Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risk primarily from changes in interest rates, which may affect our future income, cash flows and fair value, depending on changes to interest rates. In certain situations, we may seek to reduce cash flow volatility associated with changes in interest rates by entering into financial arrangements intended to provide a hedge against a portion of the risks associated with such volatility.
Interest Rate Risk
As of December 31, 2023, there was no variable rate debt outstanding as we have no outstanding borrowings under our Revolver, which is our only variable-rate debt. Borrowings under our Revolver bear interest based on the secured overnight financing rate ("SOFR"). Our future interest rate risk may be affected by any future borrowings under our Revolver prior to the December 1, 2026 maturity date.
The following table sets forth the contractual maturities and the total fair values as of December 31, 2023 for our financial instruments:
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Maturities by Period | | | | |
| 2024(1) | | 2025 | | 2026 | | 2027 | | 2028 | | Thereafter | | Carrying Value | | Fair Value |
| | | | | | | | | | | | | | | |
| (in millions, excluding average interest rate) |
| Liabilities: | | | | | | | | | | | | | | | |
| Fixed-rate debt | $ | 61 | | | $ | 657 | | | $ | 1,563 | | | $ | 30 | | | $ | 725 | | | $ | 750 | | | $ | 3,786 | | | $ | 3,626 | |
| Average interest rate | 4.83 | % | | 7.47 | % | | 4.20 | % | | 5.37 | % | | 5.88 | % | | 4.88 | % | | 5.24 | % | | |
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
___________________________________________________________________________________(1)Excludes the SF Mortgage Loan.
Refer to Note 7: "Debt" in our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K for additional information.
