Symantec 2012 Annual Report Download - page 130

of approximately $22 million and an increase of approximately $45 million, respectively. However, this
hypothetical change in interest rates would not impact the interest expense on the fixed-rate debt.
Foreign currency exchange rate risk
We conduct business in 38 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 (expense)
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 (expense) 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:
Value of
Contracts
Given X%
Appreciation of
Foreign
Currency Notional
Amount
Value of
Contracts
Given X%
Depreciation of
Foreign
Currency
Foreign Forward Exchange Contracts 10% 5% (5)% (10)%
(In millions)
Purchased, March 30, 2012 ..................... $353 $339 $323 $306 $287
Sold, March 30, 2012 .......................... $267 $280 $294 $309 $327
Purchased, April 1, 2011 ....................... $217 $208 $199 $188 $177
Sold, April 1, 2011 ............................ $271 $283 $298 $313 $331
Equity price risk
In June 2006, we issued $1.1 billion in principal amount of 0.75% notes and $1.0 billion in principal amount
of 1.00% notes. We received proceeds of $2.1 billion from the 0.75% notes and 1.00% notes and incurred net
transaction costs of approximately $33 million, of which $9 million was allocated to equity and the remainder
allocated proportionately to the 0.75% notes and 1.00% notes. The 0.75% notes and 1.00% notes were each
issued at par and bear interest at 0.75% and 1.00% per annum, respectively. Interest is payable semiannually in
arrears on June 15 and December 15. Concurrent with the issuance of the 0.75% notes and 1.00% notes, the
Company entered into note hedge transactions with affiliates of certain initial purchasers whereby the Company
has the option to purchase up to 110 million shares of Symantec common stock at a price of $19.12 per share.
The cost of the note hedge transactions was approximately $592 million.
In September 2010, we repurchased $500 million of aggregate principal amount of our 0.75% convertible
senior notes in privately negotiated transactions for approximately $510 million. Concurrently with the
repurchase, we sold a proportionate share of the note hedges that we entered into at the time of the issuance of
the convertible senior notes back to the note hedge counterparties for approximately $13 million. The net cost of
the repurchase and the concurrent sale of the note hedges was $497 million in cash. On June 15, 2011, we repaid
the remaining principal balance of $600 million under our 0.75% convertible senior notes upon maturity.
Concurrent with the maturity, the remaining related note hedges and warrants expired. No portion of these
hedges and warrants was converted into our common shares upon maturity.
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