Company: HLI
Filing Date: 2025-02-04
Form Type: 10-Q
Source: 0001302215-25-000007
Chunk: 51

Company: HOULIHAN LOKEY, INC.
Filing Date: 2025-02-04
Form: 10-Q
Item: Part I, Item 3
Chunk 51
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 nine months ended December 31, 2024 and 2023, the net impact of the fluctuation of foreign currencies in other comprehensive income within the Consolidated Statements of Comprehensive Income was $(19.7) million and $8.7 million, respectively.

In addition, the reported amounts of our revenues and expenses may be affected by movements in the rate of exchange between the currencies in the non-U.S. countries in which we operate and the United States dollar, affecting our operating results. We have analyzed our potential exposure to changes in the value of the U.S. dollar relative to the pound sterling and euro, the primary currencies of our European operations, by performing a sensitivity analysis on our net income, and determined that while our earnings are subject to fluctuations from changes in foreign currency rates, at this time we do not believe we face any material risk in this respect.

From time to time, we enter into transactions to hedge our exposure to certain foreign currency fluctuations through the use of derivative instruments or other methods. As of December 31, 2024, we had one foreign currency forward contract outstanding between the U.S. dollar and the pound sterling with an aggregate notional value of $7.0 million. As of December 31, 2023, we had one foreign currency forward contract outstanding between the U.S. dollar and the pound sterling with an aggregate notional value of $2.0 million. The change in fair value of these contracts represented a net gain included in Other operating expenses of $3,423 and $11,272 during the three months ended December 31, 2024 and December 31, 2023, respectively.

In summary, we have been impacted by changes in exchange rates and the potential impact of future currency fluctuation will increase as our international expansion continues. The magnitude of this impact will depend on the timing and volume of revenues and expenses of, and the amounts of assets and liabilities in, our foreign subsidiaries along with the timing of changes in the relative value of the U.S. dollar to the currencies of the non-U.S. countries in which we operate.

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Item 4.        Controls and Procedures

Limitations on Effectiveness of Controls and Procedures 

In designing and evaluating our disclosure controls and procedures, management, including the chief executive officer and chief financial officer, recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, not absolute, assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures