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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Installed Building Products, Inc. · 10-Q · Q2 FY2026 · Period ended Jun 30, 2026
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We are exposed to market risks related to fluctuations in interest rates on our outstanding variable rate debt. As of June 30, 2026, we had $488.7 million outstanding on our Term Loan, gross of unamortized debt issuance costs, no outstanding borrowings on our ABL Revolver and no outstanding borrowings under finance leases subject to variable interest rates. As of June 30, 2026, we had two active interest rate swaps which, when combined, serve to hedge $400.0 million of the variable cash flows on our Term Loan through December 14, 2028. As a result, total variable rate debt of $88.7 million was exposed to market risks as of June 30, 2026. A hypothetical one percentage point increase (decrease) in interest rates on our variable rate debt would increase (decrease) our annual interest expense by approximately $0.9 million. The 2034 Senior Notes accrue interest at a fixed rate of 5.625%.
For variable rate debt, interest rate changes generally do not affect the fair value of the debt instrument, but do impact future earnings and cash flows, assuming other factors are held constant. We have not entered into and currently do not hold derivatives for trading or speculative purposes.