Vestis Corp 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Risk We are exposed to market risk from changes in foreign currency exchange rates. This exposure results from revenues and profits denominated in foreign currencies being translated into U.S. dollars and from our legal entities entering into transactions denominated in a foreign currency other than their functional currency. We currently do not enter into financial instruments to manage this foreign currency translation risk. Approximately 9% of our consolidated revenue and profit are generated from foreign denominated revenue and profit. Interest Rate Risk We are exposed to interest rate risk through fluctuations in interest rates on our debt obligations. Our outstanding Term Loan Facilities bear interest at variable rates. As a result, increases in interest rates could increase the cost of servicing our debt and could materially reduce our profitability and cash flows. We seek to manage exposure to adverse interest rate changes through our normal operating and financing activities, as well as through entering into interest rate derivative agreements. Excluding the impact of interest rate derivative agreements, each 1% increase in interest rates on the Term Loan Facilities would increase our annual interest expense by approximately $15 million based on the aggregate 43 Table of Contents principal amount outstanding under the Term Loan Facilities as of September 29, 2023. As of September 29, 2023, $1,500 million aggregate principal amount was outstanding under the Term Loan Facilities. 44 Table of Contents