Crucial 2015 Annual Report Download - page 43

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41
The functional currency for all of our consolidated subsidiaries is the U.S. dollar. The substantial majority of our revenues
are transacted in the U.S. dollar; however, significant amounts of our operating expenditures and capital purchases are incurred
in or exposed to other currencies, primarily the British pound, the euro, the shekel, the Singapore dollar, the New Taiwan dollar,
the yen, and the yuan. We have established currency risk management programs for our operating expenditures and capital
purchases to hedge against fluctuations in the fair value and volatility of future cash flows caused by changes in currency
exchange rates. We utilize currency forward and option contracts in these hedging programs, which reduce, but do not always
entirely eliminate, the impact of currency exchange rate movements. We do not use derivative financial instruments for trading
or speculative purposes.
To hedge our exposure to changes in currency exchange rates from our monetary assets and liabilities, we utilize a rolling
hedge strategy for our primary currency exposures with currency forward contracts that generally mature within 35
days. Based on our foreign currency exposures from monetary assets and liabilities, offset by balance sheet hedges, we
estimate that a 10% adverse change in exchange rates versus the U.S. dollar would result in losses of approximately $3 million
as of September 3, 2015 and $7 million as of August 28, 2014. To hedge the exposure of changes in cash flows from changes
in currency exchange rates for certain capital expenditures, we utilize currency forward contracts that generally mature within
12 months.