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Exchange rate gains or losses related to foreign currency transactions are recognized as transaction gains or losses in our income statement as incurred.
−Removed: As of December 31, 2020, the impact to our income from operations of a 10% change (up or down) in exchange rates is estimated to be an increase or decrease of approximately $38 million on an annual basis.
+Added: As of December 31, 2021, the impact to our income from operations of a 10% swing (up or down) in exchange rates is estimated to be an increase or decrease of approximately $48 million on an annual basis.
We use derivative instruments such as foreign exchange forward contracts to manage a portion of our exposure to changes in foreign exchange rates.
−Removed: As of December 31, 2020, we had derivative contracts outstanding with a notional value of $809 million maturing at various dates through September 25, 2024.
+Added: As of December 31, 2021, we had derivative contracts outstanding with notional values of $848 million maturing at various dates through September 25, 2024.
INTEREST RATE RISK
−Removed: We centrally manage our debt portfolio through the use of interest rate swaps and monitor our mix of fixed-rate and variable-rate debt.
−Removed: As of December 31, 2020, the carrying value of our fixed-rate debt, excluding lease obligations, was $13,065 million and our variable-rate debt was $423 million, inclusive of commercial paper.
−Removed: As of December 31, 2020, the total notional value of our receive-variable, pay-fixed interest rate swaps was $450 million.
−Removed: Based upon our variable rate debt and the fair value of the interest rate swaps that could result from hypothetical interest rate changes during the term of the financial instruments, there was no interest rate risk associated with our debt balances based on debt levels as of December 31, 2020.
+Added: We centrally manage our debt portfolio through the use of interest rate contracts and monitor our mix of fixed-rate and variable-rate debt.
+Added: As of December 31, 2021, the carrying value of our fixed-rate debt, excluding lease obligations, was $11,733 million and our variable-rate debt was $149 million, comprised entirely of commercial paper.
+Added: Additionally, as of December 31, 2021, the total notional value of receive-fixed, pay-variable interest rate swaps was $400 million.
+Added: Our variable-rate instruments are generally based on LIBOR and a credit spread.
+Added: We estimate that the potential impact to our interest rate expense associated with variable rate debt and derivative instruments resulting from a hypothetical interest rate change of 1%, based on variable-rate debt and derivative instrument levels as of December 31, 2021, would be an increase of approximately $5 million or decrease of approximately $1 million.
+Added: Our estimate of the annual impact to interest expense reflects our assumption that LIBOR will not fall below 0%.
COMMODITY RISK
We are subject to market risks with respect to commodities because our ability to recover increased costs through higher pricing may be limited by the competitive environment in which we operate.
−Removed: Our principal commodities risks relate to our purchases of coffee beans, PET, aluminum, diesel fuel, corn (for high fructose corn syrup), apple juice concentrate, apples, sucrose and natural gas (for use in processing and packaging).
+Added: Our principal commodities risks relate to our purchases of coffee beans, PET, aluminum, diesel fuel, corn (for high fructose corn syrup), apple juice concentrate, sucrose and natural gas (for use in processing and packaging).
We utilize commodities derivative instruments and supplier pricing agreements to hedge the risk of movements in commodity prices for limited time periods for certain commodities.
−Removed: As of December 31, 2020, we had derivative contracts outstanding with a notional value of $450 million maturing at various dates through January 1, 2024.
+Added: As of December 31, 2021, we had derivative contracts outstanding with a notional value of $529 million maturing at various dates through November 28, 2023.
The fair market value of these contracts as of December 31, 2021 was a net asset of $106 million.
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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.