QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: For complete quantitative and qualitative disclosures about market risk affecting the Company, see "Item 7A.
−Removed: Qualitative and Quantitative Disclosures About Market Risk" in our report on Form 10-K for the twelve months ended January 3, 2016 .
−Removed: The following table presents the sensitivity of the fair value of our open commodity contracts and foreign currency contracts to a hypothetical 10% change in market prices or in interest rates and foreign exchange rates, as of October 2, 2016 and January 3, 2016 .
+Added: We are exposed to market risks from changes in commodity prices, interest rates and foreign exchange rates, as well as risks from concentrations of credit.
+Added: To mitigate these risks, we utilize derivative instruments to hedge our exposure to changing prices and rates.
+Added: When available, we use quoted market prices or rates to determine the fair value of our derivative instruments.
+Added: This may include prices or rates quoted on an exchange, such as the Chicago Mercantile Exchange, quotes obtained from brokers, or independent valuations from external sources, such as banks.
+Added: In some cases where market prices are not available, we make use of observable market-based inputs to calculate fair value.
+Added: The size and mix of our derivative portfolio vary from time to time based on our analysis of current and future market conditions.
+Added: The following table presents the fair values of our open derivative financial instruments in the condensed consolidated balance sheets.
+Added: March 30, 2025 December 29, 2024
(in millions)
−Removed: Foreign currency
+Added: Livestock (1)
+Added: ________________
+Added: (1) Negative amount represents net liabilities.
+Added: Derivative Financial Instruments” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the effects of derivative instruments on our condensed consolidated statements of income.
+Added: Commodities Risk
+Added: Our meat processing and hog production operations use various raw materials, primarily live hogs, corn, soybean meal and wheat, which are actively traded on commodity exchanges.
+Added: These commodities are subject to significant price fluctuations.
+Added: We enter into hedging transactions for these commodities when we determine conditions are appropriate to mitigate the inherent price risks.
+Added: While this hedging may limit our ability to participate in gains from favorable commodity fluctuations, it also reduces the risk of loss from adverse changes in raw material prices.
+Added: We attempt to closely match the hedging instrument terms with the hedged item’s terms.
+Added: Gains and losses resulting from our commodity derivative contracts are recorded in cost of sales except for lean hog contracts that are designated in cash flow hedging relationships, which are recorded in sales, and are generally offset by increases and decreases in cash prices for the underlying commodity (with such increases and decreases reflected in the same income statement line items).
+Added: For example, in a period of rising grain prices, gains resulting from long grain derivative positions would generally be offset by higher cash prices paid to farmers and other suppliers in spot
+Added: However, under the “mark-to-market” method described above, these offsetting changes do not always occur in the same period, which could result in volatility in our results of operations.
+Added: The following table presents the sensitivity of the fair value of our open commodity derivative contracts to a hypothetical 10% change in market prices.
+Added: March 30, 2025 December 29, 2024
+Added: (in millions)
+Added: Livestock $ 91 $ 64
+Added: Interest Rate Risk
+Added: The following table presents the fair values and carrying values of our fixed-rate debt.
+Added: March 30, 2025 December 29, 2024
+Added: Fair Value Carrying Value Fair Value Carrying Value
+Added: (in millions)
+Added: Debt $ 1,856 $ 1,983 $ 1,821 $ 1,983
+Added: We determine the fair value of fixed-rate debt using Level 2 inputs based on quoted market prices.
+Added: The carrying amount of all other debt approximates fair value as those instruments are based on variable interest rates.
+Added: Changes in interest rates impact the fair value of our fixed-rate debt.
+Added: A hypothetical 10% change in interest rates would impact the fair value of our fixed-rate debt by $38 million and $43 million as of March 30, 2025 and December 29, 2024, respectively.
+Added: We periodically enter into interest rate swaps to hedge our exposure to changes in interest rates on certain financial instruments and to manage the overall mix of fixed rate and floating rate debt instruments.
+Added: The fair values of interest rate swaps as of March 30, 2025 and December 29, 2024 were not material.
+Added: Foreign Currency Exchange Risk
+Added: Our revenues are primarily generated from transactions denominated in U.S.
+Added: However, we also generate revenues from transactions denominated in Japanese yen, Canadian dollars and Australian dollars, among others.
+Added: We employ foreign currency exchange forward contracts to manage the exposure to foreign currency exchange risk.
+Added: The fair values of foreign currency exchange forward contracts as of March 30, 2025 and December 29, 2024 were not material.
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.