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This excerpt taken from the ELN 6-K filed Mar 30, 2009. d Foreign
currency 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 did not enter into any forward contracts in 2008. During
2007, we entered into a number of Euro forward currency
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 and
2007.
The table below shows our currency exposure. Such exposure
comprises the monetary assets and monetary liabilities that are
not denominated in the functional currency of the operating unit
involved. At 31 December, these exposures were as follows:
Table of Contents
Notes to the
Consolidated Financial Statements
A 10% strengthening of the U.S. dollar against the
following currencies at 31 December would have
increased/(decreased) shareholders’ equity and net loss by
the amounts shown below. This analysis assumes that all other
variables, in particular interest rates, remain constant.
A 10% weakening of the U.S. dollar against the above
currencies would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that
all other variables remain constant.
This excerpt taken from the ELN 6-K filed Mar 31, 2008. d Foreign
currency 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 as the presentation currency
for financial reporting. We do, however, have revenues, costs,
assets and liabilities denominated in currencies other than
U.S. dollars. Consequently, we enter into derivative
financial instruments to manage our
non-U.S. dollar
foreign exchange risk. We use derivative financial instruments
primarily to reduce exposures to market fluctuations in foreign
exchange rates. We do not enter into derivative financial
instruments for trading or speculative purposes. All derivative
contracts entered into are in liquid markets with
credit-approved parties. The treasury function operates within
strict terms of reference that have been approved by our board
of directors.
The U.S. dollar is the base currency against which all
identified transactional foreign exchange exposures are managed
and hedged. The principal risks to which we are exposed are
movements in the exchange rates of the U.S. dollar against
the Euro and Sterling. 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.
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. The forward
contracts expired on various dates throughout 2007. There were
no forward contracts outstanding at 31 December 2007.
Elan Corporation, plc 2007 Annual
Report 123
Table of Contents
The table below shows our currency exposure. Such
exposure comprises the monetary assets and monetary liabilities
that are not denominated in the functional currency of the
operating unit involved. At 31 December, these exposures
were as follows:
The amounts shown in the table above take into account the
effect of forward contracts entered into to manage these
currency exposures.
A 10% strengthening of the U.S. dollar against the
following currencies at 31 December would have
increased/(decreased) equity and net loss by the amounts shown
below. This analysis assumes that all other variables, in
particular interest rates, remain constant.
A 10% weakening of the U.S. dollar against the above
currencies would have had the equal but opposite effect on the
above currencies to the amounts shown above, on the basis that
all other variables remain constant.
This excerpt taken from the ELN 6-K filed Mar 30, 2007. c Foreign
currency risk
We are a multinational business operating in a number of
countries and the US dollar is the primary currency in which we
conduct business. The US dollar is used for planning and
budgetary purposes and as the presentation currency for
financial reporting. We do, however, have revenues, costs,
assets and liabilities denominated in currencies other than US
dollars. Consequently, we enter into derivative financial
instruments to manage our non-US dollar foreign exchange risk.
We use forward contracts primarily to reduce exposures to market
fluctuations in foreign exchange rates.
The US dollar is the base currency against which all identified
transactional foreign exchange exposures are managed and hedged.
The principal risks to which we are exposed are movements in the
exchange rates of the US dollar against the Euro, Sterling and
Japanese Yen. 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.
The table below shows our currency exposure. Such exposure
comprises the monetary assets and monetary liabilities that are
not denominated in the functional currency of the operating unit
involved. At 31 December 2006 and 2005, respectively, these
exposures were as follows:
The amounts shown in the table above take into account the
effect of forward contracts entered into to manage these
currency exposures.
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