QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: The COVID-19 pandemic and Russia-Ukraine conflict have resulted in negative impacts on global economies and financial markets, which may increase our foreign currency exchange risk and interest rate risk.
+Added: The COVID-19 pandemic and recent macroeconomic events have resulted in negative impacts on global economies and financial markets, which may increase our foreign currency exchange risk and interest rate risk.
For further discussion of the potential impacts of these events on our business, financial condition, and operating results, see “Risk Factors” included in Part II, Item 1A of this report.
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As a result, our operating results and cash flows are subject to fluctuations due to changes in foreign currency exchange rates.
−Removed: As of April 30, 2022, our most significant currency exposures were the euro, British pound, Canadian dollar, and Australian dollar.
+Added: As of July 31, 2022, our most significant currency exposures were the euro, British pound, Canadian dollar, and Australian dollar.
Due to our exposure to market risks that may result from changes in foreign currency exchange rates, we enter into foreign currency derivative hedging transactions to mitigate these risks.
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Interest Rate Risk on our Investments
−Removed: We had cash, cash equivalents, and marketable securities totaling $6.3 billion and $3.6 billion as of April 30, 2022, and January 31, 2022, respectively.
+Added: We had cash, cash equivalents, and marketable securities totaling $6.3 billion and $3.6 billion as of July 31, 2022, and January 31, 2022, respectively.
Cash equivalents and marketable securities were invested primarily in U.S.
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Our debt securities are classified as “available-for-sale.” When the fair value of the security declines below its amortized cost basis, any portion of that decline attributable to credit losses, to the extent expected to be nonrecoverable before the sale of the impaired security, is recognized on the Condensed Consolidated Statements of Operations.
−Removed: An immediate increase of 100 basis points in interest rates would have resulted in a $17 million and $11 million market value reduction in our investment portfolio as of April 30, 2022, and January 31, 2022, respectively.
+Added: An immediate increase of 100 basis points in interest rates would have resulted in a $16 million and $11 million market value reduction in our investment portfolio as of July 31, 2022, and January 31, 2022, respectively.
This estimate is based on a sensitivity model that measures market value changes when changes in interest rates occur.
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In addition, the fair value of the 2022 Notes is affected by our stock price since it is a convertible debt instrument.
−Removed: Borrowings under our 2022 Credit Agreement bear interest, at our option, at a base rate plus a margin of 0.000% to 0.500% or a SOFR rate plus 10 basis points, plus a margin of 0.750% to 1.500%, in each case with such margin being determined based on our consolidated leverage ratio or credit rating.
+Added: Borrowings under our 2022 Credit Agreement will bear interest, at our option, at a base rate plus a margin of 0.000% to 0.500% or a SOFR rate plus 10 basis points, plus a margin of 0.750% to 1.500%, with such margin being determined based on our consolidated leverage ratio or debt rating.
Because the interest rates applicable to borrowings under the 2022 Credit Agreement are variable, we are exposed to market risk from changes in the underlying index rates, which affect our cost of borrowing.
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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.