Avnet 2007 Annual Report Download - page 62

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qualify for sale treatment, as a result, any borrowings under the Program are recorded as debt on the consolidated
balance sheet. The Program has a one year term that expires in August 2007 which has been renewed on comparable
terms. There were no amounts outstanding under the Program at June 30, 2007.
Long-term debt consists of the following:
June 30,
2007
July 1,
2006
(Thousands)
93⁄4% Notes due February 15, 2008 (redeemed October 12, 2006) ........ $ — $361,360
5.875% Notes due March 15, 2014 .............................. 300,000 —
6.00% Notes due September 1, 2015 ............................. 250,000 250,000
6.625% Notes due September 15, 2016 ........................... 300,000 —
2% Convertible Senior Debentures due March 15, 2034 ............... 300,000 300,000
Other long-term debt ........................................ 9,073 16,272
Subtotal ................................................ 1,159,073 927,632
Discount on notes ........................................... (3,083) (1,341)
Fair value adjustment for hedged 93⁄4% Notes ...................... — (7,481)
Long-term debt ........................................... $1,155,990 $918,810
During March 2007, the Company issued $300,000,000 of 5.875% Notes due March 15, 2014. The proceeds
from the offering, net of discount and underwriting fees, were $297,084,000, and were used to repay amounts
outstanding under the Company’s Credit Facility (defined below) and the Program. The borrowings under the Credit
Facility and the Program were used to fund the Access acquisition.
During October 2006, the Company redeemed all of its outstanding ($361.4 million) 93⁄4% Notes due
February 15, 2008 (the “93⁄4% Notes”). The Company used the net proceeds amounting to $296,085,000 from
the issuance in September 2006 of $300,000,000 principal amount of 6.625% Notes due September 15, 2016, plus
available liquidity, to repurchase the 93⁄4% Notes. In connection with the repurchase, the Company terminated two
interest rate swaps with a total notional amount of $200,000,000 that hedged a portion of the 93⁄4% Notes. Debt
extinguishment costs incurred in the first quarter of fiscal 2007 as a result of the redemption totaled $27,358,000
pre-tax, $16,538,000 after tax, or $0.11 per share on a diluted basis, and consisted of $20,322,000 for a make-whole
redemption premium, $4,939,000 associated with the two interest rate swap terminations, and $2,097,000 to write-
off certain deferred financing costs.
The Company has an unsecured $500,000,000 credit facility with a syndicate of banks (the “Credit Facility”),
expiring in October 2010. The Company may select from various interest rate options, currencies and maturities
under the Credit Facility. The Credit Facility contains certain covenants, all of which the Company was in
compliance with as of June 30, 2007. At June 30, 2007, there were no borrowings outstanding under the Credit
Facility and $21,152,000 of letters of credit issued under the Credit Facility which represents a utilization of the
Credit Facility capacity but they are not recorded in the consolidated balance sheet as the letters of credit are not
debt. As of July 1, 2006, there was $6,000,000 drawn under the Credit Facility included in “other long-term debt” in
the preceding table and $22,925,000 in letters of credit issued under the Credit Facility.
In August 2005, the Company issued $250,000,000 of 6.00% Notes due September 1, 2015. The proceeds from
the offering, net of discount and underwriting fees, were $246,483,000. The Company used these proceeds, plus
cash and cash equivalents, to fund the tender and repurchase during the first quarter of fiscal 2006 of $254,095,000
of the 8.00% Notes due November 15, 2006. As a result of the tender and repurchases, the Company incurred debt
extinguishment costs in the first quarter of fiscal 2006 of $11,665,000 pre-tax, $7,052,000 after tax, or $0.05 per
share on a diluted basis, relating primarily to premiums and other transaction costs.
62
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)