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FORM 10-K
Forward-looking information involves risks, uncertainties and other factors that could cause actual results to
differ materially from those expressed or implied in, or reasonably inferred from, such statements. Therefore,
caution should be taken not to place undue reliance on any such forward-looking statements. Much of the
information in this report that looks towards future performance of the Company is based on various factors and
important assumptions about future events that may or may not actually occur. As a result, our operations and
financial results in the future could differ materially and substantially from those we have discussed in the
forward-looking statements included in this report. We assume no obligation (and specifically disclaim any such
obligation) to publicly update or revise any forward-looking statements, whether as a result of new information,
future events or otherwise, except as required by law.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Our operations include activities in the United States and Canada. These operations expose us to a variety of
market risks, including the effects of changes in interest rates and foreign currency exchange rates. We monitor
and manage these financial exposures as an integral part of our overall risk management program. Our policies
allow for the use of specified financial instruments for hedging purposes only. Use of derivatives for speculation
purposes is prohibited.
Interest Rate Risk
We have long term debt which includes fixed-rate debt and a revolving credit facility that bears interest
based on floating London Interbank Offered Rate (“LIBOR”). As a result, we are exposed to fluctuations in
interest rates on our long term debt. The carrying value of our long term debt, excluding capital lease and other
long term obligations, was $5.4 billion and $5.1 billion as of September 25, 2015 and September 26, 2014,
respectively. The fair value of our long term debt, excluding capital lease and other long term obligations, was
$5.0 billion and $4.8 billion as of September 25, 2015 and September 26, 2014, respectively. As of
September 25, 2015, a hypothetical 10% increase or decrease in interest rates would change the fair value of our
fixed-rate debt by approximately $139 million and would not materially impact earnings or cash flows. As of
September 25, 2015, the exposure associated with our variable-rate borrowings to a hypothetical 10% increase or
decrease in interest rates would not be material to earnings, fair values or cash flows. See Note 5 to the
Consolidated Financial Statements for more information on our debt offerings and any outstanding debt.
To help manage borrowing costs, we may from time to time enter into interest rate swap transactions with
financial institutions acting as principal counterparties. As of September 25, 2015, $1.3 billion of our fixed-rate
debt was hedged by interest rate swap transactions, compared with $1.0 billion as of September 26, 2014. The
interest rate swap transactions are designated as fair value hedges, with the objective of managing the exposure to
interest rate risk by converting the interest rates on the fixed-rate notes to floating rates. As of September 25,
2015, our exposure to a hypothetical 10% increase or decrease in interest rates would not be material to earnings,
fair values or cash flows associated with the swap contracts.
Foreign Currency Risk
We have exposure to the effects of foreign currency exchange rate fluctuations on the results of our
Canadian operations. Our Canadian operations use the Canadian dollar to conduct business, but our results are
reported in U.S. dollars.
We are periodically exposed to the foreign currency rate fluctuations that affect transactions not
denominated in the functional currency of our U.S. and Canadian operations. We may from time to time use
financial derivatives, which may include forward foreign currency exchange contracts and foreign currency
options, to hedge this risk. We generally do not hedge investments in foreign subsidiaries since such investments
are long-term in nature. We hedge our exposure to fluctuations in foreign currency exchange rates through the
use of forward foreign currency exchange contracts.
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