Avnet 2007 Annual Report Download - page 39

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the factors noted above, total working capital increased by approximately 33.6% during fiscal 2007. Total debt
decreased 2.1% due to the net result of refinancing activities during the fiscal 2007. Specifically, the Company
issued $300.0 million of 6.625% Notes in September 2006, the proceeds of which were used to fund the redemption
of the 93⁄4% Notes outstanding balance of $361.4 million. The Company also repaid $143.7 million of the
8.00% Notes that matured in November 2006. In March 2007, the Company issued $300.0 million in 5.875% Notes
due 2014 and used the proceeds to repay amounts outstanding under the Credit Facility and Securitization Program,
the borrowings from which were used to acquire Access. Total capital grew primarily due to net income for fiscal
2007 of $393.1 million, the increase in common shares outstanding, and the decrease in outstanding debt. Finally,
the debt to capital ratio decreased to 26.2% at June 30, 2007 from 30.4% at July 1, 2006 primary due to the net result
of the refinancing activities discussed previously.
Long-Term Contractual Obligations
The Company has the following contractual obligations outstanding as of June 30, 2007 (in millions):
Total
Due in Less
Than 1 Year
Due in
1-3 Years
Due in
4-5 Years
Due After
5 Years
Long-term debt, including amounts due
within one year(1) ............... $1,212.4 $53.4 $ 3.5 $ 3.0 $1,152.5
Operating leases .................. $ 207.4 $61.4 $81.6 $44.7 $ 19.7
(1) Excludes discount on long-term notes
The Company does not currently have any material commitments for capital expenditures.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company seeks to reduce earnings and cash flow volatility associated with changes in interest rates and
foreign currency exchange rates by entering into financial arrangements intended to provide a hedge against all or a
portion of the risks associated with such volatility. The Company continues to have exposure to such risks to the
extent they are not hedged.
The Company has used interest rate swaps that convert certain fixed rate debt to variable rate debt, effectively
hedging the change in fair value of the fixed rate debt resulting from fluctuations in interest rates. During fiscal year
2007, the Company terminated its remaining swaps in connection with the redemption of its 93⁄4% Notes (see
Financing Transactions). The following table sets forth the scheduled maturities of the Company’s debt outstanding
at June 30, 2007 (dollars in millions):
2008 2009 2010 2011 2012 Thereafter Total
Fiscal Year
Liabilities:
Fixed rate debt(1) .............. $ 1.9 $1.7 $1.8 $1.9 $1.1 $1,152.5 $1,160.9
Floating rate debt .............. $51.5 $ — $ — $ — $ — $ — $ 51.5
(1) Excludes discounts on long-term notes.
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