Tech Data 2013 Annual Report Download - page 34

Table of Contents
Net cash used in investing activities of $345.7 million during fiscal 2013 is primarily the result of $310.3 million of cash used for acquisitions in
Europe and $38.4 million of expenditures for the continuing expansion and upgrading of our IT systems, office facilities and equipment for our
logistics centers in both the Americas and Europe. We expect to make total capital expenditures of approximately $37.0 million during fiscal 2014
for equipment and machinery in our logistics centers, office facilities and IT systems.
Net cash used in investing activities of $69.1 million during fiscal 2012 is primarily the result of $44.6 million of expenditures for the continuing
expansion and upgrading of our IT systems, office facilities and equipment for our logistics centers in both the Americas and Europe and $24.9
million of cash used for acquisitions in Europe.
Net cash provided by financing activities of $80.3 million during fiscal 2013 is primarily the result of $345.8 million in net proceeds from the
issuance of Senior Notes in September 2012, $87.2 million of net borrowings on our revolving credit lines and $3.4 million of proceeds received
from the reissuance of treasury stock related to the vesting and exercise of equity-based incentive awards and purchases made through our
Employee Stock Purchase Plan (“ESPP”),
partially offset by $185.1 million of cash used in the repurchase of shares of our common stock under our
share repurchase programs and other share repurchases, $117.2 million of cash used for the acquisition of the noncontrolling interest in BEL, $49.5
million for repayment of loans due to our former joint venture partner and $9.1 million for the return of capital to our former joint venture partner.
Net cash used in financing activities of $670.8 million during fiscal 2012 is primarily the result of the $350.0 million repayment of our convertible
senior debentures, $314.9 million of cash used in the repurchase of 6,736,436 shares of our common stock under our share repurchase programs and
$41.2 million of net repayments on our revolving credit lines, partially offset by $35.1 million of proceeds received from the reissuance of treasury
stock related to the vesting and exercise of equity-based incentive awards and purchases made through our ESPP.
Capital Resources and Debt Compliance
Our debt to total capital ratio was 21% at January 31, 2013. We believe a conservative approach to our capital structure will continue to support us
in a global economic environment that remains uncertain. Within our capital structure, we have a range of financing facilities, which are diversified
by type and geographic region with various financial institutions. A significant portion of our cash and cash equivalents balance generally resides in
our operations outside of the United States and are deposited and/or invested with various financial institutions which we monitor regularly for
credit quality. However, we are exposed to risk of loss on funds deposited with the various financial institutions and we may experience significant
disruptions in our liquidity needs if one or more of these financial institutions were to declare bankruptcy or other similar restructuring. We believe
that our existing sources of liquidity, including cash resources and cash provided by operating activities, supplemented as necessary with funds
available under our credit arrangements, will provide sufficient resources to meet our working capital and cash requirements for at least the next 12
months. Changes in our credit rating or other market factors may increase our interest expense or other costs of capital or capital may no longer be
available to us on acceptable terms to fund our working capital needs. The inability to obtain sufficient capital could have an adverse effect on our
business.
Our credit facilities contain various financial and other covenants that may limit our ability to borrow or limit our flexibility in responding to
business conditions. The Company has entered into certain waiver agreements with respect to these and other obligations within certain of the
Company's credit facilities in connection with the restatement of our financial statements discussed in Note 2 of Notes to Consolidated Financial
Statements. Each of the waiver agreements relates primarily to representations that may have been incorrect when made, the Company’s potential
failure to comply with certain covenants, including principally financial reporting covenants, as well as the potential defaults and events of default
that may have arisen or could arise as a result of the foregoing.
At January 31, 2013, we had approximately $340.6 million in cash and cash equivalents, of which $328.6 million was held in our foreign
subsidiaries. As discussed above, the Company currently has sufficient resources, cash flows and liquidity within the United States to fund current
and expected future working capital requirements. Historically, the Company has utilized and reinvested cash earned outside the United States to
fund foreign operations and expansion and plans to continue reinvesting such earnings and future earnings indefinitely outside of the United States.
If the Company’s plans for the use of cash earned outside of the United States change in the future, cash and cash equivalents held by our foreign
subsidiaries could not be repatriated to the United States without potential negative income tax consequences.
The following is a detailed discussion of our various financing facilities.
Senior Notes
In September 2012, the Company issued $350.0 million aggregate principal amount of 3.75% Senior Notes in a public offering, resulting in cash
proceeds of approximately $345.8 million, net of debt discount and debt issuance costs of approximately $1.3
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