1 unchanged sentence
We are exposed to financial risk resulting from volatility in foreign exchange rates, interest rates and commodity prices.
−Removed: 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.
+Added: 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.
Financial derivatives are used expressly for hedging purposes and under no circumstances are they used for speculative purposes.
12 unchanged sentences
To help manage our exposure to exchange rate volatility, we use foreign currency forward contracts on a regular basis to hedge forecasted intercompany and third-party sales and purchases denominated in non-functional currencies.
−Removed: Our foreign currency cash flow hedges generally mature within two years.
−Removed: These foreign currency forward contracts are designated and qualify as foreign currency cash flow hedges.
+Added: These foreign currency forward contracts are designated and qualify as foreign currency cash flow hedges and generally mature withing two years.
For the years ended December 31, 2025, and 2024, there were no circumstances that resulted in the discontinuance of a foreign currency cash flow hedge.
4 unchanged sentences
dollar reporting currency.
−Removed: In order to minimize movements in certain investments, in 2022 we began entering into foreign exchange forwards designated as net investment hedges.
+Added: In order to minimize movements in certain investments, we enter into foreign exchange forwards designated as net investment hedges.
Under the terms of our foreign exchange forwards, we agreed with third parties to sell British pounds, Chinese renminbi and Euros in exchange for U.S.
3 unchanged sentences
The unrealized gain or loss is classified into income in the same period when the foreign subsidiary is sold or substantially liquidated.
+Added: In the second quarter of 2025, we began entering into cross-currency interest rate swaps designated as net investment hedges for certain of our investments to help reduce volatility in the equity value of our subsidiaries.
+Added: Under the current terms of our cross-currency interest rate swaps, we generally pay fixed-rate interest in Euros or Chinese renminbi and receive fixed-rate interest in U.S.
+Added: These swaps are utilized to hedge portions of our net investments denominated in these currencies against the effect of exchange rate fluctuations on the translation of foreign currency balances to the U.S.
+Added: The fixed-rate interest payments on the swaps are recorded as interest income.
+Added: The change in fair value of the swaps is deferred and reported as components of AOCL.
+Added: The unrealized gain or loss is classified into income in the same period when the foreign subsidiary is sold or substantially liquidated.
At December 31, 2025, the potential gain or loss in the fair value of our outstanding foreign currency contracts, assuming a hypothetical 10 percent fluctuation in the currencies of such contracts, would be approximately $64 million.
−Removed: The sensitivity analysis of the effects of changes in foreign currency exchange rates assumes the notional value to remain constant for the next 12 months.
+Added: The sensitivity analysis of the effects of changes in foreign currency exchange rates assumes the notional value remains constant for the next 12 months.
The analysis ignores the impact of foreign exchange movements on our competitive position and potential changes in sales levels.
17 unchanged sentences
At December 31, 2025, realized and unrealized gains and losses related to these hedges were not material to our financial statements.
−Removed: We also enter into physical forward contracts, which qualify for the normal purchases scope exception and are treated as purchase commitments.
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.
1 unchanged sentence
These arrangements enable us to fix the prices of a portion of our purchases of these commodities, which otherwise are subject to market volatility.
+Added: These physical forward contracts qualify for the normal purchases scope exception and are treated as purchase commitments.
Additional information on the physical forwards is included in NOTE 14, “COMMITMENTS AND CONTINGENCIES.”
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.