Tech Data 2014 Annual Report Download - page 32

Table of Contents
Net cash used in financing activities of
$127.3 million during fiscal 2014 is primarily the result of $122.7 million of net repayments on our
revolving credit lines and $6.2 related to acquisition earn-out payments, partially offset by $1.1 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 Employee Stock Purchase
Plan (“ESPP”).
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 the 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 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 our European joint venture, $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 approximately 6.7 million 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 16% at January 31, 2014. We believe a conservative approach to our capital structure will continue to support
us in a global economic environment that remains uncertain. As part of our capital structure and to provide us with significant liquidity, we have
a diverse range of financing facilities across our geographic regions with various financial institutions. Also providing us liquidity are our cash
and cash equivalents balances across our regions which are deposited and/or invested with various financial institutions. We are exposed to risk
of loss on funds deposited with these financial institutions, however, we monitor our financing and depository financial institution partners
regularly for credit quality. We believe that our existing sources of liquidity, including cash resources and cash provided by operating activities
are sufficient to meet our working capital needs 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 obligations, financial and other covenants that may limit our ability to borrow or limit our flexibility in
responding to business conditions. The Company 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 certain of our consolidated financial statements and other
financial information from fiscal 2009 to fiscal 2013. Each of the waiver agreements relates primarily to representations that may have been
incorrect when made, the Company’s potential failure to comply with specific 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, 2014, we had approximately $570.1 million in cash and cash equivalents, of which $438.7 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 discussion of our various financing facilities:
Senior Notes
In September 2012, the Company issued the 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 million and $2.9 million, respectively. The debt issuance costs incurred in
connection with the public offering are amortized over the life of the Senior Notes as additional interest expense using the effective interest
method. We pay interest on the Senior Notes semi-annually in arrears on March 21 and September 21 of each year. We may, at our option,
redeem the Senior Notes at any time in whole or from time to time in part, at a redemption price equal to the greater of (i) 100% of the principal
amount of the Senior Notes to be redeemed or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on
the Senior Notes being redeemed, discounted at a rate equal to the sum of the applicable Treasury Rate plus 50 basis points, plus accrued and
unpaid interest up to the date of redemption. The Senior Notes are senior, unsecured obligations and rank equally in right of payment with all of
our other unsecured and unsubordinated indebtedness.
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