UNISYS CORP 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest rate risk The company has exposure to interest rate risk from its debt. In an effort to manage interest rate exposures, the company strives to achieve an acceptable balance between fixed and variable debt positions. As of December 31, 2025, substantially all of the company’s total long-term debt is at a fixed rate and therefore does not expose the company to risk related to rising interest rates. See Note 13, “Debt,” of the Notes to Consolidated Financial Statements. Although at December 31, 2025 the company had no outstanding borrowings under the Amended and Restated ABL Credit Facility, future borrowings, if any, will be subject to variable interest rates. As of December 31, 2025, the company had outstanding $687.2 million ($700 million face value) of 10.625% Senior Secured Notes due 2031 (the 2031 Notes). As the 2031 Notes have a fixed interest rate, the company does not have financial and economic exposure related to rising interest rates with respect to the 2031 Notes. However, the fair value of fixed rate instruments fluctuates when interest rates change. As of December 31, 2025, the fair value of the 2031 Notes was $717.5 million. Foreign currency exchange rate risk The company is also exposed to foreign currency exchange rate risks. The company is a net receiver of currencies other than the U.S. dollar and, as such, can benefit from a weaker dollar, and can be adversely affected by a stronger dollar relative to currencies worldwide, primarily the Australian dollar, Brazilian real, British pound sterling, Mexican pesos and euro. Accordingly, changes in exchange rates, and in particular a strengthening of the U.S. dollar, may adversely affect consolidated revenue and operating margins as expressed in U.S. dollars. Currency exposure gains and losses are mitigated by purchasing components and incurring expenses in local currencies. In connection with the company's global cash management operations, the company maintains various intercompany lending arrangements, some of which are denominated in currencies other than the applicable entities’ functional currencies. As a result, the remeasurement of these balances exposes the company to foreign currency exchange risk. During 2025, the company ceased its use of foreign currency forward contracts, which had previously mitigated the impact of exchange rate fluctuations in these intercompany balances. The company expects increased volatility in its consolidated statement of income (loss) related to the remeasurement of these foreign currency denominated intercompany balances. 45