Reorganization Costs
2013 Actions
In 2013, we incurred net reorganization costs primarily relating to a number of key initiatives, including: (a) the integration of BrightPoint operations into Ingram Micro, resulting in headcount reductions and the closure of certain BrightPoint facilities, and the exit of a portion of our Australian offices in Asia-Pacific; (b) headcount reductions in Europe to respond to the current market environment, and (c) the transition of certain transaction-oriented service and support functions to shared services centers.
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 global shared service centers located in Asia-Pacific and Europe. We closed our in-country Argentina operations in Latin America 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.
2011 and Prior Actions
In 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 and the 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, and launched 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 2013, 2012 and 2011 are as follows:
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| Reorganization costs |
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| Headcount Reduction |
| Employee Termination Benefits |
| Facility Costs |
| Total Reorganization Costs |
| Adjustments to Prior Year Costs |
| Total Costs |
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Fiscal year ended December 28, 2013 |
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IT Distribution: |
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North America |
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| $ | 3,698 |
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| $ | — |
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| $ | 3,698 |
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| $ | 173 |
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| $ | 3,871 |
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Europe |
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| 11,316 |
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| — |
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| 11,316 |
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| (188 | ) |
| 11,128 |
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Asia-Pacific |
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|
| 952 |
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| 4,259 |
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| 5,211 |
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| (12 | ) |
| 5,199 |
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Latin America |
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| — |
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| — |
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| — |
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| — |
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| — |
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BrightPoint |
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| 9,361 |
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| 5,070 |
|
| 14,431 |
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| — |
|
| 14,431 |
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Total |
| 628 |
| $ | 25,327 |
|
| $ | 9,329 |
|
| $ | 34,656 |
|
| $ | (27 | ) |
| $ | 34,629 |
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Fiscal year ended December 29, 2012 |
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IT Distribution: |
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North America |
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| $ | 34 |
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| $ | — |
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| $ | 34 |
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| $ | 779 |
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| $ | 813 |
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Europe |
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| 3,087 |
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| — |
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| 3,087 |
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| (32 | ) |
| 3,055 |
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Asia-Pacific |
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| 4,523 |
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| — |
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| 4,523 |
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| (115 | ) |
| 4,408 |
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Latin America |
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| 432 |
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| — |
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| 432 |
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| — |
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| 432 |
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BrightPoint |
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|
| 668 |
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| 300 |
|
| 968 |
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| — |
|
| 968 |
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Total |
| 359 |
| $ | 8,744 |
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| $ | 300 |
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| $ | 9,044 |
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| $ | 632 |
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| $ | 9,676 |
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Fiscal year ended December 31, 2011 | | | | | | | | | | | | |
IT Distribution: | | | | | | | | | | | | |
North America | | | | $ | 1,216 |
| | $ | — |
| | $ | 1,216 |
| | $ | (467 | ) | | $ | 749 |
|
Europe | | | | 2,070 |
| | — |
| | 2,070 |
| | (617 | ) | | 1,453 |
|
Asia-Pacific | | | | 2,730 |
| | — |
| | 2,730 |
| | — |
| | 2,730 |
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Latin America | | | | 199 |
| | — |
| | 199 |
| | — |
| | 199 |
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Total | | 123 | | $ | 6,215 |
| | $ | — |
| | $ | 6,215 |
| | $ | (1,084 | ) | | $ | 5,131 |
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Adjustments in the table above primarily reflect increases or decreases in estimated costs for employee terminations or to exit facilities.
The remaining liabilities and 2013 activities associated with the aforementioned actions are summarized in the table below:
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| Reorganization Liability | |
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| Remaining Liability at December 29, 2012 |
| Expenses (Income), Net |
| Amounts Paid and Charged Against the Liability |
| Foreign Currency Translation (a) |
| Remaining Liability at December 28, 2013 | |
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2013 Reorganization actions |
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Employee termination benefits |
| $ | — |
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| $ | 25,327 |
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| $ | (12,615 | ) |
| $ | 177 |
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| $ | 12,889 |
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Facility Costs |
| — |
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| 9,329 |
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| (3,438 | ) |
| (385 | ) |
| $ | 5,506 |
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Subtotal |
| — |
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| 34,656 |
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| (16,053 | ) |
| (208 | ) |
| 18,395 |
| (b) |
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2012 Reorganization actions |
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Employee termination benefits |
| 1,826 |
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| (200 | ) |
| (604 | ) |
| 37 |
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| 1,059 |
| (c) |
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2011 Reorganization actions |
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Employee termination benefits |
| 79 |
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| — |
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| (79 | ) |
| — |
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| — |
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2009 and prior reorganization actions |
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Facility Costs |
| 6,214 |
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| 173 |
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| (3,137 | ) |
| (230 | ) |
| $ | 3,020 |
| (d) |
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| $ | 8,119 |
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| $ | 34,629 |
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| $ | (19,873 | ) |
| $ | (401 | ) |
| $ | 22,474 |
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(a)Reflects the net foreign currency impact on the U.S. dollar liability.
(b)We expect the remaining liabilities to be substantially utilized by the end of 2016.
(c)We expect the remaining liabilities to be substantially utilized by the end of 2014.
(d)We expect the remaining liabilities to be fully utilized by the end of 2015.