Company: SLGN
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000849869-25-000029
Chunk: 130

Company: SILGAN HOLDINGS INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 1A
Chunk 130
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 under our Credit Agreement, including a  €700.0 million incremental term loan, which we used, along with cash on hand, to fund the purchase price for our acquisition of Weener Packaging, which term and revolving loans were subsequently refinanced by a new €900.0 million term loan when we further amended our Credit Agreement in November 2024. 

A significant portion of our cash flow must be used to service our indebtedness and is therefore not available to be used in our business. In 2024, we paid $160.2 million in interest on our indebtedness. Our ability to generate cash flow is subject to general economic, financial, competitive, legislative, regulatory and other factors that may be beyond our control. In addition, a significant portion of our indebtedness bears interest at floating rates, and therefore a substantial increase in interest rates could adversely impact our results of operations. After the London Interbank Offered Rate, or LIBOR, expired on June 30, 2023, we transitioned to using the Secured Overnight Financing Rate, or SOFR, in place of LIBOR. SOFR has a limited history and SOFR-based reference rates may perform differently from LIBOR, which may affect our net interest expense, change our market risk profile and require changes to our financing strategies. Based on the average outstanding amount of our variable rate indebtedness in 2024, a one percentage point change in the interest rates for our variable rate indebtedness would have impacted our 2024 interest expense by an aggregate amount of approximately $11.3 million, after taking into account the average outstanding notional amount of our interest rate swap agreements during 2024.

Our indebtedness could have important consequences. For example, it could:

•increase our vulnerability to general adverse economic and industry conditions;

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•require us to dedicate a significant portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, acquisitions and capital expenditures, and for other general corporate purposes;

•limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate;

•restrict us from making strategic acquisitions or exploiting business opportunities; and

•limit, along with the financial and other restrictive covenants in our indebtedness, among other things, our ability to borrow additional funds. 

DESPITE OUR CURRENT LEVELS OF INDEBTEDNESS, WE MAY INCUR ADDITIONAL DEBT IN THE FUTURE, WHICH COULD