Restructuring, integration and other charges

Fiscal 2012

During the third quarter and first nine months of fiscal 2012, 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 recently acquired businesses. As a result, the Company incurred restructuring, integration and other charges as presented in the following table.



	Quarter Ended March 31, 2012			Nine Months Ended March 31, 2012
	(Thousands)
Restructuring charges	$	11,217		$	40,156
Integration costs	3,988			7,438
Acquisition transaction costs	4,196			7,262
Reversal of excess prior year restructuring reserves	(792		)	(1,742		)
Pre-tax restructuring, integration and other charges	$	18,609		$	53,114
After tax restructuring, integration and other charges	$	13,691		$	37,255
Restructuring, integration and other charges per share on a diluted basis	$	0.10		$	0.25

The activity related to the restructuring charges incurred during the first nine months of fiscal 2012 is presented in the following table:



	Severance Reserves			Facility Exit Costs			Other			Total
	(Thousands)
Fiscal 2012 pre-tax charges	$	26,523		$	10,525		$	3,108		$	40,156
Cash payments	(18,385		)	(1,460		)	(1,512		)	(21,357		)
Non-cash write-downs	—			(2,112		)	(537		)	(2,649		)
Other, principally foreign currency translation	(15		)	(106		)	9			(112		)
Balance at March 31, 2012	$	8,123		$	6,847		$	1,068		$	16,038

Severance charges recorded in the first nine months of fiscal 2012 related to over 550 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 350 in EM and 200 in TS. Facility exit costs for vacated facilities related to nine facilities in the Americas, five in EMEA and twelve in Asia 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 on-going benefit to the Company. Of the $40,156,000 pre-tax restructuring charges recorded during the first nine months of fiscal 2012, $23,948,000 related to EM, $16,208,000 related to TS and the remaining related to corporate charges. As of March 31, 2012, management expects the majority of the remaining severance and other 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 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 for extended periods 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. Transaction costs consisted primarily of professional fees for brokering the acquisitions, due diligence work and other legal costs.

Acquisition transaction costs incurred during the first nine months of fiscal 2012 related primarily to professional fees for advisory and broker services and legal and accounting due diligence procedures and other legal costs associated with acquisitions.

Fiscal 2011

During fiscal 2011, the Company incurred restructuring, integration and other charges related to acquisition and integration activities associated with acquired businesses. The following table presents the activity during the first nine months of fiscal 2012 related to the remaining restructuring reserves established during fiscal 2011.



	Severance Reserves			Facility Exit Costs			Other			Total
	(Thousands)
Balance at July 2, 2011	$	9,803		$	8,294		$	1,038		$	19,135
Cash payments	(7,884		)	(2,826		)	(440		)	(11,150		)
Adjustments	(576		)	(260		)	(297		)	(1,133		)
Other, principally foreign currency translation	(564		)	(281		)	(23		)	(868		)
Balance at March 31, 2012	$	779		$	4,927		$	278		$	5,984

As of March 31, 2012, management expects the majority of the remaining severance and other 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.

Fiscal 2010 and prior restructuring reserves

In fiscal 2010 and prior, the Company incurred restructuring, integration and other charges of which four restructuring plans are remaining. The following table presents the activity during the first nine months of fiscal 2012 related to the remaining restructuring reserves that were established during fiscal 2010 and prior.



	Severance Reserves			Facility Exit Costs			Other			Total
	(Thousands)
Balance at July 2, 2011	$	316		$	6,632		$	1,966		$	8,914
Cash payments	(32		)	(3,606		)	(1,096		)	(4,734		)
Adjustments	(36		)	(383		)	(10		)	(429		)
Other, principally foreign currency translation	(20		)	(60		)	(119		)	(199		)
Balance at March 31, 2012	$	228		$	2,583		$	741		$	3,552

As of March 31, 2012, management expects the majority of the remaining severance and other reserves to be utilized by the end of fiscal 2014 and the remaining facility exit cost reserves to be utilized by the end of fiscal 2016