2 unchanged sentences
To address certain of these risks, we enter into various derivative transactions as described below.
−Removed: If a derivative instrument is accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument will be offset either against the change in fair value of the hedged assets, liabilities or firm commitments through earnings or recognized in other comprehensive income (loss) until the hedged item is recognized in earnings.
−Removed: The ineffective portion of an instrument’s change in fair value is immediately recognized in earnings as a component of cost of sales.
−Removed: Additionally, we hold certain positions, primarily in grain and livestock futures that either do not meet the criteria for hedge accounting or are not designated as hedges.
+Added: If a derivative instrument is accounted for as a hedge, depending on the nature of the hedge, changes in the fair value of the instrument either will be offset against the change in fair value of the hedged assets, liabilities or firm commitments through earnings, or be recognized in other comprehensive income (loss) until the hedged item is recognized in earnings.
+Added: The ineffective portion of an instrument’s change in fair value is recognized immediately.
+Added: Further, we hold certain positions, primarily in grain and livestock futures that either do not meet the criteria for hedge accounting or are not designated as hedges.
With the exception of normal purchases and normal sales that are expected to result in physical delivery, we record these positions at fair value, and the unrealized gains and losses are reported in earnings at each reporting date.
−Removed: Changes in market value of derivatives used in our risk management activities relating to forward sales contracts are recorded in sales.
−Removed: Changes in market value of derivatives used in our risk management activities surrounding inventories on hand or anticipated purchases of inventories are recorded in cost of sales.
−Removed: Changes in market value of derivatives used in our risk management activities related to interest rates are recorded in interest expense.
−Removed: Changes in the market value of derivatives used in our risk management activities related to foreign exchange contracts are recorded in other, net.
The sensitivity analyses presented below are the measures of potential losses of fair value resulting from hypothetical changes in market prices related to commodities.
3 unchanged sentences
We purchase certain commodities, such as grains and livestock in the course of normal operations.
−Removed: As part of our commodity risk management activities, we use derivative financial instruments, primarily futures and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity.
+Added: As part of our commodity risk management activities, we use derivative financial instruments, primarily forwards and options, to reduce the effect of changing prices and as a mechanism to procure the underlying commodity.
However, as the commodities underlying our derivative financial instruments can experience significant price fluctuations, any requirement to mark-to-market the positions that have not been designated or do not qualify as hedges could result in volatility in our results of operations.
1 unchanged sentence
Contracts designated and highly effective at meeting this risk reduction and correlation criteria are recorded using hedge accounting.
−Removed: The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of September 28, 2019 and September 29, 2018 , on the fair value of open positions.
−Removed: The fair value of such positions is a summation of the fair values calculated for each commodity by valuing each net position at quoted futures prices.
−Removed: The market risk exposure analysis included hedge and non-hedge derivative financial instruments.
+Added: We generally do not hedge
+Added: anticipated transactions beyond 18 months.
+Added: The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of October 3, 2020 and September 28, 2019 , on the fair value of open positions.
+Added: The fair value of such positions is a summation of the fair values calculated for each commodity by valuing each net position at quoted forward and option prices.
+Added: The market risk exposure analysis included both derivatives designated as hedge instruments and derivatives not designated as hedge instruments.
Effect of 10% change in fair value
Interest Rate Risk:
−Removed: At September 28, 2019 , we had variable rate debt of $1,875 million with a weighted average interest rate of 2.5%.
−Removed: A hypothetical 10% increase in interest rates effective at September 28, 2019 , and September 29, 2018 , would have a minimal effect on interest expense.
+Added: At October 3, 2020 , we had variable rate debt of $1,521 million with a weighted average interest rate of 1.8%.
+Added: A hypothetical 10% increase in interest rates effective at October 3, 2020 , and September 28, 2019 , would have a minimal effect on interest expense.
Additionally, changes in interest rates impact the fair value of our fixed-rate debt.
−Removed: At September 28, 2019 , we had fixed-rate debt of $10,057 million with a weighted average interest rate of 4.42%.
+Added: At October 3, 2020 , we had fixed-rate debt of $9,818 million with a weighted average interest rate of 4.42%.
Market risk for fixed-rate debt is estimated as the potential increase in fair value, resulting from a hypothetical 10% decrease in interest rates.
−Removed: A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately $184 million at September 28, 2019 , and $207 million at September 29, 2018 .
+Added: A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately $108 million at October 3, 2020 , and $184 million at September 28, 2019 .
The fair values of our debt were estimated based on quoted market prices and/or published interest rates.
−Removed: We have $400 million total notional amount of interest rate swaps at September 28, 2019 as part of our risk management activities to hedge a portion of our exposure to changes in interest rates.
−Removed: A hypothetical 10% decrease in interest rates would have a minimal effect on interest expense.
We are subject to interest rate risk associated with our pension and post-retirement benefit obligations.
4 unchanged sentences
Foreign Currency Risk:
−Removed: We have foreign exchange exposure from fluctuations in foreign currency exchange rates primarily as a result of certain receivable and payable balances as well as revenues and expenses.
−Removed: The primary currencies we have exposure to are the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the Thai baht, the Malaysian ringgit, the European euro, the Japanese yen, the New Zealand dollar, the Australian dollar and the Mexican peso.
+Added: We have foreign exchange exposure from fluctuations in foreign currency exchange rates primarily as a result of certain receivable and payable balances.
+Added: The primary currencies we have exposure to are the Australian dollar, the Brazilian real, the British pound sterling, the Canadian dollar, the Chinese renminbi, the European euro, the Malaysian ringgit, the Mexican peso, and the Thai baht.
We periodically enter into foreign exchange forward and option contracts to hedge some portion of our foreign currency exposure.
−Removed: A hypothetical 10% change in foreign exchange rates effective at September 28, 2019 and September 29, 2018 , related to the foreign exchange forward and option contracts would have a $15 million and $9 million impact, respectively, on pretax income.
+Added: A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a $54 million and $15 million impact on pretax income at October 3, 2020 and September 28, 2019 , respectively.
Concentrations of Credit Risk:
3 unchanged sentences
We perform periodic credit evaluations of our customers’ financial condition and generally do not require collateral.
−Removed: At September 28, 2019 and September 29, 2018 , 16.2% and 18.6% , respectively, of our net accounts receivable balance was due from Walmart Inc.
+Added: At October 3, 2020 and September 28, 2019 , 16.5% and 16.2% , respectively, of our net accounts receivable balance was due from Walmart Inc.
No other single customer or customer group represented 10% or greater of net accounts receivable.
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.