17. Restructuring, integration and other expenses

Fiscal 2016

During fiscal 2016, the Company took certain actions in an effort to reduce future operating expenses, including the continuation of the restructuring activities started in the fourth quarter of fiscal 2015. These actions include activities related to the Avnet Advantage initiative, which is focused on creating long-term operational efficiencies. In addition, the Company incurred integration and other costs as discussed further below. The following table presents the restructuring, integration and other expenses recorded during fiscal 2016:


	Year Ended
	July 2, 2016
	(Thousands, except per share data)
Restructuring expenses	$	52,781
Integration costs		10,425
Other costs, including acquisition costs		19,784
Changes in estimates for prior year restructuring liabilities		(3,672)
Restructuring, integration and other expenses before tax	$	79,318
Restructuring, integration and other expenses after tax	$	52,343
Restructuring, integration and other expenses per share on a diluted basis	$	0.39

The activity related to the restructuring liabilities established and other associated expenses incurred during fiscal 2016 is presented in the following table:


			Facility			Asset
	Severance		Exit Costs		Impairments		Other		Total
	(Thousands)
Fiscal 2016 restructuring expenses	$	45,592	$	5,129	$	1,254	$	806	$	52,781
Cash payments		(31,304)		(979)		—		(267)		(32,550)
Non-cash amounts		—		—		(1,254)		(378)		(1,632)
Other, principally foreign currency translation		(67)		(57)		—		62		(62)
Balance at July 2, 2016	$	14,221	$	4,093	$	—	$	223	$	18,537

Severance expense recorded in fiscal 2016 related to the reduction, or planned reduction, of over 700 employees, primarily in operations, sales and business support functions, in connection with cost reduction actions taken in both operating groups including the impact of a voluntary retirement program in the United States. Facility exit costs primarily consist of liabilities for remaining lease obligations for exited facilities. Asset impairments relate to the impairment of property, plant and equipment as a result of the underlying restructuring actions taken in fiscal 2016. Other restructuring costs related primarily to other miscellaneous restructuring and exit costs. Of the $52.8 million in restructuring expenses recorded during fiscal 2016, $28.6 million related to EM, $21.2 million related to TS and $3.0 million related to Corporate business support functions. The Company expects the majority of the remaining severance and facility exit costs to be paid by the end of fiscal 2017.

Integration costs are primarily related to the integration of acquired businesses, the integration of certain regional and global businesses, the integration of significant information technology systems and incremental costs incurred as part of the consolidation, relocation and closure of warehouse and office facilities. Integration costs include certain consulting costs for significant new information technology systems and business operation integration assistance, facility moving costs, legal fees, travel, meeting, training, marketing and communication costs that are specifically and incrementally incurred as a result of such integration activities. Also included in integration costs are incremental salary costs specific to integration, consolidation and closure activities. Other costs consists primarily of professional fees incurred for acquisitions, costs incurred for businesses divested or closed in current or prior periods, any ongoing facilities operating costs associated with the consolidation, relocation and closure of facilities once such facilities have been vacated or substantially vacated, and other miscellaneous costs that relate to restructuring, integration and other expenses. Included in other costs during fiscal 2016 was $4.3 million of expense associated with Avnet’s estimated environmental remediation obligations related to certain legacy manufacturing operations that were divested several decades ago and $8.4 million of legal expenses related to lawsuits associated with operations of an acquired business prior to Avnet’s acquisition. The remaining integration and other costs in fiscal 2016 were comprised of many different costs, none of which were individually material.

Fiscal 2015

During fiscal 2015, the Company incurred restructuring expenses related to various restructuring actions intended to achieve planned synergies from acquired businesses and to reduce future operating expenses. The following table presents the restructuring, integration and other expenses incurred during fiscal 2015:


	Year Ended
	June 27, 2015
	(Thousands, except per share data)
Restructuring expenses	$	58,677
Integration costs		19,144
Other costs including acquisition costs		13,724
Changes in estimates for prior year restructuring liabilities		(740)
Restructuring, integration and other expenses before tax	$	90,805
Restructuring, integration and other expenses after tax	$	65,897
Restructuring, integration and other expenses per share on a diluted basis	$	0.47

The fiscal 2016 activity related to the remaining restructuring liabilities established during fiscal 2015 is presented in the following table:


			Facility
	Severance		Exit Costs		Total
	(Thousands)
Balance at June 27, 2015	$	11,256	$	3,210	$	14,466
Cash payments		(9,842)		(1,166)		(11,008)
Changes in estimates, net		(2,092)		(522)		(2,614)
Non-cash amounts		—		—		—
Other, principally foreign currency translation		2,800		(89)		2,711
Balance at July 2, 2016	$	2,122	$	1,433	$	3,555

Of the $58.7 million in restructuring expenses recorded during fiscal 2015, $26.0 million related to EM, $31.9 million related to TS and $0.8 million related to Corporate business support functions. As of July 2, 2016, management expects the majority of the remaining severance, facility exit and other liabilities to be utilized by the first half of fiscal 2017.

Fiscal 2014 and prior

During fiscal 2014 and prior fiscal years, the Company incurred expenses to reduce costs, including costs related to the acquisition and integration activities associated with acquired businesses as follows:


	Year Ended
	June 28, 2014
	(Thousands, except per share data)
Restructuring expenses	$	65,749
Integration costs		20,455
Other costs including acquisition costs		8,767
Changes in estimates for prior year restructuring liabilities		(348)
Restructuring, integration and other expenses before tax	$	94,623
Restructuring, integration and other expenses after tax	$	70,773
Restructuring, integration and other expenses per share on a diluted basis	$	0.50

Of the $65.7 million in restructuring expenses recorded during fiscal 2014 and prior, $41.3 million related to EM, $23.1 million related to TS and $1.3 million related to Corporate business support functions.

As of June 27, 2015, there was $11.8 million of restructuring liabilities remaining related to restructuring actions taken in fiscal years 2014 and prior, the majority of which relates to facility exit costs. The remaining balance for such historical restructuring liabilities as of July 2, 2016 was $4.0 million, which is expected to be paid by the end of fiscal 2017.