Avnet 2003 Annual Report Download - page 31
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Please find page 31 of the 2003 Avnet 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.The following table summarizes the charges recorded in 2003, 2002 and 2001:
Summary of Restructuring and Other Charges
After-Tax
Pre-Tax After-Tax Per Diluted
Year Quarter Category Charge Charge Share Impact
(Thousands, except per share amounts)
2003 Q3 Debt extinguishment costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 13,487 $ 8,152 $(0.07)
Q2 Reorganization chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 106,765 65,750 (0.55)
Total for YearÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $120,252 $ 73,902 $(0.62)
2002 Q4 Write-down of certain acquired Kent assets ÏÏÏÏÏÏ $ 29,734 $ 17,974 $(0.15)
Reorganization chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,712 8,289 (0.07)
Impairment of Internet investments ÏÏÏÏÏÏÏÏÏÏÏÏÏ 36,177 35,821 (0.30)
Total for YearÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 79,623 $ 62,084 $(0.52)
2001 Q4 Kent acquisition and integration costs ÏÏÏÏÏÏÏÏÏÏÏ $157,331 $130,609 $(1.10)
Reorganization chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 127,274 80,302 (0.67)
Impairment of Internet investments ÏÏÏÏÏÏÏÏÏÏÏÏÏ 42,880 25,781 (0.22)
Total for YearÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $327,485 $236,692 $(1.99)
See also Note 17 to the consolidated Ñnancial statements appearing in Item 15 of this Report for a detail
of activity within the restructuring and other charge accounts during the past three years.
During the second quarter of 2003, the Company executed certain actions as part of its ongoing cost
reduction initiatives and, accordingly, recorded charges totaling $106.8 million pre-tax, $65.8 million after tax,
or $0.55 per diluted share. The entire pre-tax charge was included in selling, general and administrative
expenses. The charge consisted of severance costs ($21.7 million pre-tax), charges related to the consolidation
of selected facilities ($37.4 million pre-tax) and charges related to certain IT-related initiatives ($47.7 million
pre-tax).
Severance costs and charges related to the consolidation of selected facilities were taken in response to
the current business environment. During the second quarter, management identiÑed a number of facilities in
each of the Company's operating segments and its corporate functions, which covered each of the Company's
geographic regions, to be consolidated into other facilities. Due primarily to the signiÑcant reductions in
personnel discussed below, the facilities were identiÑed in an eÅort to combine certain logistics and
administrative operations wherever possible and eliminate what would otherwise be duplicative costs. The
charges related to reserves for remaining non-cancelable lease obligations, write-downs of the carrying value of
certain owned facilities to market value and write-downs to fair market value of owned assets located in these
leased and owned facilities that have been vacated. All facilities identiÑed for consolidation had been vacated
by the end of the third quarter of 2003. Workforce reductions at these and other facilities worldwide resulted
in the termination of approximately 750 personnel as part of the second quarter reorganization plan. The
impacted personnel were primarily in non-customer facing positions. Also during the second quarter of Ñscal
2003, management evaluated and elected to discontinue a number of IT-related initiatives that, in light of
recent business restructurings, no longer met the Company's return on investment standards for continued use
or development. These charges relate to the write-oÅ of capitalized hardware, software and software licenses
(all non-cash charges) and reserves for remaining lease commitments on leased hardware and software which
will no longer be utilized by the Company's operations in light of the decisions made and the reorganizations
completed as discussed above.
During the fourth quarter of 2003, the Company executed certain additional actions that resulted in
charges totaling $6.6 million pre-tax. The incremental impact of these actions was substantially oÅset by
certain adjustments that the Company recorded, also in the fourth quarter of 2003, primarily relating to
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