6 unchanged sentences
We have no intention of entering into financial derivative contracts, other than to hedge a specific financial risk.
−Removed: Currency Rate Risk.
−Removed: We enter into forward foreign exchange contracts to hedge our foreign currency exposures on future production expenses denominated in various foreign currencies.
−Removed: These contracts are entered into with major financial institutions as counterparties.
−Removed: We are exposed to credit loss in the event of nonperformance by the counterparty, which is limited to the cost of replacing the contracts, at current market rates.
−Removed: We do not require collateral or other security to support these contracts.
−Removed: See Note 16 to our unaudited condensed consolidated financial statements for additional information on our financial instruments.
−Removed: Interest Rate Risk.
−Removed: At December 31, 2021, we had interest rate swap agreements to fix the interest rate on $1.7 billion of variable rate LIBOR-based debt.
−Removed: See Note 16 to our unaudited condensed consolidated financial statements for additional information.
−Removed: The difference between the fixed rate to be paid and the variable rate received under the terms of the interest rate swap agreements will be recognized as interest expense for the related debt.
−Removed: Changes in the variable interest rates to be paid or received pursuant to the terms of the interest rate swap agreements will have a corresponding effect on future cash flows.
−Removed: Certain of our borrowings, primarily borrowings under our Senior Credit Facilities, certain production and related loans, our Production Tax Credit Facility and our IP Credit Facility, are, and are expected to continue to be, at variable rates of interest
−Removed: and expose us to interest rate risk.
+Added: See Note 16 to our unaudited condensed consolidated financial statements for additional information on our financial instruments, and see Part II, Item 7A.
+Added: “Quantitative and Qualitative Disclosures About Market Risk” found in our Annual Report on Form 10-K filed with the SEC on May 26, 2022.
+Added: Certain of our borrowings, primarily borrowings under our Senior Credit Facilities, and our production and related loans, IP Credit Facility and other financing obligations are, and are expected to continue to be, at variable rates of interest and expose us to interest rate risk.
If interest rates increase, our debt service obligations on the variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.
1 unchanged sentence
The applicable margin with respect to loans under our Term Loan B is a percentage per annum equal to a LIBOR rate plus 2.25%.
−Removed: Assuming the revolving credit facility is drawn up to its maximum borrowing capacity of $1.25 billion, based on the applicable LIBOR in effect as of December 31, 2021, each quarter point change in interest rates would result in a $2.6 million change in annual net interest expense on the revolving credit facility, Term Loan A, Term Loan B and interest rate swap agreements.
−Removed: The variable interest individual production and related loans incur primarily LIBOR-based interest at a weighted average rate of approximately 2.47%, including applicable margins ranging from 1.75% over the one or three-month LIBOR to 3.00% over the twelve-month LIBOR.
−Removed: A quarter point increase of the interest rates on the outstanding principal amount of our variable rate individual production and related loans would result in $2.0 million in additional costs capitalized to the respective film or television asset.
−Removed: The applicable margin with respect to advances under the Production Tax Credit Facility is a percentage per annum equal to a LIBOR rate plus 1.50%.
−Removed: Assuming the Production Tax Credit Facility is utilized up to its maximum capacity of $220.0 million, based on the applicable LIBOR in effect as of December 31, 2021, each quarter point change in interest rates would result in a $0.5 million change in annual net interest expense on the Production Tax Credit Facility.
−Removed: The applicable margin with respect to advances under the IP Credit Facility is a percentage per annum equal to a LIBOR rate plus 2.25%.
−Removed: Based on the applicable LIBOR in effect as of December 31, 2021, each quarter point change in interest rates on the outstanding amount under the IP Credit Facility would result in a $0.3 million change in annual net interest expense on the IP Credit Facility.
−Removed: At December 31, 2021, our 5.500% Senior Notes had an outstanding carrying value of $964.8 million, and an estimated fair value of $1,017.5 million.
+Added: Assuming the revolving credit facility is drawn up to its maximum borrowing capacity of $1.25 billion, based on the applicable LIBOR in effect as of June 30, 2022, each quarter point change in interest rates would result in a $2.1 million change in annual net interest expense on the revolving credit facility, Term Loan A, Term Loan B and interest rate swap agreements.
+Added: The variable interest film related financing obligations (which includes our production loans, programming notes, Production Tax Credit Facility, IP Credit Facility, Backlog Financing Facility and other) incur primarily LIBOR and SOFR-based interest, with applicable margins ranging from 1.375% to 4.00% per annum.
+Added: A quarter point increase of the interest rates on the variable interest film related financing obligations would result in $3.0 million in additional costs capitalized to the respective film or television asset for production loans and programming notes (based on the outstanding principal amount of such loans), and a $1.5 million change in annual net interest expense (based on the outstanding principal amount of such loans, and assuming the Production Tax Credit Facility and Backlog Financing Facility are utilized up to their maximum capacity of $235.0 million and $125.0 million, respectively).
+Added: At June 30, 2022, our 5.500% Senior Notes had an outstanding carrying value of $966.8 million, and an estimated fair value of $779.2 million.
A 1% increase in the level of interest rates would decrease the fair value of the 5.500% Senior Notes by approximately $39.5 million, and a 1% decrease in the level of interest rates would increase the fair value of the 5.500% Senior Notes by approximately $43.2 million.
The following table presents information about our financial instruments that are sensitive to changes in interest rates.
−Removed: The table also presents the cash flows of the principal amounts of the financial instruments, or the cash flows associated with the notional amounts of interest rate derivative instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of December 31, 2021:
−Removed: Three Months Ending March 31, Year Ending March 31, Fair Value
−Removed: 2022 2023 2024 2025 2026 Thereafter Total December 31,
+Added: The table also presents the cash flows of the principal amounts of the financial instruments, or the cash flows associated with the notional amounts of interest rate derivative instruments, and related weighted-average interest rates by expected maturity or required principal payment dates and the fair value of the instrument as of June 30, 2022:
+Added: Nine Months Ending March 31, Year Ending March 31, Fair Value
+Added: 2023 2024 2025 2026 2027 Thereafter Total June 30,
(Amounts in millions)
9 unchanged sentences
Average Interest Rate 4.04 % 4.04 % 4.04 % — — —
−Removed: Production and related loans (2)
−Removed: 28.9 614.5 157.1 214.1 — — 1,014.6 1,014.6
−Removed: Average Interest Rate 2.39 % 2.56 % 2.15 % 1.60 % — —
−Removed: IP Credit Facility (3)
+Added: Film related financing and other obligations (2)
633.3 431.1 439.2 144.9 9.0 125.0 1,782.5 1,782.5
1 unchanged sentence
5.500% Senior Notes (3)
+Added: 18.7 — — — — 981.3 1,000.0 779.2
Interest Rate 5.50 % — — — — 5.50 %
3 unchanged sentences
(1) The effective interest rate in the table above is before the impact of interest rate swaps.
−Removed: (2) Production and related loans include individual loans for the production of film and television programs that the Company produces or licenses and the Company's Production Tax Credit Facility.
−Removed: Production Tax Credit Facility amounts represent outstanding amounts under our Production Tax Credit Facility at December 31, 2021, and the repayment date represents the maturity date of the Production Tax Credit Facility (January 27, 2025), however net advances and payments under the Production Tax Credit Facility can fluctuate depending on the amount of collateral available.
−Removed: (3) IP Credit Facility amounts represent outstanding amounts under our IP Credit Facility at December 31, 2021, and repayment dates are based on the projected future cash flows generated from the exploitation of the rights, subject to a minimum guaranteed payment amount, as applicable.
−Removed: (4) Represents interest rate swap agreements on certain of our LIBOR-based floating-rate debt with fixed rates paid ranging from 1.840% to 2.915% with maturities beginning in March 2025 through March 2030.
+Added: (2) Represents amounts outstanding under film related financing and other obligations (i.e., production loans, Production Tax Credit Facility, programming notes, Backlog Financing Facility and other, and IP Credit Facility), actual amounts outstanding and the timing of expected future repayments may vary in the future (see Note 6 to our unaudited condensed consolidated financial statements for further information).
+Added: (3) In July 2022, we repurchased $18.7 million principal amount of the 5.500% Senior Notes for $14.6 million, together with accrued and unpaid interest.
+Added: See Note 18 - Subsequent Events to our unaudited condensed consolidated financial statements.
+Added: (4) Represents interest rate swap agreements on certain of our LIBOR-based floating-rate debt with fixed rates paid ranging from 2.723% to 2.915% with maturities in March 2025.
See Note 16 to our unaudited condensed consolidated financial statements.
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.