3 unchanged sentences
We are exposed to changes in short-term market interest rates and these changes in rates will impact our net interest expense.
−Removed: Our cash and cash equivalents generate interest income that will vary based on changes in short-term interest rates.
+Added: Our cash, cash equivalents and restricted cash generate interest income that will vary based on changes in short-term interest rates.
In addition, we have swapped a portion of our fixed-rate debt to floating-rate such that the interest expense on this debt will vary with short-term interest rates.
Refer to Note 6, Derivative Instruments , and Note 8, Debt , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding our interest rate swaps.
−Removed: In fiscal 2021 we entered into T-Lock contracts to hedge the base interest rate variability on a portion of our then-expected refinancing of our maturing 2021 Notes.
−Removed: The T-Lock contracts were immaterial and cash settled upon issuance of our 2030 Notes in fiscal 2021.
−Removed: The fair value of the T-Lock contracts upon settlement was released from Accumulated other comprehensive income on our Consolidated Balance Sheets and recorded in Interest expense on our Consolidated Statements of Earnings as interest is accrued over the life of the 2030 Notes.
−Removed: As of January 30, 2021, we had $5.5 billion of cash and cash equivalents and $500 million of debt that has been swapped to floating rate, and therefore the net balance exposed to interest rate changes was $5.0 billion.
+Added: As of January 29, 2022, we had $3.2 billion of cash, cash equivalents and restricted cash and $500 million of debt that has been swapped to floating rate, and therefore the net balance exposed to interest rate changes was $2.7 billion.
As of January 29, 2022, a 50-basis point increase in short-term interest rates would have led to an estimated $14 million reduction in net interest expense, and conversely a 50-basis point decrease in short-term interest rates would have led to an estimated $14 million increase in net interest expense.
Foreign Currency Exchange Rate Risk
−Removed: We have market risk arising from changes in foreign currency exchange rates related to our International segment operations.
+Added: We have market risk arising from changes in foreign currency exchange rates related to operations in our International segment.
On a limited basis, we utilize foreign exchange forward contracts to manage foreign currency exposure to certain forecasted inventory purchases, recognized receivable and payable balances and our investment in our Canadian operations.
Our primary objective in holding derivatives is to reduce the volatility of net earnings and cash flows, as well as net asset value associated with changes in foreign currency exchange rates.
−Removed: Our foreign currency risk management strategy includes both hedging instruments and derivatives that are not designated as hedging instruments, which generally have terms of up to 12 months.
+Added: Our foreign currency risk management strategy includes both hedging instruments and derivatives that are not designated as hedging instruments.
Refer to Note 6, Derivative Instruments , of the Notes to Consolidated Financial Statements, included in Item 8, Financial Statements and Supplementary Data , of this Annual Report on Form 10-K for further information regarding these instruments.
−Removed: In fiscal 2021 foreign currency exchange rate fluctuations were driven by the strength of the U.S.
−Removed: dollar compared to the Mexican peso and the Canadia n dollar compared to the prior-year period, which had a negative overall impact on our revenue as foreign currencies translated into fewer U.S.
−Removed: The strength of the U.S.
−Removed: dollar compared to the Mexican peso also had a favorable impact on earnings as the operating loss in Mexican pesos translated into fewer U.S.
−Removed: We estimate that foreign currency exchange rate fluctuations had a net unfavorable impact on our revenue of approximately $45 million and a net favorable impact on earnings of approximately $15 million in fiscal 2021, excluding the r eclassification of cumulative translation adjustments into earnings as a result of our exit from Mexico.
+Added: In fiscal 2022, foreign currency exchange rate fluctuations were primarily driven by the strength of the Canadian dollar compared to the U.S.
+Added: dollar compared to the prior-year period, which had a positive overall impact on our revenue as this foreign currency revenue translated into more U.S.
+Added: We estimate that foreign currency exchange rate fluctuations had a net favorable impact on our revenue of approximately $217 million.
+Added: The impact of foreign exchange rate fluctuations on our net earnings in fiscal 2022 was not significant.
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