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We are exposed to market risks that may result from changes in foreign currency exchange rates, interest rates and equity prices.
−Removed: To reduce certain of these risks, we enter into various types of foreign currency derivative hedging transactions, follow investment guidelines and monitor outstanding receivables as part of our risk management program.
+Added: To reduce certain of these risks, we enter into various types of foreign currency derivative transactions, follow our investment policy guidelines and monitor outstanding receivables as part of our risk management program.
Foreign Currency Exchange Rate Risk
We have operations in more than 35 countries worldwide.
−Removed: As a result, our financial results could be significantly affected by factors such as changes in foreign currency exchange rates or weak economic conditions in the foreign markets in which we distribute our products.
−Removed: Our operating results are exposed to changes in foreign currency exchange rates between the U.S.
−Removed: dollar and various foreign currencies, the most significant of which is the Euro.
+Added: As such, certain of our monetary assets and liabilities and approximately 26% of our 2025 product sales are denominated in foreign currencies.
+Added: Our operations in foreign countries expose us to risk associated with foreign currency exchange rate fluctuations between the U.S.
+Added: dollar and various foreign currencies, primarily the Euro.
When the U.S.
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dollar and are adversely affected by a stronger U.S.
−Removed: Approximately 27% of our product sales were denominated in foreign currencies during 2024.
−Removed: To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales, we enter into foreign currency exchange forward contracts.
−Removed: We also hedge certain monetary assets and liabilities denominated in foreign currencies, which reduces but does not eliminate our exposure to currency fluctuations between the date a transaction is recorded and the date that cash is collected or paid.
−Removed: In general, the market risks of these contracts are offset by corresponding gains and losses on the transactions being hedged.
+Added: Additionally, our monetary assets and liabilities denominated in foreign currencies expose us to currency fluctuations between the date a transaction is recorded and the date that cash is collected or paid.
+Added: To partially mitigate the impact of changes in currency exchange rates on net cash flows from our foreign currency denominated sales as well as outstanding monetary assets and liabilities, we enter into foreign currency exchange forward contracts.
+Added: In general, the risk of foreign currency fluctuations related to our operations is offset by corresponding gains and losses from our derivative instruments.
As of December 31, 2025 and 2024, we had open foreign currency forward contracts with notional amounts of $3.9 billion and $2.9 billion, respectively.
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Interest Rate Risk
−Removed: We occasionally invest in available-for-sale debt securities, adhering to a policy that requires us to limit invested amounts based on credit rating, maturity, industry group and investment type and issuer, except for securities issued by the U.S.
−Removed: The goals of our investment policy, in order of priority, are as follows:
−Removed: • safety and preservation of principal and diversification of risk;
−Removed: • liquidity of investments sufficient to meet cash flow requirements;
−Removed: • a competitive after-tax rate of return.
+Added: We invest in available-for-sale debt securities, adhering to a policy that requires us to limit invested amounts based on credit rating, maturity, industry group and investment type and issuer, except for securities issued by the U.S.
+Added: The goals of our investment policy, in order of priority, are (1) safety and preservation of principal and diversification of risk, (2) liquidity of investments sufficient to meet cash flow requirements and (3) a competitive after-tax rate of return.
The fair value of any available-for-sale debt securities is subject to change as a result of potential changes in market interest rates.
−Removed: However, primarily due to the typically short-term nature of our portfolio, we do not believe that future market risks, including a hypothetical 10% increase or decrease in interest rates related to any securities, would have a material adverse impact on our financial position, results of operations, or liquidity.
+Added: However, primarily due to the contractual maturity typically being less than five years, we do not believe that future market risks, including a hypothetical 10% increase or decrease in interest rates related to any securities, would have a material adverse impact on our financial position, results of operations, or liquidity.
Our senior unsecured notes have fixed interest rates.
As such, there is no financial interest rate exposure.
−Removed: The fair value of these senior unsecured notes and our liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc.
+Added: The fair values of both our senior unsecured notes as well as our liability related to future royalties as part of our 2020 acquisition of Immunomedics, Inc.
are exposed to fluctuations in interest rates.
The current fair value of our debt portfolio and liability related to future royalties are $22.3 billion and $0.8 billion, respectively.
−Removed: The fair value will decrease as interest rates increase.
−Removed: The fair value will increase as interest rates decrease.
+Added: The fair value will decrease as interest rates increase and will increase as interest rates decrease.
Additionally, we have a $2.5 billion five-year revolving credit facility that matures in June 2029.
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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.