QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We are exposed to changes in foreign currency exchange rates because we transact in a variety of foreign currencies.
+Added: We are exposed to changes in foreign currency exchange rates because we transact our business in a variety of foreign currencies.
We are also exposed to changes in the prices of certain commodities (primarily metals) that we use in production.
−Removed: Changes in these foreign currency exchange rates and commodity prices may have an impact on future cash flows and earnings.
−Removed: We monitor our exposure to these risks and may employ derivative financial instruments to limit the volatility to earnings and cash flows generated by these exposures.
−Removed: We employ derivative contracts that may or may not be designated for hedge accounting treatment under FASB ASC Topic 815, Derivatives and Hedging , which can result in volatility to earnings depending upon fluctuations in the underlying markets.
+Added: Changes in foreign currency exchange rates and commodity prices may have an impact on future cash flows and earnings.
+Added: We monitor our exposure to these risks and may or may not employ derivative financial instruments ("derivative instruments") to limit the volatility to earnings and cash flows generated by these exposures.
+Added: Any derivative instrument we employ may or may not be designated for hedge accounting treatment under FASB ASC Topic 815, Derivatives and Hedging , which may result in volatility to earnings depending upon fluctuations in the underlying markets.
By using derivative instruments, we are subject to credit and market risk.
2 unchanged sentences
We are exposed to counterparty credit (or repayment) risk in the event of non-performance by counterparties to our derivative agreements.
−Removed: We attempt to minimize this risk by entering transactions with major financial institutions of investment grade credit rating.
+Added: We attempt to minimize this risk by entering into transactions with major financial institutions of investment grade credit rating.
Interest Rate Risk
As discussed further in Note 14:
−Removed: Debt of our Financial Statements included elsewhere in this Report, the Credit Agreement provides for the Senior Secured Credit Facilities consisting of the Term Loan, the Revolving Credit Facility, and incremental availability (the "Accordion") under which additional secured credit facilities could be issued under certain circumstances.
+Added: Debt of our Financial Statements included elsewhere in this Report, the Credit Agreement provides for the Senior Secured Credit Facilities including the Revolving Credit Facility, and incremental availability (the "Accordion") under which additional secured credit facilities could be issued under certain circumstances.
In the year ended December 31, 2023, we prepaid the entire outstanding balance on the Term Loan, which was our only variable-rate debt.
Borrowings under the Revolving Credit Facility continue to be subject to interest based on a variable rate, but we had no outstanding balance on the Revolving Credit Facility at December 31, 2024 or 2023.
−Removed: Sensitivity Analysis
−Removed: As of December 31, 2023, we had no outstanding variable interest rate loans.
−Removed: As of December 31, 2022, we had an outstanding balance on the Term Loan (excluding debt discount and deferred financing costs) of $446.8 million.
−Removed: The applicable interest rate associated with the Term Loan at December 31, 2022 was 5.87%.
−Removed: An increase of 100 basis points in this rate would have resulted in additional interest expense of $1.5 million in fiscal year 2023.
−Removed: An additional 100 basis point increase in this rate would have resulted in incremental interest expense of $3.1 million in fiscal year 2023.
Foreign Currency Risk
−Removed: Consistent with our risk management objective and strategy to reduce exposure to variability in cash flows, and for non-trading purposes, we enter into foreign currency exchange rate derivatives that qualify as cash flow hedges, and that are intended to offset the effect of exchange rate fluctuations on forecasted sales and certain manufacturing costs.
−Removed: We also enter into foreign currency forward contracts that are not designated for hedge accounting purposes.
+Added: Consistent with our risk management objectives and strategy to reduce exposure to variability in cash flows, and for non-trading purposes, we may enter into foreign currency exchange rate derivatives that qualify as cash flow hedges, and that are intended to offset the effect of exchange rate fluctuations on forecasted sales and certain forecasted costs.
+Added: We may also enter into foreign currency forward contracts that are not designated for hedge accounting purposes.
Refer to Note 19:
3 unchanged sentences
(Decrease)/Increase to Future Pre-Tax Earnings Due to:
−Removed: (In millions) Net (Liability)/Asset Balance as of December 31, 2023
+Added: (In millions) Net Asset/(Liability) Balance as of December 31, 2024
10% Strengthening of the Value of the Foreign Currency Relative to the U.S.
2 unchanged sentences
Chinese Renminbi $ (6.2) $ 5.9 $ (5.9)
−Removed: Japanese Yen $ 0.0 $ 0.1 $ (0.1)
−Removed: Korean Won $ (0.0) $ (2.3) $ 2.3
−Removed: Malaysian Ringgit $ 0.0 $ 0.5 $ (0.5)
Mexican Peso $ (20.4) $ 19.8 $ (19.8)
1 unchanged sentence
(Decrease)/Increase to Future Pre-Tax Earnings Due to:
−Removed: (In millions) Net Asset/(Liability) Balance as of December 31, 2022
+Added: (In millions) Net (Liability)/Asset Balance as of December 31, 2023
10% Strengthening of the Value of the Foreign Currency Relative to the U.S.
9 unchanged sentences
We are exposed to the potential change in prices associated with certain commodities used in the manufacturing of our products.
−Removed: We offset a portion of this exposure by entering forward contracts that fix the price at a future date for various notional amounts associated with these commodities.
+Added: We may mitigate a portion of this exposure by entering forward contracts that fix the price at a future date for various notional amounts associated with these commodities.
These forward contracts are not designated as accounting hedges.
3 unchanged sentences
The tables below present our commodity forward contracts as of December 31, 2024 and 2023 and the estimated impact to pre-tax earnings associated with a 10% increase/(decrease) in the related forward price for each commodity:
−Removed: Net Asset Balance as of
+Added: Net Asset/(Liability) Balance as of
December 31, 2024
6 unchanged sentences
Copper $ (0.7) $ 4.04 $ 2.1 $ (2.1)
−Removed: Net Asset/(Liability) Balance as of
+Added: Net Asset Balance as of
December 31, 2023
5 unchanged sentences
Silver $ 0.5 $ 24.61 $ 1.7 $ (1.7)
−Removed: Gold $ 0.1 $ 1,877.27 $ 1.5 $ (1.5)
−Removed: Nickel $ 0.7 $ 13.76 $ 0.3 $ (0.3)
−Removed: Aluminum $ (0.5) $ 1.11 $ 0.5 $ (0.5)
Copper $ 0.2 $ 3.90 $ 2.5 $ (2.5)
−Removed: Platinum $ 0.9 $ 1,070.21 $ 1.2 $ (1.2)
−Removed: Palladium $ (0.5) $ 1,803.34 $ 0.2 $ (0.2)
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.