Quantitative and Qualitative Disclosures About Market Risk
−Removed: Interest Rate Risk
−Removed: Our interest rate risk results primarily from our variable rate indebtedness under our Credit Agreement, which is influenced by movements in short-term rates.
−Removed: Borrowings under our $300.0 million senior secured revolving credit facility bear interest at a rate per annum equal to:
−Removed: • The ABR or the Adjusted LIBO Rate, in the case of revolving loans denominated in U.S.
−Removed: • The Canadian Prime Rate or the CDOR rate, in the case of revolving loans denominated in Canadian Dollars;
−Removed: • The Adjusted LIBO Rate, in the case of revolving loans denominated in Pounds Sterling or Australian Dollars;
−Removed: • The EURIBO Rate, in the case of revolving loans denominated in Euros,
−Removed: in each case, plus the Applicable Margin, which is based on the Company's Leverage Ratio.
−Removed: The Applicable Margin on ABR loans ranges between 0.625% and 1.625%.
−Removed: The Applicable Margin for Adjusted LIBO, EURIBO and CDOR loans ranges between 1.625% and 2.625% and the Applicable Margin for Canadian Prime Rate loans ranges between 2.125% and 3.125%.
−Removed: Financial instruments with interest rate risk at June 30, 2020 were as follows:
−Removed: Maturity by Fiscal Year Fair Value as
−Removed: of June 30, 2020
−Removed: 2021 2022 2023 2024 2025
−Removed: (In thousands)
−Removed: Long-term debt:
−Removed: Variable rate debt $ — $ 9,208 $ — $ — $ — $ 9,208
−Removed: The Company has not entered into any derivative instruments to hedge interest rate risk, but evaluates the materiality of interest rate risk exposure.
−Removed: An increase of 100 basis points in interest rates would not have had a material impact on the financial results of the Company for the fiscal year ended June 30, 2020.
Foreign Currency Risk
−Removed: Matrix Service Company has subsidiaries with operations in Canada and South Korea, which use the Canadian Dollar and South Korean Won, respectively, as their functional currencies.
−Removed: The Company also has a subsidiary with operations in Australia, but its functional currency is the U.S.
+Added: We have subsidiaries with operations in Canada and South Korea, which use the Canadian Dollar and South Korean Won, respectively, as their functional currencies.
+Added: We also have a subsidiary with operations in Australia, but its functional currency is the U.S.
Dollar since its sales are primarily denominated in U.S.
Historically, movements in the Canadian Dollar to U.S.
−Removed: Dollar exchange rate have not significantly impacted the Company's results.
−Removed: Also, the Company does not expect exchange rate fluctuations in its South Korean and Australian operations to materially impact its financial results since these operations represent an insignificant portion of the Company's consolidated revenue and expenses.
−Removed: However, further growth in its Canadian, South Korean and/or Australian operations and/or significant fluctuations in the Canadian Dollar, South Korean Won and/or Australian Dollar to U.S.
−Removed: Dollar exchange rates could impact the Company’s financial results in the future.
+Added: Dollar exchange rate have not significantly impacted our results.
+Added: Also, we do not expect exchange rate fluctuations in our South Korean and Australian operations to materially impact our financial results since these operations represent an insignificant portion of our consolidated revenue and expenses.
+Added: However, further growth in our Canadian, South Korean and/or Australian operations and/or significant fluctuations in the Canadian Dollar, South Korean Won and/or Australian Dollar to U.S.
+Added: Dollar exchange rates could impact our financial results in the future.
Management has not entered into derivative instruments to hedge foreign currency risk, but periodically evaluates the materiality of our foreign currency exposure.
3 unchanged sentences
A 10% unfavorable change in the Canadian Dollar against the U.S.
−Removed: Dollar would not have had a material impact on the financial results of the Company for the fiscal year ended June 30, 2020.
+Added: Dollar would not have had a material impact on our financial results for the fiscal year ended June 30, 2021.
Commodity Price Risk
−Removed: The Company has no direct commodity exposure, but we do have exposure to materials derived from certain commodities including steel plate, steel pipe, and copper, which are key materials used by the Company.
−Removed: Supplies of these materials are available throughout the United States and worldwide.
−Removed: We anticipate that adequate amounts of these materials will be available in the foreseeable future.
−Removed: However, the price, quantity, and delivery schedules of these materials could change rapidly due to various factors, including producer capacity, the level of foreign imports, worldwide demand, the imposition or removal of tariffs on imported steel and other market conditions.
−Removed: We mitigate these risks primarily by procuring materials upon contract execution to ensure that our purchase price approximates the costs included in the project estimate, and also by negotiating contract escalation clauses to cover unexpected costs due to fluctuations in materials derived from certain commodities.
+Added: We have no direct commodity exposure, but we do have exposure to materials derived from certain commodities including steel plate, steel pipe, and copper, which are key materials we use.
+Added: We mitigate these risks primarily by procuring materials upon contract execution to ensure that our purchase price approximates the costs included in the project estimate, and also by negotiating contract escalation clauses to cover unexpected costs due to fluctuations in materials costs.
+Added: The ongoing COVID-19 pandemic has resulted in disruptions to global supply chains, which have led to higher prices for some of the materials we need to run our business.
+Added: We have been proactive with managing our procurement processes to help reduce the impacts of rising materials prices on our business and to help ensure we continue to have the materials we need available.
+Added: However, rising prices and the potential for materials shortages have interjected additional risk into bidding and executing work profitably.
+Added: The timing of normalization of the global supply chains is uncertain and will depend on several factors, including the speed of recovery from the pandemic, producer capacity, the level of imports, worldwide demand, tariffs on imported goods and other market conditions.
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.