |
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(a) |
In the three and nine months ended September 29, 2019, the fair value of contingent consideration for the earn-out in connection with the acquisition of MiR was decreased by $7.8 million and $16.5 million, respectively, primarily due to a decrease in the forecasted revenue, partially offset by impact from the modification, in the three months ended September 29, 2019, of the earn-out structure . In the three and nine months ended September 30, 2018, the fair value of contingent consideration for the earn-out in connection with the acquisition of Universal Robots A/S (“Universal Robots”) was decreased by $0.8 million and $9.2 million, respectively, primarily due to a decrease in forecasted revenue. |
(b) |
In the nine months ended September 29, 2019, Teradyne paid $30.8 million and $3.8 million of contingent consideration for the earn-outs in connection with the acquisition of MiR and Universal Robots, respectively. In the nine months ended September 30, 2018, Teradyne paid $24.6 million of contingent consideration for the earn-out in connection with the acquisition of Universal Robots. |
|
Quantitative Information Associated With Fair Value Measurement of Level 3 Financial Instrument |
The following table provides quantitative information associated with the fair value measurement of Teradyne’s Level 3 financial instruments:
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September 29, 2019 Fair Value |
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$ |
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% |
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% |
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Schedule of Carrying Amounts and Fair Values of Financial Instruments |
The carrying amounts and fair values of Teradyne’s financial instruments at September 29, 2019 and December 31, 2018 were as follows:
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Cash and cash equivalents |
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$ |
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$ |
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$ |
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$ |
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(1) |
The carrying value represents the bifurcated debt component only, while the fair value is based on quoted market prices for the convertible note, which includes the equity conversion features. |
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Schedule of Available-for-Sale Marketable Securities |
The following table summarizes the composition of available-for-sale marketable securities at September 29, 2019:
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$ |
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$ |
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$ |
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) |
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$ |
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$ |
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) |
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Corporate debt securities |
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) |
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Certificates of deposit and time deposits |
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U.S. government agency securities |
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) |
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Non-U.S. government securities |
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$ |
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$ |
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$ |
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) |
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$ |
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$ |
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$ |
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$ |
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$ |
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) |
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$ |
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$ |
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Long-term marketable securities |
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) |
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$ |
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$ |
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$ |
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) |
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$ |
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$ |
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| The following table summarizes the composition of available-for-sale marketable securities at December 31, 2018:
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$ |
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$ |
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$ |
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) |
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$ |
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$ |
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) |
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Corporate debt securities |
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) |
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U.S. government agency securities |
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) |
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Certificates of deposit and time deposits |
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Non-U.S. government securities |
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$ |
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$ |
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$ |
|
) |
|
$ |
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|
$ |
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|
$ |
|
|
|
$ |
|
|
|
$ |
|
) |
|
$ |
|
|
|
$ |
|
|
Long-term marketable securities |
|
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) |
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|
$ |
|
|
|
$ |
|
|
|
$ |
|
) |
|
$ |
|
|
|
$ |
|
|
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|
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|
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|
|
Contractual Maturities of Investments Held |
The contractual maturities of investments in available-for-sale securities held at September 29, 2019 were as follows:
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|
$ |
|
|
|
$ |
|
|
Due after 1 year through 5 years |
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|
Due after 5 years through 10 years |
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|
$ |
|
|
|
$ |
|
|
|
|
|
|
|
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|
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|
Schedule of Derivative Instruments in Statement of Financial Position at Fair Value |
The following table summarizes the fair value of derivative instruments as of September 29, 2019 and December 31, 2018:
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|
Derivatives not designated as hedging instruments: |
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|
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|
|
Foreign exchange contracts - derivative assets |
|
|
|
|
|
$ |
|
|
|
$ |
|
|
Foreign exchange contracts - derivative liabilities |
|
|
Other current liabilities |
|
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|
|
) |
|
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|
) |
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
|
) |
|
$ |
|
) |
|
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|
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|
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|
|
|
|
|
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|
|
Schedule of Effect of Derivative Instruments on Statement of Operations Recognized |
The following table summarizes the effect of derivative instruments recognized in the statement of operations for the three and nine months ended September 29, 2019 and September 30, 2018.
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Location of Losses (Gains) |
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|
Derivatives not designated as hedging instruments: |
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange contracts |
|
Other (income) expense, net |
|
$ |
|
|
|
$ |
|
) |
|
$ |
|
|
|
$ |
|
|
(1) |
The table does not reflect the corresponding gains and losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies. |
(2) |
For the three months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $1.5 million. For the nine months ended September 29, 2019, net gains from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.4 million. |
(3) |
For the three and nine months ended September 30, 2018, net losses from the remeasurement of monetary assets and liabilities denominated in foreign currencies were $3.7 million and $1.2 million, respectively. |
|