Specifics of Financial Modeling Experience

I understand that financial modeling experience is highly critical to being successful in IB, PE, etc. I am currently an intern at a PE firm for the summer. When interviews happen for next summer later this year, what exactly would qualify someone to mention that they have "financial modeling experience" on their resume.

I am just having trouble understanding the distinction. Is "experience" necessarily being able to complete a model from scratch (LBO, Merger, DCF, etc) and understand excel extensively, or can "experience" even be considered looking at actual in-depth models and understanding line-by-line what everything means? Or is it all of the above?