BHE » Topics » Item 3 - Quantitative and Qualitative Disclosures About Market Risk

This excerpt taken from the BHE 10-Q filed May 9, 2008.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

·                  Foreign currency exchange risk;

·                  Import and export duties, taxes and regulatory changes;

·                  Inflationary economies or currencies; and

·                  Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. As of March 31, 2008, we did not have any foreign currency hedges. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operations primarily generate and expend cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil.

 

We are also exposed to market risk for changes in interest rates, a portion of which relates to our investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of March 31,

 

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2008, the outstanding amount in the short-term and long-term investment portfolio included $77.3 million of auction rate securities and $1.0 of municipal bonds with an average return of approximately 4.2%.

 

This excerpt taken from the BHE 10-Q filed Nov 8, 2007.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

                  Foreign currency exchange risk;

                  Import and export duties, taxes and regulatory changes;

                  Inflationary economies or currencies; and

                  Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. As of September 30, 2007, we did not have any foreign currency hedges. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operations primarily generate and expend cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil. With the acquisition of Pemstar, our foreign currency cash flows have increased.

 

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of September 30, 2007, the outstanding amount in the short-term investment portfolio was $215.4 million of auction rate securities with an average return of approximately 4.0%.

 

33



 

This excerpt taken from the BHE 10-Q filed Aug 9, 2007.

Item 3 — Quantitative and Qualitative Disclosures About Market Risk

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

·                  Foreign currency exchange risk;

·                  Import and export duties, taxes and regulatory changes;

·                  Inflationary economies or currencies; and

·                  Economic and political instability.

We do not use derivative financial instruments for speculative purposes. As of June 30, 2007, we did not have any foreign currency hedges. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operations primarily generate and expend cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil. With the acquisition of Pemstar, our foreign currency cash flows have increased.

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of June 30, 2007, the outstanding amount in the short-term investment portfolio was $157.1 million of auction rate securities with an average return of 3.8%.

34




This excerpt taken from the BHE 10-Q filed May 10, 2007.

Item 3 — Quantitative and Qualitative Disclosures About Market Risk

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

·                  Foreign currency exchange risk;

·                  Import and export duties, taxes and regulatory changes;

·                  Inflationary economies or currencies; and

·                  Economic and political instability.

We do not use derivative financial instruments for speculative purposes. As of March 31, 2007, we did not have any foreign currency hedges. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operations primarily generate and expend cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil. With the acquisition of Pemstar, our foreign currency cash flows have increased.

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of March 31, 2007, the outstanding amount in the short-term investment portfolio was $105.7 million of auction rate securities with an average return of 3.7%.

31




 

This excerpt taken from the BHE 10-Q filed Nov 9, 2006.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

·                  Foreign currency exchange risk;

·                  Import and export duties, taxes and regulatory changes;

·                  Inflationary economies or currencies; and

·                  Economic and political instability.

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. As of September 30, 2006, we did not have any foreign currency hedges. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil.

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of September 30, 2006, the outstanding amount in the short-term investment portfolio was $150.9 million of auction rate securities with an average return of 3.6%.

30




This excerpt taken from the BHE 10-Q filed Aug 9, 2006.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

·                  Foreign currency exchange risk;

·                  Import and export duties, taxes and regulatory changes;

·                  Inflationary economies or currencies; and

·                  Economic and political instability.

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. As of June 30, 2006, we did not have any foreign currency hedges. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil.

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of June 30, 2006, the outstanding amount in the short-term investment portfolio was $183.1 million of auction rate securities with an average return of 3.5%.

28




 

This excerpt taken from the BHE 10-Q filed May 9, 2006.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

      Foreign currency exchange risk;

      Import and export duties, taxes and regulatory changes;

      Inflationary economies or currencies; and

      Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. As of March 31, 2006, we did not have any foreign currency hedges. Our sales are substantially denominated in U.S. dollars. Our foreign currency cash flows are generated in certain Asian and European countries, Mexico and Brazil.

 

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. As of March 31, 2006, the outstanding amount in the short-term investment portfolio was $172.1 million of auction rate securities with an average return of 3.3%.

 

26



 

This excerpt taken from the BHE 10-K filed Mar 13, 2006.
Quantitative and Qualitative Disclosures About Market Risk

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

·       Foreign currency exchange risk;

·       Import and export duties, taxes and regulatory changes;

·       Inflationary economies or currencies; and

·       Economic and political instability.

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates. As of December 31, 2005, we did not have any foreign currency hedges. Our sales are substantially denominated in U.S. dollars. Our primary foreign currency cash flows are generated in certain European countries and Brazil.

We are also exposed to market risk for changes in interest rates, a portion of which relates to our short-term investment portfolio. We do not use derivative financial instruments in our investment portfolio. We place cash and cash equivalents and investments with various major financial institutions. We protect our invested principal funds by limiting default risk, market risk and reinvestment risk. We mitigate default risk by generally investing in investment grade securities. At December 31, 2005, the outstanding amount in the short-term investment portfolio was $216.0 million of auction rate securities with an average return of 3.0%.

35




This excerpt taken from the BHE 10-Q filed Nov 9, 2005.
Item 3—Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

                    Foreign currency exchange risk;

                    Import and export duties, taxes and regulatory changes;

                    Inflationary economies or currencies; and

                    Economic and political instability.

 

                We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates.  As of September 30, 2005, we did not have any foreign currency hedges.  Our sales are substantially denominated in U.S. dollars.  Our primary foreign currency cash flows are generated in certain European countries and Brazil.

 

This excerpt taken from the BHE 10-Q filed Aug 8, 2005.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

                  Foreign currency exchange risk;

                  Import and export duties, taxes and regulatory changes;

                  Inflationary economies or currencies; and

                  Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates.  As of June 30, 2005, we did not have any foreign currency hedges.  Our sales are substantially denominated in U.S. dollars.  Our primary foreign currency cash flows are generated in certain European countries and Brazil.

 

This excerpt taken from the BHE 10-Q filed May 9, 2005.

Item 3 – Quantitative and Qualitative Disclosures About Market Risk

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

                  Foreign currency exchange risk;

                  Import and export duties, taxes and regulatory changes;

                  Inflationary economies or currencies; and

                  Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates.  As of March 31, 2005, we did not have any foreign currency hedges.  Our sales are substantially denominated in U.S. dollars.  Our primary foreign currency cash flows are generated in certain European countries and Brazil.

 

These excerpts taken from the BHE 10-K filed Mar 16, 2005.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Our international sales are a significant portion of our net sales; we are exposed to risks associated with operating internationally, including the following:

 

Foreign currency exchange risk;

 

Import and export duties, taxes and regulatory changes;

 

Inflationary economies or currencies; and

 

Economic and political instability.

 

We do not use derivative financial instruments for speculative purposes. Our practice is to maintain a hedged position for certain significant transaction exposures. These exposures are primarily, but not limited to, vendor payments and inter-company balances in currencies other than the currency in which our foreign operation primarily generates and expends cash. Our international operations in some instances operate in a natural hedge because both operating expenses and a portion of sales are denominated in local currency. In the future, significant transactions involving our international operations may cause us to consider engaging in hedging transactions to attempt to mitigate our exposure to fluctuations in foreign exchange rates.  As of December 31, 2004, we did not have any foreign currency hedges.  Our sales are substantially denominated in U.S. dollars.  Our primary foreign currency cash flows are generated in certain European countries and Brazil.

 

Quantitative and Qualitative Disclosures About Market Risk

The information on pages 24 through 30 of the 2004 Annual Report is incorporated herein by reference in response to this item.

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