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Credit and Interest Rate Risks
−Removed: We invest our excess cash in marketable securities consisting primarily of commercial paper, corporate debt securities, U.S.
−Removed: Treasury securities and U.S.
−Removed: Government-sponsored enterprise securities.
+Added: We invest our excess cash in marketable securities consisting primarily of U.S.
+Added: Treasury securities, U.S.
+Added: Government-sponsored enterprise securities, commercial paper and corporate debt securities.
Some of the financial instruments in which we invest subject us to market risk, in that a change in prevailing interest rates may cause the principal amount of the instrument to fluctuate.
Other financial instruments in which we invest subject us to credit risk, in that the value of the instrument may fluctuate based on the issuer’s ability to pay.
−Removed: As a result of the COVID-19 global pandemic and the perceived increased credit risks associated with certain securities, credit rating agencies have, from time to time, issued downgrades or revised outlooks to negative for certain issuers of the debt securities held in our short-term investments portfolio.
−Removed: Unrealized losses on available-for-sale debt securities at September 30, 2022 were primarily due to the recent increase in market interest rates.
−Removed: Based on the credit quality of the available-for-sale debt securities that are in an unrealized loss position, and our current estimates of future cash flows to be collected from those securities, we believe the unrealized losses were not credit losses (see Note 3, “Short-Term Investments”).
+Added: Credit rating agencies have, from time to time, issued downgrades or revised outlooks to negative for certain issuers of the debt securities held in our short-term investments portfolio.
+Added: We review our portfolio of available-for-sale debt securities quarterly to determine if any investment is impaired due to changes in credit risk or other potential valuation concerns.
+Added: Unrealized losses on available-for-sale debt securities at March 31, 2023 were primarily due to the recent increase in market interest rates.
+Added: Based on the credit quality of the available-for-sale debt securities in an unrealized loss position, and our current estimates of future cash flows to be collected from those securities, we believe the unrealized losses were not credit losses (see Note 3, “Short-Term Investments”).
The primary objectives of our investment activities are to maintain liquidity and preserve principal while maximizing the income we receive from our financial instruments without significantly increasing risk.
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Because of the short-term maturities of our financial instruments, we do not believe that an increase or decrease in market interest rates would have any significant impact on the realized value of our investment portfolio.
−Removed: If a 10% change in interest rates were to have occurred on September 30, 2022, it would not have had a material effect on the fair value of our investment portfolio as of that date.
+Added: If a 10% change in interest rates were to have occurred on March 31, 2023, it would not have had a material effect on the fair value of our investment portfolio as of that date.
In May 2020, we issued $287.5 million principal amount of Convertible Senior Notes, which bear interest at a fixed rate of 1.50% per year.
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Our operations are primarily located in the United States.
−Removed: In addition, we have a sales and marketing office in Canada and, beginning in 2022, a distribution center in the Netherlands.
+Added: In addition, we have a sales and marketing office in Canada, a distribution center in the Netherlands and, beginning in 2023, a research and development facility in Switzerland associated with the acquisition of AMF Medical.
Our sales to customers in the United States are made in U.S.
−Removed: With the exception of sales from our distribution center in the Netherlands and a portion of our sales in Canada, our sales to customers outside of the United States are currently made to independent distributors under agreements denominated in U.S.
−Removed: Accordingly, we believe our exposure to foreign currency rate fluctuations is currently limited to our operations in Canada and the Netherlands, where fluctuations in the rate of exchange between the U.S.
−Removed: dollar and the local currency could adversely affect our financial results.
+Added: Sales from our distribution center in the Netherlands are made to independent distributors under agreements denominated in Euros.
+Added: In addition, a portion of our sales in Canada are denominated in Canadian dollars.
+Added: Accordingly, we believe our exposure to foreign currency rate fluctuations is primarily related to our operations in Canada and Europe, and acquisition related contingent earnout payments, where fluctuations in the rate of exchange between the U.S.
+Added: dollar and the local currency could adversely affect our financial results (see Note 12, “Acquisitions”).
As we expand and further develop our operations in markets outside the United States, particularly in Europe, we will be exposed to additional foreign currency exchange rate risk.
−Removed: In addition, from time to time, we may have foreign currency exchange risk related to existing assets and liabilities, committed transactions and forecasted future cash flows.
+Added: In addition, from time to time, we may have foreign currency exchange risk related to existing assets and liabilities, other committed transactions and forecasted future cash flows.
In certain circumstances, we may seek to manage such foreign currency exchange risk by using derivative instruments such as foreign currency exchange forward contracts to hedge our risk.
−Removed: In general, we may hedge foreign currency exchange exposures up to 12 months in advance.
However, we may choose not to hedge some exposures for a variety of reasons, including prohibitive economic costs.
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.