Seagate 2014 Annual Report Download - page 93
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SEAGATETECHNOLOGYPLC
NOTESTOCONSOLIDATEDFINANCIALSTATEMENTS—(Continued)
instrumentsareclassifiedasdesignatedornon-designatedhedginginstruments.TheCompanyrecordsallderivativesintheConsolidatedBalanceSheetsatfair
value.ThechangesinthefairvalueoftheeffectiveportionsofdesignatedcashflowhedgesarerecordedinAccumulatedothercomprehensivelossuntilthe
hedgeditemisrecognizedinearnings.Derivativesthatarenotdesignatedashedginginstrumentsandtheineffectiveportionsofcashflowhedgesareadjustedto
fairvaluethroughearnings.Theamountofnetunrealizedgainoncashflowhedgeswas$1millionasofJuly3,2015andtheamountofnetunrealizedlossoncash
flowhedgeswas$1millionasofJune27,2014.
TheCompanydedesignatesitscashflowhedgeswhentheforecastedhedgedtransactionsarerealizedoritisprobabletheforecastedhedgedtransactionswill
notoccurintheinitiallyidentifiedtimeperiod.Atsuchtime,theassociatedgainsandlossesdeferredinAccumulatedothercomprehensivelossarereclassified
immediatelyintoearningsandanysubsequentchangesinthefairvalueofsuchderivativeinstrumentsareimmediatelyreflectedinearnings.TheCompanydidnot
recognizeanymaterialnetgainsorlossesrelatedtothelossofhedgedesignationondiscontinuedcashflowhedgesduringfiscalyears2015,2014,and2013.Asof
July3,2015,theCompany'sexistingforeigncurrencyforwardexchangecontractsmaturewithin12months.Thedeferredamountcurrentlyrecordedin
Accumulatedothercomprehensivelossexpectedtoberecognizedintoearningsoverthenext12monthsisimmaterial.
ThefollowingtablesshowthetotalnotionalvalueoftheCompany'soutstandingforeigncurrencyforwardexchangecontractsasofJuly3,2015andJune27,
2014:
TheCompanyissubjecttoequitymarketrisksduetochangesinthefairvalueofthenotionalinvestmentsselectedbyitsemployeesaspartofitsNon-
qualifiedDeferredCompensationPlan—theSeagateDeferredCompensationPlan(the"SDCP").InthequarterendedDecember27,2013,theCompanyentered
intoaTotalReturnSwap("TRS")inordertomanagetheequitymarketrisksassociatedwiththeSDCPliabilities.TheCompanypaysafloatingrate,basedon
LIBORplusaninterestratespread,onthenotionalamountoftheTRS.TheTRSisdesignedtosubstantiallyoffsetchangesintheSDCPliabilityduetochangesin
thevalueoftheinvestmentoptionsmadebyemployees.AsofJuly3,2015,thenotionalinvestmentsunderlyingtheTRSamountedto$98million.Thecontract
termoftheTRSisthroughJanuary2016andissettledonamonthlybasis,thereforelimitingcounterpartyperformancerisk.
90
AsofJuly3,2015
(Dollarsinmillions) ContractsDesignatedasHedges ContractsNotDesignatedasHedges
ThaiBaht $ 18 $ 48
SingaporeDollars 23 42
ChineseRenminbi 5 16
Euro — 13
BritishPoundSterling 35 —
MalaysianRinggit 12 15
$ 93 $ 134
AsofJune27,2014
(Dollarsinmillions) ContractsDesignatedasHedges ContractsNotDesignatedasHedges
Thaibaht $ — $ 143
BritishPoundSterling 25 —
MalaysianRinggit 9 —
$ 34 $ 143