Quantitative and Qualitative Disclosures About Market Risk.
−Removed: Tredegar has exposure to the volatility of interest rates, polyethylene and polypropylene resin prices, Terephthalic Acid (“PTA”) and Monoethylene Glycol (“MEG”) prices, aluminum ingot and scrap prices, energy prices, foreign currencies and emerging markets.
−Removed: See Liquidity and Capital Resources above regarding interest rate exposures related to borrowings under the Credit Agreement.
+Added: Tredegar has exposure to the volatility of interest rates, polyethylene and polypropylene resin prices, aluminum ingot and scrap prices, energy prices, foreign currencies and emerging markets.
+Added: See Liquidity and Capital Resources above regarding interest rate exposures related to borrowings under the ABL Facility.
Profit margins in Aluminum Extrusions are sensitive to fluctuations in aluminum ingot and scrap prices as well as natural gas prices (natural gas is the principal energy source used to operate its casting furnaces).
Changes in polyethylene resin prices and the timing of those changes could have a significant impact on profit margins in PE Films.
−Removed: Changes in polyester resin, PTA and MEG prices, and the timing of those changes, could have a significant impact on profit margins in Flexible Packaging Films.
There is no assurance of the Company’s ability to pass through higher raw material and energy costs to its customers.
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(a primary raw material for PE Films) is shown in the chart below.
−Removed: Quarterly averages computed by Tredegar using monthly data provided by IHS, Inc.
−Removed: In February 2020, IHS reflected a 32 cents per pound non-market adjustment based on their estimate of the growth of discounts in prior periods.
−Removed: The fourth quarter 2019 average rate of $0.51 per pound is shown on a pro forma basis as if the non-market adjustment was made in the fourth quarter of 2019.
−Removed: In January 2023, IHS reflected a 41 cents per pound non-market adjustment based on their estimate of the growth of discounts in the prior periods.
+Added: Quarterly averages computed by Tredegar using monthly data provided by Oil Price Information Service (OPIS).
+Added: In January 2023, OPIS reflected a 41 cents per pound non-market adjustment based on their estimate of the growth of discounts in the prior periods.
The fourth quarter 2022 average rate of $0.60 per pound is shown on a pro forma basis as if the non-market adjustment was made in the fourth quarter of 2022.
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Pricing on the remainder of the business is based upon raw material costs and supply/demand dynamics within the markets that the Company competes.
−Removed: Polyester resins, MEG and PTA used in flexible packaging films produced in Brazil are primarily purchased domestically, with other sources available mostly from Asia and the U.S.
−Removed: Given the nature of these products as commodities, pricing is derived from Asian pricing indexes.
−Removed: The volatility of the average quarterly prices for polyester fibers in Asia, which is representative of polyester resin (a primary raw material for Flexible Packaging Films) pricing trends, is shown in the chart below:
−Removed: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data.
−Removed: The volatility of average quarterly prices of PTA and MEG in Asia (raw materials used in the production of polyester resins produced by Flexible Packaging Films) is shown in the chart below:
−Removed: Quarterly averages computed by Tredegar using monthly data from CMAI Global Index data.
−Removed: Tredegar attempts to match the pricing and cost of its products in the same currency and generally views the volatility of foreign currencies and the corresponding impact on earnings and cash flow as part of the overall risk of operating in a global environment (for additional information, see trends for the Brazilian Real and Chinese Yuan in the charts on the following page).
+Added: Tredegar attempts to match the pricing and cost of its products in the same currency and generally views the volatility of foreign currencies and the corresponding impact on earnings and cash flow as part of the overall risk of operating in a global environment (for additional information, see trends for the Chinese Yuan in the chart on the below).
Exports from the U.S.
are generally denominated in U.S.
−Removed: The Company’s foreign currency exposure on income from foreign operations relates to the Chinese Yuan and the Brazilian Real.
+Added: The Company’s foreign currency exposure on income from foreign operations relates to the Chinese Yuan.
PE Films is generally able to match the currency of its sales and costs for its product lines.
−Removed: For flexible packaging films produced in Brazil, selling prices and key raw material costs are principally determined in U.S.
−Removed: Dollars and are impacted by local economic conditions and local and global competitive dynamics.
−Removed: Flexible Packaging Films is exposed to foreign
−Removed: exchange translation risk (its functional currency is the Brazilian Real) because almost 90% of the sales of Flexible Packaging Films business unit in Brazil (“Terphane Ltda.”) and substantially all of its related raw material costs are quoted or priced in U.S.
−Removed: Dollars while its variable conversion, fixed conversion and sales, general and administrative costs before depreciation & amortization (collectively “Terphane Ltda.
−Removed: Operating Costs”) are quoted or priced in Brazilian Real.
−Removed: This mismatch, together with a variety of economic variables impacting currency exchange rates, causes volatility that could negatively or positively impact EBITDA from ongoing operations for Flexible Packaging Films.
−Removed: The Company estimates annual net costs of R$139.0 million for the net mismatch translation exposure between Terphane Ltda.’s U.S.
−Removed: Dollar quoted or priced sales and raw material costs and underlying Brazilian Real quoted or priced Terphane Ltda.
−Removed: Operating Costs.
−Removed: Terphane Ltda.
−Removed: has outstanding foreign exchange average forward rate contracts to purchase Brazilian Real and sell U.S.
−Removed: Dollars to hedge its exposure.
−Removed: See Note 7 for more information on outstanding hedging contracts and this hedging program.
Tredegar estimates that the change in the value of foreign currencies relative to the U.S.
−Removed: Dollar for PE Films had an unfavorable impact on EBITDA from ongoing operations of $0.2 million for the third quarter of 2024 and an unfavorable impact on EBITDA from ongoing operations of $0.4 million in the first nine months of 2024 compared with the same periods of 2023.
−Removed: Trends for the Brazilian Real and Chinese Yuan exchange rates relative to the U.S.
+Added: Dollar for PE Films did not have a material impact on EBITDA from ongoing operations during the first quarter of 2025 compared with the same period of 2024.
+Added: Trends for the Chinese Yuan exchange rates relative to the U.S.
Dollar are shown in the chart below.
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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.