Seagate 2014 Annual Report Download - page 64
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ThetablebelowprovidesinformationasofJuly3,2015aboutourforeigncurrencyforwardexchangecontracts.ThetableisprovidedinU.S.dollarequivalent
amountsandpresentsthenotionalamounts(atthecontractexchangerates)andtheweightedaveragecontractualforeigncurrencyexchangerates.
OtherMarketRisks.Wehaveexposuretocounterpartycreditdowngradesintheformofcreditriskrelatedtoourforeigncurrencyforwardexchange
contractsandourfixedincomeportfolio.Wemonitorandlimitourcreditexposureforourforeigncurrencyforwardexchangecontractsbyperformingongoing
creditevaluations.Wealsomanagethenotionalamountofcontractsenteredintowithanyonecounterparty,andwemaintainlimitsonmaximumtenorofcontracts
basedonthecreditratingofthefinancialinstitution.Additionally,theinvestmentportfolioisdiversifiedandstructuredtominimizecreditrisk.AsofJuly3,2015,
wehadnomaterialcreditexposurerelatedtoourforeigncurrencyforwardexchangecontracts.Changesinourcorporateissuercreditratingshaveminimalimpact
onourfinancialresults,butdowngradesmaynegativelyimpactourfuturetransactioncostsandourabilitytoexecutetransactionswithvariouscounterparties.
WearesubjecttoequitymarketrisksduetochangesinthefairvalueofthenotionalinvestmentsselectedbyouremployeesaspartofourSeagateDeferred
CompensationPlan(the"SDCP").Infiscalyear2014,theCompanyenteredintoaTotalReturnSwap("TRS")inordertomanagetheequitymarketrisks
associatedwiththeSDCPliabilities.TheCompanypaysafloatingrate,basedonLIBORplusaninterestratespread,onthenotionalamountoftheTRS.TheTRS
isdesignedtosubstantiallyoffsetchangesintheSDCPliabilityduetochangesinthevalueoftheinvestmentoptionsmadebyemployees.
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(Dollarsinmillions,exceptaveragecontractrate)
Notional
Amount
Average
ContractRate
Estimated
Fair
Value(1)
Foreigncurrencyforwardexchangecontracts:
Thaibaht $ 66 33.25 $ (1)
ChineseRenminbi 21 6.23 —
MalaysianRingitt 27 3.74 —
SingaporeDollars 65 1.29 (2)
GreatBritishPound 35 1.46 2
Euro 13 1.10 —
Total $ 227 $ (1)
(1) Equivalenttotheunrealizednetgain(loss)onexistingcontracts.