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 $4.0 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 I, Item 1A, “Risk Factors” of this Annual Report.
+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 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 this Annual Report.
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: We have entered into an interest rate swap agreement, which fixed a portion of the variable interest due on our variable rate debt.
−Removed: 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 January 1, 2023, the notional amount of the interest rate swap was $500.0 million.
−Removed: In the fourth quarter of 2022, we 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: During the fourth quarter of 2022, we terminated our non-designated $1.0 billion notional value 3.428% interest rate cap.
+Added: We entered into interest rate swap contracts, commencing on December 30, 2022, with a total notional value of $1.3 billion, which increased to $1.8 billion on December 29, 2023, 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 January 1, 2023 consisted
−Removed: 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 December 31, 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 25% of our Total revenues for the fiscal year ended January 1, 2023, from operations outside the U.S.
+Added: We derived approximately 39% of our Total revenues for the fiscal year ended December 31, 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: Foreign exchange effects from the translation of our balance sheet resulted in a comprehensive loss of $69.8 million for the fiscal year ended January 1, 2023.
+Added: Foreign exchange effects from the translation of our balance sheet resulted in comprehensive income of $50.4 million and a comprehensive loss of $69.8 million for the fiscal years ended December 31, 2023 and January 1, 2023, respectively.
Foreign exchange effects from the translation of our balance sheet were not material during the fiscal year ended January 2, 2022.
1 unchanged sentence
In the majority of our jurisdictions, we earn revenue and incur costs in the currency used in such jurisdiction.
−Removed: We incur significant costs in foreign currencies, including Brazilian Real, British Pound, Chinese Yuan/Renminbi, Euro, Indian Rupee, Japanese Yen, Mexican Peso, and the Swiss Franc.
+Added: We incur significant costs in foreign currencies, including Australian Dollar, Brazilian Real, British Pound, Canadian Dollar, Chilean Peso, Chinese Yuan/Renminbi, Colombian Peso, Euro, Indian Rupee, Japanese Yen, Mexican Peso, Philippine Peso, South Korean Won, Swiss Franc, Danish Krone, Czech Koruna and Thai Baht.
As a result, movements in exchange rates cause our revenue and expenses to fluctuate, impacting our profitability and cash flows.
3 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 fiscal year ended January 1, 2023, we recorded net foreign currency exchange loss of $6.0 million.
+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 fiscal years ended December 31, 2023 and January 1, 2023, we recorded net foreign currency exchange losses of $2.6 million and $6.0 million, respectively.
Net foreign currency exchange impact was not material for the fiscal year ended January 2, 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 in the future 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 $1,023.3 million as of January 1, 2023, with maturity dates through December 2023.
−Removed: Foreign currency forward contracts that qualified and were designated for hedge accounting are recorded at their fair value as of January 1, 2023 and the unrealized loss of $7.9 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: We had forward contracts outstanding with a total notional amount of $1,252.2 million as of December 31, 2023, with maturity dates through December 2024.
+Added: Foreign currency forward contracts that qualified and were designated for hedge accounting are recorded at their fair value as of December 31, 2023 and the pre-tax unrealized loss of $6.7 million is reported as a component of Other comprehensive income (loss) (“OCI”), all of which is expected to be reclassified to earnings in the next 12 months.
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.
+Added: Actual losses upon settlement recognized in earnings during the fiscal year ended December 31, 2023 were $6.2 million.
Actual gains upon settlement recognized in earnings during the fiscal year ended January 1, 2023 were $3.5 million.
Actual losses/gains upon settlement recognized in earnings during the fiscal year ended January 2, 2022 were not material.
−Removed: See Note 14 to our Consolidated Financial Statements for additional information related to such forward contracts, which information is incorporated herein by reference.
+Added: A sensitivity to changes in the value of the U.S.
+Added: dollar on foreign currency denominated derivatives and investments indicated that if the U.S.
+Added: dollar uniformly weakened by 10% against all currency exposures of the Company at December 31, 2023, (Loss) income before income taxes would have declined by approximately $4.4 million in fiscal year 2023.
+Added: Because the Company was in a net short (payable) position relative to its major foreign currencies after consideration of forward contracts, a uniform weakening of the U.S.
+Added: dollar will yield the largest overall potential net loss in earnings due to exchange.
+Added: This measurement assumes that a change in one foreign currency relative to the U.S.
+Added: dollar would not affect other foreign currencies relative to the U.S.
+Added: Although not predictive in nature, the Company believes that a 10% threshold reflects reasonably possible near-term changes in the Company’s major foreign currency exposures relative to the U.S.
+Added: The cash flows from these contracts are reported as operating activities in the Consolidated Statements of Cash Flows.
+Added: The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates.
+Added: The forward contracts are designated as hedges of the net investment in a foreign operation.
+Added: unrealized gains or losses on these contracts are recorded in foreign currency translation adjustment within OCI, and remain in Accumulated other comprehensive loss (“AOCI”) until either the sale or complete or substantially complete liquidation of the subsidiary.
+Added: The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components).
+Added: Changes in fair value of the excluded components are recognized in OCI.
+Added: The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument.
+Added: The cash flows from these contracts are reported as investing activities in the Consolidated Statement of Cash Flows.
+Added: See Part II, Item 8, “Financial Statements and Supplementary Data—Note 14.
+Added: Derivative Instruments and Hedging Activities” 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.