SanDisk 2010 Annual Report Download - page 183

This is a TAB type table. Insert
conts here. Annual Report
hypothetical adverse foreign currency exchange rate movement of 10 percent. These changes in fair values would
be largely offset in other income (expense) by corresponding changes in the fair values of the foreign currency
denominated monetary assets and liabilities.
Notional Amount
Unrealized
Gain (Loss)
as of
January 2, 2011
Change in Fair
Value Due to
10% Adverse
Rate Movement
(In thousands)
Balance sheet hedges:
Cross currency swap contracts entered .............. $ (469,038) $ (67,250) $ (50,428)
Forward contracts sold ........................... (125,054) (962) (12,783)
Forward contracts purchased ...................... 289,242 4,308 31,890
Total net outstanding contracts ........................ $ (304,850) $ (63,904) $ (31,321)
The notional amount and fair value of our outstanding forward contracts that are designated as cash flow
hedges as of January 2, 2011 is shown in the table below. In addition, this table shows the change in fair value of
these cash flow hedges assuming a hypothetical adverse foreign currency exchange rate movement of 10 percent.
Notional Amount
Fair Value
as of
January 2, 2011
Change in Fair
Value Due to
10% Adverse
Rate Movement
(In thousands)
Cash flow hedges:
Forward contracts purchased ...................... $ 843,465 $ 13,465 $ (75,839)
Notwithstanding our efforts to mitigate some foreign exchange risks, we do not hedge all of our foreign
currency exposures, and there can be no assurances that our mitigating activities related to the exposures that we
do hedge will adequately protect us against risks associated with foreign currency fluctuations.
Market Risk. We hold available-for-sale equity securities, a portion of which is hedged, in publicly traded
companies. As of January 2, 2011, a reduction in price of 10% of these marketable equity securities would result
in a decrease in the fair value of our investments in marketable equity securities of approximately $9 million.
All of the potential changes noted above are based on sensitivity analysis performed on our financial
position at January 2, 2011. Actual results may differ materially.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is set forth beginning at page F-1.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not applicable.
ITEM 9A. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures. Our management has evaluated, under the supervision
and with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of our
disclosure controls and procedures as of January 2, 2011. Based on their evaluation as of January 2, 2011, our
Chief Executive Officer and Chief Financial Officer have concluded that our disclosure controls and procedures
55