Plantronics 2003 Annual Report Download - page 27

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47
forecasted foreign currency-denominated receivables, payables and cash balances.
The following table summarizes our net currency position, and approximate U.S. dollar
equivalent at March 31, 2003:
Local USD
(in thousands) Currency Equivalent Position Maturity
EUR 4,364 $ 4,700 Sell 1 month
GBP (954) $ (1,500) Buy 1 month
Foreign currency transaction losses, net of the effect of hedging activity, for fiscal 2001 and
2002 were $2.2 million, and $0.4 million, respectively. Foreign currency transaction gains, net
of the effect of hedging activity for fiscal 2003 were $0.9 million.
NOTE 14. RELATED PARTY TRANSACTIONS
A member of our Board of Directors is a director and employee of a management consulting
firm. We have entered into a consulting agreement with this firm under which certain management
consulting services are provided to Plantronics from time to time. The total amounts paid to this
firm for the years ended March 31, 2001, 2002 and 2003 were $1.1 million, $0.4 million, and $1.2
million, respectively. As of March 31, 2002 there was $0.1 million due to this firm under the
agreement. No material amounts were due to this firm as of March 31, 2003.
46
Notes to Consolidated Financial Statements
The following table summarizes the changes in the carrying amount of goodwill during fiscal
2002 and 2003:
(in thousands) 2002 2003
Balance, April 1 $6,084 $9,542
Acquisition 3,250 —
Carrying value adjustments —(156)
Reclassification of intangible asset 208 —
Balance, March 31 $9,542 $9,386
In fiscal 2002, workforce in place was reclassified from intangible assets to goodwill. In fiscal
2003, an adjustment to the goodwill carrying value was made as actual expenses differed
slightly from those accrued originally.
NOTE 13. FOREIGN CURRENCY HEDGING
During the first quarter of fiscal year 2002, we adopted SFAS No. 133, “Accounting for
Derivative Instruments and Hedging Activities,” as amended by SFAS No. 138, “Accounting
for Certain Derivative Instruments and Certain Hedging Activities,” which did not have a
material impact on our financial position
Beginning in the first quarter of fiscal year 2002, and during fiscal 2003 we entered into foreign
currency forward-exchange contracts, which typically mature in one month, to hedge the
exposure to foreign currency fluctuations of expected foreign currency-denominated
receivables, payables and cash balances. We record on the balance sheet at each reporting
period the fair value of our forward-exchange contracts and record any fair value adjustments
in results of operations. Gains and losses associated with currency rate changes on the
contracts are recorded in other income (expense), offsetting transaction gains and losses on the
related assets and liabilities.
As of March 31, 2003, we had a net position of $3.2 million of foreign currency forward-
exchange contracts outstanding, in the Euro and Great British Pound, as a hedge against our