Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We do not engage in trading market risk sensitive instruments and do not purchase investments as hedges or for purposes “other than trading” that are likely to expose us to certain types of market risk, including interest rate, commodity price, or equity price risk. Although we have investments, we believe there has been no material change in our exposure to interest rate risk. We have not issued any debt instruments, entered into any forward or futures contracts, purchased any options, or entered into any swap agreements.
We are exposed, however, to other market risks, including changes in currency exchange rates as measured against the United States dollar. Because the change in value of the United States dollar measured against foreign currency may affect our consolidated financial results, changes in foreign currency exchange rates could positively or negatively affect our results as expressed in United States dollars. For example, when the United States dollar strengthens against foreign currencies in which our products are sold or weakens against foreign currencies in which we may incur costs, our consolidated net sales or related costs and expenses could be adversely affected. We translate our revenues and expenses in foreign markets using an average rate.
We maintain policies, procedures, and internal processes in an effort to help monitor any significant market risks and we do not use any financial instruments to manage our exposure to such risks. We assess the anticipated foreign currency working capital requirements of our foreign operations and maintain a portion of our cash and cash equivalents denominated in foreign currencies sufficient to satisfy most of these anticipated requirements.
We caution that we cannot predict with any certainty our future exposure to such currency exchange rate fluctuations or the impact, if any, such fluctuations may have on our future business, product pricing, operating expenses, and on our consolidated financial position, results of operations, or cash flows. However, to combat such market risk, we closely monitor our exposure to currency fluctuations. The regions and countries in which we currently have exposure to foreign currency exchange rate risk include (i) the Americas (Canada, Colombia and Mexico); (ii) EMEA (Austria, the Czech Republic, Denmark, Estonia, Finland, Germany, the Republic of Ireland, the Netherlands, Norway, South Africa, Spain, Sweden, Switzerland and the United Kingdom); and (iii) Asia/Pacific (Australia, Japan, New Zealand, the Republic of Korea, Singapore, Taiwan, Hong Kong, and China). The current (spot) rate, average currency exchange rates, and the low and high of such currency exchange rates as compared to the United States dollar, for each of these countries as of and for the nine months ended September 30, 2023 were as follows:
Nine months ended September 30, 2023 September 30, 2023
Country (foreign currency name) Low High Average Spot
Australia (Australian Dollar) 0.63721 0.71173 0.66907 0.64571
Canada (Canadian Dollar) 0.72332 0.76071 0.74331 0.74072
China (Renminbi) 0.13623 0.14921 0.14239 0.13705
Colombia (Peso) 0.00020 0.00026 0.00023 0.00025
Czech Republic (Koruna) 0.04320 0.04735 0.04549 0.04345
Denmark (Kroner) 0.14132 0.15087 0.14548 0.14194
Hong Kong (Hong Kong Dollar) 0.12739 0.12829 0.12766 0.12772
Japan (Yen) 0.00670 0.00782 0.00726 0.00670
Mexico (Peso) 0.05134 0.05996 0.05627 0.05732
New Zealand (New Zealand Dollar) 0.58793 0.65089 0.61795 0.60090
Norway (Krone) 0.08942 0.10181 0.09561 0.09375
Republic of Korea (Won) 0.00074 0.00082 0.00077 0.00074
Singapore (Singapore Dollar) 0.72936 0.76520 0.74621 0.73282
South Africa (Rand) 0.05064 0.05957 0.05461 0.05294
Sweden (Krona) 0.08944 0.09849 0.09447 0.09182
Switzerland (Franc) 1.06165 1.16509 1.10864 1.09474
Taiwan (New Taiwan Dollar) 0.03102 0.03367 0.03236 0.03109
Thailand 0.02728 0.03063 0.02903 0.02738
United Kingdom (British Pound) 1.18342 1.31132 1.24459 1.22221
Various countries (1) (Euro)
1.05371 1.12401 1.08349 1.05841
(1) Austria, Germany, the Netherlands, Estonia, Finland, the Republic of Ireland, and Spain
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