Motorola 2008 Annual Report Download - page 132

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operations. Included in the aggregate $394 million are charges of $401 million for employee separation costs,
$42 million for fixed asset impairment charges and $19 million for exit costs, offset by reversals for accruals no
longer needed.
The following table displays the net reorganization of business charges by segment:
Year Ended December 31, 2007
Mobile Devices $229
Home and Networks Mobility 71
Enterprise Mobility Solutions 30
330
General Corporate 64
$394
The following table displays a rollforward of the reorganization of businesses accruals established for exit
costs and employee separation costs from January 1, 2007 to December 31, 2007:
Accruals at
January 1,
2007
2007
Additional
Charges 2007
(1)(2)
Adjustments
2007
Amount
Used
Accruals at
December 31,
2007
Exit costs $ 54 $ 19 $ 2 $ (33) $ 42
Employee separation costs 104 401 (64) (248) 193
$158 $420 $(62) $(281) $235
(1) Includes translation adjustments.
(2) Includes $6 million of accruals established through purchase accounting for businesses acquired, covering exit
costs and separation costs for approximately 200 employees.
Exit Costs
At January 1, 2007, the Company had an accrual of $54 million for exit costs attributable to lease
terminations. The 2007 additional charges of $19 million are primarily related to the exit of certain activities and
leased facilities in Ireland by the Home and Networks Mobility segment. The 2007 adjustments of $2 million
represent accruals for exit costs established through purchase accounting for businesses acquired. The $33 million
used in 2007 reflects cash payments. The remaining accrual of $42 million, which was included in Accrued
liabilities in the Company’s consolidated balance sheets at December 31, 2007, represented future cash payments
for lease termination obligations.
Employee Separation Costs
At January 1, 2007, the Company had an accrual of $104 million for employee separation costs, representing
the severance costs for approximately 2,300 employees. The 2007 additional charges of $401 million represent
severance costs for approximately 6,700 employees, of which 2,400 were direct employees and 4,300 were indirect
employees.
The adjustments of $64 million reflect $68 million of reversals of accruals no longer needed, partially offset
by $4 million of accruals for severance plans established through purchase accounting for businesses acquired. The
$68 million of reversals represent previously accrued costs for 1,100 employees, and primarily relates to a strategic
change regarding a plant closure and specific employees previously identified for separation who resigned from the
Company and did not receive severance or who were redeployed due to circumstances not foreseen when the
original plans were approved. The $4 million of accruals represents severance plans for approximately
200 employees established through purchase accounting for businesses acquired.
During the year ended December 31, 2007, approximately 5,300 employees, of which 1,700 were direct
employees and 3,600 were indirect employees, were separated from the Company. The $248 million used in 2007
reflects cash payments to these separated employees. The remaining accrual of $193 million is included in Accrued
liabilities in the Company’s consolidated balance sheets at December 31, 2007.
124