Avnet 2002 Annual Report Download - page 67

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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
6. Goodwill and impairment:
The amortization of goodwill was suspended eÅective on June 30, 2001, the date the Company early
adopted the provisions of SFAS 142. The following table presents the pro forma Ñnancial results for 2001 and
2000, respectively, on a basis consistent with the new accounting principle applied in 2002:
Years Ended
June 28, June 29, June 30,
2002 2001 2000
(Thousands, except per share data)
Income (loss) from continuing operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (84,436) $ 97 $162,564
Add back goodwill amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 33,117 21,858
Income (loss) from continuing operations, as adjusted ÏÏÏÏÏÏ (84,436) 33,214 184,422
Income from discontinued operations, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 15,305 828
Income (loss) before cumulative eÅect of change in
accounting principle, as adjustedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (84,436) 48,519 185,250
Cumulative eÅect of change in accounting principle ÏÏÏÏÏÏÏÏ (580,495) Ì Ì
Net income (loss), as adjusted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(664,931) $48,519 $185,250
Basic earnings (loss) per share:
Earnings (loss) from continuing operations, as adjusted ÏÏÏ $ (0.71) $ 0.28 $ 1.73
Earnings from discontinued operations, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 0.13 0.01
Earnings (loss) before cumulative eÅect of change in
accounting principle, as adjustedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.71) 0.41 1.74
Cumulative eÅect of change in accounting principle ÏÏÏÏÏÏ (4.90) Ì Ì
Net earnings (loss), as adjusted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (5.61) $ 0.41 $ 1.74
Diluted earnings (loss) per share:
Earnings (loss) from continuing operations, as adjusted ÏÏÏ $ (0.71) $ 0.28 $ 1.70
Earnings from discontinued operations, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 0.13 0.01
Earnings (loss) before cumulative eÅect of change in
accounting principle, as adjustedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.71) 0.41 1.71
Cumulative eÅect of change in accounting principle ÏÏÏÏÏÏ (4.90) Ì Ì
Net earnings (loss), as adjusted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (5.61) $ 0.41 $ 1.71
The carrying amount of goodwill upon adoption of SFAS 142 was $1,404,863,000, net of accumulated
amortization through that date of $120,127,000. There have been no changes in this carrying amount during
the year ended June 28, 2002 except for the impact of changes in foreign currency exchange rates on goodwill
denominated in currencies other than U.S. dollars and additional expenditures as discussed in Note 15
(included in ""other'' in the table below), as well as the transition impairment charge from the adoption of
SFAS 142.
Prior to the adoption of SFAS 142, the Company evaluated the carrying value of its goodwill for
impairment using a future undiscounted cash Öow model. Under the transitional provisions of SFAS 142, the
Company identiÑed and evaluated its reporting units for impairment of goodwill as of June 30, 2001 using a
combination of present value and multiple of earnings valuation techniques. The carrying amounts of certain
reporting units exceeded their fair values at the date of adoption. As a result, the Company recorded an
impairment charge of $580,495,000, which was recorded as a cumulative eÅect of a change in accounting
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