Special Charges

9 Months Ended

Jul. 30, 2011

Note 6 — Special Charges

A summary of the Company’s special charges and accruals related to ongoing actions is as follows:


					Closure of
	Closure of Wafer				Wafer
	Fabrication		Reduction of		Fabrication
	Facility		Operating		Facility		Total Special
Income Statement	in Sunnyvale		Costs		in Cambridge		Charges
Fiscal 2008 Charges:
Workforce reductions	$	—	$	1,627	$	—	$	1,627

Total Fiscal 2008 Charges	$	—	$	1,627	$	—	$	1,627

Fiscal 2009 Charges:
Workforce reductions		—		26,583		7,446		34,029
Facility closure costs		—		2,411		57		2,468
Non-cash impairment charge		—		839		14,629		15,468
Other items		—		500		—		500

Total Fiscal 2009 Charges	$	—	$	30,333	$	22,132	$	52,465

Fiscal 2010 Charges:
Workforce reductions		—		10,908		—		10,908
Facility closure costs		375		—		4,689		5,064
Non-cash impairment charge		—		487		—		487
Other items		—		24		—		24

Total Fiscal 2010 Charges	$	375	$	11,419	$	4,689	$	16,483


				Closure of Wafer
	Reduction of			Fabrication Facility			Total Special
Balance Sheet	Operating Costs			in Cambridge			Charges
Balance at October 30, 2010	$	5,546		$	1,963		$	7,509

Severance payments		(1,300	)		(457	)		(1,757	)
Facility closure costs		—			(560	)		(560	)
Effect of foreign currency on accrual		(10	)		—			(10	)

Balance at January 29, 2011	$	4,236		$	946		$	5,182

Severance payments		(1,288	)		(520	)		(1,808	)
Facility closure costs		—			(50	)		(50	)
Effect of foreign currency on accrual		21			—			21

Balance at April 30, 2011	$	2,969		$	376		$	3,345

Severance payments		(468	)		(376	)		(844	)
Effect of foreign currency on accrual		(4	)		—			(4	)

Balance at July 30, 2011	$	2,497		$	—		$	2,497

Closure of Wafer Fabrication Facility in Sunnyvale

The Company ceased production at its California wafer fabrication facility in November 2006. The Company paid the related lease obligation costs on a monthly basis over the remaining lease term, which expired in March 2010. The Company recorded a one-time settlement charge of $0.4 million in the first quarter of fiscal 2010 related to the termination of the lease. This action was completed during fiscal 2010.

Reduction of Operating Costs

During the fourth quarter of fiscal 2008, in order to further reduce its operating cost structure, the Company recorded a special charge of $1.6 million for severance and fringe benefit costs in accordance with its ongoing benefit plan or statutory requirements at foreign locations for 19 engineering, and selling, marketing, general and administrative (SMG&A) employees.

During fiscal 2009, the Company recorded an additional charge of $30.3 million related to this cost reduction action. Approximately $2.1 million of this charge was for lease obligation costs for facilities that the Company ceased using during the first quarter of fiscal 2009; approximately $0.8 million was for the write-off of property, plant and equipment no longer used as a result of this action; and approximately $0.5 million was for contract termination costs and approximately $0.3 million was for clean-up and closure costs that were expensed as incurred. The remaining $26.6 million related to the severance and fringe benefit costs recorded in accordance with the Company’s ongoing benefit plan or statutory requirements at foreign locations for 245 manufacturing employees and 302 engineering and SMG&A employees.

During the first quarter of fiscal 2010, the Company recorded an additional charge of $11.4 million related to the further reduction of its operating cost structure. Approximately $10.9 million of this charge was for severance and fringe benefit costs recorded in accordance with the Company’s ongoing benefit plan or statutory requirements at foreign locations for 149 engineering and SMG&A employees. Approximately $0.5 million of the charge relates to the Company’s decision to abandon efforts to develop a particular expertise in power management, resulting in the impairment of related intellectual property.

The Company terminated the employment of all employees associated with this action and is paying amounts owed to them as income continuance.

Closure of a Wafer Fabrication Facility in Cambridge

During the first quarter of fiscal 2009, the Company recorded a special charge of $22.1 million as a result of its decision to consolidate its Cambridge, Massachusetts wafer fabrication facility into its existing Wilmington, Massachusetts facility. In connection with the anticipated closure of this facility, the Company evaluated the recoverability of the facility’s manufacturing assets and concluded that there was an impairment of approximately $12.9 million based on the revised period of intended use. The remaining $9.2 million was for severance and fringe benefit costs recorded in accordance with the Company’s ongoing benefit plan for 175 manufacturing employees and 9 SMG&A employees associated with this action.

The Company finished production in the Cambridge wafer fabrication facility and began clean-up activities during the fourth quarter of fiscal 2009. During the fourth quarter of fiscal 2009, the Company reversed approximately $1.8 million of its severance accrual. The accrual reversal was required because 51 employees either voluntarily left the Company or found alternative employment within the Company. In addition, the Company recorded a special charge of approximately $1.7 million for the impairment of manufacturing assets that were originally going to be moved to the Company’s other wafer fabrication facilities but were no longer needed at those facilities and therefore had no future use. The Company also recorded a special charge of $0.1 million for clean-up costs as the Company began its clean-up of the Cambridge wafer fabrication facility at the end of the fourth quarter of fiscal 2009.

During the first quarter of fiscal 2010, the Company recorded an additional charge of $4.7 million related to this cost reduction action. Approximately $3.4 million of the charge related to lease obligation costs for the Cambridge wafer fabrication facility, which the Company ceased using in the first quarter of fiscal 2010. The remaining $1.3 million of the charge related to clean-up and closure costs that were expensed as incurred. This action was completed during the third quarter of fiscal 2011.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

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