Avnet 2011 Annual Report Download - page 34

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Table of Contents
The following table summarizes the Company’
s capital structure as of the end of fiscal 2011 with a comparison with the end of
fiscal 2010:
Financing Transactions
The Company has a five-year $500.0 million unsecured revolving credit facility (the “Credit Agreement”)
with a syndicate of
banks that expires in September 2012. Under the Credit Agreement, the Company may elect from various interest rate options,
currencies and maturities. As of the end of fiscal 2011, there were $122.1 million in borrowings outstanding under the Credit
Agreement included in “other long-term debt”
in the consolidated financial statements. In addition, there were $16.6 million in letters
of credit issued under the Credit Agreement which represent a utilization of the Credit Agreement capacity but are not recorded in the
consolidated balance sheet as the letters of credit are not debt. As of the end of fiscal 2010, there were $93.7 million in borrowings
outstanding and $8.6 million in letters of credit issued under the Credit Agreement.
The Company has an accounts receivable securitization program (the “Securitization Program”)
with a group of financial
institutions that allows the Company to sell, on a revolving basis, an undivided interest of up to $600.0 million ($450.0 million prior to
the amendment in August 2010) in eligible receivables while retaining a subordinated interest in a portion of the receivables. The
Securitization Program does not qualify for sale accounting and has a one year term that expires at the end of August 2011 which is
expected to be renewed for another year on comparable terms. There were $160.0 million in borrowings outstanding under the
Securitization Program at July 2, 2011 and no borrowings outstanding at July 3, 2010. Interest on borrowings is calculated using a
base rate or a commercial paper rate plus a spread of 0.425%. The facility fee is 0.50%.
As a result of acquisitions during fiscal 2011, the Company acquired debt of $420.3 million, of which $211.9 million was repaid
(including associated fees) at the acquisition dates. As of July 2, 2011, the outstanding balances associated with the acquired debt and
credit facilities consisted of $16.6 million in bank credit facilities and other debt primarily used to support the acquired foreign
operations.
Notes outstanding as of the end of fiscal 2011 consisted of:
The Company assumed 3.75% Notes due March 5, 2024 in the Bell acquisition which had a fair value of $110.0 million. Prior to
the Bell acquisition, the 3.75% Notes were convertible into Bell common stock; however, as a result of the acquisition, the debt was
no longer convertible into shares. Under the terms of the 3.75% Notes, the Company could have redeemed some or all of the 3.75%
Notes for cash anytime on or after March 5, 2011 and the note holders could have required the Company to purchase for cash some or
all of the 3.75% Notes on March 5, 2011 March 5, 2014 or March 5, 2019 at a redemption price equal to 100% of the principal amount
plus interest. During the first quarter of fiscal 2011, the Company issued a tender offer for the 3.75% Notes for which approximately
$5.2 million was tendered and paid in September 2010. During the third quarter of fiscal 2011, the note holders tendered substantially
all of the remaining notes for which $104.4 million was paid in March 2011.
In addition to its primary financing arrangements, the Company has several small lines of credit in various locations to fund the
short-term working capital, foreign exchange, overdraft and letter of credit needs of its wholly-
owned subsidiaries in Europe, Asia and
Canada. Avnet generally guarantees its subsidiaries’ debt under these facilities.
30
July 2,
% of Total
July 3,
% of Total
2011
Capitalization
2010
Capitalization
(Dollars in thousands)
Short
-
term debt
$
243,079
4.4%
$
36,549
0.8%
Long
-
term debt
1,273,509
22.8
1,243,681
29.0
Total debt
1,516,588
27.2
1,280,230
29.8
Shareholders
’
equity
4,056,070
72.8
3,009,117
70.2
Total capitalization
$
5,572,658
100.0
$
4,289,347
100.0
•
$
300.0 million of 5.875% Notes due March 15, 2014
•
$
250.0 million of 6.00% Notes due September 1, 2015
•
$
300.0 million of 6.625% Notes due September 15, 2016
•
$
300.0 million of 5.875% Notes due June 15, 2020