Ubiquiti Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Sensitivity We had cash and cash equivalents of $249.4 million and $142.6 million as of June 30, 2021 and 2020. Cash and cash equivalents includes securities that have a maturity of three months or less at the date of purchase. These amounts were held primarily in cash deposit accounts in U.S. dollars. The fair value of our cash and cash equivalents would not be significantly affected by either a 10% increase or decrease in interest rates due mainly to the short-term nature of these instruments. Debt We are exposed to interest rates risks primarily through borrowing under our credit facility. Interest on our borrowings is based on variable rates. Based on a sensitivity analysis, as of June 30, 2021, an instantaneous and sustained 200-basis-point increase in interest rates affecting our floating rate debt obligations, and assuming that we take no counteractive measures, would result in an incremental charge to our income before income taxes of approximately $9.9 million over the next twelve months. Foreign Currency Risk The majority of our sales are denominated in U.S. dollars, and therefore substantially most of our revenues are not directly subject to foreign currency risk. However, changes in exchange rates, and in particular a strengthening of the U.S. dollar, will negatively affect the Company's net sales and gross margins as expressed in the U.S. dollars. Certain of our operating expenses are denominated in the currencies of the countries in which our operations are located, and may be subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Chinese Yuan, Euro, and Taiwan Dollar. A 10% appreciation or depreciation in the value of the U.S. dollar relative to the other currencies in which our expenses are denominated would result in a charge or benefit to our income before income taxes of approximately $9.5 million for fiscal year June 30, 2021. Item 8. Financial Statements The response to this Item is submitted as a separate section of this Form 10-K. See Item 15. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.