2 unchanged sentences
This risk is closely monitored and managed through the use of physical forward contracts (which are not considered derivatives) and financial derivative instruments including foreign currency forward contracts, commodity swap contracts and interest rate swaps and locks.
−Removed: Financial derivatives are used expressly for hedging purposes and under no circumstances are they used for speculative
+Added: Financial derivatives are used expressly for hedging purposes and under no circumstances are they used for speculative purposes.
When material, we adjust the estimated fair value of our derivative contracts for counterparty or our credit risk.
31 unchanged sentences
We are exposed to market risk from fluctuations in interest rates.
−Removed: We manage our exposure to interest rate fluctuations through the use of interest rate swaps and interest rate locks.
+Added: We manage our exposure to interest rate fluctuations through the use of interest rate swaps.
The objective of the swaps is to more effectively balance our borrowing costs and interest rate risk.
+Added: Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreement without exchange of the underlying notional amount.
+Added: Interest rate swaps designated as fair value hedges involve the receipt of fixed-rate amounts from a counterparty in exchange for us making variable-rate payments over the life of the agreements without exchange of the underlying notional amount.
+Added: We also may hedge the anticipated issuance of fixed-rate debt, and these contracts are designated as cash flow hedges.
At any time, a change in interest rates could have an adverse impact on the fair value of our portfolios.
Assuming a hypothetical adverse movement in interest rates of one percentage point, the combined value of our interest rate derivatives portfolios would be reduced by $3 million, as calculated as of December 31, 2023.
−Removed: However, this does not take into consideration an offset in the underlying hedged items.
+Added: However, this does not take into consideration an offset in the underlying hedged items when using fair value hedges.
While these are our best estimates of the impact of the specified interest rate scenario, actual results could differ from those projected.
6 unchanged sentences
We also enter into physical forward contracts, which qualify for the normal purchases scope exception and are treated as purchase commitments.
−Removed: We also limit our exposure to commodity price risk by entering into purchasing arrangements to fix the price of certain volumes of platinum and palladium expected to be used in our products.
−Removed: We enter into physical forward contracts with suppliers of platinum and palladium to purchase some volumes of the commodities at contractually stated prices for various periods, generally less than two years.
+Added: We also limit our exposure to commodity price risk by entering into purchasing arrangements to fix the price of certain volumes of platinum, palladium and iridium expected to be used in our products.
+Added: We enter into physical forward contracts with suppliers of platinum, palladium and iridium to purchase some volumes of the commodities at contractually stated prices for various periods, generally less than two years.
These arrangements enable us to fix the prices of a portion of our purchases of these commodities, which otherwise are subject to market volatility.
1 unchanged sentence
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.