Avnet 2004 Annual Report Download - page 55

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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The Program agreement requires the Company to maintain minimum senior unsecured credit ratings in
order to continue utilizing the Program in its current form. These minimum ratings triggers are Ba3 by
Moody's Investor Services or BB¿ by Standard & Poors. The term of the current Program agreement extends
to August 2005.
4. Comprehensive Income (Loss):
The following table illustrates the cumulative balances of comprehensive income (loss) items at July 3,
2004, June 27, 2003 and June 28, 2002:
July 3, June 27, June 28,
2004 2003 2002
(Thousands)
Cumulative translation adjustments, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $188,678 $143,208 $ 44,862
Cumulative minimum pension liability adjustments, net ÏÏÏÏÏ (37,483) (40,001) (17,050)
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $151,195 $103,207 $ 27,812
5. Property, Plant and Equipment, Net:
Property, plant and equipment are recorded at cost and consist of the following:
July 3, June 27,
2004 2003
(Thousands)
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 5,126 $ 5,648
Buildings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 76,098 78,689
Machinery, Ñxtures and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 480,613 542,030
Leasehold improvementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34,073 34,299
595,910 660,666
Less Ì accumulated depreciation and amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 408,571 410,254
$187,339 $250,412
Depreciation and amortization expense related to property, plant and equipment was $58,644,000,
$80,338,000 and $93,121,000 in Ñscal 2004, 2003 and 2002, respectively.
6. Goodwill and Impairment:
The amortization of goodwill was suspended eÅective with the beginning of Ñscal 2002, the date the
Company adopted the provisions of SFAS 142. 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 two-step
process. The Company engaged an outside valuation consultant to assist in this process. The Ñrst step was to
ascertain whether there was an indication that any of the Company's goodwill was impaired. This was
accomplished by identifying the Company's reporting units pursuant to the guidelines set out in SFAS 142 and
then determining the carrying value of each of those reporting units by assigning the Company's assets and
liabilities, including existing goodwill, to each of those reporting units as of June 30, 2001. For the purpose of
this process, the reporting unit structure was deÑned as each of the three regional businesses (Americas,
EMEA and Asia) within each of the Company's operating groups. The fair value of each reporting unit was
determined by using a combination of present value and multiple of earnings valuation techniques. Such fair
value was then compared with the carrying value of each reporting unit. As a result of completing the Ñrst step
of this process, it was determined that there was an impairment of goodwill related to the Avnet Electronics
46