5 unchanged sentences
Our financial results are subject to the impact of gains and losses on currency translations, which occur when the financial statements of foreign operations are translated into U.S.
−Removed: We operate a geographically diverse business with approximately 40% of our sales during the years ended December 31, 2020 and 2019 coming from our international operations in currencies other than the U.S.
+Added: We operate a geographically diverse business with approximately 6% and 10% of our sales during the years ended December 31, 2021 and 2020, respectively, coming from our international operations in currencies other than the U.S.
Because consolidated financial results are reported in U.S.
5 unchanged sentences
dollar in recent years have fluctuated significantly and may continue to do so in the future.
−Removed: The foreign currencies to which we have the most significant exchange rate exposure include the euro, British pound, Canadian dollar, Brazilian real and the Mexican peso.
−Removed: Sales in these top five currencies represented approximately 34% of our sales during the year ended December 31, 2020.
−Removed: A 10% change in these currencies would have impacted sales by approximately $37.5 million, or 3% of sales assuming product pricing remained constant.
+Added: The foreign currencies to which we have the most significant exchange rate exposure is the British pound.
+Added: Sales in this currencies represented approximately 4% of our sales during the year ended December 31, 2021.
+Added: A 10% change would have impacted sales by approximately $2.7 million, or 0.4% of sales assuming product pricing remained constant.
The effect of translating foreign subsidiaries’ balance sheets into U.S.
3 unchanged sentences
Net foreign exchange included in other expense was a $4.7 million gain for the year ended December 31, 2021.
−Removed: The foreign currency gain realized in the year ended December 31, 2020 was primarily driven by the Euro-denominated term loan and the non-permanent intercompany debt denominated in local currency and translated to U.S.
+Added: The foreign currency gain realized in the year ended December 31, 2021 was primarily driven by the non-permanent intercompany debt denominated in local currency and translated to U.S.
dollars, and was principally non-cash in nature.
−Removed: On February 8, 2018, we refinanced our existing senior secured term loan facility whereby the Term Loan Facility was used to repay the then-existing U.S.
+Added: In February 2018, we refinanced our existing senior secured term loan facility whereby the 2018 Term Loan Facility was used to repay the then-existing U.S.
dollar denominated and Euro denominated Term Loan Facilities, thus reducing our exposure to fluctuations in the euro.
1 unchanged sentence
The swaps are intended to enable us to effectively hedge our exposure on the net investments of certain of our Euro denominated subsidiaries.
−Removed: As described in Note 3 to the consolidated financial statements included in this Form 10-K, the Financial Accounting Standards Board (“FASB”) issued guidance in August 2017 with the objective of improving the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities in its financial statements.
−Removed: As a result of our early adoption of the FASB guidance, and because the swap agreements are designated as net investment hedges, changes in the fair value of the cross-currency swap agreements will be recognized as a component of “Foreign currency translation, net of tax” within “Other comprehensive income (loss), net of tax” in the consolidated statement of comprehensive income.
−Removed: In this regard, a favorable foreign currency change in the designated investment value of our foreign subsidiaries that use the Euro as their functional currency generally will be offset by an unfavorable foreign currency change in the cross-currency swap agreements, and vice versa.
−Removed: At December 31, 2020, a 10% fluctuation in the U.S.
−Removed: dollar-to-Euro currency exchange rate would have an approximately $34.4 million impact on the fair value of the notional amount of the cross-currency swap agreements and an offsetting $34.4 million impact on the designated net investment value of the foreign subsidiaries.
−Removed: In addition, in the event of a significant decline in the U.S.
−Removed: dollar-to-Euro exchange rate, our payment obligations to the counterparties could have a material adverse effect on our cash flows.
−Removed: In this regard, if, at the expiration or earlier termination of the swap agreements, the U.S.
−Removed: dollar-to-Euro currency exchange rate has declined by 10% from the rate in effect at December 31, 2020, we would be required to pay approximately $34.4 million to the counterparties.
−Removed: The swap agreements entail risk that the counterparties will not fulfill their obligations under the agreements.
−Removed: However, we believe the risk is reduced because we have entered into separate agreements with three different counterparties, all of whom are large, well-established financial institutions.
+Added: In October 2019, the Company settled all of its February 2018 swaps and concurrently entered into the October 2019 swaps with the same notional amount of €280,000 ($317,173 as of December 31, 2021) and same maturity date of February 2023, which resulted in cash proceeds to the Company of $38,070.
+Added: Consistent with the February 2018 swaps, the October 2019 swaps were designed to enable the Company to effectively convert a portion of its fixed-rate U.S.
+Added: dollar-denominated debt obligations under the Senior Secured Term Loan Facility into a Euro-denominated equivalent.
+Added: In March 2021, as a result of the Performance Materials and Performance Chemicals divestitures, the Company settled its October 2019 cross-currency swaps.
+Added: At the date of settlement, the total notional value of the cross-currency swaps was $311,380.
+Added: The Company paid $13,170 in cash to settle the swaps, as the underlying subsidiary subject to the net investment hedging relationship was part of the Performance Chemicals business.
Interest Rate Risk
13 unchanged sentences
In July 2020, we entered into additional interest rate cap agreements to mitigate interest rate volatility from August 2020 to August 2023, with a cap rate of 1.00% on $400.0 million of notional variable-rate debt.
−Removed: Commodity Risk
−Removed: We purchase significant amounts of natural gas to supply the energy required in our production processes for our products in each of our segments.
−Removed: Since we are a producer of inorganic chemicals, natural gas provides an energy source for us but is not a direct feedstock for our products.
−Removed: Therefore, exposure to the volatility in energy prices is less than that of producers of organic petrochemicals.
−Removed: We purchase approximately 8.8 million MMBtu’s of natural gas in a given year.
−Removed: Thus, a $1 increase in the cost of natural gas would impact our cost of goods sold by approximately $8.8 million absent hedging.
−Removed: Our purchase agreements with our customers typically provide for the pass through of natural gas price increases;
−Removed: however, there is no guarantee that we will continue to be able to pass through future price increases without loss of existing customers.
−Removed: We also make forward purchases of natural gas related to our production at certain subsidiary locations.
+Added: In August 2021, PQ Corporation novated $900,000 of its interest rate caps to Ecovyst Catalyst Technologies LLC.
We are exposed to credit risk on financial instruments to the extent our counterparty fails to perform certain duties as required under the provisions of an agreement.
8 unchanged sentences
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.