4 unchanged sentences
Interest Rate Risk
−Removed: We are subject to interest rate market risk in connection with our long-term debt.
+Added: We are subject to interest rate risk in connection with our long-term debt.
Our principal interest exposure relates to outstanding amounts under our Credit Agreement.
1 unchanged sentence
Assuming facilities under the Credit Agreement are fully drawn, each one-eighth percentage point increase or decrease in the applicable interest rates would correspondingly change our interest expense on our outstanding borrowings under the Credit Agreement by approximately $4.2 million per year before considering the impact of derivative instruments.
−Removed: For further discussion of the risks related to our Credit Agreement, see “Risk Factors—Corporate Finance Risks—Our substantial indebtedness could adversely affect our financial condition, limit our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness” in Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the quarter ended July 3, 2022.
+Added: For further discussion of the risks related to our Credit Agreement, see “Risk Factors—Risks Relating to Corporate Finance—Our indebtedness could adversely affect our financial condition, limit
+Added: our ability to raise additional capital to fund our operations and prevent us from fulfilling our obligations under our indebtedness” in Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended January 1, 2023.
We selectively use derivative instruments to reduce market risk associated with changes in interest rates.
The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes.
−Removed: As of October 2, 2022, we have an interest rate cap agreement to hedge our interest rate exposures related to our variable rate borrowings under the Credit Agreement with an interest rate cap amount of 3.4%, with caplets that mature through December 31, 2023.
−Removed: We have also entered into an interest rate swap agreement, which fixed a portion of the variable interest due on our variable rate debt.
+Added: We entered into an interest rate swap agreement, commencing on May 29, 2022, which fixed a portion of the variable interest due on our variable rate debt.
Under the terms of the agreement, we will pay a fixed rate of 1.58% and receive a variable rate of interest based on the USD-SOFR rate from the counterparty, which is reset every month through December 31, 2023.
−Removed: As of October 2, 2022, the notional amount of the interest rate swap was $1,000.0 million.
−Removed: The notional value of these instruments is expected to be $500.0 million in 2023.
−Removed: Subsequent to October 2, 2022, the Company entered into interest rate swap contracts, commencing on December 30, 2022, with a total notional value of $1.3 billion through December 29, 2023 and $1.8 billion subsequently, to hedge future interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan.
−Removed: Additionally, subsequent to October 2, 2022, the Company amended the termination date for the interest rate cap to December 30, 2022.
+Added: As of April 2, 2023, the notional amount of the interest rate swap was $500.0 million.
+Added: We also entered into interest rate swap contracts, commencing on December 30, 2022, with a total notional value of $1.3 billion through December 29, 2023 and $1.8 billion subsequently, to hedge future interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan.
Our current investment policy with respect to our cash and cash equivalents focuses on maintaining acceptable levels of interest rate risk and liquidity.
−Removed: Although we continually evaluate our investments, our cash equivalents as of October 2, 2022 consisted primarily of government money market funds and other high credit quality debt securities.
+Added: Although we continue to evaluate our investments, our cash equivalents as of April 2, 2023 consisted primarily of government money market funds and other high credit quality debt securities.
These funds provide daily liquidity and may be subject to interest rate risk and decrease in value if market interest rates increase.
3 unchanged sentences
These risks include the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany balances with foreign subsidiaries and transactions denominated in currencies other than the functional currency of the local jurisdiction.
−Removed: We derived approximately 53% and 29% of our Total revenues for the three and nine months ended October 2, 2022, respectively, from operations outside the U.S.
+Added: We derived approximately 33% of our Total revenues for the three months ended April 2, 2023 from operations outside the U.S.
For translation of operations in non-U.S.
Dollar currencies, the local currency of most entities is the functional currency.
−Removed: Our foreign assets and liabilities are translated into U.S.
−Removed: Dollars at the exchange rates existing at the respective balance sheet dates, and income and expense items are translated at the average exchange rate for each relevant period.
−Removed: Foreign exchange effects from the translation of our balance sheet resulted in a comprehensive loss of $92.9 million and $158.9 million for the three and nine months ended October 2, 2022, respectively.
−Removed: Foreign exchange effects from the translation of our balance sheet were not material during the three and nine months ended October 3, 2021.
+Added: Foreign exchange effects from the translation of our balance sheet resulted in a comprehensive gain of $30.7 million for the three months ended April 2, 2023.
+Added: Foreign exchange effects from the translation of our balance sheet were not material during the three months ended April 3, 2022.
Adjustments resulting from the re-measurement of transactions denominated in foreign currencies other than the functional currency of our subsidiaries are expensed as incurred.
6 unchanged sentences
Dollar, but we also benefit from expenses denominated in British Pound, as well as some cross-border transactions at a lower exchange rate.
−Removed: The magnitude of the impact is dependent on our business volumes in the U.K., forward contract hedge positions, cross currency volume and the exchange rate.
+Added: The magnitude of the impact is dependent on our level of operations and business volumes in the U.K., forward contract hedge positions, cross currency volume and the exchange rate.
Additionally, in order to fund the purchase price for the assets and capital stock of certain non-U.S.
2 unchanged sentences
In many instances, the intercompany loans are denominated in currencies other than the functional currency of the affected subsidiaries.
−Removed: Where intercompany loans are not a component of permanently invested capital of the affected subsidiaries, increases or decreases in the value of the subsidiaries’ functional currency against other currencies will affect our results of operations.
−Removed: During the three and nine months ended October 2, 2022, we recorded net foreign currency exchange gain of $0.2 million and loss of $2.2 million, respectively.
+Added: Where intercompany loans are not a component of permanently invested capital of the affected subsidiaries, increases or decreases in the value of the subsidiaries’ functional currency against other currencies can affect our results of operations.
+Added: During the three months ended April 2, 2023, we recorded net foreign currency exchange losses of $2.4 million.
+Added: Net foreign currency exchange impact was not material for the three months ended April 3, 2022.
The foreign currency gains/losses in each period primarily consist of unrealized gains/losses related to intercompany loans denominated in currencies other than the functional currency of the affected subsidiaries.
−Removed: We may enter into derivative instruments to manage our foreign currency exposure on these intercompany loans in the future.
+Added: We have entered into and may continue to enter into derivative instruments to manage our foreign currency exposure on these intercompany loans in the future.
We have entered into foreign currency forward contracts to manage our foreign currency exposures on foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions.
−Removed: We had forward contracts outstanding with total notional amount of $668.9 million as of October 2, 2022, with maturity dates through December 2022.
−Removed: Foreign currency forward contracts that qualified and were designated for hedge accounting are recorded at their fair value as of October 2, 2022 and the unrealized income of $4.6 million is reported as a component of Other comprehensive (loss) income, all of which is expected to be reclassified to earnings in the next 12 months.
−Removed: Actual gains (losses) upon settlement will be recognized in earnings, within the line item impacted, during the estimated time in which the transactions are incurred.
−Removed: Actual losses/gains upon settlement recognized in earnings during the three and nine months ended October 2, 2022 and October 3, 2021 were not material.
−Removed: We do not enter into foreign currency derivative instruments for trading purposes or to engage in speculative activity.
+Added: We had forward contracts outstanding with a total notional amount of $970.7 million as of April 2, 2023, with maturity dates through December 2023.
+Added: Foreign currency forward contracts that qualified and were designated for hedge accounting are recorded at their fair value as of April 2, 2023 and the pre-tax unrealized loss of $10.5 million is reported as a component of Other comprehensive income (loss), all of which is expected to be reclassified to earnings in the next 12 months.
+Added: Actual gains (losses) upon settlement will be recognized in earnings, within the line item impacted, during the estimated time in which the
+Added: transactions are incurred.
+Added: Actual gains upon settlement recognized in earnings during the three months ended April 2, 2023 were $0.5 million.
+Added: Actual losses/gains upon settlement recognized in earnings during the three months ended April 3, 2022 were not material.
See Note 12 to the unaudited Consolidated Financial Statements for additional information related to such forward contracts, which information is incorporated herein by reference.
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.