| 16. | RESTRUCTURING CHARGE |
The following table represents the restructuring liability balance at December 31, 2011 (in thousands):
| Year Ended December 31, 2011 | ||||||||||||||||||||
| Beginning Balance |
Charges and Adjustments to Charges |
Cash Payments |
Non-cash reductions |
Total Remaining Liability |
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2009 and 2010 Plans |
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Severance and benefits |
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||
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Facilities |
749 | (18 | ) | (427 | ) | (109 | ) | 195 | ||||||||||||
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Total 2009 and 2010 Plans |
$ | 749 | $ | (18 | ) | $ | (427 | ) | $ | (109 | ) | $ | 195 | |||||||
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2011 Plans |
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Q1 2011 Plan |
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Severance and benefits |
$ | 0 | $ | 5,561 | $ | (4,768 | ) | $ | (406 | ) | $ | 387 | ||||||||
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Facilities |
0 | 3,103 | (1,897 | ) | 0 | 1,206 | ||||||||||||||
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Total Q1 2011 Plan |
$ | 0 | $ | 8,664 | $ | (6,665 | ) | $ | (406 | ) | $ | 1,593 | ||||||||
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Q2 2011 Plan |
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Severance and benefits |
$ | 0 | $ | 1,900 | $ | (1,729 | ) | $ | 0 | $ | 171 | |||||||||
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Facilities |
0 | 1,645 | (1,645 | ) | 0 | 0 | ||||||||||||||
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Total Q2 2011 Plan |
$ | 0 | $ | 3,545 | $ | (3,374 | ) | $ | 0 | $ | 171 | |||||||||
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Total |
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Severance and benefits |
$ | 0 | $ | 7,461 | $ | (6,497 | ) | $ | (406 | ) | $ | 558 | ||||||||
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Facilities |
749 | 4,730 | (3,969 | ) | (109 | ) | 1,401 | |||||||||||||
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| $ | 749 | $ | 12,191 | $ | (10,466 | ) | $ | (515 | ) | $ | 1,959 | |||||||||
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2011 Restructuring Activity
During the first and second quarters of 2011, the Company initiated plans to restructure certain of its operations to realign the cost structure and resources and to take advantage of operational efficiencies following the completion of its recent acquisitions. The total estimated restructuring costs for 2011 associated with each plan are estimated to range from $10 million to $11 million for the plan initiated in the first quarter ("Q1 2011 Plan") and from $3 million to $4 million for the plan initiated in the second quarter ("Q2 2011 Plan") consisting primarily of employee severance expenses and facilities obligations. The restructuring costs will be recorded in "Restructuring Charge".
As a result of the Q1 2011 Plan, the Company recorded a restructuring charge of $5.6 million for the year ended December 31, 2011 for severance and benefits costs for the reduction in headcount of approximately 100 employees. As of December 31, 2011, the Company has a remaining severance and benefits liability of $387,000 with respect to this plan, which is reflected in "Accounts Payable and Accrued Expenses" in the consolidated balance sheet.
As part of the Q1 2011 Plan, the Company incurred a restructuring charge of $3.1 million for the year ended December 31, 2011 for the closure of three office locations and the relinquishment of space at two office locations. The remaining facility liability for this plan of $1.2 million as of December 31, 2011 is reflected as "Accounts Payable and Accrued Expenses" in the consolidated balance sheet.
As a result of the Q2 2011 Plan, the Company recorded restructuring charges of $1.9 million for severance and benefits costs for the reduction in headcount of approximately 80 employees for the year ended December 31, 2011. Additionally, the Company incurred a restructuring charge for the year ended December 31, 2011 of $1.6 million for the closure of one office location as a result of an acquisition. As of December 31, 2011, the Company has a remaining severance and benefits liability of $171,000 with respect to this plan, which is reflected in "Accounts Payable and Accrued Expenses" in the consolidated balance sheet.
For the Q1 2011 Plan, liabilities for severance and benefit costs are expected to be paid by the end of the first quarter of 2012 and facility costs are expected to be paid by the end of 2012. The Company expects to incur the remaining estimated expenses of approximately $1.5 million to $2.5 million for the Q1 2011 Plan by the end of 2012.
For the Q2 2011 Plan, liabilities for severance and benefit costs are expected to be fully paid by the end of the first quarter of 2012 and all facility costs have been paid in full as of December 31, 2011. The Company expects to incur the remaining estimated expenses up to $500,000 for the Q2 2011 Plan by the end of 2012.
Any changes to the estimate of executing these restructuring plans will be reflected in the Company's future results of operations.
2010 Restructuring Activity
During the first and fourth quarters of 2010, the Company implemented restructuring plans to eliminate certain positions in order to realign the cost structure, take advantage of acquisition synergies, and to allow for increased investment in several areas.
As a result of the first quarter plan ("Q1 2010 Plan"), the Company recorded a restructuring charge of $936,000 for the year ended December 31, 2010 for severance and benefits costs for the reduction in headcount of approximately 25 employees. As of December 31, 2010, the severance and benefits liability recorded for the Q1 2010 Plan had been fully paid.
As part of the Q1 2010 Plan, the Company incurred a restructuring charge of $97,000 for the year ended December 31, 2010 for the closure of an office location. This amount was fully paid as of December 31, 2010.
As a result of the fourth quarter plan ("Q4 2010 Plan") in connection with the Company's acquisition of Maconomy, the Company consolidated duplicate office facilities into one location. The Company ceased using the duplicate facility in 2010. As a result of these actions, a restructuring charge was recorded for approximately $740,000 for the year ended December 31, 2010 which included an early lease termination charge and a provision to write-down leasehold improvements and furniture and equipment.
At December 31, 2011 the remaining liability for the Q4 2010 Plan is $195,000 which is expected to be paid by the end of the first quarter of 2013. This amount is reflected as "Accounts Payable and Accrued Expenses" of $157,000 and "Other Long-Term Liabilities" of $38,000 in the consolidated balance sheet.
2009 Restructuring Activity
The Company implemented discrete restructuring plans in each quarter of 2009. These restructuring plans were to eliminate certain positions to realign the Company's cost structure, to create a virtual workforce and to allow for increased investment in its key strategic objectives.
During 2009, the restructuring plans included a reduction of headcount of approximately 100 employees. As a result of these plans, the Company recorded a restructuring charge of $3.1 million for severance and severance-related costs in its consolidated statement of operations for the year ended December 31, 2009. As of December 31, 2010, the severance and benefits liability recorded for the 2009 restructuring activity has been fully paid.
During 2009, the restructuring plans included the consolidation of one office location and the closure of two office locations. As a result of these plans, the Company recorded a restructuring charge of $737,000 for facilities in its consolidated statement of operations for the year ended December 31, 2009. As of December 31, 2009, the Company had a remaining facility liability of $470,000, which has been fully paid as of December 31, 2011.