Xerox 2003 Annual Report Download - page 52

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For the year ended
Reconciliation to December 31,
Statements of Income 2003 2002 2001
Restructuring provision $204 $648 $587
Restructuring reversal (29) (33) (77)
Asset impairment charges 1(1) 55(2) 205(3)
Restructuring and asset
impairment charges $176 $670 $715
(1) Asset impairment charges related to the Turnaround Program.
(2) Asset impairment charges consisted of $45 and $10 for the Fourth Quarter
2002 Program and SOHO, respectively.
(3) Asset impairment charges consisted of $28, $164 and $13 for the
Turnaround Program, SOHO and 2000 Program, respectively.
For the year ended
Reconciliation to December 31,
Statements of Cash Flows 2003 2002 2001
Charges to reserve $(377) $(474) $(555)
Pension curtailment, special
termination benefits
and settlements 33 59 21
Effects of foreign currency
and other noncash (1) 23 50
Cash payments for restructurings $(345) $(392) $(484)
Restructuring Programs – Fourth Quarter 2002 and
2003: As more fully discussed in Note 1, on October 1,
2002, we adopted the provisions of SFAS No. 146.
During the fourth quarter of 2002, we announced a
worldwide restructuring program and subsequently
recorded a provision of $402. The provision consisted
of $312 for severance and related costs, $45 of costs
associated with lease terminations and future rental
obligations, net of estimated future sublease rents and
$45 for asset impairments. The severance and related
costs were related to the elimination of approximately
4,700 positions worldwide. As of December 31, 2003,
substantially all of the affected employees had been
separated under the program. During 2003, we provid-
ed an additional $177 for restructuring programs, net
of reversals of $16 related to changes in estimates for
severance costs from previously recorded actions. The
additional provision consisted of $153 primarily related
to the elimination of over 2,000 positions worldwide,
$33 for pension settlements and post-retirement med-
ical benefit curtailments associated with prior sever-
ance actions and $7 for lease terminations. The reserve
balance for these Restructuring Programs at December
31, 2003 was $179 and is summarized as follows:
Lease
Severance Cancella-
and tion and
Related Other
Costs Costs Total
Initial Provision $ 312 $ 45 $ 357
Charges against reserve (71) – (71)
Balance at December 31, 2002 $ 241 $ 45 $ 286
Provisions 186 7 193
Reversals (15) (1) (16)
Charges (269) (15) (284)
Balance at December 31, 2003 $ 143 $ 36 $ 179
The following tables summarize the total amount
of costs expected to be incurred in connection with
these restructuring programs and the cumulative
amount incurred as of December 31, 2003:
Segment Reporting:
Net
Cumulative amount Cumulative
amount incurred amount
incurred for the incurred Total
as of year ended as of expected
December December December to be
31, 2002 31, 2003 31, 2003 incurred*
Production $146 $ 82 $228 $243
Office 102 66 168 178
DMO 54 13 67 67
Other 100 16 116 121
Total Provisions $402 $177 $579 $609
* The total amount of $609 represents the cumulative amount incurred
through December 31, 2003 plus additional expected restructuring charges
of $30 related to initiatives identified to date but not yet recognized in the
Consolidated Financial Statements. The expected restructuring provisions
primarily relate to additional pension settlement costs.
Major Cost Reporting:
Net
Cumulative amount Cumulative
amount incurred amount
incurred for the incurred Total
as of year ended as of expected
December December December to be
31, 2002 31, 2003 31, 2003 incurred*
Severance and
related costs $312 $171 $483 $509
Lease cancellation
and other costs 45 6 51 55
Asset impairments 45 – 45 45
Total Provisions $402 $177 $579 $609
Other Restructuring Programs: The following is a sum-
mary of past restructuring programs undertaken by
the Company: