CDW 2006 Annual Report Download - page 53

Download and view the complete annual report

Please find page 53 of the 2006 CDW annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 81

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81

43
7. Financing Arrangements
We have an aggregate $70.0 million available pursuant to two $35.0 million unsecured lines of
credit with two financial institutions. One line of credit was renewed in June 2006 and expires in
June 2007. The other line does not have a fixed expiration date. Borrowings under the first credit
facility bear interest at the prime rate less 2.5%, LIBOR plus 0.45% or the federal funds rate plus
0.5%, as determined by the Company. Borrowings under the second credit facility bear interest
at the prime rate less 2.5%, LIBOR plus 0.45% or the federal funds rate plus 0.45%, as
determined by the Company. The Company does not incur any facility fees associated with
either line of credit. At December 31, 2006, there were no borrowings under either of the credit
facilities.
8. Trade Financing Agreements
We have entered into security agreements with certain financial institutions in order to facilitate the
purchase of inventory from various suppliers under certain terms and conditions. The agreements
allow for a maximum credit line of $150 million collateralized by the inventory purchases financed by
the financial institutions and certain other assets. We do not incur any interest expenses associated
with these agreements, as we pay the balances when they are due. At December 31, 2006 and
2005, we owed the financial institutions approximately $108.1 million and $43.8 million, respectively,
which is included in trade accounts payable.
9. Lease Commitments
We are obligated under various operating lease agreements for office facilities that generally
provide for minimum rent payments and a proportionate share of operating expenses and
property taxes and include certain renewal and expansion options. For the years ended
December 31, 2006, 2005 and 2004, rent expense was $14.9 million, $11.4 million and $13.8
million, respectively.
In connection with the acquisition of Berbee, we assumed certain capital lease obligations for
office equipment. At the date of acquisition, the equipment subject to capital leases was
recorded in property and equipment at fair value, which was $0.9 million. From the date of
acquisition through December 31, 2006, we recorded $0.1 million of depreciation expense related
to this equipment.
Future minimum lease payments are as follows (in thousands):
Years Ended December 31,
Capital
Leases
Operating
Leases
2007 $ 562 $ 11,888
2008 211 12,428
2009 57 12,744
2010 - 12,292
2011 - 7,787
Thereafter - 46,048
Total future minimum lease payments 830 $ 103,187
Amounts representing interest (68)
Present value of future minimum lease payments 762
Current portion of capital lease obligation (507)
Long-term capital lease obligation $ 255