Netgear 2009 Annual Report Download - page 97

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Table of Contents
The Company’s investments in cash equivalents and available for sale securities are classified within Level 1 of the fair value hierarchy
because they are valued based on quoted market prices in active markets. All of the Company’s foreign currency forward contracts are with
counterparties that have long-term credit ratings of A+ or higher. The Company’s foreign currency forward contracts are classified within Level
2 of the fair value hierarchy as they are valued using pricing models that take into account the contract terms as well as currency rates and
counterparty credit rates. The Company verifies the reasonableness of these pricing models using observable market data for related inputs into
such models. Additionally, the Company includes an adjustment for non-performance risk in the recognized measure of fair value of derivative
instruments. At December 31, 2009 and December 31, 2008, the adjustment for non-performance risk did not have a material impact on the fair
value of the Company’s foreign currency forward contracts.
The carrying value of non-financial assets and liabilities measured at fair value in the financial statements on a recurring basis, including
accounts receivable and accounts payable, approximate fair value due to their short maturities.
Note 14—Comprehensive Income and Cumulative Other Comprehensive Income, Net:
The following table sets forth the activity for each component of other comprehensive income, net of related taxes, for the year ended
December 31, 2009, December 31, 2008, and December 31, 2007, respectively (in thousands):
The following table sets forth the components of cumulative other comprehensive income, net of related taxes, as of December 31, 2009
and December 31, 2008 (in thousands):
Note 15—Subsequent Events:
In January 2010, the Company completed the acquisition of certain intellectual property and other assets of Leaf Networks, LLC (“Leaf”).
The acquisition qualified as a business acquisition and will be accounted for using
95
As of December
31, 2008
Total
Quoted market
prices in active
markets
(Level 1)
Significant other
observable inputs
(Level 2)
Significant
unobservable inputs
(Level 3)
Foreign currency forward contracts(3)
$
(3,275
)
$
—
$
(
3,275
)
$
—
Total
$
(3,275
)
$
—
$
(
3,275
)
$
—
(3)
Included in other accrued liabilities on the Company
’
s consolidated balance sheet.
Year ended December 31,
2009
2008
2007
Net income
$
9,333
$
18,050
$
45,954
Change in unrealized gains and losses on derivative instruments, net of tax
20
—
—
Change in unrealized gains and losses on available
-
for
-
sale securities, net of tax
(63
)
(34
)
106
Other comprehensive income (loss)
$
(43
)
$
(34
)
$
106
Total comprehensive income
$
9,290
$
18,016
$
46,060
As of December 31,
2009
2008
Net unrealized gains on derivative instruments
$
20
$
—
Net unrealized gains on available
-
for
-
sale securities
4
67
Total cumulative other comprehensive income, net of taxes
$
24
$
67