Supercuts 2004 Annual Report Download - page 57

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Table of Contents
The table below provides information about the Company’s net investments in foreign operations and derivative financial instruments by
functional currency and presents such information in United States (U.S.) dollar equivalents. The table summarizes the Company’s exposure to
foreign currency translation risk related to its net investments in its foreign subsidiaries along with the associated cross-currency instrument
with a notional amount of $21.3 million to partially hedge the Company’s Euro foreign currency exposure related to its $115.1 million net
foreign investment. The cross-currency swap hedged approximately seven and nine percent of the Company’s net investments in total foreign
operations at June 30, 2004 and 2003, respectively.
The cross-currency swap derivative financial instrument expires in fiscal year 2007. At June 30, 2004 and 2003, the Company’s net investment
in this derivative financial instrument was in an $8.7 and $6.7 million loss position, respectively, based on its estimated fair value. See Note 5
to the Consolidated Financial Statements for further discussion.
45
Net Investments:
(U.S.$ Equivalent in thousands)
Net investment (CND)
$
64,758
Net investment (EURO)
115,139
Net investment (GBP)
83,966
Foreign Currency Derivative:
Fixed
for
fixed cross currency swap (Euro/U.S.)
Euro amount
€
23,782
Average pay Euro rate
8.29
%
U.S.$ amount
$
21,284
Average receive U.S. rate
8.39
%