NXP(NXPI)2024-02-21 16:00Foreign Currency Exposure and Hedging - The company's primary foreign currency exposure relates to the U.S. dollar to euro exchange rate, with additional exposures to currencies including the Chinese Yuan, Indian Rupee, Japanese Yen, Malaysian Ringgit, Romanian Leu, Singapore Dollar, New Taiwan Dollar, Thai Baht, and Swiss Franc[239] - The company faces exposure to adverse movements in foreign currency exchange rates due to its global operations[239] - The company may hedge currency exposures associated with certain assets and liabilities denominated in nonfunctional currencies and certain anticipated nonfunctional currency transactions[239] Derivative Financial Instruments - The company may use derivative financial instruments such as swaps, collars, forwards, options, or other instruments to limit earnings and cash flow volatility from foreign currency exposures[237] - Derivative financial instruments are used solely for hedging purposes and not for trading or speculative purposes[237] - All counterparties to the company's derivatives contracts are major banking institutions[237] - The company measures derivative financial instruments based on fair values derived from market prices or option pricing models, recording them as assets or liabilities in the balance sheet[238] - Changes in the fair values of derivative financial instruments are recognized immediately in the statement of operations unless cash flow hedge accounting is applied[238] Impact of Foreign Currency Fluctuations - The company's net asset related to foreign currency forward contracts designated as hedges of foreign currency risk was $3 million at December 31, 2023[238] - A 20% decline in forecasted operating expenditures for hedged currencies and a 20% unfavorable change in exchange rates would result in a negligible loss[238]