Supercuts 2007 Annual Report Download - page 64

Download and view the complete annual report

Please find page 64 of the 2007 Supercuts 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.

Page out of 193

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169
  • 170
  • 171
  • 172
  • 173
  • 174
  • 175
  • 176
  • 177
  • 178
  • 179
  • 180
  • 181
  • 182
  • 183
  • 184
  • 185
  • 186
  • 187
  • 188
  • 189
  • 190
  • 191
  • 192
  • 193

(contractual) maturity dates. Notional amounts are used to calculate the contractual payments to be exchanged under the contract.
**
Represents the average expected cost of borrowing for outstanding derivative balances as of June 30, 2007.
Foreign Currency Exchange Risk:
The majority of the Company’s revenue, expense and capital purchasing activities are transacted in United States dollars. However,
because a portion of the Company’s operations consists of activities outside of the United States, the Company has transactions in other
currencies, primarily the Canadian dollar, British pound and Euro. In preparing the Consolidated Financial Statements, the Company is
required to translate the financial statements of its foreign subsidiaries from the currency in which they keep their accounting records, generally
the local currency, into United States dollars. Different exchange rates from period to period impact the amounts of reported income and the
amount of foreign currency translation recorded in accumulated other comprehensive income. As part of its risk management strategy, the
Company frequently evaluates its foreign currency exchange risk by monitoring market data and external factors that may influence exchange
rate fluctuations. As a result, the Company may engage in transactions involving various derivative instruments to hedge assets, liabilities and
purchases denominated in foreign currencies. As of June 30, 2007, the Company has entered into the following financial instruments:
Hedge of the Net Investment in Foreign Subsidiaries:
The Company has numerous investments in foreign subsidiaries, and the net assets of these subsidiaries are exposed to exchange rate
volatility. The Company frequently evaluates its foreign currency exchange risk by monitoring market data and external factors that may
influence exchange rate fluctuations. As a result, the Company may engage in transactions involving various derivative instruments to hedge
assets, liabilities and purchases denominated in foreign currencies.
63
Expected maturity date as of June 30,
June 30, 2007
June 30,
2006
2008
2009
2010
2011
2012
Thereafter
Total
Fair Value
Fair Value
Liabilities
(U.S.$equivalent in
thousands)
Long
-term debt:
Fixed rate (U.S.$)
$
75,552
$
87,281
$
75,175
$
46,011
$
72,914
$
104,498
$
461,431
$
460,557
$
455,739
Average interest rate
5.7
%
7.0
%
5.9
%
5.7
%
7.1
%
5.0
%
6.1
%
Variable rate
(U.S.$)
147,800
—
—
—
—
100,000
247,800
247,800
162,787
Average interest rate
6.5
%
5.9
%
6.3
%
Total liabilities
$
223,352
$
87,281
$
75,175
$
46,011
$
72,914
$
204,498
$
709,231
$
708,357
$
618,526
Interest rate derivatives
(U.S.$equivalent in
thousands)
Pay variable/receive
fixed (U.S.$)
—
$
14,000
—
—
—
—
$
14,000
$
—
$
51
Average pay rate**
7.1
%
7.1
%
Average receive rate**
7.1
%
7.1
%
Pay fixed/receive
variable (U.S.$)
—
—
—
—
—
$
50,000
$
50,000
$
(1,728
)
(2,353
)
Average pay rate**
4.8
%
4.8
%
Average receive rate**
5.4
%
5.4
%