Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. Quantitative and Qualitative Disclosures about Market Risk
(All amounts are in millions)
We are exposed to market risk related to changes in interest rates, foreign currency exchange rates and commodity raw material prices, and we selectively use financial instruments to manage certain of these risks. We do not enter into financial instruments for speculative or trading purposes; however, these instruments may be deemed speculative if the future cash flows originally hedged are no longer probable of occurring as anticipated. Our currency exposures vary, but are primarily concentrated in the British Pound Sterling, Canadian Dollar, Euro, and South African Rand. We generally do not hedge currency translation exposures. Our exposures for commodity raw materials vary, with the highest concentration relating to steel, oil, aluminum, and copper. See Note 14 to our consolidated financial statements for further details.
The following table provides information, as of December 31, 2025, about our primary outstanding debt obligations and presents principal cash flows by expected maturity dates, weighted-average interest rates and fair values.
Expected Maturity Date
2026 2027 2028 2029 Thereafter Total Fair Value
Senior Credit Facilities $ 3.1 $ 15.6 $ 25.0 $ 25.0 $ 431.3 $ 500.0 $ 500.0
Average interest rate 5.1 %
In 2020, we entered into the Initial Swaps, which covered the period through November 2024, and effectively converted borrowings under our senior credit facilities to a fixed rate of 1.077%, plus the applicable margin. In September 2024, commensurate with an amendment to our senior credit agreement, we entered into the Additional Swaps, which had a notional amount of $524.6, covered the period from December 2024 to June 2026, and effectively converted this portion of the borrowings under our senior credit facilities to a fixed rate of 3.58%, plus the applicable margin. We had designated, and accounted for, our Additional Swaps (and, prior to their maturity, accounted for the Initial Swaps) as cash flow hedges. The Additional Swaps were settled commensurate with the Third Amendment.
We believe that cash and equivalents, cash flows from operations, and availability under revolving credit facilities and our trade receivables financing arrangement will be sufficient to fund working capital needs, planned capital expenditures, other operational cash requirements and required debt service obligations.
From time to time, we enter into FX forward contracts to manage the exposure on contracts with forecasted transactions denominated in non-functional currencies which manage the risk of transaction gains and losses associated with assets/liabilities denominated in currencies other than the functional currency of certain subsidiaries. We had FX forward contracts with an aggregate notional amount of $19.3 at December 31, 2025, all of which are scheduled to mature within one year. The fair value of our FX forward contracts was less than $0.1 at December 31, 2025.
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