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TableofContents
firstquarterof2016.Theincreasetogeneralandadministrativeexpenseswaspartiallyoffsetbythefavorableimpactof$13millionfromfluctuationsinthe
exchangeratebetweentheU.S.dollarandtheforeigncurrenciesinwhichweincurexpenses.
Generalandadministrativeexpensesincreasedin2014comparedto2013.Werecognizedcompensationexpenseof$141millionin2014relatingto
installmentpaymentstocertainkeyemployeesofAirWatchsubjecttotheachievementofspecifiedfutureemploymentconditions.Othercash-basedemployee-
relatedexpensesincreasedby$52millionin2014duetoincrementalgrowthinheadcount,bothorganicandthroughacquisitions.Costsof$11millionrelatedto
certainlitigationandothercontingencies,andamountsforITdevelopmentcostsandstock-basedcompensationexpensefurthercontributedtotheincreasein
expensesin2014comparedto2013.
Realignment Charges
OurrealignmentchargesduringtheyearsendedDecember31,2015,2014and2013wereasfollows(dollarsinmillions):
For the Year Ended December 31,
2015 vs. 2014
2014 vs. 2013
2015
2014
2013
$ Change
% Change
$ Change
% Change
Realignmentcharges $ 23
$ 16
$ 62
$ 7
46%
$ (47)
(75)%
Stock-basedcompensation —
—
6
—
—
(6)
(100)
Totalexpenses $ 23
$ 16
$ 68
$ 7
46
$ (53)
(77)
%ofTotalrevenues —%
—%
1%
DuringtheyearendedDecember31,2015,weeliminatedapproximately380positionsacrossallmajorfunctionalgroupsandgeographiestostreamlineour
operations.Asaresultoftheseactions,$23millionofseverance-relatedrealignmentchargeswererecognizedduringtheyearendedDecember31,2015.Asof
December31,2015,$3millionremainedinaccruedexpensesandotherontheconsolidatedbalancesheetsandisexpectedtobepaidduring2016.
DuringtheyearendedDecember31,2014,weeliminatedapproximately180positionsacrossallmajorfunctionalgroupsandgeographiestostreamlineour
operations.Asaresultoftheseactions,$16millionofseverance-relatedrealignmentchargeswererecognizedduringtheyearendedDecember31,2014onthe
consolidatedstatementsofincome.
DuringtheyearendedDecember31,2013,weapprovedandinitiatedabusinessrealignmentplantostreamlineouroperations.Therealignmentplanincluded
theeliminationofapproximately710positionsandpersonnelacrossallmajorfunctionalgroupsandgeographies.DuringtheyearendedDecember31,2013,$68
millionofrealignmentchargeswererecordedontheconsolidatedstatementsofincome,whichconsistedofworkforcereductionchargesandassetimpairments.As
ofDecember31,2013,theplanhadbeencompleted.
During2016,weexpecttoincurchargesof$55millionto$65millionduetothebusinessrealignmentplanweapprovedonJanuary22,2016.Weplanto
reinvesttheassociatedsavingsinfield,technicalandsupportresourcesassociatedwithgrowthproducts.Actionsassociatedwiththisplanareexpectedtobe
completedbyJune30,2016.
Other Income (Expense), Net
Ourotherincome(expense),netduringtheyearsendedDecember31,2015,2014and2013wereasfollows(dollarsinmillions):
For the Year Ended December 31,
2015 vs. 2014
2014 vs. 2013
2015
2014
2013
$ Change
% Change
$ Change
% Change
Otherincome(expense),net $ (7)
$ 7
$ 28
$ (14)
(186)%
$ (21)
(73)%
%ofTotalrevenues —%
—%
1%
Fluctuationsinotherincome(expense),netduring2015ascomparedto2014wereprimarilydrivenbygainsandlossesonstrategicinvestmentsandforeign
currencyexchange.
Otherincome(expense),netdecreasedin2014comparedto2013.Thedecreasewasprimarilyduetotherecognitionofapre-taxgainof$44millionduring
2013asaresultofexitingcertainlinesofbusinessunderourbusinessrealignmentplan.Partiallyoffsettingthisgainin2013wasanother-than-temporary
impairmentchargeof$13millionthatwerecognizedinconnectionwithastrategicinvestment.
Income Tax Provision
Ourannualeffectiveincometaxratewas17.8%,15.5%,and11.6%for2015,2014,and2013,respectively.Oureffectivetaxratein2015washigherthan
2014primarilyduetoashiftinthecompositionofincomebeforetaxfromlowerinternational
39