Yahoo 2009 Annual Report Download - page 114

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Yahoo! Inc.
Notes to Consolidated Financial Statements—(Continued)
restructuring charges, net recorded in the year ended December 31, 2009 related to the Q408 restructuring plan,
$63 million related to the U.S. segment and $2 million related to the International segment.
Q209 Restructuring Plan. During the second quarter of 2009, the Company implemented new cost reduction
initiatives to further reduce the Company’s worldwide workforce by approximately 5 percent. The restructuring
plan involves reallocating resources to align with the Company’s strategic priorities including investing resources
in some areas, reducing resources in others, and eliminating some areas of the Company’s business that do not
support the Company’s strategic priorities. During the year ended December 31, 2009, the Company incurred
total pre-tax cash charges of approximately $35 million in severance and other related costs related to the Q209
restructuring plan. The pre-tax charges were offset by an $8 million credit related to non-cash stock-based
compensation expense reversals for unvested stock awards that were forfeited. Of the $27 million in restructuring
charges, net recorded in the year ended December 31, 2009 related to the Q209 restructuring plan, $18 million
related to the U.S. segment and $9 million related to the International segment.
Q409 Restructuring Charges. During the fourth quarter of 2009, the Company decided to close one of its
international facilities and began implementation of a workforce realignment at the facility to focus resources on
its strategic initiatives. The Company plans to exit the facility in the third quarter of 2010. During the fourth
quarter of 2009, the Company incurred total pre-tax cash charges of approximately $16 million in severance and
other costs related to this realignment. In connection with the strategic realignment efforts, an executive of one of
the Company’s acquired businesses departed. The Company incurred $19 million of non-cash stock-based
compensation expense for the acceleration of certain of the executive’s stock-based awards pursuant to the
acquisition agreements. Of the $35 million in restructuring charges, recorded in the fourth quarter of 2009,
$19 million related to the U.S. segment and $16 million related to the International segment.
In addition to the charges described above, the Company currently expect to incur future charges of
approximately $28 million to $38 million for non-cancelable lease costs and relocation costs as we continue to
exit facilities identified as part of the Q408 restructuring plan and Q409 restructuring activities of which $25
million to $33 million relates to the U.S. segment and $3 million to $5 million relates to the International
segment. The expected future charges are expected to be recorded primarily in 2010 and 2011.
Restructuring Accruals. As of December 31, 2008 and 2009, the aggregate outstanding restructuring liability
related to the cost reduction initiatives were $90 million and $79 million, respectively. Of the $79 million
restructuring liability as of December 31, 2009, $20 million relates to employee severance pay expenses which
the Company expects to substantially pay out by the end of the third quarter of 2010, and $59 million relates to
non-cancelable lease costs which the Company expects to pay over the terms of the related obligations which
extend to the second quarter of 2017.
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