At May 9, 2026, the only material change to our instruments and positions that are sensitive to market risk since the disclosures in our Annual Report on Form 10-K for the year ended August 30, 2025, were the $609.4 million increase in commercial paper and repayment of our outstanding $400 million 3.125% Senior Notes due April 2026.
The fair value of the Company’s debt was estimated at $9.0 billion and $8.9 billion as of May 9, 2026, and August 30, 2025, respectively, based on the quoted market prices for the same or similar issues or on the current rates available to the Company for debt of the same terms (Level 2). Such fair value is greater than the carrying value of debt by $32.7 million and $94.4 million at May 9, 2026, and August 30, 2025, respectively, and reflects their face amount, adjusted for any unamortized debt issuance costs and discounts. We had $1.4 billion and $748.6 million of variable rate debt outstanding at May 9, 2026, and at August 30, 2025, respectively. At these borrowing levels for variable rate debt, a one percentage point increase in interest rates would have an unfavorable annual impact on our pre-tax earnings and cash flows of $13.6 million in fiscal 2026. The primary interest rate exposure is based on the federal funds rate. We had outstanding fixed rate debt of $7.7 billion, net of unamortized debt issuance costs of $41.5 million at May 9, 2026, and $8.1 billion, net of unamortized debt issuance costs of $48.8 million at August 30, 2025. A one percentage point increase in interest rates would have reduced the fair value of our fixed rate debt by $284.0 million at May 9, 2026.
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