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Table of Contents
AVNET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
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 fiscal 2012 activity related to the remaining restructuring reserves from 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 June 30, 2012
,
management expects the majority of the remaining severance reserves to be utilized by the end of fiscal 2013 and the remaining facility exit cost
reserves to be utilized by the end of fiscal 2015.
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 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.
68
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
Reserves
Facility
Exit Costs
Other
Total
(Thousands)
Balance at July 2, 2011
$
9,803
$
8,294
$
1,038
$
19,135
Cash payments
(8,110
)
(3,545
)
(463
)
(12,118
)
Adjustments
(800
)
(1,133
)
(316
)
(2,249
)
Other, principally foreign currency translation
(608
)
(345
)
(32
)
(985
)
Balance at June 30, 2012
$
285
$
3,271
$
227
$
3,783