Quantitative and Qualitative Disclosures About Market Risk
−Removed: In the normal course of business, we are exposed to market risk, including changes in interest rates and prices of certain commodities.
+Added: In the normal course of business, we are exposed to market risk, including changes in interest rates and prices of certain commodities, and to a lesser extent, foreign currency exchange rate risks.
We use hedge agreements to manage a portion of our risks related to interest rates and fuel prices.
2 unchanged sentences
We monitor our hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses over the unhedged fuel and variable rate debt positions.
−Removed: At September 30, 2020, our derivative instruments included 10 interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands of U.S.
+Added: At March 31, 2021, our derivative instruments included six interest rate swap agreements that effectively fix the interest rate on the applicable notional amounts of our variable rate debt as follows (dollars in thousands of U.S.
Interest Rate
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1-month LIBOR
−Removed: 1-month LIBOR
−Removed: 1-month LIBOR
−Removed: 1-month LIBOR
−Removed: 1-month LIBOR
February 2020
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* Plus applicable margin.
−Removed: On September 28, 2020, we terminated four of our interest rate swaps with notional amounts of $150.0 million, $150.0 million, $50.0 million and $50.0 million, each of which would have expired in January 2021.
−Removed: As a result of terminating these interest rate swaps, we made total cash payments of $0.9 million to the counterparties of the swap agreements.
Under derivatives and hedging guidance, the interest rate swap agreements are considered cash flow hedges for a portion of our variable rate debt, and we apply hedge accounting to account for these instruments.
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Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements.
−Removed: We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at September 30, 2020 and December 31, 2019, of $3.7 million and $766.2 million, respectively, including floating rate debt under our Credit Agreement.
−Removed: A one percentage point increase in interest rates on our variable-rate debt as of September 30, 2020 and December 31, 2019, would decrease our annual pre-tax income by approximately $0.1 million and $7.7 million, respectively.
+Added: We are exposed to cash flow risk due to changes in interest rates with respect to the unhedged floating rate balances owed at March 31, 2021 and December 31, 2020, of $4.0 million and $3.7 million, respectively, including floating rate debt under our Credit Agreement.
+Added: A one percentage point increase in interest rates on our variable-rate debt as of March 31, 2021 and December 31, 2020, would decrease our annual pre-tax income by approximately $0.1 million and $0.1 million, respectively.
All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above;
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To manage a portion of this risk, we periodically enter into fuel hedge agreements related to forecasted diesel fuel purchases, and we also enter into fixed price fuel purchase contracts.
−Removed: At September 30, 2020, we had no fuel hedge agreements in place;
+Added: At March 31, 2021, we had no fuel hedge agreements in place;
however, we have entered into fixed price fuel purchase contracts for 2021 as described below.
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Fair value sensitivity is not necessarily indicative of the ultimate cash flow or earnings effect we would recognize from the assumed market rate movements.
−Removed: During the three month period of October 1, 2020 to December 31, 2020, we expect to purchase approximately 11.1 million gallons of fuel at market prices;
−Removed: therefore, a $0.10 per gallon increase in the price of fuel over the remaining three months in 2020 would decrease our pre-tax income during this period by approximately $1.1 million.
+Added: During the nine month period of April 1, 2021 to December 31, 2021, we expect to purchase approximately 30.5 million gallons of fuel at market prices;
+Added: therefore, a $0.10 per gallon increase in the price of fuel over the remaining nine months in 2021 would decrease our pre-tax income during this period by approximately $3.1 million.
We market a variety of recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles and ferrous and aluminum metals.
−Removed: We own and operate recycling operations and market other collected recyclable materials to third parties for processing before resale.
+Added: We own and operate recycling operations and market collected recyclable materials to third parties for processing before resale.
Where possible, to reduce our exposure to commodity price risk with respect to recycled materials, we have adopted a pricing strategy of charging collection and processing fees for recycling volume collected from third parties.
−Removed: In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the nine months ended September 30, 2020 and 2019, would have had a $5.8 million and $4.9 million impact on revenues for the nine months ended September 30, 2020 and 2019, respectively.
+Added: In the event of a decline in recycled commodity prices, a 10% decrease in average recycled commodity prices from the average prices that were in effect during the three months ended March 31, 2021 and 2020, would have had a $3.1 million and $1.8 million impact on revenues for the three months ended March 31, 2021 and 2020, respectively.
We have operations in Canada and, where significant, we have quantified and described the impact of foreign currency translation on components of income, including operating revenue and operating costs.
3 unchanged sentences
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.