Plantronics 2011 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2011 Plantronics 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 103

  • 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

In the fourth quarter of fiscal 2009, the Company performed the annual impairment test of the Altec Lansing trademark and trade
name, which indicated that there was no further impairment. The assumptions used in the annual impairment review performed
during the fourth quarter of fiscal 2009 were consistent with the assumptions used in the interim impairment review in the third
quarter of fiscal 2009 as no significant changes were identified.
During the second quarter of fiscal 2010, the Company considered the effect of certain alternatives being evaluated by management
for the AEG segment during the quarter on its intangible assets. During the second quarter management entered into a non-binding
letter of intent to sell Altec Lansing, the Company’s AEG segment. The Company concluded that this triggered an interim
impairment review as it was now “more likely than not” that the segment would be sold; however, as the Company’s Board of
Directors had not yet approved the sale of the segment, the assets did not qualify for “held for sale” accounting under the Property,
Plant and Equipment Topic of the FASB ASC. The Company tests its indefinite lived assets for impairment by comparing the fair
value of the intangible asset with its carrying value. If the fair value is less than its carrying value, an impairment charge is
recognized for the difference. The Company used the proposed purchase price of the AEG segment net assets per the non-binding
letter of intent signed during the quarter as the fair value of the segment’s net assets. This resulted in a full impairment of the
Altec Lansing trademark and trade name; therefore, the Company recognized a non-cash impairment charge of $18.6 million in
the second quarter of fiscal 2010 and recognized a deferred tax benefit of $7.1 million associated with this impairment charge,
which is included in discontinued operations for the fiscal year ended March 31, 2010.
As a result of the proposed purchase price of the net assets of the AEG segment, the Company also evaluated the long-lived assets
within the reporting unit. The fair value of the long-lived assets, which include intangibles and property, plant and equipment,
was determined for each individual asset and compared to the asset’s relative carrying value. This resulted in a full impairment
of the AEG intangibles and a partial impairment of its property, plant and equipment; therefore, in the second quarter of fiscal
2010, the Company recognized a non-cash intangible asset impairment charge of $6.6 million, of which $2.0 million related to
customer relationships, $0.4 million related to technology and $0.4 million related to the inMotion trade name, and a non-cash
impairment charge of $3.8 million related to property, plant and equipment. The Company recognized a deferred tax benefit of
$2.5 million associated with these impairment charges. The impairment charge and tax benefit is recorded in discontinued
operations for the fiscal year ended March 31, 2010.
The intangible assets that were impaired during the second quarter of fiscal 2009 were measured at their fair value using
unobservable inputs and, therefore, were Level 3 fair value measures.
The estimated future amortization expense for each fiscal year subsequent to fiscal 2011 is as follows:
Fiscal Year Ending March 31,
2012
2013
2014
Thereafter
Total estimated amortization expense
(in thousands)
$ 472
280
104
—
$ 856
10. RESTRUCTURING AND OTHER RELATED CHARGES
The Company recorded the restructuring activities discussed below applying the guidance of either the Exit or Disposal Cost
Obligations Topic and the Compensation - Nonretirement Postemployment Benefits Topic of the FASB ASC.
The Company announced various restructuring activities in fiscal 2009 in an effort to reduce its cost structure in light of the
expected impact of the global economic recession on the Company's business and revenues. These actions consisted of reductions
in force throughout all of the Company's geographies along with a plan to close its manufacturing operations in its Suzhou, China
facility due to the decision to outsource the manufacturing of Bluetooth products to a third party supplier in China. The Company
exited the manufacturing portion of the facility in July 2009 at which time the remaining assets were classified as Assets held for
sale on the Consolidated balance sheet. Approximately 1,500 employees from functions across the Company were notified of
their termination under these actions and substantially all of these employees have been terminated as of March 31, 2011.
Table of Contents
64