Adaptec 2008 Annual Report Download - page 33

$0.4 million. At the end of the second quarter of 2007, production testing on AFE products was complete with
costs in line with expectations, and no further development efforts were required. The EPON products are also
complete and released to production, with no additional costs required to complete. By the end of the third
quarter of 2007, the EPON products were shipping to customers.
GPON products were in the early design and prototype stages at acquisition, with estimated costs to
complete of approximately $4.5 million at the acquisition date. With costs incurred in line with expectations, we
are now shipping these products to customers. Another product was incorporated with other PMC technology and
was completed in 2008. This product has earned several design wins, with shipments expected to begin in 2009.
Storage Semiconductor Business
A portion of the purchase price for the Storage Semiconductor Business was allocated to IPR&D projects
and was expensed in the first quarter of 2006 because technological feasibility had not been established and no
future alternative uses existed. Projects acquired and expensed include three next-generation Tachyon storage
protocol products.
At the acquisition date, two of the next-generation Tachyon products had been taped out, with estimated
costs to complete of approximately $0.8 million. These products are now in production, with costs incurred in
line with expectations.
The third next-generation Tachyon product and a multi-protocol storage controller were in the early design
stage at acquisition, with estimated costs to complete of approximately $10 million. We expect the third next-
generation Tachyon product to ship in production volumes in 2009. By the end of the first quarter of 2006, the
multi-protocol storage controller product was in the development stage, and based on feedback from our
customers, we re-directed our design resources from this project to the ROC controller for the server-attached
storage market, and the 8 Gbps Fibre Channel controllers for high-performance storage systems in the SAN and
NAS markets, which went into production in 2009.
Restructuring Costs and Other Charges
The activity related to excess facility and severance accruals under our restructuring plans during the three
years ended December 28, 2008, by year of plan, were as follows:
Excess facility costs
(in thousands) 2007 2006 2005 2003 2001 Total
Balance at December 31, 2005 ................. $ — $ — $4,871 $ 3,011 $ 6,866 $14,748
Reversals and adjustments .................... — — 776 (2,300) 776 (748)
New charges ............................... — 2,338 — — — 2,338
Cash payments ............................. — (227) (1,379) (162) (2,546) (4,314)
Balance at December 31, 2006 ................. — 2,111 4,268 549 5,096 12,024
Reversals and adjustments .................... 23 (441) — (549) 128 (839)
New charges ............................... 2,768 — 450 — 850 4,068
Cash payments ............................. (860) (1,081) (1,389) — (2,130) (5,460)
Balance at December 30, 2007 ................. 1,931 589 3,329 — 3,944 9,793
Reversals and adjustments .................... (393) (51) — — (747) (1,191)
New charges ............................... 230 130 1,085 — — 1,445
Cash payments ............................. (938) (490) (1,366) — (1,322) (4,116)
Balance at December 28, 2008 ................. $ 830 $ 178 $3,048 $ — $ 1,875 $ 5,931
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