Risks and Uncertainties (Notes)

6 Months Ended

Jun. 30, 2015


(14)	Risks and Uncertainties

Strengthening of the U.S. Dollar

The U.S. dollar has strengthened against most foreign currencies. For example, since its month-end high in April 2014 of $1.39 = €1.00, the spot euro exchange rate has declined to $1.11 = €1.00 at June 30, 2015. Year-over-year, the average euro exchange rate was $1.37 = €1.00 for the second quarter of 2014 compared to $1.11 = €1.00 for the second quarter of 2015. Further strengthening of the U.S. dollar would impact us for the remainder of 2015 as follows:


•	It would have a negative impact on the reported results of our foreign-denominated operations proportional to the decline in the applicable foreign currency exchange rates. Of our total net sales for the year ended December 31, 2014, approximately one-half were foreign-denominated.


•	It would have a negative impact on the reported value of our foreign-denominated net assets proportional to the decline in the applicable foreign currency exchange rates. Of our total assets at December 31, 2014, approximately one-half were foreign-denominated.

In order to partially offset our exposure to these changes, in March 2015 we designated our 4.625% Senior Notes as a hedge of our net investment in euro-denominated foreign operations. See Note 7.

We are not able to predict the impact that future changes in currency exchange rates may have on our operating results, but their impact could be significant.