Avid 2015 Annual Report Download - page 94

Download and view the complete annual report

Please find page 94 of the 2015 Avid 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 113

  • 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
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113

88
The tax years 2008 through 2015 remain open to examination by taxing authorities in the jurisdictions in which the Company
operates. The most significant operating jurisdictions include: the United States, Ireland, the Netherlands, Germany, Israel, Japan, and
the United Kingdom.
P. RESTRUCTURING COSTS AND ACCRUALS
2016 Restructuring Plan
In the first quarter of 2016, the Company commenced restructuring actions that are part of a broad restructuring plan encompassing a
series of measures intended to allow the Company to more efficiently operate in a leaner, and more directed cost structure. These
include reductions in the Company’s workforce, facilities consolidation, transferring certain business processes to lower cost regions,
and reducing other third-party services costs. In connection with this restructuring plan, the Company expects to incur incremental
cash expenditures of approximately $25 million relating to termination benefits, facility costs, employee overlap expenses and related
actions. The Company expects approximately $14 million of the expenditures will be recorded as restructuring expenses in the
quarters ending December 31, 2015 through June 30, 2017. The Company anticipates that the restructuring plan will be substantially
complete by the end of the second quarter of 2017 and will result in annualized costs savings of appropriately $68 million.
The restructuring charges of $5.8 million recorded during the quarter ended December 31, 2015, represented an initial elimination of
111 positions worldwide during January and February of 2016.
2013 Restructuring Actions
In June 2013, the Company’s leadership evaluated the marketing and selling teams and, in an effort to better align sales resources with
the Company’s strategic goals and enhance its global account team approach, eliminated 31 positions. As a result, the Company
recognized related restructuring costs of $1.7 million in 2013.
During November and December 2013, the Company’s executive management team identified opportunities to lower costs in the
supply and hardware technology group by eliminating 29 positions in hardware shared services and 15 positions in the supply and
technology group. Additionally, an engineering reorganization at the same time resulted in the elimination of four engineering
positions. As a result, the Company recognized $1.7 million of related restructuring costs in 2013.
All of the restructuring costs related to 2013 restructuring actions were fully paid as of December 31, 2015, no further actions are
anticipated.
2012 Restructuring Plan
In June 2012, the Company committed to a series of strategic actions (the “2012 Plan”) to focus on its Broadcast and Media market
and Video and Audio Post and Professional market and to drive improved operating performance. These actions included the
divestiture of certain of the Company’s consumer-focused product lines, a rationalization of the business operations and a reduction in
force. Actions under the plan included the elimination of approximately 280 positions in June 2012, the abandonment of one of the
Company’s facilities in Burlington, Massachusetts and the partial abandonment of facilities in Mountain View and Daly City,
California, in September 2012, and the partial abandonment of the facility in Pinewood, UK, in December 2012. During 2012, the
Company recorded restructuring charges of $13.9 million related to severance costs and $8.6 million for the closure or partial closure
of facilities, which included non-cash amounts of $1.4 million for fixed asset write-offs and $1.0 million for deferred rent liability
write-offs during 2012.
During 2013, the Company recorded $0.1 million in additional severance costs and revisions totaling $1.8 million resulting from
sublease assumption changes and other costs related to the abandoned facilities under the 2012 Plan. The Company substantially
completed all actions under the 2012 Plan prior to December 31, 2012.
In June 2014, the Company signed an agreement for surrender of the partially abandoned property at Pinewood, UK. As a result, the
Company recorded a recovery of $0.2 million, as the Company was released from all obligations related to the surrendered property.
In June 2015, the Company recorded a revision of restructuring costs of $0.5 million resulting from an update to the sublease
assumption related to the Company’s Mountain View, California facility that was partially abandoned in 2012.