MCGRATH RENTCORP 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The Company is exposed to cash flow and fair value risk due to changes in interest rates with respect to its 2.35% and 2.57% senior notes due in 2026 and 2028, respectively, and its revolving lines of credit. Weighted average variable rates are based on implied forward rates in the yield curve at December 31, 2022. The estimate of fair value of the Company’s fixed rate debt is based on the borrowing rates currently available to the Company for bank loans with similar terms and average maturities. The table below presents principal cash flows by expected annual maturities, related weighted average interest rates and estimated fair value for the Company’s - 52 - Series E and Series D Senior Notes and the Company’s revolving lines of credit under the Credit Facility and Sweep Service Facility as of December 31, 2022. (dollar amounts in thousands) 2023 2024 2025 2026 2027 Thereafter Total Estimated Fair Value Revolving lines of credit $ — $ — $ — $ — $ 313,775 $ — $ 313,775 $ 313,775 Weighted average interest rate — — — — 3.29 % — 3.29 % 2.35% Series E senior notes due in 2026 $ — $ — $ — $ 60,000 $ — $ — $ 60,000 $ 54,280 Stated interest rate — — — 2.35 % — — 2.35 % 2.57% Series D senior notes due in 2028 $ — $ — $ — $ — $ — $ 40,000 $ 40,000 $ 34,983 Stated interest rate — — — — — 2.57 % 2.57 % The Company formed a wholly owned Canadian subsidiary, TRS-RenTelco Inc., in 2004 in conjunction with the TRS acquisition and a wholly owned Indian subsidiary, TRS-RenTelco India Private Limited, in 2013. The Company commenced the closure of its Indian operations during 2017. The Canadian operations of the Company subject it to foreign currency risks (i.e. the possibility that the financial results could be better or worse than planned because of changes in foreign currency exchange rates). Currently, the Company does not use derivative instruments to hedge its economic exposure with respect to assets, liabilities and firm commitments denominated in foreign currencies. In 2022, the Company experienced minimal impact on net income due to foreign exchange rate fluctuations. Although there can be no assurances, given the size of the Canadian operations, the Company does not expect future foreign exchange gains and losses to be significant. The Company has no derivative financial instruments that expose the Company to significant market risk. - 53 -