Reorganization and Expense-Reduction Program Costs

2013 Actions

During the first six months of 2013, we began integrating certain BrightPoint operations into Ingram Micro, resulting in headcount reductions and facility exit costs. We also continued to move certain transactions-oriented service and support functions in Europe to our European shared services center and exited a portion of one of our Australian offices in Asia-Pacific. Associated with these actions, we incurred reorganization costs primarily related to employee termination benefits and facility exit costs in one of our offices in Australia.

2012 Actions

In 2012, we implemented headcount reductions primarily in Australia and New Zealand to better align our operating expenses with each country’s lower sales volumes. Additionally, we moved certain transactions-oriented service and support functions to shared service centers in Asia-Pacific and Europe. We closed our in-country Argentina operations in Latin America and will service this market through our export operations in Miami. Associated with these actions, we incurred net reorganization costs related to employee termination benefits.

2011 and Prior Actions

In the second half of 2011, we implemented a cost-reduction program related to our Australian operations in Asia-Pacific primarily to align our level of operating expenses with declines in sales volume as a result of the system-implementation complications and loss of market share in that country. We also implemented headcount reductions in certain operations in North America, Europe and Latin America.

In 2009 and earlier, we incurred costs to integrate past acquisitions, as well as launching various other outsourcing and optimization plans, to improve operating efficiencies and better align our level of operating expenses with the decline in sales volumes resulting from the economic downturn in that period.

While these reorganization actions were completed prior to the periods included herein, future cash outlays are required for future lease payments related to exited facilities.

A summary of the reorganization and expense-reduction program costs incurred in the thirteen weeks ended June 29, 2013 as compared to the thirteen weeks ended June 30, 2012 and twenty-six weeks ended June 29, 2013 compared to the twenty-six weeks ended June 30, 2012, are as follows:



	Reorganization Costs
	Headcount Reduction	Employee Termination Benefits		Facility Costs		Total Reorganization Costs		Adjustments to Prior Year Costs			Total Costs

Thirteen weeks ended June 29, 2013
IT Distribution:
North America		$	790	$	—	$	790	$	—		$	790
Europe		232		—		232		(25		)	207
Asia-Pacific		38		—		38		—			38
Latin America		—		—		—		—			—
BrightPoint		1,841		1,760		3,601		—			3,601
Total	98	$	2,901	$	1,760	$	4,661	$	(25	)	$	4,636

Thirteen weeks ended June 30, 2012
IT Distribution:
North America		$	2	$	—	$	2	$	(155	)	$	(153	)
Europe		663		—		663		—			663
Asia-Pacific		102		—		102		20			122
Latin America		207		—		207		—			207
BrightPoint		—		—		—		—			—
Total	24	$	974	$	—	$	974	$	(135	)	$	839



	Reorganization Costs
	Headcount Reduction	Employee Termination Benefits		Facility Costs		Total Reorganization Costs		Adjustments to Prior Year Costs			Total Costs

Twenty-six weeks ended June 29, 2013
IT Distribution:
North America		$	955	$	—	$	955	$	—		$	955
Europe		2,911		—		2,911		(188		)	2,723
Asia-Pacific		59		3,277		3,336		(12		)	3,324
Latin America		—		—		—		—			—
BrightPoint		4,540		1,760		6,300		—			6,300
Total	218	$	8,465	$	5,037	$	13,502	$	(200	)	$	13,302

Twenty-six weeks ended June 30, 2012
IT Distribution:
North America		$	34	$	—	$	34	$	(155	)	$	(121	)
Europe		663		—		663		—			663
Asia-Pacific		538		—		538		(115		)	423
Latin America		431		—		431		—			431
BrightPoint		—		—		—		—			—
Total	103	$	1,666	$	—	$	1,666	$	(270	)	$	1,396

The remaining liabilities and 2013 activities associated with the aforementioned actions are summarized in the table below:



	Reorganization Liability
	Remaining Liability at December 29, 2012		Expenses (Income), Net				Amounts Paid and Charged Against the Liability			Foreign Currency Translation (b)			Remaining Liability at June 29, 2013

2013 Reorganization actions
Employee termination benefits	$	—	$	8,465			$	(4,872	)	$	5		$	3,598
Facility Costs	—		5,037				(2,440		)	(322		)	2,275
Subtotal	—		13,502				(7,312		)	(317		)	5,873		^(c)

2012 Reorganization actions
Employee termination benefits	1,826		(200		)	^(a)	(604		)	(21		)	1,001		^(d)

2011 Reorganization actions
Employee termination benefits	79		—				(79		)	—			—

2009 and prior reorganization actions
Facility Costs	6,214		—				(1,507		)	(219		)	4,488		^(e)
	$	8,119	$	13,302			$	(9,502	)	$	(557	)	$	11,362


(a)	Adjustments reflected in the table above include a reduction of $188 and $12 to reorganization liabilities recorded in prior years in Europe and Asia-Pacific, respectively, for lower than expected employee termination benefits.


(b)	Reflects the net foreign currency impact on the U.S. dollar liability.


(c)	We expect the remaining liabilities to be substantially utilized by the end of 2016.


(d)	We expect the remaining liabilities to be substantially utilized by the end of 2014.


(e)	We expect the remaining liabilities to be fully utilized by the end of 2015.