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Commodity Price Risk
−Removed: We are subject to commodity price risk with respect to price changes in liquid asphalt and energy, including fossil fuels and electricity for aggregates and HMA production, natural gas for HMA production and fuel for distribution vehicles and production-related mobile equipment.
+Added: We are subject to commodity price risk with respect to price changes in liquid asphalt and energy, including fossil fuels and electricity for aggregates and asphalt paving mix production, natural gas for HMA production and diesel fuel for distribution vehicles and production-related mobile equipment.
In order to manage or reduce commodity price risk, we monitor the costs of these commodities at the time of bid and price them into our contracts accordingly.
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Our risk management activities also include the use of financial derivative instruments.
−Removed: We have entered into fuel swap and natural gas swap contracts to mitigate the financial impact of fluctuations in commodity prices.
+Added: We have entered into fuel swap contracts to mitigate the financial impact of fluctuations in commodity prices.
We do not enter into commodity swap contracts for speculative or trading purposes.
−Removed: These fuel and natural gas swap contracts provide a fixed price for less than 50% of our estimated fuel and natural gas usage for the remainder of fiscal year 2023 and part of fiscal year 2024.
−Removed: The table below provides information about the Company’s swap contracts that are sensitive to changes in commodity prices, specifically fuel and natural gas, as of June 30, 2023 (unaudited).
+Added: These fuel swap contracts provide a fixed price for less than 50% of our estimated fuel and natural gas usage for fiscal years 2024 and 2025.
+Added: The table below provides information about the Company’s fuel swap contracts that are sensitive to changes in commodity prices as of December 31, 2023 (unaudited).
Carrying Amount Fair Value
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Contract amount (in thousands) $ (42) $ (42)
−Removed: Natural gas swap contracts (1)
−Removed: Contract volumes (1,000 MMBTU) 250
−Removed: Weighted average price (per MMBTU) 3.88
−Removed: Contract amount (in thousands) $ (351) $ (351)
(1) See also Note 15 - Investment in Derivative Instruments and Note 16 - Fair Value Measurements to the unaudited consolidated financial statements included elsewhere in this report.
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We do not enter into such derivative instruments for speculative or trading purposes.
−Removed: At June 30, 2023, we had a total of $420.6 million of variable rate borrowings outstanding.
−Removed: Holding other factors constant and absent the interest rate swap agreements described above, a hypothetical 1% change in our borrowing rates would result in a $4.2 million change in our annual interest expense based on our variable rate debt at June 30, 2023.
−Removed: The following table presents the future principal payment obligations, interest payments, and fair values associated with the Company’s debt instruments assuming the Company’s actual level of variable rate debt as of June 30, 2023 (unaudited, in thousands).
+Added: At December 31, 2023, we had a total of $443.1 million of variable rate borrowings outstanding.
+Added: Holding other factors constant and absent the interest rate swap agreements described above, a hypothetical 1% change in our borrowing rates would result in a $4.4 million change in our annual interest expense based on our variable rate debt outstanding at December 31, 2023.
+Added: The following table presents the future principal payment obligations, interest payments, and fair values associated with the Company’s debt instruments assuming the Company’s actual level of variable rate debt as of December 31, 2023 (unaudited, in thousands).
+Added: For the Fiscal Year Ending September 30, Fair
2024 2025 2026 2027 Thereafter Total Value
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22,901 29,590 28,124 20,067 —
−Removed: (1) Represents projected interest payments using the Company’s June 2023 SOFR-based floating rate of 7.00% per annum.
−Removed: The notional amount of the Company’s outstanding interest rate swap contract at June 30, 2023 was $300.0 million.
−Removed: The maturity date of this swap is June 30, 2027, and the fair value of the outstanding swap contract was $24.5 million as of June 30, 2023.
+Added: (1) Represents projected interest payments using the Company’s December 2023 SOFR-based floating rate of 6.95% per annum.
+Added: The notional amount of the Company’s outstanding interest rate swap contract at December 31, 2023 was $300.0 million.
+Added: The maturity date of this swap is June 30, 2027, and the fair value of the outstanding swap contract was $17.6 million as of December 31, 2023.
See also Note 15 - Investment in Derivative Instruments and Note 16 - Fair Value Measurements to the unaudited consolidated financial statements included elsewhere in this report.
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We are subject to the effects of inflation through wage pressures, increases in the cost of raw materials used to produce HMA, and increases in other items, such as fuel, concrete and steel.
−Removed: In recent years, inflation, supply chain and labor constraints have had a significant impact on the global economy, including the construction industry in the United States.
+Added: In recent years, inflation, supply chain and upward wage pressures have had a significant impact on the global economy, including the construction industry in the United States.
While it is impossible to fully eliminate the impact of these factors, we seek to recover increasing costs by obtaining higher prices for our products or by including the anticipated price increases in our bids.
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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.