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 I – “Derivative Financial Instruments” in our Condensed Consolidated Financial Statements.
+Added: For further information on accounting related to derivative financial instruments, refer to Note H – “Derivative Financial Instruments” in our Condensed 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, Chinese Yuan 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.
7 unchanged sentences
We assess foreign currency risk based on transactional cash flows, identify naturally offsetting positions and purchase hedging instruments to partially offset anticipated exposures.
−Removed: At September 30, 2021, we performed a sensitivity analysis on the impact that aggregate changes in the translation effect of foreign exchange rate changes would have on our operating income.
+Added: At March 31, 2022, we performed a sensitivity analysis on the impact that aggregate changes in the translation effect of foreign exchange rate changes would have on our operating income.
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 nine months ended September 30, 2021 would have had approximately a $23 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 financial statements for the three months ended March 31, 2022 would have had approximately a $8 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 LIBOR and the U.S.
+Added: Primary exposure includes movements in benchmark rates.
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.
−Removed: At September 30, 2021, substantially all of our debt was fixed rate debt through the use of interest rate derivatives and the weighted average interest rate of our debt was 4.32%.
+Added: At March 31, 2022, 19.3% of our debt was floating rate debt and the weighted average interest rate of our total debt was 4.46%.
+Added: At March 31, 2022, we performed a sensitivity analysis for our financial instruments that have interest rate risk.
+Added: We calculated the pretax earnings effect on our interest sensitive instruments.
+Added: Based on this sensitivity analysis, we have determined that an increase of 10% in our average floating interest rates at March 31, 2022 would not have materially increased interest expense during the period.
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: 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-related production downtime at certain component suppliers.
+Added: Our manufacturing operations continue to be 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.
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.
−Removed: However, we anticipate that we will continue to be adversely affected by material shortages and production delays through the remainder of 2021 and into 2022.
−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: Increases in these input costs, primarily steel, has adversely affected our financial performance.
+Added: However, we anticipate that we will continue to be adversely affected by material shortages and production delays through the remainder of 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.
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.
−Removed: Government’s duty draw-back mechanism.
+Added: Government’s exclusion process and duty draw back mechanism.
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.
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.