Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
Interest Rate Sensitivity
We are exposed to market risk from changes in interest rates. We seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by closely monitoring our variable rate debt and converting such debt to fixed rates when we deem such conversion advantageous. From time to time, we may enter into interest rate swap agreements or other interest rate hedging contracts. While these agreements are intended to lessen the impact of rising interest rates, they also expose us to the risks that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly effective cash flow hedges under guidance included in ASC 815 "Derivatives and Hedging."
The table below provides information about financial instruments that are sensitive to changes in interest rates, including senior notes, term loans, mortgage loans and credit facilities. For debt obligations, the table presents scheduled maturities, including annual amortization of principal, and related weighted-average interest rates for the debt maturing in each specified period (dollars in thousands).
2023 2024 2025 2026 2027 Thereafter Total
Liabilities
Fixed rate debt (1)
$ 49,588 $ 2,084 $ 4,602 $ 752,318 $ 2,439 $ 48,454 $ 859,485
Average interest rate 4.71 % 5.07 % 5.00 % 1.76 % 5.07 % 5.07 % 2.15 %
Variable rate debt (1)
$ — $ 621,500 $ 460,000 $ — $ 460,000 $ — $ 1,541,500
Average interest rate — % 6.19 % 5.95 % — % 5.95 % — % 6.05 %
Total $ 49,588 $ 623,584 $ 464,602 $ 752,318 $ 462,439 $ 48,454 $ 2,400,985
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(1) Scheduled maturities assume we exercise all extension options available in our debt agreements. For a discussion of our debt, see Note 5 , Debt , to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.
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This table reflects indebtedness outstanding as of December 31, 2022 and does not reflect indebtedness, if any, incurred after that date. Our ultimate exposure to interest rate fluctuations depends on the amount of indebtedness that bears interest at variable rates, the time at which the interest rate is adjusted, the amount of adjustment, the ability to prepay or refinance variable rate indebtedness and hedging strategies used to reduce the impact of any increases in rates. As of December 31, 2022, the estimated fair value of our fixed rate debt was $700.5 million.
As of December 31, 2022, $501.5 million of the Company's aggregate indebtedness (20.9% of total indebtedness) was subject to variable interest rates, excluding amounts outstanding under the term loan facilities that have been effectively swapped into fixed rates. If interest rates on our unhedged variable rate debt increase or decrease by 0.1 percent, our annual interest expense will increase or decrease by approximately $0.5 million, respectively.
Item 8. Financial Statements and Supplementary Data.
See Financial Statements and index beginning on page F-1.
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.
None.