3 unchanged sentences
The Company’s primary market risk exposure is the risk of unfavorable movements in exchange rates between the U.S.
−Removed: Dollar, the Canadian Dollar (“CAD”), and Chinese Renminbi (“RMB”).
+Added: Dollar, the Canadian Dollar, and Chinese Renminbi (“RMB”).
The Company does not use financial instruments for trading or other speculative purposes.
13 unchanged sentences
These derivative financial instruments are utilized to hedge economic exposures as well as reduce earnings and cash flow volatility resulting from shifts in market rates.
−Removed: Certain of the Company’s PRC subsidiaries held approximately RMB 313.7 million ($44.0 million) in cash and cash equivalents as of June 30, 2024 (December 31, 2023 — RMB 213.0 million or $30.0 million) and are required to transact locally in RMB.
+Added: Certain of the Company’s PRC subsidiaries held approximately RMB 349.3 million ($49.9 million) in cash and cash equivalents as of September 30, 2024 (December 31, 2023 — RMB 213.0 million or $30.0 million) and are required to transact locally in RMB.
Foreign currency exchange transactions, including the remittance of any funds into and out of the PRC, are subject to controls and require the approval of the China State Administration of Foreign Exchange to complete.
7 unchanged sentences
There are no concentrations of cash and cash equivalents in any regional banking institutions, such that management considers there to be any material risk in this regard.
−Removed: For the three and six months ended June 30, 2024, the Company recorded foreign exchange net losses of $0.2 million and $0.5 million, respectively, resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities (2023 — net losses of $0.5 million and $0.6 million, respectively).
+Added: For the three and nine months ended September 30, 2024, the Company recorded foreign exchange net losses of $0.3 million and $0.8 million, respectively, resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities (2023 — net losses of $0.2 million and $0.8 million, respectively).
The Company has entered into a series of foreign currency forward contracts to manage the risks associated with the volatility of foreign currencies.
−Removed: Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests as of June 30, 2024, with settlement dates throughout 2024 and 2025.
+Added: Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests as of September 30, 2024, with settlement dates throughout 2024 and 2025.
Foreign currency derivatives are recognized and measured in the Condensed Consolidated Balance Sheets at fair value.
3 unchanged sentences
Any ineffective portion is recognized immediately in the Condensed Consolidated Statements of Operations.
−Removed: The notional value of foreign currency cash flow hedging instruments that qualify for hedge accounting as of June 30, 2024 was $39.4 million (December 31, 2023 — $40.6 million).
−Removed: Losses of $0.4 million and $1.3 million were recorded to Other Comprehensive Loss with respect to the change in fair value of these contracts for the three and six months ended June 30, 2024, respectively (2023 — gains of $0.7 million and $0.8 million, respectively).
−Removed: Losses of $0.1 million and $0.1 million were reclassified from Accumulated Other Comprehensive Loss to Selling, General and Administrative Expenses for the three and six months ended June 30, 2024, respectively, (2023 — loss of $0.1 million and $0.5 million, respectively).
+Added: The notional value of foreign currency cash flow hedging instruments that qualify for hedge accounting as of September 30, 2024 was $31.8 million (December 31, 2023 — $40.6 million).
+Added: Gains of $0.3 million and losses of $0.9 million were recorded to Other Comprehensive Income with respect to the change in fair value of these contracts for the three and nine months ended September 30, 2024, respectively (2023 — losses of $1.0 million and $0.2 million, respectively).
+Added: Losses of $0.2 million and $0.2 million were reclassified from Accumulated Other Comprehensive Loss to Selling, General and Administrative Expenses for the three and nine months ended September 30, 2024, respectively (2023 — loss of $0.2 million and $0.6 million, respectively).
The Company currently does not hold any derivatives which are not designated as hedging instruments.
For all derivative instruments, the Company is subject to counterparty credit risk to the extent that the counterparty may not meet its obligations to the Company.
−Removed: To manage this risk, the Company enters into derivative transactions only with major financial institutions.
−Removed: As of June 30, 2024, the Company’s Financing Receivables and working capital items denominated in Canadian Dollars, RMB, Japanese Yen, Euros and other foreign currencies translated into U.S.
+Added: To manage this risk, the Company enters into derivative transactions only with major financial institution s.
+Added: As of September 30, 2024, the Company’s Financing Receivables and working capital items denominated in Canadian Dollars, RMB, Japanese Yen, Euros and other foreign currencies translated into U.S.
Dollars was $161.4 million.
−Removed: Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates as of June 30, 2024, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $16.0 million.
+Added: Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates as of September 30, 2024, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $16.1 million.
A significant portion of the Company’s Selling, General, and Administrative Expenses is denominated in Canadian Dollars.
−Removed: Assuming a 1% change appreciation or depreciation in foreign currency exchange rates as of June 30, 2024, the potential change in the amount of Selling, General, and Administrative Expenses would be $0.2 million.
+Added: Assuming a 1% change appreciation or depreciation in foreign currency exchange rates as of September 30, 2024, the potential change in the amount of Selling, General, and Administrative Expenses would be $0.3 million.
Interest Rate Risk Management
The Company’s earnings may also be affected by changes in interest rates due to the impact those changes have on its interest income from cash, and its interest expense from variable-rate borrowings that may be made under the Credit Facility.
−Removed: As of June 30, 2024, the Company had drawn down $54.0 million on its Credit Facility (December 31, 2023 — $24.0 million), and $nil on its HSBC China Facility (December 31, 2023 — $nil) and $nil on its Bank of China Facility (December 31, 2023 — nil), which are subject to variable effective interest rates.
−Removed: The Company had variable rate debt instruments representing 11.0% and 5.0% of its total liabilities as of June 30, 2024 and December 31, 2023, respectively.
+Added: As of September 30, 2024, the Company had drawn down $47.0 million on its Credit Facility (December 31, 2023 — $24.0 million), and $nil on its HSBC China Facility (December 31, 2023 — $nil) and $nil on its Bank of China Facility (December 31, 2023 — nil), which are subject to variable effective interest rates.
+Added: The Company had variable rate debt instruments representing 10.0% and 5.0% of its total liabilities as of September 30, 2024 and December 31, 2023, respectively.
If the interest rates available to the Company increased by 10%, the Company’s interest expense would increase by $0.3 million and interest income from cash would increase by $0.1 million.
−Removed: These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances as of June 30, 2024.
+Added: These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances as of September 30, 2024.
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.