Dell 2009 Annual Report Download - page 72

Table of Contents
DELL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
During Fiscal 2010, Dell entered into several interest rate swap agreements to effectively convert $200 million of the Notes' fixed rate to
a floating rate. The floating rates are based on six-month LIBOR plus a fixed rate. The interest rate swaps qualified for hedge accounting
treatment as fair value hedges.
The principal amount of the Senior Debentures was $300 million at January 29, 2010. The estimated fair value of the Senior Debentures
was approximately $333 million at January 29, 2010, compared to a carrying value of $394 million at that date. The carrying value
includes an unamortized amount related to the termination of interest rate swap agreements in the fourth quarter of Fiscal 2009, which
were previously designated as hedges of the debt.
Dell India Pvt Ltd., Dell's wholly-owned subsidiary, borrowed $24 million under a two-year term note agreement during Fiscal 2010 for
working capital needs. The term note contains customary events of default, including failure to make required payments, failure to
comply with certain agreements or covenants, misrepresentation, change of ownership, and certain events of bankruptcy and insolvency.
The indentures governing the Notes and the Senior Debentures contain customary events of default, including failure to make required
payments, failure to comply with certain agreements or covenants, and certain events of bankruptcy and insolvency. The Indentures also
contain covenants limiting Dell's ability to create certain liens; enter into sale-and-lease back transactions; and consolidate or merge with,
or convey, transfer or lease all or substantially all of its assets to another person.
As of January 29, 2010, there were no events of default with respect to the Notes, the Senior Debentures, or the India term note.
Aggregate future maturities of long-term debt at face value (excluding a $97 million unamortized carrying value adjustment related to the
termination of interest rate swap agreements, a $5 million discount on debt issuance, and a $1 million hedge accounting adjustment) were
as follows at January 29, 2010:
Payments Due by Year
2011 2012 2013 2014 2015 Thereafter Total
(in millions)
Aggregate future maturities of long-term debt outstanding $ - $ 24 $ 400 $ 600 $ 500 $ 1,800 $ 3,324
Short-Term Debt
Commercial Paper
Dell has a $1.5 billion commercial paper program with a supporting $1.5 billion senior unsecured revolving credit facility that allows it to
obtain favorable short-term borrowing rates. Of the senior unsecured revolving credit facility, $500 million expires on April 2, 2010, and
$1 billion expires on June 1, 2011. Dell intends to extend the credit facility expiring during Fiscal 2011. The credit facility requires
compliance with conditions that must be satisfied prior to any borrowing, as well as ongoing compliance with specified affirmative and
negative covenants, including maintenance of a minimum interest coverage ratio. Amounts outstanding under the facility may be
accelerated for events of default, including failure to pay principal or interest, breaches of covenants, or non-payment of judgments or
debt obligations. As of January 29, 2010, there were no events of default and Dell was in compliance with its minimum interest coverage
ratio covenant.
At January 29, 2010, and January 30, 2009, there were $496 million and $100 million, respectively, outstanding under the commercial
paper program. The weighted-average interest rate on these outstanding short-term borrowings was 0.24% and 0.19%, respectively. There
were no outstanding advances under the related revolving credit facilities for the respective periods.
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