Avnet 2009 Annual Report Download - page 35

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Table of Contents
The following table highlights the Company’s liquidity and related ratios for the past two years:
COMPARATIVE ANALYSIS — LIQUIDITY
The Company’s quick assets (consisting of cash and cash equivalents and receivables) decreased 6.9% from
June 28, 2008 to June 27, 2009 primarily due to the reduction of receivables. Current assets declined 13.8% due to
the collection of receivables and a decline in inventory, partially offset by cash and cash equivalents which increased
$303.5 million to $943.9 million at the end of fiscal 2009. Current liabilities declined 11.6% primarily due to
payments of accounts payable which is consistent with the decline in inventory levels. As a result of the factors noted
above, total working capital decreased by 15.8% during fiscal 2009. Total debt decreased by 20.8% since the end of
fiscal 2008 primarily due to the extinguishment of $300.0 million of the 2% Debentures. Total capital decreased
30.4% since the end of fiscal 2008 and the debt to capital ratio increased to 26.0% primarily as a result of the non-
cash impairment charges recognized in fiscal 2009 as discussed previously in this MD&A.
Long-Term Contractual Obligations
The Company has the following contractual obligations outstanding as of June 27, 2009 (in millions):
At June 27, 2009, the Company had a liability for income tax contingencies (or unrecognized tax benefits) of
$135.9 million which is not included in the above table. Cash payments associated with the remaining liability cannot
reasonably be estimated as it is difficult to estimate the timing and amount of tax settlements. The Company does not
currently have any material commitments for capital expenditures.
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, from time to time, which are 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.
32
Years Ended
June 27,
June 28,
Percentage
2009
2008
Change
(Dollars in millions)
Current Assets
$
5,144.3
$
5,971.1
(13.8
)%
Quick Assets
3,732.5
4,007.9
(6.9
)
Current Liabilities
2,455.9
2,779.6
(11.6
)
Working Capital(1)
2,688.4
3,191.5
(15.8
)
Total Debt
969.9
1,225.3
(20.8
)
Total Capital (total debt plus total shareholders
equity)
3,730.7
5,360.0
(30.4
)
Quick Ratio
1.5:1
1.4:1
Working Capital Ratio
2.1:1
2.1:1
Debt to Total Capital
26.0
%
22.9
%
(1)
This calculation of working capital is defined as current assets less current liabilities.
Due in Less
Due in
Due in
Due After
Total
Than 1 Year
1
-
3 Years
4
-
5 Years
5 Years
Long-term debt, including amounts due within one year
(1)
$
972.2
$
23.3
$
3.1
$
395.5
$
550.3
Operating leases
$
265.3
$
77.2
$
102.1
$
54.5
$
31.5
(1)
Excludes discount on long
term notes.
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk