Seagate 2009 Annual Report Download - page 69
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Table of Contents
Fiscal Years Ended
Foreign Currency Exchange Risk. We may enter into foreign currency forward exchange contracts to manage exposure related to certain
foreign currency commitments and anticipated foreign currency denominated expenditures. Our policy prohibits us from entering into derivative
financial instruments for speculative or trading purposes. During fiscal years 2010 and 2009, we did not enter into any hedges of net investments
in foreign operations.
We also hedge a portion of our foreign currency denominated balance sheet positions with foreign currency forward exchange contracts to
reduce the risk that our earnings will be adversely affected by changes in currency exchange rates. The changes in fair value of these hedges are
recognized in earnings in the same period as the gains and losses from the remeasurement of the assets and liabilities. These foreign currency
forward exchange contracts are not designated as hedging instruments under ASC 815, Derivatives and Hedging (previously SFAS 161,
Disclosures About Derivative Instruments and Hedging Activities
). All these forward contracts mature within 12 months.
We evaluate hedging effectiveness prospectively and retrospectively and record any ineffective portion of the hedging instruments in Other
income (expense) on the Consolidated Statements of Operations. We did not have any net gains (losses) recognized in Other income (expense)
for cash flow hedges due to hedge ineffectiveness during fiscal year 2010, nor did we discontinue any material cash flow hedges for a forecasted
transaction in the same period.
67
(Dollars in
millions, except
percentages)
2011 2012 2013 2014 2015 Thereafter Total
Fair Value
at
July 2, 2010
Assets
Cash
equivalents:
Fixed rate
$
2,101
$
—
$
—
$
—
$
—
$
—
$
2,101
$
2,101
Average
interest
rate
0.10
%
0.10
%
Short
-
term
investments:
Fixed rate
$
163
$
58
$
27
$
—
$
—
$
—
$
248
$
252
Average
interest
rate
2.02
%
3.20
%
2.66
%
2.37
%
Long
-
term
investments:
Variable
rate
$
—
$
—
$
—
$
—
$
—
$
19
$
19
$
17
Average
interest
rate
0.61
%
0.61
%
Total
investment
securities
$
2,264
$
58
$
27
$
—
$
—
$
19
$
2,368
$
2,370
Average
interest
rate
0.24
%
3.20
%
2.66
%
0.61
%
0.34
%
Debt
Fixed rate
$
359
$
560
$
—
$
430
$
—
$
1,200
$
2,549
$
2,590
Average
interest
rate
2.69
%
6.38
%
10.00
%
6.84
%
6.68
%