We are currently selling two versions of Data Director, one for Visual Basic applications and the other for Web applications.

Merger and Restructuring Charges. During the quarter ended December 31, 1999, we recorded a charge of $2.8 million associated with the merger with Cloudscape. This amount included $1.2 million for financial advisor, legal and accounting fees related to the merger and $1.6 million for costs associated with combining the operations of the two companies; including expenditures of $0.7 million for severance and related costs, $0.4 million for closure of facilities and $0.5 million for the write-off of redundant assets. Accrued merger costs totaling $1.3 million remained as a liability in our Consolidated Financial Statements as of December 31, 1999. (See Note 11 to our Consolidated Financial Statements.)

In June and September 1997, we approved plans to restructure our operations to bring expenses in line with forecasted revenues and substantially reduced our worldwide headcount and modified operations to improve efficiency. Accordingly, we recorded restructuring charges totaling $108.2 million for 1997. The significant components of these restructuring changes were severance and benefits, write-off of assets, and facility charges. Severance and benefits represented the reduction of approximately 670 employees, primarily sales and marketing personnel, on a worldwide basis. Temporary employees and contractors were also reduced. Write-off of assets included the write-off or write-down in carrying value of equipment as a result of our decision to reduce the number of Information Superstores throughout the world, as well as the write-off of equipment associated with headcount reductions. The equipment subject to the write-offs and write-downs consisted primarily of computer servers, workstations, and personal computers that were no longer utilized in our operations. Facility charges included early termination costs associated with the closing of certain domestic and international sales offices.

During 1999 and 1998, adjustments of $0.6 million and $10.3 million, respectively, were recorded to the results of operations. These adjustments, which appear as a credit to restructuring charges in our Consolidated Statement of Operations for the years ended December 31, 1999 and 1998, were due primarily to adjusting the estimated severance and facility components of the 1997 restructuring charge to actual costs incurred. We have substantially completed actions associated with our restructuring except for subleasing or settling our remaining long-term operating leases related to vacated properties. The terms of these operating leases expire at various dates through 2003. Accrued restructuring costs totaling $1.8 million remained as a liability in our Consolidated Financial Statements as of December 31, 1999, all of which related to facility charges. (See Note 13 to our Consolidated Financial Statements.)

Other Income (Expense)

Interest Income. Interest income for 1999 was $11.1 million as compared to $11.7 million and $5.8 million for 1998 and 1997, respectively. Excluding approximately $2.4 million of interest income related to income tax refunds received in fiscal 1998, interest income earned during 1999 on cash and short-term investments actually increased by 19% over 1998. This increase is consistent with the increase in the average interest-bearing cash and short-term investment balances during 1999 when compared to the same period in 1998. The increase in 1998 when compared to 1997 also resulted from an increase in the average interest-bearing cash and short-term investment balances in 1998 due to increased sales and operating income as well as approximately $2.4 million in interest income related to income tax refunds received during 1998.

Interest Expense. Interest expense decreased to $4.3 million for 1999 from $5.8 million and $9.4 million for 1998 and 1997, respectively. These decreases are due primarily to a decline in the amortization of interest charges incurred in connection with the financing of customer accounts receivable prior to 1998, in addition to a decline in interest charges related to payments on capital leases. We did not enter into any accounts receivable financing transactions in 1999 and 1998.