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ADOBE SYSTEMS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands, except share and per share data)
(Continued)
NOTE 7. RESTRUCTURING AND OTHER CHARGES (Continued)
63
Previously announced restructuring programs
The following table depicts the activity for previously announced restructuring programs through
December 3, 1999:
Accrued Accrued
Balance at Balance at
November 27 Total Cash December 3
1998 Charges Payments Adjustments 1999
Accrual related to previous restructurings . . . $8,867 $— $(6,221) $(1,874) $772
As of December 3, 1999, approximately $0.8 million in accrued restructuring costs remain related to
the Company’s fiscal 1998 restructuring program. This balance is comprised of $0.3 million in severance
and related charges, $0.1 million in lease termination costs, and $0.4 million in canceled contracts. The
majority of the accrual is expected to be paid by the first quarter of fiscal 2000. Cash payments for the
twelve months ended December 3, 1999 related to the fiscal 1998 restructuring were $0.7 million,
$3.6 million, and $0.4 million for severance and related charges, lease termination costs, and canceled
contracts costs, respectively. In addition, adjustments related to the fiscal 1998 restructuring were made
during the year, which consisted of $0.4 million related to estimated lease termination costs and $0.3 mil-
lion related to other charges.
Included in the accrual balance as of November 27, 1998 were lease termination costs related to
previously announced restructuring programs in fiscal 1994 and 1995. Cash payments for the twelve
months ended December 3, 1999 related to both restructuring programs were $1.5 million. During the
third and fourth quarters of fiscal 1999, the Company recorded adjustments to the accrual balance of
approximately $1.2 million related to these programs. An adjustment of $0.6 million was made in the third
quarter of fiscal 1999 due to the Company’s success in terminating a lease agreement earlier than the
contract term specified. In addition, $0.6 million was reduced from the restructuring accrual relating to
expired lease termination costs for two facilities resulting from the merger with Frame in fiscal 1995. As of
December 3, 1999 no accrual balances remain related to the Aldus and Frame mergers.
Other charges
During the third and fourth quarters of fiscal 1999, the Company recorded other charges of
$8.4 million that were unusual in nature. These charges included $2.0 million associated with the
cancellation of a contract and $2.2 million for accelerated depreciation related to the adjustment of the
useful life of certain assets as a result of decisions made by management as part of the restructuring
program. Additionally, the Company incurred a nonrecurring compensation charge totaling $2.6 million
for a terminated employee and incurred consulting fees of $1.6 million to assist in the restructuring of the
Company’s operations.