5 unchanged sentences
We are exposed to interest rate risk relating to our investment portfolio and from interest-rate sensitive assets underlying the customer balances we hold on our condensed consolidated balance sheets as customer accounts.
−Removed: As of June 30, 2024 and December 31, 2023, approximately 47% and 59%, respectively, of our total cash, cash equivalents, and investment portfolio (excluding restricted cash and strategic investments) was held in cash and cash equivalents.
+Added: As of September 30, 2024 and December 31, 2023, approximately 50% and 59%, respectively, of our total cash, cash equivalents, and investment portfolio (excluding restricted cash and strategic investments) was held in cash and cash equivalents.
The remaining portfolio and assets underlying the customer balances that we hold on our condensed consolidated balance sheets as customer accounts are maintained in interest and non-interest bearing bank deposits, time deposits, and available-for-sale debt securities.
2 unchanged sentences
Interest rate movements affect the interest income we earn on cash and cash equivalents, time deposits, and available-for-sale debt securities and the fair value of those securities.
−Removed: A hypothetical 100 basis points increase in interest rates would have resulted in a decrease in the fair value of our cash equivalents and available-for-sale debt securities investment by approximately $103 million and $122 million at June 30, 2024 and December 31, 2023, respectively.
+Added: A hypothetical 100 basis points increase in interest rates would have resulted in a decrease in the fair value of our cash equivalents and available-for-sale debt securities investment by approximately $76 million and $122 million at September 30, 2024 and December 31, 2023, respectively.
Changes in the fair value of our available-for-sale debt securities resulting from such interest rate changes are reported as a component of accumulated other comprehensive income (“AOCI”) and are realized only if we sell the securities prior to their scheduled maturities or the declines in fair values are due to expected credit losses.
−Removed: As of June 30, 2024 and December 31, 2023, we had $11.8 billion and $10.6 billion, respectively, in fixed rate debt with varying maturity dates.
+Added: As of September 30, 2024 and December 31, 2023, we had an aggregate principal amount of $11.9 billion and $10.6 billion, respectively, in fixed rate debt with varying maturity dates.
Since these notes bear interest at fixed rates, they do not result in any financial statement risk associated with changes in interest rates.
However, the fair value of these notes fluctuates when interest rates change, increasing in periods of declining interest rates and declining in periods of increasing interest rates.
−Removed: As of June 30, 2024 and December 31, 2023, we also had revolving credit facilities of approximately $5.6 billion available to us.
+Added: As of September 30, 2024 and December 31, 2023, we also had revolving credit facilities of approximately $5.6 billion available to us.
We are obligated to pay interest on borrowings under these facilities as well as other customary fees, including an upfront fee and an unused commitment fee based on our debt rating.
1 unchanged sentence
As a result, we are exposed to the risk related to fluctuations in interest rates to the extent of our borrowings.
−Removed: As of June 30, 2024 and December 31, 2023, ¥70.0 billion (approximately $435 million) and ¥50.0 billion (approximately $355 million), respectively, was outstanding under these facilities.
+Added: As of September 30, 2024 and December 31, 2023, ¥90.0 billion (approximately $633 million) and ¥50.0 billion (approximately $355 million), respectively, was outstanding under these facilities.
A 100 basis points hypothetical adverse change in applicable market interest rates would not have resulted in a material impact to interest expense recorded in the period.
20 unchanged sentences
The accumulated gains and losses associated with net investment hedges will remain in AOCI until the foreign subsidiaries are sold or substantially liquidated, at which point they will be reclassified into earnings.
−Removed: dollar weakened by a hypothetical 10% at June 30, 2024 and December 31, 2023, the amount recorded in AOCI related to our foreign currency exchange forward contracts, before taxes, would have been approximately $582 million and $622 million lower, respectively, before considering the offsetting impact of the underlying hedged item.
+Added: dollar weakened by a hypothetical 10% at September 30, 2024 and December 31, 2023, the amount recorded in AOCI related to our foreign currency exchange forward contracts, before taxes, would have been approximately $627 million and $622 million lower, respectively, before considering the offsetting impact of the underlying hedged item.
We have an additional foreign currency exchange management program in which we use foreign currency exchange contracts to help offset the foreign currency exchange risk on our assets and liabilities denominated in currencies other than the functional currency of our subsidiaries.
1 unchanged sentence
The foreign currency exchange gains and losses on our assets and liabilities are recorded in other income (expense), net, and are offset by the gains and losses on the foreign currency exchange contracts.
−Removed: Adverse changes in exchange rates of a hypothetical 10% for all foreign currencies would have resulted in a negative impact on income before income taxes of approximately $335 million and $417 million at June 30, 2024 and December 31, 2023, respectively, without considering the offsetting effect of foreign currency exchange contracts.
−Removed: Foreign currency exchange contracts in place as of June 30, 2024 would have positively impacted income before income taxes by approximately $315 million, resulting in a net negative impact of approximately $20 million.
+Added: Adverse changes in exchange rates of a hypothetical 10% for all foreign currencies would have resulted in a negative impact on income before income taxes of approximately $464 million and $417 million at September 30, 2024 and December 31, 2023, respectively, without considering the offsetting effect of foreign currency exchange contracts.
+Added: Foreign currency exchange contracts in place as of September 30, 2024 would have positively impacted income before income taxes by approximately $451 million, resulting in a net negative impact of approximately $13 million.
Foreign currency exchange contracts in place as of December 31, 2023 would have positively impacted income before income taxes by approximately $400 million, resulting in a net negative impact of approximately $17 million.
2 unchanged sentences
Our strategic investments are subject to a variety of market-related risks that could substantially reduce or increase the carrying value of the portfolio.
−Removed: As of June 30, 2024 and December 31, 2023, our strategic investments totaled $1.9 billion and $1.8 billion, which represented approximately 10% and 11% of our total cash, cash equivalents, and short-term and long-term investment portfolio at those respective dates.
+Added: As of September 30, 2024 and December 31, 2023, our strategic investments totaled $1.7 billion and $1.8 billion, which represented approximately 11% of our total cash, cash equivalents, and short-term and long-term investment portfolio at those respective dates.
Our strategic investments include marketable equity securities, which are publicly traded, and non-marketable equity securities, which are primarily investments in privately held companies.
3 unchanged sentences
Additionally, the financial success of our investments in privately held companies is typically dependent on a liquidity event, such as a public offering, acquisition, private sale, or other favorable market event providing the ability to realize appreciation in the value of the investment.
−Removed: A hypothetical adverse change of 10% in the carrying value of our strategic investments as of June 30, 2024, which could be experienced in the near term, would have resulted in a decrease of approximately $185 million to the carrying value of the portfolio.
+Added: A hypothetical adverse change of 10% in the carrying value of our strategic investments as of September 30, 2024, which could be experienced in the near term, would have resulted in a decrease of approximately $171 million to the carrying value of the portfolio.
We review our non-marketable equity securities accounted for under the Measurement Alternative for impairment when events and circumstances indicate a decline in fair value of such assets below carrying value.
1 unchanged sentence
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.