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Table of Contents
Other accrued liabilities consist of the following:
Note 4—Restructuring:
The Company accounts for its restructuring plans under the authoritative guidance for exit or disposal activities. The Company presents
expenses related to restructuring as a separate line item in its Consolidated Statements of Operations.
In July 2008, the Company ceased using buildings leased in Santa Clara and Fremont, California, and consolidated all personnel and
operations from those locations to its new corporate headquarters in San Jose, California. The Company initially expected to sublease the
majority of this space through the end of the operating leases, the longest of which extends to December 2010. However, in the three months
ended June 28, 2009, a sub-lessee ceased making payments, and the Company does not expect to find a replacement sub-
lessee for the defaulting
sub-lessee during the remaining term of the lease. Additionally, in the three months ended September 27, 2009, the Company agreed to reduce
the monthly facility maintenance fees owed to the Company by the sub-lessee. As a result of these events, the Company increased its accrual for
restructuring charges by $702,000 in the year ended December 31, 2009 to reflect the decrease in sublease income through the remaining term of
the lease. In total, the Company recognized $809,000 in expenses related to future lease payments on the vacated facilities in the year ended
December 31, 2009.
The following is a summary of the accrued restructuring charges related to ceasing use of certain buildings:
Additionally, on November 12, 2008, the Company terminated the employment of approximately 35 individuals. The Company recognized
$965,000 in expenses related to this restructuring in the year ended
73
December 31,
2009
2008
(In thousands)
Sales and marketing programs
$
30,767
$
33,584
Warranty obligation
30,610
28,607
Freight
6,958
3,546
Other
19,559
22,010
Other accrued liabilities
$
87,894
$
87,747
Accrued
Restructuring
Charges at
December 31,
2008
Adjustment
to Accrual
Recognition
Ongoing
Exit
Expense
Present
Value
Accretion
Cash
Payments
Accrued
Restructuring
Charges at
December 31,
2009
(In thousands)
Abandonment of excess leased facilities
$
354
$
702
$
50
$
57
$
(647
)
$
516
Current portion
$
264
$
516
Long
-
term portion
$
90
$
—
Accrued
Restructuring
Charges at
December 31,
2007
Initial
Accrual
Recognition
Adjustment
to Initial
Accrual
Recognition
Ongoing
Exit
Expense
Present
Value
Accretion
Cash
Payments
Accrued
Restructuring
Charges at
December 31,
2008
(In thousands)
Abandonment of excess leased
facilities
$
—
$
955
$
(21
)
$
12
$
18
$
(610
)
$
354
Current portion
$
—
$
264
Long
-
term portion
$
—
$
90