Apple 2004 Annual Report Download - page 41

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related primarily to various sales and marketing activities in the U.S. and Europe. Total cost of the actions was $9.6 million for the termination
of 348 positions. As of the end of the fourth quarter of 2004, $6.8 million had been spent and 310 positions had been eliminated related to these
actions.
The Company estimates the closing of the Sacramento manufacturing operations will result in reduced ongoing quarterly operating expenses of
approximately $2 million. In addition, the Company estimates that the remaining restructuring actions taken in fiscal 2004 will ultimately result
in reduced ongoing quarterly operating expenses of approximately $6 million.
Fiscal 2003 Restructuring Actions
The Company recorded total restructuring charges of approximately $26.8 million during the year ended September 27, 2003, including
approximately $7.4 million in severance costs, a $5.0 million charge to write-off deferred compensation, $7.1 million in asset impairments and a
$7.3 million charge for lease cancellations. Of the $26.8 million charge, all had been spent by the end of 2004, except for approximately
$3.0 million related to operating lease costs on abandoned facilities. During the third quarter of 2003, approximately $500,000 of the amount
originally accrued for lease cancellations was determined to be in excess due to the sublease of a property sooner than originally estimated and
an approximately $500,000 shortfall was identified in the severance accrual due to higher than expected severance costs related to the closure of
the Company's Singapore manufacturing operations. These adjustments had no net effect on reported operating expense.
During the second quarter of 2003, the Company's management approved and initiated restructuring actions that resulted in recognition of a total
restructuring charge of $2.8 million, including $2.4 million in severance costs and $400,000 for asset write-offs and lease payments on an
abandoned facility. Actions taken in the second quarter were for the most part supplemental to actions initiated in the prior two quarters and
focused on further headcount reductions in various sales and marketing functions in the Company's Americas and Europe operating segments
and further reductions associated with PowerSchool-related activities in the Americas operating segment, including an accrual for asset write-
offs and lease payments on an abandoned facility. The second quarter actions resulted in the termination of 93 employees.
During the first quarter of 2003, the Company's management approved and initiated restructuring actions with a total cost of $24 million that
resulted in the termination of manufacturing operations at the Company-owned facility in Singapore, further reductions in headcount resulting
from the shift in PowerSchool product strategy that took place at the end of fiscal 2002, and termination of various sales and marketing activities
in the U.S. and Europe. These restructuring actions resulted in the elimination of 260 positions worldwide.
Closure of the Company's Singapore manufacturing operations resulted in severance costs of $1.8 million and costs of $6.7 million to write-off
manufacturing related fixed assets, whose use ceased during the first quarter. PowerSchool related costs included severance of approximately
$550,000 and recognition of $5 million of previously deferred stock compensation that arose when PowerSchool was acquired by the Company
in 2001 related to certain PowerSchool employee stockholders who were terminated in the first quarter of 2003. Termination of sales and
marketing activities and employees, principally in the U.S. and Europe, resulted in severance costs of $2.8 million and accrual of costs
associated with operating leases on closed facilities of $6.7 million. The total net restructuring charge of $23 million recognized during the first
quarter of 2003 also reflects the reversal of $600,000 of unused restructuring accrual originally made during the first quarter of 2002.
Fiscal 2002 Restructuring Actions
During fiscal 2002, the Company recorded total restructuring charges of approximately $30 million related to actions intended to eliminate
certain activities and better align the Company's operating expenses with
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