Item 3. Quantitative and Qualitative Disclosures About Market Risk
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Our operations expose us to a variety of market risks, including the effects of changes in interest rates as we have both fixed-rate and variable-rate debt. 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.
There were no material changes in our interest rate risk exposure to that disclosed in our 2024 Annual Report, other than as described below.
As a result of issuing the First Lien Term Loan B-2 due 2032 and the partial redemption of the First Lien Notes due 2026, a larger portion of our debt is now subject to variable interest rates. As of March 31, 2025, the principal balance of our debt, excluding finance leases, that was subject to a variable-rate was approximately 8% (including the impact of interest rate swaps) and approximately 38% (excluding the impact of interest rate swaps) of the total carrying amount of our debt.
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