Quantitative and Qualitative Disclosures About Market Risk.
−Removed: The Company is exposed to certain market risks that arise in the ordinary course of business.
−Removed: The Company may enter into derivative financial instrument transactions to manage or reduce market risk.
−Removed: The Company does not enter into derivative financial instrument transactions for trading or speculative purposes.
−Removed: A discussion of the Company’s primary market risk exposure and interest rate risk is presented below.
−Removed: Debt and Derivative Financial Instruments
The Company is subject to interest rate risk on its variable rate debt, including its revolving credit facility and term loan facility.
−Removed: Assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of June 28, 2020, interest expense for the next 12 months would increase by approximately $1.5 million.
+Added: Assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of September 27, 2020, interest expense for the next 12 months would increase by approximately $1.4 million.
This amount was determined by calculating the effect of the hypothetical interest rate on the unhedged portion of the Company’s variable rate debt.
3 unchanged sentences
As a result, any changes in the underlying risk-free interest rate will impact the fair value of the acquisition related contingent consideration and could materially impact the amount of non-cash expense or income recorded each reporting period.
−Removed: Raw Material and Commodity Price Risk
+Added: The Company is exposed to certain market risks and commodity price risk that arise in the ordinary course of business.
+Added: The Company may enter into derivative financial instrument transactions to manage or reduce market risk.
+Added: The Company does not enter into derivative financial instrument transactions for trading or speculative purposes.
The Company is also subject to commodity price risk arising from price movements for certain commodities included as part of its raw materials.
The Company manages this commodity price risk in some cases by entering into contracts with adjustable prices to hedge commodity purchases.
−Removed: The Company periodically uses derivative commodity instruments in the management of this risk.
+Added: The Company periodically uses commodity derivative instruments in the management of this risk.
The Company estimates a 10% increase in the market prices of commodities included as part of its raw materials over the current market prices would cumulatively increase costs during the next 12 months by approximately $56.3 million assuming no change in volume.
Fees paid by the Company for agreements to hedge commodity purchases are amortized over the corresponding period of the agreement.
−Removed: The Company accounts for its commodity hedges on a mark-to-market basis with any expense or income being reflected as an adjustment to cost of sales or SD&A expenses.
−Removed: Effects of Changing Prices
+Added: The Company accounts for its commodity derivative instruments on a mark-to-market basis with any expense or
+Added: income being reflected as an adjustment to cost of sales or SD&A expenses, consistent with the expense classification of the underlying hedged item.
The annual rate of inflation in the United States, as measured by year-over-year changes in the Consumer Price Index (the “CPI”), was 2.3% in 2019 and 2.4% in 2018.
4 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.