Quantitative and Qualitative Disclosures About Market Risk
−Removed: See information appearing under the captions “Orion Office REIT, Inc.
−Removed: — Liquidity and Capital Resources,” and “VEREIT Office Assets — Liquidity and Capital Resources” appearing in “Item 7.
+Added: See information appearing under the caption “Liquidity and Capital Resources – Orion Office REIT Inc.” appearing in “Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report on Form 10-K.
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Interest Rate Risk
−Removed: As of December 31, 2021, our debt included variable-rate debt that was swapped-to-fixed through the use of derivative instruments with a fair value and carrying value of $175.0 million.
−Removed: Changes in market interest rates on our swapped-to-fixed rate debt impact the fair value of the debt, but they have no impact on interest incurred or cash flow.
+Added: As of December 31, 2022, our debt included fixed-rate debt, with a fair value and carrying value of $332.3 million and $355.0 million, respectively.
+Added: Changes in market interest rates on our fixed-rate debt impact the fair value of the debt, but they have no impact on interest incurred or cash flow.
For instance, if interest rates rise 100 basis points, and the fixed-rate debt balance remains constant, we expect the fair value of our debt to decrease, the same way the price of a bond declines as interest rates rise.
−Removed: The sensitivity analysis related to our fixed-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2021 levels, with all other variables held constant.
+Added: The sensitivity analysis related to our fixed-rate debt assumes an immediate 100 basis point move in interest rates from December 31, 2022 levels, with all other variables held constant.
A 100 basis point increase in market interest rates would result in a decrease in the fair value of our fixed-rate debt of $11.6 million.
A 100 basis point decrease in market interest rates would result in an increase in the fair value of our fixed-rate debt of $12.1 million.
−Removed: As of December 31, 2021, our debt included variable-rate debt with a fair value and carrying value of $445.0 million.
−Removed: The sensitivity analysis related to our variable-rate debt assumes an immediate 100 basis point move in interest rates from their December 31, 2021 levels, with all other variables held constant.
−Removed: A 100 basis point increase or decrease in variable interest rates on our variable-rate debt would increase or decrease our interest expense by $4.5 million annually.
−Removed: See Note 6 – Debt, Net to our consolidated financial statements.
+Added: As of December 31, 2022, our debt included variable-rate debt that was swapped-to-fixed through the use of derivative instruments with a fair value and carrying value of $175.0 million.
+Added: The sensitivity analysis related to our variable-rate debt that was swapped-to-fixed assumes an immediate 100 basis point move in interest rates from December 31, 2022 levels and excludes the impact of the derivative instrument, with all other variables held constant.
+Added: A 100 basis point increase in variable interest rates would result in a decrease in the fair value of our variable-rate debt that was swapped-to-fixed of less than $0.1 million.
+Added: A 100 basis point decrease in variable interest rates would result in an increase in the fair value of our variable-rate debt that was swapped-to-fixed of less than $0.1 million.
+Added: As of December 31, 2022, we did not have any outstanding variable-rate debt that was not swapped-to-fixed through the use of derivative instruments.
+Added: See Note 6 – Debt, Net to our consolidated and combined financial statements.
As of December 31, 2022, our interest rate swaps had a fair value that resulted in net assets of $6.3 million.
−Removed: See Note 7 – Derivatives and Hedging Activities to our consolidated financial statements for further discussion.
+Added: See Note 7 – Derivatives and Hedging Activities to our consolidated and combined financial statements for further discussion.
As the information presented above includes only those exposures that existed as of December 31, 2022, it does not consider exposures or positions arising after that date.
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The Company is subject to tenant, geographic and industry concentrations.
−Removed: Business” in this Annual Report on Form 10-K.
+Added: Properties” in this Annual Report on Form 10-K.
Any downturn of the economic conditions in one or more of these tenants, geographies or industries could result in a material reduction of our cash flows or material losses to us.
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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.