Avid 1996 Annual Report Download - page 30

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29
F. Property and Equipment
Property and equipment consists of the following (in thousands):
Depreciable
December
31,
Life
1996
1995
Computer and video equipment.............................. 3 to 5 years $68,171 $61,085
Office equipment................................................. 3 to 5 years 4,233 4,601
Furniture and fixtures........................................... 3 to 5 years 6,915 4,800
Leasehold improvements...................................... 3 to 10 years
12,962
10,404
92,281 80,890
Less accumulated depreciation and amortization.........
43,035
31,898
$49,246
$48,992
As of December 31, 1996 and 1995 included in property and equipment is approximately $6,607,000 and $6,421,000 of
equipment under capital leases.
G. Long Term Debt
Capital Leases
As of December 31, 1996, future minimum lease payments under capital leases were as follows (in thousands):
Year
Amount
1997 $1,846
1998 831
1999 412
Total minimum lease payments 3,089
Less amounts representing interest 177
Present value of minimum lease payments 2,912
Less current portion of long-term debt 1,726
$1,186
Total cash payments for interest in 1996, 1995, and 1994 were approximately $311,000, $741,000, and $98,000,
respectively.
Capital Leases. During November 1994 and January 1995, the Company entered into equipment financing arrangements
with a bank for aggregate borrowings of up to $10,000,000, at various interest rates (ranging from 4.6% to 8.1%)
determined at the borrowing date. This equipment financing arrangement expired in March 1996 and was not renewed. As
of December 31, 1996 and 1995, $2,912,000 and $4,726,000, respectively were outstanding as capital leases under these
arrangements. Borrowings are collateralized by certain assets of the Company.
Line of Credit. In 1995, the Company entered into an unsecured line of credit agreement with a group of banks which
provided for up to $50,000,000 in revolving credit. The original expiration date of June 30, 1996 has been extended to June
28, 1997. Under the terms of the agreement, as amended in June 1996, the Company may borrow up to $35,000,000. The
Company must pay a quarterly commitment fee, calculated based on the debt service ratio of the Company and ranges from
.25% to .40% on the $35,000,000 line. The interest rate to be paid on any outstanding borrowings is contingent upon the
financial performance of the Company and ranges from LIBOR plus 1.25% to LIBOR plus 1.75%. Additionally, the
Company is required to maintain certain financial ratios and covenants over the life of the agreement, including a restriction
on the payment of dividends. The Company had no borrowings against this facility as of December 31, 1996.
Two of the Company’s European subsidiaries have unsecured overdraft facilities that permit aggregate borrowings of
$200,000 and DM800,000. No borrowings were outstanding under these facilities as of December 31, 1996.