Risk Management

Foreign Currency Risk

As of April 4, 2015, the Company had outstanding foreign exchange contracts with notional amounts totaling $694 million, compared to $628 million outstanding at December 31, 2014. The Company does not believe these financial instruments should subject it to undue risk due to foreign exchange movements because gains and losses on these contracts should generally offset gains and losses on the underlying assets, liabilities and transactions.

The following table shows the five largest net notional amounts of the positions to buy or sell foreign currency as of April 4, 2015, and the corresponding positions as of December 31, 2014:



	Notional Amount
Net Buy (Sell) by Currency	April 4, 2015			December 31, 2014
British Pound	$	166		$	34
Euro	154			214
Chinese Renminbi	(146		)	(161		)
Norwegian Krone	(86		)	(90		)
Brazilian Real	(38		)	(28		)

Interest Rate Risk

As of April 4, 2015, the Company had $3.4 billion of long-term debt, including the current portion, which is primarily priced at long-term, fixed interest rates.

One of the Company’s European subsidiaries has Euro-denominated loans. The interest on the Euro-denominated loans is variable and the Company has an interest rate swap in place which is not designated as a hedge. As such, the changes in the fair value of the interest rate swap is included in Other income (expense) in the Company’s condensed consolidated statements of operations. The fair value of the interest rate swap was in a liability position of $2 million at April 4, 2015 and December 31, 2014.

Counterparty Risk

The use of derivative financial instruments exposes the Company to counterparty credit risk in the event of non-performance by counterparties. However, the Company’s risk is limited to the fair value of the instruments when the derivative is in an asset position. The Company actively monitors its exposure to credit risk. As of April 4, 2015, all of the counterparties have investment grade credit ratings. As of April 4, 2015, the Company had $2 million of exposure to aggregate net credit risk with all counterparties.

The following tables summarize the fair values and location in the condensed consolidated balance sheets of all derivative financial instruments held by the Company as of April 4, 2015 and December 31, 2014:



	Fair Values of Derivative Instruments
	Assets			Liabilities
April 4, 2015	Fair Value		Balance Sheet Location	Fair Value		Balance Sheet Location
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	2	Other assets	$	1	Other liabilities
Interest rate swap	—		Other assets	2		Other liabilities
Total derivatives	$	2		$	3



	Fair Values of Derivative Instruments
	Assets		Liabilities
December 31, 2014	Fair Value	Balance Sheet Location	Fair Value	Balance Sheet Location
Derivatives not designated as hedging instruments:
Foreign exchange contracts	1	Other assets	5	Other liabilities
Interest rate swap	—	Other assets	2	Other liabilities
Total derivatives	1		7

The following table summarizes the effect of derivative instruments on the Company's condensed consolidated statements of operations for the three months ended April 4, 2015 and March 29, 2014:



	Three Months Ended						Statements of Operations Location
Loss on Derivative Instruments	April 4, 2015			March 29, 2014			Statements of Operations Location
Derivatives not designated as hedging instruments:
Interest rate swap	$	(1	)	$	—		Other income (expense)
Foreign exchange contracts	(16		)	(1		)	Other income (expense)
Total derivatives	$	(17	)	$	(1	)