Avnet Inc.
Avnet is one of the worldâs largest value-added distributors of electronic componenets, enterprise computer and storage products, IT services and embedded subsystems. Avnet creates a vital link in the technology supply chain that connects the worldâs leading electronic component and computer product manufacturers and software developers with a global customer base of original equipment manufacturers, electronic manufacturing services providers, original design manufacturers, and valueadded resellers.8
Avnet, Inc. and Subsidiaries Consolidated Statements of Cash Flows
Years Ended
June 29, 2013
June 30, 2012
July 2, 2011
(Thousands)
Cash flows from operating activities:
Net income
$450,073
$567,019
$669,069
Non-cash and other reconciling items:
Depreciation and amortization
120,676
101,336
81,389
Deferred income taxes (Note 9)
(10,019)
11,782
15,966
Stock-based compensation (Note 12)
43,677
35,737
28,931
Gain on bargain purchase and other (Note 2)
(31,011)
(2,918)
(22,715)
Other, net (Note 15)
75,327
66,263
56,846
Changes in (net of effects from businesses
acquired):
Receivables
(94,203)
72,267
(421,457)
Inventories
225,667
133,178
(321,939)
Accounts payable
(78,834)
(319,094)
165,185
Accrued expenses and other, net
(5,156)
(136,852)
26,804
Net cash flows provided by operating
activities
696,197
528,718
278,079
Cash flows from financing activities:
(Repayments of) borrowings under accounts
receivable securitization program, net (Note 3)
(310,000)
510,000
160,000
Issuance of notes in a public offering, net of
issuance costs (Note 7)
349,258
?
?
Repayment of notes (Note 7)
?
?
(109,600)
(Repayments of) proceeds from bank debt,
net (Note 7)
(179,861)
86,823
1,644
(Repayments of) proceeds from other debt, net (Note 7)
(1,080)
(1,007)
7,238
Repurchases of common stock (Note 4)
(207,192)
(318,333)
?
Other, net (Note 12)
4,792
5,590
3,930
Net cash flows (used for) provided by financing activities
(344,083)
283,073
63,212
Cash flows from investing activities:
Purchases of property, plant and equipment
(97,379)
(128,652)
(148,707)
Cash proceeds from sales of property, plant, and equipment
3,018
1,046
10,621
Acquisitions of operations and investments, net of cash acquired (Note 2)
(262,306)
(313,218)
(690,997)
Cash proceeds from divestiture activities (Note 2)
3,613
?
19,108
Net cash flows used for investing activities
(353,054)
(440,824)
(809,975)
Effect of exchange rate changes on cash and cash equivalents
3,419
(39,437)
51,916
Cash and cash equivalents: ? increase (decrease)
2,479
331,530
(416,768)
? at beginning of year
1,006,864
675,334
1,092,102
? at end of year
$ 1,009,343
$1,006,864
$ 675,334
Required:
(a) Using the Consolidated Statements of Cash Flows for Avnet, prepare a summary analysis for all three years.
(b) Write an analysis and interpretation of the cash flows for Avnet for all three years. Be sure to analyze the cash flows from operating activities, as well as the overall cash inflows and outflows for the firm.
(c) Evaluate the creditworthiness of Avnet based on only the cash flow statements.
(d) What information from the balance sheet would be useful to a creditor in determining whether to loan Avnet money?
Avnet Inc.
Avnet is one of the worldâs largest value-added distributors of electronic componenets, enterprise computer and storage products, IT services and embedded subsystems. Avnet creates a vital link in the technology supply chain that connects the worldâs leading electronic component and computer product manufacturers and software developers with a global customer base of original equipment manufacturers, electronic manufacturing services providers, original design manufacturers, and valueadded resellers.8
Avnet, Inc. and Subsidiaries Consolidated Statements of Cash Flows
Years Ended | |||||
June 29, 2013 | June 30, 2012 | July 2, 2011 | |||
(Thousands) | |||||
Cash flows from operating activities: | |||||
Net income | $450,073 | $567,019 | $669,069 | ||
Non-cash and other reconciling items: | |||||
Depreciation and amortization | 120,676 | 101,336 | 81,389 | ||
Deferred income taxes (Note 9) | (10,019) | 11,782 | 15,966 | ||
Stock-based compensation (Note 12) | 43,677 | 35,737 | 28,931 | ||
Gain on bargain purchase and other (Note 2) | (31,011) | (2,918) | (22,715) | ||
Other, net (Note 15) | 75,327 | 66,263 | 56,846 | ||
Changes in (net of effects from businesses | |||||
acquired): | |||||
Receivables | (94,203) | 72,267 | (421,457) | ||
Inventories | 225,667 | 133,178 | (321,939) | ||
Accounts payable | (78,834) | (319,094) | 165,185 | ||
Accrued expenses and other, net | (5,156) | (136,852) | 26,804 | ||
Net cash flows provided by operating | |||||
activities | 696,197 | 528,718 | 278,079 | ||
Cash flows from financing activities: | |||||
(Repayments of) borrowings under accounts | |||||
receivable securitization program, net (Note 3) | (310,000) | 510,000 | 160,000 | ||
Issuance of notes in a public offering, net of | |||||
issuance costs (Note 7) | 349,258 | ? | ? | ||
Repayment of notes (Note 7) | ? | ? | (109,600) | ||
(Repayments of) proceeds from bank debt, | |||||
net (Note 7) | (179,861) | 86,823 | 1,644 | ||
(Repayments of) proceeds from other debt, net (Note 7) | (1,080) | (1,007) | 7,238 | ||
Repurchases of common stock (Note 4) | (207,192) | (318,333) | ? | ||
Other, net (Note 12) | 4,792 | 5,590 | 3,930 | ||
Net cash flows (used for) provided by financing activities | (344,083) | 283,073 | 63,212 | ||
Cash flows from investing activities: Purchases of property, plant and equipment | (97,379) | (128,652) | (148,707) | ||
Cash proceeds from sales of property, plant, and equipment | 3,018 | 1,046 | 10,621 | ||
Acquisitions of operations and investments, net of cash acquired (Note 2) | (262,306) | (313,218) | (690,997) | ||
Cash proceeds from divestiture activities (Note 2) | 3,613 | ? | 19,108 | ||
Net cash flows used for investing activities | (353,054) | (440,824) | (809,975) | ||
Effect of exchange rate changes on cash and cash equivalents | 3,419 | (39,437) | 51,916 | ||
Cash and cash equivalents: ? increase (decrease) | 2,479 | 331,530 | (416,768) | ||
? at beginning of year | 1,006,864 | 675,334 | 1,092,102 | ||
? at end of year | $ 1,009,343 | $1,006,864 | $ 675,334 |
Required:
(a) Using the Consolidated Statements of Cash Flows for Avnet, prepare a summary analysis for all three years.
(b) Write an analysis and interpretation of the cash flows for Avnet for all three years. Be sure to analyze the cash flows from operating activities, as well as the overall cash inflows and outflows for the firm.
(c) Evaluate the creditworthiness of Avnet based on only the cash flow statements.
(d) What information from the balance sheet would be useful to a creditor in determining whether to loan Avnet money?