Quantitative and Qualitative Disclosures About Market Risk
−Removed: We are subject to price risk for our raw materials, the most significant of which relates to the cost of polypropylene and nitrile used in the manufacturing processes of our Global Products segment.
+Added: We are subject to price risk for our raw materials, the most significant of which relates to the cost of polypropylene and nitrile used in the manufacturing processes of our Products & Healthcare Services segment.
Prices of the commodities underlying these raw materials are volatile and have fluctuated significantly in recent years and in the future may contribute to fluctuations in our results of operations.
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We may use foreign currency forwards, swaps and options, where possible, to manage our risk related to certain foreign currency fluctuations.
−Removed: We are exposed to market risk from changes in interest rates related to our borrowing under our Credit Agreement and Receivables Securitization Program.
−Removed: We had no borrowings under our revolving credit facility, $197 million in borrowings under our Receivables Securitization Program, and $9.4 million in letters of credit under the Credit Agreement at December 31, 2021.
−Removed: We estimate an increase in interest rates of 100 basis points would result in a potential reduction in future pre-tax earnings of approximately $2.1 million per year based on our borrowings outstanding at December 31, 2021.
−Removed: Due to the nature and pricing of our Global Solutions segment distribution services, we are exposed to potential volatility in fuel prices.
−Removed: Our strategies for helping to mitigate our exposure to changing domestic fuel prices has included using trucks with improved fuel efficiency.
+Added: As of December 31, 2022 and 2021, we held contracts with notional amounts of $58.3 million and $9.7 million to exchange the U.S.
+Added: dollar, Euro, and Thai baht.
+Added: We are exposed to market risk from changes in interest rates related to our borrowing under our Revolving Credit Agreement and Receivables Financing Agreement.
+Added: E xcluding deferred financing costs and third party fees, we had $500 million in borrowings under our Term Loan A, $596 million in borrowings under our Term Loan B, no borrowings under our Revolving Credit Agreement, $96.0 million in borrowings under our Receivables Financing Agreement at December 31, 2022.
+Added: After considering the effects of an interest rate swap agreement entered into during April 2022, we estimate an increase in interest rates of 100 basis points would result in a potential reduction in future pre-tax earnings of approximately $7.9 million per year based on our borrowings outstanding at December 31, 2022.
+Added: Due to the nature and pricing of our distribution and delivery services, we are exposed to potential volatility in fuel prices.
+Added: Our strategies for helping to mitigate our exposure to changing domestic fuel prices have included using trucks with improved fuel efficiency.
We benchmark our domestic diesel fuel purchase prices against the U.S.
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The benchmark averaged $5.01 per gallon for 2022, an increase from $3.29 per gallon in 2021.
−Removed: Based on our fuel consumption in 2021, we estimate that every 10 cents per gallon increase in the benchmark would reduce our Global Solutions segment operating income by approximately $0.2 million on an annualized basis.
+Added: Based on our fuel consumption in 2022, we estimate that every 10 cents per gallon increase in the benchmark would directly reduce our operating income by approximately $0.4 million on an annualized basis.
+Added: We are also indirectly exposed to increased shipping and freight costs, including container and other third party fees associated with the transportation of our products due to changes in fuel prices.
+Added: Changes in fuel prices have contributed to significant shipping and freight costs in recent years and in the future may contribute to changes in our results of operations.
Financial Statements and Supplementary Data
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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.