MYR GROUP INC. 10-Q

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK As of June 30, 2023, we were not party to any derivative instruments. We did not use any material derivative financial instruments during the six months ended June 30, 2023 and 2022, including instruments for trading, hedging or speculating on changes in interest rates or commodity prices of materials used in our business. Any borrowings under our Facility are based upon interest rates that will vary depending upon the prime rate, Canadian prime rate, the NYFRB overnight bank funding rate, CDOR, and Term SOFR Reference Rate. If the prime rate, Canadian prime rate, the NYFRB overnight bank funding rate, CDOR, or Term SOFR Reference Rate rises, any interest payment obligations would increase and have a negative effect on our cash flow and financial condition. We currently do not maintain any hedging contracts that would limit our exposure to variable rates of interest when we have outstanding borrowings. As of June 30, 2023, we had $20.0 million of borrowings outstanding under the Facility. If market rates of interest on all our revolving debt as of June 30, 2023, which is subject to variable rates, permanently increased by 1%, the increase in interest expense on all revolving debt would decrease future income before provision for income taxes and cash flows by approximately $0.2 million annually. If market rates of interest on all our revolving debt, which is subject to variable rates as of June 30, 2023, permanently decreased by 1%, the decrease in interest expense on all debt would increase future income before provision for income taxes and cash flows by approximately $0.2 million annually. Borrowings under our equipment notes are at fixed rates established on the date the respective equipment note was executed.