2 unchanged sentences
The level of our pretax earnings is subject to market risk due to changes in interest rates and the resulting impact on investment income and interest expense.
−Removed: In the past we have, and in the future we may enter into interest rate swap agreements depending on market conditions and other factors.
−Removed: Under the revolving credit agreements, at our option, we can borrow on either a competitive advance basis or a revolving credit basis.
−Removed: The revolving credit portion bears interest at either LIBOR plus a spread or the base rate plus a spread.
−Removed: The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on LIBOR, at our option.
−Removed: The revolving credit agreements provide for the transition from LIBOR and do not require amendment in connection with such transition.
+Added: We have entered into interest-rate swap agreements with major financial institutions to convert our interest-rate exposure on some of our senior notes payable from fixed rates to variable rates, based on Secured Overnight Financing Rate (SOFR), to align interest costs more closely with floating interest rates received on our cash equivalents and investment securities Under the revolving credit agreements, at our option, we can borrow on either a competitive advance basis or a revolving credit basis.
+Added: The revolving credit portion bears interest at either Term SOFR or the base rate plus a spread.
+Added: The competitive advance portion of any borrowings will bear interest at market rates prevailing at the time of borrowing on either a fixed rate or a floating rate based on Term SOFR, at our option.
There were no borrowings outstanding under our credit agreements at December 31, 2024 or December 31, 2023.
Interest rate risk also represents a market risk factor affecting our consolidated financial position due to our significant investment portfolio, consisting primarily of fixed maturity securities of investment-grade quality with a weighted average S&P credit rating of AA- at December 31, 2024.
−Removed: Our net unrealized position increased $0.4 billion from a net unrealized loss position of $1.7 billion at December 31, 2022 to a net unrealized loss position of $1.3 billion at December 31, 2023.
+Added: Our net unrealized loss position increased $89 million from a net unrealized loss position of $1.3 billion at December 31, 2023 to a net unrealized loss position of
+Added: $1.4 billion at December 31, 2024.
At December 31, 2024, we had gross unrealized losses of $1.4 billion on our investment portfolio primarily due to an increase in market interest rates since the time the securities were purchased.
6 unchanged sentences
Based on the duration including cash equivalents, a 1% increase in interest rates would generally decrease the December 31, 2024 fair value of our securities by approximately $783 million.
−Removed: We have also evaluated the impact on our investment income and interest expense resulting from a hypothetical change in interest rates of 100, 200, and 300 basis points over the next twelve-month period, as reflected in the
−Removed: following table.
−Removed: The evaluation was based on our investment portfolio and our outstanding indebtedness at December 31, 2023 and 2022.
+Added: We have also evaluated the impact on our investment income and interest expense resulting from a hypothetical change in interest rates of 100, 200, and 300 basis points over the next twelve-month period, as reflected in the following table.
+Added: The evaluation was based on our investment portfolio, outstanding indebtedness, and outstanding swap contract portfolio at December 31, 2024 and 2023.
Our investment portfolio consists of cash, cash equivalents, and investment securities.
1 unchanged sentence
This evaluation measures parallel shifts in interest rates and may not account for certain unpredictable events that may affect interest income, including unexpected changes of cash flows into and out of the portfolio, changes in the asset allocation, including shifts between taxable and tax-exempt securities, spread changes specific to various investment categories and the mix of short-term versus long-term debt.
−Removed: In the past ten years, changes in 10 year US treasury rates during the year have not exceeded 300 basis points, have changed between 200 and 300 basis points one time, have changed between 100 and 200 basis points four times, and have changed by less than 100 basis points five times.
+Added: In the past ten years, changes in 10 year US treasury rates during the year have not exceeded 300 basis points, have changed between 200 and 300 basis points one time, have changed between 100 and 200 basis points five times, and have changed by less than 100 basis points four times.
Increase (decrease) in
15 unchanged sentences
Pretax $ (209) $ (136) $ (68) $ 68 $ 138 $ 207
−Removed: (a) As of December 31, 2023, none of our investments had interest rates below 1%.
−Removed: As of December 31, 2022, some of our investments had interest rates below 1%, so the assumed hypothetical change in pretax earnings does not reflect the full 1% point reduction.
−Removed: (b) The interest rate under our senior notes, which represent 93% of total debt, is fixed, unaffected by changes in interest rates.
−Removed: We did not have any variable rate term loans at December 31, 2023 and had $0.5 billion of variable rate term loans at December 31, 2022 which were used to fund the August 2021 KAH acquisition.
+Added: (a) As of December 31, 2024 and 2023, none of our investments had interest rates below 1%.
+Added: (b) The interest rate under our senior notes, which represent 100% and 93% at December 31, 2024 and 2023, respectively, of total debt, is fixed, unaffected by changes in interest rates.
+Added: We did not have any variable rate term loans at December 31, 2024 and December 31, 2023.
There were no borrowings outstanding under the credit agreement at December 31, 2024 or December 31, 2023.
−Removed: There was $871 million and $595 million outstanding under our commercial paper program at December 31, 2023 and 2022, respectively.
−Removed: As of December 31, 2023 and December 31, 2022, our interest rates under our commercial paper program was not less than 1%.
+Added: There was $871 million outstanding under our commercial paper program at December 31, 2023 with none outstanding at December 31, 2024.
+Added: At December 31, 2023, our interest rates under our commercial paper program was not less than 1%.
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.