Quantitative and Qualitative Disclosures About Market Risk.
−Removed: The Company is subject to interest rate risk on its variable rate debt, including the 2021 Revolving Credit Facility and the 2021 Term Loan Facility.
−Removed: Assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of October 1, 2021, interest expense for the next 12 months would increase by approximately $0.7 million.
−Removed: This amount was determined by calculating the effect of the hypothetical interest rate on the Company’s variable rate debt.
−Removed: This calculated, hypothetical increase in interest expense for the following 12 months may be different from the actual increase in interest expense from a 1% increase in interest rates due to varying interest rate reset dates on the Company’s variable rate debt.
+Added: The Company is subject to interest rate risk on its revolving credit facility and did not have any outstanding borrowings on its revolving credit facility as of April 1, 2022.
+Added: As such, assuming no changes in the Company’s capital structure, if market interest rates average 1% more over the next 12 months than the interest rates as of April 1, 2022, there would be no change to interest expense for the next 12 months.
The Company’s acquisition related contingent consideration liability, which is adjusted to fair value each reporting period, is also impacted by changes in interest rates.
−Removed: The risk-free interest rate used to estimate the Company’s WACC is a component of the discount rate used to calculate the present value of future cash flows due under the Company’s comprehensive beverage agreements.
+Added: The risk-free interest rate used to estimate the Company’s WACC is a component of the discount rate used to calculate the present value of expected future acquisition related sub-bottling payments due under the Company’s comprehensive beverage agreements.
As a result, any changes in the underlying risk-free interest rate could result in material changes to the fair value of the acquisition related contingent consideration liability and could materially impact the amount of non-cash expense (or income) recorded each reporting period.
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The Company may enter into commodity derivative instruments to manage or reduce market risk.
−Removed: The Company does not enter into commodity derivative instruments for trading or speculative purposes.
+Added: The Company does not use commodity derivative instruments for trading or speculative purposes.
The Company is also subject to commodity price risk arising from price movements for certain commodities included as part of its raw materials.
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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.