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These excerpts taken from the MTD 10-K filed Feb 13, 2009. Quantitative and
Qualitative Disclosures about Market Risk
We have only limited involvement with derivative financial
instruments and do not use them for trading purposes.
We have entered into foreign currency forward contracts to
economically hedge short-term intercompany balances with our
international businesses on a monthly basis. Such contracts
limit our exposure to both
Table of Contents
favorable and unfavorable currency fluctuations. The net fair
value of these contracts was inconsequential at
December 31, 2008 and a $0.6 million gain at
December 31, 2007. A sensitivity analysis to changes on
these foreign currency-denominated contracts indicates that if
the primary currency (U.S. dollar, Swiss franc and British
pound) declined by 10%, the fair value of these instruments
would increase by $1.1 million at December 31, 2008,
as compared with a decrease of $1.6 million at
December 31, 2007. Any resulting changes in fair value
would be offset by changes in the underlying hedged balance
sheet position. The sensitivity analysis assumes a parallel
shift in foreign currency exchange rates. The assumption that
exchange rates change in parallel fashion may overstate the
impact of changing exchange rates on assets and liabilities
denominated in a foreign currency. We also have other currency
risks as described under “Effect of Currency on Results of
Operations.”
We have entered into certain interest rate swap agreements.
These contracts are more fully described in Note 4 to our
consolidated financial statements. The fair value of these
contracts was a net loss of $2.8 million and a net gain of
$0.6 million at December 31, 2008 and
December 31, 2007, respectively. Based on our agreements
outstanding at December 31, 2008, a 100-basis-point
increase in interest rates would result in an increase in the
net aggregate market value of these instruments of
$2.0 million, as compared with a decrease of
$0.8 million at December 31, 2007. Conversely, a
100-basis-point decrease in interest rates would result in a
$2.0 million decrease in the net aggregate market value of
these instruments at December 31, 2008, as compared with a
net increase of $0.9 million at December 31, 2007. Any
change in fair value would not affect our consolidated statement
of operations unless such agreements and the debt they hedge
were prematurely settled.
Quantitative and
Qualitative Disclosures about Market Risk
We have only limited involvement with derivative financial
instruments and do not use them for trading purposes.
We have entered into foreign currency forward contracts to
economically hedge short-term intercompany balances with our
international businesses on a monthly basis. Such contracts
limit our exposure to both
Table of Contents
favorable and unfavorable currency fluctuations. The net fair
value of these contracts was inconsequential at
December 31, 2008 and a $0.6 million gain at
December 31, 2007. A sensitivity analysis to changes on
these foreign currency-denominated contracts indicates that if
the primary currency (U.S. dollar, Swiss franc and British
pound) declined by 10%, the fair value of these instruments
would increase by $1.1 million at December 31, 2008,
as compared with a decrease of $1.6 million at
December 31, 2007. Any resulting changes in fair value
would be offset by changes in the underlying hedged balance
sheet position. The sensitivity analysis assumes a parallel
shift in foreign currency exchange rates. The assumption that
exchange rates change in parallel fashion may overstate the
impact of changing exchange rates on assets and liabilities
denominated in a foreign currency. We also have other currency
risks as described under “Effect of Currency on Results of
Operations.”
We have entered into certain interest rate swap agreements.
These contracts are more fully described in Note 4 to our
consolidated financial statements. The fair value of these
contracts was a net loss of $2.8 million and a net gain of
$0.6 million at December 31, 2008 and
December 31, 2007, respectively. Based on our agreements
outstanding at December 31, 2008, a 100-basis-point
increase in interest rates would result in an increase in the
net aggregate market value of these instruments of
$2.0 million, as compared with a decrease of
$0.8 million at December 31, 2007. Conversely, a
100-basis-point decrease in interest rates would result in a
$2.0 million decrease in the net aggregate market value of
these instruments at December 31, 2008, as compared with a
net increase of $0.9 million at December 31, 2007. Any
change in fair value would not affect our consolidated statement
of operations unless such agreements and the debt they hedge
were prematurely settled.
Quantitative and
Qualitative Disclosures about Market Risk
We have only limited involvement with derivative financial
instruments and do not use them for trading purposes.
We have entered into foreign currency forward contracts to
economically hedge short-term intercompany balances with our
international businesses on a monthly basis. Such contracts
limit our exposure to both
Table of Contents
favorable and unfavorable currency fluctuations. The net fair
value of these contracts was inconsequential at
December 31, 2008 and a $0.6 million gain at
December 31, 2007. A sensitivity analysis to changes on
these foreign currency-denominated contracts indicates that if
the primary currency (U.S. dollar, Swiss franc and British
pound) declined by 10%, the fair value of these instruments
would increase by $1.1 million at December 31, 2008,
as compared with a decrease of $1.6 million at
December 31, 2007. Any resulting changes in fair value
would be offset by changes in the underlying hedged balance
sheet position. The sensitivity analysis assumes a parallel
shift in foreign currency exchange rates. The assumption that
exchange rates change in parallel fashion may overstate the
impact of changing exchange rates on assets and liabilities
denominated in a foreign currency. We also have other currency
risks as described under “Effect of Currency on Results of
Operations.”
We have entered into certain interest rate swap agreements.
These contracts are more fully described in Note 4 to our
consolidated financial statements. The fair value of these
contracts was a net loss of $2.8 million and a net gain of
$0.6 million at December 31, 2008 and
December 31, 2007, respectively. Based on our agreements
outstanding at December 31, 2008, a 100-basis-point
increase in interest rates would result in an increase in the
net aggregate market value of these instruments of
$2.0 million, as compared with a decrease of
$0.8 million at December 31, 2007. Conversely, a
100-basis-point decrease in interest rates would result in a
$2.0 million decrease in the net aggregate market value of
these instruments at December 31, 2008, as compared with a
net increase of $0.9 million at December 31, 2007. Any
change in fair value would not affect our consolidated statement
of operations unless such agreements and the debt they hedge
were prematurely settled.
Quantitative and Qualitative Disclosures about Market Risk We have only limited involvement with derivative financial instruments and do not use them for trading purposes. We have entered into foreign currency forward contracts to economically hedge short-term intercompany balances with our international businesses on a monthly basis. Such contracts limit our exposure to both
Table of Contentsfavorable and unfavorable currency fluctuations. The net fair value of these contracts was inconsequential at December 31, 2008 and a $0.6 million gain at December 31, 2007. A sensitivity analysis to changes on these foreign currency-denominated contracts indicates that if the primary currency (U.S. dollar, Swiss franc and British pound) declined by 10%, the fair value of these instruments would increase by $1.1 million at December 31, 2008, as compared with a decrease of $1.6 million at December 31, 2007. Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position. The sensitivity analysis assumes a parallel shift in foreign currency exchange rates. The assumption that exchange rates change in parallel fashion may overstate the impact of changing exchange rates on assets and liabilities denominated in a foreign currency. We also have other currency risks as described under “Effect of Currency on Results of Operations.” We have entered into certain interest rate swap agreements. These contracts are more fully described in Note 4 to our consolidated financial statements. The fair value of these contracts was a net loss of $2.8 million and a net gain of $0.6 million at December 31, 2008 and December 31, 2007, respectively. Based on our agreements outstanding at December 31, 2008, a 100-basis-point increase in interest rates would result in an increase in the net aggregate market value of these instruments of $2.0 million, as compared with a decrease of $0.8 million at December 31, 2007. Conversely, a 100-basis-point decrease in interest rates would result in a $2.0 million decrease in the net aggregate market value of these instruments at December 31, 2008, as compared with a net increase of $0.9 million at December 31, 2007. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled. Quantitative and Qualitative Disclosures about Market Risk We have only limited involvement with derivative financial instruments and do not use them for trading purposes. We have entered into foreign currency forward contracts to economically hedge short-term intercompany balances with our international businesses on a monthly basis. Such contracts limit our exposure to both
Table of Contentsfavorable and unfavorable currency fluctuations. The net fair value of these contracts was inconsequential at December 31, 2008 and a $0.6 million gain at December 31, 2007. A sensitivity analysis to changes on these foreign currency-denominated contracts indicates that if the primary currency (U.S. dollar, Swiss franc and British pound) declined by 10%, the fair value of these instruments would increase by $1.1 million at December 31, 2008, as compared with a decrease of $1.6 million at December 31, 2007. Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position. The sensitivity analysis assumes a parallel shift in foreign currency exchange rates. The assumption that exchange rates change in parallel fashion may overstate the impact of changing exchange rates on assets and liabilities denominated in a foreign currency. We also have other currency risks as described under “Effect of Currency on Results of Operations.” We have entered into certain interest rate swap agreements. These contracts are more fully described in Note 4 to our consolidated financial statements. The fair value of these contracts was a net loss of $2.8 million and a net gain of $0.6 million at December 31, 2008 and December 31, 2007, respectively. Based on our agreements outstanding at December 31, 2008, a 100-basis-point increase in interest rates would result in an increase in the net aggregate market value of these instruments of $2.0 million, as compared with a decrease of $0.8 million at December 31, 2007. Conversely, a 100-basis-point decrease in interest rates would result in a $2.0 million decrease in the net aggregate market value of these instruments at December 31, 2008, as compared with a net increase of $0.9 million at December 31, 2007. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled. Quantitative and Qualitative Disclosures about Market Risk We have only limited involvement with derivative financial instruments and do not use them for trading purposes. We have entered into foreign currency forward contracts to economically hedge short-term intercompany balances with our international businesses on a monthly basis. Such contracts limit our exposure to both
Table of Contentsfavorable and unfavorable currency fluctuations. The net fair value of these contracts was inconsequential at December 31, 2008 and a $0.6 million gain at December 31, 2007. A sensitivity analysis to changes on these foreign currency-denominated contracts indicates that if the primary currency (U.S. dollar, Swiss franc and British pound) declined by 10%, the fair value of these instruments would increase by $1.1 million at December 31, 2008, as compared with a decrease of $1.6 million at December 31, 2007. Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position. The sensitivity analysis assumes a parallel shift in foreign currency exchange rates. The assumption that exchange rates change in parallel fashion may overstate the impact of changing exchange rates on assets and liabilities denominated in a foreign currency. We also have other currency risks as described under “Effect of Currency on Results of Operations.” We have entered into certain interest rate swap agreements. These contracts are more fully described in Note 4 to our consolidated financial statements. The fair value of these contracts was a net loss of $2.8 million and a net gain of $0.6 million at December 31, 2008 and December 31, 2007, respectively. Based on our agreements outstanding at December 31, 2008, a 100-basis-point increase in interest rates would result in an increase in the net aggregate market value of these instruments of $2.0 million, as compared with a decrease of $0.8 million at December 31, 2007. Conversely, a 100-basis-point decrease in interest rates would result in a $2.0 million decrease in the net aggregate market value of these instruments at December 31, 2008, as compared with a net increase of $0.9 million at December 31, 2007. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled. Quantitative and Qualitative Disclosures about Market Risk We have only limited involvement with derivative financial instruments and do not use them for trading purposes. We have entered into foreign currency forward contracts to economically hedge short-term intercompany balances with our international businesses on a monthly basis. Such contracts limit our exposure to both
Table of Contentsfavorable and unfavorable currency fluctuations. The net fair value of these contracts was inconsequential at December 31, 2008 and a $0.6 million gain at December 31, 2007. A sensitivity analysis to changes on these foreign currency-denominated contracts indicates that if the primary currency (U.S. dollar, Swiss franc and British pound) declined by 10%, the fair value of these instruments would increase by $1.1 million at December 31, 2008, as compared with a decrease of $1.6 million at December 31, 2007. Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position. The sensitivity analysis assumes a parallel shift in foreign currency exchange rates. The assumption that exchange rates change in parallel fashion may overstate the impact of changing exchange rates on assets and liabilities denominated in a foreign currency. We also have other currency risks as described under “Effect of Currency on Results of Operations.” We have entered into certain interest rate swap agreements. These contracts are more fully described in Note 4 to our consolidated financial statements. The fair value of these contracts was a net loss of $2.8 million and a net gain of $0.6 million at December 31, 2008 and December 31, 2007, respectively. Based on our agreements outstanding at December 31, 2008, a 100-basis-point increase in interest rates would result in an increase in the net aggregate market value of these instruments of $2.0 million, as compared with a decrease of $0.8 million at December 31, 2007. Conversely, a 100-basis-point decrease in interest rates would result in a $2.0 million decrease in the net aggregate market value of these instruments at December 31, 2008, as compared with a net increase of $0.9 million at December 31, 2007. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled. These excerpts taken from the MTD 10-K filed Feb 15, 2008. Quantitative and
Qualitative Disclosures about Market Risk
We have only limited involvement with derivative financial
instruments and do not use them for trading purposes.
We have entered into foreign currency forward contracts to
economically hedge short-term intercompany balances with our
international businesses on a monthly basis. Such contracts
limit our exposure to both favorable and unfavorable currency
fluctuations. The fair value of these contracts was a
$0.6 million gain and a $0.2 million gain at
December 31, 2007 and 2006, respectively. A sensitivity
analysis to changes on these foreign currency-denominated
contracts indicates that if the primary currency
(U.S. dollar, Swiss franc and British pound) declined by
10%, the fair value of these instruments would decrease by
$1.6 million at December 31, 2007, as compared with a
decrease of $3.5 million at December 31, 2006. Any
resulting changes in fair value would be offset by changes in
the underlying hedged balance sheet position. The sensitivity
analysis assumes a parallel shift in foreign currency exchange
rates. The assumption that exchange rates change in parallel
fashion may overstate the impact of changing exchange rates on
assets and liabilities
Table of Contents
denominated in a foreign currency. We also have other currency
risks as described under “Effect of Currency on Results of
Operations.”
We have entered into certain interest rate swap agreements.
These contracts are more fully described in Note 4 to our
audited consolidated financial statements. The fair value of
these contracts was a $0.6 million gain at
December 31, 2007 and a $0.4 million loss at
December 31, 2006. Based on our agreements outstanding at
December 31, 2007, a 100-basis-point increase in interest
rates would result in a decrease in the net aggregate market
value of these instruments of $0.8 million, as compared
with a decrease of $1.0 million at December 31, 2006.
Conversely, a 100-basis-point decrease in interest rates would
result in a $0.9 million increase in the net aggregate
market value of these instruments at December 31, 2007, as
compared with a net increase of $1.1 million at
December 31, 2006. Any change in fair value would not
affect our consolidated statement of operations unless such
agreements and the debt they hedge were prematurely settled.
Quantitative and Qualitative Disclosures about Market Risk We have only limited involvement with derivative financial instruments and do not use them for trading purposes. We have entered into foreign currency forward contracts to economically hedge short-term intercompany balances with our international businesses on a monthly basis. Such contracts limit our exposure to both favorable and unfavorable currency fluctuations. The fair value of these contracts was a $0.6 million gain and a $0.2 million gain at December 31, 2007 and 2006, respectively. A sensitivity analysis to changes on these foreign currency-denominated contracts indicates that if the primary currency (U.S. dollar, Swiss franc and British pound) declined by 10%, the fair value of these instruments would decrease by $1.6 million at December 31, 2007, as compared with a decrease of $3.5 million at December 31, 2006. Any resulting changes in fair value would be offset by changes in the underlying hedged balance sheet position. The sensitivity analysis assumes a parallel shift in foreign currency exchange rates. The assumption that exchange rates change in parallel fashion may overstate the impact of changing exchange rates on assets and liabilities
Table of Contentsdenominated in a foreign currency. We also have other currency risks as described under “Effect of Currency on Results of Operations.” We have entered into certain interest rate swap agreements. These contracts are more fully described in Note 4 to our audited consolidated financial statements. The fair value of these contracts was a $0.6 million gain at December 31, 2007 and a $0.4 million loss at December 31, 2006. Based on our agreements outstanding at December 31, 2007, a 100-basis-point increase in interest rates would result in a decrease in the net aggregate market value of these instruments of $0.8 million, as compared with a decrease of $1.0 million at December 31, 2006. Conversely, a 100-basis-point decrease in interest rates would result in a $0.9 million increase in the net aggregate market value of these instruments at December 31, 2007, as compared with a net increase of $1.1 million at December 31, 2006. Any change in fair value would not affect our consolidated statement of operations unless such agreements and the debt they hedge were prematurely settled. | EXCERPTS ON THIS PAGE:
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