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Fixed Interest Rate Debt
−Removed: Except as described below, all of our outstanding debt obligations (maturing at various times through May 2029) have fixed interest rates which limit the risk of fluctuating interest rates.
+Added: Except as described below, all of our outstanding debt obligations (maturing at various times through February 2031) have fixed interest rates which limit the risk of fluctuating interest rates.
However, interest rate fluctuations may affect the fair value of our fixed rate debt instruments.
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If interest rates at December 31, 2023 had been 1.0% lower, the fair value of those debt instruments on that date would have increased by approximately $58.5 million.
−Removed: Additionally, we consider our $100 million Term Loan A, outstanding as of December 31, 2022 to be fixed rate debt as the rate is effectively fixed by an interest rate swap agreement.
−Removed: Also, we consider our $150 million debt outstanding as of December 31, 2022, related to Term Loan B and Term Loan C, to be fixed rate debt through November 30, 2022 as the rate was effectively fixed by an interest rate swap agreement until such date, before it became variable rate debt from December 1, 2022 to December 31, 2022.
+Added: Additionally, we consider our $325 million debt outstanding as of December 31, 2023, related to Term Loan A, Term Loan B and Term Loan C, to be fixed rate debt as the rate is effectively fixed by interest rate swap agreements.
Variable Interest Rate Debt
−Removed: Generally, we believe that our primary interest rate risk is due to fluctuations in interest rates on our variable rate debt.
−Removed: At December 31, 2022, we had $250 million of variable rate debt outstanding, of which $100 million are subject to interest rate swaps as described above.
−Removed: We have entered into term loans that have interest rates that contain both fixed and variable components.
+Added: At December 31, 2023, we had $325.0 million of variable rate debt outstanding, all of which is subject to interest rate swaps as described above.
+Added: We have historically entered into forward starting interest rate swaps in order to economically hedge against the risk of rising interest rates that would affect our interest expense related to our future anticipated debt issuances as part of our overall borrowing program.
See the discussion under Note 8 to the accompanying consolidated financial statements for details related to the interest rate swaps and for a discussion on how we value derivative financial instruments.
−Removed: Based upon this amount of variable rate debt and the specific terms, if market interest rates increased 1.0%, our annual interest expense would increase by approximately $0.2 million with a corresponding decrease in our net income and cash flows for the year.
−Removed: Conversely, if market rates decreased 1.0%, our annual interest expense would decrease by approximately $0.2 million with a corresponding increase in our net income and cash flows for the year.
+Added: Based upon this amount of variable rate debt and the specific terms, if market interest rates increased or decreased by 1.0%, our annual interest expense would not change, nor would there be a change in our net income and cash flows for the year, since this variable rate debt is effectively fixed by interest rate swap agreements.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
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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.