INGLES MARKETS INC 10-K

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Company is exposed to changes in interest rates primarily as a result of its borrowing activities, which include borrowings under the Line, real estate and equipment financing, and the bonds. The Line, along with cash flow from operations, is used to maintain liquidity and fund business operations. The 2031 Notes bear a fixed rate of interest and do not expose us to interest rate risk. The nature and amount of the Company’s debt may vary as a result of future business requirements, market conditions and other factors. The definitive extent of the Company’s interest rate risk is not quantifiable or predictable because of the variability of future interest rates and business financing requirements, but the Company does not believe such risk is material. The table below presents principal amounts and related weighted average rates by year of maturity for the Company’s debt obligations at September 30, 2023 and September 24, 2022, respectively (in thousands): September 30, 2023 2024 2025 2026 2027 2028 Thereafter Total Fair ‎ Value Line of credit $ — $ — $ — $ — $ — $ — $ — $ — Average variable interest rate — % — % — % — % — % — % — % Long-term debt, variable interest rate (1)(2) $ 13,750 $ 13,750 $ 13,750 $ 13,750 $ 8,237 $ 87,833 $ 151,070 $ 151,070 Average interest rate 6.99 % 6.99 % 6.99 % 6.99 % 6.94 % 6.93 % 6.95 % Recovery Zone Bonds, variable interest rate $ 4,530 $ 4,530 $ 4,530 $ 4,530 $ 4,530 $ 31,790 $ 54,440 $ 54,440 Average year-end interest rate 5.20 % 5.20 % 5.20 % 5.20 % 5.20 % 5.20 % 5.20 % Senior Notes, fixed interest rate $ — $ — $ — $ — $ — $ 350,000 $ 350,000 $ 287,875 Average interest rate — % — % — % — % — % 4.00 % 4.00 % September 24, 2022 2023 2024 2025 2026 2027 Thereafter Total Fair ‎ Value Line of credit $ — $ — $ — $ — $ — $ — $ — $ — Average variable interest rate — % — % — % — % — % — % — % Long-term debt, variable interest rate (1)(2) $ 13,750 $ 13,750 $ 13,750 $ 13,750 $ 13,750 $ 96,083 $ 164,833 $ 164,833 Average year-end interest rate (1)(2) 4.13 % 4.13 % 4.13 % 4.13 % 4.13 % 4.06 % 4.09 % Long-term debt, fixed interest rate $ 91 $ 95 $ 4,002 $ — $ — $ — $ 4,188 $ 4,185 Average interest rate 4.40 % 4.40 % 4.40 % — % — % — % 4.40 % Recovery Zone Bonds, variable interest rate $ 4,530 $ 4,530 $ 4,530 $ 4,530 $ 4,530 $ 36,320 $ 58,970 $ 58,970 Average year-end interest rate 2.94 % 2.94 % 2.94 % 2.94 % 2.94 % 2.94 % 2.94 % Senior Notes, fixed interest rate $ — $ — $ — $ — $ — $ 350,000 $ 350,000 $ 292,250 Average interest rate — % — % — % — % — % 4.00 % 4.00 % (1) Excludes interest rate swap that fixes at 3.962% the interest rate on $24.5 million of variable interest rate debt. (2) Excludes interest rate swap that fixes at 2.998% the interest rate on $124.6 million of variable interest rate debt. The Company will occasionally utilize financial or derivative instruments for interest rate risk management but has typically not utilized highly leveraged financial instruments. On the basis of the fair value of the Company’s market sensitive instruments at September 30, 2023, the Company does not consider the potential near-term losses in future earnings, fair values and cash flows from reasonably possible near-term changes in interest rates and exchange rates to be material.