Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is exposed to the impact of market fluctuations associated with commodity prices and interest rates. The Company has policies and procedures to assist in controlling these market risks and from time to time has utilized derivatives to manage a portion of its risk.
Interest rate risk
The Company uses fixed and variable rate long-term debt to partially finance capital expenditures, including acquisitions, and mandatory debt retirements. These debt agreements expose the Company to market risk related to changes in interest rates. The Company manages this risk by taking advantage of market conditions when timing the placement of long-term financing. The Company from time to time has utilized interest rate swap agreements to manage a portion of the Company's interest rate risk and may take advantage of such agreements in the future to minimize such risk. For additional information on the Company's long-term debt, see Item 8 - Notes 8 and 9. At December 31, 2021 and 2020, the Company had no outstanding interest rate hedges.
The following table shows the amount of long-term debt, which excludes unamortized debt issuance costs and discount, and related weighted average interest rates, both by expected maturity dates, as of December 31, 2021.
2022 2023 2024 2025 2026 Thereafter Total Fair
Value
(Dollars in millions)
Long-term debt:
Fixed rate $ 148.1 $ 77.9 $ 60.8 $ 177.8 $ 140.8 $ 1,564.9 $ 2,170.3 $ 2,413.2
Weighted average interest rate
4.5 % 3.7 % 4.2 % 4.0 % 5.7 % 4.3 % 4.4 %
Variable rate $ — $ — $ 577.8 $ — $ — $ — $ 577.8 $ 577.8
Weighted average interest rate
— % — % .7 % — % — % — % .7 %
Commodity price risk
The Company enters into commodity price derivative contracts to minimize the price volatility associated with natural gas costs for its customers at its natural gas distribution segment. At December 31, 2021 and 2020, these contracts were not material. For more information on the Company's derivatives, see Item 8 - Note 2.
62 MDU Resources Group, Inc. Form 10-K
Index
Part II
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.