Brookdale Senior Living Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are subject to market risks from changes in interest rates charged on our credit facilities and other variable-rate indebtedness. The impact on earnings and the value of our long-term debt and lease payments are subject to change as a result of movements in market rates and prices. As of December 31, 2020, we had approximately $2.4 billion of long-term fixed rate debt and $1.5 billion of long-term variable rate debt. As of December 31, 2020, our total fixed-rate debt and variable-rate debt outstanding had a weighted average interest rate of 3.59%. In the normal course of business, we enter into certain interest rate cap agreements with major financial institutions to manage our risk above certain interest rates on variable rate debt. As of December 31, 2020, $2.4 billion, or 61.2%, of our long-term debt has fixed rates. As of December 31, 2020, $1.4 billion, or 35.5%, of our long-term debt is variable rate debt subject to interest rate cap agreements. The remaining $128.0 million, or 3.3%, of our long-term debt is variable rate debt not subject to any interest rate cap agreements. Our outstanding variable rate debt is indexed to LIBOR, and accordingly our annual interest expense related to variable rate debt is directly affected by movements in LIBOR. After consideration of hedging instruments currently in place, increases in LIBOR of 100, 200 and 500 basis points would have resulted in additional annual interest 80 expense of $15.5 million, $31.0 million and $66.1 million, respectively. Certain of our variable debt instruments include springing provisions that obligate us to acquire additional interest rate caps in the event that LIBOR increases above certain levels, and the implementation of those provisions would result in additional mitigation of interest costs. 81