ERTS » Topics » Fiscal 2006 Restructuring

These excerpts taken from the ERTS 10-K filed May 22, 2009.

Fiscal 2009 Restructuring

In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with the current economic environment. This plan includes a narrowing of our product portfolio, a reduction in our worldwide workforce of approximately 11 percent, or 1,100 employees, the closure of 10 facilities, and reductions in other variable costs and capital expenditures.

During fiscal year 2009, we incurred approximately $41 million of restructuring charges, of which $32 million was for employee-related expenses and $7 million was for facilities-related expenses. Including charges incurred through March 31, 2009, we expect to incur cash and non-cash charges between $55 million and $60 million by March 2010. These charges will consist primarily of employee-related costs (approximately $35 million), facility exit costs (approximately $25 million), as well as other costs including asset impairment costs (approximately $5 million).

Fiscal 2009 Restructuring

STYLE="margin-top:6px;margin-bottom:0px">In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with the current economic environment. This plan includes a
narrowing of our product portfolio, a reduction in our worldwide workforce of approximately 11 percent, or 1,100 employees, the closure of 10 facilities, and reductions in other variable costs and capital expenditures.

STYLE="margin-top:12px;margin-bottom:0px">During fiscal year 2009, we incurred approximately $41 million of restructuring charges, of which $32 million was for employee-related expenses and $7 million was for
facilities-related expenses. Including charges incurred through March 31, 2009, we expect to incur cash and non-cash charges between $55 million and $60 million by March 2010. These charges will consist primarily of employee-related costs
(approximately $35 million), facility exit costs (approximately $25 million), as well as other costs including asset impairment costs (approximately $5 million).

FACE="Times New Roman" SIZE="2">Fiscal 2008 Reorganization

During fiscal year 2009, we incurred approximately $34 million of charges
associated with our fiscal 2008 reorganization, of which $22 million was for facilities-related expenses and $12 million related to other expenses, including contracted services costs to assist in the reorganization of our business support
functions.

 


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During the fiscal year 2008, we incurred approximately $97 million of reorganization charges, of which $58 million was for facilities-related expenses, $27
million was other expenses including contracted services costs to assist in the reorganization of our business support functions, and $12 million was employee-related expenses.

FACE="Times New Roman" SIZE="2">Losses on Strategic Investments, Net

Losses on strategic investments, net for fiscal years 2009 and 2008 were
as follows (in millions):

 








































March 31,

STYLE="margin-top:0px;margin-bottom:1px;border-bottom:1px solid #000000;width:35pt" ALIGN="center">2009

    

% of Net
Revenue

    

March 31,
2008

    

% of Net
Revenue

    

$ Change

    

% Change

$(62)

    (1%)    $(118)    (3%)    $56    (47%)

During the fiscal year ended March 31, 2009, losses on strategic investments, net decreased by $56 million,
or 47 percent, as compared to the year ended March 31, 2008. We recognized (1) a $40 million impairment charge on our investments in Neowiz’s common and preferred shares and (2) a $27 million impairment charge on our investment
in The9 during the fiscal year ended March 31, 2009. These charges were offset by a $5 million dividend received from our investment in The9.

During
the fiscal year ended March 31, 2008, we recognized (1) an $81 million impairment charge on our investment in The9 and (2) a $37 million impairment charge on our investments in Neowiz Corporation’s common and preferred shares.

Fiscal 2009 Restructuring

In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with the current economic environment. This plan includes a narrowing of our product portfolio, a reduction in our worldwide workforce of approximately 11 percent, or 1,100 employees, the closure of 10 facilities, and reductions in other variable costs and capital expenditures.

Since the inception of the fiscal 2009 restructuring plan through March 31, 2009, we have incurred charges of approximately $41 million, of which (1) $32 million were for employee-related expenses, (2) $7 million related to the closure of certain of our facilities, and (3) $2 million related to asset impairments. The restructuring accrual of $13 million as of March 31, 2009 related to our fiscal 2009 restructuring is expected to be settled by September 2016. This accrual is included in other accrued expenses presented in Note 9 of the Notes to Consolidated Financial Statements.

In fiscal year 2010, we anticipate incurring between $15 million and $20 million of restructuring charges related to the fiscal 2009 restructuring. Overall, including charges incurred through March 31, 2009, we expect to incur cash and non-cash charges between $55 million and $60 million by March 2010. These charges will consist primarily of employee-related costs (approximately $35 million), facility exit costs (approximately $25 million), as well as other costs including asset impairment costs (approximately $5 million).

Fiscal 2009 Restructuring

STYLE="margin-top:6px;margin-bottom:0px">In fiscal year 2009, we announced details of a cost reduction plan as a result of our performance combined with the current economic environment. This plan includes a
narrowing of our product portfolio, a reduction in our worldwide workforce of approximately 11 percent, or 1,100 employees, the closure of 10 facilities, and reductions in other variable costs and capital expenditures.

STYLE="margin-top:12px;margin-bottom:0px">Since the inception of the fiscal 2009 restructuring plan through March 31, 2009, we have incurred charges of approximately $41 million, of which (1) $32
million were for employee-related expenses, (2) $7 million related to the closure of certain of our facilities, and (3) $2 million related to asset impairments. The restructuring accrual of $13 million as of March 31, 2009 related to
our fiscal 2009 restructuring is expected to be settled by September 2016. This accrual is included in other accrued expenses presented in Note 9 of the Notes to Consolidated Financial Statements.

STYLE="margin-top:12px;margin-bottom:0px">In fiscal year 2010, we anticipate incurring between $15 million and $20 million of restructuring charges related to the fiscal 2009 restructuring. Overall, including
charges incurred through March 31, 2009, we expect to incur cash and non-cash charges between $55 million and $60 million by March 2010. These charges will consist primarily of employee-related costs (approximately $35 million), facility exit
costs (approximately $25 million), as well as other costs including asset impairment costs (approximately $5 million).

This excerpt taken from the ERTS 10-Q filed Feb 4, 2009.

Fiscal 2009 Restructuring

In the quarter ended December 31, 2008, we announced details of a cost-reduction plan. In connection with our fiscal 2009 restructuring, we expect to reduce our worldwide workforce by approximately 11 percent, or 1,100 employees, and close 12 studio and publishing locations.

Since the inception of the fiscal 2009 restructuring plan through December 31, 2008, we have incurred charges of approximately $13 million, of which $10 million were for employee-related expenses, $2 million related to asset impairments, and $1 million related to the closure of a facility. The restructuring accrual of $4 million as of December 31, 2008 related to our fiscal 2009 restructuring is expected to be utilized by March 31, 2009. This accrual is included in other accrued expenses presented in Note 9 of the Notes to Condensed Consolidated Financial Statements.

During the remainder of fiscal 2009, we anticipate incurring between $25 million and $30 million of restructuring charges related to the fiscal 2009 restructuring. Overall, including charges incurred through December 31, 2008, we expect to incur cash and non-cash charges between $65 million and $75 million by fiscal 2010. These charges will consist primarily of employee-related costs (approximately $35 million), facility exit costs (approximately $30 million), as well as other costs including asset impairment costs (approximately $5 million).

This excerpt taken from the ERTS 10-K filed May 30, 2007.
Fiscal 2006 Restructuring
 
During the fourth quarter of fiscal 2006, we recorded a total pre-tax restructuring charge of $10 million consisting entirely of one-time costs related to headcount reductions which are included in restructuring charges in our Consolidated Statements of Operations. These headcount reductions related to our decision in the fourth quarter of fiscal 2006 to realign our resources with our product plan for fiscal 2007 and strategic opportunities with next-generation consoles, online and mobile platforms. As of March 31, 2006, this accrual was included in other accrued expenses presented in Note 8 of the Notes to Consolidated Financial Statements. As of March 31, 2007, all $10 million had been paid out in cash under the restructuring plan.


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