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.
−Removed: The cost of products and services used in our operations is subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as the COVID-19 pandemic, geopolitical events, economic conditions or other unforeseen circumstances.
+Added: The cost of products and services used in our operations is subject to volatility due to the relative availability of labor and distribution, weather, natural disasters, inventory levels and other supply and/or demand impacting events such as geopolitical events, economic conditions or other unforeseen circumstances.
Climate change may further exacerbate a number of these factors.
During fiscal 2021, we began to experience certain supply shortages and transportation delays largely attributable to impacts of the COVID-19 pandemic.
−Removed: These shortages continued in fiscal 2022 and were exacerbated by geopolitical unrest.
+Added: These shortages continued in fiscal 2022 and were exacerbated by geopolitical unrest and macroeconomic events.
The aggregate impact of these and other factors contributed to significant cost inflation.
+Added: While we have seen improvements in many of these areas, the absolute level of commodity costs has remained elevated.
We attempt to 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.
8 unchanged sentences
For fiscal 2023 and 2022, a hypothetical increase of 1% in food costs would have negatively impacted food and beverage costs by $8.0 million and $8.1 million, respectively.
−Removed: (See Item 1A —
−Removed: 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.”)
+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.
This exposure relates to the component of the interest rate on the Loan Agreement that is indexed to market rates.
−Removed: Based on outstanding borrowings at January 3, 2023 and December 28, 2021, a hypothetical 1% rise in interest rates would have increased interest expense by $1.3 million on an annual basis.
+Added: Based on outstanding borrowings at January 2, 2024 and January 3, 2023, a hypothetical 1% rise in interest rates would have increased interest expense by $1.3 million on an annual basis.
(See Note 10 of Notes to Consolidated Financial Statements in Part IV, Item 15 of this report for further discussion of our long-term debt.)
1 unchanged sentence
In addition, because changes in these investments are not taxable, gains and losses result in tax benefit and tax expense, respectively, and directly affect net income through the income tax provision.
−Removed: Based on balances at January 3, 2023 and December 28, 2021, a hypothetical 10% decline in the market value of our deferred compensation asset and related liability would not have impacted income before income taxes.
−Removed: However, under such scenario, net income would have declined by $2.0 million and $2.3 million at January 3, 2023 and December 28, 2021, respectively.
+Added: Based on balances at January 2, 2024 and January 3, 2023, a hypothetical 10% decline in the market value of our deferred compensation asset and related liability would not have impacted income before income taxes.
+Added: However, under such scenario, net income would have declined by $2.4 million and $2.0 million at January 2, 2024 and January 3, 2023, respectively.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
2 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.