41 Notes to Consolidated Financial Statements Franklin Covey 2000 Annual Report In June 1998, the Financial Accounting Standards Board issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” This statement establishes accounting and reporting standards requiring that every derivative instrument be recorded on the balance sheet as either an asset or liability measured at fair value and that changes in the derivative’s fair value be recognized currently in earnings unless specific hedge accounting criteria are met. SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal quarters of fiscal years beginning after June 15, 2000. As a result, the Company will adopt the provisions of SFAS No. 133 in the first quarter of fiscal 2001. The Company expects that the implementation of SFAS No. 133 will not have a material impact on the Company’s results of operations and financial position. August 31, 1999. Included in the restructuring charge were costs to provide severance and related benefits, as well as costs to formally exit the leased office space.  As of August 31, 2000, the Company’s restructuring  plan was substantially completed. The components of  the accrued restructuring charge and the remaining accrual balances at August 31, 2000 were as follows  (in thousands): In December 1999, the Securities and Exchange Commission (“SEC”) issued Staff Accounting Bulletin No. 101 “Revenue Recognition in Financial Statements” (“SAB 101”). SAB 101 provides guidance on the recognition, presentation, and disclosure of revenue in financial statements. In June of 2000, the SEC issued SAB 101B, which extended the implementation date to the Company’s fourth quarter of fiscal 2001. The Company does not expect the adoption of SAB 101 to have a material impact on the Company’s results of operations, financial position, or liquidity. Certain reclassifications have been made in the prior periods’ consolidated financial statements to conform with the current year presentation. As of August 31, 2000, accrued severance costs consisted of expected remaining severance and benefit payments for terminated employees. Remaining accrued leased office space exit costs represent the difference between base rental charges and the offsetting expected sublease revenue receipts. The Company expects that the remaining restructuring accrual will be sufficient to complete its restructuring plan. The cost to provide severance and related benefits covered a planned reduction of identified employees across all areas of the business. The following table shows the number of employees in each of the Company’s operating segments that have been terminated by the reduction plan: During the fourth quarter of fiscal 1999, the Company’s Board of Directors approved a plan to restructure the Company’s operations, reduce its workforce, and formally exit the majority of its leased office space located in Provo, Utah. These changes were intended to align the Company’s products, services, and distribution channels in a manner that focuses Company resources on providing integrated training and performance solutions to organizations and individuals. The restructuring was also intended to lay strategic, operational, organiza- tional, and financial foundations for profitable growth.  In connection with the restructuring plan, the Company recorded a fourth quarter restructuring charge of $16.3 million, which is included in the accompanying consoli- dated statement of income for the fiscal year ended The severance cost accrual was established based upon estimates of factors such as expected time to find other employment, expected benefit payments, and severance payment type. However, primarily due to favorable economic conditions which decreased the average time necessary for terminated employees to find new employ- ment, the Company reassessed its potential liability for 2. RESTRUCTURING COSTS Reclassifications Recent Accounting Pronouncements  Leased Office Severance Space Costs Exit Costs Total Accrued restructuring  costs at August 31, 1999 $11,600 $ 4,600 $16,200 Restructuring costs  paid (4,641) (1,453) (6,094) Adjustments (4,544) (402) (4,946) Accrued restructuring  costs at August 31,  2000 $ 2,415 $ 2,745 $ 5,160 Number of Operating Segment Employees Consumer products 114 Training and education 173 International 57 Corporate support and other 226 570