2 unchanged sentences
We have foreign-based operations, primarily in Europe, South America and Asia, which accounted for approximately 25 percent of our net sales in 2020.
−Removed: Ingevity's significant operations outside the U.S.
−Removed: have designated the local currency as their functional currency.
+Added: We have designated the local currency as the functional currency of our significant operations outside of the U.S.
The primary currencies for which we have exchange rate exposure are the U.S.
4 unchanged sentences
Our earnings are therefore subject to change due to fluctuations in foreign currency exchange rates when the earnings in foreign currencies are translated into U.S.
−Removed: During 2017, we began hedging this foreign currency exchange rate risk.
−Removed: Foreign exchange forward contracts are used to hedge firm and highly anticipated foreign currency cash flows.
−Removed: dollar versus the euro is our most significant foreign currency exposure.
−Removed: A hypothetical 10 percent change in the average euro to U.S.
−Removed: dollar exchange rate during the year ended December 31, 2019, would have changed our net sales and income before income taxes by approximately $12 million or one percent and $4 million or two percent, respectively.
+Added: In some cases, we use foreign exchange forward contracts to hedge firm and highly anticipated foreign currency cash flows.
+Added: Our largest exposures are to the Chinese renminbi and the euro.
+Added: A hypothetical 10 percent change in the average Chinese renminbi and euro to U.S.
+Added: dollar exchange rates during the year ended December 31, 2020, would have impacted our net sales and income before income taxes by approximately $19 million or two percent and $6 million or two percent, respectively.
Concentration of credit risk
2 unchanged sentences
We had accounts receivable from our largest customer of $4.7 million and $3.2 million as of December 31, 2020 and 2019, respectively.
−Removed: Sales to this customer, which are included in the Performance Materials segment, were six percent of total net sales for each of the years ended December 31, 2019, 2018, and 2017.
+Added: Sales to this customer, which are included in the Performance Materials segment, were approximately six percent, five percent, and three percent of total net sales for each of the years ended December 31, 2020, 2019, and 2018, respectively.
No customers individually accounted for greater than 10 percent of the Ingevity's consolidated net sales.
5 unchanged sentences
Crude tall oil price risk
−Removed: Our results of operations are directly affected by the cost of our raw materials, particularly CTO, which is approximately 10 percent of all of our cost of sales and 32 percent of our raw materials purchases for the year ended December 31, 2019.
+Added: Our results of operations are directly affected by the cost of our raw materials, particularly crude tall oil ("CTO"), which is approximately 11 percent of consolidated cost of sales and 37 percent of our raw materials purchases for the year ended December 31, 2020.
Pricing for CTO is subject to particular pricing pressures by reasons of the limited supply elasticity of the product and competing demands for its use, both of which drive pressure on price.
2 unchanged sentences
We try to protect against such pricing fluctuations through various business strategies.
−Removed: Based on average pricing during the year ended December 31, 2019, a hypothetical unhedged, unfavorable 10 percent change in the market price for CTO would have resulted in additional costs of sales of approximately $8 million or one percent, which we may or may not have been able to pass on to our customers.
+Added: Based on average pricing during the year ended December 31, 2020, a hypothetical unhedged, unfavorable 10 percent change in the market price for CTO would have impacted costs of sales by approximately $8 million or one percent, which we may or may not have been able to pass on to our customers.
Natural gas price risk
2 unchanged sentences
If natural gas prices increase significantly, our business or results of operations may be adversely affected.
−Removed: In December 2017, we entered into certain derivative financial instruments in order to mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases.
+Added: We enter into certain derivative financial instruments in order to mitigate expected fluctuations in market prices and the volatility to earnings and cash flow resulting from changes to pricing of natural gas purchases.
Refer to the Note 10 to the consolidated financial statements included within Part II.
2 unchanged sentences
As of December 31, 2020, we had 0.9 million and 1.2 million mmBTUS (millions of British Thermal Units) in aggregate notional volume of outstanding natural gas commodity swap contracts and zero cost collar option contracts, respectively, designated as cash flow hedges.
−Removed: As of December 31, 2019, open commodity contracts hedge forecasted transactions until May 2020.
−Removed: The fair value of the outstanding designated natural gas commodity hedge contracts as of December 31, 2019 was a liability of $0.5 million.
+Added: As of December 31, 2020, open commodity contracts hedge forecasted transactions until February 2022.
+Added: The fair value of the outstanding designated natural gas commodity hedge contracts as of December 31, 2020 and 2019 was a net liability of $0.1 million and $0.5 million, respectively.
Interest Rate Risk
1 unchanged sentence
As a result, we are subject to interest rate risk with respect to such floating-rate debt.
−Removed: A 100 basis point increase in the variable interest rate component of our borrowings would increase our annual interest expense by approximately $9 million or 19 percent.
−Removed: In the second quarter of 2019, we entered into a floating-to-fixed interest rate swap for an initial aggregate notional amount of $141.3 million to limit exposure to interest rate increases related to a portion of our floating rate indebtedness.
−Removed: This swap agreement hedges a portion of contractual floating rate interest through its expiration in July 2023.
−Removed: As a result, our effective fixed interest rate on the notional amount floating rate indebtedness will be 3.96% through May 2021.
−Removed: The fair value of this instrument at December 31, 2019 was a liability of $3.9 million.
+Added: A 100 basis point increase in the variable interest rate component of our borrowings would increase our annual interest expense by approximately $4 million or eight percent.
+Added: As of December 31, 2020, we have entered into an interest rate swap with a notional amount of $166.2 million to manage the variability of cash flows in the interest rate payments associated with our existing LIBOR-based interest payments, effectively converting $166.2 million of our floating rate debt to a fixed rate.
+Added: In accordance with the terms of this instrument, we receive floating rate interest payments based upon three-month U.S.
+Added: dollar LIBOR and in return are obligated to pay interest at a fixed rate of 3.79 percent until July 2023.
+Added: The fair value of the interest rate swap was an asset (liability) of $(8.9) million and $(3.9) million at December 31, 2020 and 2019, respectively.
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.