Foreign Exchange Instruments

9 Months Ended

Sep. 28, 2013

Foreign Exchange Instruments

Foreign Exchange Instruments

Note 4. Foreign Exchange Instruments

We utilize foreign currency forward exchange contracts and options with recognized financial institutions to manage our exposure to the impact of fluctuations in foreign currency exchange rates on certain intercompany balances and foreign currency denominated sales and purchase transactions. We do not use derivative financial instruments for speculative or trading purposes. These forward contracts are not designated as hedging instruments for accounting purposes. Principal hedged currencies include the Euro, British Pound Sterling, and U.S. Dollar. The periods of these forward contracts range up to six months and the notional amounts are intended to be consistent with changes in the underlying exposures. We intend to exchange foreign currencies for U.S. Dollars at maturity.

Total gross notional amounts for outstanding derivatives instruments were as follows:

	September 28, 2013		December 29, 2012
Forward contracts:
Euro (sell)	€	17.8 million	€	13.9 million
British Pound Sterling (sell)	£	1.3 million	£	1.8 million
U.S. Dollar (sell)	$	17.0 million	$	5.3 million
U.S. Dollar (buy)	$	59.0 million	$	73.5 million

The following table shows the derivative instruments measured at gross fair value reported on the condensed consolidated balance sheets:

	As of September 28, 2013				As of December 29, 2012
	Prepaid expenses and other assets		Other accrued liabilities		Prepaid expenses and other assets		Other accrued liabilities
	(in thousands)
Derivatives not designated as hedging instruments (forward contracts)	$	369	$	1,408	$	16	$	380

The following table shows the effect of derivative instruments not designated as hedging instruments and foreign currency transactions gains and losses which were included in “Interest income and other” in the condensed consolidated statements of operations:

	Three Months Ended						Nine Months Ended
	September 28, 2013			September 29,2012			September 28, 2013			September 29,2012
	(in thousands)
Foreign currency exchange loss on foreign contracts	$	(1,953	)	$	(2,462	)	$	(649	)	$	(130	)
Foreign currency transactions gain	2,122			2,617			1,114			308