Restructuring Charges

6 Months Ended

Jun. 30, 2011

5. Restructuring Charges

During the first quarter of fiscal 2011, the Company implemented restructuring actions that resulted in an aggregate charge of $294,000 and the elimination of most of its Canadian subsidiary's general and administrative department. Also included in the aggregate charges for the first quarter of 2011 was a $125,000 idle facilities charge related to the Company's South San Francisco facility.

During the second quarter of fiscal 2011, we implemented a plan to restructure parts of our North America product development and global sales and marketing operations in order to align our cost structure with our current business plan. As a result of the restructuring program, we reduced our global workforce by 26 positions and recorded $720,000 of restructuring charges related to employee severance arrangements. In addition to these charges, we reversed approximately $283,000 of a previously accrued severance liability. This severance liability was initially recorded in December 2004 in connection with litigation related to a previous reduction in work force in Europe. A recent risk assessment rendered by management has indicated that the Company maintains adequate legal defenses and further settlement payments are no longer a significant risk. Accordingly, this liability was reversed at the end of the second quarter of fiscal 2011.

Historically, restructuring charges have included costs associated with reductions in workforce, exits of idle facilities and disposals of fixed assets. These restructuring charges were based on actual and estimated costs incurred including estimates of sublease income on portions of our idle facilities that we periodically update based on market conditions and in accordance with our restructuring plans. These estimates were impacted by the rules governing the termination of employees, especially those in foreign countries.

The following table summarizes the restructuring accrual activity during the six months ended June 30, 2011 (in thousands):


	Severance & Benefits			Facility Related			Total
Balance at December 31, 2010	$	654		$	631		$	1,285
Restructuring charges		606			125			731
Cash payments, net of rents collected on sublease for Q1		(425	)		(339	)		(764	)
Cash payments, net of rents collected on sublease for Q2		(650	)		(322	)		(972	)
Reclassified as a long-term asset (1)		—			26			26
Adjustments (2)		28			—			28

Balance at June 30, 2011		213			121			334
Less: current portion		(213	)		(121	)		(334	)

Long-term balance at June 30, 2011	$	—		$	—		$	—

(1)	The adjustment represents the long-term portion of the estimated operating expenses reimbursable to Actuate under its South San Francisco facility sublease agreement. This reimbursable expense was initially reclassified out of the restructuring accrual and into long-term assets in fiscal 2010.

(2)	Adjustments mainly reflect the impact of foreign currency translation.

- 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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