QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
−Removed: We have not used any derivative financial instruments during the three months ended March 31, 2023, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.
−Removed: As noted previously, the Federal Reserve Board has been increasing interest rates, and rate increases may continue in the near term.
+Added: We have not used any derivative financial instruments during the six months ended June 30, 2023, including trading or speculating on changes in interest rates or commodity prices of materials used in our business.
+Added: The Federal Reserve Board has been increasing interest rates, and rate increases may continue in the near term.
We are exposed to market risk for changes in interest rates for borrowings under the 2020 Credit Agreement, which provides for a revolving credit facility and a term loan.
−Removed: Borrowings under the 2020 Credit Agreement bear interest at variable rates and, as a result of the actions referenced above, such rates have increased throughout 2022 and the first quarter of 2023.
+Added: Borrowings under the 2020 Credit Agreement bear interest at variable rates and, as a result of the actions referenced above, such rates have increased throughout 2022 and the first half of 2023.
For further information on our outstanding debt and borrowing rates, refer to Note 7 - Debt of the notes to consolidated financial statements.
−Removed: As of March 31, 2023, there were borrowings of $100.0 million outstanding under the 2020 Revolving Credit Facility and the balance of the 2020 Term Loan was $242.8 million.
+Added: As of June 30, 2023, there were no direct borrowings outstanding under the 2020 Revolving Credit Facility;
+Added: however, the balance of the 2020 Term Loan was $242.8 million.
Based on the $242.8 million of borrowings outstanding under the 2020 Credit Agreement, if overall interest rates were to increase by 100 basis points, interest expense, net of income taxes, would increase by approximately $1.8 million in the next twelve months.
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The 2020 Credit Agreement expires on March 2, 2025.
−Removed: At the end of 2021, one-week and two-month LIBOR were discontinued.
−Removed: It is expected that the remaining maturities of LIBOR will continue to be published through June 2023, after which they will be discontinued.
−Removed: We believe our exposure to market risk associated with the discontinuation of LIBOR is limited as:
−Removed: (a) our 2020 Credit Agreement contains provisions which allow for the use of alternate benchmark rates, (b) we have not historically utilized the maturities that were discontinued in 2021 for any transaction, including borrowings under our 2020 Credit Agreement, and (c) we are not exposed to any other material contracts that reference LIBOR.
−Removed: In accordance with the provisions contained in our 2020 Credit Agreement, we anticipate amending such agreement during the second quarter of 2023 to change the reference rate from LIBOR to SOFR.
−Removed: We do not anticipate that this amendment will have a material impact on our financial position and/or results of operations.
We are exposed to construction market risk and its potential related impact on accounts receivable or contract assets on uncompleted contracts.
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Therefore, we believe we take appropriate action to manage market and other risks, but there is no assurance that we will be able to reasonably identify all risks with respect to the collectability of these assets.
−Removed: See also the previous discussion of Accounts Receivable and Allowance for Credit Losses under the heading “Critical Accounting Policies and Estimates” in Item 2.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Amounts invested in our foreign operations are translated into U.S.
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Refer to Item 2.
−Removed: Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding the impact of fluctuations in commodity and material prices on our results of operations for the three months ended March 31, 2023.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations for further discussion regarding the impact of fluctuations in commodity and material prices on our results of operations.
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.