Robin Raina: Yeah. So, I will yeah, Steve, you want to talk about G&A?
Steven Hamil:
Robin Raina: Yes, please do. Please do. And I’ll add to it. Go ahead.
Steven Hamil: So, Jeff, at the beginning of 2021, our borrowing rate was 4% through rising interest rate environment, increased spreads as we had to do an amendment for COVID. Our borrowing rate has increased pretty terribly. So if you look at the end of 2021, our borrowing rate was 5.5%. At the end of 2022, our borrowing rate was 9.6%. So in two years, we’ve gone from 4% to 9.6% largely as a result of increase in the LIBOR rate. And today, our borrowing rate is just under 12% as rates had continued to persist and we had a little bit of an increase in our borrowing spread. Additionally, in 2022, we had a couple of different payments to the bank group that were fees associated with having not refinanced the deal by certain measurement dates.
In 2022, we spent probably $2.65 million out the door to these banks and those were capitalized as deferred financing costs, but if you think about, probably $2.1 million of that was amortized into expense during 2022. And in the fourth quarter that number was probably about $900,000 plus of interest expense related to those one-time fees. So we’ve been hit by a rising rate environment, an increase in our spreads, and increased fees and out of pockets related to the bank group. From a tax standpoint
Robin Raina: So, Jeff.
Steven Hamil: From a tax standpoint…
Robin Raina: Go ahead, go ahead. Sorry.
Steven Hamil: From a tax standpoint, Jeff, our starting point for pre-tax book income wasn’t materially different ’21 to ’22. But there’s a couple of big things that have caused this effective tax rate to go from 9% to 13% during 2022. Really the first one is just the amount of foreign-related income and higher tax jurisdictions that has been generated and included related to GILTI tax calculation. And then really the second one is temporary differences around, in the Trump tax act, there is a section 163J provision which limits your business interest expense deduction and I’m not going to quote absolute numbers, but it’s about 30% of your adjusted taxable income and given the increased amount of interest expense we’ve had that differential year-over-year from 2021 to 2022 increased our taxable income by close to $8 million, just that one item. So those two items were the two biggest ones that contributed to the effective tax rate increasing from kind of 9% to 13%.
Jeff Van Rhee: So would that suggest then, we would normalize at that rate? I mean, it doesn’t seem like the Tax Act is going to change. So is that — how to think about the rate going forward?
Robin Raina: Steve, you want me to answer that?
Steven Hamil: Yeah. Go ahead, Robin.
Robin Raina: So, okay. Yes. So let me answer both. I’ll add to what Steve just talked about interest and I’ll talk about the tax rate. I expect the tax rate to be in single digits for this year. There are number of reasons for it, but we can go through that, but basically, I would expect that to be somewhere in the 6% to 8% kind of a bracket in terms of the tax rates. The second question of yours was when you talked about the interest rates, how — and how do you, you know, model all of this forward, look meaning, I think the way to look at it is there is short-term and then there is long-term. In the short term, obviously, we have costs in terms of — you already, Steve already talked you through the interest cost that we have, clearly that is something we have to with until we have paid our banks back.
