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Table of Contents
expected (contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract.
Foreign Currency Exchange Risk:
The majority of the Company's revenue, expense and capital purchasing activities are transacted in United States dollars. However, because
a portion of the Company's operations consists of activities outside of the United States, the Company has transactions in other currencies,
primarily the Canadian dollar, British pound and Euro. In preparing the Consolidated Financial Statements, the Company is required to translate
the financial statements of its foreign subsidiaries from the currency in which they keep their accounting records, generally the local currency,
into United States dollars. Different exchange rates from period to period impact the amounts of reported income and the amount of foreign
currency translation recorded in accumulated other comprehensive income. As part of its risk management strategy, the Company frequently
evaluates its foreign currency exchange risk by monitoring market data and external factors that may influence exchange rate fluctuations. As a
result, the Company may engage in transactions involving various derivative instruments to hedge assets, liabilities and purchases denominated
in foreign currencies. As of June 30, 2011, the Company has entered into the following financial instruments to manage its foreign currency
exchange risk:
Hedge of the Net Investment in Foreign Subsidiaries:
The Company has numerous investments in foreign subsidiaries, and the net assets of these subsidiaries are exposed to exchange rate
volatility. The Company frequently evaluates its foreign currency exchange risk by monitoring market data and external factors that may
influence exchange rate fluctuations. As a result, the Company may engage in transactions involving various derivative instruments to hedge
assets, liabilities and purchases denominated in foreign currencies.
During September 2006, the Company's cross-currency swap (which had a notional amount of $21.3 million and hedged a portion of the
Company's net investment in its foreign operations) was settled, resulting in a cash outlay of $8.9 million. This cash outlay was recorded within
investing activities within the Consolidated Statement of Cash Flows. The related cumulative tax-effected net loss of $7.9 million was recorded
in accumulated other comprehensive income (AOCI) in fiscal year 2007. This amount will remain deferred within AOCI indefinitely, as the
event which would trigger its release from AOCI and recognition in earnings is the sale or liquidation of the Company's international operations
that the cross
-
currency swap hedged. The Company currently has no intent to sell or liquidate this portion of its business operations.
June 30, 2011
Expected maturity date as of June 30, 2011
Fair
Value
2012
2013
2014
2015
2016
Thereafter
Total
Liabilities
(U.S.$
equivalent
in
thousands)
Long
-
term
debt:
Fixed rate
(U.S.$)
$
32,252
$
29,091
$
178,200
$
19,959
$
18,195
$
35,714
$
313,411
$
335,354
Average
interest
rate
8.4
%
8.4
%
5.5
%
8.6
%
8.5
%
8.5
%
6.7
%
Variable rate
(U.S.$)
—
—
—
—
—
—
—
—
Average
interest
rate
Total
liabilities
$
32,252
$
29,091
$
178,200
$
19,959
$
18,195
$
35,714
$
313,411
$
335,354
Interest rate
derivatives
(U.S.$
equivalent
in
thousands)
Pay
fixed/receive
variable
(U.S.$)
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—