Avnet 2011 Annual Report Download - page 77

Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Fiscal 2009
In response to the decline in sales and gross profit margin due to weaker market conditions, the Company initiated significant
cost reduction actions during fiscal 2009 in order to realign its expense structure with market conditions. As a result, the Company
incurred restructuring, integration and other charges during fiscal 2009 related to the cost reductions as well as integration costs
associated with recently acquired businesses as presented in the following table.
Restructuring charges included severance, facility exit costs and other charges. Severance charges related to personnel reductions
of approximately 1,900 employees in administrative, finance and sales functions in connection with the cost reduction actions in all
three regions of both operating groups with employee reductions of approximately 1,400 in EM, 400 in TS and the remaining from
centralized support functions. Exit costs for vacated facilities related to 29 facilities in the Americas, 13 in EMEA and three in
Asia/Pac. Other charges included fixed asset write-downs and contractual obligations with no on-
going benefit to the Company. The
Company also recorded a reversal for severance, lease and other reserves that were deemed excessive and was credited to
restructuring, integration and other charges. Integration costs included professional fees, facility moving costs, travel, meeting,
marketing and communication costs that were incrementally incurred as a result of the acquisition integration efforts. Other items
recorded to restructuring, integration and other charges included a net credit related to acquisition adjustments for which the purchase
allocation period had closed, a loss resulting from a decline in the market value of certain small investments that the Company
liquidated, and incremental intangible asset amortization.
The following table presents the activity during fiscal 2011 related to restructuring reserves established as part of this plan:
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 2015.
Fiscal 2008 and prior restructuring reserves
In fiscal 2008 and prior, the Company incurred restructuring charges under four separate restructuring plans of which two are
remaining. As of July 2, 2011, the remaining reserves associated with these actions totaled $801,000 which are expected to be fully
utilized by the end of fiscal 2012.
71
Year Ended
June 27, 2009
(Thousands)
Restructuring charges
$
84,976
Integration costs
11,160
Reversal of excess prior year restructuring reserves
(2,514
)
Prior year acquisition adjustments
(1,201
)
Loss on investment
3,091
Incremental amortization
3,830
Pre
-
tax restructuring, integration and other charges
$
99,342
After tax restructuring, integration and other charges
$
65,310
Restructuring, integration and other charges per share on a diluted basis
$
0.43
Severance
Facility
Reserves
Exit Costs
Other
Total
(Thousands)
Balance at July 3, 2010
$
1,920
$
17,136
$
1,634
$
20,690
Cash payments
(1,432
)
(7,551
)
(414
)
(9,397
)
Adjustments
(319
)
(4,161
)
(1,703
)
(6,183
)
Other, principally foreign currency translation
130
175
483
788
Balance at July 2, 2011
$
299
$
5,599
$
—
$
5,898