XML 74 R19.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Financial Instruments | 3 Months Ended
--- | ---
Jun. 28, 2014
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Financial Instruments | Financial Instruments Derivative Financial Instruments The Company is exposed to changes in foreign currency exchange rates, primarily relating to certain anticipated cash flows of its international operations. Consequently, the Company uses derivative financial instruments to manage such risks. The Company does not enter into derivative transactions for speculative or trading purposes. The following table summarizes the Company's outstanding derivative instruments on a gross basis as recorded in the consolidated balance sheets as of June 28, 2014 and March 29, 2014:
|  | Notional Amounts |  | Derivative Assets |  | Derivative Liabilities
Derivative Instrument(a) |  | June 28, 2014 |  | March 29, 2014 |  | June 28, 2014 |  | March 29, 2014 |  | June 28, 2014 |  | March 29, 2014
|  |  |  |  |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value |  | Balance Sheet Line(b) |  | Fair Value
|  | (millions)
Designated Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FC — Inventory purchases |  | $ | 501 |  |  | $ | 476 |  |  | (c) |  | $ | 4 |  |  | (d) |  | $ | 2 |  |  | AE |  | $ | 4 |  |  | AE |  | $ | 5 |
FC — Other(e) |  | 210 |  |  | 223 |  |  | — |  | — |  |  | — |  | — |  |  | AE |  | 3 |  |  | AE |  | 2 |
Total Designated Hedges |  | $ | 711 |  |  | $ | 699 |  |  |  |  | $ | 4 |  |  |  |  | $ | 2 |  |  |  |  | $ | 7 |  |  |  |  | $ | 7 |
Undesignated Hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
FC — Other(f) |  | $ | 274 |  |  | $ | 280 |  |  | PP |  | $ | 3 |  |  | (g) |  | $ | 6 |  |  | ONCL |  | $ | 1 |  |  | — |  | $ | — |
Total Hedges |  | $ | 985 |  |  | $ | 979 |  |  |  |  | $ | 7 |  |  |  |  | $ | 8 |  |  |  |  | $ | 8 |  |  |  |  | $ | 7 |
(a) | FC = Forward foreign currency exchange contracts.
(b) | PP = Prepaid expenses and other current assets; AE = Accrued expenses and other current liabilities; ONCL = Other non-current liabilities.
(c) | $2 million included within prepaid expenses and other current assets and $2 million included within other non-current assets.
(d) | $1 million included within prepaid expenses and other current assets and $1 million included within other non-current assets.
(e) | Primarily designated hedges of foreign currency-denominated intercompany royalty payments, marketing contributions, and other net operational exposures.
(f) | Primarily undesignated hedges of foreign currency-denominated intercompany loans.
(g) | $2 million included within prepaid expenses and other current assets and $4 million included within other non-current assets.
The Company records and presents the fair values of all of its derivative assets and liabilities in the consolidated balance sheets on a gross basis, even though they are subject to master netting arrangements. However, if the Company were to offset and record the asset and liability balances of all of its forward foreign currency exchange contracts on a net basis in accordance with the terms of each of its master netting arrangements, spread across eight separate counterparties, the amounts presented in the consolidated balance sheets as of June 28, 2014 and March 29, 2014 would be adjusted from the current gross presentation as detailed in the following table:
|  | June 28, 2014 |  | March 29, 2014
Derivative Instrument |  | Gross Amounts Presented in the Consolidated Balance Sheet |  | Gross Amounts not Offset in the Balance Sheet that are Subject to Master Netting Agreements |  | Net Amount |  | Gross Amounts Presented in the Consolidated Balance Sheet |  | Gross Amounts not Offset in the Balance Sheet that are Subject to Master Netting Agreements |  | Net Amount
|  | (millions)
FC — Derivative assets |  | $ | 7 |  |  | $ | (2 | ) |  | $ | 5 |  |  | $ | 8 |  |  | $ | (1 | ) |  | $ | 7 |
FC — Derivative liabilities |  | $ | 8 |  |  | $ | (2 | ) |  | $ | 6 |  |  | $ | 7 |  |  | $ | (1 | ) |  | $ | 6 |
The Company's master netting arrangements do not require cash collateral to be pledged by the Company or its counterparties. Refer to Note 3 for further discussion of the Company's master netting arrangements. The following table summarizes the pretax impact of the effective portion of gains and losses from the Company's derivative instruments on its unaudited interim consolidated financial statements for the three-month periods ended June 28, 2014 and June 29, 2013:
|  | Gains (Losses) Recognized in OCI |  | Gains (Losses) Reclassified from AOCI to Earnings |  | Location of Gains (Losses) Reclassified from AOCI to Earnings
|  | Three Months Ended |  | Three Months Ended |
Derivative Instrument |  | June 28, 2014 |  | June 29, 2013 |  | June 28, 2014 |  | June 29, 2013 |
|  |  |  | (millions) |  |  |  |
Designated Cash Flow Hedges: |  |  |  |  |  |  |  |  |  |
FC — Inventory purchases |  | $ | 1 |  |  | $ | (1 | ) |  | $ | (1 | ) |  | $ | 5 |  |  | Cost of goods sold
FC — Other |  | (2 | ) |  | — |  |  | (2 | ) |  | — |  |  | Foreign currency gains (losses)
|  | $ | (1 | ) |  | $ | (1 | ) |  | $ | (3 | ) |  | $ | 5 |  |  |
Designated Hedge of Net Investment: |  |  |  |  |  |  |  |  |  |
Euro Debt(a) |  | $ | — |  |  | $ | (1 | ) |  | $ | — |  |  | $ | — |  |  |
Total Designated Hedges |  | $ | (1 | ) |  | $ | (2 | ) |  | $ | (3 | ) |  | $ | 5 |  |  |
(a) | Amount recognized in OCI relates to remeasurement of the Euro Debt, which was repaid in October 2013, and would be recognized in earnings only upon the sale or liquidation of the hedged net investment.
During the three months ended June 29, 2013, the Company also recorded a foreign currency gain of $2 million associated with the discontinuance of certain cash flow hedges, as the related forecasted transactions were no longer probable of occurring. As of June 28, 2014, it is expected that approximately $4 million of net losses deferred in AOCI related to derivative financial instruments will be recognized in earnings over the next twelve months. No material gains or losses relating to ineffective hedges were recognized during any of the fiscal periods presented. The following table summarizes the impact of gains and losses from the Company's undesignated hedge contracts on its unaudited interim consolidated financial statements for the three-month periods ended June 28, 2014 and June 29, 2013:
|  | Gains (Losses) Recognized in Earnings |  | Location of Gains (Losses) Recognized in Earnings
|  | Three Months Ended |
Derivative Instrument |  | June 28, 2014 |  | June 29, 2013 |
|  | (millions) |  |
Undesignated Hedges: |  |  |  |  |  |
FC — Other |  | $ | (2 | ) |  | $ | 8 |  |  | Foreign currency gains (losses)
Total Undesignated Hedges |  | $ | (2 | ) |  | $ | 8 |  |  |
Risk Management Strategies The Company primarily enters into forward foreign currency exchange contracts as hedges to reduce its risk from exchange rate fluctuations on inventory purchases made in an entity's non-functional currency, intercompany royalty payments made by certain of its international operations, intercompany contributions to fund certain marketing efforts of its international operations, and other foreign currency-denominated operational cash flows. As part of its overall strategy to manage the level of exposure to the risk of foreign currency exchange rate fluctuations, primarily to changes in the value of the Euro, the Japanese Yen, the South Korean Won, the Australian Dollar, the Canadian Dollar, and the Hong Kong Dollar, the Company hedges a portion of its foreign currency exposures anticipated over a two-year period. In doing so, the Company uses foreign currency exchange forward contracts that generally have maturities of two months to two years to provide continuing coverage throughout the hedging period. See Note 3 for further discussion of the Company's accounting policies relating to its derivative financial instruments. Investments The following table summarizes the Company's short-term and non-current investments recorded in the consolidated balance sheets as of June 28, 2014 and March 29, 2014:
|  | June 28, 2014 |  | March 29, 2014
Type of Investment |  | Short-term |  | Non-current |  | Total |  | Short-term |  | Non-current |  | Total
|  |  |  |  |  | (millions) |  |  |  |
Available-for-Sale: |  |  |  |  |  |  |  |  |  |  |  |
Government bonds |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Auction rate securities(a) |  | — |  |  | 2 |  |  | 2 |  |  | — |  |  | 2 |  |  | 2 |
Total available-for-sale investments |  | $ | — |  |  | $ | 2 |  |  | $ | 2 |  |  | $ | 1 |  |  | $ | 2 |  |  | $ | 3 |
Other: |  |  |  |  |  |  |  |  |  |  |  |
Time deposits |  | $ | 658 |  |  | $ | — |  |  | $ | 658 |  |  | $ | 487 |  |  | $ | — |  |  | $ | 487 |
Total Investments |  | $ | 658 |  |  | $ | 2 |  |  | $ | 660 |  |  | $ | 488 |  |  | $ | 2 |  |  | $ | 490 |
(a) | Auction rate securities have characteristics similar to short-term investments. However, the Company has recorded these securities within other non-current assets in its consolidated balance sheets as current market conditions call into question its ability to redeem these investments for cash within the next twelve months.
No significant realized or unrealized gains or losses on available-for-sale investments or other-than-temporary impairment charges were recorded during either of the three-month periods ended June 28, 2014 and June 29, 2013. Refer to Note 16 for further detail. See Note 3 to the Fiscal 2014 10-K for further discussion of the Company's accounting policies relating to its investments.

X
- Details
Name: | us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
Name: | us-gaap_FinancialInstrumentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration