eTrade 2002 Annual Report Download - page 163

Table of Contents
Index to Financial Statements
Facility Consolidation Obligations
The components of the facility consolidation restructuring liabilities as of December 31, 2002, and their timing are as follows (in thousands):
Year Facilities Obligations Sublease Income Contracted Sublease Income Estimate Net
2003 $ 49,812 $ (2,001 ) $ (119 ) $ 47,692
2004 10,837 (1,952 ) (3,107 ) 5,778
2005 8,803 (1,638 ) (3,475 ) 3,690
2006 8,739 (1,625 ) (3,494 ) 3,620
2007 7,337 (1,293 ) (3,015 ) 3,029
Thereafter 11,940 (462 ) (6,165 ) 5,313
Total $ 97,468 $ (8,971 ) $ (19,375 ) $ 69,122
Asset Write-Off
The 2001 original facility restructuring charge included $52.5 million related to the write-off of capitalized software, hardware and other fixed
assets. In calculating the asset write-off charge, the Company used the net book value of assets less the amount of estimated proceeds upon
disposition.
During fiscal 2002, a related party, though not obligated to, reimbursed the Company for the value of the impairment of a residential property
(see Note 11) which was recorded in the initial restructuring charge. The reimbursement of approximately $0.7 million was offset by an
additional increase in the restructuring accrual resulting from the identification of additional excess equipment of approximately $0.8 million
and an additional increase related to realized losses on other real estate properties of $0.4 million.
Other
The 2001 original facility restructuring charge also included other pre-tax charges of $21.8 million in 2001 for committed expenses, termination
of consulting agreements, severance and cancellation penalties on various services that were no longer required in the facilities the Company
vacated.
The Company increased the restructuring charge included in Other above, by $3.6 million in fiscal 2002 primarily for additional severance
arrangements made with employees who were notified during fiscal 2002. Severance is recorded in the period in which affected employees are
identified and communication to these individuals is made.
Operating Expenses: Facilities Restructuring and Other Exit Charges:
In addition to adjustments and severance charges related to the original 2001 facility restructuring reserve of $11.4million recognized in fiscal
2002, charges related to new exit activities of $5.1 million, net were also recognized by the Company. Charges related to fiscal 2002 are shown
below:
Year Ended December31,
2002 2001
Charges related to the original 2001 facility restructuring (see table above) $ 11,385 $ 202,765
2003. EDGAR Online, Inc.