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Notes to the Consolidated
Financial Statements
Dollars in millions, except per-share data and unless otherwise indicated.
78 Xerox 2010 Annual Report
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, in future years, 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. However, we do not expect that there will be significant new
restructuring initiatives in 2011. Asset impairment charges were also
incurred in connection with these restructuring actions for those assets
made obsolete as a result of these programs.
The following table summarizes the reconciliation to the Consolidated
Statements of Cash Flows for the three years ended December 31, 2010:
2010 2009 2008
Charges to reserve $ (234) $ (270) $ (186)
Asset impairments 26 — 53
Effects of foreign currency and
other non-cash items (5) — 2
Cash Payments for
Restructurings $ (213) $ (270) $ (131)
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, 2010:
2010 2009 2008
Technology $ 325 $ (5) $ 288
Services 104 (2) 85
Other 54 (1) 56
Total Net Restructuring Charges $ 483 $ (8) $ 429
Note 9 – Restructuring and Asset Impairment Charges
The net restructuring and asset impairment charges (credits) in
the Consolidated Statements of Income totaled $483, $(8) and
$429 in 2010, 2009 and 2008, respectively. Detailed information
related to restructuring program activity during the three years ended
December 31, 2010 is outlined below:
Lease
Severance and Cancellation and Asset
Restructuring Activity Related Costs Other Costs Impairments(1) Total
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 54 20 — 74
Restructuring provision 470 28 26 524
Reversals of prior accruals (32) (9) — (41)
Net current year charges(2) 438 19 26 483
Charges against reserve and currency (194) (14) (26) (234)
Balance December 31, 2010 $ 298 $ 25 $ — $ 323
(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.