LOGITECH INTERNATIONAL SA - Shareholder.com

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Table of Contents foreign currency gains or losses resulting from the translation of net assets or liabilities denominated in foreign currencies to the U.S. dollar are accumulated in the cumulative translation adjustment component of other comprehensive income in shareholders’ equity. The table below provides information about the Company’s underlying transactions that are sensitive to foreign exchange rate changes, primarily assets and liabilities denominated in currencies other than the functional currency, where the net exposure is greater than $0.5 million at March 31, 2007. The table below represents the U.S. dollar impact on earnings of a 10% appreciation and a 10% depreciation of the functional currency as compared with the transaction currency (in thousands): Functional Currency Transaction Currency Long currency positions represent net assets being held in the transaction currency while short currency positions represent net liabilities being held in the transaction currency. The Company’s principal manufacturing operations are located in China, with much of its component and raw material costs transacted in CNY. However, the functional currency of its Chinese operating subsidiary is the U.S. dollar as its sales and trade receivables are transacted in U.S. dollars. To hedge against any potential significant appreciation of the CNY, the Company transferred a portion of its cash investments to CNY accounts. At March 31, 2007, net assets held in CNY totaled $77.3 million. The Company continues to evaluate the level of net assets held in CNY relative to component and raw material purchases and interest rates on cash equivalents. From time to time, certain subsidiaries enter into forward exchange contracts to hedge inventory purchase exposures denominated in U.S. dollars. The amount of the forward exchange contracts is based on forecasts of inventory purchases. These forward exchange contracts are denominated in the same currency as the underlying transactions. Logitech does not use derivative financial instruments for trading or speculative purposes. As of March 31, 2007, the notional amount of forward foreign exchange contracts outstanding for forecasted inventory exposures was $38.5 million. These forward contracts generally mature within three months. Deferred realized gains totaled $0.3 million at March 31, 2007 and are expected to be reclassified to cost of goods sold when the related inventory is sold. The Company also enters into foreign exchange forward contracts to reduce the short-term effects of foreign currency fluctuations on certain foreign currency receivables or payables. The foreign exchange forward contracts are entered into on a monthly basis and generally mature within one to three months. Further, the Company may enter into foreign exchange swap contracts to extend the terms of its foreign exchange forward contracts. The notional amounts of foreign exchange forward contracts outstanding at March 31, 2007 were $9.0 million. The notional amounts of foreign exchange swap contracts outstanding at March 31, 2007 were $11.5 million. Unrealized net losses on the contracts were immaterial at March 31, 2007. 59 Net Exposed Long (Short) Currency Position FX Gain (Loss) From 10% Appreciation of Functional Currency FX Gain (Loss) From 10% Depreciation of Functional Currency U.S. dollar Chinese yuan renminbi $ 77,302 $ (7,027 ) $ 8,589 U.S. dollar Swedish kroner 10,283 (935 ) 1,143 U.S. dollar Mexican peso 4,432 (403 ) 492 U.S. dollar Japanese yen 840 (76 ) 93 U.S. dollar Euro (575 ) 52 (64 ) U.S. dollar Taiwanese dollar (10,113 ) 919 (1,124 ) Euro British pound sterling 20,132 (1,830 ) 2,237 Euro Russian rouble 2,726 (248 ) 303 Euro Norwegian Kroner (632 ) 57 (70 ) $ 104,395 $ (9,491 ) $ 11,599
Table of Contents If the U.S. dollar had appreciated by 10% compared with the hedged foreign currency, an unrealized gain of $4.1 million in our forward foreign exchange contract portfolio would have occurred. If the U.S. dollar had depreciated by 10% compared with the hedged foreign currency, a $3.7 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 short-term investments and interest expense on variable rate short-term debt. 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, 2007 and March 31, 2006 period end rates would not have a material effect on the Company’s results of operations or cash flows. ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES Not applicable. 60
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LOGITECH INTERNATIONAL SA FORM 20-F
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Table of Contents Part I TABLE OF C
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Table of Contents PART I ITEM 1. ID
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Table of Contents The following tab
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Page 43 and 44: Table of Contents The decrease in n
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Page 49 and 50: Table of Contents During fiscal yea
Page 51 and 52: Table of Contents Purchase Obligati
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Page 55 and 56: Table of Contents SWX Swiss Exchang
Page 57 and 58: Table of Contents D. Selling Shareh
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Page 63 and 64: Table of Contents (d) Changes in In
Page 65 and 66: Table of Contents ITEM 17. FINANCIA
Page 67 and 68: Table of Contents SIGNATURES The re
Page 69 and 70: Table of Contents REPORT OF THE IND
Page 71 and 72: Table of Contents LOGITECH INTERNAT
Page 75 and 76: Table of Contents Note 1 — The Co
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Page 101 and 102: LOGITECH INTERNATIONAL S.A. LIST OF
Page 103 and 104: CONSENT OF INDEPENDENT REGISTERED P
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Page 107 and 108: An additional 40 million shares hav
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Trustees of the Santa Fe Institute,
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is responsible for leading the tran
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(4) Mr. Okamoto will retire from th
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Compensation Committee The Compensa
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the Chairman and the Chief Executiv
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eight years at Weiser Lock, a divis
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During 2007, stock option grants to
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proceedings that may arise by reaso
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5.7 Additional Fees and Remuneratio
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Shareholders is sent and re-opens o
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Independent Registered Public Accou
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LOGITECH INTERNATIONAL S.A. Consoli
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I, Mark J. Hawkins, certify that: C
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