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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì Continued
step of this process, it was determined that there was an impairment of goodwill related to the Company's EM
and CM operations in both EMEA and Asia. The Company identiÑed no impairment of goodwill in the
Americas region. In the second step of the process, the implied fair value of the aÅected reporting unit's
goodwill was compared to its carrying value. This was done in order to determine the amount of impairment;
that is, the amount by which the carrying amount exceeded the fair value. 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
principle in 2002.
The magnitude of the transition impairment charge was signiÑcantly impacted by the timing of the
eÅective date of when the fair value analysis was performed and the designation of the reporting unit structure.
Since the Company adopted SFAS 142 on June 30, 2001, the fair value analysis was required to be completed
as of that date. Due to the diÇcult business and economic conditions at that date, which severely impacted the
market sectors in which the Company operates, and the uncertainty as to when such conditions would
materially improve, the fair value of the Company's businesses was signiÑcantly less than it might have been at
other times. In other words, in a cyclical business, the timing of a valuation such as this may be an important
factor in the outcome of the valuation exercise. The reporting units with the most signiÑcant impairment of
goodwill are in Europe where the Company has not yet generated an acceptable level of proÑts and cash Öows.
In addition, the deÑned reporting unit structure has resulted in an impairment of goodwill which includes
goodwill related to certain recent acquisitions that otherwise might not have been impaired.
The Company's annual impairment tests in 2003 and 2002 have yielded no additional impairments to the
carrying value of the Company's goodwill.
The following table presents the carrying amount of goodwill, by reportable segment, for the periods
presented:
Electronics Computer Applied
Marketing Marketing Computing Total
(Thousands)
Carrying value at June 28, 2002 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $591,398 $253,199 $ Ì $844,597
Additions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,540 Ì Ì 9,540
OtherÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 298 2,675 Ì 2,973
Carrying value at June 27, 2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $601,236 $255,874 $ Ì $857,110
Additions during 2003 related primarily to acquisitions of minority interests and contingent purchase
price payments for prior year acquisitions (see Note 2). The ""Other'' caption primarily represents the impact
of changes in foreign currency exchange rates on goodwill denominated in currencies other than the
U.S. dollar.
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