QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: These disclosures should be read in conjunction with the condensed consolidated financial statements, "Management's Discussion and Analysis of Financial Condition and Results of Operations," and other information presented herein, as well as in the "Quantitative and Qualitative Disclosures About Market Risk" section contained in our Annual Report on Form 10-K, filed on March 1, 2023.
+Added: Changes in commodity prices (mainly crude oil and refined products) and interest rates are our primary sources of market risk.
+Added: When we make the decision to manage our market exposure, our objective is generally to avoid losses from adverse price changes, realizing we will not obtain the gains of beneficial price changes.
Management's Discussion and Analysis
6 unchanged sentences
Gains or losses on commodity derivative contracts accounted for as cash flow hedges are recognized in other comprehensive income on the condensed consolidated balance sheets and, ultimately, when the forecasted transactions are completed in net revenues or cost of materials and other in the condensed consolidated statements of income.
−Removed: The following table sets forth information relating to our open commodity derivative contracts, excluding our trading derivative contracts (which are presented separately below), as of September 30, 2023 ($ in millions):
+Added: The following table sets forth information relating to our open commodity derivative contracts, excluding our trading derivative contracts (which are presented separately below), as of March 31, 2024 ($ in millions):
Total Outstanding Notional Contract Volume by Year of Maturity
9 unchanged sentences
(3.7) 1,281,000 1,281,000
−Removed: Natural gas swaps - long (3)
−Removed: (0.2) 1,007,500 1,007,500 —
−Removed: Natural gas swaps - short (3)
−Removed: 0.1 697,500 697,500 —
RINs commitment contracts - long (2)
(11.5) 161,850,000 161,850,000
−Removed: RINs commitment contracts - short (2)
−Removed: 2.1 5,000,000 5,000,000 —
Total $ (21.8)
1 unchanged sentence
(2) Volume in RINs.
−Removed: (3) Volume in MMBtu.
Interest Rate Risk
−Removed: We have market exposure to changes in interest rates relating to our outstanding floating rate borrowings, which totaled approximately $2,048.1 million as of September 30, 2023.
−Removed: The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of September 30, 2023 would be to change interest expense by approximately $20.5 million.
−Removed: We also have interest rate exposure in connection with our Inventory Intermediation Agreement under which we pay a time value of money charge based on SOFR.
+Added: We have market exposure to changes in interest rates relating to our outstanding floating rate borrowings, which totaled approximately $1,508.3 million as of March 31, 2024.
+Added: The annualized impact of a hypothetical one percent change in interest rates on our floating rate debt outstanding as of March 31, 2024 would be to change interest expense by approximately $15.1 million.
+Added: We also have interest rate exposure in connection with our Inventory Intermediation Agreement under which we pay a time value of money charge based on Secured Overnight Financing Rate ("SOFR").
Inflationary factors, such as increases in the costs of our inputs, operating expenses, and interest rates may adversely affect our operating results.
In addition, current or future governmental policies may increase or decrease the risk of inflation, which could further increase costs and may have an adverse effect on our ability to maintain current levels of gross margin and operating expenses as a percentage of sales if the prices at which we are able to sell our products and services do not increase in line with increases in costs.
−Removed: Management's Discussion and Analysis
Commodity Derivatives Trading Activities
2 unchanged sentences
These contracts are classified as held for trading and are recognized at fair value with changes in fair value recognized in the income statement.
−Removed: The following table sets forth information relating to trading commodity derivative contracts as of September 30, 2023 ($ in millions):
−Removed: Total Outstanding Notional Contract Volume by Year of Maturity
−Removed: Contract Description Fair Value Notional Contract Volume 2023
−Removed: Crude forward contracts - long (1)
−Removed: $ 26.9 308,889 308,889
−Removed: Crude forward contracts - short (1)
−Removed: (34.6) 390,696 390,696
−Removed: Total $ (7.7)
−Removed: (1) Volume in barrels.
+Added: We had no outstanding trading commodity derivative contracts as of March 31, 2024.
Controls and Procedures
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.