Juno 2013 Annual Report Download - page 76

Table of Contents
all other applicable foreign currencies) are monitored by us throughout the year. We face two risks related to foreign currency exchange rates
—translation risk and transaction risk. Amounts invested in our foreign operations are translated into U.S. Dollars using period-end exchange rates. The
resulting translation adjustments are recorded as a component of accumulated other comprehensive loss in the unaudited condensed consolidated balance
sheets. Revenues and expenses in foreign currencies translate into higher or lower revenues and expenses in U.S. Dollars as the U.S. Dollar weakens or
strengthens against other currencies. Substantially all of the revenues of our foreign subsidiaries are received, and substantially all expenses are
incurred, in currencies other than the U.S. Dollar, which increases or decreases the related U.S. Dollar-reported revenues and expenses depending on
the exchange rate trend in currencies. Therefore, changes in foreign currency exchange rates may negatively affect our consolidated revenues and net
income. A hypothetical 10% adverse change in overall foreign currency exchange rates over an entire year would not have a material impact on annual
revenues and would have impacted income (loss) before income taxes by approximately $0.7 million and $0.5 million, respectively, for the years ended
December 31, 2013 and 2012. These estimates assume an adverse shift in all foreign currency exchange rates against the U.S. Dollar, which do not
always move in the same direction or in the same degrees, and actual results may differ materially. Net foreign currency transaction gains or losses
arising from transactions denominated in currencies other than the local functional currency are included in other income, net, in the consolidated
statements of operations.
We currently utilize forward foreign currency exchange contracts to protect the value of our net investments in certain foreign subsidiaries and
certain forecasted cash flows denominated in currencies other than the U.S. Dollar. These contracts are designated as hedges of net investments in
foreign subsidiaries and hedges of cash flows. At December 31, 2013, the notional value of open forward foreign currency exchange contracts
accounted for as cash flow hedges totaled $1.2 million. The Company did not have any open net investment hedges at December 31, 2013.
Periodically, we enter into forward foreign currency exchange contracts, which are not designated as hedging instruments for accounting purposes.
We enter into these derivative instruments to hedge intercompany transactions and partially offset the economic effect of fluctuations in foreign currency
exchange rates. At December 31, 2013, the notional value of open forward foreign currency exchange contracts that did not qualify for hedge
accounting treatment totaled $3.7 million. We may, in the future, also use other derivative financial instruments, if it is determined that such hedging
activities are appropriate to reduce risk.
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For our Consolidated Financial Statements and Schedule II, see the Index to Consolidated Financial Statements on page F-1.
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None.
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
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company's disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the
period covered by this report. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of
such period, the Company's disclosure controls and procedures are effective in recording, processing, summarizing, and reporting, on a timely basis,
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