12 unchanged sentences
Significant increases in raw materials can be difficult to offset with price increases due to existing contractual agreements with customers as well as difficulty finding effective financial instruments to hedge these changes.
−Removed: In the short term, our gross margin could be negatively impacted by significant increases in these costs.
+Added: In the short term, our gross margin has been and is expected to be negatively impacted by significant increases in these costs.
Our profitability could be negatively impacted in the long term if we are not able to pass along these higher raw material costs to our customers.
Foreign Exchange Risk
−Removed: The Company primarily manufactures its products in the United States, United Kingdom, China, India, and Brazil.
+Added: The Company primarily manufactures its products in the United States, United Kingdom, Canada, China, Italy, India, Mexico and Brazil.
It also sources completed products and product components from outside the United States.
1 unchanged sentence
Sales in foreign countries as well as certain expenses related to those sales are transacted in currencies other than the Company's reporting currency, the U.S.
−Removed: Accordingly, production costs and profit margins related to these sales are effected by the currency exchange relationship between the countries where the sales take place and the countries where the products are sourced or manufactured.
+Added: Accordingly, production costs and profit margins related to these sales are affected by the currency exchange relationship between the countries where the sales take place and the countries where the products are sourced or manufactured.
These currency exchange relationships can also impact the Company's competitive positions within these markets.
In the normal course of business, the Company enters into contracts denominated in foreign currencies.
−Removed: The principal foreign currencies in which the Company conducts its business are the British pound sterling, euro, Canadian dollar, Japanese yen, Mexican peso, Hong Kong dollar and Chinese renminbi.
−Removed: As of May 29, 2021, the Company had outstanding sixteen forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
−Removed: Herman Miller, Inc.
−Removed: and Subsidiaries 44
+Added: The principal foreign currencies in which the Company conducts its business are the British pound sterling, euro, Canadian dollar, Japanese yen, Mexican peso, Hong Kong dollar, Chinese renminbi, and the Danish krone.
+Added: As of May 28, 2022, the Company had outstanding 22 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
(In millions, except number of forward contracts)
3 unchanged sentences
Currency Number of Forward Contracts Net Exposure
−Removed: As of May 30, 2020, t he Company had outstanding, twenty forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
+Added: As of May 29, 2021, t he Company had outstanding, 16 forward currency instruments designed to offset either net asset or net liability exposure that is denominated in non-functional currencies.
(In millions, except number of forward contracts)
3 unchanged sentences
Currency Number of Forward Contracts Net Exposure
−Removed: The cost of the foreign currency hedges and remeasuring all foreign currency transactions into the appropriate functional currency resulted in a net gain of $0.8 million in fiscal 2021 in contrast to net loss of $1.1 million in fiscal 2020 included in net earnings.
−Removed: These amounts are included in “Other (income) expense, net” in the Consolidated Statements of Comprehensive Income.
−Removed: Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional currency into the United States dollar increased the accumulated comprehensive loss component of total stockholders' equity by $52.1 million compared to a decrease of $7.7 million as of the end of fiscal 2021 and 2020, respectively.
+Added: The cost of the foreign currency hedges and remeasuring all foreign currency transactions into the appropriate functional currency resulted in a net gain of $3.3 million in fiscal 2022 in contrast to net gain of $0.8 million in fiscal 2021 included in net earnings.
+Added: These amounts are included in Other expense (income), net in the Consolidated Statements of Comprehensive Income.
+Added: Additionally, the cumulative effect of translating the balance sheet and income statement accounts from the functional currency into the United States dollar decreased the accumulated comprehensive loss component of total stockholders' equity by $90.0 million compared to an increase of $52.1 million as of the end of fiscal 2022 and 2021, respectively.
Interest Rate Risk
The Company enters into interest rate swap agreements to manage its exposure to interest rate changes and its overall cost of borrowing.
−Removed: The Company's interest rate swap agreement was entered into to exchange variable rate interest payments for fixed rate payments over the life of the agreement without the exchange of the underlying notional amounts.
+Added: The Company's interest rate swap agreements were entered into to exchange variable rate interest payments for fixed rate payments over the life of the agreement without the exchange of the underlying notional amounts.
The notional amount of the interest rate swap agreements is used to measure interest to be paid or received and does not represent the amount of exposure to credit loss.
The differential paid or received on the interest rate swap agreements is recognized as an adjustment to interest expense.
−Removed: 45 2021 Annual Report
These interest rate swap derivative instruments are held and used by the Company as a tool for managing interest rate risk.
4 unchanged sentences
The interest rate swap is for an aggregate notional amount of $150.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028.
−Removed: As a result of the transaction, the Company effectively converted indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949 percent fixed interest rate plus applicable margin under the agreement as of the forward start date.
+Added: As a result of the transaction, the Company effectively converted indebtedness anticipated to be borrowed on the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 1.949% fixed interest rate plus applicable margin under the agreement as of the forward start date.
+Added: See Note 6 for information on the replacement of LIBOR with SOFR in our credit agreement.
In June 2017, the Company entered into an additional interest rate swap agreement.
The interest rate swap is for an aggregate notional amount of $75.0 million with a forward start date of January 3, 2018 and a termination date of January 3, 2028.
−Removed: As a result of the transaction, the Company effectively converted the Company’s revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387 percent fixed interest rate plus applicable margin under the agreement as of the forward start date.
−Removed: The fair market value of the effective interest rate swap instruments was a net liability of $14.4 million at May 29, 2021 compared to $25.0 million at May 30, 2020.
+Added: As a result of the transaction, the Company effectively converted its revolving line of credit up to the notional amount from a LIBOR-based floating interest rate plus applicable margin to a 2.387% fixed interest rate plus applicable margin under the agreement as of the forward start date.
+Added: In January, 2022, the Company entered into a third interest rate swap agreement.
+Added: The interest rate swap is for an aggregate notional amount of $575.0 million with a forward start date of January 31, 2022 and a maturity date of January 29, 2027.
+Added: The interest rate swap locked in the Company’s interest rate on forecasted outstanding borrowings of the Company.
+Added: The Company effectively will convert LIBOR-based floating interest rate plus applicable margin indebtedness to a 1.689% fixed interest rate plus applicable margin under the agreement as of the forward start date.
+Added: The fair market value of the effective interest rate swap instruments was a net asset of $31.9 million at May 28, 2022 compared to a net liability of $14.4 million at May 29, 2021.
All cash flows related to the Company's interest rate swap instruments are denominated in U.S.
2 unchanged sentences
(In millions) 2023 2024 2025 2026 2027 Thereafter Total (1)
−Removed: Long-Term Debt - Fixed rate:
+Added: Long-Term Debt Instruments:
Interest rate 1.689% (2)
+Added: $ — $ — $ — $ — $ 575.0 $ — $ 575.0
Interest rate 1.949% (2)
3 unchanged sentences
(1) Amount does not include the recorded fair value of the swap instruments.
−Removed: (2) The Company's revolving credit facility has a variable interest rate, but due to the interest rate swaps, the rate on $150.0 million and $75.0 million will be fixed at 1.949% and 2.387%, respectively.
−Removed: Herman Miller, Inc.
−Removed: and Subsidiaries 46
+Added: (2) The Company's revolving credit facility and Term Loans have a variable interest rate, but due to the interest rate swaps, the rate on $150.0 million, $75.0 million and $575.0 million will be fixed at 1.689%, 1.949% and 2.387%, respectively.
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.