13 unchanged sentences
At December 31, 2021, management considered a hypothetical 300-basis-point fluctuation in credit spreads.
−Removed: Management determined that the impact of such a fluctuation on these investments would not have a material effect on Federated Hermes' financial condition or results of operations.
+Added: Management determined that such a fluctuation could impact Federated Hermes' financial condition and results of operations by approximately $13 million.
Federated Hermes was also exposed to interest-rate risk in connection with the Credit Agreement.
1 unchanged sentence
At December 31, 2021, the balance of the Credit Agreement was $223.4 million.
−Removed: Management considered a hypothetical 300-basis-point fluctuation in LIBOR interest rates.
−Removed: Management determined that the impact of such a fluctuation would not have a material effect on Federated Hermes' financial condition or results of operations.
+Added: Management considered a hypothetical 300-basis-point fluctuation in LIBOR interest rates running through the Credit Agreement's expiration in 2026 and determined that the impact of such a fluctuation could impact Federated Hermes' financial condition and results of operations by approximately $19 million.
The Credit Agreement also exposed Federated Hermes to credit risk at December 31, 2021.
6 unchanged sentences
Foreign exchange risk is the risk that an investment's value will change due to changes in currency exchange rates.
−Removed: As of December 31, 2020, Federated Hermes was exposed to foreign exchange risk as a result of its investments in Federated Hermes Funds holding non-U.S.
+Added: As of December 31, 2021, Federated Hermes was exposed to foreign exchange risk as a result of its investments in Federated Hermes
+Added: Funds holding non-U.S.
dollar securities as well as non-U.S.
6 unchanged sentences
This subsidiary is exposed to foreign currency exchange risk as a result of a portion of its revenue being earned in U.S.
−Removed: Management considered a hypothetical 20% fluctuation in the currency exchange rate and determined that the impact of such a fluctuation would not have a material effect on Federated Hermes' financial condition or results of operations.
+Added: Management considered a hypothetical 20% fluctuation in the currency exchange rate and determined that such a fluctuation could impact Federated Hermes' financial condition and results of operations by approximately $11 million.
In addition to market risks attributable to Federated Hermes' investments, nearly all of Federated Hermes' revenue is calculated based on AUM.
−Removed: Accordingly, changes in the mark et va lue of managed assets have a direct impact on Federated Hermes'
+Added: Accordingly, changes in the mark et va lue of managed assets have a direct impact on Federated Hermes' revenue.
Declines in the fair values of these assets as a result of changes in the market or other conditions will negatively impact revenue and net income.
−Removed: Assuming the ratio of revenue from managed assets to average AUM for 2020 remained unchanged, a 20% decline in the average AUM for either period would result in a corresponding 20% decline in revenue.
+Added: Assuming the ratio of revenue from managed assets to average AUM for 2021 remained unchanged, a 20% decline in the average AUM would result in a corresponding 20% decline in revenue.
Certain expenses, including distribution and compensation and related expenses, may not vary in proportion with changes in the market value of managed assets.
As such, the impact on net income from a decline in the market values of managed assets may be greater or less than the percentage decline in the market value of managed assets.
−Removed: For further discussion of managed assets and factors that impact Federated Hermes' revenue, see Item 1A - Risk Factors and sections included in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations under the captions General and Asset Highlights.
+Added: For further discussion of managed assets and factors that impact Federated Hermes' revenue, see Item 1A - Risk Factors and sections included in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - General and Asset Highlights.
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.