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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The remaining $20 million in restructuring charges were incurred through the nine months ended April 2, 2004 and a result of a
restructuring plan established to continue the alignment of the Company’s global workforce with existing and anticipated future market
requirements, primarily in its U.S. design centers and Far East operations. The restructuring costs were comprised of employee termination
costs relating to a reduction in the Company’s workforce of approximately 650 employees. These restructuring activities were substantially
complete at July 2, 2004.
During fiscal year 2003, the Company recorded $19 million in restructuring charges. The Company also reduced a restructuring accrual
previously recorded by its predecessor in fiscal year 1998 by $10 million due to a change in estimated lease obligations. These combined
actions resulted in a net restructuring charge of $9 million for fiscal year 2003.
Of the $19 million of restructuring charges the Company recorded in fiscal year 2003, $17 million was incurred in the fiscal quarter
ended September 27, 2002 as a result of a restructuring plan, which the Company refers to as the fiscal year 2003 restructuring plan,
established to continue the alignment of the Company’s global workforce and manufacturing capacity with existing and anticipated future
market requirements, primarily in its Far East operations. The restructuring charge was comprised of employee termination costs relating to a
reduction in its workforce of approximately 3,750 employees. The fiscal year 2003 restructuring plan was substantially complete at June 27,
2003. The remaining $2 million restructuring charge was incurred in the fiscal quarter ended June 27, 2003 and was comprised of employee
termination costs relating to a workforce reduction of approximately 686 employees in the Company’
s Thailand operations. These restructuring
activities were completed in July 2003.
The following table summarizes the Company’s restructuring activities for fiscal years ended July 1, 2005, July 2, 2004 and June 27,
2003:
6. Business Segment and Geographic Information
Severance
and
Benefits
Excess
Facilities
Contract
Cancellations
Total
(in millions)
Accrual balances, June 28, 2002
$
4
$
9
$
1
$
14
Restructuring charge
19
—
—
19
Cash payments
(18
)
—
—
(
18
)
Adjustments and reclassifications
—
(
9
)
(1
)
(10
)
Accrual balances, June 27, 2003
5
—
—
5
Restructuring charge
59
—
—
59
Cash payments
(36
)
—
—
(
36
)
Non
-
cash charges
(1
)
—
—
(
1
)
Accrual balances, July 2, 2004
27
—
—
27
Restructuring charge
8
—
—
8
Cash payments
(30
)
—
—
(
30
)
Adjustments
(3
)
—
—
(
3
)
Accrual balances, July 1, 2005
$
2
$
—
$
—
$
2
Prior to the Company’s sale of Xiotech Corporation to New SAC on November 4, 2002, the Company had two operating segments: disc
drives and storage area networks, however, only the disc drive business was a
86