Xerox 2006 Annual Report Download - page 108

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
method and was included in Investments in affiliates, at
equity within our Consolidated Balance Sheets. The
pre-tax gain is classified within Other (income) expenses,
net in the accompanying Consolidated Statements of
Income. In May 2006, we recognized an additional
pre-tax gain of $10 on this sale from the receipt of
additional proceeds from escrow. The proceeds were
placed in escrow upon the sale of Integic pending
completion of an indemnification period.
ScanSoft: In April 2004, we completed the sale of
our ownership interest in ScanSoft, Inc. (“ScanSoft”) for
approximately $79 in cash, net of transaction costs. Prior
to the sale, we beneficially owned approximately 15% of
ScanSoft’s outstanding equity interests. The sale resulted
in a pre-tax gain of $38. The gain is classified within
Other (income) expenses, net in the accompanying
Consolidated Statements of Income.
ContentGuard: In March 2004, we sold all but 2% of
our 75% ownership interest in ContentGuard Inc,
(“ContentGuard”) for $66 in cash. The sale resulted in a
pre-tax gain of $109 (after-tax $83) as our investment
reflected the recognition of cumulative operating losses
and was classified as a gain in Income from discounted
operations, net of tax. The gain on sale has been presented
within the accompanying Consolidated Statements of
Income considering the reporting requirements related to
discontinued operations of SFAS No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets.”
The revenues, operating results and net assets of
ContentGuard were immaterial for all periods presented.
ContentGuard, which was originally created out of
research developed at the Xerox Palo Alto Research
Center (“PARC”), licenses intellectual property and
technologies related to digital rights management. During
2005, we sold our remaining interest in ContentGuard.
Note 22 – Subsequent Event
In February 2007, the Board of Directors authorized
an additional repurchase of up to $500 of the Company’s
common stock over the next 12 months. The repurchases
may be made on the open market, or through derivative or
negotiated transactions. The Company expects the stock
to be repurchased primarily through open-market
purchases. Open-market repurchases will be made in
compliance with the Securities and Exchange
Commission’s Rule 10b-18, and are subject to market
conditions as well as applicable legal and other
considerations.
106