Avnet 2005 Annual Report Download - page 40

The Company is funding the tender to repurchase the 8% Notes with the proceeds from the August 2005
issuance of $250 million in 6% Notes, which do not mature until September 1, 2015.
The following table highlights the Company's liquidity and related ratios for the past two years:
COMPARATIVE ANALYSIS Ì LIQUIDITY
Years Ended
July 2, July 3, Percentage
2005 2004 Change
(Dollars in millions)
Current AssetsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,783.0 $3,484.0 8.6%
Quick Assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,526.5 2,056.6 22.8
Current LiabilitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,717.5 1,645.0 4.4
Working Capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,065.4 1,839.0 12.3
Total Debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,244.5 1,356.8 (8.3)
Total Capital (total debt plus total shareholders' equity) ÏÏÏÏÏ 3,341.5 3,310.2 0.9
Quick Ratio ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1.5:1 1.3:1
Working Capital Ratio ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2.2:1 2.1:1
Debt to Total Capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 37.2% 41.0%
The single biggest driver of the Company's growth in current assets year-over-year is the net cash flow
generation of $325.2 million during fiscal 2005. The Company's accounts receivable balance also grew year-
over-year, commensurate with the moderate growth in sales in fiscal 2005. However, the growth in accounts
receivable was more than offset by reductions in inventory, as a function of the Company's previously
discussed working capital management initiatives, and other assets. As a result, quick assets (cash and cash
equivalents plus accounts receivable) grew at a greater rate than current assets. Current liabilities grew at a
lesser rate year-over-year as growth in accounts payable (also a function of the moderate increase in sales and,
thus, purchasing activity in fiscal 2005) was offset in part by the pay down of certain current debt maturities
(see Financing Transactions) during fiscal 2005. These trends in the Company's current assets and liabilities
combined to generate a 12.3% increase in working capital year-over-year. At July 2, 2005, quick assets were
greater than the Company's current liabilities by $809.0 million as compared with $411.6 million at
July 3, 2004. Working capital increased to $2.07 billion at the end of fiscal 2005 as compared with
$1.84 billion at the end of the prior year.
Long-Term Contractual Obligations
The Company has the following contractual obligations outstanding as of July 2, 2005 (in millions):
Due in Less
Than Due in Due in Due After
Total 1 Year 1-3 Years 4-5 Years 5 Years
Long-term debt, including amounts due
within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,243.6 $ 61.3 $876.4 $ 1.8 $304.1
Operating leases ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 172.2 47.2 66.2 36.1 22.7
$1,415.8 $108.5 $942.6 $37.9 $326.8
At July 2, 2005, the Company has five interest rate swaps outstanding on two of its fixed rate debt
instruments which have yielded a fair value adjustment of $0.9 million to the Company's long-term debt
included in the consolidated balance sheet at July 2, 2005. The issuance of the $250.0 million 6% Notes due in
2015 subsequent to fiscal 2005, with the net proceeds used to fund the purchase of up to $250.0 million of the
8% Notes due in 2006 (see Financing Transactions), will result in a shift of approximately $250.0 million
between the 1-3 year maturity group and the after 5 year maturity group in the table above.
The Company does not currently have any material commitments for capital expenditures.
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