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100
The following is a summary of the existing gains that are currently included in accumulated other comprehensive
income. These amounts represent the fair value of our cash flow hedge contracts that were still open as of the periods below.
Gain (Loss) on Hedges of Forecasted Transactions:
Accumulated
Other Comprehensive
Income (Loss)
November 30, December 1, December 2,
2007 2006
2005
Net unrealized gain remaining in other accumulated
comprehensive income, net of tax....................... $ 30.8 $ 566.8 $ 5,317.1
When the forecasted transaction occurs, we reclassify the related gain or loss on the cash flow hedge to revenue. In the
event the underlying forecasted transaction does not occur, or it becomes probable that it will not occur, the related hedge
gains and losses on the cash flow hedge are reclassified from accumulated other comprehensive income (loss) to interest and
other income (loss) on the consolidated statement of income at that time. For fiscal 2007, 2006 and 2005 there were no such
gains or losses recognized in other income relating to hedges of forecasted transactions that did not occur.
Pursuant to SFAS 133, we evaluate hedge effectiveness at the inception of the hedge prospectively as well as
retrospectively and record any ineffective portion of the hedging instruments in other income on the consolidated income
statement. The net gain (loss) recognized in other income for cash flow hedges due to hedge ineffectiveness was insignificant
for fiscal 2007, 2006 and 2005. The time value of purchased derivative instruments is recorded in other income.
A summary of the amounts included on the consolidated income statement due to occurrence of the hedged transaction
and or time value degradation on open hedge transactions is as follows:
Years Ended
November 30, 2007 December 1, 2006 December 2, 2005
Revenue
Other
Income
(Loss) Revenue
Other
Income
(Loss) Revenue
Other
Income
(Loss)
Gain (loss) on completed hedge
transactions:
Net realized gain reclassified from
other accumulated
comprehensive income to
revenue..................... $ 5,510 $ — $ 5,035 $ — $ 7,453
$ —
Net realized loss from the cost of
purchased options............
— (12,875) — (8,873) —
(6,624)
Gain (loss) on open hedge
transactions:
Net unrealized gain (loss) from the
time value on open cash flow
hedge transactions............
— 765 — (3,913) —
2,648
$ 5,510 $ (12,110) $ 5,035 $ (12,786) $ 7,453
$ (3,976)
Balance Sheet Hedging - Hedging of Foreign Currency Assets and Liabilities
We hedge our net recognized foreign currency assets and liabilities with forward foreign exchange contracts to reduce
the risk that our earnings and cash flows will be adversely affected by changes in foreign currency exchange rates. These
derivative instruments hedge assets and liabilities that are denominated in foreign currencies and are carried at fair value with
changes in the fair value recorded as other income. These derivative instruments do not subject us to material balance sheet
risk due to exchange rate movements because gains and losses on these derivatives are intended to offset gains and losses on
the assets and liabilities being hedged. As of November 30, 2007, total outstanding contracts were $673.0 million which