Apple 2004 Annual Report Download - page 89

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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reversal of $600,000 of unused restructuring accrual originally made during the first quarter of 2002.
The following table summarizes activity associated with restructuring actions initiated during fiscal 2003 (in millions):
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 existing general economic conditions and to partially offset the cost of
continuing investments in new product development and investments in the Company's Retail operating segment.
During the fourth quarter of 2002, the Company's management approved and initiated restructuring actions with a total cost of approximately
$6 million designed to reduce headcount costs in corporate operations and sales and to adjust its PowerSchool product strategy. These
restructuring actions resulted in the elimination of approximately 180 positions worldwide at a cost of $1.8 million, all of which were eliminated
by September 27, 2003. Eliminated positions were primarily in corporate operations, sales, and PowerSchool related research and development
in the Americas operating segment. The shift in product strategy at PowerSchool included discontinuing development and marketing of
PowerSchool's PSE product. This shift resulted in the impairment of previously capitalized development costs associated with the PSE product
in the amount of $4.5 million.
During the first quarter of 2002, the Company's management approved and initiated restructuring actions with a total cost of approximately
$24 million. These restructuring actions resulted in the elimination of approximately 425 positions worldwide at a cost of $8 million. Positions
were eliminated primarily in the Company's operations, information systems, and administrative functions. In addition, these restructuring
actions also included significant changes in the Company's information systems strategy resulting in termination of equipment leases and
cancellation of existing projects and activities. The Company ceased using the assets associated with first quarter 2002 restructuring actions
during that same quarter. Related lease and contract cancellation charges totaled $12 million, and charges for asset impairments totaled
$4 million. The first quarter 2002 restructuring actions were primarily related to corporate activity not allocated to operating segments. During
the first quarter of 2003, the Company reversed the remaining unused accrual of $600,000. All amounts associated with the fiscal 2002
restructuring actions had been spent by the end of fiscal 2003.
85
Employee
Severance
Benefits
Deferred
Compensation
Write-off
Asset
Impairments
Lease
Cancellations
Totals
Total charge
$
7.4
$
5.0
$
7.1
$
7.3
$
26.8
Total spending through September 25,
2004
(7.9
)
—
—
(
3.8
)
(11.7
)
Total non
-
cash items
—
(
5.0
)
(7.1
)
—
(
12.1
)
Adjustments
0.5
—
—
(
0.5
)
—
Accrual at September 25, 2004
$
—
$
—
$
—
$
3.0
$
3.0