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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 2013 is presented in the following table:
Severance charges recorded in fiscal 2013 related to the reduction of over 1,600
employees in sales and business support functions in
connection with the cost reduction actions taken in all three regions in both operating groups with employee reductions of 1,100 in EM, 400
in
TS and 150 in business support functions. Facility exit costs for vacated facilities related to 32 facilities in the Americas, 26 in EMEA and 11
in
the Asia region and consisted of reserves for remaining lease liabilities and the write-
down of fixed assets. Other restructuring charges related
primarily to other onerous lease obligations that have no ongoing benefit to the Company as well as a loss of $6,634,000
recognized in the third
quarter of fiscal 2013 from the write-down of the net assets and goodwill associated with the planned exit of a non-
integrated business in the EM
Americas region that occurred in the fourth quarter of fiscal 2013. Of the $120,048,000 pre-
tax restructuring charges recorded during fiscal
2013, $68,873,000 related to EM, $47,965,000 related to TS and $3,209,000 related to business support functions. As of June 29, 2013
,
management expects the majority of the remaining severance reserves to be utilized by the end of fiscal 2015
, facility exit cost reserves to be
utilized by the end of fiscal 2018 , and other to be utilized by 2014 .
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, and 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. Included in
integration costs during the third quarter of fiscal 2013 is a loss of $8,789,000 related to the exit of two multi-
employer pension plans associated
with acquired entities in Japan.
Acquisition costs incurred during fiscal 2013
related primarily to professional fees for advisory services and legal and accounting due
diligence procedures and other legal costs associated with acquisitions.
During fiscal 2013
, 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. Included in acquisition related costs is a credit of
$11,172,000
related to the reversal of an earn-out liability for which payment is no longer expected to be incurred.
68
Severance
Reserves
Facility
Exit Costs
Other
Total
(Thousands)
Fiscal 2013 pre-tax charges
$
73,337
$
34,373
$
12,338
$
120,048
Cash payments
(47,930
)
(3,421
)
(2,116
)
(53,467
)
Non-cash write-downs
—
(
14,550
)
(9,765
)
(24,315
)
Other, principally foreign currency translation
(153
)
(191
)
(87
)
(431
)
Balance at June 29, 2013
$
25,254
$
16,211
$
370
$
41,835