ServiceMagic 2009 Annual Report Download - page 58

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Table of Contents
Company is also exposed to foreign currency risk related to its assets and liabilities denominated in a currency other than the functional
currency.
The economic impact of currency exchange rate movements on the Company is often linked to variability in real growth, inflation, interest
rates, governmental actions and other factors. These changes, if material, could cause the Company to adjust its financing and operating
strategies. Foreign exchange gains and losses were not material to the Company's earnings in 2009, 2008 and 2007. As currency exchange rates
change, translation of the income statements of the Company's international businesses into U.S. dollars affects year-over-year comparability of
operating results. Historically, the Company has not hedged foreign currency translation risks because cash flows from international operations
were generally reinvested locally. However, the Company periodically reviews its strategy for hedging foreign currency translation risks. The
Company's objective in managing its foreign currency risk is to minimize its potential exposure to the changes that exchange rates might have on
its earnings, cash flows and financial position.
53