16 unchanged sentences
We generally do not hedge anticipated transactions beyond 18 months.
−Removed: The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of June 27, 2020 , and September 28, 2019 , on the fair value of open positions.
+Added: The following table presents a sensitivity analysis resulting from a hypothetical change of 10% in market prices as of January 2, 2021, and October 3, 2020, on the fair value of open positions.
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.
The market risk exposure analysis included both derivatives designated as hedge instruments and derivatives not designated as hedge instruments.
−Removed: Effect of 10% change in fair value
−Removed: June 27, 2020
−Removed: September 28, 2019
+Added: Effect of 10% change in fair value in millions
+Added: January 2, 2021 October 3, 2020
+Added: Live Cattle $ 19 $ 24
+Added: Lean Hogs 19 19
+Added: Soybean Meal 35 28
Interest Rate Risk:
−Removed: At June 27, 2020 , we had variable rate debt of $1,947 million with a weighted average interest rate of 1.5%.
−Removed: A hypothetical 10% increase in interest rates effective at June 27, 2020 , and September 28, 2019 , would not have a significant effect on variable interest expense.
+Added: At January 2, 2021, we had variable rate debt of $1,528 million with a weighted average interest rate of 1.8%.
+Added: A hypothetical 10% increase in interest rates effective at January 2, 2021, and October 3, 2020, would not have a significant effect on variable interest expense.
Additionally, changes in interest rates impact the fair value of our fixed-rate debt.
−Removed: At June 27, 2020 , we had fixed-rate debt of $10,082 million with a weighted average interest rate of 4.4%.
+Added: At January 2, 2021, we had fixed-rate debt of $9,829 million with a weighted average interest rate of 4.4%.
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 $100 million at June 27, 2020 , and $184 million at September 28, 2019 .
+Added: A hypothetical 10% decrease in interest rates would have increased the fair value of our fixed-rate debt by approximately $133 million at January 2, 2021, and $108 million at October 3, 2020.
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 June 27, 2020 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.
2 unchanged sentences
See Part II, Item 8, Notes to Consolidated Financial Statements, Note 16:
−Removed: Pensions and Other Postretirement Benefits in our Annual Report on Form 10-K for the year ended September 28, 2019 , for additional information.
+Added: Pensions and Other Postretirement Benefits in our Annual Report on Form 10-K and subsequent amendment on Form 10-K/A for the fiscal year ended October 3, 2020, for additional information.
Foreign Currency Risk:
2 unchanged sentences
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 related to the foreign exchange forward and option contracts would have had a $47 million and $15 million impact on pretax income at June 27, 2020 , and September 28, 2019 respectively.
+Added: A hypothetical 10% change in foreign exchange rates related to the foreign exchange forward and option contracts would have had a $44 million and $54 million impact on pretax income at January 2, 2021, and October 3, 2020 respectively.
Concentration of Credit Risk:
−Removed: Refer to our market risk disclosures set forth in our 2019 Annual Report filed on Form 10-K for the year ended September 28, 2019 , for a detailed discussion of quantitative and qualitative disclosures about concentration of credit risks, as these risk disclosures have not changed significantly from the 2019 Annual Report.
+Added: Refer to our market risk disclosures set forth in our Annual Report filed on Form 10-K and subsequent amendment on Form 10-K/A for the fiscal year ended October 3, 2020, for a detailed discussion of quantitative and qualitative disclosures about concentration of credit risks, as these risk disclosures have not changed significantly from our Annual Report on Form 10-K for the fiscal year ended October 3, 2020.
EBITDA Reconciliations
A reconciliation of net income to EBITDA is as follows (in millions, except ratio data):
−Removed: Nine Months Ended
−Removed: Fiscal Year Ended
−Removed: Twelve Months Ended
−Removed: June 27, 2020
−Removed: June 29, 2019
−Removed: September 28, 2019
−Removed: June 27, 2020
+Added: Three Months Ended Fiscal Year Ended Twelve Months Ended
+Added: January 2, 2021 December 28, 2019 October 3, 2020 January 2, 2021
+Added: Net income $ 472 $ 509 $ 2,071 $ 2,034
Interest income (2) (3) (10) (9)
1 unchanged sentence
Income tax expense 144 148 593 589
+Added: Depreciation 229 217 900 912
Amortization (a) 66 68 278 276
+Added: EBITDA $ 1,019 $ 1,059 $ 4,317 $ 4,277
Total gross debt $ 11,339 $ 11,357
2 unchanged sentences
Total net debt
+Added: $ 9,919 $ 8,951
Ratio Calculations:
−Removed: Gross debt/EBITDA
−Removed: Net debt/EBITDA
−Removed: Excludes the amortization of debt issuance and debt discount expense of $10 million for the nine months ended June 27, 2020 , $8 million for the nine months ended June 29, 2019 , $12 million for the fiscal year ended September 28, 2019 , and $14 million for the twelve months ended June 27, 2020 , as it is included in interest expense.
+Added: Gross debt/EBITDA 2.6x 2.7x
+Added: Net debt/EBITDA 2.3x 2.1x
+Added: (a) Excludes the amortization of debt issuance and debt discount expense of $3 million for the three months ended January 2, 2021 and December 28, 2019 and $14 million for the fiscal year ended October 3, 2020 and the twelve months ended January 2, 2021 as it is included in interest expense.
EBITDA represents net income, net of interest, income tax expense, depreciation and amortization.
4 unchanged sentences
however, the measurements of EBITDA and net debt to EBITDA may not be comparable to those of other companies, which limits their usefulness as comparative measures.
−Removed: EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with generally accepted accounting principles (GAAP) and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity.
+Added: EBITDA and net debt to EBITDA are not measures required by or calculated in accordance with GAAP and should not be considered as substitutes for net income or any other measure of financial performance reported in accordance with GAAP or as a measure of operating cash flow or liquidity.
EBITDA is a useful tool for assessing, but is not a reliable indicator of, our ability to generate cash to service our debt obligations because certain of the items added to net income to determine EBITDA involve outlays of cash.
2 unchanged sentences
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.