Avnet 2015 Annual Report Download - page 33

TableofContents
AsofJuly2,2016,theCompanyhadacombinedtotalborrowingcapacityof$2.15billionundertheCreditFacilityandthe
Program. There were $150.0 million in borrowings outstanding and $5.6 million in letters of credit issued under the Credit
Facility and $730.0 million outstanding under the Program. During fiscal 2016, the Company had an average daily balance
outstandingundertheCreditFacilityofapproximately$306.8millionand$745.2millionundertheProgram.Duringfiscal2015,
the Company had an average daily balance outstanding under the Credit Facility of approximately $57.0 million and $798.0
millionunder the Program. The Companyexpects touse cashon handand available borrowingcapacity in order to repaythe
$300.0 million of 6.63% Notes due September 2016. The Company also expects to renew or replace the Program on similar
terms, subject to market conditions, before its maturity in August 2016. The Company can use cash on hand and availability
undertheCreditFacilitytorepayborrowingsdueundertheProgramintheeventitcannotberenewedorreplaced.
During periods of weakening demand in the electronic components and enterprise computer solutions industry, the
Companytypicallygeneratescashfromoperatingactivities.Conversely,theCompanyismorelikelytouseoperatingcashflows
for working capital requirements during periods of higher growth. During fiscal 2016, the Company generated $224.3 million
fromoperatingactivities.
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expenditureneedsandtosupportacquisitions.Thesebalancesarecurrentlyexpected
tobepermanentlyreinvestedoutsidetheUnitedStates.IfthesefundswereneededforgeneralcorporateuseintheUnitedStates,
the Company would incur significant income taxes to repatriate cash held in foreign locations. In addition, local government
regulationsmayrestricttheCompany’sabilitytomovefundsamongvariouslocationsundercertaincircumstances.Management
does not believe such restrictions would limit the Company’s ability to pursue its intended business strategy. Management
believes that Avnet’s available borrowing capacity, its current cash on hand and the Company’s expected ability to generate
operatingcashflowsinthefuturewillbesufficienttomeetitsfutureliquidityneeds.TheCompanyalsomayissuedebtorequity
securitiesinthefutureandmanagementbelievestheCompanywillhaveadequateaccesstothecapitalmarkets,ifneeded.
Duringfiscal2016,theCompanyutilized$19.7millionofcash,netofcashacquired,foracquisitions.TheCompanyhas
made,andexpectstocontinuetomake,strategicinvestmentsthroughacquisitionactivitytotheextenttheinvestmentsstrengthen
Avnet’scompetitivepositionandmeetmanagement’sreturnoncapitalthresholds.SeeNote2,“Acquisitions”totheCompany’s
consolidatedfinancialstatementsincludedinItem15ofthisAnnualReportonForm10-Kforadditionalinformationrelatedtoa
potentialacquisitioninfiscal2017andtherelatedfinancingcommitmentsobtainedtofundsuchacquisition.
Inadditiontocontinuingtomakeinvestmentsin acquisitions,asofJuly2,2016, theCompanymay repurchaseupto an
aggregateof$174.9millionoftheCompany’scommonstockthrougha$1.25billionsharerepurchaseprogramapprovedbythe
Board of Directors. The Company plans to repurchase stock from time to time at the discretion of management, subject to
strategicconsiderations,marketconditionsandotherfactors.TheCompanymayterminateorlimitthesharerepurchaseprogram
atanytimewithoutpriornotice.Thetimingandactualnumberofsharesrepurchasedwilldependonavarietyoffactorssuchas
share price, corporate and regulatory requirements, and prevailing market conditions. Additionally, the Company currently
expects to pay quarterly cash dividends onshares of its common stock, subject to approval ofthe Board of Directors. During
fiscal2016,theCompanypaidcashdividendsof$88.6milliononitscommonstockor$0.17pershareonaquarterlybasis.
SeeItem6,“SelectedFinancialData”totheCompany’sconsolidatedfinancialstatementsincludedinthisAnnualReport
onForm10-KforadditionalinformationontheCompany’sliquidityandrelatedratios.
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