Company: CODI-PB
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0001345126-25-000015
Chunk: 62

Company: Compass Diversified Holdings
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7
Chunk 62
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 ratios as of December 31, 2024 included as part of the affirmative covenants in our 2022 Credit Facility:

Description of Required Covenant RatioCovenant Ratio RequirementActual RatioFixed Charge Coverage RatioGreater than or equal to 1.50:1.002.43Total Secured Debt to EBITDA RatioLess than or equal to 3.50:1.000.92Total Debt to EBITDA RatioLess than or equal to 5.00:1.003.58

We intend to use the availability under our 2022 Credit Facility and cash on hand to pursue acquisitions of additional businesses, to fund distributions (if and to the extent approved by our Board) and to provide for other working capital needs. 

Interest Expense

We incurred interest expense totaling $106.7 million in the year ended December 31, 2024, as compared to $105.2 million in the year ended December 31, 2023 and $83.5 million for the year ended December 31, 2022. 

The components of interest expense on our outstanding debt are as follows (in thousands):

Years ended December 31,202420232022Interest on credit facilities$38,985 $37,269 $13,842 Interest on Senior Notes67,500 67,500 67,500 Unused fee on Revolving Credit Facility1,840 1,998 1,913 Other interest expense403 363 276 Interest income(2,045)(1,951)(49)Interest expense, net$106,683 $105,179 $83,482 

Income Taxes

Effective September 1, 2021, the Trust elected to be treated as a corporation for U.S. federal income tax purposes (the “tax reclassification”). Prior to the tax reclassification, the Trust had been taxed as a partnership for U.S. federal income tax purposes since January 1, 2007. The LLC was treated as a partnership prior to the Trust’s tax reclassification and it will continue to be treated as a partnership following the Trust’s tax reclassification. 

Each of the Company’s majority owned subsidiaries are subject to Federal, state and in some cases, foreign income taxes. We recorded an income tax provision of $49.0 million with an annual effective rate of 53.7% during the year ended December 31, 2024, an income tax provision of $22.6 million with an annual effective