Reorganization Costs

2014 Actions

In order to further enhance our ability to innovate and respond to market needs with greater speed and efficiency, on February 13, 2014 we announced a plan to proceed with a global organizational effectiveness program that involves the following three critical aspects:


1.	Aligning and leveraging our infrastructure globally with our evolving businesses, opportunities and resources;


2.	De-layering and simplifying the organization to enable us to be more nimble, responsive and collaborative; and


3.	Maintaining investments in expertise and capabilities to continue to transform our business mix in faster growing, higher margin businesses.

As a result of the organizational effectiveness program, we recognized reorganization charges in the first quarter of 2014 primarily related to employee termination benefits.

2013 Actions

During the third quarter of 2013, we announced a plan to reduce headcount in Germany to respond to the market environment resulting in reorganization charges primarily related to employee termination benefits. In addition, we exited a BrightPoint facility in the U.S. resulting in reorganization charges primarily related to facility exit costs and employee termination benefits.

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

2012 Actions and Prior Actions

In 2012 and earlier, we implemented headcount reductions primarily in Australia and New Zealand to better align our operating expenses with each country’s then 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 and are now servicing this market through our export operations in Miami. Associated with these actions, we incurred net reorganization costs related to employee termination benefits. We also launched various other outsourcing and optimization plans, to improve operating efficiencies and better align our level of operating expenses with sales volumes, resulting in headcount reductions in certain operations in North America, Europe and Latin America. 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 March 29, 2014 and March 30, 2013 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 March 29, 2014
IT Distribution:
North America		$	6,222	$	—	$	6,222	$	—		$	6,222
Europe		28,989		—		28,989		(36		)	28,953
Asia-Pacific		1,340		—		1,340		(115		)	1,225
Latin America		469		—		469		—			469
BrightPoint		1,555		—		1,555		—			1,555
Total	746	$	38,575	$	—	$	38,575	$	(151	)	$	38,424

Thirteen weeks ended March 30, 2013
IT Distribution:
North America		$	165	$	—	$	165	$	—		$	165
Europe		2,679		—		2,679		(163		)	2,516
Asia-Pacific		21		3,277		3,298		(12		)	3,286
Latin America		—		—		—		—			—
BrightPoint		2,699		—		2,699		—			2,699
Total	120	$	5,564	$	3,277	$	8,841	$	(175	)	$	8,666

The remaining liabilities and 2014 activities associated with the aforementioned actions are summarized in the table below:



	Reorganization Liability
	Remaining Liability at December 28, 2013		Expenses (Income), Net				Amounts Paid and Charged Against the Liability			Foreign Currency Translation (b)			Remaining Liability at March 29, 2014
2014 Reorganization actions
Employee termination benefits	—		38,575				(4,507		)	(180		)	33,888		^(c)

2013 Reorganization actions
Employee termination benefits	12,889		(151		)	^(a)	(2,105		)	2			10,635
Facility Costs	5,506		—				(1,342		)	102			4,266
Subtotal	18,395		(151		)		(3,447		)	104			14,901		^(d)

2012 and prior reorganization actions
Employee termination benefits	1,059		—				—			—			1,059		^(e)
Facility Costs	3,020		—				(665		)	(37		)	2,318		^(f)
Subtotal	4,079		—				(665		)	(37		)	3,377
	$	22,474	$	38,424			$	(8,619	)	$	(113	)	$	52,166


(a)	Adjustments reflected in the table above include a reduction of $115 and $36 to reorganization liabilities recorded in prior years in Asia-Pacific and Europe, 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 2015.


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


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


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