American Home Shield 2011 Annual Report Download - page 71
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Table of Contents
expected year of maturity for a portion of the Company's fixed rate debt, the average interest rate on fixed rate debt for certain years of maturity and the fair
value of fixed rate debt. No other changes have been made from the information presented in the debt and interest rate table above.
Expected Year of Maturity
Fair
Value
As of December 31, 2011 2012 2013 2014 2015 2016 Thereafter Total
($ in millions)
Debt:
Fixed rate $ 15.3 $ 9.9 $1,439.2 $402.4 $2.1 $ 957.2 $2,826.1 $2,692.0
Average interest rate 7.6% 8.7% 4.8% 10.7% 8.2% 7.7% 6.7%
Variable rate $ 36.5 $ 40.5 $1,047.8 $ — $ — $ — $1,124.8 $1,075.2
Average interest rate 2.5% 2.7% 2.8% N/A N/
A N/A 2.8%
Interest Rate Swaps:
Receive variable/pay fixed $450.0 $980.0
Average pay rate(1) 3.5% 1.7%
Average receive rate(1) 0.5% 0.3%
Before the application of the incremental borrowing margin (2.5 percent as of December 31, 2011).(1)
Fuel Price Risk
The Company is exposed to market risk for changes in fuel prices through the consumption of fuel by its vehicle fleet in the delivery of services to its
customers. The Company uses approximately 21 million gallons of fuel on an annual basis. A ten percent change in fuel prices would result in a change of
approximately $6.5 million in the Company's annual fuel costs as of December 31, 2011 before considering the impact of fuel swap contracts. The Company's
exposure to changes in fuel prices has not changed significantly since December 31, 2010.
The Company uses fuel swap contracts to mitigate the financial impact of fluctuations in fuel prices. As of December 31, 2011, the Company had fuel
swap contracts to pay fixed prices for fuel with an aggregate notional amount of $45.5 million, maturing through 2012. The estimated fair value of these
contracts as of December 31, 2011 was a net liability of $0.7 million. These fuel swap contracts provide a fixed price for approximately 65 percent of the
Company's estimated fuel usage for 2012.
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