Avnet 2003 Annual Report Download - page 43
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Please find page 43 of the 2003 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.scheduled maturities and the total fair value (generally based on quoted market prices) of the Company's debt
outstanding at June 27, 2003 (dollars in millions):
There- Total at Fair Value at
2004 2005 2006 2007 2008 after June 27, 2003 June 27, 2003
Liabilities:
Fixed rate debt ÏÏÏÏÏÏÏÏÏÏ $176 $360 $Ì $400 $476 $ 6 $ 1,418 $1,526
Average interest rate ÏÏÏÏÏ 8.4%
Floating rate debt ÏÏÏÏÏÏÏÏ $ 12 $ Ì $Ì $ Ì $ Ì $Ì $ 12 $ 12
Average interest rate ÏÏÏÏÏ 4.4%
Interest Rate Swaps:
Fixed to variableÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $Ì $400 $ Ì $Ì $ 400
Average pay rateÏÏÏÏÏÏÏÏÏ LIBOR°2.9%
Average receive rateÏÏÏÏÏÏ 8.0%
Many of the Company's subsidiaries, on occasion, purchase and sell products in currencies other than
their functional currencies. This subjects the Company to the risks associated with the Öuctuations of foreign
currency exchange rates. The Company reduces this risk by utilizing natural hedging (oÅsetting receivables
and payables) as well as by creating oÅsetting positions through the use of derivative Ñnancial instruments,
primarily forward foreign exchange contracts with maturities of less than sixty days. The Company adjusts all
foreign denominated balances and any outstanding foreign exchange contracts to fair market value through the
consolidated statements of operations. Therefore, the market risk related to foreign exchange contracts is
oÅset by changes in valuation of the underlying items being hedged. The asset or liability representing the fair
value of foreign exchange contracts is classiÑed in the captions ""other current assets'' or ""accrued expenses
and other,'' as applicable, in the accompanying consolidated balance sheets. A hypothetical 10% change in
currency exchange rates under the contracts outstanding at June 27, 2003 would result in an increase or
decrease of approximately $15.7 million to the fair value of the forward foreign exchange contracts, which
would generally be oÅset by an opposite eÅect on the related hedged positions.
Item 8. Financial Statements and Supplementary Data
The Ñnancial statements and supplementary data are listed under Item 15 of this Report.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
As previously reported in the Company's Current Report on Form 8-K Ñled on April 23, 2002, on
April 17, 2002 the Company dismissed its independent auditor, Arthur Andersen LLP (""Arthur Andersen'')
and appointed KPMG LLP (""KPMG'') as its new independent auditor, eÅective immediately. These actions
were approved by the Company's Board of Directors upon the recommendation of its Audit Committee.
KPMG audited the consolidated Ñnancial statements of the Company for the Ñscal years ending June 27, 2003
and June 28, 2002.
During the Ñscal year ended June 29, 2001, and the subsequent interim periods through the date of
Arthur Andersen's dismissal, there was no disagreement between the Company and Arthur Andersen, as
deÑned in Item 304 of Regulation S-K, on any matter of accounting principles or practices, Ñnancial
statement disclosure, or auditing scope or procedure, which disagreement, if not resolved to Arthur Andersen's
satisfaction, would have caused Arthur Andersen to make reference to the subject matter of such disagree-
ment in connection with its reports, and there occurred no reportable events as deÑned in Item 304(a)(1)(v)
of Regulation S-K.
The audit report of Arthur Andersen on the consolidated Ñnancial statements of Avnet for the Ñscal year
ended June 29, 2001 did not contain an adverse opinion or disclaimer of opinion, nor was it qualiÑed or
modiÑed as to uncertainty, audit scope or accounting principles. During the Ñscal years of Avnet ended
June 28, 2002 and June 29, 2001, through the date of Arthur Andersen's dismissal, neither the Company nor
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