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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Accruals for income tax contingencies (or accruals for unrecognized tax benefits) are included in “accrued
expenses and other” and “other long term liabilities” on the consolidated balance sheet. These contingency reserves
relate to various tax matters that result from uncertainties in the application of complex income tax regulations in the
numerous jurisdictions in which the Company operates. The change to contingency reserves during fiscal 2009 is
primarily due to the recognition of uncertainties in current year tax positions, a change to estimates for existing tax
positions and favorable audit settlements.
A reconciliation of the beginning and ending accrual balance for unrecognized tax benefits is as follows:
The evaluation of income tax positions requires management to estimate the ability of the Company to sustain
its position and estimate the final benefit to the Company. To the extent that these estimates do not reflect the actual
outcome there could be an impact on the consolidated financial statements in the period in which the position is
settled, the statute of limitations expires or new information becomes available as the impact of these events are
recognized in the period in which they occur. It is difficult to estimate the period in which the amount of a tax
position will change as settlement may include administrative and legal proceedings whose timing the Company
cannot control. The effects of settling tax positions with tax authorities and statute expirations may significantly
impact the accrual for income tax contingencies. Within the next twelve months, management estimates that
approximately $35,288,000 of tax contingencies will be settled primarily through agreement with the tax authorities
for tax positions related to valuation matters; such matters which are common to multinational companies. The
expected cash payment related to the settlement of these contingencies is not significant.
The Company conducts business globally and consequently files income tax returns in numerous jurisdictions
including those listed in the following table. It is also routinely subject to audit in these and other countries. The
Company is no longer subject to audit in its major jurisdictions for periods prior to fiscal year 2002. The open years,
by major jurisdiction, are as follows:
61
Fiscal 2009
Fiscal 2008
Balance at beginning of year
$
124,765
$
114,285
Additions for tax positions taken in prior periods, including interest
30,930
40,081
Reductions for tax positions taken in prior periods, including interest
(45,876
)
(26,087
)
Additions for tax positions taken in current period
42,400
16,121
Reductions relating to settlements with taxing authorities
(10,574
)
(30,167
)
Reduction related to the lapse of statute of limitations
(2,876
)
(624
)
(Reduction) addition related to foreign currency translation
(2,878
)
11,156
Balance at end of year
$
135,891
$
124,765
Jurisdiction
Fiscal Year
United States (federal and state)
2004
2009
Germany
2006
2009
United Kingdom
2007
2009
Netherlands
2003
2009
Belgium
1999
2009
Singapore
2002
2009
Taiwan
2004
2009
Hong Kong
2003
2009