Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Our exposure to market risk from changes in interest rates relates primarily to our debt instruments. Our borrowings include both fixed and variable interest rate debt. At December 31, 2024, we had (i) $237.5 million in outstanding borrowings under our Term Loan, $25.0 million in outstanding borrowings under the Revolving Credit Facility, $1.4 million in letters of credit issued under the Revolving Credit Facility and $723.6 million available under the Credit Facility, (ii) an aggregate principal amount of $400 million of Senior Notes due 2028 and (iii) an aggregate principal amount of $400 million of Senior Notes due 2029. See the heading "Liquidity and Capital Resources" in Item 7 of this Report for additional information on our debt instruments.
We also have exposure from changes in interest rates related to our cash equivalents and our investment portfolio, which consists primarily of corporate bonds and mutual funds. We are averse to principal loss and seek to ensure the safety and preservation of our invested funds by limiting default risk, market risk and reinvestment risk.
We have operations in foreign locations, and, as a result, our financial results could be significantly affected by factors such as changes in foreign currency exchange ("FX") rates or weak economic conditions in those foreign markets. In order to manage the operational risks associated with FX rate fluctuations, we attempt to hedge those risks with FX derivative instruments. Historically, we have hedged those risks with FX forward contracts. At December 31, 2024, the fair values of our outstanding derivative instruments were not significant. We do not enter into speculative derivative positions.
Interest Rate Sensitivity
The following tables provide information about our financial instruments that are sensitive to changes in interest rates. The tables present principal cash flows and related weighted-average interest rates by expected maturity dates.
Principal Amount by Expected Maturity
(In thousands)
At December 31, 2024: Fair Value at
Years Ending December 31, December 31,
2025 2026 2027 2028 2029 Thereafter Total 2024
Investments
— — $ 1,479 $ — — $ 7,700 $ 9,179 $ 10,609
Average Interest Rate
— — — — — —
Note Receivable $ 6,467 — — — — — $ 6,467 $ 6,367
Average Interest Rate
6.80 % — — — — —
Fixed Interest Rate Debt
— — — $ 400,000 $ 400,000 $ — $ 800,000 $ 746,529
Average Interest Rate
— — — 4.13 % 4.13 % —
Variable Interest Rate Debt
$ 12,500 $ 12,500 $ 237,500 — — — $ 262,500 $ 262,479
Average Interest Rate
5.39 % 5.27 % 5.28 % — — —
At December 31, 2023: Fair Value at
Years Ending December 31, December 31,
2024 2025 2026 2027 2028 Thereafter Total 2023
Investments — — — $ 1,479 — $ 7,002 $ 8,481 $ 9,496
Average Interest Rate — — — 9.57 % — —
Note Receivable $ 396 $ 7,022 — — — — $ 7,418 $ 7,300
Average Interest Rate 6.80 % 6.80 % — — — —
Fixed Interest Rate Debt
— — — — $ 400,000 $ 400,000 $ 800,000 $ 734,667
Average Interest Rate
— — — — 4.13 % 4.13%
Variable Interest Rate Debt
$ 6,250 $ 12,500 $ 12,500 $ 387,500 — — $ 418,750 $ 424,751
Average Interest Rate
6.24% 4.98% 4.73% 4.75% — —
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Exchange Rate Sensitivity
The following table provides information about our FX forward contracts outstanding at December 31, 2024 and presents such information in U.S. dollar equivalents. The table presents notional amounts and related weighted-average FX rates by expected (contractual) maturity dates and constitutes a forward-looking statement. These notional amounts generally are used to calculate the contractual payments to be exchanged under the contract. The average contractual FX rates are expressed using market convention, which is dependent on the currencies being bought and sold under the forward contract.
Forward Contracts to Purchase Foreign Currencies in U.S. Dollars (in thousands)
Year Ending Fair Value at Average Contractual
Foreign Currency December 31, 2025 December 31, 2024 Exchange Rate
Canadian dollar $ 6,786 $ (290) 1.3767
U.S. dollar (selling Canadian dollar) $ 409,848 $ 8,371 1.4055
Euro (selling Canadian dollar) $ 19,175 $ (38) 1.4957
Year Ending Fair Value at Average Contractual
Foreign Currency December 31, 2026 December 31, 2024 Exchange Rate
U.S. dollar (selling Canadian dollar) $ 4,318 $ 179 1.3502
Euro (selling Canadian dollar) $ 1,720 $ (25) 1.5216
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