Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following table provides information as of December 31, 2024 about our market risk exposure associated with changing interest rates. For long-term debt obligations, the table presents principal cash flows by maturity date and average interest rates related to outstanding obligations. For more information, see Item 7 of this Annual Report under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” and note 8 to our consolidated financial statements included in this Annual Report.
Long-Term Debt 2025 2026 2027 2028 2029 Thereafter Total Fair Value
Fixed Rate Debt (a) $ 3,693.0 $ 3,319.3 $ 4,466.7 $ 6,027.4 $ 3,677.0 $ 14,572.9 $ 35,756.3 $ 33,562.4
Weighted-Average Interest Rate (a) 2.69 % 2.59 % 2.57 % 4.06 % 3.45 % 3.56 %
Variable Rate Debt (b) $ — $ — $ 1,000.0 $ — $ — $ — $ 1,000.0 $ 1,000.0
Weighted-Average Interest Rate (b)(c) — % — % 5.56 % — % — % — %
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(a) Fixed rate debt consisted of: Securities issued in the Trust Securitizations; Securities issued in the 2015 Securitization; our senior unsecured notes (see note 8 to our consolidated financial statements included in this Annual Report for a detailed description of all such senior unsecured notes); and other debt including finance leases.
(b) Variable rate debt consisted of the 2021 Term Loan, which matures on January 31, 2027.
(c) Based on rates effective as of December 31, 2024.
Interest Rate Risk
Changes in interest rates can cause interest charges to fluctuate on our variable rate debt. Variable rate debt as of December 31, 2024 consisted of $1.0 billion under the 2021 Term Loan. A 10% increase in current interest rates would result in an additional $5.6 million of interest expense for the year ended December 31, 2024.
Foreign Currency Risk
We are exposed to market risk from changes in foreign currency exchange rates primarily in connection with our foreign subsidiaries and joint ventures internationally. Any transaction denominated in a currency other than the U.S. Dollar is reported in U.S. Dollars at the applicable exchange rate. All assets and liabilities are translated into U.S. Dollars at exchange rates in effect at the end of the applicable fiscal reporting period and all revenues and expenses are translated at average rates for the period. The cumulative translation effect is included in equity as a component of Accumulated other comprehensive loss. We may enter into additional foreign currency financial instruments in anticipation of future transactions to minimize the impact of foreign currency fluctuations. For the year ended December 31, 2024, 32% of our revenues and 39% of our total operating expenses were denominated in foreign currencies.
As of December 31, 2024, we have incurred intercompany debt that is not considered to be permanently reinvested, and similar unaffiliated balances that were denominated in a currency other than the functional currency of the subsidiary in which it is
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recorded. As this debt had not been designated as being a long-term investment in nature, any changes in the foreign currency exchange rates will result in unrealized gains or losses, which will be included in our determination of net income. An adverse change of 10% in the underlying exchange rates of our unsettled intercompany debt and similar unaffiliated balances would result in $13.4 million of unrealized losses that would be included in Other expense in our consolidated statements of operations for the year ended December 31, 2024. As of December 31, 2024, we have 7.5 billion EUR (approximately $7.8 billion) denominated debt outstanding. An adverse change of 10% in the underlying exchange rates of our outstanding EUR debt would result in $0.9 billion of foreign currency losses that would be included in Other expense in our consolidated statements of operations for the year ended December 31, 2024.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 15 (a).
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.