3 unchanged sentences
We transact business globally in multiple currencies.
−Removed: International revenues, as well as costs and expenses denominated in foreign currencies, expose us to the risk of fluctuations in foreign currency exchange rates against the U.S.
−Removed: As discussed below, we enter into derivative instruments to hedge foreign currency risk.
−Removed: Principal currencies hedged included the Australian dollar, British pound, Canadian dollar, Euro, and Japanese yen.
−Removed: For the purpose of analyzing foreign currency exchange risk, we considered the historical trends in foreign currency exchange rates and determined that it was reasonably possible that adverse changes in exchange rates of 10% could be experienced.
−Removed: We use foreign currency forward and option contracts to offset the foreign exchange risk on monetary assets and liabilities denominated in currencies other than the functional currency of the subsidiary.
−Removed: These forward and option contracts reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements on our assets and liabilities.
−Removed: The foreign currency gains and losses on these assets and liabilities are recorded in OI&E, which are offset by the gains and losses on the forward and option contracts.
−Removed: If an adverse 10% foreign currency exchange rate change was applied to net monetary assets, liabilities, and commitments denominated in currencies other than the functional currencies at the balance sheet date, it would have resulted in an adverse effect on income before income taxes of approxima tely $503 million and $135 million as of December 31, 2023 and 2024, respectively, after consideration of the effect of foreign exchange contracts in place for the years ended December 31, 2023 and 2024.
−Removed: We use foreign currency forward and option contracts, including collars (an option strategy comprised of a combination of purchased and written options) to protect forecasted U.S.
−Removed: dollar-equivalent earnings from changes in foreign currency exchange rates.
−Removed: When the U.S.
−Removed: dollar strengthens, gains from foreign currency forward and option contacts reduce the foreign currency losses related to our earnings.
−Removed: When the U.S.
−Removed: dollar weakens, losses from foreign currency forward and option contracts offset the foreign currency gains related to our earnings.
−Removed: These hedging contracts reduce, but do not entirely eliminate, the effect of foreign currency exchange rate movements.
−Removed: We designate these contracts as cash flow hedges for accounting purposes.
−Removed: We reflect the gains and losses of foreign currency spot rate changes as a component of accumulated other comprehensive income (AOCI) and subsequently reclassify them into revenues to offset the hedged exposures as they occur.
−Removed: dollar weakened by 10% as of December 31, 2023 and 2024, the amount recorded in AOCI related to our cash flow hedges before tax effect would have been approximately $1.5 billion and $1.6 billion lower as of
+Added: International revenues, foreign-denominated monetary assets and liabilities, and investments in foreign subsidiaries expose us to the risk of fluctuations in foreign exchange rates against the US dollar.
+Added: Principal currency exposures include the Australian dollar, British pound, Canadian dollar, Euro, and Japanese yen.
Alphabet Inc.
−Removed: December 31, 2023 and 2024, respectively.
−Removed: The change in the value recorded in AOCI would be expected to offset a corresponding foreign currency change in forecasted hedged revenues when recognized.
−Removed: We use foreign exchange forward contracts designated as net investment hedges to hedge the foreign currency risks related to investment in foreign subsidiaries.
−Removed: These forward contracts serve to offset the foreign currency translation risk from our foreign operations.
−Removed: dollar weakened by 10%, the amount recorded in cumulative translation adjustment (CTA) within AOCI related to our net investment hedges before tax effect would have been approximately $946 million and $660 million lower as of December 31, 2023 and 2024, respectively.
−Removed: The change in value recorded in CTA would be expected to offset a corresponding foreign currency translation gain or loss from our investment in foreign subsidiaries.
+Added: We monitor our foreign currency exposures and hedge foreign exchange risks with derivative and non-derivative instruments, including forwards, options (including collars), cross-currency swaps, and foreign currency-denominated debt.
+Added: Gains or losses on these foreign currency exposures are generally offset by corresponding gains or losses on the derivative and non-derivative instruments.
+Added: Considering historical trends in foreign exchange rates, we determined that it was reasonably possible that adverse changes in exchange rates of 10% could be experienced.
+Added: We performed a sensitivity analysis on our foreign currency exposures to estimate the potential impact of this adverse 10% change.
+Added: The estimated effects on our financial position would be as follows (in millions):
+Added: As of December 31,
+Added: Impact 2024 2025
+Added: Foreign currency risk
+Added: Foreign denominated monetary assets and liabilities (1)
+Added: OI&E $ 135 $ 671
+Added: Cash flow hedges of foreign currency revenue (2)
+Added: AOCI $ 1,627 $ 2,096
+Added: Net investment hedges of investments in foreign subsidiaries (3)
+Added: AOCI $ 660 $ 2,942
+Added: (1) After consideration of the effect of derivative contracts.
+Added: (2) The change in accumulated other comprehensive income (AOCI) would be expected to offset a corresponding foreign currency change in forecasted hedged revenues when recognized.
+Added: (3) The change in AOCI would be expected to offset a corresponding foreign currency translation gain or loss from our investments in foreign subsidiaries.
Interest Rate Risk
+Added: We are exposed to interest rate risk related to our investment portfolio and outstanding debt.
Our Corporate Treasury investment strategy is to achieve a return that w ill allow us to preserve capital and maintain liquidity.
−Removed: We invest primarily in debt securities, including government bonds, corporate debt securities, mortgage-backed and asset-backed securities, money market and other funds, time deposits, and interest rate derivatives.
−Removed: By policy, we limit the amount of credit exposure to any one issuer.
+Added: By policy, we limit the amount of credit exposure within our investment portfolio to any one issuer.
Our investments in both fixed rate and floating rate interest earning securities carry a degree of interest rate risk.
1 unchanged sentence
Unrealized gains and losses on our marketable debt securities are primarily due to interest rate fluctuations as compared to interest rates at the time of purchase.
−Removed: For certain fixed and variable rate debt securities, we have elected the fair value option for which changes in fair value are recorded in OI&E.
+Added: For certain fixed and floating rate debt securities, we have elected the fair value option for which changes in fair value are recorded in OI&E.
We measure securities for which we have not elected the fair value option at fair value with gains and losses recorded in AOCI until the securities are sold, less any expected credit losses.
9 unchanged sentences
VaR analysis is not intended to represent actual losses but is used as a risk estimation.
+Added: Additionally, we had senior unsecured notes outstanding with a total carrying value of $11.9 billion and $48.5 billion as of December 31, 2024 and 2025, respectively.
+Added: As our senior unsecured notes primarily bear interest at fixed rates and are recorded at amortized cost, interest rate fluctuations generally do not affect our consolidated financial statements.
+Added: However, the fair value of the notes will fluctuate with movement in market interest rates.
Equity Investment Risk
Our marketable and non-marketable equity securities are subject to a wide variety of market-related risks that could substantially reduce or increase the fair value of our holdings.
−Removed: Our marketable equity securities are publicly traded stocks or funds and our non-marketable equity securities are investments in privately held companies, some of which are in the startup or development stages.
−Removed: We record marketable equity securities not accounted for under the equity method at fair value based on readily determinable market values, of which publicly traded stocks and mutual funds are subject to market price volatility, and represent $6.0 billion and $5.1 billion of our investments as of December 31, 2023 and 2024, respectively.
+Added: Alphabet Inc.
+Added: Our marketable equity securities are primarily publicly traded stocks or funds and our non-marketable equity securities are primarily investments in privately held companies, some of which are in the startup or development stages.
+Added: We record marketable equity securities at fair value subject to market price volatility.
+Added: These securities represent $5.1 billion and $6.3 billion of our investments as of December 31, 2024 and 2025, respectively.
A hypothetical adverse price change of 10% on our December 31, 2025 balance would decrease the fair value of marketable equity securities by $631 million.
3 unchanged sentences
These investments, especially those that are in the early stages, are inherently risky because the technologies or products these companies have under development are typically in the early phases and may never materialize, and they may experience a decline in financial condition, which could result in a loss of a substantial part of our investment in these companies.
−Removed: Valuations of our equity investments in private companies are inherently more complex due to the lack of readily available market data and
−Removed: Alphabet Inc.
−Removed: observable transactions at lower valuations could result in significant losses.
+Added: Valuations of our equity investments in private companies are inherently more complex due to the lack of readily available market data and observable transactions at lower valuations could result in significant losses.
In addition, global economic conditions could result in additional volatility.
7 unchanged sentences
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.