Apple 2000 Annual Report Download - page 51

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
NOTE 4--SPECIAL CHARGES
RESTRUCTURING OF OPERATIONS
1996 AND 1997 RESTRUCTURING ACTIONS
In the second quarter of 1996, the Company announced and began to implement a restructuring plan designed to reduce costs and return the
Company to profitability. The restructuring plan was necessitated by decreased demand for the Company's products and the Company's
adoption of a new strategic direction. These actions resulted in a charge during 1996 of $179 million. During 1997, the Company announced
and began to implement supplemental restructuring actions to meet the foregoing objectives of the plan. The Company recognized a $217
million charge during 1997 for the estimated incremental costs of those actions. All material restructuring actions contemplated under the plan
were essentially complete at the end of 1998. The combined 1996 and 1997 restructuring actions consisted of terminating approximately 4,200
full-time employees; canceling or vacating certain facility leases as a result of those employee terminations; writing down certain land,
for projects and technologies that were not critical to the Company's core business strategy. The restructuring actions under the plan resulted in
cash expenditures of $297 million and noncash asset write-downs of $95 million from the second quarter of 1996 through September 30, 2000.
quarter of 1999 and was reversed. The Company expects the remaining accrual for payments on canceled facility leases will result in cash
expenditures of approximately $1 million in 2001.
The following table depicts the restructuring activity through September 30, 2000, associated with the 1996 and 1997 restructuring actions
described above (in millions):
(a): Cash
(b): Noncash
1999 RESTRUCTURING ACTIONS
During the fourth quarter of 1999, the Company initiated restructuring actions resulting in a charge to operations of $21 million. The net
restructuring charge of $18 million recognized during the fourth quarter
48
PAYMENTS TO
EMPLOYEES PAYMENTS ON WRITE-DOWN OF PAYMENTS ON
INVOLUNTARILY CANCELED FACILITY OPERATING ASSETS CANCELED
TERMINATED (A) LEASES (A) TO BE SOLD (B) CONTRACTS (A) TOTAL
-------------- ----------------- ---------------- ------------- --------
Balances as of September 26,
1997......................... $ 76 $ 25 $ 39 $ 40 $ 180
Adjustments during 1998........ 6 4 3 (13) --
Spending during 1998........... (72) (15) (42) (20) (149)
---- ---- ---- ---- -----
Balances as of September 25,
1998......................... 10 14 -- 7 31
Adjustments during 1999........ (2) (2) -- 1 (3)
Spending during 1999........... (8) (8) -- (7) (23)
---- ---- ---- ---- -----
Balances as of September 25,
1999......................... -- 4 -- 1 5
Adjustments during 2000........ -- -- -- -- --
Spending during 2000........... -- (3) -- (1) (4)
---- ---- ---- ---- -----
Balances as of September 30,
2000......................... $ -- $ 1 $ -- $ -- $ 1
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