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Restructuring, integration and other charges | 12 Months Ended
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Jun. 29, 2013
Restructuring and Related Activities [Abstract] |
Restructuring, integration and other charges | Restructuring, integration and other charges Fiscal 2013 During fiscal 2013, the Company initiated actions to reduce costs in both operating groups in response to current market conditions and incurred acquisition and integration costs associated with acquired businesses. As a result, the Company incurred restructuring, integration and other charges as presented in the following table.
| Year Ended
| June 29, 2013
| (Thousands)
Restructuring charges | $ | 120,048 |
Integration costs | 35,742 |
Acquisition costs and adjustments | (3,224 | )
Reversal of excess prior year restructuring reserves | (3,065 | )
Pre-tax restructuring, integration and other charges | $ | 149,501 |
After tax restructuring, integration and other charges | $ | 116,382 |
Restructuring, integration and other charges per share on a diluted basis | $ | 0.83 |
The activity related to the restructuring charges incurred during fiscal 2013 is presented in the following table:
| 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 |
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. Fiscal 2012 During fiscal 2012, 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.
| Year Ended
| June 30, 2012
| (Thousands)
Restructuring charges | $ | 50,253 |
Integration costs | 9,392 |
Acquisition costs | 10,561 |
Reversal of excess prior year restructuring reserves | (3,286 | )
Prior year acquisition adjustments | 6,665 |
Pre-tax restructuring, integration and other charges | $ | 73,585 |
After tax restructuring, integration and other charges | $ | 52,963 |
Restructuring, integration and other charges per share on a diluted basis | $ | 0.35 |
The fiscal 2013 activity related to the remaining restructuring reserves from fiscal 2012 is presented in the following table:
| Severance Reserves |  | Facility Exit Costs |  | Other |  | Total
| (Thousands)
Balance at June 30, 2012 | $ | 9,746 |  |  | $ | 4,544 |  |  | $ | 1,347 |  |  | $ | 15,637 |
Cash payments | (7,899 | ) |  | (2,495 | ) |  | (939 | ) |  | (11,333 | )
Adjustments | (1,091 | ) |  | (1,019 | ) |  | (153 | ) |  | (2,263 | )
Other, principally foreign currency translation | 183 |  |  | 14 |  |  | 33 |  |  | 230 |
Balance at June 29, 2013 | $ | 939 |  |  | $ | 1,044 |  |  | $ | 288 |  |  | $ | 2,271 |
Severance charges recorded in fiscal 2012 related to over 800 employees in sales, administrative and finance functions in connection with the cost reduction actions taken in all three regions in both operating groups with employee reductions of approximately 480 in EM and 320 in TS. Facility exit costs for vacated facilities related to 12 facilities in the Americas, 5 in EMEA and 13 in the Asia/Pac region and consisted of reserves for remaining lease liabilities and the write-down of leasehold improvements and other fixed assets. Other restructuring charges related primarily to other onerous lease obligations that have no ongoing benefit to the Company. Of the $50,253,000 pre-tax restructuring charges recorded during fiscal 2012, $27,537,000 related to EM and $22,716,000 related to TS and the remaining related to corporate charges. As of June 29, 2013, management expects the majority of the remaining severance reserves to be utilized by the end of fiscal 2016 and the remaining facility exit cost and other reserves to be utilized by the end of fiscal 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. Acquisition transaction costs incurred during fiscal 2012 related primarily to professional fees for advisory services and legal and accounting due diligence procedures and other legal costs associated with acquisitions. During fiscal 2012, 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. In addition, the Company recorded $6,665,000 for (i) a legal claim associated with an acquired business and a potential royalty claim related to periods prior to acquisition by Avnet and (ii) a legal claim associated with an indemnification of a prior divested business. 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.
| 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 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 2 in the Asia/Pac region. 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, 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. 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. Fiscal 2011 and prior reserve activity In addition to the fiscal 2011 restructuring activity, the Company incurred restructuring charges under prior restructuring plans. The fiscal 2013 activity related to the remaining reserves associated with these restructuring actions is presented in the following table:
| Severance Reserves |  | Facility Exit Costs |  | Other |  | Total
| (Thousands)
Balance at June 30, 2012 | $ | 443 |  |  | $ | 4,977 |  |  | $ | 905 |  |  | $ | 6,325 |
Cash payments | (138 | ) |  | (2,791 | ) |  | (120 | ) |  | (3,049 | )
Adjustments | (158 | ) |  | (616 | ) |  | (117 | ) |  | (891 | )
Other, principally foreign currency translation | 20 |  |  | 12 |  |  | (1 | ) |  | 31 |
Balance at June 29, 2013 | $ | 167 |  |  | $ | 1,582 |  |  | $ | 667 |  |  | $ | 2,416 |
As of June 29, 2013, management expects the majority of the remaining severance and other reserves to be utilized by the end of fiscal 2020 and the remaining facility exit cost reserves to be utilized by the end of fiscal 2016.

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- Definition The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 146 -Paragraph 20 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB TOPIC 5.P.4) -URI http://asc.fasb.org/extlink&oid=6394695&loc=d3e140904-122747 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 5.P.3) -URI http://asc.fasb.org/extlink&oid=6394695&loc=d3e140864-122747 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 5 -Section P -Subsection 3, 4 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 420 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6394359&loc=d3e17939-110869 + Details
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