QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We maintain an investment portfolio of various holdings, types and maturities.
−Removed: We purchase instruments that meet high credit quality standards, as specified in our investment policy.
−Removed: Our investment policy also limits the amount of credit exposure to any one issue, issuer or type of instrument.
−Removed: The portfolio and accompanying cash balances are targeted to an average maturity of no more than one year from the date the purchase is settled.
−Removed: On an ongoing basis we monitor credit ratings, financial condition and other factors that could affect the carrying amount of our investment portfolio.
−Removed: Marketable securities, consisting of U.S.
−Removed: government and agency obligations, are classified as held-to-maturity and are stated at cost, adjusted for amortization of premiums and discounts to maturity.
−Removed: Financial instruments, which potentially subject us to concentrations of credit risk, consist primarily of cash and cash equivalents, marketable securities, and accounts receivable.
−Removed: We maintain our cash and cash equivalents and our marketable securities with several financial institutions.
−Removed: Given the short-term nature of certain investments, the related income is subject to the general level of interest rates in the United States at the time of maturity and reinvestment.
−Removed: We manage investment interest rate market risk primarily by managing portfolio maturity.
−Removed: Operating in international markets involves exposure to possible volatile movements in currency exchange rates.
−Removed: Our Materials Segment has an insignificant amount of operations in Canada and we also have affiliates that operate in Latin America (see Note 10 of “Notes to the Consolidated Financial Statements” for further information on our affiliates).
−Removed: As of December 31, 2024, we do not have any outstanding foreign currency option contracts.
−Removed: If the volume of our international operations increases and foreign currency exchange rates change, the impact to our consolidated statements of operations could be significant and may affect year-to-year comparability of operating results.
−Removed: The impact from foreign currency transactions during 2024, 2023 and 2022 was immaterial.
−Removed: We may borrow on the Revolver, at our option, at either (a) the SOFR term rate plus a credit adjustment spread plus applicable margin ranging from 1.0% to 2.0%, or (b) a base rate plus an applicable margin ranging from 0.0% to 1.0%.
−Removed: The applicable margin is based on our Consolidated Leverage Ratio (as defined in our Credit Agreement), calculated quarterly.
−Removed: As of December 31, 2024, there was nothing drawn on the Revolver.
−Removed: See Note 14 of “Notes to the Consolidated Financial Statements” for further discussion on the 3.25 % Convertible Notes, 3.75% Convertible Notes and Credit Agreement.
−Removed: The table below presents principal amounts due by year and related weighted average interest rates for our cash and cash equivalents, held-to-maturity investments and significant debt obligations, excluding debt issuance costs, as of December 31, 2024 (dollars in thousands):
−Removed: 2025 2026 2027 2028 2029 Thereafter Total
−Removed: Cash, cash equivalents, held-to-maturity investments $ 585,641 $ — $ — $ — $ — $ — $ 585,641
−Removed: Weighted average interest rate 4.34 % — % — % — % — % — % 4.34 %
−Removed: 3.75% Convertible Notes $ — $ — $ — $ 373,750 $ — $ — $ 373,750
−Removed: Coupon rate 3.75 % 3.75 % 3.75 % 3.75 % — % — % 3.75 %
−Removed: 3.25% Convertible Notes $ — $ — $ — $ — $ — $ 373,750 $ 373,750
−Removed: Coupon rate 3.25 % 3.25 % 3.25 % 3.25 % 3.25 % 3.25 % 3.25 %
−Removed: The estimated fair value of our cash and cash equivalents approximates the principal amounts reflected above based on the generally short maturities of these financial instruments.
−Removed: The fair value of the 3.75 % Convertible Notes was approximately $738.7 million and $475.6 million as of December 31, 2024 and 2023, respectively.
−Removed: The fair value of 3.25 % Convertible Notes was approximately $491.6 million as of December 31, 2024.
+Added: Our primary exposure to market risk relates to unfavorable changes in interest rates on our variable-rate debt.
+Added: Fluctuations in interest rates impact the interest expense on our variable-rate debt.
+Added: We may borrow under the Credit Agreement, at our option, at either (a) term SOFR plus an applicable margin initially and through the delivery of the March 31, 2026 compliance certificate of 1.75% and then ranging from 1.25% to 2.00%, or (b) a base rate plus an applicable margin initially and through the delivery of the March 31, 2026 compliance certificate of 0.75% and then ranging from 0.25% to 1.00%.
+Added: As of December 31, 2025, there was nothing drawn on the Revolver and $600 million outstanding on the Initial Term Loan.
+Added: Additionally, in September 2025, we entered into two interest rate swap agreements with a combined notional amount of $350 million.
+Added: See Note 8 of “Notes to the Consolidated Financial Statements.” These interest rate swap agreements, which are effective January 2026, convert the interest rate on $350 million drawn under our Initial Term Loan from a variable rate plus an applicable margin to a fixed rate of 3.218% plus the same applicable margin.
+Added: During the term of these interest rate swap agreements, we will be required to make monthly payments to the counterparties when one-month SOFR is below the fixed rate of 3.218% in an amount equal to the difference between the then current one-month SOFR and the fixed rate multiplied by the notional amount and adjusted for the number of days in the month divided by 360, while the counterparties are obligated to make monthly payments to us when one-month SOFR exceeds the fixed rate in an amount equal to the difference between the then current one-month SOFR and the fixed rate multiplied by the notional amount and adjusted for the number of days in the month divided by 360.
+Added: We may be exposed to credit risk in the derivative financial instruments we use.
+Added: Credit risk is the failure of the counterparties to perform under the terms of the derivative financial instruments.
+Added: If the fair value of a derivative financial instrument is positive, the counterparties will owe us, which creates credit risk for us.
+Added: If the fair value of a derivative financial instrument is negative, we will owe the counterparties and, therefore, do not have credit risk.
+Added: We seek to minimize the credit risk in derivative financial instruments by entering into transactions with major financial institutions that have high credit ratings.
+Added: We have historically presented a quantitative measure of our interest rate risk in a tabular disclosure of our interest sensitive assets and liabilities.
+Added: Beginning with this report, we have revised our interest rate risk disclosure alternative from the tabular format to a sensitivity analysis, which we believe is a more commonly used and easily understood disclosure alternative.
+Added: There was no sensitivity analysis performed for 2024, as we had no outstanding variable rate debt as of December 31, 2024.
+Added: As of the hedge effectiveness date in January 2026, $250 million of the $600 million outstanding Initial Term Loan will not be covered by the interest rate swap agreements.
+Added: If interest rates were to change by 1.0% and our variable rate indebtedness
+Added: were to remain unchanged, interest expense would increase or decrease by approximately $2.3 million for the next twelve months.
+Added: See Note 14 of “Notes to the Consolidated Financial Statements” for further discussion on the Credit Agreement.
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.