This excerpt taken from the HBI 10-Q filed May 11, 2009.
Market to Market Hedges Intercompany Foreign Exchange Transactions
The Company uses foreign exchange derivative contracts to reduce the impact of foreign exchange fluctuations on anticipated intercompany purchase and lending transactions denominated in foreign currencies. Foreign exchange derivative contracts are recorded as mark to market hedges when the hedged item is a recorded asset or liability that is revalued in each accounting period, in accordance with SFAS No. 52, Foreign Currency Translation. Mark to market hedge derivatives relating to intercompany foreign exchange contracts are reported in the Condensed Consolidated Statements of Cash Flows as cash flow from operating activities. As of April 4, 2009, the U.S. dollar equivalent of commitments to purchase and sell foreign currencies in our
Notes to Condensed Consolidated Financial Statements (Continued)
(dollars and shares in thousands, except per share data)
foreign currency mark to market hedge derivative portfolio is $56,411 and $41,800, respectively, using the exchange rate at the reporting date.