Quantitative and Qualitative Disclosures about Market Risk
−Removed: Foreign Currency Exchange Risk:
−Removed: We receive payment for our services exclusively in United States dollars.
−Removed: As a result, our financial results are unlikely to be affected by factors such as changes in foreign currency, exchange rates or weak economic conditions in foreign markets.
−Removed: We maintain research and development facilities in Prince Edward Island, Canada and Budapest, Hungary for which expenses are paid in the local currency.
−Removed: Accordingly, we do have currency risk resulting from fluctuations between such local currency and the United States Dollar.
−Removed: At the present time, we do not have any foreign currency exchange contracts to mitigate this risk.
−Removed: At September 30, 2020, a hypothetical 1% decline in the currency exchange rates between the U.S.
−Removed: dollar against the Canadian dollar and the Hungarian Forint would have resulted in an annual increase of approximately $27,500 in operating expenses.
Interest Rate Sensitivity :
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However due to our purchase of caps, described below, the effects of interest rate changes are limited.
−Removed: At September 30, 2020, we had $620.7 million outstanding subject to an adjusted Eurodollar election on First Lien Term Loans.
We can elect Eurodollar or Base Rate (Prime) interest rate options on amounts outstanding under the First Lien Term Loans.
−Removed: To mitigate interest rate risk sensitivity, in the fourth quarter of 2016 we entered into two forward interest rate cap agreements (the “2016 Caps”) which were designated at inception as cash flow hedges of future cash interest payments.
−Removed: The 2016 Caps are designed to provide a hedge against interest rate increases.
−Removed: Under these arrangements, we purchased a cap on 3 month LIBOR at 2.0%.
−Removed: At September 30, 2020, our effective 6 month LIBOR was 1.00%.
+Added: At March 31, 2021, we had $601.3 million outstanding subject to an adjusted Eurodollar election on First Lien Term Loans and our effective 6 month LIBOR rate plus applicable was 4.75%.
A hypothetical 1% increase in the adjusted Eurodollar rates under the First Lien Credit Agreement over the current Eurodollar rate would result in an increase of $6.0 million in annual interest expense and a corresponding decrease in income before taxes.
−Removed: See Note 2, Significant Accounting Policies, for further information.
−Removed: At September 30, 2020, we had $52.5 million outstanding subject to an adjusted Eurodollar election on the SunTrust Restated Credit Agreement.
+Added: At March 31, 2021, we had $6.0 million outstanding subject to an adjusted prime election on First Lien Term Loans and our effective prime rate was 5.75%.
+Added: A hypothetical 1% increase in the adjusted Prime rates under the First Lien Credit Agreement over the current Prime rate would result in an increase of $0.1 million in annual interest expense and a corresponding decrease in income before taxes.
+Added: At March 31, 2021, we had $50.3 million outstanding subject to an adjusted Eurodollar election on the SunTrust Restated Credit Agreement.
We can elect Eurodollar or Base Rate (Prime) interest rate options on amounts outstanding under the SunTrust Restated Credit Agreement.
−Removed: At September 30, 2020, our effective LIBOR rate plus applicable margin was 2.31%.
+Added: At March 31, 2021, our effective LIBOR rate plus applicable margin was 2.25%.
A hypothetical 1% increase in the adjusted Eurodollar rates under the SunTrust Restated Credit Agreement would result in an increase of approximately $0.5 million in annual interest expense and a corresponding decrease in income before taxes.
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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.