Lumber Liquidators 2011 Annual Report Download - page 65

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
An evaluation was performed under the supervision and with the participation of our management, including our Chief
Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), of the effectiveness
of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of
1934, as amended (Exchange Act), as of the end of the period covered by this report. Based on that evaluation, our
management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and
procedures were effective as of December 31, 2011 and designed to ensure that information required to be disclosed by us in
reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time
periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our
management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with U.S. generally accepted accounting principles.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving
their control objectives.
Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2011. In
making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on our assessment and those criteria,
management believes that we maintained effective internal control over financial reporting as of December 31, 2011.
Our independent registered public accounting firm, Ernst & Young LLP, has issued a report on our internal controls
over financial reporting as of December 31, 2011. See “Item 8. Consolidated Financial Statements and Supplementary Data.”
Changes in Internal Control over Financial Reporting
There have not been any changes in our internal control over financial reporting during the quarter ended December 31,
2011 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Item 9B. Other Information.
On February 21, 2012, the Company entered into an Amended and Restated Revolver (the “Revolver”) with Bank of
America, N.A. to provide for borrowings up to $50.0 million through expiration in February 2017. The Revolver is secured
by LLI’s inventory, supports up to $10.0 million in letters of credit, has no mandated payment provisions and a fee of
0.1% per annum, subject to adjustment based on certain financial performance criteria, on any unused portion of the
Revolver. Amounts outstanding under the Revolver would be subject to an interest rate of LIBOR plus 1.125%, subject to
adjustment based on certain financial performance criteria. The Revolver has certain defined covenants and restrictions,
including the maintenance of a Basic Fixed Charge Coverage Ratio of greater than or equal to 1.75 to 1.0 and an Adjusted
Funded Debt to EBITDAR Ratio not exceeding 2.50 to 1.0. A copy of the Revolver agreements are attached as exhibits to
this Form 10-K.
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