1 unchanged sentence
We manage our exposure to foreign exchange rate risk and interest rate risk through various strategies, including the use of derivative financial instruments.
+Added: We use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign exchange rate fluctuations.
We use net investment hedges to manage the volatility of foreign exchange rates on the investment in our foreign subsidiaries.
−Removed: We may use forward foreign exchange contracts as economic hedges to manage the cash flow volatility arising from foreign exchange rate fluctuations.
We do not use derivatives for trading or speculative purposes.
−Removed: Using derivatives exposes us to the risk that counterparties to the derivative contracts will fail to meet their contractual obligations.
+Added: Using derivatives exposes us to the credit risk that counterparties to the derivative contracts will fail to meet their contractual obligations.
We manage that risk through careful selection and ongoing evaluation of the counterparty financial institutions based on specific minimum credit standards and other factors.
3 unchanged sentences
The VaR model is not intended to represent actual losses but is used as a risk estimation and management tool.
−Removed: Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2023 was not significant.
+Added: Based on the results of the model, we estimate with 95% confidence a maximum one-day change in the net fair value of our derivative financial instruments at December 31, 2024 was not material.
Foreign Currency Exchange Risk
1 unchanged sentence
Changes in the value of foreign currencies against the U.S.
−Removed: Dollar affect our results of operations and financial position.
+Added: Dollar affect our results of operations and financial condition.
For the most part, because the revenue and expenses of our foreign operations are denominated in the same local currency, the economic impact on operating margin is minimized.
7 unchanged sentences
The net fair value of the forward foreign contracts at December 31, 2024 was not material (see Note 22 to the consolidated financial statements).
−Removed: There were no outstanding forward foreign exchange contracts at December 31, 2023.
+Added: At December 31, 2023, there were no forward foreign exchange contracts outstanding.
Foreign currency derivatives are designated as economic hedges;
10 unchanged sentences
Dollar interest payments.
−Removed: In 2023 and 2022, we recorded a reduction of interest expense of $6.6 million and $1.2 million, respectively.
−Removed: At December 31, 2023 and 2022, the liability for the swap fair value was $6.6 million and $16.5 million, respectively, and was recorded in long-term liabilities.
+Added: We recorded a reduction of interest expense of $6.6 million in each of 2024 and 2023.
+Added: At December 31, 2024, an asset of $9.3 million is recorded in other assets, and at December 31, 2023, a liability of $6.6 million is recorded in long-term liabilities, for the swap fair value.
Interest Rate Risk
2 unchanged sentences
Long-term debt at December 31, 2024 and 2023 consisted entirely of fixed-rate debt.
−Removed: We provide advertising, marketing and corporate communications services to several thousand clients that operate in nearly every sector of the global economy, and we grant credit to qualified clients in the normal course of business.
+Added: We provide marketing and communications services to several thousand clients that operate in nearly every sector of the global economy, and we grant credit to qualified clients in the normal course of business.
Due to the diversified nature of our client base, we do not believe that we are exposed to a concentration of credit risk as our largest client represented 2.7% of revenue in 2024.
1 unchanged sentence
In the normal course of business, our agencies enter into contractual commitments with media providers and production companies on behalf of our clients at levels that can substantially exceed the revenue from our services.
−Removed: These commitments are
−Removed: included in accounts payable when the services are delivered by the media providers or production companies.
−Removed: If permitted by local law and the client agreement, many of our agencies purchase media and production services for our clients as an agent for a disclosed principal.
+Added: These commitments are included in accounts payable when the services are delivered by the media providers or production companies.
+Added: If permitted by
+Added: local law and the client agreement, many of our agencies purchase media and production services for our clients as an agent for a disclosed principal.
In addition, while operating practices vary by country, media type and media vendor, in the United States and certain foreign markets, many of our agencies’ contracts with media and production providers specify that our agencies are not liable to the media and production providers under the theory of sequential liability until and to the extent we have been paid by our client for the media or production services.
−Removed: Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly and such a loss could have a material adverse effect on our business, results of operations and financial position.
+Added: Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly and such a loss could have a material adverse effect on our business, results of operations and financial condition.
While we use various methods to manage the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, these may be insufficient, less available, or unavailable during a severe economic downturn.
3 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.