EMC 2003 Annual Report Download - page 55

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Less amounts representing interest (12,345)
Present value 148,376
Current portion 63,949
Long-term portion (included in other assets, net) $ 84,427
80
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATMENTS
Actual cash collections may differ from amounts shown on the table due to early customer buyouts, trade-ins or refinancings. In addition, we may sell
our notes receivable and underlying equipment associated with our sales-type leases to third parties.
I. Property, Plant and Equipment
Property, plant and equipment consists of (table in thousands):
December 31,
2003
December 31,
2002
Furniture and fixtures $ 140,354 $ 142,669
Equipment 1,719,108 1,669,535
Buildings and improvements 840,487 828,569
Land 105,033 103,939
Construction in progress 156,504 162,570
2,961,486 2,907,282
Accumulated depreciation (1,351,304) (1,282,886)
$ 1,610,182 $ 1,624,396
Construction in progress and land owned at December 31, 2003 include $95.5 million and $6.0 million, respectively, of facilities under construction that
we are holding for future use. Depreciation expense was $391.0 million, $495.3 million and $462.2 million in 2003, 2002 and 2001, respectively.
J. Accrued Expenses
Accrued expenses consist of (table in thousands):
December 31,
2003
December 31,
2002
Salaries and benefits $ 367,067 $ 297,386
Product warranties 118,816 104,258
Restructuring (See Note C) 139,135 224,253
Other 384,678 322,460
$ 1,009,696 $ 948,357
Product Warranties
Systems sales include a standard product warranty. At the time of the sale, we accrue for systems' warranty costs. Upon expiration of the initial warranty,
we may sell additional maintenance contracts to our customers. Revenue from these additional maintenance contracts is deferred and recognized ratably over
the service period. The initial systems' warranty accrual is based upon our historical experience and specific identification of systems' requirements. The
amounts charged and accrued against the warranty reserve are as follows (table in thousands):
Year Ended December 31,
2003 2002 2001
Balance, beginning of the year $104,258 $118,347 $107,266
Current year accrual 90,444 50,275 83,927
Amounts charged to the accrual (75,886) (64,364) (72,846)
Balance, end of the year $118,816 $104,258 $118,347
81
EMC CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS