Notes
to Consolidated Financial Statements|
Notes
to Consolidated Financial Statements |
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| NOTE 14 - FINANCIAL INSTRUMENTS Foreign Currency Instruments The objective of the Company's foreign exchange risk management policy is to preserve the U.S. dollar value of after-tax cash flows in relation to foreign currency fluctuations. The Company uses forward and option contracts to hedge firm commitments and option contracts to hedge anticipated transactions. Gains and losses on financial instruments that are intended to hedge an identifiable firm commitment are deferred and included in the measurement of the underlying transaction. Gains and losses on hedges of anticipated transactions are deferred until such time as the underlying transactions are recognized or immediately when the transaction is no longer expected to occur. In addition, the Company uses forward and option contracts to hedge certain non-U.S. denominated asset and liability positions. Gains and losses on these contracts are matched with the underlying gains and losses resulting from currency movement on these balance sheet positions. Gains and losses on any instruments not meeting the above criteria are recognized in income in the current period. Net gains and losses from foreign currency-transactions were not material to the consolidated financial statements for any period presented. Fair Value and Notional Principal of Off-Balance Sheet Financial Instruments The table below shows the fair value and notional principal of the Company's off-balance sheet financial instruments as of December 31, 2000 and December 26, 1999. The notional principal amounts for off-balance sheet financial instruments provide one measure of the transaction volume outstanding as of year end and do not represent the amount of the Company's exposure to credit or market loss. The estimates of fair value are based on applicable and commonly used pricing models using prevailing financial market information as of December 31, 2000 and December 26, 1999. Although the following table reflects the notional principal and fair value of amounts of off-balance sheet financial instruments, it does not reflect the gains or losses associated with the exposures and transactions that the off-balance sheet financial instruments are intended to hedge. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments.
Fair Value of Financial Instruments A summary table of estimated fair values of financial instruments follows:
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