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Annual Report 1996


6. Short-term Debt

The Company maintains a five-year $150.0 million committed line of credit for general corporate purposes which expires in 1999. As of December 31, 1996 and 1995, there were no borrowings under this facility.

As of December 31, 1996, gross borrowings from the Company's international uncommitted lines of credit were $124.9 million. There were no borrowings from the Company's U.S. uncommitted lines of credit as of December 31, 1996. Additional available, uncommitted lines of credit for U.S. and international operations were $120.0 million and $140.3 million, respectively, at December 31, 1996. As of December 31, 1995, gross borrowings from international uncommitted lines of credit were $160.4 million. There were no borrowings from the Company's U.S. uncommitted lines of credit as of December 31, 1995. Additional available, uncommitted lines of credit for U.S. and international operations were $160.0 million and $135.0 million, respectively at December 31, 1995. Borrowings from international uncommitted lines of credit were incurred by the Company's foreign subsidiaries primarily to manage its foreign currency balance sheet exposure (see Note 3). The weighted average interest rate on international short-term debt outstanding as of December 31, 1996 and 1995 was 4.7% and 5.5%, respectively. The Company's total borrowing capacity is limited by certain debt covenants.

In December 1996, the Company entered into additional credit agreements under which it may borrow up to $150 million. These credit agreements expire on March 15, 1997 and there were no borrowings under these agreements as of December 31, 1996.

Interest expense on international short-term borrowings was $7.5 million in 1996, $10.9 million in 1995 and $8.5 million in 1994. The average interest rates ranged from 3.2% to 5.3% in 1996, 4.0% to 7.1% in 1995, and 5.0% to 6.6% in 1994. Interest expense on U.S. short-term borrowings was $.6 million in both 1996 and 1995, at average interest rates of 5.6% and 6.1%, respectively.




Polaroid Corporation Annual Report 1996
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