9 unchanged sentences
In addition, for certain transactions that are denominated in a currency other than the engaging entity’s functional currency, we may enter into foreign currency derivative contracts to further manage our foreign currency risk.
−Removed: In fiscal 2025, we recorded a net gain of less than $1 million within our statement of operations related to foreign currency derivative contracts.
+Added: In fiscal 2026, we recorded a net gain of $1 million within our statement of operations related to foreign currency derivative contracts.
In addition, our consolidated financial results are impacted by the translation of revenue and expenses in foreign currencies into U.S.
These translation impacts are primarily affected by changes in exchange rates between the U.S.
−Removed: dollar and European currencies, primarily the euro and the British pound sterling, the Brazilian real, the Canadian dollar, and the Chinese yuan.
+Added: dollar and the euro, the British pound sterling, the Brazilian real, the Canadian dollar, and the Chinese yuan.
In fiscal 2026, approximately 47 percent of our sales were generated in countries outside the U.S.
1 unchanged sentence
however, this impact will be offset, usually to a large degree, with a corresponding effect on our cost of sales and other expenses.
−Removed: In fiscal 2025, changes in foreign currency exchange rates unfavorably impacted our sales by $18 million;
+Added: In fiscal 2026, changes in foreign currency exchange rates favorably impacted our sales by $63 million;
however, the impact on our operating income was only $7 million.
1 unchanged sentence
If these rates were 10 percent higher or lower during fiscal 2026, there would not have been a material impact on our fiscal 2026 earnings.
−Removed: We maintain foreign currency-denominated debt obligations and intercompany loans that are subject to foreign currency exchange risk.
−Removed: We seek to mitigate this risk through maintaining offsetting positions between external and intercompany loans;
−Removed: however, from time to time, we also enter into foreign currency derivative contracts to manage the currency exchange rate exposure.
−Removed: These derivative instruments are typically not accounted for as hedges, and accordingly, gains or losses on the derivatives are recorded in other income and expense in the consolidated statements of operations and typically offset the foreign currency changes on the outstanding loans.
+Added: We maintain intercompany loans that are subject to foreign currency exchange risk.
+Added: From time to time, we enter into foreign currency derivative contracts to manage the associated currency exchange rate exposure.
+Added: These derivative instruments are typically not accounted for as hedges, and accordingly, gains or losses on the derivatives are recorded in other income and expense in the consolidated statements of operations and typically offset the impact of foreign currency changes on the outstanding loans.
Interest Rate Risk
1 unchanged sentence
We generally utilize a mixture of debt maturities and both fixed-rate and variable-rate debt to manage exposure to changes in interest rates.
−Removed: Interest rates for both our term loans and borrowings under our multi-currency revolving credit facility, including swingline borrowings, are variable and are currently based on either SOFR or EURIBOR, plus 137.5 to 175 basis points, depending on our leverage ratio.
−Removed: As a result, we are subject to risk of fluctuations in SOFR and EURIBOR and changes in our leverage ratio, which would affect the variable interest rate on our term loans and revolving credit facility and could create variability in interest expense.
−Removed: As of March 31, 2025, our outstanding borrowings on variable-rate term loans and the revolving credit facility totaled $194 million and $30 million, respectively.
+Added: Interest rates for our term loan and borrowings under our multi-currency revolving credit facility, including swingline borrowings, are variable and are currently based on either SOFR or EURIBOR, plus 125 to 175 basis points, depending on our leverage ratio.
+Added: As a result, we are subject to risk of fluctuations in SOFR and EURIBOR and changes in our leverage ratio, which would affect the variable interest rate on our term loan and revolving credit facility and could create variability in interest expense.
+Added: As of March 31, 2026, our outstanding borrowings on the variable-rate term loan and the revolving credit facility totaled $195 million and $150 million, respectively.
Based upon our outstanding debt with variable interest rates at March 31, 2026, a 100-basis point increase in interest rates would increase our annual interest expense in fiscal 2027 by approximately $3 million.
8 unchanged sentences
We regularly engage with our suppliers to ensure availability of purchased commodities and components and, where possible, we incorporate contractual volume protections to guarantee required supply levels.
−Removed: While we do not currently anticipate significant shortages or delays from our key suppliers, we are subject to supply risk, particularly with respect to sourcing of raw materials including aluminum, copper, steel and stainless steel (nickel).
−Removed: We are exposed to the risk that our suppliers may not be able or willing to meet our supply requirements in light of various factors, such as changes in trade laws and tariffs, sharp increases in customer demand, capacity constraints, financial instability, or other circumstances.
+Added: We are subject to supply risk, particularly with respect to sourcing of raw materials including aluminum, copper, steel and stainless steel (nickel), and certain third-party parts and components required to make our products.
+Added: In light of the rapid growth in the data center market, demand for certain components that we purchase to manufacture our data center products is currently outpacing supplier capacity.
+Added: We began experiencing supply shortages in the fourth quarter of fiscal 2026.
+Added: These component shortages are negatively impacting our production schedules and are tempering our planned production ramp-up for certain data center products.
+Added: We are actively working with our supply chain, including qualifying new vendors, to mitigate the supply constraints.
+Added: Overall, we are exposed to the risk that our suppliers may not be able or willing to meet our supply requirements in light of various factors, such as changes in trade laws and tariffs, sharp increases in customer demand, capacity constraints, financial instability, or other circumstances.
We also purchase parts from suppliers that use our tooling to create the parts.
7 unchanged sentences
These customers operate primarily in the data center cooling, commercial air conditioning and refrigeration, commercial vehicle, off-highway, and automotive and light vehicle markets and are influenced by similar market and general economic factors.
−Removed: In the past, credit losses from our customers have not been significant, nor have we experienced a significant increase in credit losses in connection with the current inflationary market conditions.
+Added: In the past, credit losses from our customers have not been significant, nor have we experienced a significant increase in credit losses in connection with inflationary market conditions in recent years.
We manage credit risk through a focus on the following:
2 unchanged sentences
After credit is granted, we actively monitor the customer’s financial condition and applicable business news;
−Removed: ● Pension assets – We have retained outside advisors to assist in the management of the assets in our pension plans.
−Removed: In making investment decisions, we utilize an established risk management protocol that focuses on protection of the plan assets against downside risk.
−Removed: In connection with the upcoming termination of our primary U.S.
−Removed: pension plan, we have sought to match the maturities of the plan assets with the anticipated funding requirements for the upcoming lump-sum offering and future benefit payments.
−Removed: We believe the plan assets are subject to appropriate investment policies and controls;
● Insurance – We monitor our insurance providers to ensure they maintain financial ratings that are acceptable to us.
3 unchanged sentences
Economic and Market Risk
+Added: We operate in numerous countries and sell a broad range of thermal management solutions and products to customers operating in diverse markets, including data centers, commercial, industrial, and building HVAC&R, and commercial vehicle, off-highway, and automotive and light vehicle.
Economic risk represents the possibility of loss resulting from economic instability in the U.S.
−Removed: or abroad, such as that caused by geopolitical uncertainly or pandemics, or downturns in markets in which we operate.
−Removed: We sell a broad range of thermal solution systems to customers operating in diverse markets, including the data center cooling, commercial, industrial, and building HVAC&R, and commercial vehicle, off-highway, and automotive and light vehicle markets.
−Removed: Considering our global presence, we also encounter risks imposed by trade restrictions, including tariffs, embargoes, sanctions, and the like.
−Removed: We continue to pursue non-speculative opportunities to mitigate these economic risks, and capitalize, when possible, on changing market conditions.
+Added: We are currently monitoring economic and market risks related to geopolitical tensions and military conflicts, including the conflict between the U.S.
+Added: and Iran, which could negatively impact or cause significant business disruptions in the global markets that we operate in.
+Added: These conflicts and tensions could result in further increases to energy and fuel prices, shipping delays, and increased freight and manufacturing costs.
+Added: We also encounter risks imposed by trade restrictions, including tariffs, embargoes, sanctions, and the like.
+Added: There is currently uncertainty regarding future relationships between the U.S.
+Added: and numerous other countries, including China, Canada, Mexico, and in Europe, with respect to trade policies and tariffs.
+Added: We are working to minimize the impact of tariffs on our businesses.
+Added: Where applicable, such efforts include renegotiating prices with suppliers, adjusting product pricing, and diversifying our supplier base.
We pursue new market opportunities after careful consideration of the potential associated risks and benefits.
Successes in new markets are dependent upon our ability to commercialize our investments.
−Removed: Current examples of new and emerging markets for us include those related to data centers, indoor air quality, and Gensets.
Our investments in these areas are subject to the risks associated with technological success, customer and market acceptance, and our ability to meet the demands of our customers as these markets grow.
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.