Ingram Micro 2011 Annual Report Download - page 49

transferring or pledging the underlying eligible receivables as collateral for other financing programs. At
December 31, 2011, the amount of trade accounts receivable which would be restricted in this regard totaled
approximately $1,371,000.
In September 2011, we terminated our senior unsecured term loan credit facility with a bank syndicate in
North America. We repaid our outstanding balance of $225,000 with our available cash. Concurrently with the
termination of our senior unsecured term loan facility, we settled our interest rate swap agreement with a notional
amount of $175,000 of the term loan principal amount at that date, which had been accounted for as a cash flow
hedge. The two terminations resulted in an aggregate loss of $5,624, consisting of a loss of $5,377 on the
settlement of our interest rate swap agreement and a write-off totaling $247 of our remaining unamortized
deferred financing costs associated with the terminated facility.
In September 2011, we also terminated our $275,000 revolving senior unsecured credit facility. We replaced
this facility on the same day with a new $750,000 revolving senior unsecured credit facility from a syndicate of
multinational banks. The new credit facility matures in September 2016. The interest rate on the new revolving
senior unsecured credit facility is based on LIBOR, plus a predetermined margin that is based on our debt ratings
and leverage ratio. We had no borrowings at December 31, 2011 and January 1, 2011 under these respective
credit facilities. These credit facilities may also be used to issue letters of credit. At December 31, 2011 and
January 1, 2011, letters of credit of $4,700 and $5,000, respectively, were issued under the new and terminated
facilities, respectively, to certain vendors and financial institutions to support purchases by our subsidiaries,
payment of insurance premiums and flooring arrangements. Our available capacity under these respective
agreements is reduced by the amount of any outstanding letters of credit.
We also have additional lines of credit, short-term overdraft facilities and other credit facilities with various
financial institutions worldwide, which provide for borrowing capacity aggregating approximately $654,000 at
December 31, 2011. Most of these arrangements are on an uncommitted basis and are reviewed periodically for
renewal. At December 31, 2011 and January 1, 2011, respectively, we had $92,428 and $92,774 outstanding
under these facilities. The weighted average interest rate on the outstanding borrowings under these facilities,
which may fluctuate depending on geographic mix, was 8.1% and 6.8% per annum at December 31, 2011 and
January 1, 2011, respectively. At December 31, 2011 and January 1, 2011, letters of credit totaling $31,405 and
$21,941, respectively, were issued to various customs agencies and landlords to support our subsidiaries. The
issuance of these letters of credit reduces our available capacity under these agreements by the same amount.
Covenant Compliance
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 December 31, 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.
Trade Accounts Receivable Factoring Programs
We have an uncommitted factoring program in North America under which trade accounts receivable of one
large customer may be sold, without recourse, to a financial institution. The program’s total amount of
receivables that may be factored at any point in time cannot exceed $150,000. We also have an uncommitted
factoring program in EMEA under which trade accounts receivable of another large customer may be sold,
without recourse, to a financial institution. The program’s total amount of receivables that may be factored at any
point in time cannot exceed €30,000, or approximately $39,000 at December 31, 2011. Available capacity under
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