LeapFrog 2013 Annual Report Download - page 73
Download and view the complete annual report
Please find page 73 of the 2013 LeapFrog annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.LEAPFROG ENTERPRISES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except per share data)
14. Derivative Financial Instruments
At December 31, 2013 and 2012, the Company had outstanding foreign exchange forward contracts with
notional values of $37,182 and $53,577, respectively. The gains and losses on these instruments are recorded
in other income (expense) in the consolidated 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, 2013, 2012 and 2011 were as follows:
Years Ended December 31,
2013 2012 2011
Losses on foreign exchange forward contracts ......... $(282) $(2,232) $ (2,004)*
Gains (losses) on underlying transactions denominated in
foreign currency ............................ (614) 666 (1,644)
Net losses ................................ $(896) $(1,566) $ (3,648)
* Amount includes a $1.5 million realized loss on foreign exchange forward hedging contracts in our
U.S. segment due to an operational error.
15. 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, 2013 and 2012 were 64,916 and 61,970, respectively. Class B shares outstanding
at December 31, 2013 and 2012 were 4,396 and 5,715, 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.
Beginning April 2004 and continuing through late December 2011, LeapFrog was a ‘‘controlled company’’
under the rules of the New York Stock Exchange (‘‘NYSE’’), as Mollusk Holdings, LLC (‘‘Mollusk’’), held
more than 50% of the voting power of the Company’s outstanding shares. On December 27, 2011, Mollusk
converted, on a one-to-one basis, 3,704 shares of the Company’s Class B common stock into shares of the
Company’s Class A common stock. After giving effect to the conversion, Mollusk held approximately
6.7 million shares of the Company’s Class B common stock and 3.8 million shares of the Company’s Class A
common stock, which together represented approximately 16.0% of the outstanding capital stock of the
Company. As a result of the conversion, Mollusk’s voting power of LeapFrog’s outstanding shares decreased
to approximately 42.8%; therefore, LeapFrog was no longer considered a ‘‘controlled company’’ under the
rules of the NYSE. In addition, in 2013, 2012 and 2011, certain Class B stockholders elected to convert
1,319, 5,398 and 6,144 shares, respectively, of their Class B common stock into the same number of shares of
Class A common stock at par value. These transactions had no material 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.
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.
65