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Interest Rate Risk
−Removed: The total amount of short-term debt, net of cash, amounted to net debt of $581.5 million and net debt of $317.9 million, at September 29, 2024 and December 31, 2023, respectively.
−Removed: A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of September 29, 2024 would have changed interest expense by approximately $5.5 million for the first nine months of 2024 and $3.1 million for 2023.
+Added: The total amount of short-term debt, net of cash, amounted to net cash positions of $1,371 million and net debt of $576 million, at March 30, 2025 and December 31, 2024, respectively.
+Added: A hypothetical 100 basis point increase in interest rates applied to this variable-rate short-term debt as of March 30, 2025 would have changed interest expense by approximately $3.4 million for the first three months of 2025 and $7.0 million for 2024.
We consider our current risk related to market fluctuations in interest rates on our remaining debt portfolio, excluding fixed-rate debt converted to variable rates with fixed-to-floating instruments, to be minimal since this debt is largely long-term and fixed-rate in nature.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise.
−Removed: A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at September 29, 2024 and December 31, 2023 by approximately $196 million and $203 million, respectively.
+Added: A 100 basis point increase in market interest rates would decrease the fair value of our fixed-rate long-term debt at March 30, 2025 and December 31, 2024 by approximately $307 million and $169 million, respectively.
However, since we currently have no plans to repurchase our outstanding fixed-rate instruments before their maturities, the impact of market interest rate fluctuations on our long-term debt does not affect our results of operations or financial position.
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We estimate the fair value of foreign currency forward exchange contracts on a quarterly basis by obtaining market quotes of spot and forward rates for contracts with similar terms, adjusted where necessary for maturity differences.
−Removed: The potential decline in fair value of foreign currency forward exchange contracts resulting from a hypothetical near-term adverse change in market rates of 10% was $32.1 million as of September 29, 2024 and $20.2 million as of December 31, 2023, generally offset by a reduction in foreign exchange associated with our transactional activities.
+Added: The potential decline in fair value of foreign currency forward exchange contracts resulting from a hypothetical near-term adverse change in market rates of 10% was $29.0 million as of March 30, 2025 and $32.3 million as of December 31, 2024, generally offset by a reduction in foreign exchange associated with our transactional activities.
Commodities—Price Risk Management and Derivative Contracts
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Cocoa Products
−Removed: During the first nine months of 2024, the average cocoa futures contract price was $3.32 per pound, with a trading range of $1.84 to $5.20 per pound, based on the Intercontinental Exchange futures contract.
+Added: During the first three months of 2025, the average cocoa futures contract price was $4.30 per pound, with a trading range of $3.63 to $4.88 per pound, based on the Intercontinental Exchange futures contract.
This average cocoa futures contract price represents an increase of approximately 25% compared to the 2024 annual average of $3.45 per pound.
−Removed: The production forecast for the 2024 – 2025 season is improving in Ghana and Ivory Coast, due to a combination of favorable weather conditions and decreased demand for cocoa;
−Removed: however, the price outlook for cocoa remains uncertain due to significant liquidity and volatility issues, which may have an impact on our financial condition and results of operations.
+Added: The cocoa supply-demand state is improving primarily due to favorable weather conditions, which have enabled the supply in Ghana and Ivory Coast to improve following the unfavorable 2023 – 2024 season.
+Added: Additionally, supply in the rest of the world continues to expand rapidly;
+Added: however, the increase in prices have negatively impacted the demand for cocoa.
+Added: The price outlook for cocoa remains uncertain due to significant liquidity and volatility events in the market, which may have an impact on our financial condition and results of operations.
Our costs for cocoa products will not necessarily reflect market price fluctuations because of our forward purchasing and hedging practices (including amount and duration thereof), premiums and discounts reflective of varying delivery times, and supply and demand for our specific varieties and grades of cocoa liquor, cocoa butter and cocoa powder.
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Commodity Sensitivity Analysis
−Removed: Our open commodity derivative contracts had a notional value of $149.6 million as of September 29, 2024 and $94.9 million as of December 31, 2023.
−Removed: At the end of the third quarter of 2024, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses by $4.8 million, generally offset by a reduction in the cost of the underlying commodity purchases.
+Added: Our open commodity derivative contracts had a notional value of $274.7 million as of March 30, 2025 and $667.4 million as of December 31, 2024.
+Added: At the end of the first quarter of 2025, the potential change in fair value of commodity derivative instruments, assuming a 10% decrease in the underlying commodity price, would have increased our net unrealized losses by $53.8 million, generally offset by a reduction in the cost of the underlying commodity purchases.
For additional information about our market risks, see Item 7A under Part II of our 2024 Annual Report on Form 10-K.
1 unchanged sentence
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.