FRP HOLDINGS, INC. 10-K

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION. Information required in response to Item 7 is included under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operation" on pages 10 through 21 of the Company’s 2022 Annual Report to Shareholders, and such information is incorporated herein by reference. 17 Item 7.A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. Interest Rate Risk - We are exposed to the impact of interest rate changes through our variable-rate borrowings under our Credit Agreement with Wells Fargo. Under the Wells Fargo Credit Agreement, the applicable margin for borrowings at December 31, 2022 was Daily 1-Month LIBOR plus 1.0%. The applicable margin for such borrowings will be increased in the event that our debt to capitalization ratio as calculated under the Wells Fargo Credit Agreement Facility exceeds a target level. The Company did not have any variable rate debt outstanding at December 31, 2022, so a sensitivity analysis was not performed to determine the impact of hypothetical changes in interest rates on the Company’s results of operations and cash flows. For our debt instruments with variable interest rates, changes in interest rates affect the amount of interest expense incurred. The following table presents the principal cash flow payments associated with our outstanding debt by year, weighted average interest rates on debt outstanding each year-end, and fair value of total debt as of December 31, 2022 (dollars in thousands): 2023 2024 2025 2026 2027 Thereafter Total Fair Value Fixed rate debt $ — $ — $ — $ — $ — $ 180,070 $ 180,070 $ 142,785 Average interest for fixed rate debt 3.03 % 3.03 % 3.03 % 3.03 % 3.03 % 3.03 % 3.03 %