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HBI » Topics » Due to the extensive nature of our foreign operations, fluctuations in foreign currency exchange rates could negatively impact our results of operations.These excerpts taken from the HBI 10-K filed Feb 19, 2008. Due to
the extensive nature of our foreign operations, fluctuations in
foreign currency exchange rates could negatively impact our
results of operations.
We sell a majority of our products in transactions denominated
in U.S. dollars; however, we purchase many of our products,
pay a portion of our wages and make other payments in our supply
chain in foreign currencies. As a result, if the
U.S. dollar were to weaken against any of these currencies,
our cost of sales could increase substantially. Outside the
United States, we may pay for materials or finished products in
U.S. dollars, and in some cases a strengthening of the
U.S. dollar could effectively increase our costs where we
use foreign currency to purchase the U.S. dollars we need
to make such payments. We use foreign exchange forward and
option contracts to hedge material exposure to adverse changes
in foreign exchange rates. We are also exposed to gains and
losses resulting from the effect that fluctuations in foreign
currency exchange rates have on the reported results in our
Consolidated Financial Statements due to the translation of
operating results and financial position of our foreign
subsidiaries. In addition, currency fluctuations can impact the
price of cotton, the primary raw material we use in our business.
Due to the extensive nature of our foreign operations, fluctuations in foreign currency exchange rates could negatively impact our results of operations. We sell a majority of our products in transactions denominated in U.S. dollars; however, we purchase many of our products, pay a portion of our wages and make other payments in our supply chain in foreign currencies. As a result, if the U.S. dollar were to weaken against any of these currencies, our cost of sales could increase substantially. Outside the United States, we may pay for materials or finished products in U.S. dollars, and in some cases a strengthening of the U.S. dollar could effectively increase our costs where we use foreign currency to purchase the U.S. dollars we need to make such payments. We use foreign exchange forward and option contracts to hedge material exposure to adverse changes in foreign exchange rates. We are also exposed to gains and losses resulting from the effect that fluctuations in foreign currency exchange rates have on the reported results in our Consolidated Financial Statements due to the translation of operating results and financial position of our foreign subsidiaries. In addition, currency fluctuations can impact the price of cotton, the primary raw material we use in our business. This excerpt taken from the HBI 10-K filed Sep 28, 2006. Due to
the extensive nature of our foreign operations, fluctuations in
foreign currency exchange rates could negatively impact our
results of operations.
We sell a majority of our products in transactions denominated
in U.S. dollars; however, we purchase many of our products,
pay a portion of our wages and make other payments in our supply
chain in foreign currencies. As a result, if the
U.S. dollar were to weaken against any of these currencies,
our cost of sales could increase substantially. We are also
exposed to gains and losses resulting from the effect that
fluctuations in foreign currency exchange rates have on the
reported results in our consolidated financial statements due to
Table of Contents
the translation of operating results and financial position of
our foreign subsidiaries. In addition, currency fluctuations can
impact the price of cotton, the primary raw material we use in
our business.
We have
significant unfunded employee benefit liabilities; if
assumptions underlying our calculation of these liabilities
prove incorrect, the amount of these liabilities could increase
or we could be required to make contributions to these plans in
excess of our current expectations, both of which could have a
negative impact on our cash flows, liquidity and results of
operations.
We assumed significant unfunded employee benefit liabilities of
approximately $277 million for pension, postretirement and
other retirement benefit qualified and nonqualified plans from
Sara Lee in connection with the spin off. Included in these
unfunded liabilities are pension obligations that have not been
reflected in our historical financial statements, because these
obligations have historically been obligations of Sara Lee. The
pension obligations we assumed are approximately
$201 million more than the corresponding pension assets we
acquired, and as a result our pension plans are underfunded. In
addition, we could be required to make contributions to the
pension plans in excess of our current expectations if financial
conditions change or if the assumptions we have used to
calculate our pension costs and obligations are inaccurate. A
significant increase in our funding obligations could have a
negative impact on our cash flows, liquidity and results of
operations.
This excerpt taken from the HBI 8-K filed Sep 5, 2006. Due to the extensive nature of our foreign operations, fluctuations in foreign currency exchange rates could negatively impact our results of operations. We sell a majority of our products in transactions denominated in U.S. dollars; however, we purchase many of our products, pay a portion of our wages and make other payments in our supply chain in foreign currencies. As a result, if the U.S. dollar were to weaken against any of these currencies, our cost of sales could increase substantially. We are also exposed to gains and losses resulting from the effect that fluctuations in foreign currency exchange rates have on the reported results in our consolidated financial statements due to the translation of operating results and financial position of our foreign subsidiaries. In addition, currency fluctuations can impact the price of cotton, the primary raw material we use in our business. We have significant unfunded employee benefit liabilities: if assumptions underlying our calculation of these liabilities prove incorrect, the amount of these liabilities could increase or we could be required to make contributions to these plans in excess of our current expectations, both of which could have a negative impact on our cash flows, liquidity and results of operations. We will assume significant unfunded employee benefit liabilities for pension, postretirement and other retirement benefit qualified and nonqualified plans from Sara Lee in connection with the spin-off. These
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Table of Contentsunfunded liabilities are expected to be approximately $348.6 million. Included in these unfunded liabilities are pension obligations which have not been reflected in our historical financial statements, because these obligations have historically been obligations of Sara Lee. The pension obligations we are assuming are projected to be approximately $266.0 million more than the corresponding pension assets we are acquiring, which will result in our pension plans being underfunded. In addition, we could be required to make contributions to the pension plans in excess of our current expectations if financial conditions change or if the assumptions we have used to calculate our pension costs and obligations turn out to be inaccurate. A significant increase in our funding obligations could have a negative impact on our cash flows, liquidity and results of operations. See “Unaudited Pro Forma Combined and Consolidated Financial Statements.” | EXCERPTS ON THIS PAGE:
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