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Because derivative instruments are used solely as hedges and not for speculative trading purposes, fluctuations in the market values of such derivative instruments are generally offset by reciprocal changes in the underlying economic exposures that the instruments are intended to hedge.
−Removed: For further discussion of derivative financial instruments, refer to Note 14, "Derivatives."
+Added: For further discussion of derivative financial instruments, see Note 14, "Derivatives."
Currency exchange rate risk
−Removed: We are exposed to foreign currency exchange rate risks inherent in our sales commitments, anticipated sales, and assets and liabilities denominated in currencies other than the functional currency of our subsidiaries.
−Removed: We hedge future cash flows denominated in currencies other than the functional currency using sales and expense forecasts up to twelve months in advance.
+Added: We are exposed to foreign currency exchange rate risks inherent in our sales commitments, anticipated sales, expenses and assets and liabilities denominated in currencies other than the functional currency of our subsidiaries.
+Added: We hedge future cash flows denominated in currencies other than the functional currency using sales and expense forecasts on a rolling period of up to twelve months.
Our exposure to exchange rate risks is managed on an enterprise-wide basis.
−Removed: This strategy utilizes derivative financial instruments, including option and forward contracts, to hedge certain foreign currency exposures with the intent of offsetting gains and losses that occur on the underlying exposures with gains and losses on the derivative contracts hedging them.
+Added: This strategy utilizes derivative financial instruments, primarily forward contracts, to hedge certain foreign currency exposures with the intent of offsetting gains and losses that occur on the underlying exposures with gains and losses on the derivative contracts hedging them.
We do not currently and do not intend to utilize derivative financial instruments for speculative trading purposes.
+Added: To the extent that we are required to pay for all, or portions, of an acquisition price in foreign currencies, we may enter into foreign exchange contracts to reduce the risk that currency movements will impact the cost of the transaction.
Our operations generate non-functional currency cash flows such as revenue, third-party vendor payments and inter-company payments.
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In 2020, 2019 and 2018, approximately 76 percent, 74 percent and 76 percent of our revenues were generated in U.S.
−Removed: We performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above.
+Added: The unfavorable effects of changes in foreign currency exchange rates, principally as a result of the strength of the U.S.
+Added: dollar, has an immaterial on our revenue in the year ended October 31, 2020.
+Added: We calculate the impact of foreign currency exchange rates movements by applying the actual foreign currency exchange rates in effect during the last month of each quarter to the current year to both the applicable current and prior year periods.
+Added: We also performed a sensitivity analysis assuming a hypothetical 10 percent adverse movement in foreign exchange rates to the hedging contracts and the underlying exposures described above.
As of October 31, 2020 and 2019, the analysis indicated that these hypothetical market movements would not have a material effect on our consolidated financial position, results of operations or cash flows.
Interest rate risk
−Removed: As of October 31, 2019, we had $1.8 billion in principal amount of senior debt outstanding.
−Removed: The carrying amount of the fixed-rate senior notes was $1.8 billion, and the related fair value based on quoted prices was $1.9 billion.
A change in interest rates on long-term debt impacts the fair value of the company’s fixed-rate long-term debt but not the company’s earnings or cash flow because the interest on such debt is fixed.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.