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Item 3 — Quantitative and Qualitative Disclosures About Market Risk
Eagle Materials Inc. · 10-Q · Q1 FY2026 · Period ended Jun 30, 2026
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We are exposed to market risks related to fluctuations in interest rates on our Revolving Credit Facility and Term Loan. We have occasionally used derivative instruments, including interest rate swaps, in conjunction with our overall strategy to manage the debt outstanding that is subject to interest rate changes. We had a $750.0 million Revolving Credit Facility at June 30, 2026, under which borrowings bear interest at a variable rate. A hypothetical 100 basis point increase in interest rates on the $277.5 million of borrowings under the Term Loan at June 30, 2026, would increase interest expense by approximately $2.8 million on an annual basis. At present, we do not use derivative financial instruments.
We are subject to commodity risk with respect to price changes principally in coal, coke, natural gas, and power. We attempt to limit our exposure to changes in commodity prices by entering into contracts or increasing our use of alternative fuels.