SanDisk 2011 Annual Report Download - page 140

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table shows the gross realized gains and (losses) on sales of available-for-sale securities (in
thousands).
Fiscal years ended
January 1,
2012
January 2,
2011
January 3,
2010
Gross realized gains ................................................ $ 36,762 $ 20,867 $ 13,997
Gross realized losses ............................................... (2,213) (344) (576)
Fixed income securities by contractual maturity as of January 1, 2012 are shown below (in thousands).
Actual maturities may differ from contractual maturities because issuers of the securities may have the right to
prepay obligations.
Amortized
Cost
Fair
Value
Due in one year or less .......................................................... $ 1,758,354 $ 1,761,097
Due after one year through five years ............................................... 2,751,954 2,766,263
Total .................................................................... $ 4,510,308 $ 4,527,360
For certain of the Company’s other financial instruments, including accounts receivable and accounts
payable, the carrying amounts approximate fair value due to their short maturities. For those financial
instruments where the carrying amounts differ from fair value, the following table represents the related carrying
values and the fair values, which are based on quoted market prices (in thousands).
January 1, 2012 January 2, 2011
Carrying
Value
Fair
Value
Carrying
Value
Fair
Value
1% Sr. Convertible Notes due 2013........................ $ 852,146 $ 914,140 $ 993,199 $ 1,118,375
1.5% Sr. Convertible Notes due 2017 ...................... 752,765 1,177,500 717,833 1,132,500
Total ............................................ $ 1,604,911 $ 2,091,640 $ 1,711,032 $ 2,250,875
Note 4: Derivatives and Hedging Activities
The Company uses derivative instruments primarily to manage exposures to foreign currency. The
Company’s primary objective in holding derivatives is to reduce the volatility of earnings and cash flows
associated with changes in foreign currency. The program is not designated for trading or speculative purposes.
The Company’s derivatives expose the Company to credit risk to the extent that the counterparties may be unable
to meet the terms of the agreement. The Company seeks to mitigate such risk by limiting its counterparties to
major financial institutions and by spreading the risk across several major financial institutions. In addition, the
potential risk of loss with any one counterparty resulting from this type of credit risk is monitored on an ongoing
basis.
The Company recognizes derivative instruments as either assets or liabilities on the balance sheet at fair
value and provides qualitative disclosures about objectives and strategies for using derivatives, quantitative
disclosures about fair value amounts of gains and losses on derivative instruments, and disclosures about credit-
risk-related contingent features in derivative agreements. Changes in fair value (i.e., gains or losses) of the
derivatives are recorded as cost of product revenues or other income (expense), or as accumulated OCI. The
Company does not offset or net the fair value amounts of derivative instruments and separately discloses the fair
value amounts of the derivative instruments as either assets or liabilities.
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