QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices.
−Removed: We are exposed to changes in interest rates primarily from long-term variable-rate debt arrangements.
−Removed: On April 16, 2021, a subsidiary of the Company entered into a foreign exchange contract to hedge the risk of appreciation of the GBP-denominated purchase price related to Gamesys pursuant to which such subsidiary can purchase approximately £900 million at a contracted exchange rate.
−Removed: On April 16, 2021, a subsidiary of the Company entered into two foreign exchange contracts to hedge the risk of appreciation of both the GBP-denominated and Euro-denominated debt held by Gamesys which would be paid off at closing of the Gamesys acquisition pursuant to which such subsidiary can purchase £200 million and €336 million, at a contracted exchange rate, respectively.
−Removed: The total premium paid by the subsidiary of the Company on these contracts was $22.6 million.
−Removed: On August 20, 2021, a subsidiary of the Company modified the above mentioned foreign exchange forward contracts, decreasing the notional amount of the GBP-denominated forward purchase commitments by £746 million to £354 million, collectively.
−Removed: The Company received $1.7 million upon settlement of the modification, which decreased the remaining fair value of the contracts.
+Added: Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.
+Added: We are exposed to changes in interest rates primarily from variable rate long-term debt arrangements and foreign currency risk attributable to our operations outside of the US.
+Added: Inflation generally affects us by increasing our cost of labor.
+Added: Bally’s does not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2022 and 2021.
+Added: Interest Rate Risk
+Added: As of March 31, 2022, interest on borrowings under our credit facility was subject to fluctuation based on changes in short-term interest rates.
+Added: On March 31, 2022, we had $2.05 billion of variable rate debt outstanding under our Term Loan and Revolving Credit Facilities and $1.50 billion of unsecured senior notes.
+Added: Based upon a sensitivity analysis of our debt levels on March 31, 2022, a hypothetical increase of 1% in the effective interest rate would cause an increase in interest expense of approximately $19.5 million over the next 12 months while a decrease of 1% in the effective interest rate, not to exceed the interest rate floor, would cause a decrease in interest expense of approximately $0.5 million over the same period.
+Added: We evaluate our exposure to market risk by monitoring interest rates in the marketplace and we have, on occasion, utilized derivative financial instruments to help manage this risk.
+Added: We have not historically utilized derivative financial instruments for trading purposes.
+Added: We do not believe that fluctuations in interest rates had a material effect on our business, financial condition or results of operations during the three months ended March 31, 2022 and 2021.
+Added: Foreign Currency Risk
+Added: We are exposed to fluctuations in currency exchange rates as a result of our net investments and operations in countries other than the US.
+Added: A vast majority of our revenues are from the UK market and are conducted in GBP and are therefore susceptible to any movements in exchange rates between the GBP and USD.
+Added: Foreign currency transaction gains for the three months ended March 31, 2022 were $0.2 million.
+Added: Foreign currency transaction losses for the three months ended March 31, 2021 were $0.5 million.
+Added: Movements in currency exchange rates could impact the translation of assets and liabilities of these foreign operations which are translated at the exchange rate in effect on the balance sheet date.
+Added: We have not historically used operational hedges or forward currency exchange rate contracts to manage the impact of currency exchange rate fluctuations on earnings and cash flows.
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.