Earthlink 2015 Annual Report Download - page 59

Download and view the complete annual report

Please find page 59 of the 2015 Earthlink annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Table of Contents
Item 7a. Quantitative and Qualitative Disclosures about Market Risk.
We are exposed to interest rate risk with respect to our outstanding indebtedness. As of December 31, 2014 and 2015 , we had approximately $582.4 million and
$498.8 million , respectively, of long-term debt outstanding (excluding capital lease obligations). The fair value of our outstanding indebtedness may be adversely
impacted due to a rise in interest rates. In general, securities with longer maturities are subject to greater interest rate risk than those with shorter maturities. We
currently do not engage in any interest rate hedging activity; however, we will continue to monitor the interest rate environment. A hypothetical increase of 100
basis points in the interest rate relative to this debt would not have a material effect on our results of operations or financial condition. For more information
regarding our outstanding indebtedness, refer to Note 7 to our Consolidated Financial Statements.
The estimated fair value of our Senior Secured Notes and Senior Notes was determined based on Level 2 input using observable market prices in less active
markets. The carrying amount of our senior secured revolving credit facility approximated its fair value as of December 31, 2015 . The following table presents the
fair value of our outstanding indebtedness, excluding capital lease obligations, as of December 31, 2014 and 2015 :
As of December 31, 2014
As of December 31, 2015
Carrying
Amount
Fair Value
Carrying
Amount
Fair Value
(in thousands)
Senior Secured Notes
$ 294,208
$ 301,503
$ 295,277
$ 305,439
Senior Notes
288,226
300,300
168,532
177,404
Senior secured revolving credit facility
—
—
35,000
35,000
Total debt, excluding capital leases
$ 582,434
$ 601,803
$ 498,809
$ 517,843
56