Switch & Data Facilities Company (SDXC)

Interest Rate Risk

We are required by our credit agreements to manage the interest rate risk on our debt. A portion of the floating interest rate on the outstanding debt of $142.5 million is swapped to fixed rate through an interest rate swap derivative, thus minimizing interest rate risk.

Our existing interest rate swap was entered into on January 15, 2009, has a notional amount of $120.0 million, and a maturity date of February 2012. There was no upfront cost for this agreement. The fixed LIBOR rates associated with this swap are 1.71% from February 2009 through February 2010 and 4.99% from February 2010 through February 2012. If the three-month LIBOR rate is higher than these fixed rates for the given periods, we will receive cash payments for the difference between actual three-month LIBOR and the fixed rates for the given periods. If the three-month LIBOR rate is lower than these fixed rates for the given periods, we will pay the difference between actual three-month LIBOR and the fixed rates for the given periods.

As of March 31, 2009, the three-month LIBOR rate was 1.19%, which is lower than our contracted rates. A 10% change in the current LIBOR rate would not change our current net pay position.

INTEREST RATE RISK

We are required by our credit agreements to manage the interest rate risk on our debt. The floating interest rate on the outstanding debt of $120.0 million is swapped to a fixed rate through interest rate swap derivatives, thus significantly minimizing interest rate risk. In November 2005, we entered into an interest rate swap agreement with a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. In August 2008, we entered into an interest rate swap agreement with a notional amount of $75.0 million with a commencement date of February 2009 and maturity date of February 2012. In October 2008, we entered into an interest rate swap agreement with a notional amount of $45.0 million with a commencement date of February 2009 and maturity date of February 2012. The fixed LIBOR rates associated with these swaps are 4.758%, 4.070%, and 3.098%, respectively. If the three-month LIBOR rate is lower than these fixed rates, we will make cash payments rates equal to the fixed rate. If the three month LIBOR rate is higher than these fixed rates, we will receive cash payments for the difference between actual three-month LIBOR and the fixed rates. These swaps required no upfront payment.

As of December 31, 2008, the three-month LIBOR rate was 1.42%, which is lower than our contracted rates. A 10% change in the current LIBOR rate would not change our current net pay position.

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On January 15, 2009, we canceled two of our existing interest rate swaps with notional values of $75.0 million and $45.0 million and fixed-rate components of 4.070% and 3.098%, respectively. There was no upfront cost to cancel these swaps. We then entered into a single interest rate swap agreement on a notional amount of $120.0 million with a commencement date of February 2009 and maturity date of February 2012. There was no upfront cost for this agreement. The fixed LIBOR rates associated with these swaps are 1.710% from February 2009 through February 2010 and 4.990% from February 2010 through February 2012. If the three-month LIBOR rate is higher than these fixed rates for the given periods, we will receive cash payments for the difference between actual three-month LIBOR and the fixed rates for the given periods. If the three-month LIBOR rate is lower than these fixed rates for the given periods, we will pay the difference between actual three-month LIBOR and the fixed rates for the given periods.

Interest Rate Risk

We are required by our credit agreements to manage the interest rate risk on our debt. A portion of the floating interest rate on the outstanding debt of $120 million is swapped to fixed rate through an interest rate swap derivative, thus minimizing interest rate risk.

In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between the actual three-month LIBOR rate and 4.758%. This swap required no upfront payment. In August 2008, we entered into an interest rate swap agreement on a notional amount of $75.0 million with a commencement date of February 2009 and maturity date of February 2012. If the three-month LIBOR rate is lower than 4.070%, we will make cash payments at a rate of 4.070%. If the three month LIBOR rate is higher than 4.070%, we will receive cash payments for the difference between the actual three-month LIBOR rate and 4.070%. This swap required no upfront payment.

As of September 30, 2008, the three-month LIBOR rate was 4.05%, which is lower than our contracted rates. We will make cash payments at the end of each quarter until the LIBOR rate increases above the contracted LIBOR rates. A 10% increase in the three month LIBOR rate would change our current net pay position, to a net receive position.

Interest Rate Risk

We are required by our credit agreements to manage the interest rate risk on our debt. A portion of the floating interest rate on the outstanding debt of $120 million is swapped to fixed rate through an interest rate swap derivative, thus minimizing interest rate risk. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three-month LIBOR and 4.758%. This swap required no upfront payment.

As of June 30, 2008, the three-month LIBOR rate was 2.68%, which is lower than our contracted rate. We will make cash payments at the end of each quarter until LIBOR increases above the contracted LIBOR rates. A 10% increase or decrease in the three month LIBOR rate will not change our net pay position.

Interest Rate Risk

We are required by our credit agreements to manage the interest rate risk on our debt. A portion of the floating interest rate on the outstanding debt of $120 million is swapped to fixed rate through an interest rate swap derivative, thus minimizing interest rate risk. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three-month LIBOR and 4.758%. This swap required no upfront payment.

As of March 31, 2008, the three-month LIBOR rate was 3.06%, which is lower than our contracted rate. We will make cash payments at the end of each quarter until LIBOR increases above the contracted LIBOR rates. A 10% increase or decrease in the three month LIBOR rate will not change our net pay position.

INTEREST RATE RISK

We are required by our credit agreements to manage the interest rate risk on our debt. The floating interest rate on the outstanding debt of $38.2 million is swapped to fixed rate through an interest rate swap derivative, thus significantly minimizing interest rate risk. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three-month LIBOR and 4.758%. This swap required no upfront payment.

As of December 31, 2007, the three-month LIBOR rate was 5.13%, which is higher than our contracted rate of 4.758%. A 37 basis point decrease in the current LIBOR rate would change our current net receive position to a net pay position.

Interest Rate Risk

We are required by our credit agreements to manage the interest rate risk on our debt. The floating interest rate on the debt of $39.1 million is swapped to fixed rate through interest rate swap derivatives, thus significantly minimizing interest rate risk. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three-month LIBOR and 4.758%. This swap required no upfront payment.

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As of September 30, 2007, the three-month LIBOR rate was 5.62%, which is higher than our contracted rate. A 10% increase or decrease in the current LIBOR rate would not change our current net receive position. We will receive cash payments at the end of each quarter unless LIBOR decreases below the contracted LIBOR rates.

Interest Rate Risk

We are required by our Credit Facility to hedge the interest rate risk on our debt. After the repayment of $104.5 million of our Credit Facility on February 14, 2007, and the scheduled principal payments of $0.4 million during the first two quarters of 2007, the floating interest rate on the debt of $39.5 million is swapped to fixed rate through interest rate swap derivatives, thus significantly minimizing interest rate risk. In March 2005, we entered into an interest rate swap agreement on a notional amount of $15 million with a commencement date of July 2006 and a maturity date of July 2007. If the three-month LIBOR rate is lower than 4.48%, we will make cash payments at a rate of 4.48%. If the three month LIBOR rate is higher than 4.48%, we will receive cash payments for the difference between actual three month LIBOR and 4.48%. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three month LIBOR and 4.758%. This swap required no upfront payment.

As of June 30, 2007, the three-month LIBOR rate is 5.36%, which is higher than our contracted rate. A 10% increase or decrease in the current LIBOR rate would not change our current net receive position. We will receive cash payments at the end of each quarter unless LIBOR decreases below the contracted LIBOR rates.

Interest Rate Risk

We are required by our Credit Facilities to manage the interest rate risk on our debt. After the repayment of $104.5 million of our Credit Facilities on February 14, 2007, and the scheduled principal payment of $0.19 million on March 31, 2007, the floating interest rate on the debt of $39.5 million is swapped to fixed rate through interest rate swap derivatives, thus significantly minimizing interest rate risk. In March 2005, we entered into an interest rate swap agreement on a notional amount of $15.0 million with a commencement date of July 2006 and a maturity date of July 2007. If the three-month LIBOR rate is lower than 4.48%, we will make cash payments at a rate of 4.48%. If the three month LIBOR rate is higher than 4.48%, we will receive cash payments for the difference between actual three month LIBOR and 4.48%. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three month LIBOR and 4.758%. Both of these swaps required zero upfront payment.

As of March 31, 2007, the three-month LIBOR rate is 5.35%, which is higher than our contracted rate for both swaps. A 10% increase or decrease in the current LIBOR rate would not change our current net receive position. We will receive cash payments at the end of each quarter unless LIBOR decreases below the contracted LIBOR rates.

INTEREST RATE RISK

We are required by our Credit Facilities to manage the interest rate risk on our debt portfolio. After the repayment of $104.5 million of our Credit Facilities on February 14, 2007, the remaining floating rate debt of $39.7 million under our Credit Facilities is swapped to fixed through interest rate swap derivatives, thus significantly minimizing interest rate risk. In March 2005, we entered into an interest rate swap agreement on a notional amount of $15.0 million with a commencement date of July 2006 and a maturity date of July 2007. If the three-month LIBOR rate is lower than 4.48%, we will make cash payments at a rate of 4.48%. If the three-month LIBOR rate is higher than 4.48%, we will receive cash payments for the difference between actual three-month LIBOR and 4.48%. In November 2005, we entered into an interest rate swap agreement on a notional amount of $70.0 million with a commencement date of February 2006 and maturity date of February 2009. If the three-month LIBOR rate is lower than 4.758%, we will make cash payments at a rate of 4.758%. If the three month LIBOR rate is higher than 4.758%, we will receive cash payments for the difference between actual three-month LIBOR and 4.758%. Both of these swaps required zero upfront payment.

As of December 31, 2006, the three-month LIBOR rate is 5.36%, which is higher than our contracted rate for both swaps. A 10% increase or decrease in the current LIBOR rate would not change our current net receive position. We will receive cash payments at the end of each quarterly period for these swaps unless LIBOR decreases below the contracted LIBOR rates.