Ingram Micro 2010 Annual Report Download - page 65

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renewal. At January 1, 2011 and January 2, 2010, respectively, we had $92,774 and $64,571 outstanding under these
facilities. The weighted average interest rate on the outstanding borrowings under these facilities, which may
fluctuate depending on geographic mix, was 6.8% and 5.1% per annum, respectively, at January 1, 2011 and
January 2, 2010. At January 1, 2011 and January 2, 2010, letters of credit totaling $21,941 and $22,112,
respectively, were issued principally to support the performance by our subsidiaries with respect to certain lease
agreements, vendor purchase obligations, or other operating liabilities. The issuance of these letters of credit
reduces our available capacity under these agreements by the same amount.
We are required to comply with certain financial covenants under the terms of certain of our financing
facilities, including restrictions on funded debt and liens and covenants related to tangible net worth, leverage and
interest coverage ratios and trade accounts receivable portfolio performance including metrics related to receivables
and payables. We are also restricted by other covenants, including, but not limited to, restrictions on the amount of
additional indebtedness we can incur, dividends we can pay, and the amount of common stock that we can
repurchase annually. At January 1, 2011, we were in compliance with all material covenants or other material
requirements set forth in our trade accounts receivable-backed programs and credit agreements, as discussed above.
Note 7 — Income Taxes
We account for income taxes under the asset and liability method, which requires the recognition of deferred
tax assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities are determined based on the differences between
the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is
recognized in income in the period that includes the enactment date. The estimates and assumptions we use in
computing the income taxes reflected in our consolidated financial statements could differ from the actual results
reflected in our income tax returns filed during the subsequent year. We record adjustments based on filed returns as
such returns are finalized and resultant adjustments are identified.
The components of income (loss) before income taxes consist of the following:
2010 2009 2008
Fiscal Year Ended
United States ..................................... $ 86,200 $ (19,473) $(189,168)
Foreign.......................................... 351,861 288,721 (192,970)
Total............................................ $438,061 $269,248 $(382,138)
57
INGRAM MICRO INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)