Restructuring, integration and other charges

Fiscal 2013

During the first quarter of fiscal 2013, the Company initiated actions to reduce costs in both operating groups in response to continued weakness in business conditions. In addition, the Company incurred acquisition and integration costs associated with recently acquired businesses. The following table presents the restructuring, integration and other charges incurred during the first quarter of fiscal 2013.



	Quarter Ended September 29, 2012
	(Thousands)
Restructuring charges	$	30,210
Integration costs	5,049
Acquisition costs	2,780
Other reversal of excess prior year restructuring reserves	(631		)
Pre-tax restructuring, integration and other charges	$	37,408
After tax restructuring, integration and other charges	$	27,101
Restructuring, integration and other charges per share on a diluted basis	$	0.19

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	$	25,900		$	3,967		$	343		$	30,210
Cash payments	(13,168		)	(22		)	(12		)	(13,202		)
Non-cash write-downs	—			(277		)	—			(277		)
Other, principally foreign currency translation	62			4			4			70
Balance at September 29, 2012	$	12,794		$	3,672		$	335		$	16,801

Severance charges recorded in the first three months of fiscal 2013 related to over 600 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 400 in EM and 200 in TS. Facility exit costs for vacated facilities related to three facilities in the Americas and four in EMEA 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 $30,210,000 pre-tax restructuring charges recorded during the first quarter of fiscal 2013, $21,613,000 related to EM, $8,387,000 related to TS and the remaining related to corporate. As of September 29, 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.

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 due diligence work and other legal costs.

Fiscal 2012

During fiscal 2012, 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 three months of fiscal 2013 related to the remaining restructuring reserves established during fiscal 2012.



	Severance Reserves			Facility Exit Costs			Other			Total
	(Thousands)
Balance at June 30, 2012	$	9,746		$	4,544		$	1,347		$	15,637
Cash payments	(5,408		)	(406		)	23			(5,791		)
Adjustments	(425		)	81			(18		)	(362		)
Other, principally foreign currency translation	166			52			52			270
Balance at September 29, 2012	$	4,079		$	4,271		$	1,404		$	9,754

As of September 29, 2012, management expects the majority of the remaining severance and other reserves to be utilized by the end of fiscal 2015 and the remaining facility exit cost reserves to be utilized by the end of fiscal 2016.

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 three months of fiscal 2013 related to the remaining restructuring reserves established during fiscal 2011.



	Severance Reserves			Facility Exit Costs			Other			Total
	(Thousands)
Balance at June 30, 2012	$	285		$	3,271		$	227		$	3,783
Cash payments	(44		)	(610		)	(21		)	(675		)
Adjustments	(121		)	(12		)	(31		)	(164		)
Other, principally foreign currency translation	13			103			8			124
Balance at September 29, 2012	$	133		$	2,752		$	183		$	3,068

As of September 29, 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 three months of fiscal 2013 related to the remaining restructuring reserves that were established during fiscal 2010 and prior.



	Severance Reserves			Facility Exit Costs			Other		Total
	(Thousands)
Balance at June 30, 2012	$	158		$	1,706		$	678	$	2,542
Cash payments	(27		)	(640		)	—		(667		)
Adjustments	(1		)	—			—		(1		)
Other, principally foreign currency translation	6			14			32		52
Balance at September 29, 2012	$	136		$	1,080		$	710	$	1,926

As of September 29, 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.