Avnet 2007 Annual Report Download - page 12

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control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate. If the Company fails to maintain the adequacy of its internal controls, including any failure
to implement required new or improved controls, or if the Company experiences difficulties in their implementation, the
Company’s business and operating results could be harmed, and the Company could fail to meet its reporting obligations,
which could have a material adverse effect on its business and the share price.
If the Company’s internal information systems fail to function properly, its business operations could suffer.
The Company’s expanding operations put increasing reliance on the Company’s internal information systems
in producing timely, accurate and reliable reports on financial and operational results. Currently, the Company’s
global operations are tracked with multiple internal information systems. The Company recently implemented a
new financial system for its North America operations. There is no guarantee that the Company will be successful at
all times or that there will not be integration difficulties that will adversely affect the Company’s operations or the
accurate recording and reporting of financial data. In addition, these systems are subject to computer hacking or
other general system failure. Maintaining and operating these systems requires continuous investments. Failure of
any of these internal information systems or material difficulties in upgrading these information systems could have
material adverse effects on the Company’s business and its compliance with securities laws.
Item 1B. Unresolved Staff Comments
Not applicable.
Item 2. Properties
At June 30, 2007, the Company owned and leased approximately 839,000 and 3,918,000 square feet of space,
respectively, of which approximately 44% is located in the United States. The following table summarizes certain of
the Company’s key facilities as of June 30, 2007. In addition, the Company has numerous facilities that were added
as a result of acquisitions, including Access warehouse facilities, certain of which are expected to be exited within
the next twelve months.
Location Sq. Footage
Leased or
Owned Primary Use
Phoenix, Arizona . . . ................. 176,000 Leased Corporate and EM headquarters
Tempe, Arizona ..................... 132,000 Leased TS headquarters
Chandler, Arizona . . . ................. 395,000 Owned EM warehousing and value-added operations
Phoenix, Arizona . . . ................. 122,000 Leased TS warehousing, integration and value-added
operations
Grapevine, Texas . . . ................. 181,000 Owned EM warehousing and value-added operations
Poing, Germany . .................... 423,000 Leased EM warehousing, value-added operations
and offices
Tongeren, Belgium . . ................. 244,000 Owned EM and TS warehousing and value-added
operations
Tsuen Wan, Hong Kong . . . ............ 181,000 Leased EM 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 Envi-
ronmental 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 off-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.
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