Avnet 2000 Annual Report Download - page 30

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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
10. Stock-based compensation plans (continued):
(Thousands, except per share amounts) Years Ended
June 30, July 2, June 26,
2000 1999 1998
Net income:
As reported $ 145,141 $ 174,457 $ 151,424
Pro forma 137,849 168,046 146,599
Diluted earnings per share:
As reported $ 1.75 $ 2.43 $ 1.90
Pro forma 1.67 2.36 1.85
The fair value of the stock options granted is estimated on the date of grant using the Black-Scholes option pricing model. The weighted average assump-
tions used, and the weighted average estimated fair value of an option granted are as follows:
Years Ended
June 30, July 2, June 26,
2000 1999 1998
Expected life (years) 5.9 5.9 6.0
Risk-free interest rate 5.8% 4.6% 6.1%
Volatility 31.0% 24.0% 23.0%
Dividend yield 1.4% 1.7% 1.0%
Weighted average fair value $ 7.91 $ 4.52 $ 10.44
11. Contingent liabilities:
From time to time, the Company may become liable with respect to pending and threatened litigation, taxes and environmental and other matters. The
Company has been designated a potentially responsible party or has had other claims made against it in connection with environmental clean-ups at sever-
al sites. Based upon the information known to date, the Company believes that it has appropriately reserved for its share of the costs of the clean-ups and
it is not anticipated that any contingent matters will have a material adverse impact on the Company’s financial condition, liquidity or results of operations.
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
12. Additional cash flow information:
Other non-cash and reconciling items primarily includes provisions for doubtful accounts and certain non-recurring items (See Note 14).
Due to the Company’s fiscal year end (See Note 1) and its historical dividend payment dates, the fiscal year ended July 2, 1999 includes the cash payment of
the July 1, 1999 dividend. This results in the inclusion of five quarterly dividend payments in 1999 as compared with three quarterly payments in 2000 and four
in 1998.
The net cash disbursed in each of the three years in connection with acquisitions (See Note 2), as well as the net cash collected in those years from dispo-
sitions, are reflected as cash flows from “(acquisition) disposition of operations, net.”
Interest and income taxes paid were as follows: Years Ended
June 30, July 2, June 26,
2000 1999 1998
Interest $ 73,545 $ 47,764 $ 38,906
Income taxes 229,724 91,913 126,851
13. Segment information:
The Company currently consists of three major operating groups, Electronics Marketing (“EM”), Computer Marketing (“CM”) and Avnet Applied Computing
(“AAC”) which began operating in the Americas and in Europe effective as of the beginning of the second and third quarters of 2000, respectfully. The results
for AAC in the Americas and Europe prior to those dates are included in EM and CM as the results of the operating groups have not been restated. EM
focuses on the global distribution of and value-added services associated with electronics components; CM focuses on middle-to-high-end, value-added com-
puter products distribution and related services; and AAC serves the needs of personal computer OEMs and system integrators by providing leading-edge
technologies such as microprocessors, and serves the needs of embedded systems OEMs that require technical services such as product prototyping, con-
figurations and other value-added services.