| |
On September 9, 2002, the
Company announced plans to sell its TradeCast subsidiaries,
which provide direct access trade execution and
software designed for active traders, due to redundancies
with Datek's technology. An impairment loss of $63.4
million was recorded during fiscal 2002 to reflect
the amount by which the carrying value of the TradeCast
subsidiaries, including goodwill, exceeded its estimated
fair value. The impairment loss consisted of $53.5
million of goodwill and $9.9 million of property
and equipment. The Company has not classified the
TradeCast business as "held for sale"
pursuant to SFAS No. 144 because, as of September
27, 2002, a sale was not considered probable within
one year.
During the first six months of fiscal 2001, due
to unfavorable market and economic conditions, the
Company terminated approximately 450 employees,
primarily at its Omaha, Nebraska and Fort Worth,
Texas call centers, and consolidated office space
in certain facilities. On June 27, 2001, the Company
announced a reorganization of its corporate and
management structure (see Note 14). In connection
with the reorganization, a comprehensive facilities
consolidation began and approximately 30 additional
employees were terminated. Offices in Fort Worth,
Texas; Omaha, Nebraska; Baltimore, Maryland; and
Purchase, New York were affected by the consolidation.
The following is a summary of restructuring charges
related to the facilities consolidation and staff
reductions during fiscal 2001: |
 |
| Employee compensation
and benefits: |
|
|
|
|
Severance
pay and benefits |
|
$ |
2,836 |
| Occupancy
and equipment costs: |
|
|
|
|
Non-cancelable
lease costs, net of estimated sublease
income |
|
|
12,926 |
| Professional
services: |
|
|
|
|
Estimated
tenant improvement, commission and
other costs on subleases |
|
|
2,430 |
| Other: |
|
|
|
|
Losses
on impairment and abandonment of
property and equipment |
|
|
15,581 |
|
Losses
on impairment of leasehold improvements
related to non-cancelable leases |
|
|
4,113 |
|
Losses
on impairment of prepaid assets |
|
|
382 |
|
|
|
| Total
restructuring charges |
|
$ |
38,268 |
|
|
|
|
|
|
|
|
|
|
|
| The following is a summary
of the activity in the Company's restructuring and
acquisition exit liabilities: |
|
| |
|
|
Employee
Compensation |
|
|
Occupancy
and Equipment |
|
|
Professional
Services |
|
|
Other |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restructuring
liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fiscal
2001 activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
charges |
|
$ |
2,836 |
|
$ |
12,926 |
|
$ |
2,430 |
|
$ |
20,076 |
|
$ |
38,268 |
|
|
Utilized |
|
|
(1,861) |
|
|
(1,603) |
|
|
- |
|
|
(15,837) |
|
|
(19,301) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 28, 2001 |
|
|
975 |
|
|
11,323 |
|
|
2,430 |
|
|
4,239 |
|
|
18,967 |
|
| Fiscal
2002 activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Utilized |
|
|
(975) |
|
|
(5,604) |
|
|
(595) |
|
|
(439) |
|
|
(7,613) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 27, 2002 |
|
$ |
- |
|
$ |
5,719 |
|
$ |
1,835 |
|
$ |
3,800 |
|
$ |
11,354 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| NDB
exit liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fiscal
2001 activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exit
costs incurred |
|
$ |
6,399 |
|
$ |
1,366 |
|
$ |
- |
|
$ |
3,720 |
|
$ |
11,485 |
|
| |
Utilized |
|
|
- |
|
|
(202) |
|
|
- |
|
|
(159) |
|
|
(361) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 28, 2001 |
|
|
6,399 |
|
|
1,164 |
|
|
- |
|
|
3,561 |
|
|
11,124 |
|
| Fiscal
2002 activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Utilized |
|
|
(6,399) |
|
|
(1.164) |
|
|
- |
|
|
(3,561) |
|
|
(11,124) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 27, 2002 |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Datek
exit liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fiscal
2002 activity: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Exit
costs incurred |
|
$ |
27,663 |
|
$ |
14,128 |
|
$ |
- |
|
$ |
5,496 |
|
$ |
47,287 |
|
| |
Utilized |
|
|
(2,044) |
|
|
- |
|
|
- |
|
|
(389) |
|
|
(2,433) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance,
September 27, 2002 |
|
$ |
25,619 |
|
$ |
14,128 |
|
$ |
- |
|
$ |
5,107 |
|
$ |
44,854 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company expects to utilize
the remaining restructuring liabilities over the
respective lease periods through fiscal 2005. Most
Datek employee compensation and other costs are
expected to be paid in fiscal 2003, with any remaining
amounts paid in fiscal 2004. Remaining Datek occupancy
and equipment exit liabilities are expected to be
utilized over the respective lease periods through
fiscal 2011.
The Company recorded impairment charges of approximately
$4.7 million during fiscal 2000 related to specific
software applications discontinued. |
|
|
