Life Time Group Holdings, Inc. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We are exposed to market risks in the ordinary course of our business that include changes in interest rates and changes in foreign currency exchange rates. Information relating to quantitative and qualitative disclosures about these market risks is set forth below. Interest rate risk Our cash consists primarily of an interest-bearing account at a large United States bank with limited interest rate risk. At September 30, 2024, we held no investments in marketable securities. In connection with the refinancing of our former Term Loan Facility in May 2023, we converted the Term Loan Facility and the Revolving Credit Facility from LIBOR to SOFR. We incur interest at variable rates under our Revolving Credit Facility and we incurred interest at variable rates under our former Term Loan Facility until we paid it off in full on September 20, 2024. At September 30, 2024, there were $210.0 million of outstanding borrowings under the Revolving Credit Facility and $31.2 million of outstanding letters of credit, resulting in total revolver availability of $408.8 million, which was available following the amendment to our senior secured credit agreement in September 2024 at intervals ranging from 30 to 180 days at interest rates of SOFR plus 2.50% or base rate plus 1.50%. Before we paid in full the aggregate principal balance outstanding under our former Term Loan Facility, the variable rate s thereunder were SOFR plus the applicable credit adjustment spread plus 4.00% or base rate plus 3.00% . During the nine months ended September 30, 2024 , we also amended the credit agreement governing the Revolving Credit Facility to replace the Canadian Dollar Offered Rate (CDOR), which ceased at the end of June 2024, with the Canadian Overnight Repo Rate Average (CORRA). We do not have any outstanding borrowings in Canadian dollars under the Revolving Credit Facility. 30 Table of Contents Assuming that the Revolving Credit Facility is fully drawn, each one percentage point change in interest rates would result in an approximately $6.5 million change in annual interest expense on the indebtedness under the Credit Facilities as of September 30, 2024. Foreign currency exchange risk We operate primarily in the United States with three centers operating in Canada. Given our limited operations outside of the United States, fluctuations due to changes in foreign currency exchange rates would not have a material impact on our business.