2 unchanged sentences
We conduct the majority of our business in U.S.
−Removed: dollars and are not currently exposed to foreign currency risk.
+Added: dollars and are not currently exposed to material foreign currency risk.
Interest Rate Risk
1 unchanged sentence
Interest rates on our variable-rate debt are based on the market rate for the lender’s prime rate, SOFR or LIBOR.
−Removed: At September 30, 2022, we had $703.2 million in debt, $265.1 million of which had variable interest rates.
+Added: At March 31, 2023, we had $709.6 million in debt, $271.6 million of which had variable interest rates.
A 10% increase in interest rates would affect our interest cost by approximately $2.4 million per year.
1 unchanged sentence
Commodity Price Risk
−Removed: Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains, corn oil and natural gas.
−Removed: Ethanol prices are sensitive to world crude oil supply and demand, the price of crude oil, gasoline and corn, the price of substitute fuels, refining capacity and utilization, government regulation and consumer demand for alternative fuels.
−Removed: Corn prices are affected by weather conditions, yield, changes in domestic and global supply and demand, and government programs and policies.
+Added: Our business is highly sensitive to commodity price risk, particularly for ethanol, corn, distillers grains, Ultra-High Protein, renewable corn oil and natural gas.
+Added: Ethanol prices are sensitive to world crude oil supply and demand, the price of crude oil, gasoline, corn, the price of substitute fuels, refining capacity and utilization, government regulation and consumer demand for alternative fuels.
+Added: Corn prices are affected by weather conditions, crop yields, changes in domestic and global supply and demand, and government programs and policies.
Distillers grains prices are impacted by livestock numbers on feed, prices for feed alternatives and supply, which is associated with ethanol plant production.
1 unchanged sentence
Other factors include North American energy exploration and production, and the amount of natural gas in underground storage during injection and withdrawal seasons.
−Removed: To reduce the risk associated with fluctuations in the price of ethanol, corn, distillers grains, corn oil, and natural gas, at times we use forward fixed-price physical contracts and derivative financial instruments, such as futures and options executed on the Chicago Board of Trade, the New York Mercantile Exchange and the Chicago Mercantile Exchange.
+Added: To reduce the risk associated with fluctuations in the price of ethanol, corn, distillers grains, Ultra-High Protein, renewable corn oil and natural gas, at times we use forward fixed-price physical contracts and derivative financial instruments, such as futures and options executed on the Chicago Board of Trade, the New York Mercantile Exchange and the Chicago Mercantile Exchange.
We focus on locking in favorable operating margins, when available, using a model that continually monitors market prices for corn, natural gas and other inputs relative to the price for ethanol and distillers grains at each of our production facilities.
1 unchanged sentence
As a result, we frequently have gains on derivative financial instruments that are offset by losses on forward fixed-price physical contracts or inventories and vice versa.
−Removed: Our results are impacted by a mismatch of gains or losses associated with the derivative instrument during a reporting period when the physical commodity purchases or sale has not yet occurred.
−Removed: During the three and nine months ended September 30, 2022, revenues included net gains of $3.5 million and $6.0 million, respectively, and cost of goods sold included net losses of $6.3 million and $68.5 million, respectively, associated with derivative financial instruments.
+Added: Our results can be impacted if there is a mismatch of gains or losses associated with the derivative instrument during a reporting period when the physical commodity purchases or sale has not yet occurred.
+Added: During the three months ended March 31, 2023, revenues included net losses of $7.2 million, and cost of goods sold included net gains of $17.2 million associated with derivative financial instruments.
Ethanol Production Segment
1 unchanged sentence
To reduce commodity price risk caused by market fluctuations, we enter into exchange-traded futures and options contracts that serve as economic hedges.
−Removed: Our exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price purchase and sale contracts and derivatives, is based on the estimated net income effect resulting from a hypothetical 10% change in price for the next 12 months starting on September 30, 2022, which is as follows (in thousands):
+Added: Our results are impacted when there is a mismatch of gains or losses associated with the derivative instrument during a reporting period when the physical commodity purchase or sale has not yet occurred.
+Added: Our exposure to market risk, which includes the impact of our risk management activities resulting from our fixed-price purchase and sale contracts and derivatives, is based on the estimated net income effect resulting from a hypothetical 10% change in price for the next 12 months starting on March 31, 2023, which is as follows (in thousands):
Commodity Estimated Total Volume
7 unchanged sentences
Distillers grains 2,400 Tons (2)
−Removed: Corn oil 290,000 Pounds $10,512
+Added: Renewable corn oil 310,000 Pounds $12,011
Natural gas 27,700 MmBTU $3,506
2 unchanged sentences
Agribusiness and Energy Services Segment
−Removed: In the agribusiness and energy services segment, physical purchase and sale contracts and derivatives are marked to market.
+Added: In the agribusiness and energy services segment, our inventories, physical purchase and sale contracts and derivatives are marked to market.
Our inventories are carried at the lower of cost or net realizable value, except fair-value hedged inventories.
−Removed: To reduce commodity price risk caused by market fluctuations for purchase and sale commitments of grain and grain held in inventory, we enter into exchange-traded futures and options contracts that serve as economic hedges.
+Added: To reduce commodity price risk caused by market fluctuations for purchase and sale commitments of grain and
+Added: grain held in inventory, we enter into exchange-traded futures and options contracts that serve as economic hedges.
The market value of exchange-traded futures and options used for hedging are highly correlated with the underlying market value of grain inventories and related purchase and sale contracts for grain.
5 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.