−Removed: Quantitative and Qualitative Disclosures About Market Risks.
+Added: Quantitative and Qualitative Disclosures About Market Risk.
In the normal course of business, the Company encounters several significant types of market risks including commodity and interest rate risks.
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Commodity price risk is the risk of loss arising from adverse changes in market rates and prices.
−Removed: We are able to limit our exposure to fluctuations in natural gas prices as our pricing in contracts with customers is largely based on the Henry
−Removed: Hub index price plus a contractual spread.
+Added: We are able to limit our exposure to fluctuations in natural gas prices as our pricing in contracts with downstream customers is largely based on the Henry Hub index price plus a contractual spread.
Our exposure to market risk associated with LNG price changes may adversely impact our business.
−Removed: During the third quarter of 2022, the Company entered into a commodity swap transaction to swap pricing exposure for a portion of January 2023 deliveries (approximately 1.5 TBtus) with market pricing for a fixed price.
−Removed: However, we do not currently have any other derivative arrangements to protect against fluctuations in commodity prices.
−Removed: To mitigate the effect of fluctuations in LNG prices on our operations, in future we may enter into various derivative instruments.
+Added: In 2022, we entered into a commodity swap transaction as an economic hedge to reduce the risks associated with commodity prices which settled in the first quarter of 2023 resulting in a realized gain of $146.1 million.
+Added: In January 2023, we entered into a commodity swap transaction and we recognized an unrealized loss of $5.0 million in the first quarter of 2023.
+Added: We currently do not have other derivative instruments to mitigate the effect of fluctuations in LNG prices on our operations;
+Added: in the future we may enter into additional derivative instruments.
Interest Rate Risk
−Removed: The 2025 Notes and 2026 Notes were issued with a fixed rate of interest, and as such, a change in interest rates would impact the fair value of the 2025 Notes and 2026 Notes but such a change would have no impact on our results of operations or cash flows.
−Removed: A 100-basis point increase or decrease in the market interest rate would decrease or increase the fair value of our fixed rate debt by approximately $78,000.
+Added: The 2025 Notes, 2026 Notes and South Power 2029 Bonds (each defined in our Annual Report) were issued with a fixed rate of interest, and as such, a change in interest rates would impact the fair value of the 2025 Notes, 2026 Notes and South Power 2029 Bonds but such a change would have no impact on our results of operations or cash flows.
+Added: A 100-basis point increase or decrease in the market interest rate would decrease or increase the fair value of our fixed rate debt by approximately $79.0 million.
The sensitivity analysis presented is based on certain simplifying assumptions, including instantaneous change in interest rate and parallel shifts in the yield curve.
−Removed: We acquired an interest rate swap to manage the exposure to adverse movements in interest rates of debt held by our equity method investee, Hilli LLC, but we do not currently have any derivative arrangements to protect against fluctuations in interest rates applicable to our other outstanding indebtednes s.
+Added: Interest under the Barcarena Term Loan has a component based on the Secured Overnight Financing Rate ("SOFR").
+Added: A 100-basis point increase or decrease in the market interest rate would decrease or increase our annual interest expense by approximately $2 million.
Foreign Currency Exchange Risk
−Removed: After the completion of the Hygo Merger, we began to have more significant transactions, assets and liabilities denominated in Brazilian reais;
−Removed: our Brazilian subsidiaries and investments receive income and pay expenses in Brazilian reais.
−Removed: A portion of our exposure to exchange rates was economically hedged by a cross-currency interest rate swap;
−Removed: we terminated this swap in the third quarter of 2022 in conjunction with the repayment of the Debenture Loan.
−Removed: We have also entered into a foreign currency forward associated with the sale of our CELSEPAR and CEBERRA operations.
−Removed: The forward mitigated foreign currency risk, and we recognized a gain upon settlement of the forward in October 2022.
−Removed: We have no other derivative instruments to economically hedge our exposure to fluctuations in the Brazilian real.
−Removed: Based on our Brazilian real revenues and expenses for the period since the completion of the Hygo Merger, a 10% depreciation of the U.S.
−Removed: dollar against the Brazilian real would not significantly decrease our revenue or expenses.
+Added: We have transactions, assets and liabilities denominated in Brazilian reais, and our Brazilian subsidiaries and investments receive income and pay expenses in Brazilian reais.
+Added: Based on our Brazilian reais revenues and expenses, a 10% depreciation of the U.S.
+Added: dollar against the Brazilian reais would not significantly decrease our revenue or expenses.
As our operations expand in Brazil, our results of operations will be exposed to changes in fluctuations in the Brazilian real, which may materially impact our results of operations.
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dollars, and as such, our results of operations and cash flows have not materially been impacted by fluctuations due to changes in foreign currency exchange rates.
−Removed: We currently incur a limited amount of costs in foreign jurisdictions other than Brazil that are paid in local currencies, but we expect our international operations to continue to grow in the near term .
−Removed: In addition, we may enter into derivative or hedging transactions with third parties to manage our exposure to changes in foreign currency exchange risks as we expand our international operations.
+Added: We currently incur a limited amount of costs in foreign jurisdictions other than Brazil that are paid in local currencies.
+Added: As we expect our international operations to continue to grow in the near term, w e may enter into derivative or hedging transactions with third parties to manage our exposure to changes in foreign currency exchange risks as we expand our international operations.
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.