Symantec 2010 Annual Report Download - page 127

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 2, 2010 ........................... $ 10 $ 10 $ 10 $ 10 $ 10 *
April 3, 2009 ........................... $680 $680 $680 $680 $681 $681
* Amount not meaningful
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 44 currencies through our worldwide operations and, as such, we are exposed to
foreign currency 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 2, 2010 ........................ $217 $209 $199 $189 $177
Sold, April 2, 2010 ............................ $236 $248 $260 $274 $289
Purchased, April 3, 2009 ........................ $264 $252 $240 $228 $216
Sold, April 3, 2009 ............................ $320 $337 $355 $373 $391
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
Senior Notes, we entered into convertible note hedge transactions and separately, warrant transactions, to reduce the
potential dilution from the conversion of the Senior Notes and to mitigate any negative effect such conversion may
have on the price of our common stock.
For business and strategic purposes, we also hold equity interests in several privately held companies, many of
which can be considered to be in the start-up or development stages. These investments are inherently risky and we
could lose a substantial part or our entire investment in these companies. These investments are recorded at cost and
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