2 unchanged sentences
As a matter of policy, we do not engage in trading or speculative transactions.
−Removed: For further information on accounting related to derivative financial instruments, refer to Note J – “Derivative Financial Instruments” in our Consolidated Financial Statements.
+Added: For further information on accounting related to derivative financial instruments, refer to Note I – “Derivative Financial Instruments” in our Consolidated Financial Statements.
Foreign Exchange Risk
1 unchanged sentence
The reporting currency for our consolidated financial statements is the U.S.
−Removed: Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound and Australian dollar.
+Added: Certain of our assets, liabilities, expenses, revenues and earnings are denominated in other countries’ currencies, including the Euro, British Pound, Chinese Yuan, Australian Dollar and Mexican Peso.
Those assets, liabilities, expenses, revenues and earnings are translated into U.S.
6 unchanged sentences
dollar may cause our actual results to differ materially from those anticipated in our guidance and have a material adverse effect on our business or results of operations.
−Removed: We note that departure of the U.K.
−Removed: from the E.U.
−Removed: may negatively impact the value of the British Pound as compared to the U.S.
−Removed: dollar and other currencies.
We assess foreign currency risk based on transactional cash flows, identify naturally offsetting positions and purchase hedging instruments to partially offset anticipated exposures.
1 unchanged sentence
Based on this sensitivity analysis, we have determined that a change in the value of the U.S.
−Removed: dollar relative to other currencies by 10% to amounts already incorporated in the financial statements for the year ended December 31, 2020 would have had approximately a $19 million impact on the translation effect of foreign exchange rate changes already included in our reported operating income for the period.
+Added: dollar relative to other currencies by 10% to amounts already incorporated in the consolidated financial statements for the year ended December 31, 2021 would have had approximately a $32 million impact on the translation effect of foreign exchange rate changes already included in our reported operating income for the period.
Interest Rate Risk
We are exposed to interest rate volatility with regard to future issuances of fixed rate debt and existing issuances of variable rate debt.
−Removed: Primary exposure includes movements in the U.S.
−Removed: prime rate and LIBOR.
−Removed: We manage interest rate risk by establishing a mix of indebtedness bearing interest at both floating and fixed rates at inception and maintain a ratio of floating and fixed rates on this mix of indebtedness using interest rate derivatives when necessary.
−Removed: At December 31, 2020, approximately 24% of our debt was floating rate debt and the weighted average interest rate for all debt was 4.28%.
−Removed: At December 31, 2020, we performed a sensitivity analysis for our derivatives and other financial instruments that have interest rate risk.
+Added: Primary exposure includes movements in benchmark rates.
+Added: We manage our exposure to interest rate risk by establishing a mix of indebtedness bearing interest at both floating and fixed rates at inception and maintain a ratio of floating and fixed rates on this mix of indebtedness using interest rate derivatives when necessary.
+Added: At December 31, 2021, approximately 12% of our debt was floating rate debt and the weighted average interest rate of our debt was 4.68%.
+Added: At December 31, 2021, we performed a sensitivity analysis for our financial instruments that have interest rate risk.
We calculated the pretax earnings effect on our interest sensitive instruments.
−Removed: Based on this sensitivity analysis, we have determined that an increase of 10% in our average floating interest rates at December 31, 2020 would have increased interest expense by approximately $1 million for the year ended December 31, 2020.
+Added: Based on this sensitivity analysis, we have determined that an increase of 10% in our average floating interest rates at December 31, 2021 would not have materially increased interest expense for the year ended December 31, 2021.
Commodities Risk
6 unchanged sentences
We actively manage our material supply sourcing, and employ various methods to limit risk associated with commodity cost fluctuations and availability.
−Removed: We design and implement plans to mitigate the impact of these risks by using alternate suppliers, expanding our supply base globally, leveraging our overall purchasing volumes to obtain favorable pricing and quantities, developing a closer working relationship with key suppliers and purchasing hedging instruments to partially offset anticipated exposures.
−Removed: One key element of our strategy is to focus on strategic sourcing to gain efficiencies using our global purchasing power.
−Removed: Principal materials and components used in our various manufacturing processes include steel, castings, engines, tires, hydraulics, cylinders, drive trains, electric controls and motors, and a variety of other commodities and fabricated or manufactured items.
−Removed: While material input costs were generally stable in 2020, steel prices increased considerably beginning in the fourth quarter of 2020, putting pressure on input costs in 2021.
−Removed: Section 301 tariffs on certain Chinese origin goods continue to put pressure on input costs.
−Removed: While we have been able to mitigate a portion of the effects of tariffs through the U.S.
−Removed: government’s duty draw back mechanism and from tariff exclusions, nearly all tariff exclusions have expired and there is no indication that expired tariff exclusions will be reinstated.
−Removed: Increases in the cost of these materials and components and the elimination of tariff exclusions has an adverse impact on our material costs and may affect our financial performance.
−Removed: If we are unable to recover a substantial portion of increased raw material or component costs through duty draw-back or from our customers and suppliers this could have an adverse effect on our business or results of operations.
+Added: During 2021, our manufacturing operations were adversely affected by material shortages and production delays as the continuity of supply was impacted by capacity constraints, global logistics disruptions, raw material shortages and COVID-19 related production downtime at certain component suppliers.
+Added: We have designed and implemented plans to mitigate the impact of these risks by using alternate suppliers, expanding our supply base globally, leveraging our overall purchasing volumes to obtain favorable pricing and quantities, developing a closer working relationship with key suppliers and purchasing hedging instruments to partially offset anticipated exposures.
+Added: However, we anticipate that we will continue to be adversely affected by material shortages and production delays into 2022.
+Added: Principal materials and components used in our various manufacturing processes include steel, castings, engines, tires, hydraulics, cylinders, drive trains, electric controls and motors, semiconductors, and a variety of other commodities and fabricated or manufactured items.
+Added: We have seen a rise in input costs across most materials and components which has adversely affected our financial performance.
+Added: Additionally, tariffs on certain Chinese origin goods continue to put pressure on input costs, which we have been able to partially mitigate through the U.S.
+Added: Government’s duty draw back mechanism.
+Added: If we are unable to recover a substantial portion of increased costs from our customers and suppliers or through duty draw-back, our business or results of operations could be adversely affected.
We will continue to monitor international trade policy and will make adjustments to our supply base where possible to mitigate the impact on our costs.
2 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.