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Table of Contents
SEAGATE TECHNOLOGY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
During fiscal year 2005, the Company recorded restructuring costs of $8 million in connection with its on-going restructuring activities.
These costs were primarily a result of a restructuring plan established to continue the alignment of the Company’s global workforce with
existing and anticipated future business requirements, primarily in its U.S. operations. The restructuring costs were comprised of employee
termination costs of approximately $5 million relating to a reduction in the Company’s workforce and approximately $3 million in charges
related to impaired facility improvements as a result of the alignment plan. These restructuring activities were substantially completed as of
March 31, 2006. Additionally, the Company reversed approximately $8 million of its restructuring accruals comprised of approximately $3
million recorded in prior fiscal years relating to accrued severance benefits that were less than amounts originally estimated and approximately
$5 million relating to the sale in the first quarter of fiscal year 2005 of a surplus building previously impaired in the fiscal year 2000
restructuring.
During fiscal year 2004, the Company recorded $59 million in restructuring charges. Of the $59 million, $39 million was incurred in the
fourth fiscal quarter ended July 2, 2004 and was associated with the Company’
s planned workforce reduction first announced in April 2004 and
implemented in June 2004. The $39 million restructuring charge was comprised of employee termination costs relating to a workforce
reduction, primarily in its U.S. and Far East operations, of approximately 2,400 employees. The restructuring activities related to the charge
taken in the fourth quarter of fiscal year 2004 were substantially complete as of October 2004. 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.
The following table summarizes the Company’s restructuring activities for fiscal years ended June 30, 2006, July 1, 2005 and July 2,
2004:
Liabilities Recognized in Connection with Business Combinations:
Severance
and
Benefits
(in millions)
Accrual balances, June 27, 2003
$
5
Restructuring charge
59
Cash payments
(36
)
Non
-
cash charges
(1
)
Accrual balances, July 2, 2004
27
Restructuring charge
8
Cash payments
(30
)
Adjustments
(3
)
Accrual balances, July 1, 2005
2
Restructuring charge
4
Cash payments
(6
)
Accrual balances, June 30, 2006
$
—
In connection with the Maxtor acquisition, the Company accrued certain exit costs aggregating $251 million (see Note 10).
85