Ingram Micro 2011 Annual Report Download - page 48

to meet our capital requirements, including the potential need to post cash collateral for identified contingencies
(see Note 10 to our consolidated financial statements and Part I, Item 3. “Legal Proceedings”), for at least the
next twelve months. Nevertheless, depending on capital and credit market conditions, we may from time to time
seek to increase our available capital resources through additional debt or other financing facilities. Finally, since
the capital and credit markets can be volatile, we may be limited in our ability to replace in a timely manner
maturing credit facilities and other indebtedness on terms acceptable to us, or at all, or to access committed
capacities due to the inability of our finance partners to meet their commitments to us.
The following is a detailed discussion of our various financing facilities.
We have $300,000 of 5.25% senior unsecured notes due 2017. Interest on the notes is payable semiannually
in arrears on March 1 and September 1 of each year. We may redeem the notes in whole at any time or in part
from time to time, at our option, at redemption prices that are designated in the terms and conditions of the notes.
We have a revolving trade accounts receivable-backed financing program in North America, which provides
for up to $500,000 in borrowing capacity, and may, subject to the financial institutions’ approval and availability
of eligible receivables, be increased to $700,000 in accordance with the terms of the program. The interest rate of
this program is dependent on designated commercial paper rates (or, in certain circumstances, an alternate rate)
plus a predetermined margin. In April 2011, we extended the maturity of this North American financing program
for an additional year to April 2014. We had no borrowings at December 31, 2011 and January 1, 2011 under this
North American financing program.
We have a revolving trade accounts receivable-backed financing program in EMEA that matures in January
2014 and provides for a borrowing capacity of up to €100,000, or approximately $129,000 at December 31, 2011.
The current program requires certain commitment fees, and borrowings under this program incur financing costs
based on EURIBOR plus a predetermined margin. We have two other revolving trade accounts receivable-
backed financing programs in EMEA, which mature in May 2013, and respectively provide for a maximum
borrowing capacity of £60,000, or approximately $93,000, and €90,000, or approximately $117,000, at
December 31, 2011. These programs require certain commitment fees, and borrowings under the programs incur
financing costs, based on LIBOR and EURIBOR, respectively, plus a predetermined margin. We had no
borrowings at December 31, 2011 and January 1, 2011 under these EMEA financing programs.
In May 2011, we terminated our multi-currency revolving trade accounts receivable-backed financing
program in Asia-Pacific, which provided a borrowing capacity of up to 210,000 Australian dollars. We replaced
this facility in the same month with a new multi-currency revolving trade accounts receivable-backed financing
program from the same financial institution, which provides borrowing capacity of up to 160,000 Australian
dollars, or approximately $164,000 at December 31, 2011. The new financing program matures in May 2014.
The interest rate for this financing program is dependent upon the currency in which the drawing is made and is
related to the local short-term bank indicator rate for such currency plus a predetermined margin. At
December 31, 2011 and January 1, 2011, we had no borrowings under these Asia-Pacific financing programs.
Our ability to access financing under all our trade accounts receivable-backed financing programs in
North America, EMEA and Asia-Pacific, as discussed above, is dependent upon the level of eligible trade
accounts receivable as well as continued covenant compliance. We may lose access to all or part of our financing
under these programs under certain circumstances, including: (a) a reduction in sales volumes leading to related
lower levels of eligible trade accounts receivable; (b) failure to meet certain defined eligibility criteria for the
trade accounts receivable, such as receivables remaining assignable and free of liens and dispute or set-off rights;
(c) performance of our trade accounts receivable; and/or (d) loss of credit insurance coverage for our EMEA and
Asia-Pacific facilities. At December 31, 2011, our actual aggregate capacity under these programs was
approximately $977,000 based on eligible trade accounts receivable available, of which no amount of such
capacity was used. Even if we do not borrow, or choose not to borrow to the full available capacity of certain
programs, most of our trade accounts receivable-backed financing programs prohibit us from assigning,
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