risks for foreign currencies. For example, if the
currency exchange rate were to fluctuate by 10%, our revenues
could be affected by as much as 2 to 3%.
We also have exposure to interest rate risk
related to our investment portfolio and our borrowings. The
primary objective of our investment activities is to preserve
principal while at the same time maximizing the income we
receive from our invested cash without significantly increasing
the risk of loss.
Our interest income is sensitive to changes in
the general level of U.S. interest rates, particularly
since the majority of our investments are in short-term
instruments. We invest our excess cash primarily in
U.S. government securities and marketable debt securities
of financial institutions and corporations with strong credit
ratings. These instruments generally have maturities of one year
or less when acquired. We do not utilize derivative financial
instruments, derivative commodity instruments or other market
risk sensitive instruments, positions or transactions.
Accordingly, we believe that while the instruments we hold are
subject to changes in the financial standing of the issuer of
such securities, we are not subject to any material risks
arising from changes in interest rates, foreign currency
exchange rates, commodity prices, equity prices or other market
changes that affect market risk sensitive instruments.
We do not believe that inflation has had a
material adverse impact on our business or operating results
during the periods presented.