v2.4.0.8
Derivative Financial Instruments
 3 Months Ended
Sep. 27, 2013
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments and Hedging Activities Disclosure [Text Block]
Derivative Financial Instruments
 
The Company is exposed to foreign currency exchange rate, interest rate, and to a lesser extent, equity price risks relating to its ongoing business operations. The Company enters into foreign currency forward exchange contracts to manage the foreign currency exchange rate risk on forecasted expenses denominated in foreign currencies and to mitigate the remeasurement risk of certain foreign currency denominated liabilities. The Company’s accounting policies for these instruments are based on whether the instruments are classified as designated or non-designated hedging instruments. The Company records all derivatives in the Condensed Consolidated Balance Sheets at fair value. The changes in the fair values of the effective portions of designated cash flow hedges are recorded in Accumulated other comprehensive loss until the hedged item is recognized in earnings. Derivatives that are not designated as hedging instruments and the ineffective portions of cash flow hedges are adjusted to fair value through earnings. The amount of net unrealized gains (losses) on cash flow hedges was not material as of September 27, 2013 and June 28, 2013.
 
The Company dedesignates its cash flow hedges when the forecasted hedged transactions are realized or it is probable the forecasted hedged transactions will not occur in the initially identified time period. At such time, the associated gains and losses deferred in Accumulated other comprehensive loss are reclassified immediately into earnings and any subsequent changes in the fair value of such derivative instruments are immediately reflected in earnings. The Company did not recognize any material net gains or losses related to the loss of hedge designation on discontinued cash flow hedges during the three months ended September 27, 2013. As of September 27, 2013, the Company’s existing foreign currency forward exchange contracts mature within 12 months. The deferred amount currently recorded in Accumulated other comprehensive loss expected to be recognized into earnings over the next 12 months is immaterial.

The following tables show the total notional value of the Company’s outstanding foreign currency forward exchange contracts as of September 27, 2013 and June 28, 2013:
 
 
As of September 27, 2013
(Dollars in millions)
 
Contracts
Designated as
Hedges
 
Contracts Not
Designated as
Hedges
Thai baht
 
$
—

 
$
223

Singapore dollars
 
95

 
15

Chinese renminbi
 
—

 
—

 
 
$
95

 
$
238


 
 
 
As of June 28, 2013
(Dollars in millions)
 
Contracts
Designated as
Hedges
 
Contracts Not
Designated as
Hedges
Thai baht
 
$
—

 
$
20

Singapore dollars
 
—

 
—

Chinese renminbi
 
—

 
—

Czech koruna
 
—

 
—

 
 
$
—

 
$
20

 
The following table shows the Company’s derivative instruments measured at fair value as reflected in the Condensed Consolidated Balance Sheet as of September 27, 2013 and June 28, 2013:
 
 
 
As of September 27, 2013
 
 
Asset Derivatives
 
Liability Derivatives
(Dollars in millions)
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 

 
 
 
 

Foreign currency forward exchange contracts
 
Other current assets
 
$
1

 
Accrued expenses
 
$
—

Derivatives not designated as hedging instruments:
 
 
 
 

 
 
 


Foreign currency forward exchange contracts
 
Other current assets
 
3

 
Accrued expenses
 
—

Total derivatives
 
 
 
$
4

 
 
 
$
—


 
 
 
As of June 28, 2013
 
 
Asset Derivatives
 
Liability Derivatives
(Dollars in millions)
 
Balance Sheet
Location
 
Fair Value
 
Balance Sheet
Location
 
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 

 
 
 
 

Foreign currency forward exchange contracts
 
Other current assets
 
$
—

 
Accrued expenses
 
$
—

Derivatives not designated as hedging instruments:
 
 
 
 

 
 
 
 

Foreign currency forward exchange contracts
 
Other current assets
 
—

 
Accrued expenses
 
(1
)
Total derivatives
 
 
 
$
—

 
 
 
$
(1
)

The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statement of Comprehensive Income and the Condensed Consolidated Statement of Operations for the three months ended September 27, 2013:
 
(Dollars in millions) 
Derivatives Designated as Hedging Instruments
 
Amount of
Gain or (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
Location of
Gain or (Loss)
Reclassified from
Accumulated OCI
into income (Effective Portion)
 
Amount of
Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
 
Location of
Gain or (Loss)
Recognized in Income
on Derivative
 (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
 
Amount of
Gain or (Loss)
Recognized in Income
(Ineffective Portion and
Amount Excluded from 
Effectiveness Testing) (a)
Foreign currency forward exchange contracts
 
$
1

 
Cost of revenue
 
$
—

 
Cost of revenue
 
$
—

 
Derivatives Not Designated as Hedging Instruments
 
Location of
Gain or (Loss)
Recognized in
Income on
Derivative
 
Amount of
Gain or (Loss)
Recognized in Income
on Derivative
Foreign currency forward exchange contracts
 
Other, net
 
$
1

___________________________________________
(a)The amount of gain or (loss) recognized in income represents $0 related to the ineffective portion of the hedging relationship and $0 related to the amount excluded from the assessment of hedge effectiveness for the three months ended September 27, 2013.
 
The following tables show the effect of the Company’s derivative instruments on the Condensed Consolidated Statement of Comprehensive Income and the Condensed Consolidated Statement of Operations for the three months ended September 28, 2012:
 
(Dollars in millions)
 
Derivatives Designated as Hedging Instruments
 
Amount of
Gain or (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
Location of
Gain or (Loss)
Reclassified from
Accumulated OCI
into income (Effective Portion)
 
Amount of
Gain or (Loss)
Reclassified from
Accumulated OCI
into Income
(Effective Portion)
Location of
Gain or (Loss)
Recognized in Income
on Derivative
 (Ineffective Portion and
Amount Excluded from Effectiveness Testing)
 
Amount of
Gain or (Loss)
Recognized in Income
(Ineffective Portion and
Amount Excluded from 
Effectiveness Testing) (a)
Foreign currency forward exchange contracts
 
$
—

 
Cost of revenue
 
$
—

Cost of revenue
 
$
—

 
Derivatives Not Designated as Hedging Instruments
 
Location of
Gain or (Loss)
Recognized in
Income on
Derivative
 
Amount of
Gain or (Loss)
Recognized in Income
on Derivative
Foreign currency forward exchange contracts
 
Other, net
 
$
2

___________________________________________
(a)The amount of gain or (loss) recognized in income represents $0 related to the ineffective portion of the hedging relationship and $0 related to the amount excluded from the assessment of hedge effectiveness for the three months ended September 28, 2012, respectively.