Motorola 2010 Annual Report Download - page 125

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117
Company’s business segments, as well as corporate functions, were impacted by these plans, with the majority of the
impact in the Mobile Devices segment. The employees affected were located in all regions. The Company recorded
net reorganization of business charges of $300 million, including $84 million of charges in Costs of sales and
$216 million of charges under Other charges in the Company’s consolidated statements of operations. Included in
the aggregate $300 million are charges of $283 million for employee separation costs, $66 million for exit costs
,partially offset by $49 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by business segment:
Year Ended December 31, 2008
Enterprise Mobility Solutions $25
Mobile Devices 216
Home 21
262
Corporate 38
$300
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs
and employee separation costs from January 1, 2008 to December 31, 2008:
2008
Accruals at
January 1
Additional
Charges Adjustments
Amount
Used
Accruals at
December 31
Exit costs $ 27 $ 66 $ (1) $ (14) $ 78
Employee separation costs 160 283 (44) (246) 153
$187 $349 $(45) $(260) $231
Adjustments include translation adjustments.
Exit Costs
At January 1, 2008, the Company had an accrual of $27 million for exit costs attributable to lease
terminations. The 2008 additional charges of $66 million were primarily related to: (i) the exit of leased facilities in
the United Kingdom by the Mobile Devices segment, and (ii) the exit of leased facilities in Mexico by the Home
segment. The adjustments of $1 million reflect $2 million of translation adjustments, partially offset by $3 million
of reversals of accruals no longer needed. The $14 million used in 2008 reflected cash payments. The remaining
accrual of $78 million, which was included in Accrued liabilities in the Company’s consolidated balance sheets at
December 31, 2008, represented future cash payments, primarily for lease termination obligations.
Employee Separation Costs
At January 1, 2008, the Company had an accrual of $160 million for employee separation costs, representing
the severance costs for approximately 2,100 employees. The additional 2008 charges of $283 million were severance
costs for approximately an additional 5,100 employees, of which 2,200 were direct employees and 2,900 were
indirect employees.
The adjustments of $44 million reflected $46 million of reversals of accruals no longer required, partially offset
by $2 million of translation adjustments. The $46 million of reversals represented previously accrued costs for
approximately 600 employees.
During 2008, approximately 5,200 employees, of which 2,300 were direct employees and 2,900 were indirect
employees, were separated from the Company. The $246 million used in 2008 reflected cash payments to these
separated employees. The remaining accrual of $153 million was included in Accrued liabilities in the Company’s
consolidated balance sheets at December 31, 2008.
14. Intangible Assets and Goodwill
The Company accounts for acquisitions using purchase accounting with the results of operations for each
acquiree included in the Company’s consolidated financial statements for the period subsequent to the date of