INGRAM MICRO INC | 2013 | FY | 3


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:


Reorganization costs


Headcount Reduction

Employee Termination Benefits

Facility Costs

Total Reorganization Costs

Adjustments to Prior Year Costs

Total Costs













Fiscal year ended December 28, 2013












IT Distribution:












North America



$
3,698


$


$
3,698


$
173


$
3,871

Europe



11,316




11,316


(188
)

11,128

Asia-Pacific



952


4,259


5,211


(12
)

5,199

Latin America












BrightPoint



9,361


5,070


14,431




14,431

Total

628

$
25,327


$
9,329


$
34,656


$
(27
)

$
34,629














Fiscal year ended December 29, 2012












IT Distribution:












North America



$
34


$


$
34


$
779


$
813

Europe



3,087




3,087


(32
)

3,055

Asia-Pacific



4,523




4,523


(115
)

4,408

Latin America



432




432




432

BrightPoint



668


300


968




968

Total

359

$
8,744


$
300


$
9,044


$
632


$
9,676

 
 
 
 
 
 
 
 
 
 
 
 
 
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

Latin America
 
 
 
199

 

 
199

 

 
199

Total
 
123
 
$
6,215

 
$

 
$
6,215

 
$
(1,084
)
 
$
5,131


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:


Reorganization Liability
 


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
 











 
2013 Reorganization actions










 
Employee termination benefits

$


$
25,327


$
(12,615
)

$
177


$
12,889

 
Facility Costs



9,329


(3,438
)

(385
)

$
5,506

 
Subtotal



34,656


(16,053
)

(208
)

18,395

(b)











 
2012 Reorganization actions










 
Employee termination benefits

1,826


(200
)

(604
)

37


1,059

(c)











 
2011 Reorganization actions










 
Employee termination benefits

79




(79
)




 











 
2009 and prior reorganization actions










 
Facility Costs

6,214


173


(3,137
)

(230
)

$
3,020

(d)


$
8,119


$
34,629


$
(19,873
)

$
(401
)

$
22,474

 

(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.

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