−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURE OF MARKET RISKS
+Added: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
3 unchanged sentences
We are also subject to interest rate risk through interest income received on our cash and cash equivalent balances, which consist of highly liquid investments with original maturities of 90 days or less held in cash on hand, bank balances, short-term deposits and money market funds.
−Removed: The Federal Reserve continued increasing short-term interest rates in fiscal 2023 compared to the historically low levels in fiscal 2021.
−Removed: Such interest rate increases, if they continue, may increase the interest rate applicable to our borrowings that have rates that are subject to adjustment pursuant to floating rate indices such as SOFR.
−Removed: As of February 3, 2024, we had no outstanding borrowings under the revolving line of credit and $2,449 million outstanding under the Term Loan Credit Agreement.
+Added: Interest rate increases may increase the interest rate applicable to our borrowings that have rates that are subject to adjustment pursuant to floating rate indices, such as SOFR.
+Added: As of February 1, 2025, we had $200 million of outstanding borrowings under the revolving line of credit and $2,424 million outstanding under the Term Loan Credit Agreement.
The ABL Credit Agreement provides for a borrowing amount based on the value of eligible collateral and a formula linked to certain borrowing percentages based on certain categories of collateral.
3 unchanged sentences
However, our exposure to change in our interest expense is partially offset by interest income, which is also affected by changes in market interest rates.
−Removed: SOFR, which is currently published by the Federal Reserve Bank of New York based on overnight U.S.
−Removed: Treasury repurchase agreement transactions, has been recommended as the alternative to LIBOR by the Alternative Reference Rates Committee convened by the Federal Reserve Board and the Federal Reserve Bank of New York.
−Removed: The Term Loan Credit Agreement transitioned to reference SOFR in fiscal 2023.
−Removed: As of February 3, 2024, we had $42 million principal amount of 0.00% convertible senior notes due 2024 outstanding (the “2024 Notes”).
−Removed: As this instrument does not bear interest, we do not have interest rate risk exposure related to this debt.
+Added: In fiscal 2023, the Term Loan Credit Agreement transitioned to reference SOFR, which is published by the Federal Reserve Bank of New York to replace LIBOR.
Foreign Currency Risk
8 unchanged sentences
To date, we have not engaged in foreign currency hedging transactions because our foreign currency transaction gains and losses have not been material to our consolidated financial statements, but we may begin foreign currency risk management strategies in the future.
−Removed: FORM 10-K | 61
Impact of Inflation
1 unchanged sentence
While it is difficult to accurately measure the historical impact of inflation due to the imprecise nature of the estimates required, we believe the effects of inflation on our consolidated results of operations and financial condition have been primarily transitory to date as we have been able to adjust our costs of operation as well as our merchandise pricing in response to increased prices for services and other inputs, including the costs to purchase merchandise from our vendors.
−Removed: On the other hand, some increased costs related to higher levels of inflation may have longer duration impact on our operations, including increased costs of compensation for our associates as well as higher prices for construction and materials used in our Gallery development.
+Added: On the other hand, some increased costs related to higher levels of inflation may have longer duration impact on our operations, including increased costs of compensation for our team members as well as higher prices for construction and materials used in our Gallery development.
There can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future, including by the lingering effects of heightened levels of inflation experienced globally since 2022.
1 unchanged sentence
Risks related to inflation could include increased costs for many products and services that are necessary for the operation of our business as well as the impact of interest rate increases, which could have, among other consequences, a negative effect on the housing market and consumer demand for our products.
+Added: 62 | FORM 10-K
+Added: PART II — FINANCIAL STATEMENTS
On August 16, 2022, the Inflation Reduction Act, H.R.
3 unchanged sentences
The CAMT provision did not have a material impact on our consolidated financial statements in fiscal 2024.
−Removed: During fiscal 2023, we incurred excise tax related to our share repurchase activity.
Refer to Note 16 —Share Repurchase Program and Share Retirement .
+Added: PART II — FINANCIAL STATEMENTS
FORM 10-K | 63
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.