Ingram Micro 2006 Annual Report Download - page 54

identifiable intangible assets consisting of customer and vendor relationships of $36.0 million with an estimated
useful life of approximately 6 years. During 2005, we made an adjustment to Tech Pacific’s purchase price
allocation. This adjustment reflected additional liabilities of $3.4 million for costs associated with the reductions of
Tech Pacific’s workforce and closure and consolidation of Tech Pacific facilities, which were made redundant by
the acquisition. This adjustment resulted in an increase of goodwill for that same amount.
In July 2004, we acquired substantially all of the assets and assumed certain liabilities of Nimax, a privately-
held distributor of automatic identification and data capture and point-of-sale solutions. The purchase price,
consisting of cash payments of $9.7 million, was allocated to the assets acquired and liabilities assumed based on
estimated fair values on the transaction date, resulting in the recording of $0.9 million of other amortizable
intangible assets primarily related to customer and vendor relationships. No goodwill was recorded in this
transaction.
Capital Resources
We believe that our existing sources of liquidity, including cash resources and cash provided by operating
activities, supplemented as necessary with funds available under our credit arrangements, will provide sufficient
resources to meet our present and future working capital and cash requirements for at least the next twelve months.
On-Balance Sheet Capital Resources
In July 2006, we increased our borrowing capacity to $550 million under our revolving accounts receivable-
backed financing program in the U.S., secured by substantially all U.S.-based receivables. We also extended the
maturity date of the program from March 2008 to July 2010. At our option, the program may be increased to as
much as $650 million at any time prior to the new maturity date. The interest rate on this facility varies dependent on
the designated commercial paper rates plus a predetermined margin. At December 30, 2006 and December 31,
2005, we had borrowings of $234.4 million and $304.3 million, respectively, under this revolving accounts
receivable-backed financing program in the U.S.
We also have a revolving accounts receivable-backed financing program in Canada, which provides for
borrowing capacity of up to 150 million Canadian dollars, or approximately $129 million at December 30, 2006.
This facility matures on August 2008. The interest rate on this facility is dependent on the designated commercial
paper rates plus a predetermined margin at the drawdown date. At December 30, 2006 and December 31, 2005, we
had borrowings of $0 and $38.7 million, respectively, under this revolving accounts receivable-backed financing
program.
We have two revolving accounts receivable-backed financing facilities in Europe, which individually provide
for borrowing capacity of up to Euro 107 million, or approximately $141 million, and Euro 230 million, or
approximately $303 million, respectively at December 30, 2006, with a financial institution that has an arrangement
with a related issuer of third-party commercial paper. These facilities mature in July 2007 and January 2009,
respectively. Both of these European facilities require certain commitment fees, and borrowings under both
facilities incur financing costs at rates indexed to EURIBOR. At December 30, 2006 and December 31, 2005, we
had no borrowings under these European revolving accounts receivable-backed financing facilities.
We have a multi-currency revolving accounts receivable-backed financing facility in Asia-Pacific supported
by trade accounts receivable, which provides for up to 250 million Australian dollars of borrowing capacity, or
approximately $197 million at December 30, 2006, with a financial institution that has an arrangement with a
related issuer of third-party commercial paper. This facility expires in June 2008. The interest rate is dependent
upon the currency in which the drawing is made and is related to the local short-term bank indicator rate for such
currency. At December 30, 2006 and December 31, 2005, we had borrowings of $36.3 million and $112.6 million,
respectively, under this facility.
Our ability to access financing under our North American, European and Asia-Pacific facilities, as discussed
above, is dependent upon the level of eligible trade accounts receivable and the level of market demand for
commercial paper. At December 30, 2006, our actual aggregate available capacity under these programs was
approximately $974 million based on eligible accounts receivable available, of which approximately $270.7 million
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