QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: In addition to the inherent risks associated with our normal operations, we are also exposed to additional market risks.
−Removed: Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates and foreign currency exchange rates.
−Removed: Our primary exposure to market risk is interest rate risk associated with our variable rate long-term debt.
+Added: Our primary market exposures are to fluctuations in interest rates, foreign currency exchange rates, and equity market trading prices.
+Added: Interest rate risk.
+Added: We are subject to interest rate risk associated with our variable rate long-term debt.
We attempt to limit our exposure to interest rate risk by managing the mix of our long-term fixed rate borrowings and short-term borrowings under our bank credit facilities.
2 unchanged sentences
This effect would be realized in the periods subsequent to the periods when the debt matures.
−Removed: We do not enter into derivative transactions that would be considered speculative positions .
As of December 31, 2023, variable rate borrowings represented approximately 6% of our total borrowings.
−Removed: The following table provides additional information about the maturities of our debt subject to changes in interest rates:
+Added: The following table provides additional information about our gross long-term debt:
Debt maturing in Fair Value December 31, 2023
4 unchanged sentences
Variable rate $ — $ — $ 371 $ — $ — $ — $ 371 $ 371
−Removed: Average interest rate 8.0 % 6.9 % N/A N/A N/A N/A 7.0 %
−Removed: In addition to the risk associated with our variable interest rate debt, we are also exposed to risks related to changes in foreign currency exchange rates, mainly related to MGM China and to our operations at MGM Macau and MGM Cotai.
−Removed: While recent fluctuations in exchange rates have not been significant, potential changes in policy by governments or fluctuations in the economies of the United States, China, Macau or Hong Kong could cause variability in these exchange rates.
−Removed: We cannot assure you that the Hong Kong dollar will continue to be pegged to the U.S.
−Removed: dollar or the current peg rate for the Hong Kong dollar will remain at the same level.
−Removed: The possible changes to the peg of the Hong Kong dollar may result in severe fluctuations in the exchange rate thereof.
−Removed: dollar denominated debt incurred by MGM China, fluctuations in the exchange rates of the Hong Kong dollar in relation to the U.S.
−Removed: dollar could have adverse effects on our financial position and results of operations.
−Removed: As of December 31, 2022, a 1% weakening of the Hong Kong dollar (the functional currency of MGM China) to the U.S.
−Removed: dollar would result in a foreign currency transaction loss of $28 million .
+Added: Average interest rate N/A N/A 8.6 % N/A N/A N/A 8.6 %
+Added: Foreign currency risk.
+Added: Our worldwide operations are conducted in multiple foreign currencies, but we report our financial results in U.S.
+Added: We manage the foreign currency risk through normal operating activities and, when deemed appropriate, through the use of derivative instruments.
+Added: We do not enter into derivative instruments for trading or speculative purposes.
+Added: MGM China holds U.S.
+Added: dollar denominated debt, which may cause foreign currency transaction losses.
+Added: The Macau pataca is pegged to the Hong Kong dollar and the Hong Kong dollar is pegged to the U.S.
+Added: dollar, however, the current peg rates may not remain at the same level and possible changes to the peg rates may result in severe fluctuations in the exchange rate thereof.
+Added: While recent fluctuations in exchange rates have not been significant, potential changes in policy by governments or fluctuations in the economies of the United States, China, Macau or Hong Kong could cause variabilit y in these exchange rates.
+Added: As of December 31, 2023 , a 1% adverse change in the exchange rate would result in a foreign currency transaction loss of $28 million.
+Added: dollar denominated intercompany debt that is held with foreign subsidiaries, which may cause foreign currency transaction losses that do not eliminate in consolidation.
+Added: As of December 31, 2023, a 1% adverse change in the exchange rate would result in a foreign currency transaction loss of $22 million.
+Added: We hold forward foreign exchange contracts to hedge certain portions of forecasted cash flows denominated in foreign currencies.
+Added: As of December 31, 2023 , the notional amount of forward contracts was $528 million with a fair value of negative $7 million and a 10% adverse change in the exchange rate would result in a foreign currency transaction loss of approximately $53 million.
+Added: Equity price risk.
+Added: We have investments in equity securities of publicly traded companies that are subject to equity price volatility.
+Added: As of December 31, 2023 , a 10% adverse change in the quoted market prices would result in an impact to earnings of $44 million.
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.