2 unchanged sentences
We are primarily exposed to interest rate and commodity price risk.
+Added: Commodity Price Risk
+Added: Our Electric segment business is exposed to market risk arising from changes in commodity prices for wholesale energy and natural gas.
+Added: OTP purchases energy in the wholesale market to supplement its own electricity generation and to respond to changes in demand and variability in generating plant output.
+Added: In addition, OTP procures natural gas as a fuel source for its combustion turbine peaking facilities.
+Added: OTP's exposure to price risk for these commodities is largely mitigated by the current ratemaking process and regulatory framework, which generally allows recovery of purchased power and fuel costs from our electric customers.
+Added: OTP, where prudent, seeks to further manage its exposure to commodity price variability and reduce volatility in prices for its retail customers through the use of derivative instruments, primarily financial swap agreements.
+Added: OTP does not engage in derivative and hedging activities for trading purposes.
+Added: As of December 31, 2021, OTP was party to financial swap agreements with an aggregate notional amount of 263,400 megawatt-hours of electricity with various settlement dates throughout 2022.
+Added: As of December 31, 2021, the aggregate fair value of these instruments was $6.2 million.
+Added: Holding other variables constant, a ten percent change in energy prices would have had an approximate $1.5 million impact on the fair value of these instruments.
+Added: Our Manufacturing segment businesses are exposed to market risk arising from changes in commodity prices for certain raw material inputs, including steel, aluminum, and polystyrene and other plastics resins.
+Added: We attempt to manage commodity price risk by passing changes in the cost of these input materials on to our customers.
+Added: If our efforts to manage commodity price risk are unsuccessful, the operating revenues and earnings of our Manufacturing segment could be impacted.
+Added: Our Plastics segment businesses are exposed to market risk arising from changes in prices for PVC resin, the primary raw material commodity used to manufacture PVC pipe.
+Added: The PVC pipe industry as a whole is highly sensitive to volatility in PVC resin prices, with frequent adjustments to PVC pipe sale prices to reflect volatility in PVC resin costs.
+Added: Historically, when resin prices are rising or stable, sales volumes have been higher.
+Added: In contrast, when resin prices are falling, sales volumes have been lower.
+Added: Due to the commodity nature of PVC resin and dynamic supply and demand factors worldwide, gross profit margins can fluctuate significantly from period to period.
+Added: We do not engage in any hedging activities within our Manufacturing and Plastics segments to manage our commodity price risk.
Interest Rate Risk
−Removed: Our exposure to interest rate risk as of December 31, 2020 arises from outstanding short-term debt which is subject to variable rates of interest based on benchmark interest rates, primarily LIBOR.
−Removed: As of December 31, 2020 we had $81.0 million of short-term debt outstanding.
−Removed: Holding other variables constant, a one percentage point change in interest rates would have had an approximate $0.3 million impact to interest charges in 2020 based upon our average outstanding short-term debt during the year.
−Removed: All of our outstanding long-term debt obligations on December 31, 2020 have fixed interest rates and thus are not subject to interest rate risk.
+Added: Our exposure to interest rate risk arises from outstanding short-term debt which is subject to variable rates of interest based on benchmark interest rates, primarily LIBOR.
+Added: As of December 31, 2021 and 2020, we had $91.2 million and $81.0 million of short-term debt outstanding.
+Added: Holding other variables constant, a one percentage point change in interest rates would have had an approximate $1.0 million impact to interest charges in 2021 based on our average outstanding short-term debt during the year.
+Added: All of our outstanding long-term debt obligations as of December 31, 2021 and 2020 had fixed interest rates and thus were not subject to interest rate risk.
We manage our interest rate risk through the issuance of fixed-rate debt with varying maturities, by limiting the amount of variable interest rate debt and the utilization of short-term borrowings to allow flexibility in the timing and placement of long-term debt.
3 unchanged sentences
We do not enter into interest rate transactions for speculative or trading purposes.
−Removed: Commodity Price Risk
−Removed: The companies in our Manufacturing segment are exposed to market risk related to changes in commodity prices for steel, aluminum, and polystyrene and other plastics resins.
−Removed: The price and availability of these raw materials could affect the revenues and earnings of our Manufacturing segment.
−Removed: The companies in our Plastics segment are exposed to market risk related to changes in commodity prices for PVC resins, the raw material used to manufacture PVC pipe.
−Removed: The PVC pipe industry is highly sensitive to commodity raw material pricing volatility.
−Removed: Historically, when resin prices are rising or stable, sales volume has been higher and when resin prices are falling, sales volume has been lower.
−Removed: Operating income may decline when the supply of PVC pipe increases faster than demand.
−Removed: Due to the commodity nature of PVC resin and the dynamic supply and demand factors worldwide, it is very difficult to predict gross margin percentages or to assume that historical trends will continue.
−Removed: We do not engage in any hedging activities to manage our commodity price risk.
−Removed: Table of Content s
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.