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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Disclosure About Foreign Currency Risk
Although the majority of our transactions are in U.S. dollars, some transactions are based in various foreign cur-
rencies. We purchase short-term, foreign exchange contracts to hedge the impact of foreign currency exchange
fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs
denominated in foreign currencies. The purpose of entering into these hedge transactions is to minimize the impact of
foreign currency fluctuations on our results of operations. The contract maturity dates do not exceed 12 months. We
do not purchase foreign exchange contracts for trading purposes. See Part II, Item 8, Notes 1 and 12 in the Notes to
Consolidated Financial Statements, included in this Annual Report on Form 10-K.
As of July 3, 2015, we had outstanding the following purchased foreign exchange contracts (in millions, except
weighted average contract rate):
Contract
Amount
Weighted Average
Contract Rate*
Unrealized
Gain
(Loss)
Foreign exchange contracts:
Cash flow hedges:
Japanese Yen ........................... $163 $118.43 $ (4)
Malaysian Ringgit ....................... $228 $ 3.70 $ (9)
Philippine Peso ......................... $ 51 $ 44.95 —
Singapore Dollar ........................ $ 45 $ 1.34 $ —
Thai Baht ............................. $628 $ 33.36 $(12)
Fair value hedges:
British Pound Sterling .................... $ 7 $ 0.64 —
Euro ................................. $ 6 $ 0.90 —
Japanese Yen ........................... $ 81 $122.93 —
Philippine Peso ......................... $ 33 $ 45.19 —
Singapore Dollar ........................ $ 15 $ 1.34 —
Thai Baht ............................. $ 80 $ 33.88 —
* Expressed in units of foreign currency per U.S. dollar
In 2015, 2014 and 2013, total net realized transaction and foreign exchange contract currency gains and losses
were not material to our consolidated financial statements.
Disclosure About Other Market Risks
Variable Interest Rate Risk
Borrowings under the Credit Agreement bear interest at a rate equal to, at the option of the applicable Borrower,
either (a) a customary London interbank offered rate (a “Eurodollar Rate”) or (b) a customary base rate (a “Base Rate”),
in each case plus an applicable margin. The applicable margins range from 1.25% to 2.00% with respect to Euro-
dollar Rate borrowings and 0.25% to 1.00% with respect to Base Rate borrowings. WDT, WDI and WD Interna-
tional are also required to pay a commitment fee for the unused portion of the revolving credit facility, which ranges
from 0.175% to 0.300% per annum. The applicable margins for borrowings and the commitment fee ranges are
determined based upon a leverage ratio of us and our subsidiaries calculated on a consolidated basis. A one percent
increase in the variable rate of interest on the term loan and revolving credit facility would increase interest expense by
approximately $26 million annually. For additional information, see Part II, Item 8, Note 3 of the Notes to Con-
solidated Financial Statements included in this Annual Report on Form 10-K.
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