Xerox 2007 Annual Report Download - page 134

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
Note 19 – Divestitures and Other Sales
During the three years ended December 31, 2007, the
following significant divestitures occurred:
Ridge Re: In March 2006, Ridge Re, a wholly owned
subsidiary included in our net investment in discontinued
operations (within Other long-term assets), completed an
agreement to transfer its obligations under its remaining
reinsurance agreement, together with related investments
held in trust, to another insurance company as part of a
complete exit from this business. As a result of this
transaction, the remaining investments held by Ridge Re
were sold and the excess cash held by Ridge Re of $119,
after the payment of its remaining liabilities, was
distributed back to the Company as part of a plan of
liquidation. This amount is presented within investing
activities in the Consolidated Statements of Cash Flows.
Integic: In March 2005, we completed the sale of our
entire equity interest in Integic Corporation (“Integic”) for
$96 in cash, net of transaction costs. The sale resulted in a
pre-tax gain of $93. Prior to this transaction, our
investment in Integic was accounted for using the equity
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.
REPORTS OF MANAGEMENT
Management’s Responsibility for Financial Statements
Our management is responsible for the integrity and
objectivity of all information presented in this annual
report. The consolidated financial statements were
prepared in conformity with accounting principles
generally accepted in the United States of America and
include amounts based on management’s best estimates
and judgments. Management believes the consolidated
financial statements fairly reflect the form and substance
of transactions and that the financial statements fairly
represent the Company’s financial position and results of
operations.
The Audit Committee of the Board of Directors, which
is composed solely of independent directors, meets
regularly with the independent auditors,
PricewaterhouseCoopers LLP, the internal auditors and
representatives of management to review accounting,
financial reporting, internal control and audit matters, as
well as the nature and extent of the audit effort. The Audit
Committee is responsible for the engagement of the
independent auditors. The independent auditors and
internal auditors have free access to the Audit Committee.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and
maintaining adequate internal control over financial
reporting, as such term is defined in the rules promulgated
under the Securities Exchange Act of 1934. Under the
supervision and with the participation of our
management, including our principal executive, financial
and accounting officers, we have conducted an evaluation
of the effectiveness of our internal control over financial
reporting based on the framework in “Internal Control –
Integrated Framework” issued by the Committee of
Sponsoring Organizations of the Treadway Commission.
Based on the above evaluation, management has
concluded that our internal control over financial reporting
was effective as of December 31, 2007.
Anne M. Mulcahy
Chief Executive Officer
Lawrence A. Zimmerman
Chief Financial Officer
Gary R. Kabureck
Chief Accounting Officer
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