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Please find page 64 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.AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì Continued
The Program qualiÑes for sale treatment under SFAS 140. As of June 27, 2003, the Company had no
drawings outstanding under the Program and therefore there are no securitized accounts receivable held by the
third party conduits. As of June 28, 2002, the outstanding balance of securitized accounts receivable held by
the third party conduits, net of applicable allowances, totaled $324,570,000, of which the Company's
subordinated retained interest was $124,570,000. Accordingly, $200,000,000 of accounts receivable balances
were removed from the consolidated balance sheet at June 28, 2002, with those funds used to reduce
outstanding debt. Cash outÖows for reduced drawings under the Program in the consolidated statements of
cash Öows for 2003 and 2002 reÖect the impact of a lower amount of accounts receivable being sold, on a
revolving basis, into the third party conduits.
Expenses associated with the Program are as follows:
Years Ended
June 27, June 28, June 29,
2003 2002 2001
(Thousands)
Losses on sales of receivables and discount on retained interest,
net of servicing revenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,244 $ 8,511 $ Ì
Program, facility and professional fees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,864 1,619 200
Loss on sale of receivables at inception ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 3,696
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,108 $10,130 $3,896
Losses on sales of receivables and discount on retained interest, net of related servicing revenues, are
recorded in interest expense while the other costs associated with the Program are recorded in selling, general
and administrative expenses in the accompanying consolidated statements of operations. To the extent there
have been drawings under the Program, the Company has historically measured the fair value of its retained
interests at the time of a securitization using a present value model incorporating two key assumptions: (1) a
weighted average life of trade accounts receivable of 45 days and (2) a discount rate of 6.75% per annum.
The Program agreement requires the Company to maintain minimum senior unsecured credit ratings in
order to continue utilizing the Program in its current form. In December 2002, the Company amended the
Program agreement to lower the minimum ratings triggers to Ba2 by Moody's Investor Services (""Moody's'')
or BB by Standard & Poors (""S&P''). Subsequent to 2003, the Company amended the Program agreement to
lower the minimum ratings triggers to Ba3 by Moody's or BB¿ by S&P. This most recent amendment
eÅectively extended the term of the Program to August 2005.
4. Comprehensive income (loss):
The following table illustrates the cumulative balances of comprehensive income (loss) items at June 27,
2003, June 28, 2002 and June 29, 2001:
June 27, June 28, June 29,
2003 2002 2001
(Thousands)
Cumulative translation adjustments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $143,208 $ 44,862 $(56,297)
Cumulative minimum pension liability adjustments, netÏÏÏÏ (40,001) (17,050) Ì
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $103,207 $ 27,812 $(56,297)
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