Circuit City 2005 Annual Report Download - page 57

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2004 United States streamlining plan
$122
$3,743
2003 United States warehouse consolidation plan
642
$713
2002 United Kingdom consolidation plan
(93)
467
2,173
Litigation settlements (recoveries)
300
(1,272)
Other severance and exit costs
3,822
2,504
112
Total restructuring and other charges
$4,151
$7,356
$1,726
2004 United States Streamlining Plan
In the first quarter of 2004, the Company implemented a plan to streamline the back office and warehousing
operations in its United States computer businesses. The Company recorded $3.7 million of costs related to this
plan, including $3.2 million for severance and benefits for approximately 200 terminated employees and
$483,000 of non-cash costs for impairment of the carrying value of fixed assets.
2003 United States Warehouse Consolidation Plan
In the fourth quarter of 2003, the Company implemented a plan to consolidate the warehousing facilities in its
United States computer supplies business. The Company recorded $122,000 of additional severance costs in 2005
and $642,000 of additional exit costs in 2004 related to this plan.
2002 United Kingdom Consolidation Plan
In 2002 the Company implemented a restructuring plan to consolidate the activities of three United Kingdom
locations into a new facility constructed for the Company. During the year ended December 31, 2003, the
Company recorded $2,173,000 of additional exit costs related to this plan. During the year ended December 31,
2004, the Company recorded $467,000 of additional exit costs related to this plan.
Other Severance and Exit Costs
The Company recorded restructuring costs of $3.7 million during 2005 and $2.5 million during 2004 in Europe in
connection with workforce reductions and facility exit costs. In 2005, these costs were comprised of employee
severance costs. In 2004, these costs were comprised of $1.8 million of employee severance costs and $0.7
million of other exit costs, primarily asset write-downs.
The following table summarizes the components of the accrued restructuring charges and the movements within
these components during the years ended December 31, 2005 and 2004 (in thousands). The balance of the
restructuring reserves is included in the Consolidated Balance Sheets within accrued expenses and other current
liabilities.
Severance and
Other
Personnnel
Costs
Exit Costs
Total
Balance as of January 1, 2004
$
63
$
2,962
$
3,025
Charged to expense in 2004
3,153
1,699
4,852
Amounts utilized
(2,583
)
(3,265
)
(5,848
)
Balance at December 31, 2004
633
1,396
2,029
Charged to expense in 2005
3,945
(93
)
3,852
Amounts utilized
(4,325
)
(1,038
)
(5,363
)
Balance at December 31, 2005
$
253
$
265
$
518
Litigation Settlements
In May 2006 the Company entered into a stipulation of settlement with all of the plaintiffs who had filed
derivative complaints in 2005 alleging misconduct in connection with the Company's restatement of its 2004
financial results (see Note 11).