Quantitative and Qualitative Disclosures About Market Risk
−Removed: As of February 1, 2025, our exposure to market risk was primarily from interest rate changes on our debt obligations and short-term investments.
+Added: As of January 31, 2026, our exposure to market risk was primarily from interest rate changes on our debt obligations and short-term investments.
Our interest rate exposure is primarily due to differences between our floating rate debt obligations, including fixed rate debt hedged using floating rate interest rate swaps, compared to our floating rate short-term investments.
−Removed: As of February 1, 2025, our floating rate short-term investments exceeded our floating rate debt obligations by approximately $1.7 billion.
−Removed: Based on our financial position as of February 1, 2025, the annualized effect of a 1 percentage point increase in floating interest rates on our floating rate short-term investments, net of our floating rate debt obligations, would increase our earnings before income taxes by $17 million.
+Added: As of January 31, 2026, our floating rate short-term investments exceeded our floating rate debt obligations by approximately $2.4 billion.
+Added: Based on our financial position as of January 31, 2026, the annualized effect of a 1 percentage point increase in floating interest rates on our floating rate short-term investments, net of our floating rate debt obligations, would increase our earnings before income taxes by $24 million.
In general, we expect our floating rate debt obligations to be in line with our floating rate short-term investments over time, but that may vary in different interest rate and economic environments.
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therefore, these liabilities fluctuate with changes in interest rates.
−Removed: Based on our balance sheet position as of February 1, 2025, the annualized effect of a 1 percentage point increase/(decrease) in interest rates would increase/(decrease) earnings before income taxes by $17 million.
+Added: Based on our balance sheet position as of January 31, 2026, the annualized effect of a 1 percentage point increase/(decrease) in interest rates would increase/(decrease) earnings before income taxes by $20 million.
In addition, we are exposed to market return fluctuations on our qualified defined benefit pension plan.
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To protect against declines in interest rates, we hold high-quality, long-duration bonds and derivative instruments in our pension plan trust.
−Removed: As of February 1, 2025, we had hedged 70 percent of the interest rate exposure of our plan liabilities.
+Added: As of January 31, 2026, we had hedged 75 percent of the interest rate exposure of our plan liabilities.
As more fully described in Note 24 to the Financial Statements, we are exposed to market returns on accumulated team member balances in our nonqualified, unfunded deferred compensation plans.
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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.