NATURES SUNSHINE PRODUCTS INC

Previous wording

In the third quarter of 2024, we experienced an increase in our consolidated net sales of 3.1 percent (or 4.2 percent in local currencies) compared to the same period in 2023. Asia net sales increased approximately 5.9 percent (or 8.6 percent in local currencies) compared to the same period in 2023. Europe net sales increased approximately 4.5 percent (or 2.9 percent in local currencies) compared to the same period in 2023. North America net sales decreased approximately 3.3 percent (or 3.2 percent in local currencies) compared to the same period in 2023. Latin America and Other net sales increased approximately 12.0 percent (or 14.5 percent in local currencies) compared to the same period in 2023. The strengthening of the U.S. dollar versus the local currencies, primarily in our Asian markets, resulted in an approximate 1.1 percent, or $1.3 million, decrease of our net sales during the quarter.

Current wording

In the first quarter of 2025, we experienced an increase in our consolidated net sales of 2.0 percent (or 4.5 percent in local currencies) compared to the same period in 2024. Asia net sales increased approximately 5.3 percent (or 10.1 percent in local currencies) compared to the same period in 2024. Europe net sales increased approximately 8.2 percent (or 8.6 percent in local currencies) compared to the same period in 2024. North America net sales decreased approximately 4.1 percent (or 3.7 percent in local currencies) compared to the same period in 2024. Latin America and Other net sales decreased approximately 8.2 percent (or 3.7 percent in local currencies) compared to the same period in 2024. The strengthening of the U.S. dollar versus the local currencies, primarily in our Asian markets, resulted in an approximate 2.5 percent, or $2.7 million, decrease of our net sales during the quarter.

Previous wording

Cost of sales increased $2.9 million during the three months ended September 30, 2024, compared to the same period in 2023, and as a percentage of net sales were 28.7 percent and 26.9 percent for the three months ended September 30, 2024 and 2023, respectively. The increase in cost of sales percentage is primarily due to higher inflation and unfavorable foreign exchange which offset our savings initiatives.

Current wording

Cost of sales decreased $0.4 million during the three months ended March 31, 2025, compared to the same period in 2024, and as a percentage of net sales were 27.9 percent and 28.8 percent for the three months ended March 31, 2025 and 2024, respectively. The decrease in cost of sales percentage is primarily due to price increases and the effects of our cost savings initiatives.

Previous wording

In absolute terms, selling, general and administrative expenses decreased $0.3 million during the three months ended September 30, 2024, compared to the same period in 2023, and as a percentage of net sales were 35.7 percent and 37.1 percent for the three months ended September 30, 2024 and 2023, respectively. The decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China's lower net sales.

Current wording

In absolute terms, selling, general and administrative expenses decreased $0.2 million during the three months ended March 31, 2025, compared to the same period in 2024, and as a percentage of net sales were 35.8 percent and 36.7 percent for the three months ended March 31, 2025 and 2024, respectively. The decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China's lower net sales.

Previous wording

On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. Our consultants in our Russia and Other market, a market within our Europe business segment that includes Russia, Ukraine, Belarus and other Common Independent States in the region, continue to operate their independent businesses, albeit at a reduced level than prior to the start of the conflict. We expect that this will continue to impact our business for the foreseeable future. We will continue monitoring the social, political, regulatory and economic environment in Ukraine and Russia, and will consider further actions as appropriate.

Current wording

On February 24, 2022, Russian forces launched significant military action against Ukraine. There continues to be sustained conflict and disruption in the region, which is expected to endure for the foreseeable future. Our consultants in our Eastern Europe market, a market within our Europe business segment that includes Russia, Ukraine, Belarus and other Common Independent States in the region, continue to operate their independent businesses, albeit at a reduced level than prior to the start of the conflict. We expect that this will continue to impact our business for the foreseeable future. We will continue monitoring the social, political, regulatory and economic environment in Ukraine and Russia and will consider further actions as appropriate.

Previous wording

Net sales related to Eastern Europe for the three and nine months ended September 30, 2024 were $12.2 million and $41.1 million, respectively, compared to $12.1 million and $41.3 million for the same periods in 2023. Operating income related to Eastern Europe for the three and nine months ended September 30, 2024 was $0.5 million and $2.8 million, respectively, compared to $0.8 million and $1.6 million for the same periods in 2023. As of September 30, 2024, Eastern Europe had assets of $8.4 million net of working capital reserves related to inventories.

Current wording

Net sales related to Eastern Europe for the three months ended March 31, 2025 and 2024, were $15.8 million and $14.7 million, respectively. Operating income related to Eastern Europe for the three months ended March 31, 2025 and 2024, were $1.4 million and $1.6 million, respectively. As of March 31, 2025, Eastern Europe had assets of $6.6 million net of working capital reserves related to inventories.

Previous wording

More broadly, there could be additional negative impacts to our net sales, earnings and cash flows should the situation escalate beyond its current scope, including, among other potential impacts, economic recessions in certain neighboring countries or globally due to inflationary pressures and supply chain cost increases or the geographic proximity of the war relative to the rest of Europe.

Current wording

More broadly, there could be additional negative impacts to our net sales, earnings and cash flows should the situation escalate beyond its current scope, including, among other potential impacts, economic recessions in certain neighboring countries.

Previous wording

Consolidated net sales for the three and nine months ended September 30, 2024 were $114.6 million and $336.2 million, respectively, compared to $111.2 million and $336.4 million for the same period in 2023, which represents an increase of 3.1 percent and a decrease of 0.1 percent, respectively. The increase for the three months ended September 30, 2024 was primarily related to product sales increases in our Asia and Europe operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the three and nine months ended September 30, 2024 increased 4.2 percent and 1.7 percent, respectively, from the same periods in 2023.

Current wording

Consolidated net sales for the three months ended March 31, 2025 and 2024, were $113.2 million and $111.0 million, respectively, which represents an increase of 2.0 percent. The increase was primarily related to product sales increases in our Asia and Europe operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the three months ended March 31, 2025 increased 4.5 percent from the same period in 2024.

Previous wording

Net sales related to Asia for the three and nine months ended September 30, 2024 were $55.3 million and $151.5 million, respectively, compared to $52.2 million and $153.4 million for the same periods in 2023, or an increase of 5.9 percent and a decrease of 1.3 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2024 increased 8.6 percent and 3.3 percent, respectively, compared to the same periods in 2023.

Current wording

Net sales related to Asia for the three months ended March 31, 2025 and 2024, were $48.7 million and $46.2 million, respectively, or an increase of 5.3 percent. In local currency, net sales for the three months ended March 31, 2025, increased 10.1 percent, compared to the same period in 2024.

Previous wording

In our Taiwan market, net sales increased $2.8 million and $4.7 million, or 17.9 percent and 10.2 percent, for the three and nine months ended September 30, 2024, compared to the same periods in 2023. In local currencies, net sales for the three and nine months ended September 30, 2024 increased 20.4 percent and 14.1 percent, compared to the same periods in 2023. We attribute the growth in net sales primarily to effective execution of fundamentals to improve consultant activity.

Current wording

In our Taiwan market, net sales increased $2.1 million, or 13.1 percent, for the three months ended March 31, 2025, compared to the same period in 2024. In local currencies, net sales for the three months ended March 31, 2025, increased 18.4 percent, compared to the same period in 2024. We attribute the growth in net sales to strong growth in consultant activity and effective product promotions.

Previous wording

In our South Korea market, net sales decreased $27,000 and $29,000, or 0.2 percent and 0.1 percent, for the three and nine months ended September 30, 2024, compared to the same periods in 2023. In local currency, net sales for the three and nine months ended September 30, 2024 increased 3.1 percent and 3.8 percent, respectively, compared to the same periods in 2023. Net sales continued to show a modest improvement in local currency due to improved customer acquisition.

Current wording

In our South Korea market, net sales decreased $0.8 million, or 7.2 percent, for the three months ended March 31, 2025, compared to the same period in 2024. In local currency, net sales for the three months ended March 31, 2025, increased 1.4 percent, compared to the same period in 2024. Net sales in local currency increased due to an increase in average order value.

Previous wording

In our Japan market, net sales increased $2.9 million and $0.7 million, or 28.1 percent and 2.3 percent, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. In local currencies, net sales for the three and nine months ended September 30, 2024 increased 34.4 percent and 12.1 percent, respectively, compared to the same periods in 2023. The increase in net sales was primarily the result of strong customer acquisition that was bolstered by higher average order values.

Current wording

In our Japan market, net sales increased $1.9 million, or 20.3 percent, for the three months ended March 31, 2025, compared to the same period in 2024. In local currencies, net sales for the three months ended March 31, 2025, increased 23.7 percent, compared to the same period in 2024. The increase in net sales was primarily the result of strong customer acquisition driving an increase in total orders.

Previous wording

In our China market, net sales decreased $2.4 million and $7.2 million, or 22.3 percent and 21.9 percent, for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. In local currencies, net sales for the three and nine months ended September 30, 2024 decreased 23.0 percent and 20.4 percent, respectively, compared to the same periods in 2023. The decrease in net sales was primarily the result of challenging macroeconomic factors.

Current wording

In our China market, net sales decreased $0.6 million, or 6.9 percent, for the three months ended March 31, 2025, compared to the same period in 2024. In local currencies, net sales for the three months ended March 31, 2025, decreased 5.8 percent, compared to the same period in 2024. The decrease in net sales was primarily the result of challenging macroeconomic factors.

Previous wording

Net sales related to Europe for the three and nine months ended September 30, 2024 were $19.6 million and $63.5 million, respectively, compared to $18.8 million and $61.4 million for the same periods in 2023, or increases of 4.5 percent and 3.4 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2024 increased 2.9 percent and 1.8 percent, respectively, compared to the same periods in 2023. The functional currency for many of these markets is the U.S. Dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign currency exchange rates had favorable impacts on net sales of $0.3 million and $1.0 million for the three and nine months ended September 30, 2024, respectively. We attribute the increase in net sales in local currency primarily due to the increased focus on our field activation initiatives.

Current wording

Net sales related to Europe for the three months ended March 31, 2025 and 2024, were $24.1 million and $22.3 million, respectively, or an increase of 8.2 percent. In local currency, net sales for the three months ended March 31, 2025, increased 8.6 percent, compared to the same period in 2024. The functional currency for many of these markets is the U.S. dollar which reduces the effect from foreign currency fluctuations. Fluctuations in foreign currency exchange rates had unfavorable impacts on net sales of $0.1 million for the three months ended March 31, 2025. We attribute the increase in net sales in local currency primarily due to improved customer acquisition.

Previous wording

Net sales related to North America for the three and nine months ended September 30, 2024 were $33.6 million and $103.7 million, respectively, compared to $34.8 million and $104.1 million for the same periods in 2023, or decreases of 3.3 percent and 0.4 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2024 decreased 3.2 percent and 0.3 percent, respectively, compared to the same periods in 2023.

Current wording

Net sales related to North America for the three months ended March 31, 2025 and 2024, were $35.0 million and $36.5 million, respectively, or a decrease of 4.1 percent. In local currency, net sales for the three months ended March 31, 2025, decreased 3.7 percent, compared to the same period in 2024.

Previous wording

In the United States, net sales for the three and nine months ended September 30, 2024 decreased $0.9 million and $0.4 million, or 2.8 percent and 0.4 percent, respectively, compared to the same periods in 2023. The decrease was primarily due to lower customer acquisition resulting from the near-term impact of the launch of our new digital platform.

Current wording

In the United States, net sales for the three months ended March 31, 2025, decreased $1.2 million, or 3.6 percent, compared to the same period in 2024. The decrease was primarily due to lower customer acquisition and fewer total orders.

Previous wording

Net sales related to Latin America and Other markets for the three months ended September 30, 2024 was $6.1 million compared to $5.4 million for the same period in 2023, an increase of 12.0 percent. For the nine months ended September 30, 2024 net sales remained flat, compared to the same period in 2023, at $17.4 million. In local currency, net sales for the three and nine months ended September 30, 2024 increased 14.5 percent and decreased 0.8 percent, respectively, compared to the same periods in 2023. Fluctuations in foreign currency had unfavorable impacts on net sales of $0.1 million and favorable impacts of $0.1 million for the three and nine months ended September 30, 2024, respectively.

Current wording

Net sales related to Latin America and Other markets for the three months ended March 31, 2025 and 2024, were $5.5 million and $6.0 million, respectively, or a decrease of 8.2 percent. In local currency, net sales for the three months ended March 31, 2025, decreased 3.7 percent, compared to the same period in 2024. Fluctuations in foreign currency had unfavorable impacts on net sales of $0.3 million for the three months ended March 31, 2025.

Previous wording

Cost of sales as a percent of net sales was 28.7 percent and 28.7 percent for the three and nine months ended September 30, 2024, compared to 26.9 percent and 27.8 percent for the same periods in 2023. The increase in cost of sales percentage is primarily due to higher inflation and unfavorable foreign exchange which more than offset our savings initiatives.

Current wording

Cost of sales as a percent of net sales was 27.9 percent and 28.8 percent for the three months ended March 31, 2025 and 2024, respectively. The decrease in cost of sales percentage is primarily due to price increases and the effects of our cost savings initiatives.

Previous wording

Volume incentives expense as a percent of net sales was 31.0 percent and 30.9 percent for the three and nine months ended September 30, 2024, respectively, compared to 30.7 percent and 30.5 percent for the same periods in 2023. The increase was primarily due to the timing of promotional incentives and changes in market mix. These payments are designed to provide incentives for reaching certain sales levels. Volume incentives vary slightly, on a percentage basis, by product due to pricing policies and commission plans in place in our various geographies. We do not pay volume incentives in China, instead we pay independent service fees which are included in selling, general and administrative expenses.

Current wording

Volume incentives expense as a percent of net sales was 30.8 percent and 30.2 percent for the three months ended March 31, 2025 and 2024, respectively. The increase was primarily due to the timing of promotional incentives and changes in market mix. These payments are designed to provide incentives for reaching certain sales levels. Volume incentives vary slightly, on a percentage basis, by product due to pricing policies and commission plans in place in our various geographies. We do not pay volume incentives in China, instead we pay independent service fees which are included in selling, general and administrative expenses.

Previous wording

Selling, general and administrative expenses decreased $0.3 million and $6.9 million, respectively, to $41.0 million and $120.3 million for the three and nine months ended September 30, 2024, respectively, compared to the same periods in 2023. Selling, general and administrative expenses were 35.7 percent and 35.8 percent of net sales for the three and nine months ended September 30, 2024, compared to 37.1 percent and 37.8 percent for the same periods in 2023. The decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China's lower net sales.

Current wording

Selling, general and administrative expenses decreased $0.2 million to $40.6 million for the three months ended March 31, 2025, compared to the same period in 2024. Selling, general and administrative expenses were 35.8 percent and 36.7 percent of net sales for the three months ended March 31, 2025 and 2024. The decrease was primarily related to the streamlining of our global overhead expenses and reduced service fees due to China's lower net sales.

Previous wording

Other income (loss), net, for the three and nine months ended September 30, 2024, was income of $2.6 million and $1.4 million, respectively, compared to losses of $0.9 million and $0.5 million during the same periods in 2023, respectively. Other income (loss), net for the three and nine months ended September 30, 2024 primarily consisted of foreign exchange gains in Asia, partially offset by foreign exchange losses in Latin America, that resulted from net changes in foreign currencies.

Current wording

Other income, net, for the three months ended March 31, 2025 and 2024, was $0.9 million and $31,000, respectively. Other income, net for the three months ended March 31, 2025 primarily consisted of foreign exchange gains that resulted from net changes in foreign currencies.

Previous wording

For the three months ended September 30, 2024 and 2023, our provision for income taxes, as a percentage of income before income taxes was 41.2 percent and 35.9 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent. For the nine months ended September 30, 2024 and 2023, our provision for income taxes, as a percentage of income before income taxes was 49.2 percent and 43.6 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.

Current wording

For the three months ended March 31, 2025 and 2024, our provision for income taxes, as a percentage of income before income taxes was 31.3 percent and 46.5 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.

Previous wording

The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2024, was primarily attributed to operations in certain foreign countries which are treated as a branch for US tax purposes and current year foreign losses that presently do not provide future tax benefit, partially offset by foreign tax credits.

Current wording

The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended March 31, 2025, was primarily attributed to operations in certain foreign countries which are treated as a branch for US tax purposes and current year foreign losses that presently do not provide future tax benefit, partially offset by adjustments to foreign tax credits and valuation allowances.

Previous wording

The difference between the effective tax rate and the U.S. federal statutory tax rate for the three and nine months ended September 30, 2023, was primarily attributed to adjustments relating to operations in foreign countries which are treated as a

Current wording

The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended March 31, 2024, was primarily attributed to operations in foreign countries which are treated as a branch for US tax purposes and current year foreign losses that presently do not provide future tax benefit.

Previous wording

The difference between the effective tax rate for the three and nine months ended September 30, 2024, compared to September 30, 2023, is primarily caused by a decrease in the utilization of foreign tax credits in the current period.

Current wording

The difference between the effective tax rate for the three months ended March 31, 2025, compared to March 31, 2024, is primarily caused by adjustments to foreign tax credits and valuation allowances in the current period.

Previous wording

As of September 30, 2024 and December 31, 2023, we had accrued $0.7 million and $0.3 million, respectively, related to unrecognized tax positions.

Current wording

As of March 31, 2025 and December 31, 2024, we had accrued $0.6 million and $0.6 million, respectively, related to unrecognized tax positions.

Previous wording

See Note 7, Segment Information, for a summary of the U.S. dollar amounts from the sale of general health, immune, cardiovascular, digestive, personal care and weight management products for the three and nine months ended September 30, 2024 and 2023, by business segment.

Current wording

See Note 7, Segment Information, for a summary of the U.S. dollar amounts from the sale of general health, immune, cardiovascular, digestive, personal care and weight management products for the three months ended March 31, 2025 and 2024, by business segment.

Previous wording

We pay sales commissions, or “volume incentives” to our independent consultants based upon their own product sales and the product sales of their sales organization. As an exception, in China, we do not pay volume incentives; rather, we pay independent service fees, which are included in selling, general and administrative expenses. These volume incentives are recorded as an expense in the year earned. The amounts of volume incentives that we expensed during the quarters ended September 30, 2024 and 2023, are set forth in the Condensed Consolidated Financial Statements in Item 1 of this report. In addition to the opportunity to receive volume incentives, independent consultants who attain certain levels of monthly product sales are eligible for additional incentive programs including automobile allowances, sales convention privileges and travel awards.

Current wording

We pay sales commissions, or “volume incentives” to our independent consultants based upon their own product sales and the product sales of their sales organization. As an exception, in China, we do not pay volume incentives; rather, we pay independent service fees, which are included in selling, general and administrative expenses. These volume incentives and independent service fees are recorded as an expense in the year earned. The amounts of volume incentives that we expensed during the quarters ended March 31, 2025 and 2024, are set forth in the unaudited Condensed Consolidated Financial Statements in Item 1 of this report. In addition to the opportunity to receive volume incentives, independent consultants who attain certain levels of monthly product sales are eligible for additional incentive programs including automobile allowances, sales convention privileges and travel awards.

Previous wording

Our principal use of cash is to pay for operating expenses, including volume incentives, inventory and raw material purchases, capital assets and funding of international expansion. As of September 30, 2024, working capital was $96.4 million, compared to $89.1 million as of December 31, 2023. At September 30, 2024, we had $78.7 million in cash, of which $5.7 million was held in the U.S. and $73.0 million was held in foreign markets and may be subject to various withholding taxes and other restrictions related to repatriation before becoming available to be used along with the normal cash flows from operations to fund any unanticipated shortfalls in future cash flows.

Current wording

Our principal use of cash is to pay for operating expenses, including volume incentives, inventory and raw material purchases, capital assets and funding of international expansion. As of March 31, 2025, working capital was $100.0 million, compared to $94.9 million as of December 31, 2024. At March 31, 2025, we had $86.5 million in cash, of which $8.0 million was held in the U.S. and $78.5 million was held in foreign markets and may be subject to various withholding taxes and other restrictions related to repatriation before becoming available to be used along with the normal cash flows from operations to fund any unanticipated shortfalls in future cash flows.

Previous wording

Our net consolidated cash inflows (outflows) are as follows (in thousands):

Current wording

Our unaudited net consolidated cash inflows (outflows) are as follows (in thousands):

Previous wording

For the nine months ended September 30, 2024, operating activities provided cash of $13.1 million, compared to $31.6 million in the same period in 2023. Operating cash flows decreased primarily due to the timing of payments for accrued liabilities, lease liabilities, prepaid expenses, and timing of receipts of accounts receivable, partially offset by a reduction in inventories.

Current wording

For the three months ended March 31, 2025, operating activities provided cash of $2.6 million, compared to $2.2 million in the same period in 2024. Operating cash flows increased primarily due to the timing of payments for accrued liabilities and accrued volume incentives and service fees, partially offset by increases in inventories.

Previous wording

For the nine months ended September 30, 2024, investing activities used $8.8 million, compared to $9.2 million for the same period in 2023, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.

Current wording

For the three months ended March 31, 2025, investing activities used $1.1 million, compared to $3.7 million for the same period in 2024, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.

Previous wording

For the nine months ended September 30, 2024, financing activities used $9.3 million, compared to $3.4 million for the same period in 2023.

Current wording

For the three months ended March 31, 2025, financing activities used $0.7 million, compared to provided cash of $0.1 million for the same period in 2024.

Previous wording

During the nine months ended September 30, 2024, we used cash to repurchase 509,000 shares of our common stock under the share repurchase program for $8.4 million. At September 30, 2024, the remaining balance available for repurchases under the program was $9.2 million.

Current wording

During the three months ended March 31, 2025, we used cash to repurchase 38,000 shares of our common stock under the share repurchase program for $0.5 million. At March 31, 2025, the remaining balance available for repurchases under the program was $8.3 million.

Previous wording

We maintain a revolving credit agreement with Bank of America, N.A (the “Credit Agreement”), as well as a credit agreement with Banc of America Leasing and Capital, LLC (the "Capital Credit Agreement"). At September 30, 2024, there were no outstanding balances under the Credit Agreement or the Capital Credit Agreement. Our debt obligations are discussed in greater detail in Note 4, “Revolving Credit Facility and Other Obligations,” to our Condensed Consolidated Financial Statements in Item 1, Part 1 of this report.

Current wording

We maintain a revolving credit agreement with Bank of America, N.A (the “Credit Agreement”), as well as a credit agreement with Banc of America Leasing and Capital, LLC (the "Capital Credit Agreement"). At March 31, 2025, there were no outstanding balances under the Credit Agreement or the Capital Credit Agreement. Our debt obligations are discussed in greater detail in Note 4, “Revolving Credit Facility and Other Obligations,” to our unaudited Condensed Consolidated Financial Statements in Item 1, Part 1 of this report.

Previous wording

Our revenue recognition practices are discussed in Note 11, “Revenue Recognition,” to our Condensed Consolidated Financial Statements in Item 1, Part 1 of this report.

Current wording

Our revenue recognition practices are discussed in Note 11, “Revenue Recognition,” to our unaudited Condensed Consolidated Financial Statements in Item 1, Part 1 of this report.

Previous wording

We are involved in certain legal proceedings and disputes. When a loss is considered probable in connection with litigation or non-income tax contingencies and when such loss can be reasonably estimated with a range, we record our best estimate within the range related to the contingency. If there is no best estimate, we record the minimum of the range. As additional information becomes available, we assess the potential liability related to the contingency and revise the estimates. Revision in estimates of the potential liabilities could materially affect our results of operations in the period of adjustment. Our contingencies are discussed in further detail in Note 9, “Commitments and Contingencies”, to the Notes of our Condensed Consolidated Financial Statements, of Item 1, Part 1 of this report.

Current wording

We are involved in certain legal proceedings and disputes. When a loss is considered probable in connection with litigation or non-income tax contingencies and when such loss can be reasonably estimated with a range, we record our best estimate within the range related to the contingency. If there is no best estimate, we record the minimum of the range. As additional information becomes available, we assess the potential liability related to the contingency and revise the estimates. Revision in estimates of the potential liabilities could materially affect our results of operations in the period of adjustment. Our contingencies are discussed in further detail in Note 9, “Commitments and Contingencies”, to the Notes of our unaudited Condensed Consolidated Financial Statements, of Item 1, Part 1 of this report.