Avnet 2001 Annual Report Download - page 52

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Avnet, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
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The components of the provision for income taxes are indicated in
the table below. The future tax benefit for deferred income taxes in
each year results from temporary differences arising principally from
inventory valuation, accounts receivable valuation, net operating
losses related to foreign operations, certain accruals and depreciation.
June 29, June 30, July 2,
Years Ended 2001 2000 1999
(In thousands)
Current:
Federal $ 93,646 $110,431 $183,336
State and local 15,271 24,243 44,916
Foreign 57,897 26,567 11,098
Total current taxes 166,814 161,241 239,350
Deferred:
Federal (31,491) (11,615) (8,008)
State and local (6,047) (2,640) (901)
Foreign (42,121) (25,904) (25,623)
Total deferred taxes (79,659) (40,159) (34,532)
Provision for
income taxes $ 87,155 $121,082 $204,818
The significant components of deferred tax assets and liabilities
included on the consolidated balance sheets were as follows:
June 29, June 30,
2001 2000
(In thousands)
Deferred tax assets:
Inventory valuation $ 25,053 $ 29,258
Accounts receivable valuation 54,250 12,904
Foreign tax loss carry-forwards 68,159 52,436
Various accrued liabilities
and other 66,920 43,314
214,382 137,912
Deferred tax liabilities:
Depreciation and amortization
of property, plant and
equipment 15,579 16,975
Other — 2,597
15,579 19,572
Net deferred tax assets $198,803 $118,340
10. PENSION AND PROFIT SHARING PLANS
The Company’s noncontributory defined benefit pension plan (the
“Plan”) and its 401(k) plan cover substantially all domestic employees.
Kent also had a 401(k) plan covering all of its eligible employees
which, in September 2001, was merged into the Avnet 401(k) plan.
The expense relating to the 401(k) plans for 2001, 2000 and 1999
amounted to $4,281,000, $2,632,000 and $1,611,000, respectively. The
noncontributory pension plan provides defined benefits pursuant
to a cash balance feature whereby a participant accumulates a
benefit based upon a percentage of current salary, which varies with
age, and interest credits. At June 29, 2001, the market value of the
pension plan assets was $171,187,000. These assets were comprised of
common stocks (66%), U.S. Government securities (10%), corporate
debt obligations (23%) and money market funds (1%).
The following tables outline changes in benefit obligations, plan assets
and the funded status of the Plan as of the end of 2001 and 2000:
June 29, June 30,
2001 2000
(In thousands)
Changes in benefit obligations:
Benefit obligations
at beginning of year $146,824 $140,203
Service cost 10,441 8,588
Interest cost 11,731 10,515
Actuarial (gain) loss 9,745 (1,861)
Benefits paid (11,004) (10,621)
Benefit obligations
at end of year $167,737 $146,824
Change in plan assets:
Fair value of plan assets
at beginning of year $201,721 $189,778
Actual return on plan assets (19,530) 22,464
Benefits paid (11,004) (10,621)
Contributions — 100
Fair value of plan assets
at end of year $ 171,187 $201,721
Information on funded status
of plan and the amount
recognized:
Funded status of the plan $ 3,450 $ 54,897
Unrecognized transition asset — (1,980)
Unrecognized net actuarial gain (2,040) (47,808)
Unamortized prior service credit (1,651) (1,972)
(Accrued) prepaid pension cost
recognized in the balance sheet $ (241) $ 3,137