Restructuring Charges

9 Months Ended

Aug. 31, 2012

Restructuring and Related Activities [Abstract]

Fiscal 2011 Restructuring Plan

In the fourth quarter of fiscal 2011, we initiated a restructuring plan consisting of reductions in workforce and the consolidation of facilities in order to better align our resources around our Digital Media and Digital Marketing strategies.

During the nine months ended August 31, 2012, we continued to implement restructuring activities under this plan. We vacated approximately 64,000 square feet of sales and/or research and development facilities in Canada, the Czech Republic, Germany, Ireland, Israel and the United Kingdom. We accrued $11.1 million for the fair value of our future contractual obligations under those operating leases as of the dates we ceased to use the leased properties using our estimated credit-adjusted risk-free interest rates ranging from approximately 1% to 4%. This amount is net of the fair value of future estimated sublease income of approximately $3.4 million. Total costs incurred for termination benefits through the third quarter of fiscal 2012 was $56.7 million which includes favorable adjustments of $21.9 million arising from revisions to severance cost estimates that were made in connection with the fourth quarter fiscal 2011 restructuring plan. Total costs incurred to date and expected to be incurred for closing redundant facilities are $14.9 million as all facilities under this plan have been exited as of August 31, 2012.

Other Restructuring Plans

Other restructuring plans include other Adobe plans and other plans associated with certain of our acquisitions that are substantially complete. We continue to make cash outlays to settle obligations under these plans, however the current impact to our condensed consolidated financial statements is not significant. As of August 31, 2012, the total remaining balance under our other restructuring plans was $1.7 million for termination benefits and $11.5 million for closing redundant facilities, of which approximately $8.4 million relates to our Fiscal 2009 Restructuring Plan. Our other restructuring plans primarily consist of the following:

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Fiscal 2009 Restructuring Plan—In the fourth quarter of fiscal 2009, in order to appropriately align our costs in connection with our fiscal 2010 operating plan, we initiated a restructuring plan consisting of reductions in workforce and the consolidation of facilities. The restructuring activities related to this program affected only those employees and facilities that were associated with Adobe prior to the acquisition of Omniture, Inc. (“Omniture”) on October 23, 2009.


•	Omniture Restructuring Plan—We completed our acquisition of Omniture on October 23, 2009. In the fourth quarter of fiscal 2009, we initiated a plan to restructure the pre-merger operations of Omniture to eliminate certain duplicative activities, focus our resources on future growth opportunities and reduce our cost structure.


•	Fiscal 2008 Restructuring Plan—In the fourth quarter of fiscal 2008, we initiated a restructuring program consisting of reductions in workforce and the consolidation of facilities, in order to reduce our operating costs and focus our resources on key strategic priorities.

Summary of Restructuring Plans

The following table sets forth a summary of restructuring activities related to all of our restructuring plans described above during the nine months ended August 31, 2012 (in thousands):



	December 2, 2011		Costs Incurred		Cash Payments			Other Adjustments^*			August 31, 2012
Fiscal 2011 Restructuring Plan:
Termination benefits	$	72,817	$	—	$	(47,273	)	$	(22,180	)	$	3,364
Cost of closing redundant facilities	2,995		11,097		(3,723		)	551			10,920
Other Restructuring Plans:
Termination benefits	1,548		810		(529		)	(143		)	1,686
Cost of closing redundant facilities	11,019		4,475		(5,833		)	1,878			11,539
Total restructuring plans	$	88,379	$	16,382	$	(57,358	)	$	(19,894	)	$	27,509

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^(*)	Included in Other Adjustments are foreign currency translation adjustments and Goodwill adjustments of $0.5 million and $0.4 million, respectively.

Accrued restructuring charges of approximately $27.5 million as of August 31, 2012 includes $14.8 million recorded in accrued restructuring, current and $12.7 million related to long-term facilities obligations recorded in accrued restructuring, non-current on our Condensed Consolidated Balance Sheets. We expect to pay accrued termination benefits through fiscal 2013 and facilities-related liabilities under contract through fiscal 2021.

- 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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