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As more fully described in Note 8—Derivatives to the Consolidated Financial Statements included in Item 8.
−Removed: Financial Statements and Supplementary Data of this Annual Report, we have used interest rate swap agreements with the objective to protect us against adverse changes in interest rates by effectively converting certain of our variable rate obligations to fixed rate obligations.
+Added: Financial Statements and Supplementary Data of this Annual Report, we have used interest rate swap agreements to mitigate our exposure to adverse changes in interest rates by effectively converting certain of our variable rate obligations to fixed rate obligations.
These interest rate swaps are derivative instruments designated as cash flow hedges on the forecasted interest payments related to a certain portion of our debt obligations.
−Removed: Our variable rate borrowings consist primarily of LIBOR based loans, which is the benchmark interest rate being hedged in our interest rate swap agreements.
−Removed: Changes in interest rates could also affect the interest rates we pay on future borrowings under our ABL Credit Facility and Term Loan Facility, which rates are typically related to LIBOR.
−Removed: We estimate that a 100 basis point increase in the interest rates related to our variable rate borrowings would increase our annualized interest expense by approximately $5 million, net of the floating interest rate receivable on our interest rate swaps.
+Added: Our variable rate borrowings consist primarily of SOFR-based loans, which is the benchmark interest rate being hedged in our interest rate swap agreements.
+Added: Changes in interest rates could also affect the interest rates we pay on future borrowings under our ABL Credit Facility and Term Loan Facility, which rates are typically related to SOFR.
+Added: As of July 30, 2022, we estimate that a 100-basis point increase in the interest rates related to our variable rate borrowings would increase our annualized Interest expense by approximately $4 million, net of the floating interest rate receivable on our interest rate swaps.
Changes in interest rates related to our fixed rate debt instruments would not have an impact upon future results of operations or cash flows while outstanding;
however, if additional debt issuances at higher interest rates are required to fund fixed rate debt maturities, future results of operations or cash flows may be impacted.
−Removed: As of July 31, 2021, a 100 basis point increase in forward LIBOR interest rates would increase the fair value of the interest rate swaps by approximately $31 million;
−Removed: a 100 basis point decrease in forward LIBOR interest rates would decrease the fair value of the interest rate swaps by approximately $32 million.
−Removed: Refer to Note 8—Derivatives for further information on interest rate swap contracts.
−Removed: Customer loans have been extended to certain wholesale customers in the normal course of business through notes receivable.
−Removed: The notes generally bear fixed interest rates negotiated with each wholesale customer.
−Removed: The market value of the fixed rate notes is subject to change due to fluctuations in market interest rates;
−Removed: however, this market risk is not significant to us.
+Added: As of July 30, 2022, a 100-basis point increase in forward SOFR interest rates would increase the fair value of the interest rate swaps by approximately $17 million;
+Added: while a 100-basis point decrease in forward SOFR interest rates would decrease the fair value of the interest rate swaps by approximately $18 million.
+Added: Refer to Note 8—Derivatives in Part II, Item 8 of this Annual Report for further information on interest rate swap contracts.
The table below provides information about our financial instruments that are sensitive to changes in interest rates, including debt obligations, interest rate swaps and notes receivable.
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(1) Excludes the effect of interest rate swaps effectively converting certain of our variable rate obligations to fixed rate obligations.
−Removed: (2) Refer to Note 8—Derivatives for further information on interest rate swap contracts.
+Added: (2) Refer to Note 8—Derivatives in Part II, Item 8 of this Annual Report for further information on interest rate swap contracts.
Investment Risk
−Removed: We assumed the defined benefit pension plan obligations and assets of the SUPERVALU INC.
−Removed: Retirement Plan from the Supervalu acquisition.
−Removed: This plan holds investments in fixed income, public and private equity, and real estate securities, which is described further in Note 13—Benefit Plans in Part II, Item 8 of this Annual Report.
+Added: The SUPERVALU INC.
+Added: Retirement Plan holds investments in fixed income securities, domestic equity securities, private equity securities, international equity securities and real estate securities, which is described further in Note 13—Benefit Plans in Part II, Item 8 of this Annual Report.
Changes in SUPERVALU INC.
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Retirement Plan assets can result in a related increase or decrease to our equity through Accumulated other comprehensive loss.
−Removed: As of July 31, 2021, a 10 percent unfavorable change in the total value of investments held by the SUPERVALU INC.
+Added: In fiscal 2022, as the plan administrator, we took additional steps to de-risk the investments in the plan assets as its funding level increased.
+Added: This de-risking included a further shift to fixed income investments.
+Added: Given the relationships between discount rates that impact the valuation of fixed income plan assets and the impact of discount rates in measuring plan obligations, the SUPERVALU INC.
+Added: Retirement Plan is subject to less volatility in the net plan assets.
+Added: As of July 30, 2022, a 10% unfavorable change in the total value of investments held by the SUPERVALU INC.
Retirement Plan (entirely within the return-seeking portion of the plan assets) would not have had an impact on our minimum contributions required under ERISA for fiscal 2022, but would have resulted in an unfavorable change in net periodic pension income for fiscal 2023 of $2 million and would have reduced Stockholders’ equity by $172 million on a pre-tax basis as of July 30, 2022.
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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.