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, and to a lesser extent, foreign currency exchange rate risks.
+Added: In the normal course of business, we are exposed to market risk, including changes in interest rates, prices of certain commodities and foreign currency exchange rate risks.
We use hedge agreements to manage a portion of our risks related to interest rates.
2 unchanged sentences
We monitor our hedge positions by regularly evaluating the positions at market and by performing sensitivity analyses over the unhedged variable rate debt positions.
−Removed: At September 30, 2022, our derivative instruments included five 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, 2023, our derivative instruments included four 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
+Added: Date Entered (a)
+Added: Rate Paid (b)
Effective Date
−Removed: 1-month LIBOR
−Removed: 1-month LIBOR
−Removed: February 2020
−Removed: February 2023
−Removed: 1-month LIBOR
−Removed: 1-month LIBOR
+Added: 1-month Term SOFR
+Added: November 2022
+Added: 1-month Term SOFR
+Added: November 2022
+Added: 1-month Term SOFR
+Added: November 2022
December 2018
−Removed: 1-month LIBOR
+Added: 1-month Term SOFR
+Added: November 2022
____________________
−Removed: * Plus applicable margin.
+Added: (a) In October 2022, we amended the reference rate in all of our outstanding interest rate swap contracts to replace One-Month LIBOR with One-Month Term SOFR and certain credit spread adjustments.
+Added: We did not record any gains or losses upon the conversion of the reference rates in these interest rate swap contracts, and we believe these amendments will not have a material impact on our Condensed Consolidated Financial Statements.
+Added: (b) Plus applicable margin.
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.
4 unchanged sentences
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, 2022 and December 31, 2021, of $438.2 million and $603.9 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, 2022 and December 31, 2021, would decrease our annual pre-tax income by approximately $4.4 million and $6.0 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, 2023 and December 31, 2022, of $1.300 billion and $1.115 billion, respectively, including floating rate debt under our Credit Agreement and Term Loan Agreement.
+Added: A one percentage point increase in interest rates on our variable-rate debt at March 31, 2023 and December 31, 2022, would decrease our annual pre-tax income by approximately $13.0 million and $11.1 million, respectively.
All of our remaining debt instruments are at fixed rates, or effectively fixed under the interest rate swap agreements described above;
3 unchanged sentences
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, 2022, we had no fuel hedge agreements in place;
−Removed: however, we have entered into fixed price fuel purchase contracts for 2022 as described below.
−Removed: For the year ending December 31, 2022, we expect to purchase approximately 88.0 million gallons of fuel, of which 43.9 million gallons will be purchased at market prices and 44.1 million gallons will be purchased under our fixed price fuel purchase contracts.
+Added: At March 31, 2023, we had no fuel hedge agreements in place;
+Added: however, we have entered into fixed price diesel fuel purchase contracts for 2023 as described below.
+Added: For the year ending December 31, 2023, we expect to purchase approximately 89.3 million gallons of diesel fuel, of which 47.0 million gallons will be purchased at market prices and 42.3 million gallons will be purchased under our fixed price diesel fuel purchase contracts.
We have performed sensitivity analyses to determine how market rate changes will affect the fair value of our unhedged, market rate diesel fuel purchases.
2 unchanged sentences
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, 2022 to December 31, 2022, we expect to purchase approximately 11.0 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 2022 would decrease our pre-tax income during this period by approximately $1.1 million.
+Added: During the nine month period of April 1, 2023 to December 31, 2023, we expect to purchase approximately 35.2 million gallons of diesel fuel at market prices;
+Added: therefore, a $0.10 per gallon increase in the price of diesel fuel over the remaining nine months in 2023 would decrease our pre-tax income during this period by approximately $3.5 million.
We market a variety of recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles and ferrous and aluminum metals.
1 unchanged sentence
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, 2022 and 2021, would have had a $17.1 million and $12.6 million impact on revenues for the nine months ended September 30, 2022 and 2021, 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, 2023 and 2022, would have had a $3.1 million and $6.1 million impact on revenues for the three months ended March 31, 2023 and 2022, 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.