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Interest Rate Risk
−Removed: During the three months ended March 31, 2025, the Company borrowed $410.0 million on its revolving credit facility, resulting in $410.0 million of outstanding variable rate debt as of March 31, 2025.
+Added: During the six months ended June 30, 2025, the Company borrowed $410.0 million and subsequently paid down $410.0 million on its revolving credit facility, resulting in no outstanding variable rate debt as of June 30, 2025 and therefore no exposure to interest rate risk on its current borrowings.
We may incur additional variable rate debt in the future, including additional amounts that we may borrow under our revolving credit facility.
−Removed: As of March 31, 2025, assuming no change in the outstanding balance of our existing variable rate debt, which bears interest at the Secured Overnight Financing Rate (“SOFR”) plus a 0.10% spread adjustment and a margin of 0.85%, a hypothetical 100 basis point increase or decrease in the SOFR would increase or decrease our projected annual interest expense by approximately $4.1 million.
−Removed: This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment.
−Removed: Further, in the event of a change of such magnitude, we would consider taking actions to further mitigate our exposure to the change.
−Removed: However, because of the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our capital structure.
Treasury lock agreements are used from time to time to manage the potential change in interest rates in anticipation of the possible issuance of fixed rate debt.
We do not hold or issue these derivative contracts for trading or speculative purposes.
−Removed: As further described in Note 13.
−Removed: Fair Value to our condensed consolidated financial statements in this report, during the three months ended March 31, 2025, in anticipation of a potential debt issuance and in order to hedge interest rate risk, the Company entered into two treasury lock agreements with an aggregate notional amount of $200.0 million based on the 10-year treasury note rates at the time.
−Removed: The treasury locks were designated as cash flow hedging instruments and had an aggregate fair value liability of $1.5 million recognized as an unrealized loss in the condensed consolidated financial statements as of March 31, 2025.
−Removed: If the 10-year treasury note rate were to decrease, there would be a corresponding increase in unrealized loss on our treasury locks.
−Removed: The treasury locks will be settled upon the issuance of debt and any gain or loss recorded in accumulated other comprehensive income upon settlement will be reclassified into earnings as either a reduction of or increase to interest expense over the term of the debt.
There have been no other material changes to our market risk from those disclosed in section Part II, “Item 7A.
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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.