NATURES SUNSHINE PRODUCTS INC

Previous wording

We are a natural health and wellness company primarily engaged in the manufacture and sale of nutritional and personal care products. We are a Utah corporation with our principal place of business in Lehi, Utah, and sell our products directly to customers and to a sales force of independent consultants who resell our products to consumers.

Current wording

We are a global leader in manufacturing and marketing high-quality herbal and nutritional supplements. We are a Utah corporation with our principal place of business in Lehi, Utah, and sell our products directly to consumers and to a sales force of independent consultants who resell our products to consumers.

Previous wording

Our independent consultants market and sell our products to customers and sponsor other independent consultants who also market our products to customers. Because a significant amount of revenue is generated through the sales of our independent consultants, our revenue can be impacted by the number and productivity of our independent consultants. We seek to motivate and provide incentives to our independent consultants by offering high quality products, product support, training seminars and financial incentives, among other considerations.

Current wording

Our independent consultants market and sell our products to consumers and sponsor other independent consultants who also market our products to consumers. Because a significant amount of revenue is generated through the sales of our independent consultants, our revenue can be impacted by the number and productivity of our independent consultants. We seek to motivate and provide incentives to our independent consultants by offering high quality products, product support, training seminars and financial incentives, among other considerations.

Previous wording

In the third quarter of 2025, we experienced an increase in our consolidated net sales of 12.0 percent (or 10.5 percent in local currencies) compared to the same period in 2024. Asia net sales increased approximately 17.1 percent (or 14.9 percent in local currencies) compared to the same period in 2024. Europe net sales increased approximately 12.7 percent (or 10.0 percent in local currencies) compared to the same period in 2024. North America net sales increased approximately 7.7 percent (or 7.8 percent in local currencies) compared to the same period in 2024. Latin America and Other net sales decreased approximately 13.1 percent (or 13.3 percent in local currencies) compared to the same period in 2024. The strengthening of the local currencies versus the U.S. dollar, primarily in our Asian and European markets, resulted in an approximate 1.5 percent, or $1.7 million, increase of our net sales during the quarter.

Current wording

In the first quarter of 2026, we experienced an increase in our consolidated net sales of 8.5 percent (or 6.9 percent in local currencies) compared to the same period in 2025. Asia net sales increased approximately 7.3 percent (or 5.9 percent in local currencies) compared to the same period in 2025. Europe net sales increased approximately 9.5 percent (or 6.0 percent in local currencies) compared to the same period in 2025. North America net sales increased approximately 9.4 percent (or 9.1 percent in local currencies) compared to the same period in 2025. Latin America and Other net sales increased approximately 9.7 percent (or 5.6 percent in local currencies) compared to the same period in 2025. The strengthening of the U.S. dollar versus the local currencies, resulted in an approximate 1.6 percent, or $1.8 million, increase of our net sales during the quarter.

Previous wording

Cost of sales increased $1.4 million during the three months ended September 30, 2025, compared to the same period in 2024, and as a percentage of net sales were 26.7 percent and 28.7 percent for the three months ended September 30, 2025 and 2024, respectively. The decrease in cost of sales percentage is primarily due to cost savings initiatives, market mix and favorable foreign exchange.

Current wording

Cost of sales increased $1.3 million during the three months ended March 31, 2026, compared to the same period in 2025, and as a percentage of net sales were 26.8 percent and 27.9 percent for the three months ended March 31, 2026 and 2025, respectively. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.

Previous wording

In absolute terms, selling, general and administrative expenses increased $4.8 million during the three months ended September 30, 2025, compared to the same period in 2024, and as a percentage of net sales were 35.6 percent and 35.7 percent for the three months ended September 30, 2025 and 2024, respectively. The increase was primarily related to the timing of compensation costs, incremental investment in digital marketing and consultant events as well as other non-recurring expenses.

Current wording

In absolute terms, selling, general and administrative expenses increased $3.0 million during the three months ended March 31, 2026, compared to the same period in 2025, and as a percentage of net sales were 35.4 percent and 35.8 percent for the three months ended March 31, 2026 and 2025, respectively. The decrease as a percent of net sales was primarily related to reductions in professional fees, digital marketing and other non-recurring expenses.

Previous wording

Net sales related to Eastern Europe for the three and nine months ended September 30, 2025 were $13.9 million and $43.2 million, respectively, compared to $12.2 million and $41.1 million for the same periods in 2024. Operating income related to Eastern Europe for the three and nine months ended September 30, 2025 was $1.3 million and $3.7 million, respectively, compared to $0.5 million and $2.8 million for the same periods in 2024. As of September 30, 2025, Eastern Europe had assets of $6.2 million net of working capital reserves related to inventories.

Current wording

Despite the war in Ukraine, net sales related to Eastern Europe for the three months ended March 31, 2026 and 2025, were $17.6 million and $15.8 million, respectively. Operating income related to Eastern Europe for the three months ended

Previous wording

In addition, in November 2024 we began an internal investigation regarding our past compliance with relevant U.S. trade controls and made an initial voluntary self-disclosure of apparent trade controls violations to the U.S. Department of Commerce's Bureau of Industry and Security (“BIS”). In addition, in April 2025 we filed an initial voluntary self-disclosure with the Office of Foreign Asset Control (“OFAC”) relating to the same internal investigation. Following our internal investigation, we filed final voluntary self-disclosures with BIS and OFAC on September 5, 2025. We estimate that such potential violations represented less than one percent of our net revenue in each of our last three fiscal years. An unfavorable outcome of this investigation may include fines or penalties imposed in response to our voluntary disclosures. While we believe the amount of any fines or penalties would not be material to our financial condition and results of operation, we are unable to predict the outcome or to reasonably estimate the time it may take to resolve these matters.

Current wording

In November 2024, we began an internal investigation regarding our past compliance with relevant U.S. trade controls and made an initial voluntary self-disclosure of apparent trade controls violations to the U.S. Department of Commerce's Bureau of Industry and Security (“BIS”). In addition, in April 2025 we filed an initial voluntary self-disclosure with the Office of Foreign Asset Control (“OFAC”) relating to the same internal investigation. Following our internal investigation, we filed final voluntary self-disclosures with BIS and OFAC on September 5, 2025. We estimate that such potential violations represented less than one percent of our net revenue in each of our last three fiscal years. An unfavorable outcome of this investigation may include fines or penalties imposed in response to our voluntary disclosures. While we believe the amount of any fines or penalties would not be material to our financial condition and results of operation, we are unable to predict the outcome or the timing of resolution of these matters.

Previous wording

While we have not seen a material price increase as a result of tariffs and tariff speculation, we continue to monitor the additional pressure that tariff-related price increases may have. In addition, we are monitoring other effects of tariffs on our business, including the price, availability and quality of raw materials and other ingredients. While higher tariffs have begun affecting our costs in 2025, the full-year impact is not expected to be material.

Current wording

While we did not experience material impacts as a result of tariffs for the three months ended March 31, 2026 and 2025, we continue to monitor the additional pressure that tariff-related price increases may have on our business, including the price, availability and quality of raw materials and other ingredients. We expect that tariffs may adversely affect our costs in the remainder of 2026.

Previous wording

Consolidated net sales for the three and nine months ended September 30, 2025, were $128.3 million and $356.3 million, respectively, compared to $114.6 million and $336.2 million for the same period in 2024, which represents an increase of 12.0 percent and 6.0 percent, respectively. The increase was primarily related to product sales increases in our Asia, Europe and North America operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the three and nine months ended September 30, 2025 increased 10.5 percent and 5.8 percent, respectively, from the same periods in 2024.

Current wording

Consolidated net sales for the three months ended March 31, 2026 and 2025, were $122.9 million and $113.2 million, respectively, which represents an increase of 8.5 percent. The increase was primarily related to product sales increases in each of our operating segments. Excluding the impact of foreign currency exchange rate fluctuations, consolidated net sales for the three months ended March 31, 2026, increased 6.9 percent from the same period in 2025.

Previous wording

Net sales related to Asia for the three and nine months ended September 30, 2025 were $64.7 million and $166.0 million, respectively, compared to $55.3 million and $151.5 million for the same periods in 2024, or increases of 17.1 percent and 9.6 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2025 increased 14.9 percent and 9.3 percent, respectively, compared to the same periods in 2024.

Current wording

Net sales related to Asia for the three months ended March 31, 2026 and 2025, were $52.2 million and $48.7 million, respectively, or an increase of 7.3 percent. In local currencies, net sales for the three months ended March 31, 2026, increased 5.9 percent compared to the same period in 2025.

Previous wording

In our Taiwan market, net sales increased $0.5 million and $3.0 million, or 2.5 percent and 5.9 percent, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. In local currencies, net sales for the three and nine months ended September 30, 2025 decreased 4.8 percent and increased 3.0 percent, respectively, compared to the same periods in 2024. Net sales in local currency decreased for the three months ended September 30, 2025 primarily due to a reduction in total orders and average order value. The increase in net sales for the nine months ended September 30, 2025 was primarily the result of an increase in active consultants and total orders in the first quarter.

Current wording

In our Taiwan market, net sales decreased $2.9 million, or 16.1 percent, for the three months ended March 31, 2026, compared to the same period in 2025. In local currency, net sales for the three months ended March 31, 2026, decreased 19.3 percent, compared to the same period in 2025. The decrease was primarily the result of slower consumer acquisition and a reduction in total orders.

Previous wording

In our Japan market, net sales increased $4.4 million and $9.8 million, or 33.2 percent and 30.4 percent, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. In local currencies, net sales for the three and nine months ended September 30, 2025 increased 31.5 percent and 27.9 percent, respectively, compared to the same periods in 2024. The increase in net sales was primarily the result of strong field fundamentals and timing of event qualifications that drove greater customer acquisition and an increase in total orders and average order value.

Current wording

In our Japan market, net sales increased $1.4 million, or 12.9 percent, for the three months ended March 31, 2026, compared to the same period in 2025. In local currency, net sales for the three months ended March 31, 2026, increased 16.0 percent, compared to the same period in 2025. The increase in net sales was primarily the result of strong field fundamentals and timing of event qualifications that drove greater consultant activity and an increase in total orders and average order value.

Previous wording

In our South Korea market, net sales increased $1.3 million and decreased $0.5 million, or increased 9.4 percent and decreased 1.1 percent, for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. In local currency, net sales for the three and nine months ended September 30, 2025 increased 12.4 percent and 3.3 percent, respectively, compared to the same periods in 2024.The increase in net sales was primarily the result of event qualifications that drove greater average order value.

Current wording

In our South Korea market, net sales increased $1.4 million, or 13.4 percent, for the three months ended March 31, 2026, compared to the same period in 2025. In local currency, net sales for the three months ended March 31, 2026, increased 14.3 percent, compared to the same period in 2025. The increase in net sales was primarily the result of an increase in total orders and average order value.

Previous wording

In our China market, net sales increased $3.0 million and $2.4 million, or 35.7 percent and 9.3 percent, for the three and nine months ended September 30, 2025, compared to the same periods in 2024. In local currencies, net sales for the three and nine months ended September 30, 2025 increased 35.8 percent and 9.8 percent, respectively, compared to the same periods in 2024. The increase in net sales was primarily the result of higher total orders driven by improved consultant engagement.

Current wording

In our China market, net sales increased $3.5 million, or 45.7 percent, for the three months ended March 31, 2026, compared to the same period in 2025. In local currency, net sales for the three months ended March 31, 2026, increased 39.7 percent, compared to the same period in 2025. The increase in net sales was primarily the result of an increase in average order value and total orders.

Previous wording

Net sales related to Europe for the three and nine months ended September 30, 2025 were $22.1 million and $68.0 million, respectively, compared to $19.6 million and $63.5 million for the same periods in 2024, or increases of 12.7 percent and 7.0 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2025 increased 10.0 percent and 5.6 percent, respectively, compared to the same periods 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 favorable impacts on net sales of $0.5 million and $0.9 million for the three and nine months ended September 30, 2025, respectively. Net sales in local currency increased for the three and nine months ended September 30, 2025 primarily as a result of improved customer acquisition and existing customer engagement.

Current wording

Net sales related to Europe for the three months ended March 31, 2026 and 2025, were $26.4 million and $24.1 million, respectively, or an increase of 9.5 percent. In local currencies, net sales for the three months ended March 31, 2026, increased 6.0 percent, compared to the same period in 2025. 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 $0.8 million for the three months ended March 31, 2026. Net sales increased primarily as a result of improved consumer acquisition and existing consumer engagement, as evidenced by increased active consumer count and average order size.

Previous wording

Net sales related to North America for the three and nine months ended September 30, 2025 were $36.2 million and $106.2 million, respectively, compared to $33.6 million and $103.7 million for the same periods in 2024, or increased 7.7 percent and 2.4 percent, respectively. In local currency, net sales for the three and nine months ended September 30, 2025 increased 7.8 percent and 2.6 percent, respectively, compared to the same periods in 2024.

Current wording

Net sales related to North America for the three months ended March 31, 2026 and 2025, were $38.3 million and $35.0 million, respectively, or an increase of 9.4 percent. In local currencies, net sales for the three months ended March 31, 2026, increased 9.1 percent compared to the same period in 2025.

Previous wording

In the United States, net sales for the three and nine months ended September 30, 2025 increased $2.6 million and $3.1 million, or 8.3 percent and 3.2 percent, respectively, compared to the same periods in 2024. The increase was primarily due to improved customer acquisition through our digital channels as well as stabilization of our core business.

Current wording

In the United States, net sales for the three months ended March 31, 2026, increased $3.2 million, or 9.7 percent compared to the same period in 2025. The increase was primarily due to improved consumer acquisition through our digital channels, supported by our strategic focus on field fundamentals for our consultants.

Previous wording

Net sales related to Latin America and Other markets for the three and nine months ended September 30, 2025 were $5.3 million and $16.1 million, respectively, compared to $6.1 million and $17.4 million for the same periods in 2024, or decreased 13.1 percent and 7.6 percent. In local currency, net sales for the three and nine months ended September 30, 2025 decreased 13.3 percent and 5.0 percent, respectively, compared to the same periods in 2024. Fluctuations in foreign currency had favorable impacts on net sales of $14,000 and unfavorable impacts of $0.4 million for the three and nine months ended September 30, 2025, respectively.

Current wording

Net sales related to Latin America and Other markets for the three months ended March 31, 2026 and 2025, were $6.0 million and $5.5 million, respectively, or an increase of 9.7 percent. In local currencies, net sales for the three months ended March 31, 2026, increased 5.6 percent compared to the same period in 2025. Fluctuations in foreign currencies had favorable impacts on net sales of $0.2 million for the three months ended March 31, 2026.

Previous wording

Cost of sales as a percent of net sales was 26.7 percent and 27.6 percent for the three and nine months ended September 30, 2025, compared to 28.7 percent and 28.7 percent for the same periods in 2024. The decrease in cost of sales percentage is primarily due to cost savings initiatives, market mix and favorable foreign exchange.

Current wording

Cost of sales as a percent of net sales was 26.8 percent and 27.9 percent for the three months ended March 31, 2026 and 2025, respectively. The decrease in cost of sales percentage is primarily due to cost savings initiatives and market mix.

Previous wording

Volume incentives expense as a percent of net sales was 30.7 percent and 30.5 percent for the three and nine months ended September 30, 2025, respectively, compared to 31.0 percent and 30.9 percent for the same periods in 2024. The decrease was primarily due to timing of promotional incentives and changes in product pricing and 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 30.0 percent and 30.8 percent for the three months ended March 31, 2026 and 2025, respectively. The decrease was primarily due to changes in market mix and the timing of promotional incentives. 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 increased $4.8 million and $9.7 million, respectively, to $45.7 million and $130.0 million for the three and nine months ended September 30, 2025, respectively, compared to the same periods in 2024. Selling, general and administrative expenses were 35.6 percent and 36.5 percent of net sales for the three and nine months ended September 30, 2025, compared to 35.7 percent and 35.8 percent for the same periods in 2024. The increase was primarily related to the timing of compensation costs, incremental investment in digital marketing and consultant events as well as other non-recurring expenses.

Current wording

Selling, general and administrative expenses increased $3.0 million to $43.5 million for the three months ended March 31, 2026, compared to the same period in 2025. Selling, general and administrative expenses were 35.4 percent and 35.8 percent of net sales for the three months ended March 31, 2026 and 2025, respectively. The decrease as a percent of net sales was primarily related to reductions in professional fees, digital marketing and other non-recurring expenses.

Previous wording

Other income, net, for the three and nine months ended September 30, 2025, was $0.7 million and $4.9 million, respectively, compared to $2.6 million and $1.4 million during the same periods in 2024, respectively. Other income, net for the three and nine months ended September 30, 2025 primarily consisted of foreign exchange gains in Asia and Europe, partially offset by foreign exchange losses in Latin America, that resulted from net changes in foreign currencies.

Current wording

Other income (expense), net, for the three months ended March 31, 2026 and 2025, was expense of $1.4 million and income of $0.9 million, respectively. Other income (expense), net for the three months ended March 31, 2026, primarily consisted of foreign exchange losses in Asia, Europe and Latin America, that resulted from net changes in foreign currencies.

Previous wording

For the three months ended September 30, 2025 and 2024, our provision for income taxes, as a percentage of income before income taxes was 42.8 percent and 41.2 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent. For the nine months ended September 30, 2025 and 2024, our provision for income taxes, as a percentage of income before income taxes was 34.5 percent and 49.2 percent, respectively, compared with a U.S. federal statutory rate of 21.0 percent.

Current wording

For the three months ended March 31, 2026 and 2025, our provision for income taxes, as a percentage of income before income taxes was 37.2 percent and 31.3 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, 2025, was primarily attributed to operations in foreign countries which are treated as a branch for U.S. tax purposes, partially offset by foreign derived intangible income deduction.

Current wording

The difference between the effective tax rate and the U.S. federal statutory tax rate for the three months ended March 31, 2026, was primarily attributed to recording a valuation allowance on foreign tax credits which are not expected to be utilized before expiration and to current year foreign losses that presently do not provide future tax benefits, partially offset by the deduction allowed for foreign-derived eligible income.

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 foreign countries which are treated as a branch for U.S. tax purposes and foreign losses which 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 U.S. tax purposes and current year foreign losses that presently do not provide future tax benefits, partially offset by adjustments to foreign tax credits and valuation allowances.

Previous wording

The difference between the effective tax rate for the three months ended September 30, 2025, compared to September 30, 2024, was primarily caused by adjustments to deferred tax assets in the current period.

Current wording

The difference between the effective tax rate for the three months ended March 31, 2026, compared to March 31, 2025, was primarily caused by favorable adjustments to foreign tax credits and valuation allowances in the prior period that did not repeat in the current period.

Previous wording

As of September 30, 2025 and December 31, 2024, we had accrued $0.5 million and $0.6 million, respectively, related to unrecognized tax positions.

Current wording

As of March 31, 2026 and December 31, 2025, we had accrued $0.5 million and $0.4 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, 2025 and 2024, 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, 2026 and 2025, by business segment.

Previous wording

We market our products primarily through our network of independent consultants, who market our products to customers through direct selling techniques. We seek to motivate and provide incentives to our independent consultants by offering high quality products and providing independent consultants with product support, training seminars, sales conventions, travel programs and financial incentives.

Current wording

We market our products primarily through our network of independent consultants, who market our products to consumers through direct selling techniques. We seek to motivate and provide incentives to our independent consultants by offering high quality products and providing independent consultants with product support, training seminars, sales conventions, travel programs and financial incentives.

Previous wording

Our principal use of cash is to pay for operating expenses, including volume incentives, inventory and raw material purchases, capital assets, digital investments and funding of international expansion. As of September 30, 2025, working capital was $102.4 million, compared to $94.9 million as of December 31, 2024. At September 30, 2025, we had $95.6 million in cash, of which $5.8 million was held in the U.S. and $89.8 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, digital investments and funding of international expansion. As of March 31, 2026, working capital was $107.2 million, compared to $100.3 million as of December 31, 2025. At March 31, 2026, we had $87.6 million in cash and cash equivalents, of which $3.6 million was held in the U.S. and $84.0 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.

Previous wording

For the nine months ended September 30, 2025, operating activities provided cash of $25.4 million, compared to $13.1 million in the same period in 2024. Operating cash flows increased primarily due to improved net income and the timing of payments for accrued liabilities, accrued volume incentives and service fees and deferred revenue, partially offset by an increase in inventories and reduction in account payables.

Current wording

For the three months ended March 31, 2026, operating activities used cash of $1.8 million, compared to provided cash of $2.6 million in the same period in 2025. Operating cash flows decreased primarily due to the timing of payments and receipts for accrued liabilities, deferred revenue, accounts receivables, and prepaid expenses and other current assets, partially offset by reduced accrued volume incentives and service fees, and inventories.

Previous wording

For the nine months ended September 30, 2025, investing activities used $4.1 million, compared to $8.8 million for the same period in 2024, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.

Current wording

For the three months ended March 31, 2026, investing activities used $2.5 million, compared to $1.1 million for the same period in 2025, which consisted of capital expenditures related to the purchase of equipment, computer systems and software.

Previous wording

For the nine months ended September 30, 2025, financing activities used $15.2 million, compared to $9.3 million for the same period in 2024.

Current wording

For the three months ended March 31, 2026, financing activities used $1.6 million, compared to $0.7 million for the same period in 2025.

Previous wording

During the nine months ended September 30, 2025, we used cash to repurchase 1,129,000 shares of our common stock under the share repurchase program for $14.4 million. On May 6, 2025, we announced an amendment to the share repurchase program allowing the repurchase of an additional $25.0 million in common shares. At September 30, 2025, the remaining balance available for repurchases under the program was $19.3 million.

Current wording

During the three months ended March 31, 2026, we used cash to repurchase 20,000 shares of our common stock under the share repurchase program for $0.5 million. At March 31, 2026, the remaining balance available for repurchases under the program was $16.9 million.

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 unaudited 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. Revisions 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.