Under Armour 2012 Annual Report Download - page 46

properties, assets, financial condition or results of operations. The credit agreement contains a number of
restrictions that limit our ability, among other things, and subject to certain limited exceptions, to incur additional
indebtedness, pledge our assets as security, guaranty obligations of third parties, make investments, undergo a
merger or consolidation, dispose of assets, or materially change our line of business. In addition, the credit
agreement includes a cross default provision whereby an event of default under other debt obligations, as defined
in the credit agreement, will be considered an event of default under the credit agreement.
Borrowings under the credit facility bear interest based on the daily balance outstanding at LIBOR (with no
rate floor) plus an applicable margin (varying from 1.25% to 1.75%) or, in certain cases a base rate (based on a
certain lending institution’s Prime Rate or as otherwise specified in the credit agreement, with no rate floor) plus
an applicable margin (varying from 0.25% to 0.75%). The credit facility also carries a commitment fee equal to
the unused borrowings multiplied by an applicable margin (varying from 0.25% to 0.35%). The applicable
margins are calculated quarterly and vary based on our leverage ratio as set forth in the credit agreement.
Upon entering into the credit facility in March 2011, we terminated our prior $200.0 million revolving credit
facility. The prior revolving credit facility was collateralized by substantially all of our assets, other than
trademarks, and included covenants, conditions and other terms similar to our new credit facility.
During the three months ended September 30, 2011, we borrowed $30.0 million under the revolving credit
facility to fund seasonal working capital requirements and repaid it during the three months ended December 31,
2011. The interest rate under the revolving credit facility was 1.5% during the year ended December 31, 2011,
and no balance was outstanding as of December 31, 2012 and December 31, 2011. In May 2011, we borrowed
$25.0 million under the term loan facility to finance a portion of the acquisition of our corporate headquarters
and repaid it during the three months ended December 31, 2012. The interest rate on the term loan was 1.6% and
1.5% during the years ended December 31, 2012 and 2011, respectively, and no balance was outstanding as of
December 31, 2012.
Long Term Debt
We have long term debt agreements with various lenders to finance the acquisition or lease of qualifying
capital investments. Loans under these agreements are collateralized by a first lien on the related assets acquired.
As these agreements are not committed facilities, each advance is subject to approval by the lenders.
Additionally, these agreements include a cross default provision whereby an event of default under other debt
obligations, including our credit facility, will be considered an event of default under these agreements. These
agreements require a prepayment fee if we pay outstanding amounts ahead of the scheduled terms. The terms of
the credit facility limit the total amount of additional financing under these agreements to $40.0 million, of which
$18.0 million was available for additional financing as of December 31, 2012. At December 31, 2012 and 2011,
the outstanding principal balance under these agreements was $11.9 million and $14.5 million, respectively.
Currently, advances under these agreements bear interest rates which are fixed at the time of each advance. The
weighted average interest rates on outstanding borrowings were 3.2%, 3.5% and 5.3% for the years ended
December 31, 2012, 2011 and 2010, respectively.
We monitor the financial health and stability of its lenders under the revolving credit and long term debt
facilities, however during any period of significant instability in the credit markets lenders could be negatively
impacted in their ability to perform under these facilities.
In July 2011, in connection with the acquisition of our corporate headquarters, we assumed a $38.6 million
nonrecourse loan secured by a mortgage on the acquired property. The assumed loan had an original term of
approximately 10 years with a scheduled maturity date of March 2013. The loan included a balloon payment of
$37.3 million due at maturity. The assumed loan was nonrecourse with the lender’s remedies for non-
performance limited to action against the acquired property and certain required reserves and a cash collateral
account, except for nonrecourse carve outs related to fraud, breaches of certain representations, warranties or
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