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We evaluate and manage exposure to these market risks as follows:
−Removed: CURRENT YEAR RESULTS ENDED 2022
+Added: Import shipping costs – We import a significant quantity of our products, particularly fasteners and private label products, from foreign suppliers, primarily in Asia.
+Added: As a result, we incur costs related to shipping charges, duties, harbor fees, and sundry other expenses involved in the movement of product for sale in North America and our other global locations.
+Added: These costs are embedded in our product values, and significant fluctuations can affect our product gross profit depending on what mitigating actions might be taken.
+Added: The most significant contributor to these fluctuations is the cost of overseas shipping containers.
+Added: During 2023, the cost of overseas shipping containers was below the prior year.
+Added: We estimate the effect on our net earnings related to import shipping costs was $23.0 to $28.0 in 2023.
+Added: Commodity steel prices – We buy and sell various types of steel products;
+Added: these produ cts consist primarily of different types of fasteners and related hardware.
+Added: We are exposed to the impacts of commodity steel pricing and our related ability to pass through the impacts to our end customers.
+Added: During 2023, the price of steel as reflected in many market indexes has been below prior year levels, though in most cases price levels have stabilized in recent periods and the rate of decline is moderating.
+Added: Due to our long supply chain, changes in the cost of steel can take a number of quarters to be reflected in our financial results.
+Added: Further, the cost of the raw material is generally a small part of the total value of the steel products that we sell, which can also diminish the impact of cost changes for the raw material.
+Added: We estimate the effect on our net earnings related to commodity steel prices was immaterial in 2023.
+Added: Commodity energy prices – We have market risk for changes in prices of oil, gasoline, diesel fuel, natural gas, and electricity.
+Added: As reflected in many market indexes, energy prices during 2023 were generally below prior year levels, which contributed to lower costs for fuel consumed in our vehicles and lower utility costs at our facilities.
+Added: Total direct fuel consumption is a relatively minor cost to the company and, as a result, we estimate the effect on our net earnings related to commodity energy prices was immaterial in 2023.
+Added: Fossil fuels are also often a key feedstock for chemicals and plastics that comprise a key raw material for many products that we sell.
+Added: During 2023, prices for fossil fuels were generally below prior year levels.
+Added: The cost of the raw material is generally a small part of the total value of the products that we sell, which can diminish the impact of cost changes for the raw material.
+Added: As a result, we estimate the effect on our net earnings related to materials for which fossil fuels are a feedstock was immaterial in 2023.
Foreign currency exchange rates – Foreign currency fluctuations can affect our net investments, our operations in countries other than the U.S., and earnings denominated in foreign currencies.
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We have not historically hedged our foreign currency risk given that exposure to date has not been material.
−Removed: During 2022, changes in foreign currency exchange rates decreased our reported net sales by $37.5 with the estimated effect on our net earnings being immaterial.
−Removed: Commodity steel pricing – We buy and sell various types of steel.
−Removed: These products consist primarily of different types of threaded fasteners and related hardware.
−Removed: We are exposed to the impacts of commodity steel pricing and our related ability to pass through the impacts to our end customers.
−Removed: During 2022, and particularly in the latter half of 2022, the price of steel as reflected in many market indexes began to decrease.
−Removed: Due to our long supply chain, changes that we experienced in 2022 do not immediately impact our earnings results.
−Removed: In fact, we were not able to fully compensate for higher costs through higher prices in 2022, resulting in a modestly negative impact to our gross margin percentage in 2022.
−Removed: We estimate the effect on our net earnings was immaterial in 2022.
−Removed: Commodity energy prices – We have market risk for changes in prices of oil, gasoline, diesel fuel, natural gas, and electricity.
−Removed: During 2022, the price of energy as reflected in many market indexes increased as economic activity improved, which contributed to higher costs for fuel in our vehicles and utilities at our facilities.
−Removed: We believe we were able to mitigate the effect of higher fuel costs by increasing freight charges in 2022, and as a result our estimated net earnings exposure for commodity energy prices was immaterial.
−Removed: Fossil fuels are also often a key feedstock for chemicals and plastics that comprise a key raw material for many products that we sell.
−Removed: During 2022, prices for fossil fuels were generally higher, which caused us to experience higher prices for products with high chemical or plastic content.
−Removed: In 2022, our estimated net earnings exposure for materials for which fossil fuels are feedstock was immaterial.
−Removed: We believe that over time these risks are mitigated in part by our ability to pass freight and product costs to our customers, the efficiency of our trucking distribution network, and the ability, over time, to manage our occupancy costs related to the heating and cooling of our facilities through better efficiency.
+Added: We estimate the effect on our sales and net earnings related to changes in foreign exchange rates was $18.7 and immaterial, respectively, in 2023.
Interest rates - Loans under our Credit Facility bear interest at floating rates.
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A one percentage point increase to our floating rate debt in 2023 would have resulted in approximately $0.6 of additional interest expense.
−Removed: A description of our Credit Facility is contained in Note 9 of the Notes to Consolidated Financial Statements.
+Added: A description of our Credit Facility is contained in Note 9 of the Notes to Condensed Consolidated Financial Statements.
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.