LeapFrog 2009 Annual Report Download - page 83

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LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
12. Derivative Financial Instruments
At December 31, 2009 and 2008, the Company had outstanding foreign exchange forward contracts with notional
values of $13,277 and $21,890, 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, 2009, 2008 and 2007 were as follows:
Years Ended December 31,
2009 2008 2007
Gains (losses) on foreign exchange forward contracts .................... $ (55) $ 874 $(2,967)
Gains (losses) on underlying transactions denominated in foreign currency . . . (404) (2,092) 2,964
Net losses ................................................... $(459) $(1,218) $ (3)
13. Comprehensive Net Loss
The Company’s comprehensive net loss for the three years ended December 31, 2009, 2008 and 2007 was as
follows:
Years Ended December 31,
2009 2008 2007
Net loss ......................................................... $(2,688) $(68,354) $(102,476)
Currency translation adjustments ................................. 2,006 (6,689) 1,512
Temporary impairment gain (loss) on investments ................... 435 598 (598)
Tax expense allocated to temporary gain (loss) on investments ......... (228) — —
Comprehensive net loss ................................... $ (475) $(74,445) $(101,562)
14. 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, 2009 and 2008 were 36,894 and 36,627, respectively. Class B shares outstanding at
December 31, 2009 and 2008 were 27,141 and 27,141, 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.
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