Ingram Micro 2010 Annual Report Download - page 64

had no borrowings outstanding at January 1, 2011 and had $57,526 outstanding at January 2, 2010 under this Asia
Pacific financing program.
Our ability to access financing under all our trade accounts receivable-backed financing programs in North
America, EMEA and Asia Pacific, as discussed above, is dependent upon the level of eligible trade accounts
receivable as well as continued covenant compliance. We may lose access to all or part of our financing under these
programs under certain circumstances, including: (a) a reduction in sales volumes leading to related lower levels of
eligible trade accounts receivable; (b) failure to meet certain defined eligibility criteria for the trade accounts
receivable, such as receivables remaining assignable and free of liens and dispute or set-off rights; (c) performance
of our trade accounts receivable; and/or (d) loss of credit insurance coverage for our EMEA and Asia Pacific
facilities. At January 1, 2011, our actual aggregate available capacity under these programs was approximately
$1,037,000 based on eligible trade accounts receivable available, against which we had no borrowings. Even if we
do not borrow, or choose not to borrow to the full available capacity of certain programs, most of our trade accounts
receivable-backed financing programs prohibit us from assigning, transferring or pledging the underlying eligible
receivables as collateral for other financing programs. At January 1, 2011, the amount of trade accounts receivable
which would be restricted in this regard totaled approximately $1,287,000.
We have a senior unsecured term loan facility with a bank syndicate in North America with an outstanding
balance of $234,375 at January 1, 2011 and $246,875 at January 2, 2010. The interest rate on this facility is based on
one-month LIBOR, plus a variable margin that is based on our debt ratings and leverage ratio. Interest is payable
monthly. Under the terms of the agreement, we are also required to pay a minimum of $3,125 of principal on the
loan on a quarterly basis and a balloon payment of $215,625 at the end of the loan term in August 2012. The
agreement also contains certain negative covenants, including restrictions on funded debt and interest coverage, as
well as customary representations and warranties, affirmative covenants and events of default.
In connection with the senior unsecured term loan facility, we entered into an interest rate swap agreement for a
notional amount at January 1, 2011 of $184,375 of the term loan principal amount, the effect of which is to swap the
LIBOR portion of the floating-rate obligation for a fixed-rate obligation. The fixed rate including the variable
margin is approximately 5%. The notional amount on the interest rate swap agreement reduces by $3,125 quarterly
since November 2009 and the swap expires in August 2012, consistent with the maturity schedule of the senior
unsecured term loan. We account for the interest rate swap agreement as a cash flow hedge. At January 1, 2011 and
January 2, 2010, the mark-to-market value of the interest rate swap amounted to $9,252 and $9,662, respectively,
which was recorded as a decrease in other comprehensive income with an offsetting increase to the hedged debt,
bringing the total carrying value of the senior unsecured term loan to $243,627 and $256,537, respectively.
We have a $275,000 revolving senior unsecured credit facility with a bank syndicate in North America, which
matures in August 2012. The interest rate on the revolving senior unsecured credit facility is based on LIBOR plus a
predetermined margin that is based on our debt ratings and leverage ratio. At January 1, 2011 and January 2, 2010,
we had no borrowings under this North American credit facility. This credit facility may also be used to issue letters
of credit. At both January 1, 2011 and January 2, 2010, letters of credit of $5,000 were issued to certain vendors to
support payment of insurance claims. Our available capacity under the agreement is reduced by the amount of any
issued and outstanding letters of credit.
We have a 20,000 Australian dollar, or approximately $20,000 at January 1, 2011, senior unsecured credit
facility which matures in December 2011. The interest rate on this credit facility is based on Australian or New
Zealand short-term bank indicator rates, depending on the funding currency, plus a predetermined margin that is
based on our debt ratings and our leverage ratio. We had no borrowings outstanding at January 1, 2011 and had $861
outstanding at January 2, 2010 under this Asia Pacific facility.
We also have additional lines of credit, short-term overdraft facilities and other credit facilities with various
financial institutions worldwide, which provide for borrowing capacity aggregating approximately $596,000 at
January 1, 2011. Most of these arrangements are on an uncommitted basis and are reviewed periodically for
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INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)