Indivior Pharmaceuticals, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. a. Quantitative Information about Market Risk See Item 7 . Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources . In addition to the risks inherent in our operations, we are exposed to a variety of financial risks, such as market risk (including foreign currency exchange, cash flow and interest rate risk), credit risk and liquidity risk. b. Qualitative Information about Market Risk We invest cash equivalents and investments with the primary objective to preserve principal while also maximizing the income that we receive. We invest in highly-rated corporate bonds, commercial paper, and U.S. Treasuries for purposes other than trading which are reported at fair value or amortized cost, which approximates fair value for the nature and duration of instruments we use. These securities are subject to interest rate risk and credit risk. See Item 8 . Financial Statements—Audited Consolidated Financial Statements - Note 13. Financial Instruments and Fair Value Measurements. Interest on our Note Purchase Agreement is subject to fluctuation based on SOFR, which may impact future expense and cash flows. See Item 8 . Financial Statements—Audited Consolidated Financial Statements - Note 12. Debt. We operate in different territories around the world. Generally, the functional currency of our operations is that of the country in which it operates. One USD functional currency subsidiary has significant exposure to assets in Canadian Dollars and liabilities in British Pounds Sterling. The Canadian Dollar assets turn quickly and our strategy is to mitigate exposure to British Pounds with offsetting assets. However, we could be exposed to material foreign currency risk in these currencies. 120