Avid 2011 Annual Report Download - page 88

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83
Company also recorded facilities restructuring charges of approximately $1.0 million related to the closure of a facility in
Germany, which included non-cash amounts totaling $0.1 million for fixed asset write offs. To date, total restructuring charges of
approximately $10 million have been recorded under the 2010 Plan, and no further restructuring actions are anticipated under this
plan.
During 2010, the Company also initiated acquisition-related restructuring actions that resulted in restructuring charges of $1.8
million for the severance costs for 24 former Euphonix employees and the closure of three Euphonix facilities. During 2011, the
Company recorded additional restructuring charges of approximately $0.2 million primarily resulting from revised estimates for
the write-off of fixed assets related to the facilities closures. No further restructuring actions are anticipated under this plan.
2008 Restructuring Plans
In October 2008, the Company initiated a company-wide restructuring plan (the “2008 Plan”) that included a reduction in force of
approximately 500 positions, including employees related to product line divestitures, and the closure of all or parts of some
facilities worldwide. The 2008 Plan is intended to improve operational efficiencies and bring costs in line with expected
revenues. In connection with the 2008 Plan, during the fourth quarter of 2008 the Company recorded restructuring charges of
$20.4 million related to employee termination costs and $0.5 million for the closure of three small facilities. In addition, as a
result of the decision to sell the PCTV product line, the Company recorded a non-cash restructuring charge of $1.9 million in cost
of revenues related to the write-down of inventory.
During 2009 and 2010, the Company recorded additional restructuring charges of $30.0 million related to the 2008 Plan,
including new restructuring charges of $14.8 million related to employee termination costs for approximately 320 additional
employees; $12.3 million related to the closure of all or part of fifteen facilities, including non-cash charges of $2.7 million
related to the write-off of fixed assets; $0.8 million, recorded in cost of revenues, related to a write-down of inventory; and $2.1
million for revisions to previous estimates. The charges resulting from the reduction in force of 320 additional employees were
recorded in the third and fourth quarters of 2009 and were primarily the result of the expanded use of offshore development
resources for R&D projects and the Company's desire to better align its 2010 cost structure with revenue expectations.
During 2011, the Company recorded restructuring charges of of $2.2 million related to the 2008 Plan for revised estimates of the
costs associated with previously closed facilities.
No additional actions are expected to take place under the 2008 Plan. To date, restructuring charges of approximately $55 million
have been recorded under the 2008 Plan.
Restructuring and Other Costs Summary
For 2010, also included in the Company’s results of operations under the caption “restructuring and other costs, net” were costs of
$3.7 million related to the exit from its Tewksbury, Massachusetts headquarters lease. The following table sets forth the summary
of restructuring and other costs for the years ended December 31, 2011, 2010 and 2009 (in thousands):
Non-acquisition related restructuring charges
Acquisition-related restructuring charges
Tewksbury facility exit costs
Restructuring and other costs, net
2011
$ 8,747
111
—
$ 8,858
2010
$ 14,947
1,755
3,748
$ 20,450
2009
$ 27,719
(47)
—
$ 27,672
Accounting for Restructuring Plans
The Company records facility-related restructuring charges in accordance with ASC Topic 420, Liabilities: Exit or Disposal Cost
Obligations. Based on the Company's policies for the calculation and payment of severance benefits, the Company accounts for
employee-related restructuring charges as an ongoing benefit arrangement in accordance with ASC Topic 712, Compensation -
Nonretirement Postemployment Benefits. Restructuring charges and accruals require significant estimates and assumptions,
including sub-lease income assumptions. These estimates and assumptions are monitored on at least a quarterly basis for changes
in circumstances and any corresponding adjustments to the accrual are recorded in the Company's statement of operations in the
period when such changes are known.