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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
64
Note 9 – Restructuring Programs
Wehave engaged in a series of restructuring programs related
to downsizing our employee base, exiting certain activities,
outsourcing certain internal functions and engaging in other
actions designed to reduce our cost structure and improve
productivity. Management continues to evaluate our business
The restructuring and asset impairment charges in the Consolidated Statements of Income totaled $366, $86 and $176 in 2005, 2004
and 2003, respectively. Detailed information related to restructuring program activity during the three years ended December 31, 2005
is outlined below (in millions):
Ongoing Programs
Lease
Severance Cancellation
and and Asset Legacy
Restructuring Activity Related Costs Other Costs Impairments(1) Total Programs(2) Total
Ending Balance December 31, 2002 $ 241 $ 45 $ – $ 286 $ 137 $ 423
Restructuring Provision 186 7 – 193 12 205
Reversals of prior accruals (15) (1) – (16) (13) (29)
Net current-year charges(3) 171 6 – 177 (1) 176
Charges against reserve and currency (269) (15) – (284) (94) (378)
Ending Balance December 31, 2003 $ 143 $ 36 $ – $ 179 $ 42 $ 221
Restructuring Provision 95 8 1 104 2 106
Reversals of prior accruals (11) – – (11) (9) (20)
Net current-year charges(3) 84 8 1 93 (7) 86
Charges against reserve and currency (157) (21) (1) (179) (11) (190)
Ending Balance December 31, 2004 $ 70 $ 23 $ – $ 93 $ 24 $ 117
Restructuring Provision 371 12 15 398 1 399
Reversals of prior accruals (21) (6) – (27) (6) (33)
Net current-year charges(3) 350 6 15 371 (5) 366
Charges against reserve and currency(4) (203) (10) (15) (228) (19) (247)
Ending Balance December 31, 2005 $ 217 $ 19 $ – $ 236 $ – $ 236
(1) Charges associated with asset impairments represent the write-down of the related assets to their new cost basis and are recorded concurrently with the recognition of the
provision. Accordingly, no reserve is ever maintained for asset impairments.
(2) Legacy Programs includes the runoffactivity of several predecessor restructuring programs which were initiated between 2000 and 2001.
(3) Represents amount recognized within the Consolidated Statements of Income for the years shown.
(4) Charges in 2005 associated with Legacy Programs include the reclassification of $9 to Other current and non-current liabilities reflecting the close-out of these programs due
to the immateriality of the remaining liability. The remaining liability primarily relates to our exit from facilities in Europe and the U.S., which are currently leased through 2009.
and, therefore, there may be supplemental provisions for new
plan initiatives as well as changes in estimates to amounts
previously recorded, as payments are made or actions are
completed. Asset impairment charges were also incurred in
connection with these restructuring actions for those assets
made obsolete as a result of these programs.
Xerox Annual Report 2005