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Table of Contents
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (Continued)
The following table summarizes the restructuring and asset impairment activity for the 2006 efficiency program during 2008
and 2009:
We recorded the additional accruals, net of adjustments, as restructuring and asset impairment charges. The 2006 efficiency
plan is complete.
From the third quarter of 2006 through 2009, we incurred a total of $1.6 billion in restructuring and asset impairment charges
related to this program. These charges included a total of $686 million related to employee severance and benefit arrangements
for 11,300 employees. A substantial majority of these employee actions affected employees within manufacturing, information
technology, and marketing. The restructuring and asset impairment charges also included $896 million in asset impairment
charges.
We estimate that the total employee severance and benefit charges incurred as part of the 2006 efficiency program result in
gross annual savings of approximately $1.1 billion. We are realizing these savings within marketing, general and
administrative; cost of sales; and R&D.
Amortization of acquisition
-related intangibles. The increase of $29 million was due to amortization of intangibles primarily
related to the acquisition of Wind River Systems completed in the third quarter of 2009. See “Note 15: Acquisitions”
in Part II,
Item 8 of this Form 10-K.
Share
-Based Compensation
Share-based compensation totaled $889 million in 2009, $851 million in 2008, and $952 million in 2007. Share-based
compensation was included in cost of sales and operating expenses.
As of December 26, 2009, unrecognized share-based compensation costs and the weighted average periods over which the
costs are expected to be recognized were as follows:
37
Employee
Severance
Asset
(In Millions)
and Benefits
Impairments
Total
Accrued restructuring balance as of December 29, 2007
$
127
$
—
$
127
Additional accruals
167
344
511
Adjustments
(16
)
—
(
)
Cash payments
(221
)
—
(
221
)
Non
-
cash settlements
—
(
344
)
(344
)
Accrued restructuring balance as of December 27, 2008
$
57
$
—
$
Additional accruals
18
8
Adjustments
(10
)
—
(
)
Cash payments
(65
)
—
(
)
Non
-
cash settlements
—
(
8
)
(8
)
Accrued restructuring balance as of December 26, 2009
$
—
$
—
$
—
Unrecognized
Share
-
Based
Weighted
Compensation
Average
(Dollars in Millions)
Costs
Period
Stock options
$
282
1.3 years
Restricted stock units
$
1,196
1.4 years
Stock purchase plan
$
9
1 month