Company: ACA
Filing Date: 2025-02-28
Form Type: 10-K
Source: 0001739445-25-000026
Chunk: 109

Company: Arcosa, Inc.
Filing Date: 2025-02-28
Form: 10-K
Item: Item 7A
Chunk 109
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Table of Contents

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Our earnings could be affected by changes in interest rates due to the impact those changes have on our variable rate revolving credit facility and Term Loan. As of December 31, 2024, we had no outstanding loans borrowed under the revolving credit facility and the Term Loan had a balance of $700.0 million. If interest rates average one percentage point more in fiscal year 2025 than they did during 2024, our interest expense would increase by $7.0 million. In comparison, at December 31, 2023, we estimated that an average increase of one percentage point would increase interest expense by $1.6 million.

As of December 31, 2024, we had $400.0 million outstanding on our 4.375% 2021 Notes due 2029. The 2021 Notes have a 4.375% fixed annual interest rate and, therefore, our economic interest rate exposure is fixed. However, the values of the 2021 Notes are exposed to interest rate risk. We estimate that a one percentage point increase in market interest rates would decrease the fair value of the 2021 Notes by approximately $13.9 million. We carry the 2021 Notes at face value less unamortized discount on our Consolidated Balance Sheet and present the fair value for disclosure purposes only.

As of December 31, 2024, we had $600.0 million outstanding on our 6.875% 2024 Notes due 2032. The 2024 Notes have a 6.875% fixed annual interest rate and, therefore, our economic interest rate exposure is fixed. However, the values of the 2024 Notes are exposed to interest rate risk. We estimate that a one percentage point increase in market interest rates would decrease the fair value of the 2024 Notes by approximately $34.6 million. We carry the 2024 Notes at face value less unamortized discount on our Consolidated Balance Sheet and present the fair value for disclosure purposes only.

In addition, we are subject to market risk related to our net investments in our foreign subsidiaries. The net investment in foreign subsidiaries as of December 31, 2024 was $130.2 million. The impact of such market risk exposures as a result of foreign exchange rate fluctuations has not been significant to Arcosa. See Note 9 to the Consolidated Financial Statements.

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