1 unchanged sentence
Foreign currency exchange rate risk
−Removed: We have foreign-based operations, primarily in Europe, South America and Asia, which accounted for approximately 23 percent of our net sales in the first six months of 2024.
+Added: We have foreign-based operations, primarily in Europe, South America and Asia, which accounted for approximately 23 percent of our net sales in the first nine months of 2024.
We have designated the local currency as the functional currency of our significant operations outside of the U.S.
8 unchanged sentences
A hypothetical 10 percent adverse change, excluding the impact of any hedging instruments, in the average Chinese renminbi and euro to U.S.
−Removed: dollar exchange rates during the six months ended June 30, 2024, would have decreased our net sales and income before income taxes by approximately $7.9 million or one percent, and $2.7 million or one percent, respectively.
+Added: dollar exchange rates during the nine months ended September 30, 2024, would have decreased our net sales and income before income taxes by approximately $12.1 million or one percent, and $4.5 million or one percent, respectively.
Comparatively, a hypothetical 10 percent adverse change, excluding the impact of any hedging instruments, in the average Chinese renminbi and euro to U.S.
−Removed: dollar exchange rates during the six months ended June 30, 2023, would have decreased our net sales and income before income taxes by approximately $7.9 million or two percent, and $2.1 million or three percent, respectively.
+Added: dollar exchange rates during the nine months ended September 30, 2023, would have decreased our net sales and income before income taxes by approximately $13.2 million or one percent, and $3.9 million or one percent, respectively.
Interest rate risk
−Removed: As of June 30, 2024, approximately $852.9 million of our borrowings include a variable interest rate component.
−Removed: As a result, we are subject to interest rate risk with respect to such floating-rate debt.
−Removed: A hypothetical 100 basis point increase in the variable interest rate component of our borrowings for the six months ended June 30, 2024, would have increased our annual interest expense by approximately $8.5 million or ten percent.
−Removed: Comparatively, a 100 basis point increase in the variable interest rate component of our borrowings for the six months ended June 30, 2023, would have increased our interest expense by approximately $8.8 million or ten percent.
+Added: During the three months ended September 30, 2024, we entered into a floating-to-fixed interest rate swap with a notional amount of $200.0 million to manage the variability of cash flows in the interest rate payments associated with our existing SOFR-based interest payments, effectively converting $200.0 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 one-month U.S.
+Added: dollar SOFR and in return are obligated to pay interest at a fixed rate of 3.84 percent until August 2026.
+Added: The fair value of the interest rate swap was an asset (liability) of $(1.7) million and zero at September 30, 2024 and December 31, 2023, respectively.
+Added: As of September 30, 2024, approximately $651.6 million of our borrowings, adjusted for our $200.0 million floating-to-fixed interest rate swap, included a variable interest rate component.
+Added: The weighted average interest rate associated with our variable interest rate borrowings, was 6.67 percent for the period ended September 30, 2024.
+Added: A hypothetical 100 basis point increase in the variable interest rate component of our borrowings for the nine months ended September 30, 2024, would have increased our annual interest expense by approximately $6.5 million or 8 percent.
+Added: Comparatively, a 100 basis point increase in the variable interest rate component of our borrowings for the nine months ended September 30, 2023, would have increased our interest expense by approximately $8.3 million or ten percent.
Commodity price risk
2 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, excluding CTO resales, represented 16 percent and 24 percent of our condensed consolidated cost of sales for the six months ended June 30, 2024 and June 30, 2023, respectively.
−Removed: Raw material CTO spend was approximately $55 million and $111 million, excluding CTO resales, during the three and six months ended June 30, 2024, respectively.
−Removed: Comparatively, total raw material CTO spend was approximately $97 million and $140 million during the three and six months ended June 30, 2023, respectively.
+Added: Our results of operations are directly affected by the cost of our raw materials, particularly CTO, which, excluding CTO resales, represented 13 percent and 24 percent of our condensed consolidated cost of sales for the nine months ended September 30, 2024 and September 30, 2023, respectively.
+Added: Raw material CTO spend was approximately $12 million and $123 million, excluding CTO resales, during the three and nine months ended September 30, 2024, respectively.
+Added: Comparatively, total raw material CTO spend was approximately $81 million and $221 million during the three and nine months ended September 30, 2023, respectively.
Pricing for CTO is driven by the limited supply of the product and competing demands for its use, both of which drive pressure on its price.
−Removed: Our gross profit and margins have been and could continue to be adversely affected by increases in the cost of CTO
−Removed: if we are unable to pass the increases on to our customers.
−Removed: Based on average pricing during the three and six months ended June 30, 2024, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our spend by approximately $5.5 million and $11.1 million, respectively, which we may not have been able to pass on to our customers.
−Removed: Comparatively, based on average pricing during the three and six months ended June 30, 2023, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our spend by approximately $9.7 million and $14.0 million, respectively.
+Added: Our gross profit and margins have been and could continue to be adversely affected by increases in the cost of CTO if we are unable to pass the increases on to our customers.
+Added: Based on average pricing during the three and nine months ended September 30, 2024, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our spend by approximately $1.2 million and $12.3 million, respectively, which we may not have been able to pass on to our customers.
+Added: Comparatively, based on average pricing during the three and nine months ended September 30, 2023, a hypothetical unhedged, unfavorable 10 percent increase in the market price for CTO would have increased our spend by approximately $8.1 million and $22.1 million, respectively.
Other market risks
−Removed: Information about our other remaining market risks for the period ended June 30, 2024, does not differ materially from that discussed under Part II, Item 7A.
+Added: Information about our other remaining market risks for the period ended September 30, 2024, does not differ materially from that discussed under Part II, Item 7A.
Quantitative and Qualitative Disclosures About Market Risk of our 2023 Annual Report.
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.