Memorex 2010 Annual Report Download - page 57

measuring the fair value of the reporting unit’s assets and liabilities (both recognized and unrecognized) at the time of the
impairment test. The difference between the reporting unit’s fair value and the fair values assigned to the reporting unit’s
individual assets and liabilities is the implied fair value of the reporting unit’s goodwill. Based on this step of the impairment
test, we determined that the full amount of remaining goodwill, $23.5 million, was impaired.
Note 7 — Restructuring and Other Expense
The components of our restructuring and other expense included in the Consolidated Statements of Operations were
as follows:
2010 2009 2008
Years Ended December 31,
(In millions)
Restructuring
Severance and severance related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13.0 $11.2 $15.7
Lease termination costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.7 0.7 4.8
Total restructuring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.7 11.9 20.5
Other
Pension settlement/curtailment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8 11.7 5.7
Asset impairments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31.2 2.7 5.0
TDK post-closing purchase price adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (2.3)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.4 0.3 —
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $51.1 $26.6 $28.9
2011 Manufacturing Redesign Restructuring Program
On January 13, 2011, the Board of Directors approved the 2011 manufacturing redesign restructuring program of up
to $55 million to rationalize certain product lines and discontinue tape coating operations at our Weatherford, Oklahoma
facility by April 2011 and subsequently close the facility. We signed a strategic agreement with TDK Corporation to jointly
develop and manufacture magnetic tape technologies. Under the agreement, we will collaborate on the research and
development of future tape formats in both companies’ research centers in the U.S. and Japan, while consolidating tape
coating operations to the TDK Group Yamanashi manufacturing facility.
This program was anticipated to include approximately $50 million in restructuring and other charges, consisting of
severance related costs of approximately $3 million, asset impairments of approximately $31 million primarily related to the
Weatherford facility, inventory write-offs of approximately $14 million, and other charges of approximately $2 million.
During 2010 we have recorded $3.2 million of severance and related expenses and $31.2 million of asset impairment
charges primarily related to the Weatherford facility. These are included in restructuring and other on our Consolidated
Statements of Operations. We also recorded non-cash inventory write-offs of $14.2 million related to this program, which is
included in cost of goods sold on our Consolidated Statements of Operations. Approximately $2 million of other costs will
be recorded in the future. The restructuring is expected to be complete during the first half of 2011.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)