Logitech 2010 Annual Report Download - page 159
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147
ANNUAl REPORT
extend the terms of its foreign exchange forward contracts. The primary risk managed by using forward and swap
contracts is the foreign currency exchange rate risk. The gains or losses on foreign exchange forward contracts are
recognized in earnings based on the changes in fair value.
The notional amounts of foreign exchange forward contracts outstanding at March 31, 2010 relating to foreign
currency receivables or payables were $15.1 million. Open forward contracts as of March 31, 2010 consisted of
contracts in British pounds to purchase euros at a future date at a predetermined exchange rate. The notional
amounts of foreign exchange swap contracts outstanding at March 31, 2010 were $38.9 million. Swap contracts
outstanding at March 31, 2010 consisted of contracts in British pounds, Japanese yen, Mexican pesos and Canadian
dollars. Unrealized net losses on the contracts outstanding at March 31, 2010 were $0.1 million.
If the U.S. dollar had appreciated by 10% compared with the foreign currencies in which we have forward or
swap contracts, an unrealized gain of $7.0 million in our forward foreign exchange contract portfolio would have
occurred. If the U.S. dollar had depreciated by 10% compared with the foreign currencies in which we have forward
or swap contracts, a $7.3 million unrealized loss in our forward foreign exchange contract portfolio would have
occurred.
Interest Rates
Changes in interest rates could impact the Company’s anticipated interest income on its cash equivalents
and investment securities. The Company prepared sensitivity analyses of its interest rate exposures to assess the
impact of hypothetical changes in interest rates. Based on the results of these analyses, a 100 basis point decrease
or increase in interest rates from the March 31, 2010 and March 31, 2009 period end rates would not have a material
effect on the Company’s results of operations or cash flows.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
None.