Avnet 2004 Annual Report Download - page 17

Item 2. Properties
At July 3, 2004, the Company owned and leased approximately 627,000 and 3,302,000 square feet of
space, respectively, of which approximately 52% is located in the United States. The following table
summarizes certain of the Company's key facilities as of July 3, 2004:
Sq. Leased or
Location Footage Owned Primary Use
Phoenix, Arizona ÏÏÏ 176,000 Leased Corporate and EM headquarters
Tempe, Arizona ÏÏÏÏ 132,000 Leased TS headquarters
Chandler, Arizona ÏÏ 395,000 Owned EM warehousing and value-added operations
Phoenix, Arizona ÏÏÏ 122,000 Leased TS warehousing, integration and value-added operations
Grapevine, Texas ÏÏÏ 181,000 Leased EM warehousing and value-added operations
Poing, Germany ÏÏÏÏ 190,000 Leased EM warehousing and value-added operations
Tongeren, BelgiumÏÏ 167,000 Owned EM and TS warehousing and value-added operations
Item 3. Legal Proceedings
As a result primarily of certain former manufacturing operations, Avnet may have liability under various
federal, state and local environmental laws and regulations, including those governing pollution and exposure
to and the handling, storage and disposal of hazardous substances. For example, under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended (""CERCLA'') and similar
state laws, Avnet may be liable for the costs of cleaning up environmental contamination on or from its current
or former properties, and at oÅ-site locations where the Company disposed of wastes in the past. Such laws
may impose joint and several liability. Typically, however, the costs for cleanup at such sites are allocated
among potentially responsible parties (""PRPs'') based upon each party's relative contribution to the
contamination, and other factors.
In May 1993, the Company and the former owners of a Company-owned site in Oxford, North Carolina
entered into a Settlement Agreement in which the former owners agreed to bear 100% of all costs associated
with investigation and cleanup of soils and sludges remaining on the site and 70% of all costs associated with
investigation and cleanup of groundwater. The Company agreed to be responsible for 30% of the groundwater
investigation and cleanup costs. In October 1993, the Company and the former owners entered into a Consent
Decree and Court Order with the Environmental Protection Agency (the ""EPA'') for the environmental
clean-up of the site, the cost of which, according to the EPA's remedial investigation and feasibility study, was
estimated to be approximately $6.3 million, exclusive of the approximately $1.5 million in EPA past costs paid
by the PRPs. Based on current information, the Company does not anticipate its liability in the matter will be
material to its Ñnancial position, cash Öow or results of operations.
In September 2002, the Company's subsidiary, Sterling Electronics, Inc. (""Sterling''), was added as a
defendant in an existing lawsuit Ñled in the Superior Court of California, County of Los Angeles, by property
owners and residents in or near the San Gabriel Valley Superfund Site. This master case is a consolidation of
six diÅerent matters Ñled during the period from July 1997 through November 2001. Sterling once owned
92.46% of the capital stock of Phaostron, Inc., which has been named as a PRP for contamination at the site.
In March 2003, the court dismissed all six cases on technical grounds, but allowed the plaintiÅs the
opportunity to properly serve newly-added industrial defendants, including Sterling, in any case not yet outside
the mandatory service period. In Ñve of the six cases, the applicable service period has expired. Sterling,
therefore, cannot be re-added to those cases as a defendant. In the remaining case, the plaintiÅs have until
November 30, 2004 to re-add Sterling as a defendant in the master case and properly perfect service of process
on Sterling. Those plaintiÅs have not indicated a monetary amount sought in this matter. The Company
believes that Sterling has meritorious defenses to liability, and, although the ultimate outcome is uncertain,
based on current information, the Company does not believe that its liability for this matter, if any, will be
material to its Ñnancial position, cash Öow or results of operations.
The Company is a PRP at a manufacturing site in Huguenot, New York currently under investigation by
the New York State Department of Environmental Conservation (""NYSDEC''), which site the Company
owned from the mid-1960s until the early-1970s. The estimated cost of the Ñrst phase of the environmental
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