Xerox 2007 Annual Report Download - page 103

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
Amortization expense related to intangible assets was
$46, $45, and $42 for the years ended December 31,
2007, 2006 and 2005, respectively, and is expected to
approximate $46 in 2008 and approximate $45 annually
from 2009 through 2012.
Amortization expense is primarily recorded in Other
expenses, net, with the exception of amortization expense
associated with licensed technology, which is recorded in
Cost of sales and Cost of service, outsourcing and rentals,
as appropriate.
Note 9 – Restructuring and Asset Impairment Charges
We have 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 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.
The net restructuring and asset impairment charges
in the Consolidated Statements of Income totaled $(6),
$385 and $366 in 2007, 2006 and 2005, respectively.
Detailed information related to restructuring program
activity during the three years ended December 31, 2007
is outlined below (in millions):
Restructuring Activity Severance and
Related Costs
Lease
Cancellation and
Other Costs Asset
Impairments(1)
Legacy
Programs(2) Total
Ending Balance December 31, 2004 ............ $ 70 $ 23 $ – $ 24 $ 117
Restructuring Provision ....................... 371 12 15 1 399
Reversals of prior accruals .................... (21) (6) – (6) (33)
Net current year charges(3) ............... 350 6 15 (5) 366
Charges against reserve and currency ......... (203) (10) (15) (19) (247)
Ending Balance December 31, 2005 ............ $ 217 $ 19 $ – $ – $ 236
Restructuring Provision ....................... 351 39 30 – 420
Reversals of prior accruals .................... (33) (2) – – (35)
Net current year charges(3) ............... 318 37 30 – 385
Charges against reserve and currency ......... (242) (12) (30) – (284)
Ending Balance December 31, 2006 ............ $ 293 $ 44 $ – $ – $ 337
Restructuring Provision ....................... 27 7 1 – 35
Reversals of prior accruals .................... (38) (3) – – (41)
Net current year charges(3) ............... (11) 4 1 – (6)
Charges against reserve and currency ......... (211) (10) (1) – (222)
Ending Balance December 31, 2007(4) .......... $ 71 $ 38 $ – $ – $ 109
(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.
(2) Legacy Programs, includes the runoff activity 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) We expect to utilize the majority of the December 31, 2007 restructuring balance in 2008.
Xerox Annual Report 2007 101