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We are exposed to changes in interest rates on all of these variable-rate debt instruments.
−Removed: The term loan A facility currently bears interest based on Adjusted Term SOFR plus an applicable margin currently 2.00% per year.
−Removed: The term loan B facility currently bears interest based on Adjusted Term SOFR subject to a 0.50% floor plus an initial applicable margin of 2.5%.
−Removed: We used a sensitivity analyses to measure our interest rate risk exposure.
+Added: The term loan A facility currently bears interest based on Adjusted Term SOFR plus an applicable margin of 2.00% per year.
+Added: The term loan B facility currently bears interest based on Adjusted Term SOFR subject to a 0.50% floor plus an applicable margin of 2.5%.
+Added: We used a sensitivity analysis to measure our interest rate risk exposure.
If the SOFR rate increases or decreases 1% from December 31, 2023 , the additional annual interest expense or savings related to the term loans would be approximately $16.5 million.
In order to mitigate and offset a portion of this interest rate risk exposure associated with these debt instruments we entered into interest rate swaps to achieve a targeted mix of fixed and variable-rate debt.
−Removed: The term loan A swap has an initial notional amount of $300.0 million, reducing to $150.0 million evenly on a quarterly basis excluding its final maturity on March 30, 2027 and we will pay a fixed rate of 1.32% and will receive the greater of 3-month USD SOFR or (0.15)%.
−Removed: The term loan B swap has an initial notional amount of $750.0 million, reducing to $46.9 million evenly on a quarterly basis excluding its final maturity on March 30, 2026 and we will pay a fixed rate of 1.17% and will receive the greater of 3-month USD SOFR or 0.35%.
+Added: The term loan A swap has an initial notional amount of $300.0 million, reducing to $150.0 million evenly on a quarterly basis through its final maturity on March 30, 2027 and we pay a fixed rate of 1.32% and receive the greater of 3-month USD SOFR or (0.15)%.
+Added: The term loan B swap has an initial notional amount of $750.0 million, reducing to $46.9 million evenly on a quarterly basis through its final maturity on March 30, 2026 and we pay a fixed rate of 1.17% and receive the greater of 3-month USD SOFR or 0.35%.
+Added: In June 2023, we entered into an additional swap with a notional amount of $300 million with a maturity date of June 30, 2028 and we pay a fixed rate of 3.8765% starting on June 30, 2023 and receive 3-month USD SOFR.
Derivatives and Hedging Activities to the Consolidated Financial Statements in Part II, Item 8 of this Annual Report on Form 10-K).
+Added: Accounts Receivable Purchase Program
+Added: Additionally, our accounts receivable purchase program with Bank of the West, which was subsequently acquired by BMO in February 2023, bears discount rates tied to SOFR.
+Added: These variable discount rates would affect the amount of factoring costs we incur, and the amount of cash we receive upon the sales of accounts receivable under this program.
+Added: A 1% change in SOFR rates on the accounts receivable sales would not have a material impact on our results of operations, (see Note 17:
+Added: Accounts Receivable Purchase Program to the Consolidated Financial Statements in Part II, Item 8.
+Added: Of this Annual Report on Form 10-K).
Foreign Exchange Risk
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Gains and losses on the hedging instruments offset gains and losses on the hedged forecasted transactions and reduce the earnings volatility related to foreign exchange, however we do not hedge our entire foreign exchange exposure and are still subject to potentially significant earnings volatility due to foreign exchange risk.
−Removed: We use foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated revenues and expenses (principally Mexican Pesos, Euros, Czech Koruna, Japanese Yen, U.S.
−Removed: Dollar, Canadian Dollar, Australian Dollar and Chinese Renminbi) that differ from the functional currency of the operating unit.
+Added: We use foreign exchange forward contracts to hedge a portion of our forecasted foreign currency-denominated revenues and expenses (principally Mexican Pesos, Euros, Japanese Yen, U.S.
+Added: Dollar, Chinese Renminbi, Canadian Dollar, and Australian Dollar) that differ from the functional currency of the operating unit.
These derivative contracts are designated and qualify as cash flow hedges (see Note 7:
4 unchanged sentences
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.