Avnet 2014 Annual Report Download - page 30

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The following table summarizes the Company’s capital structure as of the end of fiscal 2014
with a comparison with the end of fiscal
2013 :
Financing Transactions
During fiscal 2014, the Company had a five-year $1.00 billion
senior unsecured revolving credit facility (the "2012 Credit Facility") with a
syndicate of banks, which expires in November 2016
. Under the 2012 Credit Facility, the Company may select from various interest rate
options, currencies and maturities. There were $12.0 million in borrowings outstanding under the 2012 Credit Facility as of June 28, 2014
and
$6.7 million as of June 29, 2013 .
In August 2013, the Company amended and extended its accounts receivable securitization program (the “Program”)
with a group of
financial institutions to allow the Company to sell, on a revolving basis, an undivided interest of up to $800.0 million in eligible receivables
while retaining a subordinated interest in a portion of the receivables. The Program does not qualify for sale accounting treatment and, as a
result, any borrowings under the Program are recorded as debt on the consolidated balance sheets. The Program has a one-year
term that expires
at the end of August 2014 , at which time it is expected to be renewed for another one to two years on comparable terms. There were
$615.0
million in borrowings outstanding under the Program as of June 28, 2014 and $360.0 as of June 29, 2013
. Interest on borrowings is calculated
using a base rate or a commerical paper rate plus a spread of 0.35%. The facility fee is 0.35% .
Notes outstanding at June 28, 2014 consisted of:
The Company also has several small lines of credit and other forms of bank debt in various foreign locations to fund the short-
term
working capital, foreign exchange, overdraft and letter of credit needs of its wholly owned subsidiaries in EMEA, Asia, Latin America and
Canada. Avnet generally guarantees its subsidiaries’
obligations under these facilities. Outstanding borrowings under such forms of debt as of
the end of fiscal 2014 was $253.7 million .
Covenants and Conditions
The 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
Program agreements, 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 28, 2014 .
The 2012 Credit Facility contains certain covenants with various limitations on debt incurrence, share repurchases, 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
28
June 28,
2014
% of Total
Capitalization
June 29,
2013
% of Total
Capitalization
(Dollars in thousands)
Short-term debt
$
865,088
12.4
%
$
838,190
13.2
%
Long-term debt
1,213,814
17.4
1,206,993
19.1
Total debt
2,078,902
29.8
2,045,183
32.3
Shareholders’ equity
4,890,193
70.2
4,289,125
67.7
Total capitalization
$
6,969,095
100.0
$
6,334,308
100.0
• $
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