6 unchanged sentences
Our principal interest exposure relates to outstanding amounts under our Credit Agreement.
−Removed: Our Credit Agreement provides for variable rate borrowings of up to $2,750.0 million under the Term Loan and $800.0 million under the Revolving Credit Facility.
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 $3.6 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—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.
−Removed: We selectively use derivative instruments to reduce market risk associated with changes in interest rates.
−Removed: The use of derivatives is intended for hedging purposes only, and we do not enter into derivative instruments for speculative purposes.
−Removed: 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.
−Removed: 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 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.
−Removed: These funds provide daily liquidity and may be subject to interest rate risk and decrease in value if market interest rates increase.
−Removed: We do not expect our operating results or cash flows to be affected to any significant degree by a sudden change in market interest rates.
+Added: We have interest rate swap contracts with a total notional value of $1.8 billion to hedge future interest rate exposures on variable rate debt, including the Revolving Credit Facility and Term Loan.
Foreign Currency Exchange Risk
4 unchanged sentences
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 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.
−Removed: Foreign exchange effects from the translation of our balance sheet were not material during the fiscal year ended January 2, 2022.
−Removed: Adjustments resulting from the re-measurement of transactions denominated in foreign currencies other than the functional currency of our subsidiaries are expensed as incurred.
−Removed: 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 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.
−Removed: As a result, movements in exchange rates cause our revenue and expenses to fluctuate, impacting our profitability and cash flows.
−Removed: Future business operations and opportunities, including the continued expansion of our business outside North America, may further increase the risk that cash flows resulting from these activities may be adversely affected by changes in currency exchange rates.
−Removed: Like many multi-national companies, we have exposure to the British Pound.
−Removed: We are negatively impacted by a lower British Pound exchange rate from translation impact when compared to the U.S.
−Removed: 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 level of operations and business volumes in the U.K., forward contract hedge positions, cross currency volume and the exchange rate.
−Removed: Additionally, in order to fund the purchase price for the assets and capital stock of certain non-U.S.
−Removed: entities, a combination of equity contributions and intercompany loans were utilized to capitalize certain non-U.S.
−Removed: subsidiaries.
−Removed: 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 can affect our results of operations.
−Removed: 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.
−Removed: Net foreign currency exchange impact was not material for the fiscal year ended January 2, 2022.
−Removed: 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 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.
−Removed: 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 a total notional amount of $1,252.2 million as of December 31, 2023, with maturity dates through December 2024.
−Removed: 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.
−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 upon settlement recognized in earnings during the fiscal year ended December 31, 2023 were $6.2 million.
−Removed: Actual gains upon settlement recognized in earnings during the fiscal year ended January 1, 2023 were $3.5 million.
−Removed: Actual losses/gains upon settlement recognized in earnings during the fiscal year ended January 2, 2022 were not material.
+Added: We have entered into foreign currency forward contracts to manage our exposures on foreign currency denominated firm commitments and forecasted foreign currency denominated intercompany and third-party transactions.
+Added: We had forward contracts outstanding with a total notional amount of $1.4 billion as of December 29, 2024, with maturity dates through November 2025.
A sensitivity to changes in the value of the U.S.
dollar on foreign currency denominated derivatives and investments indicated that if the U.S.
−Removed: 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.
−Removed: 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.
−Removed: dollar will yield the largest overall potential net loss in earnings due to exchange.
+Added: dollar uniformly weakened by 10% against all currency exposures of the Company at December 29, 2024, (Loss) income before income taxes would have increased by approximately $7.1 million in fiscal year ended 2024.
+Added: Because the Company was in a net long (receivable) 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 gain in earnings due to exchange.
This measurement assumes that a change in one foreign currency relative to the U.S.
1 unchanged sentence
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.
−Removed: The cash flows from these contracts are reported as operating activities in the Consolidated Statements of Cash Flows.
The Company also uses forward exchange contracts to hedge a portion of its net investment in foreign operations against movements in exchange rates.
The forward contracts are designated as hedges of the net investment in a foreign operation.
−Removed: 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.
−Removed: The Company excludes certain portions of the change in fair value of its derivative instruments from the assessment of hedge effectiveness (excluded components).
−Removed: Changes in fair value of the excluded components are recognized in OCI.
−Removed: The Company recognizes in earnings the initial value of the excluded components on a straight-line basis over the life of the derivative instrument.
−Removed: The cash flows from these contracts are reported as investing activities in the Consolidated Statement of Cash Flows.
−Removed: See Part II, Item 8, “Financial Statements and Supplementary Data—Note 14.
−Removed: Derivative Instruments and Hedging Activities” for additional information related to such forward contracts, which information is incorporated herein by reference.
+Added: Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 16.
+Added: Derivative Instruments and Hedging Activities” for additional information related to such forward contracts.
+Added: The use of derivative instruments exposes us to credit risk if the counterparty fails to perform when the fair value of a derivative instrument contract is positive.
+Added: If the counterparty fails to perform, collateral is not required by any party whether derivatives
+Added: are in an asset or liability position.
+Added: We have a policy of diversifying derivatives with counterparties to mitigate the overall risk of counterparty defaults.
+Added: Refer to Part II, Item 8, “Financial Statements and Supplementary Data—Note 16.
+Added: Derivative Instruments and Hedging Activities” for additional information.
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.