Company: IR
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001628280-25-006391
Chunk: 43

Company: Ingersoll Rand Inc.
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7A
Chunk 43
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We manage our debt centrally, considering tax consequences and our overall financings strategies. Our exposure to interest rate risk results primarily from our fixed rate to floating rate swap contracts which are used to adjust the relative fixed rate versus floating rate proportions of our debt portfolio. As of December 31, 2024, we had no variable rate debt outstanding.

At times we use interest rate swaps and interest rate caps to offset or mitigate our exposure to interest rate movements. The outstanding interest rate swaps qualify and are designated as fair value hedges. As of December 31, 2024, we were a variable rate payer on 7 interest rate swap contracts that effectively convert a total of $750.0 million of the Company’s fixed rate borrowings to variable rate borrowings. See Note 20 “Hedging Activities, Derivative Instruments and Credit Risk” to our audited consolidated financial statements included elsewhere in this Form 10-K.

The following table presents the impact of hypothetical changes in market interest rates across the yield curve by 100 basis points, including the effect of our interest rate swaps for the years ended December 31, 2024 and 2023 on our interest expense.

20242023Increase (decrease) in market interest rates100 basis points$7.5 $7.4 (100) basis points(7.5)(7.4)

Foreign Currency Risk

We are exposed to foreign currency risks that arise from our global business operations. Changes in foreign currency exchange rates affect the translation of local currency balances of foreign subsidiaries, transaction gains and losses associated with intercompany loans with foreign subsidiaries and transactions denominated in currencies other than a subsidiary’s functional currency. In 2024 and 2023, the relative strengthening of the U.S. dollar against foreign currencies had a unfavorable impact on our revenues and results of operations. While future changes in foreign currency exchange rates are difficult to predict, our revenues and earnings may be adversely affected if the U.S. dollar strengthens against foreign currencies.

We seek to minimize our exposure to foreign currency risks through a combination of normal operating activities, including by conducting our international business operations primarily in their functional currencies to match expenses with revenues and the use of foreign currency forward exchange contracts and net investment hedges. In addition, to mitigate the risk arising from entering into transactions in currencies other than our functional currencies, we typically settle intercompany trading balances at least