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## A M P H E N O L C O R P O R A T I O N 2 0 0 4 A N N U A L R E P O R T 

## Disclosures about contractual obligations and commitments 

The following table summarizes the Company's known obligations to make future payments pursuant to certain contracts as of December 31, 2004, as well as an estimate of the timing in which such obligations are expected to be satisfied: 

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## Item 7A. 

## Quantitative and Qualitative Disclo- sures About Market Risk 

The Company, in the normal course of doing business, is exposed to the risks associated with foreign currency exchange rates and changes in interest rates. 

## Foreign Currency Exchange Rate Risk 

The Company conducts business in several international currencies through its worldwide operations, and as a result is subject to foreign exchange exposure due to changes in exchange rates of the various currencies. Changes in exchange rates can positively or negatively affect the Company's sales, gross margins and retained earnings. The Company attempts to minimize currency exposure risk by producing its products in the same country or region in which the products are sold and thereby generating revenues and incurring expenses in the same currency and by managing its working capital although there can be no assurance that this approach will be successful, especially in the event of a significant and sudden decline in the value of any of the international currencies of the Company's worldwide operations. The Company does not engage in purchasing forward exchange contracts for speculative purposes. 

## Interest Rate Risk 

Relative to interest rate risk, the Company completed a refinancing of its senior credit facilities during the second quarter 2003 as discussed in Liquidity and Capital Resources above. In conjunction with the 2003 refinancing, the Company entered into interest rate swap agreements that fixed the Company’s LIBOR interest rate on $250.0 million and $50.0 million of floating rate debt at 2.44% and 3.01%, expiring in May 2006 and June 2006, respectively. At December 31, 2004, the Company’s average LIBOR rate was 2.5%. A 10% change in the LIBOR interest rate at December 31, 2004 would have the effect of increasing or decreasing interest expense by approximately $0.3 million. The Company does not expect changes in interest rates to have a material effect on income or cash flows in 2005, although there can be no assurances that interest rates will not significantly change. 

