QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: The following discussion of market risks contains forward-looking statements and should be read in conjunction with our consolidated financial statements and related notes in Part IV, Item 15 of this report, the “Risk Factors” in Part I, Item 1A of this report, the "Management's Discussion and Analysis of Financial Condition and Results of Operations"
−Removed: in Part II, Item 7 of this report and the cautionary statements included throughout this report.
+Added: The following discussion of market risks contains forward-looking statements and should be read in conjunction with our consolidated financial statements and related notes in Part IV, Item 15 of this report, the “Risk Factors” in Part I, Item 1A of this report, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report and the cautionary statements included throughout this report.
Actual results may differ materially from the following discussion based on general conditions in the commodity and financial markets.
We purchase food and other commodities for use in our operations based on market prices established with our suppliers.
−Removed: Many of the commodities purchased by us can be subject to volatility due to market supply and demand factors outside of our control.
−Removed: We mitigate the risk of supply shortages and obtain competitive prices by utilizing multiple qualified suppliers for substantially all our ingredients and supplies.
+Added: Many of these commodities can be subject to market volatility driven by supply and demand factors outside of our control, including the relative availability of labor and distribution, weather, natural disasters, inventory levels, and political and economic conditions.
+Added: Climate change may further exacerbate a number of these factors.
+Added: During fiscal 2021, we began to experience certain supply shortages and transportation delays largely attributable to impacts of the COVID-19 pandemic.
+Added: We expect these shortages and delays to continue in fiscal 2022.
We negotiate short-term and long-term agreements for some of our principal commodity, supply and equipment requirements, such as certain dairy products and poultry, depending on market conditions and expected demand.
−Removed: We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing risk and variability associated with such commodities.
−Removed: Although these vehicles may be available to us, as of the end of our 2020 fiscal year, we had chosen not to enter into any hedging contracts due to pricing volatility, excessive risk premiums, hedge inefficiencies or other factors.
+Added: We continue to evaluate the possibility of entering into similar arrangements for other commodities and periodically evaluate hedging vehicles, such as direct financial instruments, to assist us in managing price risk and variability associated with such commodities.
+Added: As of the end of fiscal 2021, we had no hedging contracts in place.
Commodities for which we have not entered into contracts can be subject to unforeseen supply and cost fluctuations, which at times may be significant.
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dollar relative to other currencies, international trade disputes, tariffs and varying global demand.
−Removed: We may or may not have the ability to increase menu prices or vary menu items in response to food commodity price increases.
−Removed: For fiscal years 2020 and 2019, a hypothetical increase of 1% in food costs would have negatively impacted cost of sales by $4.6 million and $5.6 million, respectively.
−Removed: (See Item 1A — Risk Factors — Risks Related to Our Business — “Our inability to anticipate and react effectively to changes in the costs of key operating resources may increase our cost of doing business, which could materially adversely affect our financial performance.”)
+Added: We may not have the ability to increase menu prices or vary menu items in response to food commodity price increases.
+Added: For fiscal 2021 and 2020, a hypothetical increase of 1% in food costs would have negatively impacted cost of sales by $6.5 million and $4.6 million, respectively.
+Added: (See Item 1A — Risk Factors — “Our inability to anticipate and react effectively to changes in the costs of key operating resources may increase our cost of doing business, which could materially adversely affect our financial performance.”)
We are exposed to market risk from interest rate changes on our funded debt.
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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.