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61Xerox 2009 Annual Report
Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
The following table summarizes the total amount of costs incurred in
connection with these restructuring programs by segment for the three
years ended December 31, 2009:
2009 2008 2007
Production $ (4) $ 190 $ (6)
Office (3) 200 3
Other (1) 39 (3)
Total Net Restructuring Charges $ (8) $ 429 $ (6)
Over the past several years, 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.
These initiatives primarily include severance actions and impact all major
geographies and segments. Management continues to evaluate our
business and, therefore, there may be additional 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.
Lease
Severance and Cancellation and Asset
Restructuring Activity Related Costs Other Costs Impairments(1) Total
Balance December 31, 2006 $ 293 $ 44 $ — $ 337
Restructuring provision 27 7 1 35
Reversals of prior accruals (38) (3) — (41)
Net current-year charges(2) (11) 4 1 (6)
Charges against reserve and currency (211) (10) (1) (222)
Balance December 31, 2007 $ 71 $ 38 $ — $ 109
Restructuring provision 363 20 53 436
Reversals of prior accruals (6) (1) — (7)
Net current-year charges(2) 357 19 53 429
Charges against reserve and currency (108) (25) (53) (186)
Balance December 31, 2008 $ 320 $ 32 $ — $ 352
Restructuring provision 28 9 — 37
Reversals of prior accruals (39) (6) — (45)
Net current-year charges(2) (11) 3 — (8)
Charges against reserve and currency (255) (15) — (270)
Balance December 31, 2009(3) $ 54 $ 20 $ — $ 74
(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) Represents amount recognized within the Consolidated Statements of Income for the years shown.
(3) We expect to utilize the majority of the remaining December 31, 2009 restructuring balance in 2010.
The following table summarizes the reconciliation to the Consolidated
Statements of Cash Flows:
Year Ended December 31,
2009 2008 2007
Charges to reserve $ (270) $ (186) $ (222)
Asset impairments — 53 1
Effects of foreign currency and
other non-cash items — 2 (14)
Cash Payments for
Restructurings $ (270) $ (131) $ (235)
Note 9 – Restructuring and Asset Impairment Charges
The net restructuring and asset impairment (credits) charges in the
Consolidated Statements of Income totaled $(8), $429 and $(6) in
2009, 2008 and 2007, respectively. Detailed information related to
restructuring program activity during the three years ended December
31, 2009 is outlined below: