LeapFrog 2008 Annual Report Download - page 89

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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
15. Derivative Financial Instruments
At December 31, 2008 and 2007, the Company had outstanding foreign exchange forward contracts with
notional values of $21,890 and $34,785, respectively. The gains and losses on these instruments are recorded in
“other income(expense), net” in the statements of operations. Gains and losses from foreign exchange forward
contracts, net of gains and losses on the underlying transactions denominated in foreign currency for the years
ended December 31, 2008, 2007 and 2006 are shown in the table below.
Years Ending December 31,
2008 2007 2006
Gains (losses) on foreign currency forward contracts ........................ $ 874 $(2,967) $(3,872)
Gains (losses) on underlying transactions denominated in foreign currency ...... (2,092) 2,964 2,812
Net losses ...................................................... $(1,218) $ (3) $(1,060)
16. Comprehensive Net Loss
The Company’s comprehensive net loss for the three years ended December 31, 2008, 2007 and 2006 was
as follows:
Years Ending December 31,
2008 2007 2006
Net loss ....................................................... $(68,256) $(101,315) $(145,092)
Add (subtract):
Currency translation adjustments ............................... (6,689) 1,512 2,197
Temporary impairment loss on investments ...................... 598 (598) —
Comprehensive net loss ................................. $(74,347) $(100,401) $(142,895)
17. Stockholders’ Equity
The Company is authorized to issue 180,000 shares of common stock at a par value of $0.0001 per share, of
which 139,500 shares are designated as Class A and 40,500 shares are designated as Class B. Class A shares
outstanding at December 31, 2008 and 2007 were 36,627 and 35,857, respectively. Class B shares outstanding at
December 31, 2008 and 2007 were 27,141 and 27,614, respectively.
Class A stockholders are entitled to one vote per share and Class B stockholders are entitled to ten votes per
share. The Class B stockholders have the right to convert their Class B shares into an equal number of Class A
shares. In the fourth quarter of 2008, certain Class B stockholders elected to convert 473 shares of their Class B
common stock into 473 shares of Class A common stock at par value. The transaction had no impact on the
Company’s financial statements.
Class A and B stockholders are entitled to dividends paid in equal amounts per share on all shares of
Class A and Class B common stock. The terms of the Company’s asset-backed line of credit facility prohibit the
payment of cash dividends. From the inception of the Company through the date of this report, no dividends have
been declared or paid and management has no plans at this time to pay dividends in the foreseeable future.
In the event of liquidation, Class A and B common stockholders are equally entitled to all assets of the
Company available for distribution.
F-31