Avnet (AVT) 10-Q 29 Jan 10 2010 Q2 Quarterly report Financial data

Document and Company Informatio

Document and Company Information (USD $)
	6 Months Ended Jan. 02, 2010	Jan. 22, 2010
Document and Company Information [Abstract]
Entity Registrant Name	AVNET INC
Entity Central Index Key	0000008858
Document Type	10-Q
Document Period End Date	2010-01-02
Amendment Flag	false
Current Fiscal Year End Date	--06-27
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		151,732,735

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands	Jan. 02, 2010	Jun. 27, 2009
Current assets:
Cash and cash equivalents	$894,871	$943,921
Receivables, less allowances of $84,653 and $85,477, respectively	3,439,459	2,618,697
Inventories	1,698,349	1,411,755
Prepaid and other current assets	135,523	169,879
Total current assets	6,168,202	5,144,252
Property, plant and equipment, net	302,291	305,682
Goodwill (Notes 2 and 3)	573,080	550,118
Other assets	271,674	273,464
Total assets	7,315,247	6,273,516
Current liabilities:
Borrowings due within one year (Note 4)	81,033	23,294
Accounts payable	2,735,097	1,957,993
Accrued expenses and other	502,506	474,573
Total current liabilities	3,318,636	2,455,860
Long-term debt (Note 4)	938,756	946,573
Other long-term liabilities	77,195	110,226
Total liabilities	4,334,587	3,512,659
Shareholders' equity (Notes 8 and 9):
Common stock $1.00 par; authorized 300,000,000 shares; issued 151,341,000 shares and 151,099,000 shares, respectively	151,341	151,099
Additional paid-in capital	1,200,046	1,178,524	[1]
Retained earnings	1,368,817	1,214,071	[1]
Accumulated other comprehensive income (Note 8)	261,386	218,094
Treasury stock at cost, 45,602 shares and 32,306 shares, respectively	(930)	(931)
Total shareholders' equity	2,980,660	2,760,857
Total liabilities and shareholders' equity	$7,315,247	$6,273,516
[1]As adjusted for the retrospective application of an accounting standard. See Note 1 to the consolidated financial statements.

1_Consolidated Balance Sheets (

Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)
In Thousands, except Share data	Jan. 02, 2010	Jun. 27, 2009
Current assets:
Allowances for receivable	$84,653	$85,477
Shareholders' equity (Notes 8 and 9):
Common stock, par value	1	1
Common stock, shares authorized	300,000,000	300,000,000
Common stock, shares issued	151,341,000	151,099,000
Treasury stock, shares	45,602	32,306

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Per Share data	3 Months Ended Jan. 02, 2010	3 Months Ended Dec. 27, 2008		6 Months Ended Jan. 02, 2010	6 Months Ended Dec. 27, 2008
Sales	$4,834,524	$4,269,178		$9,189,560	$8,763,628
Cost of sales	4,282,633	3,735,666		8,137,932	7,645,949
Gross profit	551,891	533,512		1,051,628	1,117,679
Selling, general and administrative expenses	389,604	380,174		782,269	799,728
Impairment charges (Note 3)	0	1,348,845		0	1,348,845
Restructuring, integration and other charges (Note 12)	0	13,149		18,072	23,140
Operating income (loss)	162,287	(1,208,656)		251,287	(1,054,034)
Other income (expense), net	(835)	817		2,081	168
Interest expense	(15,316)	(21,725)		(30,597)	(42,728)
Gain on sale of assets (Note 2)	5,549	0		5,549	0
Income (loss) before income taxes	151,685	(1,229,564)		228,320	(1,096,594)
Income tax provision (benefit)	47,834	(24,595)		73,574	18,036
Net income (loss)	$103,851	($1,204,969)		$154,746	($1,114,630)
Net earnings (loss) per share (Note 9):
Basic	0.69	-7.99	[1]	1.02	-7.4	[1]
Diluted	0.68	-7.99	[1]	1.01	-7.4	[1]
Shares used to compute earnings (loss) per share (Note 9):
Basic	151,391	150,721		151,333	150,641
Diluted	152,945	150,721		152,790	150,641
[1]As adjusted for the retrospective application of an accounting standard. See Note 1 to the consolidated financial statements.

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands	6 Months Ended Jan. 02, 2010	6 Months Ended Dec. 27, 2008
Cash flows from operating activities:
Net income (loss)	$154,746	($1,114,630)
Non-cash and other reconciling items:
Depreciation and amortization	31,127	35,289
Deferred income taxes	16,019	(25,116)
Stock-based compensation	19,799	13,212
Impairment charges (Note 3)	0	1,348,845
Gain on sale of assets (Note 2)	(5,549)	0
Other, net	8,363	20,612
Changes in (net of effects from businesses acquired):
Receivables	(793,294)	38,916
Inventories	(272,882)	50,149
Accounts payable	753,354	(108,972)
Accrued expenses and other, net	(2,988)	55,937
Net cash flows (used for) provided by operating activities	(91,305)	314,242
Cash flows from financing activities:
Proceeds from (repayment of) bank debt, net (Note 4)	39,660	(7,391)
Proceeds from (repayment of) other debt, net (Note 4)	8	(1,795)
Other, net	2,767	904
Net cash flows provided by (used for) financing activities	42,435	(8,282)
Cash flows from investing activities:
Purchases of property, plant and equipment	(24,465)	(49,601)
Cash proceeds from sales of property, plant and equipment	5,441	1,633
Acquisition of operations, net of cash acquired (Note 2)	(5,606)	(212,728)
Cash proceeds from divestitures (Note 2)	8,583	0
Net cash flows used for investing activities	(16,047)	(260,696)
Effect of exchange rate changes on cash and cash equivalents	15,867	(14,860)
Cash and cash equivalents:
- (decrease) increase	(49,050)	30,404
- at beginning of period	943,921	640,449
- at end of period	$894,871	$670,853

Basis of presentation

Basis of presentation
	6 Months Ended Jan. 02, 2010 USD / shares
Basis of presentation [Abstract]
Basis of presentation	1. Basis of presentation In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments necessary to present fairly the Companys financial position, results of operations and cash flows. All such adjustments are of a normal recurring nature, except for (i)the adoption of an accounting standard which changes the accounting for convertible debt that may be settled in cash as discussed below, (ii)the gain on sale of assets discussed in Note 2, (iii)the goodwill and intangible asset impairment charges discussed in Note 3, and (iv) the restructuring, integration and other charges discussed in Note 12. The preparation of financial statements in accordance with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results may differ from these estimates. The Company operates on a 52/53week fiscal year, and as a result, the first six months of fiscal 2010 contained 27weeks (with the extra week falling in the Companys first fiscal quarter) while the first six months of fiscal 2009 contained 26weeks. Interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year. The information included in this Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in the Companys Annual Report on Form 10-K for the fiscal year ended June27, 2009. Management has evaluated events and transactions that occurred after the balance sheet date and through the date these consolidated financial statements were issued. Adoption of accounting standard The Financial Accounting Standards Board issued authoritative guidance which requires the issuer of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the debt and equity (conversion option) components of the instrument. The standard requires the convertible debt to be recognized at the present value of its cash flows discounted using the non-convertible debt borrowing rate at the date of issuance. The resulting debt discount from this present value calculation is to be recognized as the value of the equity component and recorded to additional paid in capital. The discounted convertible debt is then required to be accreted up to its face value and recorded as non-cash interest expense over the expected life of the convertible debt. In addition, deferred financing costs associated with the convertible debt are required to be allocated between the debt and equity components based upon relative values. During the first quarter of fiscal 2010, the Company adopted this standard, however, there was no impact to the fiscal 2010 consolidated financial statements because the Companys $300.0million 2% Convertible Senior Debentures (the Debentures), to which this standard applies, were extinguished in fiscal 2009. Due to the required retrospective application of this standard to prior periods, the Company adjusted the prior period comparative consolidated fin

Acquisitions

Acquisitions
	6 Months Ended Jan. 02, 2010 USD / shares
Acquisitions [Abstract]
Acquisitions	2. Acquisitions During the second quarter of fiscal 2010, the Company completed two acquisitions with combined annualized revenues of approximately $60million. Both acquisitions are reported as part of the TS Asia/Pac region. For the first half of fiscal 2010, the Company utilized a total of $5,606,000, net of cash acquired, related to acquisitions. During the first half of fiscal 2009, the Company completed the following three acquisitions with combined annualized revenues of approximately $500million: Horizon Technology Group plc, Source Electronics Corporation and OnTrack Solutions Pvt. Ltd., which are reported in the TS EMEA, EM Americas and TS Asia reporting units, respectively. Acquisition-related exit activity accounted for in purchase accounting During fiscal 2007 and 2006, the Company recorded certain exit-related liabilities through purchase accounting which consisted of severance for workforce reductions, non-cancelable lease commitments and lease termination charges for leased facilities, and other contract termination costs associated with the exit activities. The following table summarizes the utilization of the remaining reserves during the first half of fiscal 2010: FY 2007 FY 2006 Total (Thousands) Balance at June27, 2009 $ 698 $ 7,619 $ 8,317 Amounts utilized (383 ) (1,416 ) (1,799 ) Other, principally foreign currency translation (10 ) 15 5 Balance at January2, 2010 $ 305 $ 6,218 $ 6,523 As of January2, 2010, the remaining reserves related primarily to facility exit costs and other contractual lease obligations which management expects to be substantially utilized by fiscal 2012. Divestitures During the second quarter of fiscal 2010, the Company recognized a gain on the sale of assets amounting to $5,549,000 pre-tax, $3,383,000 after tax and $0.02 per share on a diluted basis, as a result of certain earn-out provisions associated with the prior sale of the Companys equity investment in Calence LLC. In addition, the Company sold a cost method investment and received proceeds of approximately $3,034,000. As a result, the Company received a total of $8,583,000 in cash proceeds from divestitures for the first half of fiscal 2010.

Goodwill and intangible assets

Goodwill and intangible assets
	6 Months Ended Jan. 02, 2010 USD / shares
Goodwill and intangible assets [Abstract]
Goodwill and intangible assets	3. Goodwill and intangible assets The following table presents the carrying amount of goodwill, by reportable segment, for the six months ended January2, 2010: Electronics Technology Marketing Solutions Total (Thousands) Carrying value at June27, 2009 $ 240,388 $ 309,730 $ 550,118 Additions 11,101 10,909 22,010 Adjustments (142 ) (142 ) Foreign currency translation 1,080 14 1,094 Carrying value at January2, 2010 $ 252,427 $ 320,653 $ 573,080 Goodwill additions in EM related to purchase accounting entries during the purchase price allocation period for acquisitions that closed prior to fiscal 2010. Goodwill additions in TS related to two acquisitions in Asia (see Note 2). As of January2, 2010, Other assets included customer relationship intangible assets with a carrying value of $51,923,000; (consisting of $78,248,000 in original cost value and accumulated amortization and foreign currency translation of $26,325,000). These assets are being amortized over a weighted average life of nine years. Intangible asset amortization expense was $2,158,000 and $2,793,000 for the second quarter of fiscal 2010 and 2009, respectively, and $4,334,000 and $8,008,000 for the first six months of fiscal 2010 and fiscal 2009, respectively. The Company recognized $3,830,000 for a cumulative catch up adjustment to amortization expense during the first six months of fiscal 2009. Amortization expense for the next five years is expected to be approximately $9,000,000 each year. In the second quarter of fiscal 2009, due to a steady decline in the Companys market capitalization primarily related to the global economic downturn, the Company determined an interim impairment test was necessary. Based on the test results, the Company recognized a non-cash goodwill impairment charge of $1,317,452,000 pre-tax, $1,283,308,000 after tax and $8.51 per share to write off all goodwill related to its EM Americas, EM Asia, TS EMEA and TS Asia reporting units. The Company also evaluated the recoverability of its long-lived assets at each of the four reporting units where goodwill was deemed to be impaired. Based upon this evaluation, the Company recognized a non-cash intangible asset impairment charge of $31,393,000 pre- and after tax and $0.21 per share. The non-cash charges had no impact on the Companys compliance with debt covenants, its cash flows or available liquidity, but did have a material impact on its consolidated financial statements.

External financing

External financing
	6 Months Ended Jan. 02, 2010 USD / shares
External financing [Abstract]
External financing	4. External financing Short-term debt consists of the following: January 2, June 27, 2010 2009 (Thousands) Bank credit facilities $ 79,098 $ 20,882 Other debt due within one year 1,935 2,412 Short-term debt $ 81,033 $ 23,294 Bank credit facilities consist of various committed and uncommitted lines of credit with financial institutions utilized primarily to support the working capital requirements of foreign operations. The weighted average interest rate on the outstanding bank credit facilities was 1.7% at January2, 2010 and 1.8% at June27, 2009. The Company has an accounts receivable securitization program (the Program) with a group of financial institutions that allows the Company to sell, on a revolving basis, an undivided interest of up to $450,000,000 in eligible receivables while retaining a subordinated interest in a portion of the receivables. The Program does not qualify for sale treatment and, as a result, any borrowings under the Program are recorded as debt on the consolidated balance sheet. The Program contains certain covenants, all of which the Company was in compliance with as of January2, 2010. The Program has a one year term that expires in August2010. There were no amounts outstanding under the Program at January2, 2010 or June27, 2009. Long-term debt consists of the following: January 2, June 27, 2010 2009 (Thousands) 5.875% Notes due March15, 2014 $ 300,000 $ 300,000 6.00% Notes due September1, 2015 250,000 250,000 6.625% Notes due September15, 2016. 300,000 300,000 Other long-term debt 90,900 98,907 Subtotal 940,900 948,907 Discount on notes (2,144 ) (2,334 ) Long-term debt $ 938,756 $ 946,573 The Company has a five-year $500,000,000 unsecured revolving credit facility (the Credit Agreement) with a syndicate of banks which expires in September2012. Under the Credit Agreement, the Company may elect from various interest rate options, currencies and maturities. The Credit Agreement contains certain covenants, all of which the Company was in compliance with as of January 2, 2010. At January2, 2010, there were $85,957,000 in borrowings outstanding under the Credit Agreement included in other long-term debt in the preceding table. In addition, there were $2,009,000 in letters of credit issued under the Credit Agreement which represent a utilization of the Credit Agreement capacity but are not recorded in the consolidated balance sheet as the letters of credit are not debt. At June27, 2009, there were $86,565,000 in borrowings outstanding under the Credit Agreement and $1,511,000 in letters of credit issued under the Credit Agreement. At January2, 2010, the carrying value and fair value of the Companys debt was $1,019,789,000 and $1,056,835,000, respectively. Fair value was estimated primarily based upon quoted market prices.

Derivative financial instrument

Derivative financial instruments
	6 Months Ended Jan. 02, 2010 USD / shares
Derivative financial instruments [Abstract]
Derivative financial instruments	5. Derivative financial instruments Many of the Companys subsidiaries, on occasion, purchase and sell products in currencies other than their functional currencies. This subjects the Company to the risks associated with fluctuations in foreign currency exchange rates. The Company reduces this risk by utilizing natural hedging (offsetting receivables and payables) as well as by creating offsetting positions through the use of derivative financial instruments, primarily forward foreign exchange contracts with maturities of less than sixty days. The Company continues to have exposure to foreign currency risks to the extent they are not hedged. The Company adjusts all foreign denominated balances and any outstanding foreign exchange contracts to fair market value through the consolidated statements of operations. Therefore, the market risk related to the foreign exchange contracts is offset by the changes in valuation of the underlying items being hedged. The asset or liability representing the fair value of foreign exchange contracts, based upon level 2 criteria under the fair value measurements standard, is classified in the captions other current assets or accrued expenses and other, as applicable, in the accompanying consolidated balance sheets and were not material. In addition, the Company did not have material gains or losses related to the forward contracts which are recorded in other income (expense), net in the accompanying consolidated statements of operations. The Company generally does not hedge its investment in its foreign operations. The Company does not enter into derivative financial instruments for trading or speculative purposes and monitors the financial stability and credit standing of its counterparties.

Commitments and contingencies

Commitments and contingencies
	6 Months Ended Jan. 02, 2010 USD / shares
Commitments and contingencies [Abstract]
Commitments and contingencies	6. Commitments and contingencies From time to time, the Company may become a party to, or otherwise involved in pending and threatened litigation, tax, environmental and other matters arising in the ordinary course of conducting its business. Management does not anticipate that any contingent matters will have a material adverse impact on the Companys financial condition, liquidity or results of operations.

Pension plan

Pension plan
	6 Months Ended Jan. 02, 2010 USD / shares
Pension plan [Abstract]
Pension plan	7. Pension plan The Companys noncontributory defined benefit pension plan (the Plan) covers substantially all domestic employees. Components of net periodic pension costs during the second quarters and six months ended January2, 2010 and December27, 2008 were as follows: Second Quarters Ended Six Months Ended January 2, December 27, January 2, December 27, 2010 2008 2010 2008 (Thousands) Service cost $ $ 4,051 $ $ 8,102 Interest cost 3,937 4,544 7,874 9,088 Expected return on plan assets (7,534 ) (6,363 ) (15,068 ) (12,726 ) Recognized net actuarial loss 1,422 581 2,844 1,162 Amortization of prior service credit (1,221 ) (2,442 ) Net periodic pension cost (income) $ (3,396 ) $ 2,813 $ (6,792 ) $ 5,626 During the first quarter fiscal 2010, the Company made contributions to the Plan of $4,750,000. Due to the economic downturn and its impact on the business, the Company suspended additional benefits under the Plan; as a result, there is currently no service cost being incurred during the current fiscal year. In October2009, the Company agreed to settle a pension litigation matter, subject to court approval, which will require a plan amendment to provide retroactive benefits to certain pension plan participants and which will result in additional pension expense to the Company of approximately $3million per year for each of the next 11years.

Comprehensive income

Comprehensive income (loss)
	6 Months Ended Jan. 02, 2010 USD / shares
Comprehensive income (loss) [Abstract]
Comprehensive income (loss)	8. Comprehensive income (loss) Second Quarters Ended Six Months Ended January 2, December 27, January 2, December 27, 2010 2008(1) 2010 2008(1) (Thousands) Net income (loss) $ 103,851 $ (1,204,969 ) $ 154,746 $ (1,114,630 ) Foreign currency translation adjustments and other (16,921 ) (88,320 ) 43,292 (239,984 ) Total comprehensive income (loss) $ 86,930 $ (1,293,289 ) $ 198,038 $ (1,354,614 ) (1) As adjusted for the retrospective application of an accounting standard. See Note 1.

Earnings

Earnings (loss) per share
	6 Months Ended Jan. 02, 2010 USD / shares
Earnings (loss) per share [Abstract]
Earnings (loss) per share	9. Earnings (loss)per share Second Quarters Ended Six Months Ended January 2, December 27, January 2, December 27, 2010 2008(1) 2010 2008(1) (Thousands, except per share data) Numerator: Net income (loss) $ 103,851 $ (1,204,969 ) $ 154,746 $ (1,114,630 ) Denominator: Weighted average common shares for basic earnings per share 151,391 150,721 151,333 150,641 Net effect of dilutive stock options and performance share awards 1,554 1,457 Weighted average common shares for diluted earnings per share 152,945 150,721 152,790 150,641 Basic earnings (loss)per share $ 0.69 $ (7.99 ) $ 1.02 $ (7.40 ) Diluted earnings (loss)per share $ 0.68 $ (7.99 ) $ 1.01 $ (7.40 ) (1) As adjusted for the retrospective application of an accounting standard. See Note 1. Options to purchase 991,000 and 1,036,000 shares of the Companys stock were excluded from the calculations of diluted earnings per share for the second quarter and first half of fiscal 2010, respectively, because the exercise price for those options was above the average market price of the Companys stock. Therefore, inclusion of these options in the diluted earnings per share calculation would have had an anti-dilutive effect. Options to purchase shares of the Companys stock as well as contingently issuable shares associated with the performance share program were excluded from the calculations of diluted earnings per share for the second quarter and first half of fiscal 2009, because the Company recognized a net loss and inclusion of these shares in the diluted earnings per share calculation would have had an anti-dilutive effect.

Additional cash flow informatio

Additional cash flow information
	6 Months Ended Jan. 02, 2010 USD / shares
Additional cash flow information [Abstract]
Additional cash flow information	10. Additional cash flow information Interest and income taxes paid in the six months ended January2, 2010 and December27, 2008 were as follows: Six Months Ended January 2, December 27, 2010 2008 (Thousands) Interest $ 29,594 $ 33,730 Income taxes, net of refunds 46,616 18,165

Segment information

Segment information
	6 Months Ended Jan. 02, 2010 USD / shares
Segment information [Abstract]
Segment information	11. Segment information Second Quarters Ended Six Months Ended January 2, December 27, January 2, December 27, 2010 2008(1) 2010 2008(1) (Thousands) Sales: Electronics Marketing $ 2,517,200 $ 2,267,318 $ 4,955,282 $ 4,968,797 Technology Solutions 2,317,324 2,001,860 4,234,278 3,794,831 $ 4,834,524 $ 4,269,178 $ 9,189,560 $ 8,763,628 Operating income (loss): Electronics Marketing $ 92,194 $ 99,092 $ 173,605 $ 237,798 Technology Solutions 88,150 66,880 139,547 117,987 Corporate (18,057 ) (12,634 ) (43,793 ) (37,834 ) 162,287 153,338 269,359 317,951 Impairment charges (Note 3) (1,348,845 ) (1,348,845 ) Restructuring, integration and other charges (Note 12) (13,149 ) (18,072 ) (19,310 ) Incremental intangible asset amortization (3,830 ) $ 162,287 $ (1,208,656 ) $ 251,287 $ (1,054,034 ) Sales, by geographic area: Americas (2) $ 2,189,480 $ 2,117,279 $ 4,108,607 $ 4,134,450 EMEA (3) 1,476,187 1,363,831 2,823,502 2,860,303 Asia/Pacific (4) 1,168,857 788,068 2,257,451 1,768,875 $ 4,834,524 $ 4,269,178 $ 9,189,560 $ 8,763,628 (1) As adjusted for the retrospective application of an accounting standard. See Note 1. (2) Includes sales in the United States of $1.98billion and $1.92billion for the second quarter of fiscal 2010 and 2009, respectively. Includes sales in the United States of $3.73billion and $3.75billion for the first half of fiscal 2010 and 2009, respectively. (3) Includes sales in Germany and the United Kingdom of $515.9million and $289.8 million, respectively, for the second quarter of fiscal 2010, and $982.0million and $574.7million, respectively, for the first half of fiscal 2010. Includes sales in Germany and the United Kingdom of $474.4million and $227.7million, respectively, for the second quarter of fiscal 2009 and $1.03billion and $477.7million, respectively, for the first half of fiscal 2009. (4) Includes sales in Taiwan, Singapore and Hong Kong of $316.5million, $281.3 million and $356.2million, respectively, for the second quarter of fiscal 2010, and $642.1million, $540.6million and $709.4million, respectively, for the first half of fiscal 2010. Includes sales in Taiwan, Singapore and Hong Kong of $234.9million, $215.6million and $303.2million, respectively, for the second quarter of fiscal 2009, and $567.9million, $465.3million and $601.4million, respectively, for the first half of fiscal 2009. January 2, June 27, 2010 2009 (Thousands) Assets: Electronics Marketing $ 4,008,

Restructuring, integration and

Restructuring, integration and other charges
	6 Months Ended Jan. 02, 2010 USD / shares
Restructuring, integration and other charges [Abstract]
Restructuring, integration and other charges	12. Restructuring, integration and other charges Fiscal 2010 During the first quarter of fiscal 2010, the Company incurred restructuring, integration and other charges related to the remaining cost reduction actions announced in fiscal 2009 which were taken in response to market conditions as well as integration costs associated with acquired businesses. Quarter ended October 3, 2009 (Thousands) Restructuring charges $ 15,991 Integration costs 2,931 Other 1,104 Reversal of excess prior year restructuring reserves (1,954 ) Total restructuring, integration and other charges $ 18,072 The activity related to the restructuring charges incurred during the first half of fiscal 2010 is presented in the following table: Severance Facility Reserves Exit Costs Other Total (Thousands) Fiscal 2010 pre-tax charges $ 9,683 $ 3,711 $ 2,597 $ 15,991 Amounts utilized (6,436 ) (1,599 ) (122 ) (8,157 ) Adjustments (71 ) (71 ) Other, principally foreign currency translation (5 ) (3 ) (24 ) (32 ) Balance at January2, 2010 $ 3,171 $ 2,109 $ 2,451 $ 7,731 Severance charges recorded in the first quarter of fiscal 2010 related to personnel reductions of over 150 employees in administrative, finance and sales functions in connection with the cost reduction actions in all three regions. Facility exit costs consisted of lease liabilities and fixed asset write-downs associated with seven vacated facilities in the Americas, one in EMEA and four in the Asia/Pac region. Other charges consisted primarily of contractual obligations with no on-going benefit to the Company. Cash payments of $7,001,000 are reflected in the amounts utilized during the first half of fiscal 2010 and the remaining amounts were related to non-cash asset write downs. As of January2, 2010, management expects the majority of the remaining severance and other reserves to be utilized by the end of fiscal 2012 and the remaining facility exit cost reserves to be utilized by the end of fiscal 2013. During the first quarter of fiscal 2010, the Company incurred integration costs for professional fees, facility moving costs, travel, meeting, marketing and communication costs that were incrementally incurred as a result of the integration efforts of previously acquired businesses. Fiscal 2009 During fiscal 2009, the Company incurred restructuring, integration and other charges related to cost reduction actions, costs for integration activity for acquired business and other items. The following table presents the activity during the first half of fiscal 2010 related to the remaining restructuring reserves established during fiscal 2009. Severance Facility Reserves Exit Costs Other Total (Thousands) Balance at June27, 2009 $ 19,471 $ 26,678 $ 2,458 $ 48,607 Amounts utilized (9,