Motorola 2014 Annual Report Download - page 86

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reverses accruals through the consolidated statements of operations where the original charges were recorded when it is
determined they are no longer needed.
During 2014, 2013, and 2012 the Company continued to implement various productivity improvement plans aimed at
achieving long-term, sustainable profitability by driving efficiencies and reducing operating costs. Both of the Company’s
segments were impacted by these plans. The employees affected were located in all geographic regions.
2014 Charges
During 2014, the Company recorded net reorganization of business charges of $73 million, including $9 million of charges
in Costs of sales and $64 million of charges in Other charges in the Company’s consolidated statements of operations. Included
in the aggregate $73 million are charges of $67 million for employee separation costs and, $7 million for exit costs, partially
offset by $1 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by segment:
Year ended December 31 2014
Products $ 48
Services 25
$ 73
The following table displays a rollforward of the reorganization of businesses accruals established for exit costs and
employee separation costs, including those related to discontinued operations which were maintained by the Company after the
sale of the Enterprise business, from January 1, 2014 to December 31, 2014:
Accruals at
January 1 Additional Charges Adjustments Amount Used Accruals at December 31
Exit costs $ 6 $ 7 $ — $ (13) $ —
Employee separation costs 103 93 (4) (135) 57
$ 109 $ 100 $ (4) $ (148) $ 57
Exit Costs
At January 1, 2014, the Company had an accrual of $6 million for exit costs attributable to lease terminations. There were
$7 million of additional charges in 2014. The $13 million used in 2014 reflects cash payments. There is no remaining accrual as
of December 31, 2014.
Employee Separation Costs
At January 1, 2014, the Company had an accrual of $103 million for employee separation costs. The 2014 additional
charges of $93 million represent severance costs for approximately an additional 1,200 employees, of which 300 were direct
employees and 900 were indirect employees. The adjustments of $4 million reflect reversals of accruals no longer needed. The
$135 million used in 2014 reflects cash payments to separated employees, including $50 million related to employees of the
Enterprise business and included in cash flow from discontinued operations. The remaining accrual of $57 million, which is
included in Accrued liabilities in the Company’s consolidated balance sheet at December 31, 2014, is expected to be paid,
generally, within one year to: (i) severed employees who have already begun to receive payments and (ii) approximately 500
employees to be separated in 2015.
2013 Charges
During 2013, the Company recorded net reorganization of business charges of $86 million, including $16 million of charges
in Costs of sales and $70 million of charges under Other charges in the Company’s consolidated statements of operations.
Included in the aggregate $86 million are charges of (i) $94 million for employee separation costs, and (ii) $2 million of charges
for exit costs, partially offset by $10 million of reversals for accruals no longer needed.
The following table displays the net charges incurred by segment:
Year ended December 31 2013
Products $ 57
Services 29
$ 86