Polaris 2015 Annual Report Download - page 66

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addition, we are a purchaser of components and parts containing various commodities, including steel,
aluminum, rubber and others, which are integrated into the Company’s end products. While such materials are
typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. We
generally buy these commodities and components based upon market prices that are established with the
vendor as part of the purchase process and from time to time will enter into derivative contracts to hedge a
portion of the exposure to commodity risk. At December 31, 2015, derivative contracts in place to hedge our
diesel fuel exposures for 2016 are immaterial. Based on our current outlook for commodity prices, the total
impact of commodities is expected to have a positive impact on our gross margins for 2016 when compared to
2015.
We are a party to a credit agreement with various lenders consisting of a $500 million revolving loan facility.
Interest accrues on the revolving loan at variable rates based on LIBOR or ‘‘prime’’ plus the applicable
add-on percentage as defined. At December 31, 2015, we had an outstanding balance of $225.7 million on the
revolving loan. Assuming no additional borrowings or payments on the debt, a one-percent fluctuation in
interest rates would have an approximate $2.0 million impact to interest expense in 2015.
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