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These excerpts taken from the AYR 10-K filed Mar 2, 2009. Sensitivity
Analysis
The following discussion about the potential effects of changes
in interest rates is based on a sensitivity analysis, which
models the effects of hypothetical interest rate shifts on our
financial condition and results of operations. We changed our
interest rate risk disclosure to an alternative that provides
more meaningful analysis of our interest rate risk. Although we
believe a sensitivity analysis provides the most meaningful
analysis permitted by the rules and regulations of the SEC, it
is constrained by several factors, including the necessity to
conduct the analysis based on a single point in time and by the
inability to include the extraordinarily complex market
reactions that normally would arise from the market shifts
modeled. Although the following results of a sensitivity
analysis for changes in interest rates may have some limited use
as a benchmark, they should not be viewed as a forecast. This
forward-looking disclosure also is selective in nature and
addresses only the potential
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Table of Contents
minimum contracted rental and interest expense impacts on our
financial instruments and our 13 variable rate leases and, in
particular, does not address the mark-to-market impact on our
derivative instruments. It also does not include a variety of
other potential factors that could affect our business as a
result of changes in interest rates.
A hypothetical 100-basis point increase/decrease in our variable
interest rates would increase/decrease the minimum contracted
rentals on our portfolio for the year ending December 31,
2008 by $3.7 million. A hypothetical 100-basis point
increase/decrease in our variable interest rate on our
borrowings would result in an interest expense increase/decrease
of $0.6 million and $0.6 million, net of amounts
received from our interest rate hedges, for the years ending
December 31, 2007 and 2008, respectively.
Our consolidated financial statements and notes thereto,
referred to in Item 15(A)(1) of this
Form 10-K,
are filed as part of this report and appear in this
Form 10-K
beginning on
page F-1.
None.
Sensitivity Analysis The following discussion about the potential effects of changes in interest rates is based on a sensitivity analysis, which models the effects of hypothetical interest rate shifts on our financial condition and results of operations. We changed our interest rate risk disclosure to an alternative that provides more meaningful analysis of our interest rate risk. Although we believe a sensitivity analysis provides the most meaningful analysis permitted by the rules and regulations of the SEC, it is constrained by several factors, including the necessity to conduct the analysis based on a single point in time and by the inability to include the extraordinarily complex market reactions that normally would arise from the market shifts modeled. Although the following results of a sensitivity analysis for changes in interest rates may have some limited use as a benchmark, they should not be viewed as a forecast. This forward-looking disclosure also is selective in nature and addresses only the potential
Table of Contentsminimum contracted rental and interest expense impacts on our financial instruments and our 13 variable rate leases and, in particular, does not address the mark-to-market impact on our derivative instruments. It also does not include a variety of other potential factors that could affect our business as a result of changes in interest rates. A hypothetical 100-basis point increase/decrease in our variable interest rates would increase/decrease the minimum contracted rentals on our portfolio for the year ending December 31, 2008 by $3.7 million. A hypothetical 100-basis point increase/decrease in our variable interest rate on our borrowings would result in an interest expense increase/decrease of $0.6 million and $0.6 million, net of amounts received from our interest rate hedges, for the years ending December 31, 2007 and 2008, respectively.
Our consolidated financial statements and notes thereto, referred to in Item 15(A)(1) of this Form 10-K, are filed as part of this report and appear in this Form 10-K beginning on page F-1.
None.
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