Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

Financial Instruments

As part of our investment portfolio, we own financial instruments that are sensitive to market risks. The investment

portfolio is used to preserve our capital, provide adequate liquidity and earn returns commensurate with our risk appetite. We

invest in instruments that meet the credit quality standards outlined in our investment policy, which also limits the amount of

credit exposure to any one issue or type of instrument. These instruments primarily include securities issued by the U.S.

government and its agencies, investment-grade corporate bonds, asset-backed securities and money market funds. These

investments are primarily denominated in U.S. Dollars and none are held for trading purposes.

All of our interest-bearing securities are subject to interest rate risk and could change in value if interest rates fluctuate.

Substantially all of our investment portfolio consists of marketable securities with active secondary or resale markets to help

ensure portfolio liquidity, and we have implemented guidelines limiting the term-to-maturity of our investment instruments.

Since we account for these securities as available-for-sale, no gains or losses are realized due to changes in the fair value of

our investments unless we sell our investments prior to maturity or incur a credit loss. Due to the conservative nature of these

instruments, we do not believe that the fair value of our investments has a material exposure to interest rate risk.

While we are exposed to global interest rate fluctuations, our investment portfolio is most affected by fluctuations in U.S.

interest rates, which affect the interest earned on our cash, cash equivalents and marketable securities.

Credit Agreement

In 2022, we entered into a $500.0 million unsecured revolving credit facility (“credit agreement”). Loans under this

credit agreement bear interest, at our option, at a base rate or a Secured Overnight Financing Rate (“SOFR”), plus an

applicable margin based on our consolidated leverage ratio (the ratio of our total consolidated funded indebtedness to our

consolidated EBITDA for the most recently completed four fiscal quarter period). Pursuant to our credit agreement, the

applicable margin on base rate loans ranges from 0.000% to 0.500% and the applicable margin on SOFR loans ranges from

1.000% to 1.500%. We do not believe that changes in interest rates related to our credit agreement would have a material

effect on our consolidated financial statements. As of December 31, 2025, we had no principal or interest outstanding under

our credit facility. A portion of our “Interest expense” in 2026 will be dependent on whether, and to what extent, we borrow

amounts under this facility.

Foreign Exchange Market Risk

As a result of our foreign operations, we face significant exposure to movements in foreign currency exchange rates

between the U.S. dollar and various foreign currencies, the most significant of which is the Euro. Fluctuations in the amounts

of our foreign revenues and fluctuations in foreign currency exchange rates, may have a positive or negative effect on our

foreign exchange rate exposure. The current exposures arise primarily from cash, accounts receivable, intercompany

receivables and payables, payables, and accruals, and inventories.

We have a foreign currency management program, which is separate from our investment policy and portfolio, with the

objective of reducing the effect of exchange rate fluctuations on our operating results and forecasted revenues denominated in

foreign currencies. We have cash flow hedges related to a portion of our forecasted product revenues that qualify for hedge

accounting treatment under U.S. GAAP. We do not seek hedge accounting treatment for our foreign currency forward

contracts related to monetary assets and liabilities that impact our operating results. As of December 31, 2025, we held

foreign exchange forward contracts that were designated as cash flow hedges with notional amounts totaling $6.1 billion

representing a net liability of $111.5 million on our consolidated balance sheet.

Although not predictive in nature, we believe a hypothetical 10% threshold reflects a reasonably possible near-term

change in exchange rates. If the December 31, 2025 exchange rates were to change by a hypothetical 10%, the fair value

recorded on our consolidated balance sheet related to our foreign exchange forward contracts that were designated as cash

flow hedges as of December 31, 2025 would change by approximately $608.0 million. However, since these contracts hedge

a specific portion of our forecasted product revenues denominated in certain foreign currencies, any change in the fair value

of these contracts is recorded in “Accumulated other comprehensive (loss) income” on our consolidated balance sheets and is

reclassified to earnings in the same periods during which the underlying product revenues affect earnings. Therefore, any

change in the fair value of these contracts that would result from a hypothetical 10% change in exchange rates would be

entirely offset by the change in value associated with the underlying hedged product revenues resulting in no impact on our

future anticipated earnings and cash flows with respect to the hedged portion of our forecasted product revenues.