QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We use various financial instruments, particularly interest rate caps, to manage and reduce the interest rate risk related to our debt.
+Added: We use various financial instruments, particularly interest rate caps and interest rate swaps, to manage and reduce the interest rate risk related to our debt.
Foreign currency forwards, spots, and swaps are also used to manage and reduce the foreign currency exchange rate risk associated with our foreign currency denominated receivables and payables, forecasted royalties, forecasted earnings, cash flows of foreign subsidiaries, and other transactions.
3 unchanged sentences
Our principal market exposures are interest rate and foreign currency rate risks.
−Removed: • Our primary interest rate exposures as of December 31, 2022, are to interest rate fluctuations in LIBOR interest rates, asset-backed commercial paper interest rates, and SOFR interest rates due to their impact on variable rate borrowings and other interest rate sensitive liabilities.
+Added: • Our primary interest rate exposures as of December 31, 2023, are to interest rate fluctuations in asset-backed commercial paper interest rates and SOFR interest rates due to their impact on variable rate borrowings and other interest rate sensitive liabilities.
+Added: In the first quarter of 2023, we amended the credit agreement governing our revolving credit facility and term loan B facilities to replace LIBOR with Term SOFR as the benchmark rate.
+Added: This change became effective on March 31, 2023, for both new borrowings and rollovers of then existing USD LIBOR based borrowings (except Base Rate borrowings) and eliminated our exposure to LIBOR.
In addition, interest rate movements in one country, as well as relative interest rate movements between countries, can impact us.
We anticipate that SOFR and asset-backed commercial paper rates will remain our primary market risk exposures.
−Removed: In the first quarter of 2023, we expect to exercise our option under our credit agreement to replace LIBOR with Term SOFR, subject to lender approval, as the benchmark rate governing our revolving credit facility and Term Loan B, which would eliminate our largest exposure to LIBOR based interest rates.
−Removed: • Currently, we have debt agreements in place that reference LIBOR-based rates which contain standard LIBOR replacement benchmark language to SOFR for USD denominated debt.
−Removed: Although these LIBOR based obligations provide for alternative methods of calculating the related interest rate payable (including transition to an alternative benchmark rate) if LIBOR is not reported, uncertainty as to the extent and manner of future changes may result in interest rates and/or payments that are higher than, lower than, or that do not otherwise correlate over time with the interest rates and/or payments that would have been made on our obligations if LIBOR was available in its current form.
−Removed: • We have foreign currency rate exposure to exchange rate fluctuations worldwide particularly with respect to the Euro, British pound sterling, Australian and Canadian dollars, Danish krone, and Mexican peso.
+Added: • We have foreign currency rate exposure to exchange rate fluctuations worldwide particularly with respect to the Euro, British pound sterling, Australian and Canadian dollars, and Mexican peso.
We anticipate that such foreign currency exchange rate risk will remain a market risk exposure for the foreseeable future.
7 unchanged sentences
As of December 31, 2023, the absolute notional amount of our outstanding foreign exchange hedging instruments was $61 million.
−Removed: We have determined that a hypothetical 10% change in the foreign currency exchange rates would have resulted in an approximate increase or decrease to the fair value of our outstanding forward foreign currency exchange contracts of $5 million, which
−Removed: would generally be offset by an opposite effect on the underlying exposure being economically hedged.
+Added: We have determined that a hypothetical 10% change in the foreign currency exchange rates would have resulted in an approximate increase or decrease to the fair value of our outstanding forward foreign currency exchange contracts of $5 million, which would generally be offset by an opposite effect on the underlying exposure being economically hedged.
As such, we believe that a 10% change in interest rates or foreign currency exchange rates would not have a material effect on our prices, earnings, fair values, or cash flows.
15 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.