Avnet 2011 Annual Report Download - page 75

Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
17. Restructuring, integration and other charges
Fiscal 2011
During fiscal 2011, the Company incurred charges related primarily to the acquisition and integration activities associated with
acquired businesses (see Note 2) and also recorded credits related to prior restructuring reserves and acquisition adjustments.
The activity related to the restructuring reserves established during fiscal 2011 is presented in the following table:
Severance charges recorded in fiscal 2011 related to personnel reductions of over 550 employees in administrative, finance and
sales functions primarily in connection with the integration of the acquired Bell business into the existing EM Americas, TS Americas
and TS EMEA regions and, to a lesser extent, other cost reduction actions. Facility exit costs consisted of lease liabilities, fixed asset
write-
downs and other related charges associated with 50 vacated facilities: 23 in the Americas, 25 in EMEA and two in the Asia/Pac
region. As of July 2, 2011, management expects the majority of the remaining severance reserves to be utilized by the end of fiscal
2012 and the remaining facility exit cost reserves to be utilized by the end of fiscal 2014.
Integration costs included professional fees associated with legal and IT consulting, facility moving costs, travel, meeting,
marketing and communication costs that were incrementally incurred as a result of the integration efforts of acquired businesses. Also
included in integration costs are incremental salary and employee benefit costs, primarily of the acquired businesses’
personnel who
were retained by Avnet for extended periods following the close of the acquisitions solely to assist in the integration of the acquired
business’
IT systems, and administrative and logistics operations into those of Avnet. These identified personnel have no other
meaningful day-to-day operational responsibilities outside of the integration effort.
Acquisition costs incurred during fiscal 2011 related primarily to professional fees for advisory and broker services, legal and
accounting due diligence, and other legal costs associated with the acquisition.
During fiscal 2011, the Company recorded credits to restructuring, integration and other charges related to (i) the reversal of
restructuring reserves established in prior years that were deemed to be no longer required, (ii) acquisition adjustments for which the
purchase allocation period had closed and (iii) exit-
related reserves originally established through goodwill in prior years that were
deemed no longer required, which were credited to the consolidated statement of operations rather than to goodwill because the
associated goodwill was impaired in fiscal 2009 (see Notes 2 and 6).
69
Year Ended
July 2, 2011
(Thousands)
Restructuring charges
$
47,763
Integration costs
25,068
Acquisition costs
15,597
Reversal of excess prior year restructuring reserves
(6,076
)
Prior year acquisition adjustments
(5,176
)
Pre
-
tax restructuring, integration and other charges
$
77,176
After tax restructuring, integration and other charges
$
56,169
Restructuring, integration and other charges per share on a diluted basis
$
0.36
Severance
Facility
Reserves Exit Costs Other Total
(Thousands)
Fiscal 2011 pre
-
tax charges
$
28,584
$
17,331
$
1,848
$
47,673
Cash payments
(19,142
)
(5,651
)
(787
)
(25,580
)
Non
-
cash write downs
—
(
3,278
)
(51
)
(3,329
)
Adjustments
(293
)
(349
)
(223
)
(865
)
Other, principally foreign currency translation
654
241
251
1,146
Balance at July 2, 2011
$
9,803
$
8,294
$
1,038
$
19,135