Avnet 2013 Annual Report Download - page 30

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Table of Contents
of the receivables. The Program does not qualify for sale treatment and, as a result, any borrowings under the Program are recorded as debt on
the consolidated balance sheet. The Program contains certain covenants, all of which the Company was in compliance with as of June 29, 2013
.
The Program has a one-
year term that expires at the end of August 2013, which is expected to be renewed for another year on comparable terms.
There were $360.0 million in borrowings outstanding under the Program at June 29, 2013 and $670.0 million outstanding at June 30, 2012 .
Notes outstanding at June 29, 2013 consisted of:
In addition to its primary financing arrangements, the Company has $180.3 million
of debt outstanding with foreign financial institutions
and several small lines of credit in various locations to fund the short-
term working capital, foreign exchange, overdraft and letter of credit needs
of its wholly owned subsidiaries in EMEA, Asia and Canada. Avnet generally guarantees its subsidiaries' obligations under these facilities.
Covenants and Conditions
The Securitization Program requires the Company to maintain certain minimum interest coverage and leverage ratios in order to continue
utilizing the Program. The Program also contains certain covenants relating to the quality of the receivables sold. If these conditions are not met,
the Company may not be able to borrow any additional funds and the financial institutions may consider this an amortization event, as defined in
the agreement, which would permit the financial institutions to liquidate the accounts receivables sold to cover any outstanding borrowings.
Circumstances that could affect the Company’s ability to meet the required covenants and conditions of the Program include the Company’
s
ongoing profitability and various other economic, market and industry factors. Management does not believe that the covenants under the
Program limit the Company’
s ability to pursue its intended business strategy or its future financing needs. The Company was in compliance with
all covenants of the Program as of June 29, 2013 .
The 2012 Credit Facility contains certain covenants with various limitations on debt incurrence, dividends, investments and capital
expenditures and also includes financial covenants requiring the Company to maintain minimum interest coverage and leverage ratios.
Management does not believe that the covenants in the 2012 Credit Facility limit the Company’
s ability to pursue its intended business strategy
or its future financing needs. The Company was in compliance with all covenants of the Credit Facility as of June 29, 2013 .
See Liquidity below for further discussion of the Company’s availability under these various facilities.
Liquidity
As of June 29, 2013 , the Company had total borrowing capacity of $1.80 billion
under the 2012 Credit Facility and the Program. There
were $6.7 million in borrowings outstanding and $2.3 million in letters of credit issued under the 2012 Credit Facility and
$360.0 million
outstanding under the Securitization Program resulting in $1.4 billion of net availability at the end of fiscal 2013 . During fiscal 2013
, the
Company had an average daily balance outstanding under the 2012 Credit Facility of approximately $5.0 million and $570.0 million
under the
Securitization Program. During fiscal 2012
, the Company had an average daily balance outstanding under the 2012 Credit Facility of
approximately $115.0 million and $620.0 million under the Securitization Program.
The Company had cash and cash equivalents of $1.01 billion as of June 29, 2013 , of which $918.4 million
was held outside the U.S. As of
June 30, 2012 , the Company had cash and cash equivalents of $1.01 billion , of which $874.0 million
was held outside of the U.S. Liquidity is
subject to many factors, such as normal business operations as well as general economic, financial, competitive, legislative, and regulatory
factors that are beyond the Company’
s control. Cash balances generated and held in foreign locations are used for ongoing working capital,
capital expenditures and to support acquisitions. These balances are currently expected to be permanently reinvested outside the U.S. If these
funds were needed in the U.S., the Company would incur significant income taxes to repatriate cash held in foreign locations to the extent they
are in excess of outstanding intercompany loans due to Avnet, Inc. from the foreign subsidiaries. In addition, local government regulations may
restrict the Company’s ability to move
28
• $300.0 million of 5.875% Notes due March 15, 2014 (reflected as short-
term debt)
• $
250.0 million of 6.00% Notes due September 1, 2015
• $
300.0 million of 6.625% Notes due September 15, 2016
• $
300.0 million of 5.875% Notes due June 15, 2020
• $
350.0 million of 4.875% Notes due December 1, 2022