Adobe 2001 Annual Report Download - page 79

Download and view the complete annual report

Please find page 79 of the 2001 Adobe annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 105

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105

ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(In thousands, except share and per share data)
Note 7. Restructuring and Other Charges (Continued)
During the second quarter of fiscal 2000, we paid our remaining obligations, totaling $8.0 million,
related to the three fiscal 1999 and fiscal 1998 restructuring programs. In addition to the cash payments
made, we revised our estimate of the total costs associated with the restructuring programs, resulting in an
adjustment of approximately $0.7 million. The adjustment primarily reflected lower than estimated
severance and related charges attributable to employees whose positions were eliminated as a result of the
restructurings but who were able to find alternative employment within Adobe. The remaining adjustment
was due to lower than expected charges related to vacating leased facilities. As of December 1, 2000, there
was no restructuring liability remaining for our fiscal 1999 and 1998 restructuring programs. The tables
below show the breakdown of the cash payments and adjustments made in fiscal 2000 for the three
separate restructuring programs.
Fiscal 1999 restructuring programs
The fourth quarter 1999 restructuring program was implemented to enhance our worldwide customer
support activity and to streamline the product distribution and warehouse operations in North America.
This restructuring program included a reduction in force of 86 positions and the closure of the North
American distribution warehouse as a result of our decision to outsource our North American distribution
operation and the majority of our customer support services. The reduction in force primarily affected
employees in Seattle, Washington and Santa Clara, California. We incurred $2.1 million in total charges in
the fourth quarter of fiscal 1999 as a result of the restructuring, which included severance and related
charges associated with the reduction in force and charges related to vacating leased facilities. During fiscal
2000, we paid our remaining obligation, and as of December 1, 2000, no restructuring liability existed.
The following table depicts the activity for the 1999 fourth-quarter restructuring program through
December 1, 2000:
Accrued Accrued
Balance at Balance at
December 3, Cash December 1,
1999 Payments 2000
Severance and related charges .............. $1,953 $(1,953) $—
Lease termination costs ................... 103 (103) —
$2,056 $(2,056) $—
The 1999 restructuring program that we implemented throughout the second and third quarters of
fiscal 1999 was directly related to the centralization of our worldwide sales and administrative
organizations and the realignment of our Printing Solutions business. This program included a reduction in
force of 198 positions, two of which were executive positions. The reduction in force primarily affected our
European headquarters in Edinburgh, Scotland and our North American headquarters in San Jose,
California. In addition to severance and related charges associated with the reduction in force, the
restructuring program included charges for vacating leased facilities. These restructuring actions in the
second and third quarters of fiscal 1999 resulted in total charges of $17.6 million, of which approximately
$0.1 million were noncash charges. During fiscal 2000, we paid our remaining obligation related to this
restructuring program, and as of December 1, 2000, no restructuring liability existed.
79