Hanesbrands (HBI)

 

We sell the majority of our products in transactions denominated in U.S. dollars; however, we purchase some raw materials, pay a portion of our wages and make other payments in our supply chain in foreign currencies. Our exposure to foreign exchange rates exists primarily with respect to the Canadian dollar, Mexican peso and Japanese yen against the U.S. dollar. We use foreign exchange forward and option contracts to hedge material exposure to adverse changes in foreign exchange rates. A sensitivity analysis technique has been used to evaluate the effect that changes in the market value of foreign exchange currencies will have on our forward and option contracts. At December 29, 2007, the potential change in fair value of foreign currency derivative instruments, assuming a 10% adverse change in the underlying currency price, was $4.0 million.

 

 

We sell the majority of our products in transactions denominated
in U.S. dollars; however, we purchase some raw materials,
pay a portion of our wages and make other payments in our supply
chain in foreign currencies. Our exposure to foreign exchange
rates exists primarily with respect to the Canadian dollar,
Mexican peso and Japanese yen against the U.S. dollar. We
use foreign exchange forward and option contracts to hedge
material exposure to adverse changes in foreign exchange rates.
A sensitivity analysis technique has been used to evaluate the
effect that changes in the market value of foreign exchange
currencies will have on our forward and option contracts. At
December 29, 2007, the potential change in fair value of
foreign currency derivative instruments, assuming a 10% adverse
change in the underlying currency price, was $4.0 million.

 

 

We sell the majority of our products in transactions in U.S. dollars; however, we purchase some raw materials, pay a portion of our wages and make other payments in our supply chain in foreign currencies. Our exposure to foreign exchange rates exists primarily with respect to the Canadian dollar, Mexican peso, and Japanese yen against the U.S. dollar. We intend to use foreign exchange forward and option contracts to hedge our exposure to adverse changes in foreign exchange rates. A sensitivity analysis technique has been used to evaluate the effect that changes in the market value of foreign exchange currencies will have on our forward and option contracts. At the end of fiscal 2006, the potential change in fair value of these instruments, assuming a 10% change in the underlying currency price, was $6.4 million. At the end of fiscal 2006, the market value of the contracts was $1.2 million. In conjunction with the spin off, all foreign currency hedge contracts were terminated and, all gains and losses on these contracts were realized at the time of termination.