Debt

9 Months Ended

Oct. 31, 2011

Debt [Abstract]

Debt

NOTE 3 — DEBT

	October 31, 2011			January 31, 2011
	(In thousands)
Convertible senior debentures, interest at 2.75% payable semi-annually, due December 2026	$	350,000		$	350,000
Less—unamortized debt discount		(1,285	)		(8,993	)
Convertible senior debentures, net		348,715			341,007
Capital leases		7,080			7,325
Loan payable to Brightstar Corporation, interest at LIBOR plus 4.0% payable annually, due September 2015		15,940			15,203
Interest-free revolving credit loan payable to Brightstar Corporation		38,737			38,045
Other committed and uncommitted revolving credit facilities, average interest rate of 7.99% and 3.27% at October 31, 2011 and January 31, 2011, expiring on various dates through fiscal 2012		62,660			92,931
		473,132			494,511
Less—current maturities (included as "Revolving credit loans and current portion of long-term debt, net")		(411,909	)		(434,435	)
Total long-term debt	$	61,223		$	60,076

Convertible Senior Debentures

In December 2006, the Company issued $350.0 million of convertible senior debentures due 2026 ("the debentures"). The debentures bear interest at 2.75% per year. The Company pays interest on the debentures on June 15 and December 15 of each year. In accordance with the accounting rules regarding the accounting treatment for convertible debt instruments requiring or permitting partial cash settlement upon conversion, the Company has accounted for the debt and equity components of the debentures in a manner that reflects the estimated non-convertible debt borrowing rate at the date of the issuance of the debentures at 6.30%. Under this accounting treatment, during the three and nine months ended October 31, 2011 and 2010, the Company has recorded contractual interest expense of $2.4 million and $7.2 million, respectively, and non-cash interest expense of $2.5 million and $7.5 million, respectively, related to the debentures. At October 31, 2011, the if-converted value of the debentures did not exceed the principal balance and the $1.3 million unamortized debt discount has a remaining amortization period of approximately two months based on the Company's notice of redemption of the debentures in December 2011.

In accordance with the terms of the debentures, on November 16, 2011, the Company announced its election to fully redeem the debentures on December 20, 2011, at a redemption price equal to the principal amount of the debentures plus any accrued and unpaid interest to, but excluding, the redemption date. As a result of the Company's notice of redemption, the debentures are convertible by the holders of the debentures, as provided for under the indenture. Debentures tendered for conversion will not be subject to redemption. If the holders of the debentures elect to convert, the Company will deliver cash equal to the lesser of the aggregate principal amount of the debentures to be converted and the Company's total conversion obligation as provided for under the indenture. The Company will issue shares of common stock in respect of the remainder, if any, of the Company's conversion obligation.

In addition, in accordance with the terms of the debentures, the holders have the right to require the Company to purchase their debentures for cash ("put option"). The put option, if exercised by the holders of the debentures, will require the Company to purchase all or part of the debentures on December 15, 2011, in cash at a price equal to the principal amount of the debentures plus accrued and unpaid interest up to, but excluding December 15, 2011. As December 15, 2011 is an interest payment date under the debentures, it is not anticipated that any interest payment will be made on those debentures that are delivered under the put option. Debentures for which the put option is not exercised will be redeemed by the Company on December 20, 2011, subject to earlier conversion by the holders of the debentures as described above.

The Company will use cash and/or the Company's $500.0 million Credit Agreement to satisfy the repayment of the debentures discussed above.

Loans Payable to Brightstar Corporation

In October 2010, Brightstar Corporation ("Brightstar") entered into an agreement to loan Brightstar Europe Limited ("BEL"), a joint venture between the Company and Brightstar, its share of the funding requirements related to BEL's acquisition of Mobile Communication Company B.V. and Mobile Communications Company Belgium N.V. ("the Acquisition Loan"). The Acquisition Loan from Brightstar, plus any accrued interest, has a repayment date of September 2015, or earlier if agreed between the two parties, and bears interest at the applicable LIBOR rate plus 4.0% per year, which is payable annually on October 1.

The Company also has an interest-free revolving credit loan from Brightstar that was issued in connection with the operations of BEL ("the Brightstar Revolver"). The terms of the Brightstar Revolver contain no contractual repayment date and allow for the revolving credit loan to increase or decrease in accordance with the working capital requirements of BEL, as determined by the Company. Effective October 2010, a resolution of BEL's board was approved stating that the Brightstar Revolver will not be repaid for the foreseeable future and therefore the revolving credit loan is classified as long-term debt within the Company's Consolidated Balance Sheet at both October 31, 2011 and January 31, 2011.

Other Credit Facilities

The Company has an agreement (the "Receivables Securitization Program") with a syndicate of banks that allows the Company to transfer an undivided interest in a designated pool of U.S. accounts receivable, on an ongoing basis, to provide security or collateral for borrowings up to a maximum of $300.0 million. Under this program, which was renewed in August 2011, the Company legally isolates certain U.S. trade receivables into a wholly-owned bankruptcy remote special purpose entity. Such receivables, which are recorded in the Consolidated Balance Sheet, totaled $699.0 million and $549.8 million at October 31, 2011 and January 31, 2011, respectively. As collections reduce accounts receivable balances included in the security or collateral pool, the Company may transfer interests in new receivables to bring the amount available to be borrowed up to the maximum. The Company pays interest on advances under the Receivables Securitization Program at the applicable commercial paper or LIBOR rate plus an agreed-upon margin. There are no amounts outstanding under this program at either October 31, 2011 or January 31, 2011.

In September 2011, the Company entered into a $500.0 million Credit Agreement with a syndicate of banks (the "Credit Agreement"), which replaced the Company's $250.0 million Multi-currency Revolving Credit Facility scheduled to expire in March 2012. The Credit Agreement, among other things, i) provides for a maturity date of September 27, 2016, ii) provides for an interest rate on borrowings, facility fees and letter of credit fees based on the Company's non-credit enhanced senior unsecured debt rating as determined by Standard & Poor's Rating Service and Moody's Investor Service, and iii) may be increased up to $750.0 million, subject to certain conditions. The Credit Agreement includes various covenants, limitations and events of default customary for similar facilities for similarly rated borrowers, including a maximum debt to capitalization ratio and minimum interest coverage. The Company has also provided a guarantee of certain of its significant subsidiaries. The Company pays interest on advances under the Credit Agreement at the applicable LIBOR rate plus a predetermined margin that is based on the Company's debt rating. There are no amounts outstanding under either of these facilities at October 31, 2011 or January 31, 2011, respectively.

In addition to the facilities described above, the Company has various other committed and uncommitted lines of credit and overdraft facilities totaling approximately $578.9 million at October 31, 2011 to support its operations. Most of these facilities are provided on an unsecured, short-term basis and are reviewed periodically for renewal.

The total capacity of the other credit facilities discussed above, as well as the maximum borrowings under the facilities, was approximately $1.4 billion, of which $62.7 million was outstanding at October 31, 2011. The Company's credit facilities contain limitations on the amounts of annual dividends and repurchases of common stock. Additionally, the credit facilities require compliance with certain warranties and covenants. The financial ratio covenants contained within the credit facilities include a debt to capitalization ratio and a minimum interest coverage ratio. At October 31, 2011, the Company was in compliance with all such covenants. The ability to draw funds under these credit facilities is dependent upon sufficient collateral (in the case of the Receivables Securitization Program) and meeting the aforementioned financial covenants, which may limit the Company's ability to draw the full amount of these facilities. At October 31, 2011, the Company had also issued standby letters of credit of $80.5 million. These letters of credit typically act as a guarantee of payment to certain third parties in accordance with specified terms and conditions. The issuance of these letters of credit reduces the Company's available capacity under the above-mentioned facilities by the same amount.