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Derivative Financial Instruments
 6 Months Ended
Jun. 28, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments DERIVATIVE FINANCIAL INSTRUMENTS
The following tables present information about our hedge instruments measured at fair value on a recurring basis as of June 28, 2020 and December 29, 2019, all of which utilize Level 2 inputs under the fair value hierarchy:

(In thousands)Balance Sheet ClassificationJune 28, 2020December 29, 2019
Assets:
Derivatives designated as hedging instruments: 
Foreign currency option contracts Prepaid expenses and other current assets$299  $514  
  $299  $514  
Derivatives not designated as hedging instruments: 
Foreign currency forward exchange contracts Prepaid expenses and other current assets$974  $488  
 $974  $488  
  
Liabilities:
Derivatives designated as hedging instruments: 
Foreign currency option contractsAccrued liabilities$1,929  $922  
Foreign currency forward exchange contractsAccrued liabilities—  461  
Interest rate swap contractsOther long-term liabilities649  373  
 $2,578  $1,756  
  
Derivatives not designated as hedging instruments: 
Foreign currency forward exchange contractsAccrued liabilities$178  $579  
 $178  $579  

June 28, 2020
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets, but Have Rights to Offset
(In thousands)Gross Amounts RecognizedGross Amounts OffsetNet Amounts PresentedFinancial InstrumentsCash CollateralNet Amounts
Derivative assets$1,273  $—  $1,273  $1,273  $—  $—  
Derivative liabilities2,756  —  2,756  1,273  —  1,483  
December 29, 2019
Gross Amounts Not Offset in the Condensed Consolidated Balance Sheets, but Have Rights to Offset
(In thousands)Gross Amounts RecognizedGross Amounts OffsetNet Amounts PresentedFinancial InstrumentsCash CollateralNet Amounts
Derivative assets$1,002  $—  $1,002  $1,002  $—  $—  
Derivative liabilities2,335  —  2,335  1,002  —  1,333  

The following table summarizes the pre-tax amount of unrealized gain or loss recognized in "accumulated other comprehensive income" ("OCI") in "stockholders' equity" on our condensed consolidated balance sheets:
Three Months EndedSix Months Ended
(In thousands)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Derivatives designated as cash flow hedges:
Gain (loss) in OCI at the beginning of the period$430  $21  $(1,258) $(164) 
Unrealized (loss) gain recognized in OCI (effective portion)(1,709) (466) 363  (278) 
Less: Gain reclassified from OCI to revenue (effective portion of FX trades)(946) (444) (1,337) (444) 
Less: Loss reclassified from OCI to interest expense (effective portion of interest rate swaps)29  10  36  7  
Net loss on derivatives(2,626) (900) (938) (715) 
Loss in OCI at the end of the period$(2,196) $(879) $(2,196) $(879) 

The following table summarizes the amount of gain or loss recognized in "other, net" in our condensed consolidated statements of operations in the three months and six months ended June 28, 2020 and June 30, 2019:
Three Months EndedSix Months Ended
(In thousands)June 28, 2020June 30, 2019June 28, 2020June 30, 2019
Derivatives designated as cash flow hedges:
Gain recognized in "Other, net" on derivatives (ineffective portion and amount excluded from effectiveness testing)$31  $107  $182  $107  
Derivatives not designated as hedging instruments:
Gain (loss) recognized in "Other, net"$33  $(125) $(809) $(1,034) 
Foreign Currency Exchange Risk

Designated Derivatives Hedging Cash Flow Exposure

Our cash flow exposure primarily relates to anticipated third-party foreign currency revenues and expenses and interest rate fluctuations. We derive a portion of our revenues in foreign currencies, predominantly in Euros, as part of our ongoing business operations. In addition, a portion of our assets are held in foreign currencies. We enter into foreign currency forward contracts and at times, option contracts designated as cash flow hedges to hedge certain forecasted revenue transactions denominated in currencies other than our functional currency. Our foreign currency forward and option contracts are entered into for periods consistent with the related underlying exposures and do not constitute positions that are independent of those exposures.

As of June 28, 2020 and December 29, 2019, we had designated outstanding cash flow hedge forward contracts with a notional value of $0.0 million and $48.9 million, respectively. As of June 28, 2020 and December 29, 2019, we also had designated outstanding cash flow hedge option contracts with a notional value of $128.6 million and $142.9 million, respectively. We designate either gross external or intercompany revenue up to our net economic exposure. These derivatives have a maturity of six months or less and consist of option contracts. The effective portion of these cash flow hedges is reclassified into revenue when third-party revenue is recognized in our condensed consolidated statements of operations.

Non-Designated Derivatives Hedging Transaction Exposure

Derivatives not designated as hedging instruments consist of forward and option contracts used to hedge re-measurement of foreign currency denominated monetary assets and liabilities primarily for intercompany transactions, receivables from customers, and payables to third parties. Changes in exchange rates between our subsidiaries' functional currencies and the currencies in which these assets and liabilities are denominated can create fluctuations in our reported condensed consolidated financial position, results of operations and cash flows. As of June 28, 2020, to hedge balance sheet exposure, we held forward contracts with an aggregate notional value of $78.6 million. These foreign currency forward contracts have maturity of one month or less. As of December 29, 2019, to hedge balance sheet exposure, we held forward contracts with an aggregate notional value of $17.5 million. These contracts matured in January 2020.

Interest Rate Risk

We also enter into interest rate swap agreements to reduce the impact of changes in interest rates on our project specific non-recourse floating rate debt. As of June 28, 2020 and December 29, 2019, we had interest rate swap agreements designated as cash flow hedges with aggregate notional values of $6.0 million and $6.1 million, respectively. These swap agreements allow us to effectively convert floating-rate payments into fixed-rate payments periodically over the life of the agreements. These derivatives have a maturity of more than 12 months. The effective portion of these swap agreements designated as cash flow hedges is reclassified into interest expense when the hedged transactions are recognized in our condensed consolidated statements of operations. We analyze our designated interest rate swaps quarterly to determine if the hedge transaction remains effective or ineffective. We may discontinue hedge accounting for interest rate swaps prospectively if certain criteria are no longer met, the interest rate swap is terminated or exercised, or if we elect to remove the cash flow hedge designation. If hedge accounting is discontinued, and the forecasted hedged transaction is considered possible to occur, the previously recognized gain or loss on the interest rate swaps will remain in accumulated other comprehensive loss and will be reclassified into earnings during the same period the forecasted hedged transaction affects earnings or is otherwise deemed improbable to occur. All changes in the fair value of non-designated interest rate swap agreements are recognized immediately in current period earnings.

Credit Risk

Our option and forward contracts do not contain any credit-risk-related contingent features. We are exposed to credit losses in the event of nonperformance by the counterparties to these option and forward contracts. We enter into derivative contracts with high-quality financial institutions and limit the amount of credit exposure to any single counterparty. In addition, we continuously evaluate the credit standing of our counterparties.