8 unchanged sentences
However, we use interest rate swaps to manage our exposure to interest rate movements on our term credit agreements by swapping existing and anticipated future borrowings from floating rates to fixed rates.
−Removed: As of June 30, 2021, excluding the Timber Funds, we had $550 million of U.S.
+Added: As of September 30, 2021, we had $550 million of U.S.
variable rate debt outstanding on our term credit agreements.
−Removed: The Timber Funds had $25 million of U.S.
−Removed: variable rate debt outstanding on the Fund II Mortgages Payable.
−Removed: The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at June 30, 2021 was $550 million.
−Removed: The maturity date of the Term Credit Agreement was extended from August 2024 to April 2028, with the associated interest rate swaps maturing in August 2024.
+Added: The notional amount of outstanding interest rate swap contracts with respect to our term credit agreements at September 30, 2021 was $550 million.
+Added: The Term Credit Agreement matures in April 2028, with the associated interest rate swaps maturing in August 2024.
We have entered into forward starting interest rate swaps to cover $150 million of the Term Credit Agreement through the extended maturity date.
The Incremental Term Loan Agreement and associated interest rate swaps mature in May 2026.
−Removed: At this borrowing level, a hypothetical one-percentage point increase/decrease in interest rates would result in a corresponding increase/decrease in interest payments and expense of approximately $0.3 million over a 12-month period.
+Added: At this borrowing level, a hypothetical one-percentage point increase/decrease in interest rates would result in no corresponding increase/decrease in interest payments and expense over a 12-month period.
The fair market value of our fixed interest rate debt is also subject to interest rate risk.
−Removed: The estimated fair value of our fixed rate debt excluding the Timber Funds at June 30, 2021 was $861.0 million compared to the $844.2 million principal amount.
−Removed: The estimated fair value of our Timber Funds’ fixed rate debt at June 30, 2021 was $34.9 million compared to the $32.4 million principal amount.
+Added: The estimated fair value of our fixed rate debt at September 30, 2021 was $825.1 million compared to the $826.4 million principal amount.
We use interest rates of debt with similar terms and maturities to estimate the fair value of our debt.
Generally, the fair market value of fixed-rate debt will increase as interest rates fall and decrease as interest rates rise.
−Removed: A hypothetical one-percentage point increase/decrease in prevailing interest rates at June 30, 2021 would result in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $44 million and $49 million, respectively.
+Added: A hypothetical one-percentage point increase/decrease in prevailing interest rates at September 30, 2021 would result in a corresponding decrease/increase in the fair value of our fixed rate debt of approximately $40 million and $43 million, respectively.
We estimate the periodic effective interest rate on our U.S.
−Removed: long-term fixed and variable rate debt, excluding Timber Funds, to be approximately 3.1% after consideration of interest rate swaps and estimated patronage refunds, excluding unused commitment fees on the revolving credit facility.
−Removed: We estimate the periodic effective interest rate on our Timber Funds’ long-term fixed and variable rate debt to be approximately 2.9% after consideration of estimated patronage refunds.
−Removed: The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of expected maturity and their fair values at June 30, 2021:
+Added: long-term fixed and variable rate debt to be approximately 3.0% after consideration of interest rate swaps and estimated patronage refunds, excluding unused commitment fees on the revolving credit facility.
+Added: The following table summarizes our outstanding debt, interest rate swaps and average interest rates, by year of expected maturity and their fair values at September 30, 2021:
(Dollars in thousands) 2021 2022 2023 2024 2025 Thereafter Total Fair Value
2 unchanged sentences
Average interest rate (a)(b) — — — — — 1.70 % 1.70 %
−Removed: Fixed rate debt, excluding Timber Funds:
−Removed: Principal amounts — $325,000 — — $34,171 $485,000 $844,171 $861,040
−Removed: Average interest rate (b) — 3.75 % — — 3.86 % 2.91 % 3.27 %
−Removed: Variable rate debt, Timber Funds:
+Added: Fixed rate debt:
Principal amounts — $325,000 — — $23,739 $477,696 $826,435 $825,097
Average interest rate (b) — 3.75 % — — 2.95 % 2.80 % 3.18 %
−Removed: Fixed rate debt, Timber Funds:
−Removed: Principal amounts — — $17,980 $14,400 — — $32,380 $34,899
−Removed: Average interest rate (a)(b) — — 5.10 % 4.45 % — — 4.81 %
Interest rate swaps:
7 unchanged sentences
(a) Excludes estimated patronage refunds.
−Removed: (b) Interest rates as of June 30, 2021.
+Added: (b) Interest rates as of September 30, 2021.
Foreign Currency Exchange Rate Risk
−Removed: The functional currency of our New Zealand-based operations and New Zealand subsidiary is the New Zealand dollar.
−Removed: Through these operations and our ownership in the New Zealand subsidiary, we are exposed to foreign currency risk on cash held in foreign currencies, shareholder distributions which are paid in U.S.
−Removed: dollars and on foreign export sales and ocean freight payments that are predominantly denominated in U.S.
−Removed: To mitigate these risks, the New Zealand subsidiary routinely enters into foreign currency exchange contracts and foreign currency option contracts to hedge a portion of the New Zealand subsidiary’s foreign exchange exposure.
+Added: The New Zealand subsidiary’s export sales are predominately denominated in U.S.
+Added: dollars, and therefore its cash flows are affected by fluctuations in the exchange rate between the New Zealand dollar and the U.S.
+Added: This exposure is partially managed by a natural currency hedge, as ocean freight payments and shareholder distributions are also paid in U.S.
+Added: We manage any excess foreign exchange exposure through the use of derivative financial instruments.
Sales and Expense Exposure
−Removed: At June 30, 2021, the New Zealand subsidiary had foreign currency exchange contracts with a notional amount of $97 million and foreign currency option contracts with a notional amount of $8 million outstanding related to foreign export sales and ocean freight payments.
+Added: At September 30, 2021, the New Zealand subsidiary had foreign currency exchange contracts with a notional amount of $144 million outstanding related to foreign export sales and ocean freight payments.
The amount hedged represents a portion of forecasted U.S.
−Removed: dollar denominated export timber and log trading sales proceeds over the next 18 months and next 2 months, respectively.
−Removed: The following table summarizes our outstanding foreign currency exchange rate risk contracts at June 30, 2021:
−Removed: (Dollars in thousands) 0-1 months 1-2 months 2-3 months 3-6 months 6-12 months 12-18 months 18-24 months Total Fair Value
+Added: dollar denominated export timber and log trading sales proceeds over the next 18 months.
+Added: The following table summarizes our outstanding foreign currency exchange rate risk contracts at September 30, 2021:
+Added: (Dollars in thousands) 0-1 months 1-2 months 2-3 months 3-6 months 6-12 months 12-18 months Total Fair Value
Foreign exchange contracts to sell U.S.
2 unchanged sentences
Average contract rate 1.5028 1.4769 1.4859 1.4605 1.4444 1.4493 1.4577
−Removed: Foreign currency option contracts to sell U.S.
−Removed: dollar for New Zealand dollar
−Removed: Notional amount $4,000 $4,000 — — — — — $8,000 $356
−Removed: Average strike price 1.6100 1.6027 — — — — — 1.6063
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.