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Interest Rate Risk
−Removed: We are primarily exposed to interest rate risk through our variable rate borrowings under our Amended Credit Facility, as further described in Note 11, “Credit Facility,” in the Financial Statements.
+Added: We are primarily exposed to interest rate risk through our variable rate borrowings under our Amended Credit Facility, as further described in Note 11 , “Debt,” in the Financial Statements.
Under the Amended Credit Facility, the term loan and U.S.-dollar-denominated borrowings under the revolver bear interest at a rate equal to one-month LIBOR plus a spread.
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To limit exposure to upward movements in interest rates associated with our floating-rate, LIBOR-based borrowings, we entered into interest rate swap agreements to fix the interest rates on a portion of our outstanding borrowings.
−Removed: At October 31, 2021, we had interest rate swaps with an underlying notional amount of $260.0 million and fixed interest rates of 2.84% and 2.86%.
−Removed: Based on our average borrowings, interest rates, and interest rate swaps in effect at October 31, 2021, a 100 basis point increase in LIBOR, EURIBOR, and SONIA would decrease our future earnings and cash flows by $7.1 million.
−Removed: For 2020, our market risk exposure related to interest rate fluctuations was $2.5 million.
+Added: At October 31, 2022, we had interest rate swaps with an underlying notional amount of $650.0 million and fixed interest rates ranging from 1.78% to 2.98%.
+Added: Based on our average borrowings, interest rates, and interest rate swaps in effect at October 31, 2022 and 2021, a 100 basis point increase in LIBOR, EURIBOR, and SONIA would decrease our future earnings and cash flows by $5.2 million and $7.1 million, respectively.
As actual interest rate movements over time are uncertain, our interest rate swaps pose potential interest rate risks if interest rates decrease.
−Removed: As of October 31, 2021, the fair value of our interest rate swap agreements was a liability of $4.6 million.
+Added: As of October 31, 2022, the fair value of our interest rate swap agreements was an asset of $36.9 million.
Foreign Currency Exchange Rate Risk
−Removed: We are primarily exposed to the impact of foreign exchange rate risk through our U.K.
−Removed: operations where the functional currency is the GBP.
+Added: We are primarily exposed to the impact of foreign exchange rate risk through our UK operations where the functional currency is the British pound sterling (“GBP”).
As we intend to remain permanently invested in these foreign operations, we do not utilize hedging instruments to mitigate foreign currency exchange risks.
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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.