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These risks include primarily interest rate, foreign exchange, and inflation risks.
−Removed: The risks below may be further exacerbated by the effects of the COVID-19 pandemic on global macroeconomic and market conditions.
+Added: The risks below may be further exacerbated by the effects of certain global macroeconomic challenges and market conditions.
Interest Rate Fluctuation Risk
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We do not have economic interest rate expense exposure on our Convertible Senior Notes due to their fixed interest rate nature.
−Removed: The amount paid upon redemption is not based on changes in any index or changing market rates.
+Added: The amount paid upon redemption or maturity, before considering any potential additional amount owed due to increases in our underlying share price above the conversion price, is not based on changes in any interest rate index or underlying market interest rates.
It is fixed at 100% of the principal amount of the Convertible Senior Notes plus unpaid interest.
−Removed: Since the Convertible Senior Notes bear fixed rate coupon, we are not exposed to interest rate risk on those notes, however, the fair value of those notes will change as market interest rates change.
−Removed: We have a Term Loan B Facility under the Credit Agreement which bears a floating rate of interest that resets periodically, subject to a 0.75% floor on that floating rate, according to the terms of the agreement.
−Removed: Our financial results have been exposed to changes in the underlying base interest rate on that debt because the underlying base interest rate has now reset above the floor on such underlying interest rate.
−Removed: The fair value of Term Loan B Facility may fluctuate when the underlying base interest rate fluctuates below the floor or when the rate of return demanded by our loan investors increases relative to when the loans were issued.
−Removed: As of December 31, 2022, the Company had no outstanding borrowings under the Revolving Credit Facility.
−Removed: Should the company borrow under the Revolving Credit Facility at any point in the future, any associated borrowings would have a floating underlying base rate of interest that would expose the Company to interest rate risk.
+Added: Since the Convertible Senior Notes bear a fixed interest rate, we are not exposed to interest rate risk on those notes, however, the fair value of those notes will change as market interest rates change.
+Added: As of December 31, 2023, we were party to our Prior Term Loan B Facility, which bore interest rate at a floating interest rate that reset periodically, subject to a 0.75% floor (the "SOFR Floor").
+Added: Interest expense has been impacted by floating interest rates as a result of underlying interest rates on our Prior Term Loan B Facility moving above this floor since the second quarter of 2022.
+Added: As of December 31, 2023, the Company had no outstanding borrowings under the Prior Revolving Credit Facility.
We do not believe that an increase or decrease in interest rates of 100 basis points would have a material effect on our operating results or financial condition.
−Removed: The annualized impact to interest expense for each 100 basis points increase above the LIBOR Floor on our Term Loan B Facility is approximately $3.5 million.
−Removed: The actual impact to our financial results of the same increase in interest rates is expected to be lower than $3.5 million depending on the timing and magnitude of such rate changes relative to our LIBOR Floor, and will be partially offset by higher interest income earned on our cash and cash equivalent balances over the same period.
+Added: As of the end of December 31, 2023, the annualized impact to interest expense for each 100 basis points increase above the SOFR Floor on our Prior Term Loan B Facility is approximately $3.5 million.
+Added: The actual impact to our financial results of the same increase in interest rates is expected to be lower depending on the timing and magnitude of such rate changes relative to our SOFR Floor, and will be partially offset by higher interest income earned on our cash and cash equivalent balances over the same period.
In future periods, we will continue to evaluate our investment opportunities and policy relative to our overall objectives.
−Removed: With regard to all debt currently outstanding, the company is potentially exposed to refinancing risk, should the Company seek to refinance existing debt or raise new debt in the future, and the prevailing cost or terms for that debt differs from terms in our current debt agreements.
+Added: On February 6, 2024, we refinanced the Prior Term Loan B Facility with a $365.0 million New Term Loan B Facility.
+Added: We do not believe that an increase or decrease in interest rates of 100 basis points on the New Term Loan B Facility will have a material effect on our operating results or financial condition as compared to the annualized impact on our Prior Term Loan B Facility, which is discussed above.
+Added: With regard to all debt currently outstanding as of December 31, 2023 and to debt outstanding under the New Credit Agreement, the Company is potentially exposed to refinancing risk in the future, should the Company seek to refinance its debt or raise new debt.
+Added: As such, the type, cost, and terms of any new debt potentially raised in the future may differ from that of our existing debt agreements.
Foreign Currency Exchange Risk
based company that does business around the globe, we have foreign currency risks related to our revenue and expenses denominated in currencies other than the U.S.
−Removed: Dollar, principally the British Pound, Australian Dollar, Canadian Dollar and Euro.
−Removed: The volatility of exchange rates depends on many factors that we cannot forecast with reliable accuracy.
+Added: Dollar, principally the Australian Dollar, British Pound, Canadian Dollar, Euro, Japanese Yen, and New Zealand Dollar.
+Added: Foreign exchange rate volatility is influenced by many factors that we cannot forecast with reliable accuracy.
In the event our non-U.S.
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At this time we do not, but we may in the future, enter into derivatives or other financial instruments in an attempt to hedge our foreign currency exchange risk.
−Removed: It is difficult to predict the impact hedging activities would have on our results of operations.
Inflation Risk
3 unchanged sentences
This risk of cost inflation is distinct from the risk that inflation throughout the broader economy could lead to reduced ad spend and indirectly harm our business, financial condition, and results of operations.
−Removed: For a discussion of the indirect results of inflation on our business, see "Impact of COVID-19 Pandemic and Other Macroeconomic Developments."
+Added: For a discussion of the indirect results of inflation on our business, see "Macroeconomic Developments."
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.