Avnet 2008 Annual Report Download - page 60

Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The following table presents the carrying amount of goodwill, by reportable segment, for the periods presented:
The addition to goodwill in EM related primarily to the acquisition of YEL Electronics Hong Kong, Ltd.,
Azzurri Technology Ltd. and two small businesses acquired during fiscal 2008 (see Note 2). The adjustment to
goodwill in EM related to Memec deferred tax valuation adjustments. The addition to goodwill in TS related
primarily to the acquisition of Acal plc Ltd.’s IT Solutions division and the European Enterprise Infrastructure
division of the Magirus Group (see Note 2) as well as two smaller acquisitions completed during fiscal 2008. The
adjustments to TS goodwill related to adjustments to certain Access acquired net assets which were recorded within
the one year purchase price allocation period.
As of June 28, 2008, the Company had a carrying value of $43,700,000 in customer relationship intangible
assets included in “other assets” on the consolidated balance sheet, and consisted of $55,400,000 in original cost
value and accumulated amortization of $11,700,000, which are being amortized over ten years. Intangible asset
amortization expense was $6,767,000, $5,800,000 and $4,160,000 for fiscal 2008, 2007 and 2006, respectively.
Fiscal 2008 amortization expense included $1,227,000 recorded for estimated amortization of intangible assets
related to certain acquisitions for which the valuations of intangible assets have not yet been completed.
Amortization expense for the next five years for intangible assets identified for acquisitions completed to date is
expected to be approximately $6,000,000 each year.
Short-term debt consists of the following:
Bank credit facilities consist of various committed and uncommitted lines of credit with financial institutions
utilized primarily to support the working capital requirements of foreign operations. The weighted average interest
rate on the bank credit facilities was 1.5% at the end of fiscal 2008 and 2007.
The Company has an accounts receivable securitization program (the “Program”) with a group of financial
institutions that allows the Company to sell, on a revolving basis, an undivided interest of up to $450,000,000 in
eligible receivables while retaining a subordinated interest in a portion of the receivables. The Program does not
qualify for sale treatment, as a result, any borrowings under the Program are recorded as debt on the consolidated
balance sheet. The Program has a one year term that expires in August 2008, which has been renewed on comparable
terms for another year. There were no amounts outstanding under the Program at June 28, 2008 or June 30, 2007.
57
6.
Goodwill and intangible assets
Electronics
Technology
Marketing Solutions Total
Carrying value at June 30, 2007
$
1,039,209
$
363,261
$
1,402,470
Additions
117,720
208,065
325,785
Adjustments
(16,915
)
(5,081
)
(21,996
)
Foreign currency translations
1,778
20,867
22,645
Carrying value at June 28, 2008
$
1,141,792
$
587,112
$
1,728,904
7.
External financing
June 28,
June 30,
2008
2007
(Thousands)
Bank credit facilities
$
32,649
$
51,534
Other debt due within one year
11,155
1,833
Short
-
term debt
$
43,804
$
53,367