MOLX » Topics » We are exposed to fluctuations in currency exchange rates.

These excerpts taken from the MOLX 10-K filed Aug 6, 2008.
We are exposed to fluctuations in currency exchange rates.
 
Since a significant portion of our business is conducted outside the U.S., we face substantial exposure to movements in non-U.S. currency exchange rates. This may harm our results of operations, and any measures that we may implement to reduce the effect of volatile currencies and other risks of our global operations may not be effective. We mitigate our foreign currency exchange rate risk principally through the establishment of local production facilities in the markets we serve. This creates a “natural hedge” since purchases and sales within a specific country are both denominated in the same currency and therefore no exposure exists to hedge with a foreign exchange forward or option contract (collectively, “foreign exchange contracts”). Natural hedges exist in most countries in which we operate, although the percentage of natural offsets, as compared with offsets that need to be hedged by foreign exchange contracts, will vary from country to country. To reduce our exposure to fluctuations in currency exchange rates when natural hedges are not effective, we may use financial instruments to hedge U.S. dollar and other currency commitments and cash flows arising from trade accounts receivable, trade accounts payable and fixed purchase obligations.


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If these hedging activities are not successful or we change or reduce these hedging activities in the future, we may experience significant unexpected expenses from fluctuations in exchange rates or financial instruments which become ineffective. The success of our hedging program depends on accurate forecasts of transaction activity in the various currencies. To the extent that these forecasts are over or understated during periods of currency volatility, we could experience unanticipated currency or hedge gains or losses.
 
We are exposed to
fluctuations in currency exchange rates.



 



Since a significant portion of our business is conducted outside
the U.S., we face substantial exposure to movements in
non-U.S. currency
exchange rates. This may harm our results of operations, and any
measures that we may implement to reduce the effect of volatile
currencies and other risks of our global operations may not be
effective. We mitigate our foreign currency exchange rate risk
principally through the establishment of local production
facilities in the markets we serve. This creates a “natural
hedge” since purchases and sales within a specific country
are both denominated in the same currency and therefore no
exposure exists to hedge with a foreign exchange forward or
option contract (collectively, “foreign exchange
contracts”). Natural hedges exist in most countries in
which we operate, although the percentage of natural offsets, as
compared with offsets that need to be hedged by foreign exchange
contracts, will vary from country to country. To reduce our
exposure to fluctuations in currency exchange rates when natural
hedges are not effective, we may use financial instruments to
hedge U.S. dollar and other currency commitments and cash
flows arising from trade accounts receivable, trade accounts
payable and fixed purchase obligations.





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If these hedging activities are not successful or we change or
reduce these hedging activities in the future, we may experience
significant unexpected expenses from fluctuations in exchange
rates or financial instruments which become ineffective. The
success of our hedging program depends on accurate forecasts of
transaction activity in the various currencies. To the extent
that these forecasts are over or understated during periods of
currency volatility, we could experience unanticipated currency
or hedge gains or losses.


 




This excerpt taken from the MOLX 10-K filed Aug 3, 2006.

We are exposed to fluctuations in currency exchange rates.


Since a significant portion of our business is conducted outside the U.S., we face substantial exposure to movements in non-U.S. currency exchange rates.  This may harm our results of operations, and any measures that we may implement to reduce the effect of volatile currencies and other risks of our global operations may not be effective.  We mitigate our foreign currency exchange rate risk principally through the establishment of local production facilities in the markets we serve.  This creates a “natural hedge” since purchases and sales within a specific country are both denominated in the same currency and therefore no exposure exists to hedge with a foreign exchange forward or option contract (collectively, “foreign exchange contracts”).  Natural hedges exist in most countries in which we operate, although the percentage of natural offsets, as compared with offsets that need to be hedged by foreign exchange contracts, will vary from country to country.  To reduce our exposure to fluctuations in currency exchange rates when natural hedges are not effective, we may use financial instruments to hedge U.S. dollar and other currency commitments and cash flows arising from trade accounts receivable, trade accounts payable and fixed purchase obligations.  


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If these hedging activities are not successful or we change or reduce these hedging activities in the future, we may experience significant unexpected expenses from fluctuations in exchange rates or financial instruments which become ineffective.  The success of our hedging program depends on accurate forecasts of transaction activity in the various currencies.  To the extent that these forecasts are over or understated during periods of currency volatility, we could experience unanticipated currency or hedge gains or losses.


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