Salesforce.com 2013 Annual Report Download - page 81

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Details on outstanding foreign currency derivative contracts related primarily to intercompany receivables
and payables are presented below (in thousands):
As of January 31,
2013 2012
Notional amount of foreign currency derivative contracts ......... $692,637 $186,336
Fair value of foreign currency derivative contracts .............. $ 2,336 $ (1,930)
The fair value of the Company’s outstanding derivative instruments are summarized below (in thousands):
Fair Value of Derivative Instruments
As of January 31,
Balance Sheet Location 2013 2012
Derivative Assets
Derivatives not designated as hedging
instruments:
Foreign currency derivative
contracts .....................
Prepaid expenses and
other current assets $5,643 $ 621
Derivative Liabilities
Derivatives not designated as hedging
instruments:
Foreign currency derivative
contracts .....................
Accounts payable,
accrued expenses
and other liabilities $3,307 $2,551
The effect of the derivative instruments not designated as hedging instruments on the consolidated
statements of operations during fiscal 2013, 2012 and 2011, respectively are summarized below (in thousands):
Derivatives Not Designated as Hedging Instruments
Gains (Losses) on Derivative Instruments
Recognized in Income
Fiscal Year Ended January 31,
Location 2013 2012 2011
Foreign currency derivative contracts ........... Other expense $16,591 $6,221 $(3,098)
Strategic Investments
The Company has four investments in marketable equity securities measured using quoted prices in their
respective active markets and certain interests in non-marketable equity and debt securities that are collectively
considered strategic investments. As of January 31, 2013, the fair value of the Company’s marketable equity
securities of $4.9 million includes an unrealized gain of $1.7 million. As of January 31, 2012, the Company had
two investments in marketable equity securities. The fair value of the Company’s marketable equity securities of
$5.6 million included an unrealized gain of $3.4 million. These investments are recorded in other assets, net on
the consolidated balance sheets.
The Company’s interest in non-marketable equity and debt securities consists of noncontrolling equity and
debt investments in privately-held companies. The Company’s investments in these privately-held companies are
reported at cost or marked down to fair value when an event or circumstance indicates an other-than-temporary
decline in value has occurred. These investments are valued using significant unobservable inputs or data in an
inactive market and the valuation requires the Company’s judgment due to the absence of market price and
inherent lack of liquidity.
As of January 31, 2013 and 2012, the carrying value that approximates the fair value of the Company’s
investments in privately-held companies was $46.8 million and $48.3 million, respectively. These investments
are recorded in other assets, net on the consolidated balance sheets.
77