Xerox 2011 Annual Report Download - page 70

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The following is a reconciliation of segment profit to pre-tax income:
Year Ended December 31,
Segment Profit Reconciliation to Pre-tax Income 2011 2010 2009
Total Segment Profit $ 2,092 $ 1,875 $ 838
Reconciling items:
Restructuring and asset impairment charges (33) (483) 8
Restructuring charges of Fuji Xerox (19) (38) (46)
Acquisition-related costs — (77) (72)
Amortization of intangible assets (398) (312) (60)
Venezuelan devaluation costs — (21) —
ACS shareholders’ litigation settlement — (36) —
Loss on early extinguishment of liability and debt (33) (15) —
Equity in net income of unconsolidated affiliates (149) (78) (41)
Curtailment gain 107 — —
Other (2) — —
Pre-tax Income $ 1,565 $ 815 $ 627
Geographic area data are based upon the location of the subsidiary reporting the revenue or long-lived assets and are as follows for the three years ended
December 31, 2011:
Revenues Long-Lived Assets (1)
2011 2010 2009 2011 2010 2009
United States $ 14,493 $ 13,801 $ 8,156 $ 1,894 $ 1,764 $ 1,245
Europe 5,557 5,332 4,971 776 741 717
Other areas 2,576 2,500 2,052 276 309 262
Total Revenues and Long-Lived Assets $ 22,626 $ 21,633 $ 15,179 $ 2,946 $ 2,814 $ 2,224
(1) Long-lived assets are comprised of (i) land, buildings and equipment, net, (ii) equipment on operating leases, net, (iii) internal use software, net and (iv) product software, net.
In September 2011, we acquired the net assets related to the U.S.
operationsofSymcorInc.(“Symcor”). In connection with the
acquisition, we assumed and took over the operational responsibility for
the customer contracts related to this operation. We agreed to pay $17
for the acquired net assets and the seller agreed to pay us $52, which
represented the fair value of the liabilities assumed, for a net cash receipt
of $35. The assumed liabilities primarily include customer contract
liabilities representing the estimated fair value of the obligations
associated with the assumed customer contracts. We are recognizing
these liabilities over a weighted-average period of approximately two
years consistent with the cash outflows from the contracts. Symcor
specializes in outsourcing services for U.S. financial institutions and its
offerings range from cash management services to statement and
check processing.
In July 2011, we acquired EducationSalesandMarketing,LLC(“ESM”),
a leading provider of outsourced enrollment management and student
loan default solutions, for approximately $43 net of cash acquired. The
acquisition of ESM enables us to offer a broader range of services to assist
post-secondary schools in attracting and retaining the most qualified
students while reducing accreditation risk.
Note 3 – Acquisitions
2011 Acquisitions
In December 2011, we acquired the Merizon Group Inc. which operates
MBM, formerly known as Modern Business Machines, a Wisconsin-based
office products distributor, for approximately $42 net of cash acquired.
The acquisition furthers our strategy of creating a nationwide network of
locally based companies focused on improving document workflow and
office efficiency.
In November 2011, we acquired TheBreakawayGroup(“Breakaway”),
a cloud-based service provider that helps healthcare professionals
accelerate their adoption of an electronic medical records (“EMR”) system,
for approximately $18 net of cash acquired. We are also obligated to
pay the sellers up to an additional $25 if certain future performance
targets are achieved, of which $18 was recorded as of the acquisition
date representing the estimated fair value of this obligation, for a total
acquisition fair value of $36. The Denver-based firm’s technology allows
caregivers to practice using an EMR system without jeopardizing actual
patient data. This acquisition adds to our offering of services that help
healthcare professionals use the EMR system for clinical benefit.
Notes to the Consolidated
Financial Statements
(in millions, except per-share data and where otherwise noted)