Motorola 2006 Annual Report Download - page 120

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112
offset by $23 million of reversals for accruals no longer needed. Total employees impacted by the actions
committed to in 2006 are 3,900.
The following table displays the net reorganization of business charges by segment:
Year Ended December 31,
2006
Mobile Devices $ (1)
Networks and Enterprise 157
Connected Home Solutions 50
206
General Corporate 7
$213
The following table displays a rollforward of the reorganization of business accruals established for exit costs
and employee separation costs from January 1, 2006 to December 31, 2006:
Accruals at 2006 2006 Accruals at
January 1, Additional 2006(1) Amount December 31,
2006 Charges Adjustments Used 2006
Exit costs Ì lease terminations $ 50 $ 30 $ (7) $ (19) $ 54
Employee separation costs 53 191 (16) (124) 104
$103 $221 $(23) $(143) $158
(1) Includes translation adjustments.
Exit Costs Ì Lease Terminations
At January 1, 2006, the Company had an accrual of $50 million for exit costs attributable to lease
terminations. The 2006 additional charges of $30 million were primarily related to a lease cancellation by the
Networks and Enterprise segment. The 2006 adjustments of $7 million represent reversals of accruals no longer
needed. The $19 million used in 2006 reflects cash payments to lessors. The remaining accrual of $54 million,
which is included in Accrued liabilities in the Company's consolidated balance sheet at December 31, 2006,
represents future cash payments for lease termination obligations.
Employee Separation Costs
At January 1, 2006, the Company had an accrual of $53 million for employee separation costs, representing the
severance costs for approximately 1,600 employees, of which 1,100 were direct employees and 500 were indirect
employees. The 2006 additional charges of $191 million represent costs for an additional 3,900 employees, of
which 1,700 were direct employees and 2,200 were indirect employees. The adjustments of $16 million represent
reversals of accruals no longer needed.
During 2006, approximately 3,200 employees, of which 1,400 were direct employees and 1,800 were indirect
employees, were separated from the Company. The $124 million used in 2006 reflects cash payments to these
separated employees. The remaining accrual of $104 million, which is included in Accrued liabilities in the
Company's consolidated balance sheet at December 31, 2006, is expected to be paid to approximately 2,300
employees to be separated in 2007.
2005 Charges
During the year ended December 31, 2005, the Company recorded net reorganization of business charges of
$91 million, including $37 million of charges in Costs of sales and $54 million of charges under Other charges in
the Company's consolidated statement of operations. Included in the aggregate $91 million are charges of
$86 million for employee separation costs and $15 million for fixed asset impairment charges and $5 million for
exit costs, partially offset by $15 million of reversals for accruals no longer needed. Total employees impacted by
these action were approximately 2,600.