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ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
76
Comprehensive Income Items
In 2011, 2010, and 2009, actuarial (gains)/losses of $15,228, $(368), and $(1,038), respectively, were recognized in comprehensive
income, net of related taxes, related to the company's defined benefit plans. In 2011, 2010, and 2009, the following amounts were
recognized as a reclassification adjustment of comprehensive income, net of related taxes, as a result of being recognized in net
periodic pension cost: transition obligation of $0, $18, and $251, respectively, prior service cost of $19, $43, and $186, respectively,
and an actuarial loss of $1,103, $2,369, and $2,019, respectively.
Included in accumulated other comprehensive at December 31, 2011 and 2010 are the following amounts, net of related taxes,
that have not yet been recognized in net periodic pension cost: unrecognized prior service costs of $44 and $63, respectively, and
unrecognized actuarial losses of $40,243 and $26,332, respectively.
The prior service cost and actuarial loss included in accumulated other comprehensive loss, net of related taxes, which are expected
to be recognized in net periodic pension cost for the year ended December 31, 2012 are $19 and $2,180, respectively.
Defined Contribution Plan
The company has a defined contribution plan for eligible employees, which qualifies under Section 401(k) of the Internal Revenue
Code. The company's contribution to the plan, which is based on a specified percentage of employee contributions, amounted to
$10,063, $8,870, and $7,821 in 2011, 2010, and 2009, respectively. Certain international subsidiaries maintain separate defined
contribution plans for their employees and made contributions thereunder, which amounted to $25,265, $20,714, and $17,900 in
2011, 2010, and 2009, respectively.
14. Lease Commitments
The company leases certain office, distribution, and other property under non-cancelable operating leases expiring at various dates
through 2023. Rental expense under non-cancelable operating leases, net of sublease income, amounted to $74,882, $60,286, and
$57,612 in 2011, 2010, and 2009, respectively.
Aggregate minimum rental commitments under all non-cancelable operating leases, exclusive of real estate taxes, insurance, and
leases related to facilities closed as a result of the integration of acquired businesses and the restructuring of the company, are as
follows:
2012
2013
2014
2015
2016
Thereafter
$ 61,749
50,182
32,312
23,222
15,468
26,555
15. Contingencies
Settlement of Legal Matter
During 2011, the company recorded a charge of $5,875 ($3,609 net of related taxes or $.03 per share on both a basic and diluted
basis) in connection with the settlement of a legal matter, inclusive of related legal costs. This matter related to a customer dispute
that originated in 1997. The company had successfully defended itself in a trial, but the verdict was subsequently overturned, in
part, by an appellate court and remanded for a new trial. The company ultimately decided to settle this matter to avoid further
legal expense and the burden on management's time that such a trial would entail.
Tekelec Matter
In 2000, the company purchased Tekelec Europe SA ("Tekelec") from Tekelec Airtronic SA and certain other selling shareholders.
Subsequent to the closing of the acquisition, Tekelec received a product liability claim in the amount of €11,333. The product
liability claim was the subject of a French legal proceeding started by the claimant in 2002, under which separate determinations