Arrow Electronics 2010 Annual Report Download - page 74

Download and view the complete annual report

Please find page 74 of the 2010 Arrow Electronics annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 98

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98

ARROW ELECTRONICS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in thousands except per share data)
72
The restructuring charge of $69,836 in 2008 primarily includes personnel costs of $39,383, facilities costs
of $4,305, and a write-down of a building and related land of $25,423. These initiatives are the result of
the company's continued efforts to lower cost and drive operational efficiency. The personnel costs are
primarily associated with the elimination of approximately 750 positions across multiple functions and
multiple locations. The facilities costs are related to the exit activities of 9 vacated facilities in the
Americas and EMEA. During the fourth quarter of 2008, the company recorded an impairment charge of
$25,423 in connection with an approved plan to actively market and sell a building and related land in the
United States within the company's global components business segment. The decision to exit this
location was made to enable the company to consolidate facilities and reduce future operating costs. The
company wrote-down the carrying values of the building and related land to their estimated fair values
less cost to sell and ceased recording depreciation. During 2009, the company recorded an impairment
charge of $2,112 as a result of further declines in real estate valuations. As of December 31, 2009 and
2008, the assets were designated as held-for-sale, and the carrying values of $7,388 and $9,500,
respectively, were included in "Other current assets" on the company's consolidated balance sheets. The
sale was completed in the first quarter of 2010.
Restructuring and Integration Accruals Related to Actions Taken Prior to 2008
The following table presents the activity in the restructuring and integration accruals during 2008, 2009,
and 2010 related to actions taken prior to 2008:
Personnel
Costs Facilities Other Total
December 31, 2007 $ 4,717 $ 10,114 $ 4,657 $ 19,488
Restructuring and integration charges (credits) (a) 1,287 851 (1,574) 564
Payments (4,957) (3,437) (14) (8,408)
Non-cash usage - - (201) (201)
Foreign currency translation (135) (1,456) 105 (1,486)
December 31, 2008 912 6,072 2,973 9,957
Restructuring and integration charges (credits) (207) 201 (1,339) (1,345)
Payments (533) (2,614) (10) (3,157)
Foreign currency translation (1) 381 (10) 370
December 31, 2009 171 4,040 1,614 5,825
Restructuring and integration charges (credits) - (925) (204) (1,129)
Payments - (1,277) - (1,277)
Foreign currency translation (11) (154) - (165)
December 31, 2010 $ 160 $ 1,684 $ 1,410 $ 3,254
(a) Includes integration costs of $886 relating to actions taken in 2008 (of which $551 was recorded
as an integration charge and $335 was recorded as costs in excess of net assets of companies
acquired), offset, in part, by a restructuring credit of $322 related to restructuring actions taken
prior to 2008.
Restructuring and Integration Accrual Summary
In summary, the restructuring and integration accruals aggregate $14,047 at December 31, 2010, all of
which is expected to be spent in cash, and are expected to be utilized as follows:
• The accruals for personnel costs of $4,104 to cover the termination of personnel are primarily
expected to be spent within one year.