Memorex 2013 Annual Report Download - page 33

We compared the carrying value of our asset groups with their estimated undiscounted future cash flows and
determined that the carrying value of certain asset groups exceeded the undiscounted cash flows expected to be generated
by the asset group. For those asset groups, we then compared the carrying value of the asset group to its estimated fair value
to determine the amount by which our long-lived assets (primarily intangible assets) within the asset group were impaired. As
a result of these analyses, we recorded an impairment charge of $260.5 million in our Consolidated Statements of Operations
for the year ended December 31, 2012. During 2013, the impairment charge of $8.7 million that related to our Memcorp Asset
Group was reclassified to discontinued operations and thus the 2012 impairment charge from continuing operations in our
Consolidated Statement of Operations as of December 31, 2013 is reported as $251.8 million. See Note 4 — Acquisitions and
Divestitures in our Notes to Consolidated Financial Statements for more information on our discontinued operations.
See Note 6 — Intangible Assets and Goodwill in our Notes to Consolidated Financial Statements for more information
on our 2012 impairment of intangible assets.
Litigation Settlement
A $2.5 million gain from a litigation settlement from a long-standing case in Brazil was recognized in 2013. In 2011, we
recognized a $2.0 million charge related to a litigation settlement with Advanced Research Corp.
Restructuring and Other
2012 Global Process Improvement Restructuring Program
On October 22, 2012, the Board of Directors approved our GPI Program in order to realign our business structure and
reduce operating expenses in excess of 25 percent over time. This restructuring program addressed product line
rationalization and infrastructure and included a planned reduction in our global workforce. The majority of these actions were
implemented during 2013. As of December 31, 2013 we have reduced operating expenses by approximately 30 percent, not
considering the incremental operating expense from the acquisition of Nexsan, and we have reduced our global workforce by
over 20 percent under the GPI Program.
Other Prior Programs Substantially Complete
We have two additional programs, as described further below, that were initiated in prior years and are now substantially
complete.
The 2011 Corporate Program was initiated during the first quarter of 2011 to rationalize certain product lines, increase
efficiency and gain greater focus in support of our go-forward strategy. Major components of the program included charges
associated with certain benefit plans, improvements to our global sourcing and distribution network, costs associated with
further rationalization of our product lines and evolution of our skill sets to align with our announced strategy. At December 31,
2012, we had approximately $15 million of authorized spending amounts remaining related to this program. At December 31,
2012, this remaining authorization was transferred and added to the GPI Program and any future charges, as well as the
remaining spend relating to the 2011 Corporate Program, will be accounted for under the 2012 GPI Program.
The 2011 Manufacturing Redesign Restructuring Program (2011 Manufacturing Program) was initiated during the first
quarter of 2011 to rationalize certain product lines and discontinue tape coating operations at our Weatherford, Oklahoma
facility and subsequently close the facility.
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