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This excerpt taken from the ELN 6-K filed Mar 30, 2009. Exchange
Rate Risk
We are a multinational business operating in a number of
countries and the U.S. dollar is the primary currency in
which we conduct business. The U.S. dollar is used for
planning and budgetary purposes and is the functional currency
for financial reporting. We do, however, have revenues, costs,
assets and liabilities denominated in currencies other than
U.S. dollars. Transactions in foreign currencies are
recorded at the exchange rate prevailing at the date of the
transaction. The resulting monetary assets and liabilities are
translated into the appropriate functional currency at exchange
rates prevailing at the balance sheet date and the resulting
gains and losses are recognised in the income statement.
Consequently, we enter into forward contracts to manage our
non-U.S. dollar
foreign exchange risks and reduce exposures to market
fluctuations in foreign exchange rates, where appropriate. We do
not enter into derivative financial instruments for trading or
speculative purposes.
The principal foreign currency risk to which we are exposed
relates to movements in the exchange rate of the
U.S. dollar against the Euro. The main exposures are net
costs in Euro arising from a manufacturing and research presence
in Ireland and the sourcing of raw materials in European
markets, and revenue received in Euros arising from sales of
Tysabri in the European Union. Our exchange rate risk is
partially mitigated by these counteracting exposures.
We had entered into a number of Euro forward foreign exchange
contracts at various rates of exchange that required us to sell
U.S. dollars for Euros on various dates. These forward
contracts expired on various dates throughout 2007. There were
no forward contracts outstanding at 31 December 2008.
During 2008, average exchange rates were $1.47 = €1.00. We
sell U.S. dollars to buy Euros for costs incurred in Euros.
For additional information regarding exchange rate risk, refer
to Note 25 to the Consolidated Financial Statements.
This excerpt taken from the ELN 20-F filed Feb 26, 2009. Exchange
Rate Risk
We are a multinational business operating in a number of
countries and the U.S. dollar is the primary currency in
which we conduct business. The U.S. dollar is used for
planning and budgetary purposes and is the functional currency
for financial reporting. We do, however, have revenues, costs,
assets and liabilities denominated in currencies other than
U.S. dollars. Transactions in foreign currencies are
recorded at the exchange rate prevailing at the date of the
transaction. The resulting monetary assets and liabilities are
translated into the appropriate functional currency at exchange
rates prevailing at the balance sheet date and the resulting
gains and losses are recognized in the income statement.
Consequently, we enter into forward contracts to manage our
non-U.S. dollar
foreign exchange risks and reduce exposures to market
fluctuations in foreign exchange rates, where appropriate. We do
not enter into derivative financial instruments for trading or
speculative purposes.
The principal foreign currency risk to which we are exposed
relates movements in the exchange rate of the U.S. dollar
against the Euro. The main exposures are net costs in Euro
arising from a manufacturing and research presence in Ireland
and the sourcing of raw materials in European markets, and
revenue received in Euro arising from sales of Tysabri in
the European Union. Our exchange rate risk is partially
mitigated by these counteracting exposures.
We had entered into a number of Euro forward foreign exchange
contracts at various rates of exchange that required us to sell
U.S. dollars for Euro on various dates. These forward
contracts expired on various dates throughout 2007. There were
no forward contracts outstanding at December 31, 2008.
During 2008, average exchange rates were $1.47 = €1.00. We
sell U.S. dollars to buy Euro for costs incurred in Euro.
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