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Notes To Consolidated Financial Statements
The Company expects to realize the accumulated OCI balance related to foreign exchange contracts within
the next twelve months and realize the accumulated OCI balance related to the equity market risk contract in
fiscal year 2011.
Effect of Designated Derivative Contracts on the Consolidated Statements of Operations. The effect of
designated derivative contracts under SFAS 133 on results of operations recognized in Cost of Product Revenues
was as follows (in thousands):
Fiscal Years Ended
December 28,
2008
December 30,
2007
December 31,
2006
Foreign exchange contracts designated as cash flow hedges ......... $(9,696) $ — $ —
Equity market risk contract designated as cash flow hedge .......... — — —
Effect of Non-Designated Derivative Contracts on the Consolidated Statements of Operations. The effect
of non-designated derivative contracts on results of operations recognized in Other Income (Expense) was as
follows (in thousands):
Fiscal Years Ended
December 28,
2008
December 30,
2007
December 31,
2006
Gain (loss) on foreign exchange contracts ....................... $(137,927) $(8,253) $5,831
Note 7: Financing Arrangements
The following table reflects the carrying value of the Company’s long-term borrowings as of December 28,
2008 and December 30, 2007:
December 28,
2008
December 30,
2007
(In millions)
1% Convertible Senior Notes due 2013 ..................................... $ 1,150 $ 1,150
1% Convertible Notes due 2035 .......................................... 75 75
1% Convertible Senior Notes Due 2013. In May 2006, the Company issued and sold $1.15 billion in
aggregate principal amount of 1% Convertible Senior Notes due 2013 (the “1% Notes due 2013”) at par. The 1%
Notes due 2013 may be converted, under certain circumstances described below, based on an initial conversion
rate of 12.1426 shares of common stock per $1,000 principal amount of notes (which represents an initial
conversion price of approximately $82.36 per share). The net proceeds to the Company from the offering of the
1% Notes due 2013 were $1.13 billion.
The 1% Notes due 2013 may be converted prior to the close of business on the scheduled trading day
immediately preceding February 15, 2013, in multiples of $1,000 principal amount at the option of the holder
under any of the following circumstances: 1) during the five business-day period after any five consecutive
trading-day period (the “measurement period”) in which the trading price per note for each day of such
measurement period was less than 98% of the product of the last reported sale price of the Company’s common
stock and the conversion rate on each such day; 2) during any calendar quarter after the calendar quarter ending
June 30, 2006, if the last reported sale price of the Company’s common stock for 20 or more trading days in a
period of 30 consecutive trading days ending on the last trading day of the immediately preceding calendar
quarter exceeds 120% of the applicable conversion price in effect on the last trading day of the immediately
preceding calendar quarter; or 3) upon the occurrence of specified corporate transactions. On and after
February 15, 2013 until the close of business on the scheduled trading day immediately preceding the maturity
date of May 15, 2013, holders may convert their notes at any time, regardless of the foregoing circumstances.
F-23