Avnet 2004 Annual Report Download - page 68

AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
stock options and restricted stock awards, are excluded from the computation above of which approximately
10,467,000 and 3,891,000, respectively, related to options for which the exercise prices were greater than the
average market price of the Company's common stock (see Note 12 for options outstanding and weighted
average exercise prices).
15. Additional Cash Flow Information:
Other non-cash and reconciling items consist of the following:
Years Ended
July 3, June 27, June 28,
2004 2003 2002
(Thousands)
Provisions for doubtful accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $36,434 $46,664 $32,276
Other, net Ì primarily net periodic pension cost (Note 10)ÏÏÏÏÏ 11,215 3,120 11,003
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $47,649 $49,784 $43,279
In Ñscal 2003 and 2002, the Company recognized through other comprehensive income (loss) additional
minimum pension liabilities of $42,939,000 and $28,205,000, respectively, net of the related deferred tax
beneÑt of $19,988,000 and $11,155,000, respectively. In Ñscal 2004, the Company reversed through other
comprehensive income (loss) a portion of the additional minimum pension liability amounting to
$4,169,000 net of the related deferred taxes of $1,651,000. These are non-cash reconciling items. See Note 10
for discussion of the Company's pension plan.
Interest and income taxes paid (refunded) during the last three years were as follows:
Years Ended
July 3, June 27, June 28,
2004 2003 2002
(Thousands)
Interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $105,773 $ 95,306 $126,945
Income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (59,073) (195,994) 40,109
16. Segment Information:
During the Ñrst quarter of Ñscal 2004, the Company combined its Avnet Computer Marketing (""CM'')
and Avnet Applied Computing (""AC'') operating groups into one computer products and services business
called Avnet Technology Solutions (""TS''). This combination was part of the Company's continued eÅorts to
strengthen its market leadership position, streamline the business and further leverage cost synergies resulting
from the combination. In light of the similarities of the logistics operations and related functions of CM and
AC, the consolidation of certain of the units' operating facilities, equipment and processes has yielded cost
savings while also stimulating new market opportunities for the combined group.
As a result of the formation of TS, Avnet Electronics Marketing (""EM'') and TS are the overall
segments upon which management primarily evaluates the operations of the Company and upon which it
based its operating decisions during Ñscal 2004. Therefore, the segment data that follows reÖects the two
segments subsequent to the formation of TS. Data for Ñscal 2003 and 2002 has been restated to present
segment data on a consistent basis with Ñscal 2004.
EM markets and sells semiconductors, interconnect, passive and electromechanical devices, and radio
frequency/microwave components. EM markets and sells its products to a diverse customer base spread across
end-markets including communications, computer hardware and peripheral, industrial and manufacturing,
medical equipment and military and aerospace. EM also oÅers an array of value-added services to its
customers such as supply-chain management, engineering design, inventory replenishment systems, connector
and cable assembly and semiconductor programming.
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