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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The additions in fiscal 2006 for EM primarily relate to the Memec acquisition and reflect purchase
accounting adjustments recorded during fiscal 2006 (see Note 2). The additions in EM also relate to the
purchase of shares formerly held by a minority interest holder in one of the Company's Israeli subsidiaries.
The additions in Technology Solutions relate primarily to a final earnout payment made in the first quarter of
fiscal 2006 to the former owners of DNS Slovakia, which was acquired by Avnet in fiscal 2005. During fiscal
2006, the Company divested a small, non-core EM business (see Note 2) for which the write off of goodwill
was included in the loss on sale of business recorded in the consolidated statement of operations. Additions
during fiscal 2005 related primarily to the acquisition of DNS Slovakia (see Note 2).
7. External financing
Short-term debt consists of the following:
July 1, July 2,
2006 2005
(Thousands)
8.00% Notes due November 15, 2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $143,675 $ Ì
Bank credit facilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 130,725 60,468
Accounts receivable securitization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40,000 Ì
Other debt due within one year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,616 830
Short-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $316,016 $61,298
Bank credit facilities consist of various committed and uncommitted lines of credit with financial
institutions utilized primarily to support the working capital requirements of foreign operations, including bank
credit facilities in Japan assumed as part of the acquisition of Memec (see Note 2). The weighted average
interest rates on the bank credit facilities at July 1, 2006 and July 2, 2005 were 4.1% and 4.0%, respectively.
Although interest rates generally rose during fiscal 2006, the weighted average rate at July 1, 2006 only
increased slightly compared to July 2, 2005 primarily due to the mix of outstanding borrowings amongst the
Company's different bank credit facilities. Specifically, at July 1, 2006, more than 25% of borrowings on bank
credit facilities were drawn on the Japanese facility acquired with Memec in the first quarter of fiscal 2006.
The interest rates for borrowings under this facility average less than 1%. The Company has an accounts
receivable securitization program which is described in Note 3. There was $40,000,000 of drawings
outstanding under the Program at July 1, 2006.
During fiscal 2005, the Company repaid the remaining $2,956,000 of the 4.5% Convertible Notes that
matured on September 1, 2004 and repaid the remaining $86,633,000 of the 7
7
/
8
% Notes that matured on
February 15, 2005.
Long-term debt consists of the following:
July 1, July 2,
2006 2005
(Thousands)
8.00% Notes due November 15, 2006 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ 400,000
9
3
/
4
% Notes due February 15, 2008ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 361,360 475,000
6% Notes due September 1, 2015ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 250,000 Ì
2% Convertible Senior Debentures due March 15, 2034 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 300,000 300,000
Other long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14,931 7,285
Subtotal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 926,291 1,182,285
Fair value adjustment for hedged 9
3
/
4
% and 8% NotesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7,481) 910
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $918,810 $1,183,195
63