Avnet 2008 Annual Report Download - page 34

Table of Contents
in purchase accounting associated with the Memec acquisition, and restructuring and other costs as a result of the
sale of two TS business lines and other actions taken during fiscal 2006. See Results of Operations — Restructuring,
Integration and Other Charges
discussed elsewhere in this MD&A. The Company also made an accelerated
contribution to the Company’s pension plan during the first quarter of fiscal 2006, totaling $58.6 million and used
$27.0 million primarily for premiums, transaction costs and other costs associated with the refinancing and
repurchasing of its Notes and credit facilities (see Financing Transactions below).
Cash Flows from Investing Activities
The Company’s cash flows associated with investing activities during fiscal 2008 were primarily the result of
acquisitions discussed previously in this MD&A and amounted to $369.4 million. In addition, the Company received
proceeds of $68.6 million related to the gain on sale of assets in connection with the sale of the Company’s equity
investment and the receipt of contingent purchase price proceeds (see Results of Operations —
Gain (Loss) on Sale of
Assets, net
). Other investing activities included capital expenditures primarily for system development costs,
computer hardware and software.
For fiscal 2007, the Company’s cash flows associated with investing activities included capital expenditures
related to system development costs, computer hardware and software expenditures as well as certain leasehold
improvement costs. Also included in cash flows from investing activities is cash used for the acquisition of Access,
Azure and a small distributor business in Italy, net of contingent purchase price proceeds received (see Results of
Operations — Gain (Loss) on Sale of Assets, net discussed elsewhere in this MD&A).
The cash flows associated with investing activities included capital expenditures during fiscal 2006, primarily
related to certain information technology hardware and software purchases, a new mainframe purchase and the
ongoing development of one additional operating system to replace one of the systems that was disposed of as part of
the restructuring, integration and other charges (see Results of Operations — Restructuring, Integration and Other
Charges for further discussion). Also included in cash flows used in investing activities for fiscal 2006 is
$294.3 million for acquisitions and investments net of divestitures which relate primarily to the following:
(1) $297.5 million associated with the Company’s acquisition of Memec, including the retirement of substantially all
of Memec’s debt at the time of the acquisition; (2) $13.9 million cash contribution to the Calence, LLC joint venture;
and (3) $5.7 million for the purchase of shares held by a minority interest holder in one of the Company’s Israeli
subsidiaries, an additional earn-out payment associated with a small acquisition completed in fiscal 2005 and other
items; net of (4) cash inflow of $22.8 million relating to the divestiture of the TS end-user business lines during the
third quarter and EM business lines during the fourth quarter of fiscal 2006.
Cash Flows from Financing Activities
During fiscal 2008, 2007 and 2006, the Company used $41.9 million, $35.6 million and $34.6 million,
respectively, of cash for net debt repayments. (see Financing Transactions below for further discussion). Other
financing activities, net, in fiscal 2008, 2007 and 2006 were primarily a result of cash received for the exercise of
stock options and the associated excess tax benefit.
Capital Structure
The Company uses a variety of financing arrangements, both short-term and long-term, to fund its operations.
The Company also uses diversified sources of funding so that it does not become overly dependent on one source and
to achieve lower cost of funding through these different alternatives. These financing arrangements include public
bonds, short-term and long-term bank loans and an accounts receivable securitization program. For a detailed
description of the Company’s external financing arrangements outstanding at June 28, 2008, refer to Note 7 to the
consolidated financial statements appearing in Item 15 of this Report.
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