SCHOLASTIC CORP 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk The Company conducts its business in various foreign countries, and as such, its cash flows and earnings are subject to fluctuations from changes in foreign currency exchange rates. The Company sells products from its domestic operations to its foreign subsidiaries, creating additional currency risk. The Company manages its exposures to this market risk through internally established procedures and, when deemed appropriate, through the use of short-term forward exchange contracts, which were not significant as of August 31, 2020. The Company does not enter into derivative transactions or use other financial instruments for trading or speculative purposes. Market risks relating to the Company’s operations result primarily from changes in interest rates in its variable-rate borrowings. The Company is subject to the risk that market interest rates and its cost of borrowing will increase and thereby increase the interest charged under its variable-rate debt. Additional information relating to the Company’s outstanding financial instruments is included in Note 4 of Notes to Condensed Consolidated Financial Statements - unaudited in Item 1, “Financial Statements.” The following table sets forth information about the Company’s debt instruments as of August 31, 2020: ($ amounts in millions) Fiscal Year Maturity 2021 (1) 2022 2023 2024 2025 Thereafter Total Fair Value @ 8/31/2020 Debt Obligations Lines of credit and current portion of long-term debt $ 8.5 11.4 — — — — $ 19.9 $ 19.9 Average interest rate 4.2 % 1.9 % — — — — Long-term debt $ — 200.0 $ — $ — $ — $ — $ 200.0 $ 200.0 Average interest rate — 1.4 % — — — — (1) Fiscal 2021 includes the remaining nine months of the current fiscal year ending May 31, 2021. 30 SCHOLASTIC CORPORATION