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AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
Marketing (""EM'') and Avnet Technology Solutions (""TS'') 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 with 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 Ñscal 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 Company was required to complete the fair
value analysis 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 were in Europe where the Company had not yet generated an acceptable
level of proÑts and cash Öows. In addition, the deÑned reporting unit structure resulted in an impairment of
goodwill which included goodwill related to certain recent acquisitions that otherwise might not have been
impaired.
The Company's annual impairment tests in Ñscal 2004, 2003 and 2002 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:
Avnet Avnet
Electronics Technology
Marketing Solutions Total
(Thousands)
Carrying value at June 28, 2002ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $591,398 $253,199 $844,597
AdditionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,540 Ì 9,540
Foreign currency translation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 298 2,675 2,973
Carrying value at June 27, 2003ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 601,236 255,874 857,110
AdditionsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35,652 Ì 35,652
Foreign currency translation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 286 1,834 2,120
Carrying value at July 3, 2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $637,174 $257,708 $894,882
Additions during Ñscal 2004 related primarily to the contingent purchase price payment for Eurotronics
B.V. and other prior year acquisitions as well as acquisitions of minority interests (see Note 2).
47