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Item 7A. Quantitative and Qualitative Disclosures About Market Risk. INTEREST RATE RISK We have exposure to interest rate risk in connection with our long-term debt portfolio. We use interest rate swap agreements to manage our fixed/floating-rate debt portfolio, none of which are for trading or speculative purposes. At February 2, 2025, after giving consideration to our interest rate swap agreements, floating-rate debt principal was $6.0 billion, or approximately 12% of our senior notes portfolio. Our interest rate swap agreements were in an aggregate liability position of $795 million at February 2, 2025. The changes in the fair values of our interest rate swap agreements offset the changes in the fair value of the hedged long-term debt. Based on our February 2, 2025 floating-rate debt principal, a one percentage point increase in the interest rate of floating-rate debt would increase our annual interest expense by approximately $60 million. FOREIGN CURRENCY EXCHANGE RATE RISK We are exposed to risks from foreign currency exchange rate fluctuations on the translation of our foreign operations into U.S. dollars and on the purchase of goods by these foreign operations that are not denominated in their local currencies. We use derivative instruments to hedge a portion of our foreign currency exchange rate risk, none of which are for trading or speculative purposes. Our foreign currency related hedging arrangements outstanding at the end of fiscal 2024 were not material. Fiscal 2024 Form 10-K 35 Table of Contents COMMODITY PRICE RISK We experience inflation and deflation related to our purchase and sale of certain commodity products. This price volatility could potentially have a material impact on our financial condition and/or our results of operations. In order to mitigate price volatility, we monitor commodity price fluctuations and may adjust our selling prices accordingly; however, our ability to recover higher costs through increased pricing may be limited by the competitive environment in which we operate. We currently do not use derivative instruments to manage these risks.