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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2023-05-09 compared with 2022-11-09 · 35 added, 33 removed, 27 unchanged (72% of the section changed)

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are exposed to various

market risks, including changes in commodity prices as discussed below.

Market risk is the potential loss arising from adverse changes

in market rates and prices.

In the ordinary course of business, we may enter into various types of transactions involving financial instruments

to manage and reduce the impact of changes in commodity prices.

We are exposed to various market risks, including

changes in commodity prices as discussed below.

Market risk is the potential loss arising from adverse changes in market rates and prices.

In the ordinary course of business, we may enter into various types of transactions involving financial instruments to manage and reduce

the impact of changes in commodity prices.

We do not have material exposure to interest rate risk.

We do not expect

to have any exposure to foreign currency risk as we conduct all of our transactions in U.S.

We do not expect to have any exposure

to foreign currency risk as we conduct all of our transactions in U.S.

We produce alcohol and essential ingredients.

business is sensitive, in particular, to changes in the prices of ethanol and corn.

In the ordinary course of business, we may enter into

various types of transactions involving financial instruments to manage and reduce the impact of changes in ethanol and corn prices.

do not enter into derivatives or other financial instruments for trading or speculative purposes.

business is sensitive to changes in the prices of ethanol and corn.

In the ordinary course of business, we may enter into various types

of transactions involving financial instruments to manage and reduce the impact of changes in ethanol and corn prices.

We do not enter

into derivatives or other financial instruments for trading or speculative purposes.

We are subject to market risk with respect to ethanol

4 unchanged sentences

carbon intensity;

government regulation, including governmental mandates for renewable fuel use;

and consumer demand for alternative

Our ethanol sales are priced using contracts that are either based on a fixed price or an indexed price tied to a specific market,

such as the CBOT or the Oil Price Information Service.

Under these fixed-priced arrangements, we are exposed to the risk of a decrease

in the market price of ethanol between the time the price is fixed and the time the ethanol is sold.

government regulation;

and consumer demand for alternative fuels.

Our alcohol sales are priced using contracts

that are either based on a fixed price or an indexed price tied to a specific market, such as the CBOT or the Oil Price Information Service.

Under these fixed-priced arrangements, we are exposed to risk of a decrease in the market price of ethanol between the time the price

is fixed and the time the alcohol is sold.

We satisfy our physical corn needs, the principal

7 unchanged sentences

wide fluctuations due to unpredictable factors such as weather conditions, farmer planting decisions, governmental policies with respect

to agriculture and international trade, including trade and other sanctions that may be levied against grain producing countries, and

global supply and demand.

Under the fixed price arrangements, we assume the risk of a decrease in the market price of corn between the

time the price is fixed and the time the corn is utilized.

to agriculture and international trade, and global supply and demand.

Under the fixed price arrangements, we assume the risk of a decrease

in the market price of corn between the time the price is fixed and the time the corn is utilized.

Essential ingredients are sensitive to various

demand factors such as numbers of livestock on feed, prices for feed alternatives, and supply factors, primarily the production of alcohol

co-products by plants and other sources.

demand factors such as numbers of livestock on feed, prices for feed alternatives, and supply factors, primarily production of ethanol

co-products by ethanol plants and other sources.

As noted above, we may attempt to reduce the market

5 unchanged sentences

immediately in cost of goods sold.

We recognized net gains of $21.2 million and $18.4 million related to the changes in the fair values

of these contracts for the nine months ended September 30, 2022 and 2021, respectively.

At September 30, 2022, we prepared a sensitivity

analysis to estimate our exposure to ethanol and corn costs.

Market risk related to these factors was estimated as the potential change

in pre-tax income resulting from a hypothetical 10% adverse change in the prices of our expected ethanol and corn volumes.

uses average CBOT prices for the year and does not factor in future contracted volumes.

The results of this analysis for the nine months

ended September 30, 2022, which may differ materially from actual results, are as follows (in millions):

We recognized net losses of $1.8 million and net gains of $5.3 million related to the changes in the

fair values of these contracts for the three months ended March 31, 2023 and 2022, respectively.

We prepared a sensitivity analysis as of March

31, 2023 to estimate our exposure to ethanol and corn.

Market risk related to these factors was estimated as the potential change in pre-tax

income resulting from a hypothetical 10% adverse change in the prices of our expected ethanol and corn volumes.

The analysis uses average

CBOT prices for the year and does not factor in future contracted volumes.

The results of this analysis for the three months ended March

31, 2023, which may differ materially from actual results, are as follows (in millions):

Unit of Measure

Approximate Adverse

Change to Pre-Tax

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.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk