Motorola 2010 Annual Report Download - page 124

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116
During 2009, the Company recorded net reorganization of business charges of $298 million, including
$63 million of charges in Costs of sales and $235 million of charges under Other charges in the Company’s
consolidated statements of operations. Included in the aggregate $298 million are charges of $320 million for
employee separation costs, $36 million for exit costs and $18 million for fixed asset impairment charges, partially
offset by $76 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by business segment:
Year Ended December 31, 2009
Enterprise Mobility Solutions $66
Mobile Devices 184
Home 18
268
Corporate 30
$298
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs
and employee separation costs from January 1, 2009 to December 31, 2009:
2009
Accruals at
January 1
Additional
Charges Adjustments
Amount
Used
Accruals at
December 31
Exit costs $ 78 $ 36 $(11) $ (46) $ 57
Employee separation costs 153 320 (61) (347) 65
$231 $356 $(72) $(393) $122
Adjustments include translation adjustments.
Exit Costs
At January 1, 2009, the Company had an accrual of $78 million for exit costs attributable to lease
terminations. The additional 2009 charges of $36 million are primarily related to the exit of leased facilities and
contractual termination costs. The adjustments of $11 million reflect: (i) $8 million of reversals of accruals no
longer needed, and (ii) $3 million of translation adjustments. The $46 million used in 2009 reflects cash payments.
The remaining accrual of $57 million, which is included in Accrued liabilities in the Company’s consolidated
balance sheets at December 31, 2009, represents future cash payments, primarily for lease termination obligations.
Employee Separation Costs
At January 1, 2009, the Company had an accrual of $153 million for employee separation costs, representing
the severance costs for approximately 2,000 employees. The additional 2009 charges of $320 million represent
severance costs for approximately an additional 8,300 employees, of which 3,100 are direct employees and 5,200
are indirect employees.
The adjustments of $61 million reflect $68 million of reversals of accruals no longer required, partially offset
by $7 million of translation adjustments.
During 2009, approximately 9,100 employees, of which 3,800 were direct employees and 5,300 were indirect
employees, were separated from the Company. The $347 million used in 2009 reflects cash payments to these
separated employees. The remaining accrual of $65 million, which is included in Accrued liabilities in the
Company’s consolidated balance sheets at December 31, 2009.
2008 Charges
During 2008, the Company committed to implement various productivity improvement plans aimed at
achieving long-term, sustainable profitability by driving efficiencies and reducing operating costs. All three of the