Symantec 2009 Annual Report Download - page 113

reported at fair value with unrealized gains and losses, net of tax, included in Accumulated other comprehensive
income within Stockholders’ equity in the Consolidated Balance Sheets. The amortization of premiums and
discounts on the investments, realized gains and losses, and declines in value judged to be other-than-temporary on
available-for-sale securities are included in Other income, net in the Consolidated Statements of Operations. We use
the specific identification method to determine cost in calculating realized gains and losses upon sale of short-term
investments.
The following table presents the fair value and hypothetical changes in fair values on short-term investments
sensitive to changes in interest rates (in millions):
150 bps 100 bps 50 bps
Fair Value
As of (25 bps) (75 bps)
Value of Securities Given an
Interest Rate Increase of
X Basis Points (bps)
Value of Securities
Given an Interest
Rate Decrease of X
Basis Points (bps)
April 3, 2009 ...................... $ 680 $ 680 $ 680 $ 680 $ 681 $ 681
March 28, 2008 .................... $1,301 $1,302 $1,304 $1,305 $1,305 $1,306
The modeling technique used above measures the change in fair market value arising from selected potential
changes in interest rates. Market changes reflect immediate hypothetical parallel shifts in the yield curve of plus
150 bps, plus 100 bps, plus 50 bps, minus 25 bps, and minus 75 bps.
Foreign Currency Exchange Rate Risk
We conduct business in 40 currencies through our worldwide operations and, as such, we are exposed to
foreign currency exposure risk. Foreign currency risks are associated with our cash and cash equivalents,
investments, receivables, and payables denominated in foreign currencies. Fluctuations in exchange rates will
result in foreign exchange gains and losses on these foreign currency assets and liabilities and are included in Other
income, net. Our objective in managing foreign exchange activity is to preserve stockholder value by minimizing
the risk of foreign currency exchange rate changes. Our strategy is to primarily utilize forward contracts to hedge
foreign currency exposures. Under our program, gains and losses in our foreign currency exposures are offset by
losses and gains on our forward contracts. Our forward contracts generally have terms of one to six months. At the
end of the reporting period, open contracts are marked-to-market with unrealized gains and losses included in Other
income, net.
The following table presents a sensitivity analysis on our foreign forward exchange contract portfolio using a
statistical model to estimate the potential gain or loss in fair value that could arise from hypothetical appreciation or
depreciation of foreign currency (in millions):
Foreign Forward Exchange Contracts 10% 5%
Notional
Amount (5)% (10)%
Value of
Contracts
Given X%
Appreciation of
Foreign
Currency
Value of
Contracts
Given X%
Depreciation of
Foreign
Currency
Purchased, April 3, 2009 ........................ $264 $252 $240 $228 $216
Sold, April 3, 2009 ............................ $320 $337 $355 $373 $391
Purchased, March 28, 2008 ...................... $196 $189 $180 $171 $160
Sold, March 28, 2008........................... $352 $369 $387 $407 $430
Equity Price Risk
In June 2006, we issued $1.1 billion principal amount of 0.75% Convertible Senior Notes due 2011 and
$1.0 billion of 1.00% Convertible Senior Notes due 2013. Holders may convert their Senior Notes prior to maturity
upon the occurrence of certain circumstances. Upon conversion, we would pay the holder the cash value of the
applicable number of shares of Symantec common stock, up to the principal amount of the note. Amounts in excess
of the principal amount, if any, may be paid in cash or in stock at our option. Concurrent with the issuance of the
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