−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)
+Added: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
+Added: The market risk inherent in the Company’s market risk sensitive instruments and positions is the potential loss arising from adverse changes in:
+Added: commodity market prices as they relate to the Company’s net commodity position, foreign currency exchange rates, and interest rates as described below.
+Added: The availability and prices of agricultural commodities are subject to wide fluctuations due to factors such as changes in weather conditions, crop disease, plantings, government programs and policies, competition, changes in global demand, changes in customer preferences and standards of living, and global production of similar and competitive crops.
+Added: The Company manages its exposure to adverse price movements of agricultural commodities used for, and produced in, its business operations, by entering into derivative and non-derivative contracts which reduce the Company’s overall short or long commodity position.
+Added: Additionally, the Company uses exchange-traded futures and exchange-traded and over-the-counter option contracts as components of merchandising strategies designed to enhance margins.
+Added: The results of these strategies can be significantly impacted by factors such as the correlation between the value of exchange-traded commodities futures contracts and the cash prices of the underlying commodities, counterparty contract defaults, and volatility of freight markets.
+Added: In addition, the Company, from time-to-time, enters into derivative contracts which are designated as hedges of specific volumes of commodities that will be purchased and processed, or sold, in a future month.
+Added: The changes in the market value of such futures contracts have historically been, and are expected to continue to be, highly effective at offsetting changes in price movements of the hedged item.
+Added: Gains and losses arising from open and closed designated hedging transactions are deferred in other comprehensive income, net of applicable taxes, and recognized as a component of cost of products sold or revenues in the statement of earnings when the hedged item is recognized.
+Added: The Company’s commodity position consists of merchandisable agricultural commodity inventories, related purchase and sales contracts, energy and freight contracts, and exchange-traded futures and exchange-traded and over-the-counter option contracts including contracts used to hedge anticipated transactions.
+Added: The fair value of the Company’s commodity position is a summation of the fair values calculated for each commodity by valuing all of the commodity positions at quoted market prices for the period, where available, or utilizing a close proxy.
+Added: The Company has established metrics to monitor the amount of market risk exposure, which consist of volumetric limits, and value-at-risk (VaR) limits.
+Added: VaR measures the potential loss, at a 95% confidence level, that could be incurred over a one year period.
+Added: Volumetric limits are monitored daily and VaR calculations and sensitivity analysis are monitored weekly.
In addition to measuring the hypothetical loss resulting from an adverse two standard deviation move in market prices (assuming no correlations) over a one year period using VaR, sensitivity analysis is performed measuring the potential loss in fair value resulting from a hypothetical 10% adverse change in market prices.
6 unchanged sentences
Average position 388 39 671 67
−Removed: The change in fair value of the average position was due to the increase in average quantities and prices of the underlying commodities.
+Added: The change in fair value of the average position was due to the decrease in prices of certain commodities and, to a lesser extent, the overall decrease in average quantities.
+Added: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Continued)
The Company has consolidated subsidiaries in more than 70 countries.
7 unchanged sentences
The potential loss in fair value for such net currency position resulting from a hypothetical 10% adverse change in foreign currency exchange rates is not material.
+Added: Effective April 1, 2022, the Company changed the functional currency of its Turkish entities to the U.S.
+Added: dollar which did not have a material impact on the Company’s consolidated financial statements.
The amount the Company considers indefinitely invested in foreign subsidiaries and corporate joint ventures translated into dollars using the year-end exchange rates is $13.0 billion and $10.6 billion ($15.5 billion and $12.7 billion at historical rates) at December 31, 2022 and 2021, respectively.
1 unchanged sentence
dollar of $0.4 billion.
−Removed: The potential loss in fair value, which would principally be recognized in Other Comprehensive Income, resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates is $1.3 billion for December 31, 2021 and 2020, respectively.
+Added: The potential loss in fair value, which would principally be recognized in Other Comprehensive Income, resulting from a hypothetical 10% adverse change in quoted foreign currency exchange rates is $1.6 billion and $1.3 billion for December 31, 2022 and 2021, respectively.
Actual results may differ.
The fair value of the Company’s long-term debt is estimated using quoted market prices, where available, and discounted future cash flows based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.
−Removed: Such fair value exceeded the long-term debt carrying value.
Market risk is estimated as the potential increase in fair value resulting from a hypothetical 50 basis points decrease in interest rates.
3 unchanged sentences
Fair value of long-term debt $ 7,502 $ 9,512
−Removed: Excess of fair value over carrying value 1,500 1,602
+Added: Fair value amount over (under) carrying value (232) 1,500
Market risk 342 490
−Removed: The increase in the fair value of long-term debt at December 31, 2021 is primarily due to increased borrowings.
+Added: The decrease in the fair value of long-term debt at December 31, 2022 is primarily due to higher interest rates.
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.