Avnet 2012 Annual Report Download - page 62

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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The general investment objectives of the Plan are to maximize returns through a diversified investment portfolio in order to earn
annualized returns that meet the long-term cost of funding the Plan’
s pension obligations while maintaining reasonable and prudent levels of
risk. The target rate of return on Plan assets is currently 8.5% , which represents
the average rate of earnings expected on the funds invested or to
be invested to provide for the benefits included in the benefit obligation. This assumption has been determined by combining expectations
regarding future rates of return for the investment portfolio along with the historical and expected distribution of investments by asset class and
the historical rates of return for each of those asset classes. The mix of equity securities is typically diversified to obtain a blend of domestic and
international investments covering multiple industries. The Plan assets do not include any material investments in Avnet common stock. The
Plan’s investments in debt securities are also diversified across both public and private fixed income securities. The Company’
s current target
allocation for the investment portfolio is for equity securities, both domestic and international, to represent approximately 76%
of the portfolio
with a policy for minimum investment in equity securities of 60% of the portfolio and a maximum of 92%
. The majority of the remaining
portfolio of investments is to be invested in fixed income securities.
As of June 30, 2012, the market value of plan assets by investment category was: U.S. Equity ( $178.9 million ); U.S. Bonds (
$72.6
million ); International Equity ( $46.9 million ) and cash and receivables ( $3.0 million
). Asset values are Level 1 for all asset categories as the
fair values are based upon quoted market prices for identical assets. The pension assets were highly diversified to reduce the potential risk of
significant concentrations of credit risk.
11. Long-term leases
The Company leases many of its operating facilities and is also committed under lease agreements for transportation and operating
equipment. Rent expense charged to operations during the last three years is as follows:
The aggregate future minimum operating lease commitments, principally for buildings, in fiscal 2013 through 2017 and thereafter (through
2028), are as follows (in thousands):
The preceding table includes operating lease commitments that have been reserved for as part of the Company’
s restructuring activities
(see Note 17).
59
Years Ended
June 30,
2012
July 2,
2011
July 3,
2010
(Thousands)
Buildings
$
84,531
$
78,371
$
59,047
Equipment
8,093
8,332
5,440
$
92,624
$
86,703
$
64,487
2013
$
95,784
2014
67,926
2015
42,104
2016
29,720
2017
22,456
Thereafter
36,548
Total
$
294,538