Avnet 2012 Annual Report Download - page 70

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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The activity related to the restructuring charges incurred during fiscal 2012 is presented in the following table:
Severance charges recorded in fiscal 2012 related to over 800
employees in sales, administrative and finance functions in connection with
the cost reduction actions taken in all three regions in both operating groups with employee reductions of approximately 480 in EM and 320
in
TS. Facility exit costs for vacated facilities related to 12 facilities in the Americas, 5 in EMEA and 13
in the Asia/Pac region and consisted of
reserves for remaining lease liabilities and the write-
down of leasehold improvements and other fixed assets. Other restructuring charges related
primarily to other onerous lease obligations that have no on-going benefit to the Company. Of the $50,253,000 pre-
tax restructuring charges
recorded during fiscal 2012, $27,537,000 related to EM and $22,716,000
related to TS and the remaining related to corporate charges. As of
June 30, 2012, management expects the majority of the remaining severance and other reserves to be utilized by the end of fiscal 2015 and the
remaining facility exit cost reserves to be utilized by the end of fiscal 2016.
Integration costs incurred related to the integration of acquired businesses and incremental costs incurred as part of the consolidation and
closure of certain office and warehouse locations. Integration costs included IT consulting costs for system integration assistance, facility
moving costs, legal fees, travel, meeting, marketing and communication costs that were incrementally incurred as a result of the integration
activity. Also included in integration costs are incremental salary costs associated with the consolidation and closure activities as well as costs
associated with acquisition activity, primarily related to the acquired businesses' personnel who were retained by Avnet following the close of
the acquisitions solely to assist in the integration of the acquired businesses' 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 transaction costs incurred during fiscal 2012 related primarily to professional fees for advisory services and legal and
accounting due diligence procedures and other legal costs associated with acquisitions.
During fiscal 2012, the Company recorded credits to restructuring, integration and other charges related to the reversal of restructuring
reserves established in prior years that were deemed to be no longer required.
In addition, the Company recorded $6,665,000
for (i) a legal claim associated with an acquired business and a potential royalty claim
related to periods prior to acquisition by Avnet and (ii) a legal claim associated with an indemnification of a prior divested business.
67
Severance
Reserves
Facility
Exit Costs
Other
Total
(Thousands)
Fiscal 2012 pre-tax charges
$
33,206
$
11,999
$
5,048
$
50,253
Cash payments
(23,055
)
(4,366
)
(1,889
)
(29,310
)
Non-cash write-downs —
(
2,943
)
(1,768
)
(4,711
)
Other, principally foreign currency translation
(405
)
(146
)
(44
)
(595
)
Balance at June 30, 2012
$
9,746
$
4,544
$
1,347
$
15,637