Incredimail 2014 Annual Report Download - page 87

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A copy of each document (or a translation thereof to the extent not in English) concerning Perion that is referred to in this annual report
on Form 20-
F, is available for public view (subject to confidential treatment of agreements pursuant to applicable law) at our principal executive
offices at Perion Network Ltd., 26 HaRokmim Street, Holon 5885849, Israel.
I. SUBSIDIARY INFORMATION
Not applicable.
ITEM 11. QUANTITATIVE AN D QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Exchange Rate Risk.
A portion of our revenues and expenses are denominated in foreign currencies. As a result, numerous balances are
denominated or linked to these currencies. Foreign currency related fluctuations resulted in $2.2 million and $1.2 million net gains in 2012 and
2013, respectively, and $2.7 million net losses in 2014. These gains and losses are included in financial income (expense), net, as presented in
our statements of income.
As of December 31, 2014, balance sheet financial items in U.S. dollars, our functional currency, and those currencies other than the
U.S. dollars were as follows:
The fair value of firmly committed transactions denominated in currencies other than our functional currency, as of December 31, 2014,
was a net liability of $0.6 million for less than one year and an asset of $0.1 million for more than one year, all denominated in ILS.
The fair value of the outstanding derivative instruments and the notional amount of the hedged instruments as of December 31, 2014
were as follows:
In addition, in territories where our prices are based on local currencies, fluctuations in the dollar exchange rate could affect our gross
profit margin. We may compensate for such fluctuations by changing product prices accordingly. We also hold a small part of our financial
investments in other currencies, mainly ILS and Euro. The dollar value of those investments may decline. A revaluation of 1% of the foreign
currencies (i.e. other than U.S. dollar) would not have a material effect on our income before taxes possibly reducing it by less than $0.5 million.
U.S. dollars
ILS
Other
Currencies
Total
In thousands of U.S. dollars
Current assets
148,605
8,657
522
157,784
Long
-
term assets
2,076
624
-
2,700
Current liabilities
48,881
10,014
3,322
62,217
Long-term liabilities
2,281
37,179
-
39,460
Total
201,843
56,474
3,844
262,161
Notional
Amount
Fair Value
In thousands of U.S. dollars
Cross currency SWAP
36,895
0.1
Zero
-
cost collar contracts to hedge payroll expenses
6,625
(0.6
)
81