Xerox 2015 Annual Report Download - page 57

Restructuring and Asset Impairment Charges
During the year ended December 31, 2015, we recorded net restructuring and asset impairment charges of $186
million ($118 million after-tax). Approximately 88% of the charges were related to our Services segment, 8% to our
Document Technology segment, and 4% to our Other segment and included the following:
• $54 million of severance costs related to headcount reductions of approximately 1,700 employees globally. The
actions impacted several functional areas, with approximately 53% of the costs focused on gross margin
improvements, 42% on SAG and 5% on the optimization of RD&E investments.
• $4 million for lease termination costs primarily reflecting continued optimization of our worldwide operating
locations.
• $153 million of asset impairment charges, including $146 million recorded in second quarter 2015 associated
with software asset impairments resulting from a change in our Government Healthcare Solutions strategy in
the Services segment as well as $7 million of charges incurred in the third quarter 2015.
The above charges were partially offset by $25 million of net reversals for changes in estimated reserves from prior
period initiatives.
We expect 2016 pre-tax savings of approximately $50 million from our 2015 restructuring actions.
During the year ended December 31, 2014, we recorded net restructuring and asset impairment charges of $128
million ($91 million after-tax). Approximately 30% of the charges were related to our Services segment, 59% to our
Document Technology segment, and 11% to our Other segment and included the following:
• $143 million of severance costs related to headcount reductions of approximately 4,000 employees globally.
The actions impacted several functional areas, with approximately 53% of the costs focused on gross margin
improvements, 42% on SAG and 5% on the optimization of RD&E investments.
• $5 million for lease termination costs primarily reflecting continued optimization of our worldwide operating
locations.
• $7 million of asset impairment losses.
The above charges were partially offset by $27 million of net reversals for changes in estimated reserves from prior
period initiatives.
Restructuring Summary
The restructuring reserve balance as of December 31, 2015 for all programs was $24 million, of which
approximately $23 million is expected to be spent over the next twelve months. In the first quarter 2016, we expect
to incur additional restructuring charges of approximately $100 million pre-tax.
Refer to Note 11 - Restructuring and Asset Impairment Charges in the Consolidated Financial Statements for
additional information regarding our restructuring programs.
Amortization of Intangible Assets
During the year ended December 31, 2015, we recorded $310 million of expense related to the amortization of
intangible assets, which is $5 million lower than the prior year primarily due to currency and the run-off of
amortization associated with acquired technology assets.
During the year ended December 31, 2014, we recorded $315 million of expense related to the amortization of
intangible assets, which is $10 million higher than the prior year reflecting the increase in acquisitions in 2014.
Refer to Note 10 - Goodwill and Intangible assets, Net in the Consolidated Financial Statements for additional
information regarding our intangible assets.
Worldwide Employment
Worldwide employment of approximately 143,600 as of December 31, 2015 increased by approximately 5,700 from
December 31, 2014, due primarily to the impact of ramping new business and acquisitions partially offset by
restructuring reductions and productivity improvements. Worldwide employment was approximately 137,900 and
133,300 at December 2014 and 2013, respectively (NOTE: prior year employment amounts are adjusted to exclude
employees associated with the divested ITO business).
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