Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

LONG-TERM DEBT OBLIGATIONS

The following summary of our long-term debt obligations includes:

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scheduled principal repayments for the next five years and after;

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weighted average interest rates for debt maturing in each of the next five years and after and

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estimated fair values of outstanding obligations.

We estimate the fair value of long-term debt based on quoted market prices we receive for the same types and issues of our debt or on the discounted value of the future cash flows using market yields for the same type and comparable issues of debt. Changes in market rates of interest affect the fair value of our fixed-rate debt.

Summary of Long-Term Debt Obligations as of June 30, 2026

(1)

Excludes $32 million of unamortized discounts and capitalized debt expense.

(2)

As of June 30, 2026, the weighted average interest rate for our variable-rate debt was 4.97 percent, excluding estimated patronage refunds and the impact of interest rate swaps.

(3)

Excludes outstanding commercial paper of $250 million as of June 30, 2026. The timing of the repayment of the current outstanding balance is uncertain due to our intent and ability to refinance these borrowings on a long-term basis. See Note 8: Long-Term Debt, Line of Credit and Commercial Paper Program for further information on our commercial paper program.

During third quarter 2025, we entered into interest rate swaps with the risk management objective of managing exposure to interest rate volatility by converting variable rate debt obligations associated with our $800 million term loan due in 2028 into fixed rate payments. The interest rate swaps provide the right to make fixed rate payments at the rate of 3.414 percent to the counterparty in exchange for variable payments based on the 1-month SOFR plus a spread, on a monthly settlement schedule. As of June 30, 2026 and December 31, 2025, our interest rate swap agreements with an aggregate notional amount of $800 million were designated as cash flow hedging instruments of variable, SOFR-based interest payments on our $800 million term loan. There have been no material changes in swap terms or risk management strategy since inception.