Avnet 2002 Annual Report Download - page 69

Download and view the complete annual report

Please find page 69 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

AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The Floating Rate Notes were paid down upon their maturity in October 2001. The Floating Rate Notes
bore interest at an annual rate equal to three-month LIBOR, reset quarterly, plus 87.5 basis points (0.875%).
Long-term debt consists of the following:
June 28, June 29,
2002 2001
(Thousands)
6.45% Notes due August 15, 2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 200,000 $200,000
8.20% Notes due October 17, 2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 250,000 250,000
6
7
/
8
% Notes due March 15, 2004ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 100,000 100,000
7
7
/
8
% Notes due February 15, 2005ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 360,000 360,000
8.00% Notes due November 15, 2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 400,000 Ì
Bank credit facilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 178,410 Ì
Belgian commercial paper ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 63,964 Ì
Other long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,419 9,493
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,558,793 919,493
Fair value adjustment for hedged 8.00% NotesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,043 Ì
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,565,836 $919,493
On November 16, 2001, the Company issued $400,000,000 of 8.00% Notes due November 15, 2006 (the
""8% Notes''). The net proceeds received by the Company from the sale of the 8% Notes, approximately
$394,328,000 after deduction of the underwriting discounts and other expenses associated with the sale, were
used to repay commercial paper and other short-term indebtedness.
The Company entered into two interest rate swaps (the ""Swaps'') with a total notional amount of
$400,000,000 in order to hedge the change in fair value of the 8% Notes related to Öuctuations in interest rates.
These contracts are classiÑed as fair value hedges and mature in November 2006. The Swaps modify the
Company's interest rate exposure by eÅectively converting the 8.0% Ñxed rate on the 8% Notes to a Öoating
rate based on three-month U.S. LIBOR plus a spread through their maturities (4.8% at June 28, 2002). The
hedged Ñxed rate debt and the Swaps are adjusted to current market values through interest expense in the
accompanying consolidated statements of operations. The Company accounts for the hedges using the
shortcut method as deÑned under SFAS 133 and the hedges were perfectly eÅective during the year and at
year-end. Therefore, the market value adjustments for the hedged debt and the Swaps directly oÅset one
another. The fair value of the Swaps at June 28, 2002 was $7,043,000 and is included in other long-term assets
in the accompanying consolidated balance sheet. Additionally, included in long-term debt is a comparable fair
value adjustment increasing the total liability by $7,043,000.
On October 25, 2001, the Company entered into agreements providing $1.0 billion in Ñnancing with a
syndicate of banks led by Bank of America in order to replace the then existing $1.25 billion 364-day credit
facility and the $700,000,000 Ñve-year credit facility. This new bank Ñnancing is divided into three separate
credit facilities: a multi-year facility, a 364-day facility and a term loan facility. The multi-year facility is a
three-year revolving, multi-currency facility that matures on October 25, 2004 and provides up to
$428,750,000 in Ñnancing. The 364-day facility is a revolving, multi-currency facility that matures on
October 23, 2002 and provides up to $488,750,000 in Ñnancing. Management does not intend to renew this
facility upon its expiration. The term loan facility, which matured on November 16, 2001, was a U.S. dollar
facility that provided up to $82,500,000 in Ñnancing. The Company may select from various interest rate
options and maturities under these facilities, although the Company intends to use a signiÑcant amount as a
back up for its commercial paper program pursuant to which the Company is authorized to issue short-term
notes for current operational business requirements. The bank Ñnancing contains certain Ñnancial and non-
58