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90
Note 9. Restructuring
In fiscal 2008, we recorded restructuring charges totaling $32.1 million of which $29.2 related to fiscal 2008
restructuring charges and $2.9 million related to changes in estimates associated with pre-existing facilities accruals for the
Macromedia acquisition. These restructuring charges are included in our consolidated statements of income.
Fiscal 2008 Restructuring Charges
In the fourth quarter of fiscal 2008, we initiated a restructuring program in order to reduce our operating costs and focus
our resources on key strategic priorities impacting a total of approximately 560 full-time positions globally. In connection
with this restructuring plan, we recorded restructuring charges totaling $29.2 million related to termination benefits for the
elimination of approximately 460 of the 560 full-time positions globally. As of November 28, 2008, $0.4 million was paid.
The remaining accrual for these restructuring charges is expected to be substantially paid during fiscal 2009. Charges
associated with these ongoing termination benefits were recorded in accordance with SFAS No. 112, “Employers’
Accounting for Postemployment Benefits.”
Macromedia Acquisition
In the first quarter of fiscal 2006, pursuant to the Board of Directors’ approval, we initiated plans to restructure both the
pre-merger operations of Adobe and Macromedia to eliminate certain duplicative activities, focus our resources on future
growth opportunities and reduce our cost structure. In connection with the worldwide restructuring plan, we recognized costs
related to termination benefits for employee positions that were eliminated and for the closure of duplicative facilities. We
also recognized costs related to the cancellation of certain contracts associated with the wind-down of subsidiaries and other
service contracts held by Macromedia. Pursuant to EITF Issue No. 95-3, “Recognition of Liabilities in Connection with a
Purchase Business Combination,” all restructuring charges related to the Macromedia acquisition are recognized as a part of
the purchase price allocation. See Note 2 for information regarding the Macromedia acquisition.
Macromedia Merger Restructuring Charges—The following table sets forth a summary of Macromedia restructuring
activity, including any costs incurred during fiscal 2007 and 2008 and the cumulative costs incurred through November 28,
2008 for each major type of cost associated with the restructuring plan:
November 30,
2007
Cash
Payments
Adjustments
November 28,
2008
Total
Costs
Incurred
To
Date
Total
Costs
Expected
To Be
Incurred
Termination benefits ............
$
—
$
—
$
—
$
—
$
26,976
$
26,976
Cost of closing redundant
facilities .....................
16,283
(7,187
)
3,072
12,168
30,148
42,316
Cost of contract termination ......
—
—
—
—
3,238
3,238
Other .........................
1,435
(147
)
(311
)
977
1,379
2,356
Total .......................
$
17,718
$
(7,334
)
$
2,761
$
13,145
$
61,741
$
74,886