Avnet 2002 Annual Report Download - page 39

Download and view the complete annual report

Please find page 39 of the 2002 Avnet annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 91

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91

(excluding cash and cash equivalents), resulting in $186.2 million of net cash Öows provided from operations.
In addition, the Company used $149.4 million for other normal business operations including purchases of
property, plant and equipment ($125.4 million) and dividends ($27.4 million), oÅset by cash generated from
other items ($3.4 million). This resulted in $36.8 million being generated from normal business operations.
The Company also used $660.5 million for acquisitions, net of cash received from dispositions and the net cash
used for discontinued operations. This overall use of cash of $623.7 million was Ñnanced by a $119.2 million
net increase in debt, $350.0 million of proceeds from the asset securitization program and the utilization of
$154.5 million of available cash.
In 2000, the Company generated $249.3 million from income from continuing operations before
depreciation, amortization, deferred taxes and other non-cash items (including the non-cash portion of special
charges), and used $743.7 million for working capital (excluding cash and cash equivalents), resulting in
$494.4 million of net cash Öows being used for operating activities. In addition, the Company used
$82.5 million for other normal business operations including purchases of property, plant and equipment
($92.5 million) and dividends ($18.2 million), oÅset by cash generated from other items ($28.2 million). This
resulted in $576.9 million being used for normal business operations. The Company also used $729.1 million
for acquisitions and the net cash used for discontinued operations. This overall use of cash of $1.306 billion
was Ñnanced by a $1.054 billion net increase in debt and the utilization of $251.7 million of available cash.
Capital Structure
The Company uses a variety of Ñnancing arrangements, both short-term and long-term, to fund its
operations. The Company uses diversiÑed sources of funding so that it does not become overly dependent on
one source and in eÅorts to achieve lower cost of funding through these diÅerent alternatives. These Ñnancing
arrangements include public bonds, short-term and long-term bank loans, commercial paper and an accounts
receivable securitization program. For a detailed description of the Company's external Ñnancing arrange-
ments outstanding at June 28, 2002, please refer to Note 7 in the notes to the consolidated Ñnancial statements
appearing in Item 14 of this Report.
The table below highlights the capital structure for the past two years:
CAPITAL STRUCTURE
(Dollars in thousands)
2002 2001 % Change
Short-Term Debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 59,309 $1,302,129 (95.45)%
Long-Term Debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,565,836 919,493 70.29 %
Shareholders' Equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,804,510 2,374,590 (24.01)%
Total Capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,429,655 $4,596,212 (25.38)%
Financing Transactions
In November 2001, the Company issued $400.0 million of 8.0% Notes due November 15, 2006 (the
""8% Notes''). The net proceeds received by the Company from the sale of the 8% Notes were approximately
$394.3 million after deduction of the underwriting discounts and other expenses associated with the sale. The
net proceeds from the 8% Notes have been used to repay commercial paper and other short-term
indebtedness. The 8% Notes are hedged with two interest rate swaps as discussed in Note 7 to the consolidated
Ñnancial statements appearing in Item 14 of this Report and in Item 7A. The hedges eÅectively convert the
8% Notes from a Ñxed rate to a Öoating rate based upon U.S. LIBOR plus a spread. The Company accounts
for the hedges using the shortcut method as deÑned under the FASB's Statement of Financial Accounting
Standards No. 133 (""SFAS 133''), ""Accounting for Derivative Instruments and Hedging Activities,'' as
amended by Statement of Financial Accounting Standards No. 138, ""Accounting for Certain Derivative and
Hedging Activities.'' Under this method, the hedges were perfectly eÅective during the year and at year-end.
28