filings.toolsItem 7A. Quantitative and Qualitative Disclosures About Market Risk
4K characters. Original on sec.gov · Markdown
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We operate internationally and enter into intercompany transactions denominated in foreign currencies. Consequently, we are subject to market risk arising from exchange rate movements between the dates foreign currencies are recorded and the dates they are settled. We regularly use foreign exchange contracts to reduce our risks related to most of these transactions. These contracts, primarily associated with the euro, yen and pound sterling, typically have maturities of 90 days or less, and generally require the exchange of foreign currencies for United States dollars at rates stated in the contracts. Gains and losses from changes in the market value of these contracts offset foreign exchange losses and gains, respectively, on the underlying transactions. Other transactions denominated in foreign currencies are designated as hedges of our net investments in foreign subsidiaries or are intercompany transactions of a long-term investment nature. As a result of the use of foreign exchange contracts on a routine basis to reduce the risks related to most of our transactions denominated in foreign currencies, as of October 31, 2019, we did not have material foreign currency exposure.
Refer to Note 12 to the Consolidated Financial Statements for further discussion about our foreign currency transactions and the methods and assumptions used to record these transactions.
A portion of our operations is financed with short-term and long-term borrowings and is subject to market risk arising from changes in interest rates.
The tables that follow present principal repayments and weighted-average interest rates on outstanding borrowings of fixed-rate debt.
| Total | Fair | |||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| At October 31, 2019 | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Value | Value | ||||||||||||||||||||||||
| Annual repayments of long-term debt | $ | 68,738 | $ | 38,187 | $ | 30,791 | $ | 130,796 | $ | 110,801 | $ | 235,851 | $ | 615,164 | $ | 647,982 | ||||||||||||||||
| Average interest rate on total borrowings outstanding during the year | 3.5 | % | 3.6 | % | 3.7 | % | 3.7 | % | 3.8 | % | 3.9 | % | 3.5 | % | ||||||||||||||||||
| Total | Fair | |||||||||||||||||||||||||||||||
| At October 31, 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | Thereafter | Value | Value | ||||||||||||||||||||||||
| Annual repayments of long-term debt | $ | 28,734 | $ | 68,738 | $ | 38,187 | $ | 30,791 | $ | 130,796 | $ | 346,652 | $ | 643,898 | $ | 622,283 | ||||||||||||||||
| Average interest rate on total borrowings outstanding during the year | 3.5 | % | 3.5 | % | 3.6 | % | 3.7 | % | 3.7 | % | 3.8 | % | 3.5 | % |
We also have variable-rate notes payable and long-term debt. The weighted average interest rate of this debt was 3.0 percent at October 31, 2019 and 3.2 percent at October 31, 2018. A one percent increase in interest rates would have resulted in additional interest expense of approximately $7,236 on the variable rate notes payable and long-term debt in 2019.
Nordson Corporation 32
Previous: Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations · Next: Item 8. Financial Statements and Supplementary Data