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require (or permit) assets or liabilities to be measured at fair value. The standard does not expand the use of fair value in
any new circumstances, but provides clarification on acceptable fair valuation methods and applications. SFAS 157 was
effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within
those fiscal years, which is the first quarter of our fiscal year 2009. On November 14, 2007, the FASB provided a one year
deferral for the adoption of SFAS 157 for non-financial assets and liabilities. We are currently evaluating the impact the
adoption of SFAS 157 will have on our consolidated financial statements.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities” (“SFAS 159”). SFAS 159 permits entities to choose to measure many financial assets and financial liabilities at
fair value. Unrealized gains and losses on items for which the fair value option has been elected are reported in earnings.
SFAS 159 is effective for fiscal years beginning after November 15, 2007, which is the first quarter of our fiscal year 2009.
We are currently evaluating the impact the adoption of SFAS 159 will have on our consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141(R), “Business Combinations” (“SFAS 141(R)”). SFAS 141(R)
establishes principles and requirements for how the acquirer of a business recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree. The
statement also provides guidance for recognizing and measuring the goodwill acquired in the business combination or a
gain from a bargain purchase and determines what information to disclose to enable users of financial statements to
evaluate the nature and financial effects of the business combination. SFAS 141(R) is effective for financial statements
issued for fiscal years beginning after December 15, 2008, which is the first quarter of our fiscal year 2010. We are
currently evaluating the impact the adoption of SFAS 141(R) will have on our consolidated financial statements.
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging
Activities-an amendment of FASB Statement No. 133” (“SFAS 161”). SFAS 161 updates guidance regarding disclosure
requirements for derivative instruments and hedging activities. It responds to constituents’ concerns that FASB
Statement No. 133 does not provide adequate information about how derivative and hedging activities affect an
entity’s financial position, financial performance, and cash flows. The disclosure of fair values of derivative instruments
and their gains and losses in a tabular format, as required by SFAS 161, should provide a more complete picture of the
location in an entity’s financial statements of both the derivative positions existing at period end and the effect of using
derivatives during the reporting period. SFAS 161 is effective for financial statements issued for fiscal years and interim
period beginning after November 15, 2008, which is the first quarter of our fiscal year 2010. We are currently evaluating
the impact the adoption of SFAS 161 will have on our consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Disclosure About Foreign Currency Risk
Although the majority of our transactions are in U.S. dollars, some transactions are based in various foreign
currencies. We purchase short-term, forward exchange contracts to hedge the impact of foreign currency exchange
fluctuations on certain underlying assets, liabilities and commitments for operating expenses and product costs
denominated in foreign currencies. The purpose of entering into these hedge transactions is to minimize the impact
of foreign currency fluctuations on our results of operations. The contract maturity dates do not exceed 12 months. We do
not purchase short-term forward exchange contracts for trading purposes. Currently, we focus on hedging our foreign
currency risk related to the Thai Baht, Malaysian Ringgit, Euro and the British Pound Sterling. Malaysian Ringgit
contracts are designated as cash flow hedges. Euro and British Pound Sterling contracts are designated as fair value
hedges. Thai Baht contracts are designated as both cash flow and fair value hedges. See Part II, Item 8, Note 1 in the
Notes to Consolidated Financial Statements, included in this Annual Report on Form 10-K.
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