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0000320193
20041203
10-K
1,511
No sales of EarthLink were made in any of the subsequent quarters of fiscal 2002.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,512
However, during the fourth quarter of 2002, the Company determined that the then current decline in the fair value of its investment in EarthLink was other-than-temporary.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,513
As a result, the Company recognized a $44 million charge to earnings to write-down the basis of its investment in EarthLink to $35 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,514
This charge was included in gains (losses) on non-current investments, net.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,515
As of September 28, 2002, the Company held 6.5 million shares of EarthLink stock valued at $35 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,516
Akamai In June 1999, the Company invested $12.5 million in Akamai, a global Internet content delivery service.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,517
The investment was in the form of convertible preferred stock that converted into 4.1 million shares of Akamai common stock (adjusted for subsequent stock splits) at the time of Akamai's initial public offering in October 1999.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,518
Beginning in the first quarter of 2000, the Company categorized its shares in Akamai as available-for-sale.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,519
During 2004, the Company sold its remaining 986,000 shares of Akamai stock.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,520
The transaction generated proceeds of approximately $5 million and a gain before taxes of approximately $4 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,521
During the fourth quarter of 2003, the Company sold 1,875,000 shares of Akamai stock for net proceeds of $9 million and a gain before taxes of $8 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,522
As of September 27, 2003, the Company's remaining investment in Akamai consisted of 986,000 shares of Akamai stock valued at $5 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,523
During the first quarter of 2002, the Company sold 250,000 shares of Akamai stock for net proceeds of $2 million and a gain before taxes of $710,000.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,524
No sales of Akamai were made in any of the subsequent quarters of fiscal 2002.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,525
However, during the fourth quarter of 2002, the Company determined the decline in the fair value of its investment in Akamai was other-than-temporary.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,526
As a result, the Company recognized a $6 million charge to earnings to write-down the basis of its investment in Akamai to $3 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,527
This charge was included in gains (losses) on non-current investments, net.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,528
ARM ARM is a publicly held company in the U.K. involved in the design and licensing of high performance microprocessors and related technology.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,529
During the third quarter of 2003, the Company sold all of its remaining holdings in ARM stock, consisting of 278,000 shares for net proceeds of approximately $295,000, and a gain before taxes of $270,000.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,530
During the first quarter of 2002, the Company sold 4.7 million shares of ARM stock for both net proceeds and a gain before taxes of $21 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,531
No sales of ARM were made in any of the subsequent quarters of fiscal 2002.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,532
Other Strategic Investments The Company has made additional minority debt and equity investments in several privately held technology companies, which were reflected in the consolidated balance sheets in other assets.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,533
These investments were inherently risky because the products and/or markets of these companies were typically not fully developed.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,534
During 2002, the Company determined the decline in fair value of certain of these investments was other-than-temporary and, accordingly, recognized a charge to earnings of $15 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,535
These charges were included in gains (losses) on non-current investments, net.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,536
As of September 25, 2004, the Company had $1.4 million of equity investments reflected in its consolidated balance sheet.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,537
As of September 27, 2003, the Company had no private debt or equity investments reflected in its consolidated balance sheet.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,538
Note 3-Consolidated Financial Statement Details (in millions) Inventories Other Current Assets Property, Plant, and Equipment Other Assets Accrued Expenses Interest and Other Income, Net Note 4-Acquisitions Goodwill and Other Intangible Assets The Company is currently amortizing its acquired intangible assets with defi...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,539
The Company ceased amortization of goodwill at the beginning of fiscal 2002 when it adopted SFAS No.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,540
142.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,541
The following table summarizes the components of gross and net intangible asset balances (in millions): (a)Accumulated amortization related to goodwill of $55 million arising prior to the adoption of SFAS No.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,542
142 has been reflected in the gross carrying amount of goodwill as of September 25, 2004 and September 27, 2003.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,543
During the third quarter of 2004, the Company recorded an adjustment of approximately $5 million to goodwill related to the acquisition of PowerSchool, Inc (PowerSchool) in fiscal 2001.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,544
This reduction of goodwill included the cancellation of 79,167 shares of Apple common stock, valued at approximately $2 million, that were previously held in escrow and were refunded upon resolution of certain matters arising out of the acquisition of PowerSchool.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,545
This adjustment also included approximately $3 million to adjust the original estimates of the pre-acquisition PowerSchool restructuring liability to actual costs incurred.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,546
Expected annual amortization expense related to acquired technology is as follows (in millions): Amortization expense related to acquired intangible assets is as follows (in millions): Acquisition of Emagic GmbH During the fourth quarter of 2002, the Company acquired Emagic GmbH (Emagic), a provider of professional sof...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,547
During fiscal 2003, contingent consideration totaling $1.3 million was paid.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,548
The acquisition has been accounted for as a purchase.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,549
The portion of the purchase price allocated to purchased in-process research and development (IPR&D) was expensed immediately, and the portion of the purchase price allocated to acquired technology and to tradename will be amortized over their estimated useful lives of 3 years.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,550
Goodwill associated with the acquisition of Emagic is not subject to amortization pursuant to the provisions of SFAS No.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,551
142.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,552
Total consideration was allocated as follows (in millions): The amount of the purchase price allocated to IPR&D was expensed upon acquisition, because the technological feasibility of products under development had not been established and no alternative future uses existed.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,553
The IPR&D relates primarily to Emagic's Logic series technology and extensions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,554
At the date of the acquisition, the products under development were between 43%-83% complete, and it was expected that the remaining work would be completed during the Company's fiscal 2003 at a cost of approximately $415,000.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,555
The remaining efforts, which were completed in 2003, included finalizing user interface design and development, and testing.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,556
The fair value of the IPR&D was determined using an income approach, which reflects the projected free cash flows that will be generated by the IPR&D projects and that are attributable to the acquired technology, and discounting the projected net cash flows back to their present value using a discount rate of 25%.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,557
Acquisition of certain assets of Zayante, Inc., Prismo Graphics, and Silicon Grail During fiscal 2002 the Company acquired certain technology and patent rights of Zayante, Inc., Prismo Graphics, and Silicon Grail Corporation for a total of $20 million in cash.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,558
These transactions have been accounted for as asset acquisitions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,559
The purchase price for these asset acquisitions, except for $1 million identified as contingent consideration which would be allocated to compensation expense over the following 3 years, has been allocated to acquired technology and would be amortized on a straight-line basis over 3 years, except for certain assets acq...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,560
Acquisition of Nothing Real, LLC During the second quarter of 2002, the Company acquired certain assets of Nothing Real, LLC (Nothing Real), a privately-held company that develops and markets high performance tools designed for the digital image creation market.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,561
Of the $15 million purchase price, the Company has allocated $7 million to acquired technology, which will be amortized over its estimated life of 5 years.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,562
The remaining $8 million, which has been identified as contingent consideration, rather than recorded as an additional component of the cost of the acquired assets, would be allocated to future compensation expense in the appropriate periods over the following 3 years.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,563
Note 5-Restructuring Charges Fiscal 2004 Restructuring Actions The Company recorded total restructuring charges of approximately $23 million during the year ended September 25, 2004, including approximately $14 million in severance costs, $5.5 million in asset impairments, and a $3.5 million charge for lease cancellati...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,564
Of the $23 million charge, $14.3 million had been spent by the end of 2004, with the remaining $8.7 million consisting of $5.2 million for employee severance benefits and $3.5 million for lease cancellations.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,565
During the fourth quarter of 2004, the Company recognized restructuring expense of $5.5 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,566
In conjunction with the European workforce reduction during the second quarter of 2004, the Company vacated a leased sales facility during the fourth quarter of 2004 resulting in a charge of $3.7 million for contract termination and asset impairment costs.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,567
The Company also recognized employee termination costs of $1.8 million related to the elimination of non-essential positions, principally in Europe.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,568
In addition, the Company reversed $400,000 of excess restructuring expense from prior periods related primarily to lower than expected disposal costs on Sacramento manufacturing-related fixed assets.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,569
The net cost of the restructuring plans for the fourth quarter of 2004 was $5.1 million, of which $300,000 had been paid prior to the end of 2004.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,570
These actions will result in the termination of 54 positions, 4 of which had been terminated prior to the end of 2004.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,571
During the third quarter of 2004, the Company finalized restructuring plans related to closing Company-owned manufacturing activities in Sacramento.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,572
In addition, the Company's management approved restructuring plans related to certain headcount reductions primarily for various sales and marketing activities principally in the U.S. Total cost of the restructuring plan for the third quarter of 2004 was $7.9 million, of which $7.2 million had been paid prior to the en...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,573
These actions will result in the termination of 83 positions, 77 of which had been terminated prior to the end of 2004.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,574
The closing of manufacturing operations in Sacramento resulted in the elimination of 67 positions for a severance cost of $1.9 million and write-off of $5.3 million in manufacturing-related fixed assets whose use ceased during the third quarter of 2004.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,575
Termination of sales and marketing activities, principally in the U.S., resulted in severance of $0.7 million for the elimination of 16 positions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,576
During the second quarter of 2004, the Company's management approved restructuring plans related to the termination of Company-owned manufacturing activities in Sacramento and headcount reductions related primarily to various sales and marketing activities in the U.S. and Europe.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,577
Total cost of the actions was $9.6 million for the termination of 348 positions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,578
As of the end of the fourth quarter of 2004, $6.8 million had been spent and 310 positions had been eliminated related to these actions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,579
The following table summarizes activity associated with restructuring actions initiated during fiscal 2004 (in millions): Fiscal 2003 Restructuring Actions The Company recorded total restructuring charges of approximately $26.8 million during the year ended September 27, 2003, including approximately $7.4 million in se...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,580
Of the $26.8 million charge, all had been spent by the end of 2004, except for approximately $3.0 million related to operating lease costs on abandoned facilities.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,581
During the third quarter of 2003, approximately $500,000 of the amount originally accrued for lease cancellations was determined to be in excess due to the sublease of a property sooner than originally estimated and a shortfall of approximately $500,000 was identified in the severance accrual due to higher than expecte...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,582
These adjustments had no net effect on reported operating expense.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,583
During the second quarter of 2003, the Company's management approved and initiated restructuring actions that resulted in recognition of a total restructuring charge of $2.8 million, including $2.4 million in severance costs and $400,000 for asset write-offs and lease payments on an abandoned facility.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,584
Actions taken in the second quarter were for the most part supplemental to actions initiated in the prior two quarters and focused on further headcount reductions in various sales and marketing functions in the Company's Americas and Europe operating segments and further reductions associated with PowerSchool-related a...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,585
The second quarter actions resulted in the termination of 93 employees.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,586
During the first quarter of 2003, the Company's management approved and initiated restructuring actions with a total cost of $24 million that resulted in the termination of manufacturing operations at the Company-owned facility in Singapore, further reductions in headcount resulting from the shift in PowerSchool produc...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,587
These restructuring actions resulted in the elimination of 260 positions worldwide.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,588
Closure of the Company's Singapore manufacturing operations resulted in severance costs of $1.8 million and costs of $6.7 million to write-off manufacturing related fixed assets, whose use ceased during the first quarter.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,589
PowerSchool related costs included severance of approximately $550,000 and recognition of $5 million of previously deferred stock compensation that arose when PowerSchool was acquired by the Company in 2001 related to certain PowerSchool employee stockholders who were terminated in the first quarter of 2003.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,590
Termination of sales and marketing activities and employees, principally in the U.S. and Europe, resulted in severance costs of $2.8 million and accrual of costs associated with operating leases on closed facilities of $6.7 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,591
The total net restructuring charge of $23 million recognized during the first quarter of 2003 also reflects the reversal of $600,000 of unused restructuring accrual originally made during the first quarter of 2002.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,592
The following table summarizes activity associated with restructuring actions initiated during fiscal 2003 (in millions): Fiscal 2002 Restructuring Actions During fiscal 2002, the Company recorded total restructuring charges of approximately $30 million related to actions intended to eliminate certain activities and be...
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,593
During the fourth quarter of 2002, the Company's management approved and initiated restructuring actions with a total cost of approximately $6 million designed to reduce headcount costs in corporate operations and sales and to adjust its PowerSchool product strategy.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,594
These restructuring actions resulted in the elimination of approximately 180 positions worldwide at a cost of $1.8 million, all of which were eliminated by September 27, 2003.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,595
Eliminated positions were primarily in corporate operations, sales, and PowerSchool related research and development in the Americas operating segment.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,596
The shift in product strategy at PowerSchool included discontinuing development and marketing of PowerSchool's PSE product.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,597
This shift resulted in the impairment of previously capitalized development costs associated with the PSE product in the amount of $4.5 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,598
During the first quarter of 2002, the Company's management approved and initiated restructuring actions with a total cost of approximately $24 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,599
These restructuring actions resulted in the elimination of approximately 425 positions worldwide at a cost of $8 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,600
Positions were eliminated primarily in the Company's operations, information systems, and administrative functions.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,601
In addition, these restructuring actions also included significant changes in the Company's information systems strategy resulting in termination of equipment leases and cancellation of existing projects and activities.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,602
The Company ceased using the assets associated with first quarter 2002 restructuring actions during that same quarter.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,603
Related lease and contract cancellation charges totaled $12 million, and charges for asset impairments totaled $4 million.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,604
The first quarter 2002 restructuring actions were primarily related to corporate activity not allocated to operating segments.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,605
During the first quarter of 2003, the Company reversed the remaining unused accrual of $600,000.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,606
All amounts associated with the fiscal 2002 restructuring actions had been spent by the end of fiscal 2003.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,607
Note 6-Income Taxes The provision for income taxes consisted of the following (in millions): The foreign provision for income taxes is based on foreign pretax earnings of approximately $384 million, $250 million and $284 million in 2004, 2003, and 2002, respectively.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,608
As of September 25, 2004, approximately $3.2 billion of the Company's cash, cash equivalents, and short-term investments are held by foreign subsidiaries and are generally based in U.S. dollar-denominated holdings.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,609
Amounts held by foreign subsidiaries are generally subject to U.S. income taxation on repatriation to the U.S.
0001047469-04-035975/full-submission.txt
0000320193
20041203
10-K
1,610
The Company's consolidated financial statements fully provide for any related tax liability on amounts that may be repatriated, aside from undistributed earnings of certain of the Company's foreign subsidiaries that are intended to be indefinitely reinvested in operations outside the U.S. U.S. income taxes have not bee...
0001047469-04-035975/full-submission.txt