Company: SLGN
Filing Date: 2025-02-27
Form Type: 10-K
Source: 0000849869-25-000029
Chunk: 177

Company: SILGAN HOLDINGS INC
Filing Date: 2025-02-27
Form: 10-K
Item: Item 7A
Chunk 177
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

Market risks relating to our operations result primarily from changes in interest rates and, with respect to our international dispensing and specialty closures and metal container operations and our Canadian custom container operations, from foreign currency exchange rates. In the normal course of business, we also have risk related to commodity price changes for items such as natural gas. We employ established policies and procedures to manage our exposure to these risks. Interest rate, foreign currency and commodity pricing transactions are used only to the extent considered necessary to meet our objectives. We do not utilize derivative financial instruments for trading or other speculative purposes.

INTEREST RATE RISK

Our interest rate risk management objective is to limit the impact of interest rate changes on our net income and cash flow. To achieve our objective, we regularly evaluate the amount of our variable rate debt as a percentage of our aggregate debt. During 2024, our average outstanding variable rate debt, after taking into account the average outstanding notional amount of our interest rate swap agreements, was 29 percent of our average outstanding total debt. At December 31, 2024, our outstanding variable rate debt, after taking into account interest rate swap agreements, was approximately 19 percent of our outstanding total debt. Over the course of the year, we also borrow revolving loans under our revolving loan facilities which bear interest at variable rates to fund our seasonal working capital needs.  From time to time, we manage a portion of our exposure to interest rate fluctuations in our variable rate debt through interest rate swap agreements. As of December 31, 2024, we have $300.0 million aggregate notional principal amount of U.S. dollar interest rate swap agreements outstanding, which mature in 2026, and €685.0 million aggregate notional principal amount of Euro interest rate swap agreements outstanding, which mature at various times through 2030. These agreements effectively convert interest rate exposure from variable rates to fixed rates of interest. We entered into these agreements with banks under our Credit Agreement, and our obligations under these agreements were guaranteed and secured on a pari passu basis with our obligations under our Credit Agreement. Depending upon future market conditions and our level of outstanding variable rate debt, we may enter into additional interest rate swap or hedge agreements (with counterparties that, in our judgment, have sufficient creditworthiness) to hedge our exposure against interest rate volatility. You should also read Notes 9 and 10 to our Consolidated Financial Statements for