Ingram Micro 1999 Annual Report Download - page 29

well as the amount of common stock that the Company can repurchase annually. Borrowings are subject to the satisfaction of
customary conditions, including the absence of any material adverse change in the Company’s business or financial condition.At
January 1, 2000 and January 2, 1999, the Company had $503.5 million and $994.5 million in outstanding borrowings under the
credit facilities.
The Company has an arrangement pursuant to which certain U.S. trade accounts receivable of the Company are transferred to
a trust, which in turn has sold certificates representing undivided interests in the total pool of trade receivables without recourse.
The trust has issued fixed-rate, medium-term certificates to investors (which results in a reduction of trade accounts receivable on
the Company’s Consolidated Balance Sheet) and a variable-rate certificate to support a commercial paper program. At January 1,
2000 and January 2, 1999, the amount of medium-term certificates outstanding totaled $75 million and $100 million, respectively.
The amortization period for the commercial paper program began October 1, 1999 and terminated effective December 31, 1999.
Accordingly, there were no amounts outstanding under this commercial paper program at January 1, 2000.The amount outstanding
under this commercial paper program at January 2, 1999 totaled $150 million. In March 2000, the Company completed a new
5-year accounts receivable securitization program in the U.S., which provides for the issuance of up to $700 million in commercial
paper.The Company believes that available funding under this new program will provide increased flexibility for the Company to
make incremental investments in strategic growth initiatives and to manage working capital requirements.
The Company also established certain other facilities relating to accounts receivable in Europe and Canada during 1999.
Under these programs, the Company has sold approximately $188 million of trade accounts receivable in the aggregate resulting
in a further reduction of trade accounts receivable on the Company’s Consolidated Balance Sheet at January 1, 2000.
The aggregate amount of trade accounts receivable sold as of January 1, 2000 totaled approximately $263 million. Proceeds
from these accounts receivable facilities are generally used to repay existing indebtedness.The Company believes that there are
sufficient trade accounts receivable to support the outstanding medium-term certificates, the new U.S. commercial paper program
and the European and Canadian facilities.
On June 9, 1998, the Company sold $1.33 billion aggregate principal amount at maturity of its Zero Coupon Convertible
Senior Debentures due 2018 in a private placement.The Company has subsequently registered the resale of these debentures
with the SEC. Gross proceeds from this offering were $460.4 million. The debentures were sold at an issue price of $346.18 per
$1,000 principal amount at maturity (representing a yield to maturity of 5.375% per annum), and are convertible into shares of
the Company’s Class A Common Stock at a rate of 5.495 shares per $1,000 principal amount at maturity, subject to adjustment
under certain circumstances. In March 1999, the Company repurchased Zero Coupon Convertible Senior Debentures with a
carrying value of $56.5 million as of the repurchase date for approximately $50.3 million in cash.The debenture repurchase
resulted in an extraordinary gain of $3.8 million (net of $2.4 million in income taxes).
As of January 1, 2000, the debentures were convertible into approximately 6.4 million shares of the Company’s Class A
Common Stock.The debentures are redeemable at the option of the Company on or after June 9, 2003, at the issue price plus
accrued original issue discount to the date of the redemption. Each debenture is subject to repurchase at the option of the holder
as of June 9, 2001, June 9, 2003, June 9, 2008, or June 9, 2013, or if there is a Fundamental Change (as defined), at the issue price
plus accrued original issue discount to the date of the redemption. In the event of a repurchase at the option of the holder (other
than upon a Fundamental Change), the Company may, at its option, satisfy the redemption in cash or Class A Common Stock, or any
combination thereof. In the case of any such repurchase as of June 9, 2001, the Company may elect, in lieu of the payment of cash
or Class A Common Stock, to satisfy the redemption in new Zero Coupon Convertible Senior Debentures due 2018.
The Company and its foreign subsidiaries have additional lines of credit, commercial paper, short-term overdraft facilities
and other credit facilities with various financial institutions worldwide, which provide for borrowings aggregating $601.0 million
at January 1, 2000. Most of these arrangements are on an uncommitted basis and are reviewed periodically for renewal.At
January 1, 2000, the Company had $248.1 million outstanding under these facilities.
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Ingram Micro
Annual Report