Tech Data 2014 Annual Report Download - page 33

Table of Contents
Other Credit Facilities
We have a $500.0 million revolving credit facility with a syndicate of banks (the “Credit Agreement”), which, among other things, i) provides
for a maturity date of September 27, 2016, ii) provides for an interest rate on borrowings, facility fees and letter of credit fees based on our non-
credit enhanced senior unsecured debt rating as determined by Standard & Poor’s Rating Service and Moody’s Investor Service, and iii) may be
increased to a maximum of $750.0 million, subject to certain conditions. The Credit Agreement includes various covenants, limitations and
events of default customary for similar facilities for similarly rated borrowers, including a maximum debt to capitalization ratio and minimum
interest coverage. We pay interest on advances under the Credit Agreement at the applicable LIBOR rate plus a predetermined margin that is
based on our debt rating. There were no amounts outstanding under the Credit Agreement at January 31, 2014. There was $42.9 million
outstanding under the Credit Agreement at January 31, 2013 at an interest rate of 1.65%.
We also have an agreement with a syndicate of banks (the "Receivables Securitization Program") that allows us to transfer an undivided interest
in a designated pool of U.S. accounts receivable, on an ongoing basis, to provide security or collateral for borrowings up to a maximum of
$400.0 million. The Receivables Securitization Program was renewed in October 2012 for a period of two years and interest is to be paid on
advances at the applicable commercial paper or LIBOR rate plus an agreed-upon margin. There were no amounts outstanding under the
Receivables Securitization Program at January 31, 2014. There was $83.5 million outstanding under the Receivables Securitization Program at
January 31, 2013, at an interest rate of 1.02%.
In addition to the facilities described above, we have various other committed and uncommitted lines of credit and overdraft facilities totaling
approximately $429.6 million at January 31, 2014 to support our operations. Most of these facilities are provided on an unsecured, short-term
basis and are reviewed periodically for renewal. There was $42.9 million outstanding on these facilities at January 31, 2014, at a weighted
average interest rate of 6.15% , and there was $40.6 million outstanding at January 31, 2013, at a weighted average interest rate of 4.76% .
In consideration of the financial covenants discussed below, our maximum borrowing availability on our credit facilities is approximately
$891.0
million , of which $42.9 million
was outstanding at January 31, 2014. Certain of our credit facilities contain limitations on the amounts of annual
dividends and repurchases of common stock and require compliance with other obligations, warranties and covenants. The financial ratio
covenants contained within these credit facilities include a debt to capitalization ratio and a minimum interest coverage ratio. At January 31,
2014, we were in compliance with all such financial covenants.
At January 31, 2014, we had also issued standby letters of credit of $83.0 million. These letters of credit typically act as a guarantee of payment
to certain third parties in accordance with specified terms and conditions. The issuance of these letters of credit reduces our borrowing
availability under certain of the above-mentioned facilities.
Accounts Receivable Purchase Agreements
We have uncommitted accounts receivable purchase agreements under which certain accounts receivable may be sold, without recourse, to third-
party financial institutions. Under these programs, we may sell certain accounts receivable in exchange for cash less a discount, as defined in the
agreements. Available capacity under these programs, which we use as a source of working capital funding, is dependent on the level of accounts
receivable eligible to be sold into these programs and the financial institutions' willingness to purchase such receivables. In addition, certain of
these agreements also require that we continue to service, administer and collect the sold accounts receivable. At January 31, 2014 and 2013, the
Company had a total of $263.7 million and $284.7 million , respectively, of accounts receivable sold to and held by financial institutions under
these agreements. During the fiscal years ended January 31, 2014, 2013 and 2012, discount fees recorded under these facilities were $3.4
million , $2.6 million , and $1.1 million, respectively, which are included as a component of "other (income) expense, net" in the Company's
Consolidated Statement of Income.
Share Repurchase Programs
During fiscal 2013, we repurchased 3,752,939 shares of our common stock at a cost of $185.1 million in connection with both of our $100.0
million share repurchase programs approved by the Board of Directors in May 2012 and November 2011. Both share repurchase programs were
completed during fiscal 2013. In addition, 125,609 shares were acquired outside of the stock repurchase programs related to the exercise of an
employee’s equity incentive grants.
In conjunction with our share repurchase programs approved by the Board of Directors, 10b5-1 plans were executed that instruct the brokers
selected by us to repurchase shares on our behalf. The amount of common stock repurchased in accordance with the 10b5-1 plans on any given
trading day is determined by a formula in the plans, which is based on the market price of our common stock and average daily volumes. Shares
repurchased by us are held in treasury for general corporate purposes, including issuances under equity incentive and benefit plans.
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