Avnet 2007 Annual Report Download - page 78

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(3) Included in sales for fiscal years 2007, 2006 and 2005 for the EMEA region are $1.8 billion, $1.6 billion and
$1.4 billion, respectively, of sales related to Germany.
(4) Included in sales for fiscal year 2007 for the Asia/Pacific region are $864 million, $797 million and $760 million
of sales related to Taiwan, Hong Kong and Singapore, respectively. Included in sales for fiscal year 2006 for the
Asia/Pacific region are $688 million, $850 million and $606 million of sales related to Taiwan, Hong Kong and
Singapore, respectively. Taiwan, Hong Kong and Singapore sales were not a significant component of
consolidated sales in fiscal 2005.
(5) Property, plant and equipment, net, for the Americas region as of the end of fiscal 2007, 2006 and 2005 includes
$110.0 million, $93.3 million and $94.6 million, respectively, related to the United States.
(6) Property, plant and equipment, net, for the EMEA region as of the end of fiscal 2007, 2006 and 2005 includes
$26.8 million, $25.9 million and $28.5 million, respectively, related to Germany and $13.4 million,
$13.5 million and $14.2 million, respectively, related to Belgium.
The Company manages its business based upon the operating results of its two operating groups before
restructuring and other charges (see Note 17). In fiscal 2007 and 2006, presented above, approximate unallocated
pre-tax restructuring, integration and other items related to EM and TS, respectively, were a benefit of ($5,201,000)
and charges of $11,522,000 in fiscal 2007, and $53,456,000 and $9,529,000 in fiscal 2006. The remaining
restructuring, integration and other items in each year relate to corporate activities.
17. Restructuring, integration and other items
The Company recorded a number of restructuring, integration and other items during fiscal 2007 and 2006.
There were no restructuring charges recorded in fiscal 2005. The fiscal 2007 restructuring, integration and other
items related to cost-reduction initiatives and the acquisition and subsequent integration of Access (see Note 2). The
fiscal 2006 restructuring, integration and other items related primarily to actions taken to integrate Memec into the
existing Avnet business as well as actions taken in connection with recent divestitures, and other actions
Fiscal 2007
During fiscal 2007, the Company incurred certain restructuring, integration and other items as a result of cost-
reduction initiatives in all three regions and the acquisition of Access on December 31, 2006 (see Note 2). The
Company established and approved plans for cost reduction initiatives across the Company and approved plans to
integrate the acquired Access business into Avnet’s existing TS operations, which was complete as of the end of
fiscal 2007. The following table summarizes these exit-related charges and activity during fiscal 2007:
Severance
Reserves
Facility Exit
Costs Other Total
(Thousands)
Fiscal 2007 pre-tax charges.................... $10,750 $1,041 $ 1,835 $13,626
Amounts utilized ......................... (4,159) (214) (1,445) (5,818)
Other, principally foreign currency translation .... 62 — 3 65
Balance at June 30, 2007 ..................... $ 6,653 $ 827 $ 393 $ 7,873
In addition to the exit-related charges in the table above of $13,626,000, the Company also recorded in
“restructuring, integration and other items” Access integration costs of $7,331,000, the write-down of $661,000
related to an Avnet owned building in EMEA, and the reversal of $1,739,000 related primarily to excess severance and
lease reserves, certain of which were previously established through “restructuring, integration and other items” in
prior fiscal periods (see further discussions in this Note 17). Partially offsetting these charges was a pre-tax benefit of
$12,526,000 which resulted from the favorable outcome of a contingent liability acquired in connections with an
acquisition completed in a prior year. The impact of both the restructuring, integration and other charges, including
78
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)