eFax 2010 Annual Report Download - page 36

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Dollar, primarily the Canadian Dollar, Euro and British Pound Sterling. However, the exposure is mitigated by our practice of generally
reinvesting profits from international operations in order to grow that business.
As we increase our operations in international markets we become increasingly exposed to changes in currency exchange rates. The
economic impact of currency exchange rate movements is often linked to variability in real growth, inflation, interest rates, governmental actions
and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.
As currency exchange rates change, translation of the income statements of the international businesses into U.S. Dollars affects year-
over-
year comparability of operating results. Historically, we have not hedged translation risks because cash flows from international operations
were generally reinvested locally; however, we may do so in the future. Our objective in managing foreign exchange risk is to minimize the
potential exposure to changes that exchange rates might have on earnings, cash flows and financial position.
Foreign exchange gains and losses were not material to our earnings in 2010, 2009 or 2008. For the years ended December 31, 2010,
2009 and 2008, translation adjustments amounted to $(0.7) million, $1.7 million and $(6.8) million, respectively. As of December 31, 2010,
cumulative translation adjustments included in other comprehensive income amounted to $(2.5) million.
We currently do not have derivative financial instruments for hedging, speculative or trading purposes and therefore are not subject to
such hedging risk. However, we may in the future engage in hedging transactions to manage our exposure to fluctuations in foreign currency
exchange rates.
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