Adobe 2009 Annual Report Download - page 63

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63
termination benefits for the elimination of approximately 340 of these full-time positions worldwide. As of November 27,
2009, approximately $2.5 million was paid. The remaining accrual associated with these ongoing termination benefits is
expected to be paid during fiscal 2010. The restructuring activities related to this program affect only those employees and
facilities that were associated with Adobe prior to the acquisition of Omniture on October 23, 2009.
Beginning in the first quarter of fiscal 2010, we expect to record additional restructuring charges of approximately $15
million to $18 million primarily related to the consolidation of leased facilities and up to approximately $26 million related to
employee severance arrangements for the elimination of the remaining full-time positions worldwide. We expect to accrue
the facility related liabilities beginning in the first quarter of fiscal 2010 and pay these liabilities through fiscal 2021 based on
current lease terms. Substantially all of these charges will result in cash expenditures.
Omniture Restructuring Charges
We completed our acquisition of Omniture on October 23, 2009. In the fourth quarter of fiscal 2009, we initiated a plan
to restructure the pre-merger operations of Omniture to eliminate certain duplicative activities, focus our resources on future
growth opportunities and reduce our cost structure. In connection with this restructuring plan, we accrued a total of
approximately $10.6 million in costs related to termination benefits for the elimination of approximately 100 regular
positions and for the closure of duplicative facilities. We also accrued approximately $0.2 million in costs related to the
cancellation of certain contracts associated with the wind-down of subsidiaries and other service contracts held by Omniture.
These costs were recorded as a part of the purchase price allocation, as discussed in Note 2 of our Notes to Consolidated
Financial Statements, and have been accrued for as of November 27, 2009. We expect to pay the termination benefits and
facility related liabilities through fiscal 2010 and fiscal 2013, respectively.
Additionally, approximately $1.5 million of restructuring costs related to facilities were included in the liabilities
assumed by us upon our acquisition of Omniture on October 23, 2009.
Fiscal 2008 Restructuring Charges
In the fourth quarter of fiscal 2008, we initiated a restructuring program, consisting of reductions in workforce of
approximately 560 full-time positions globally and the consolidation of facilities, in order to reduce our operating costs and
focus our resources on key strategic priorities. In connection with this restructuring program, we recorded restructuring
charges totaling $29.2 million related to ongoing 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.
During fiscal 2009, we continued to implement restructuring activities under this program. We vacated approximately
89,000 square feet of research and development and sales facilities in the U.S., the United Kingdom and Canada. We accrued
$8.5 million for the fair value of our future contractual obligations under these operating leases using our credit-adjusted risk-
free interest rate, estimated at approximately 6% as of the date we ceased to use the leased properties. This amount is net of
the fair value of future estimated sublease income of approximately $4.4 million. We also recorded additional charges of $6.7
million for termination benefits for the elimination of substantially all of the remaining 100 full-time positions expected to be
terminated.
We have paid substantially all of the accrued termination benefits during fiscal 2009 and expect to pay the remaining
amounts in fiscal 2010. We expect to pay facilities-related liabilities through fiscal 2013.
Macromedia Restructuring Charges
We completed our acquisition of Macromedia on December 3, 2005. In connection with this acquisition, 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. Costs for termination benefits and contract
cancellations were completed during fiscal 2007. Total costs incurred were $27.0 million and $3.2 million, respectively.