THQ 2009 Annual Report Download - page 80

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methods. We have estimated the value of the put option as the difference between the par value of the
underlying ARS and the fair value of the ARS, after applying an estimated risk discount, as the put option
gives us the right to sell the underlying ARS to the broker during the period June 30, 2010 to July 2, 2012
for a price equal to the par value.
The following table provides a summary of changes in fair value of our Level 3 financial assets as of
March 31, 2009:
Level 3
Fair Value
Measurements
Balance at March 31, 2008 ................................ $54,419
Total gains or (losses) (realized/unrealized):
Included in earnings ................................... (4,554)
Included in accumulated other comprehensive income ........... 1,033
Purchases, sales, issuances and settlements, net .................. (11,120)
Transfers in/(out) of Level 3 ............................... (4,135)
Balance at March 31, 2009 ................................ $ 35,643
Transfers out of Level 3 represent three ARS related to the Lehman Brothers bankruptcy, that are now
valued using Level 1 and Level 2 inputs of the underlying securities we have received.
Financial Instruments. As of March 31, 2009 and 2008, we had foreign exchange forward contracts in the
notional amount of $67.2 million and $97.0 million, respectively, with a fair value that approximates zero at
both March 31, 2009 and 2008. We estimate the fair value of these contracts using inputs obtained in
quoted public markets. The net loss recognized from foreign currency contracts during fiscal 2009 was
$2.3 million, and the net gain recognized from foreign currency contracts during fiscal 2008 was
$5.9 million, both of which are included in interest and other income, net, in our consolidated statements
of operations.
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